World Bank

[Karl Marx's Camel]

Could someone sum up the role of the World Bank, it's background, and it's effect in today's world?

[Morpheus]

Short version: the world bank works with the IMF to screw over poor countries.

Long version: The World Bank was formed near the end of World War Two as a result of an agreement among the capitalist nations reach during a conference at Bretton Woods, USA. The World Bank, International Monetary Fund (IMF) & other organizations are called "Bretton Woods" institutions because they were formed at this conference. The purpose of the Bretton Woods agreements was to save capitalism after the devastation of the great depression & second world war. The World Bank initially made loans to pro-US European countries to help them rebuild. It gets its funds from interests on its loans and by donations made by a few rich countries. In practice, it's controlled by the US - every head of the World Bank has been an American.

After Europe was rebuilt the WB started giving loans to "3rd world" countries. Officially this was to "encourage development" but really it was to keep them on the right side during the cold war. A good chunk of the money loaned was embezelled by corrupt dictators & the like. There were also loans made by private banks to 3rd world countries. In the '70s it became clear that the countries would never be able to afford to repay their debt, but the world bank got the private banks out of trouble by purchasing the debts. So now the 3rd world owed the World Bank the money it previously owed private banks.

The debt is so big that it will never be paid back, the interest increases the size of the debt faster than it can be paid off. Often, countries have problems even making payments on time. When that happens, they're offered a loan usually from the IMF so they can continue paying their debt. In some cases the World Bank will also agree to partially reduce the debt when this happens, but for both the WB & IMF their are strings attached. The country getting the loan or debt renegotiation must agree to a "structural adjustment program" (SAP). SAPs generally require the countries to change their policies so that they favor large corporations, especially large foreign corporations. They have to weaken labor & enviromental protections, privatize industries, sell off public resources (including water), charge user fees to anyone who goes to school, let foreign corporations buy up their economy, allow foreign goods to flood their markets, etc. This greatly harms the workers & peasants in the country but it also means the rich - especially rich first worlders - get richer.

Even longer version: http://friendslikeyou.tripod.com/globalecon.html