The World Bank is an international organization dedicated to providing financing, advice and research to developing nations to aid their economic advancement.
The World Bank has two stated goals that it aims to achieve by 2030. The first is to end extreme poverty by decreasing the amount of people living on less than $1.90 a day to below 3% of the world population. The second is to increase overall prosperity by increasing the income growth in the bottom 40% of the world’s population.
Beyond its specific goals, the World Bank provides qualifying individuals and governments with low-interest loans, zero-interest credits and grants. These debt borrowings and cash infusions help with global education, health care, public administration, infrastructure and private sector development. The World Bank also shares information with world governments through policy
advice, research and analysis and technical assistance.
The World Bank Group is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world and is an observer at the United Nations Development Group. Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International
Centre for Settlement of Investment Disputes (ICSID)
World Bank Group‘s latest trade strategy, named ‗Leveraging Trade For Development and Inclusive Growth, identifies four priority themes for support activities: trade competitiveness and diversification; trade facilitation, transport logistics and trade finance; support for market access and international trade cooperation; and managing shocks and promoting greater inclusion.
This strategy is to provide support and expertise to allow Least Developed Countries (LDCs) and developing countries to promote trade-related reforms in order to benefit fully from global trade flows and promote national development. This is done through the implementation of ‗Aid For Trade‘ programmes.
These programmes aim ‗to help governments reap the gains from openness to trade and regional integration, and also to manage risks of economic changes, such as adjustment costs and external shocks‘.
Using trade more effectively to expand sources of sustainable income is essential to achieving the WBG‘s twin goals of ending extreme poverty and boosting shared prosperity. Economic integration through trade and improved competitiveness is central to any development strategy. The challenges for developing countries are to grow their economies, improve productivity, boost real incomes and create more and better jobs. To meet these challenges, countries need to be better integrated with the world economy, and policymakers, private firms and international partners are actively seeking support from the WBG to find effective ways of achieving this. Looking in more detail at the principal areas of the World Bank Group‘s work in trade, these are:
• Trade Policy and Integration: Analysis and policy advice to help countries eliminate unnecessary non-tariff measures, or NTMs, modernise services regulations and trade, address the poverty and labour impacts of trade policies and shocks, and support global and regional integration, including free trade agreement negotiations and World Trade Organization accession and participation.
• Trade Performance: Help for governments in designing and implementing policies to maximise their trade competitiveness in both goods and services; assistance in creating comprehensive policy frameworks that shape individual firms‘ capacities and incentives to
import and export; and helping governments to reap the benefits of openness to trade and to manage both adjustment costs and external shocks.
• Competition Policies: Eliminating anti-competitive market regulations; strengthening antitrust rules; promoting pro-competition sector policies to discourage monopolies of state-owned enterprises.
• Trade Facilitation and Logistics: Strengthening trade corridors, supply chains and trade logistics; modernising border management; enhancing connectivity between firms, markets and consumers. To fund much of this work, the World Bank Group has five main trade-related trust funds, two of which receive financial contributions from the EU:
• The Multi-Donor Trust Fund for Trade and Development (MDTF-TD) is the largest source of donor funds supporting analytical trade work across the WBG. The WBG has received USD 34.5 million in pledges to the MDTF-TD2 over three years.
• The Trade Facilitation Support Programme (TFSP), supported by the European Commission, is a multi-donor platform launched in June 2014 that provides developing countries with rapid-response technical assistance to help them align with the World Trade Organization‘s December 2013 Trade Facilitation Agreement. To date, 45 countries have sought support from the USD 36 million trust fund.
• The Trade Facilitation Facility (TFF), which closed in July 2015, supported improvements in customs and other trade facilitation systems that help developing countries reduce trade costs and improve competitiveness. As of March 2015, 76 projects with an allocation of USD 49.8 million had been approved. Eighty percent of these benefit African countries.
• The Enhanced Integrated Framework (EIF) trust fund, also supported by the European Commission, supports WBG work as part of the global EIF partnership‘s efforts to help LDCs tackle constraints to trade. It funds capacity-building in LDCs, diagnostics that identify key trade constraints, and the implementation of technical assistance projects. The trust fund has received USD 4.3 million and currently provides trade-related support to 16 LDCs.
• The Transparency in Trade (TNT) trust fund, which is an ongoing partnership between the ITC (Geneva), UNCTAD and the WBG, with active support from the AfDB. Its goal is to collect and make available data on non-tariff measures and services trade policies.