Bretton Woods Revisited: The World Bank (part 2 of 4)

2.Executive Directors. General operations are overseen by a 25-member group of executive directors: one representative from each of the five largest donors (the United States, Japan, Germany, France, and Britain) and 20 elected by the remaining 180 donor countries. This group reviews loan proposals submitted by the president of the Bank and has the final authority to approve or decline a loan.

3.The President. The president of the World Bank is appointed by the executive directors, typically for a five-year term. Though no written article requires it, traditionally the president is an American. The current president, James D. Wolfensohn, formerly an international investment banker, was appointed to a five-year term on June 1, 1995.

Arms of the World Bank. There are several institutions that make up the World Bank, each with a unique mission. Throughout its 50-year history, members of the Bank have created many arms, known collectively as "the World Bank Group." These are the International Finance Corporation (IFC), the International Development Association (IDA), the International Center for Settlement of Investment Disputes (ICSID), and the Multilateral Investment Guarantee Agency (MIGA). Each has its own mission and goals.

1. The International Finance Corporation (IFC). The Bank established the IFC in 1956 to provide loan guarantees and subsidized loans to businesses in less developed countries. These loans, usually long-term, are focused on equity investment (like stock markets) and similar lending. Interest rates are supposed to be the going market rates, which vary between countries and with the proposed project. Maturity on the loans is generally 13 years, with a grace period of up to eight years. Some 80 percent of the funding is borrowed by the Bank from international financial markets and through public bond issues. The rest is borrowed from the IBRD. Each year, the IFC approves some $4 billion to $5 billion in new financing. In 1995, the U.S. contributed $36 million to the IFC.

2. The International Development Association (IDA). The Bank established the IDA in 1960 to provide assistance to poor countries that cannot afford to borrow money from the IBRD. The funds are provided separately by donor nations and through IBRD investment profits. Two types of loans have been offered through this branch of the Bank: IDA credits and Special Fund credits. The IDA no longer makes Special Fund credits, but many are

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