Explain the corruption behind the World Bank.?

Question

Ok,I have heard there's a lot of corruption behind the world bank. From the movie "Life and Debt" on the instant viewing on Netflix to watching the protests on TV and learning about nations like ours that owe billions to other countries while they owe us slightly less in billions,but we don't simply subtract what they owe to us and have us pay the difference.

This allows the World Bank to collect 10's of millions in interest every single year.

But I can't get why an organization such as them is able to continue to do this to us?

Answer 1

By providing developing nations with loans, the World Bank and IMF claim to be helping these nations, but because a number of reasons (poor investment, political corruption) these nations will be unable to pay the W.B. back as scheduled.  Because of high interest rates, many nations, especially those in Africa, have payed the W.B. back more interest than the loan was for.  The World Bank also has policies attached to loans, called Structural Adjustment Programs, which forces the nation's government to make changes, including decreasing funding on school and healthcare, and privatization of businesses, which means that many of the nation's industries are no longer owned by the workers, but rather a foreign corporation, which brings in it's own employees and keeps the profits from reaching the nation's citizens.  This leads to a vicious cycle of debt, where the nation can no longer  pay back the loan, because the nation is lacking any funds, education, and healthy people to create the economic advancement necessary to uplift the nation.

Answer 2

There are two problems, like all credit arrangements, they do not mirror one another and more importantly not all the actors are the same.  America owes trillions to China and China owes money to the United States, but it is particular businesses, people and governments who owe each other varying amounts.  It isn't two loans of two different amounts owed to the same people.  It is your 401(k) plan that has mutual funds that have loaned money or invested money to companies and governments in Brazil.  There are wealthy individuals, banks and governments that have loaned money to the people, governments and companies of the United States.  You cannot just swap.

Second, the World Bank loans money to developing nations at just above their cost of funds, which is probably about six percent interest right now.  That is the problem.  Many of these nations should not receive credit at below 20% interest.  Of course if you charged a market rate of interest, then little development would occur.  By not charging a market rate, that is much the same as giving money away to the central governments, because they have to budget less.  This permits the politically powerful to redirect money from what would be interest payments, to projects ran by their buddies just like Congress transfers "pork," to political supporters in their district.  So, by "helping" the people you free up constrained governments to do what they want with the now "extra" money.  This of course causes the World Bank to regulate what the economy it loans to can do because it is trying to force those governments to use the money for the purposes that the loan was for.  Some development projects are assigned to American firms or other firms in major nations.  The official reason is that the firm that acquires the firm has the technical competence, which is true.  It is very common that no domestic firm could do the work.  However, if you wish to build a domestic industrial base then you would want to build the skills base of the local workforce.  The firms doing the work do not want to pick up the liability of contract failure by hiring unqualified employees and then be responsible for contract failures.

The World Bank was primarily created to rebuild Europe after the Second World War as part of the Bretton Woods agreement.  It is very well meant, but in practice it has had very mixed results.  In part it is because no one has ever tried to do this in the history of mankind.  There was never a time when the governments of one set of nations tried to empower the people and governments of another set of nations.  It works but it doesn't work at the ideal level.  It is a real organization that works with real governments that have real constraints.  Some things the World Bank has done has not worked at all, but since no one has tried it before there wasn't any way to know it wouldn't work.  They are well planned ideas that in retrospect were bad ideas.

Answer 3

I think you are intersted in investigation or corruption cases it is nice .you make it as a profession.

Answer 4

He who has the money, makes the rules.