WB The World Bank

Specialized Agency Topic

The World Bank

I. Background

The World Bank, originally called International Bank for Reconstruction and Development, originated after World War II, 1944, in the need of loaning money towards the rebuilding of different States due to war. In 1956, the bank was able to provide services to private companies and financial institutions with the creation of the IFC. Four years later, in 1960, another big organization called the IDA helped the bank focus its attention on the poorest countries in the world, making one of its goals to eradicate poverty worldwide. The World Bank Headquarters is located in Washington D.C. and it has over 120 offices around the globe. The bank collaborates with governments, multilateral institutions, commercial banks, and private sector investors.

The World Bank is part of a bigger institution Called ‘The World Bank Group’ which hosts five organizations:

➢ IBRD: The International Bank for Reconstruction and Development (IBRD) “providing loans, guarantees, risk management products, and advisory services to middle-income and creditworthy low-income countries” (Devex 2020). Said countries engage with the IBRD as clients and shareholders. It is essential to understand that clients of IBRD are lower-middle-income countries, meaning that they have a better economic situation and credit than the ones from IDA. The IBRD aims to reduce poverty and bring prosperity to nations looking to escalate the economic chain (IBRD, 2020).

➢ IDA: The International Development Association (IDA) provides assistance to the poorest countries and those with not a great credit with the bank to construct social services in them, such as primary education, basic health services, clean water, agriculture, among many others. The IDA lends money on concessional terms, meaning that they give very low-interest rates and stretch repayments in a 30-40-year period. The IDA is a key in the resolution of crises and emergencies and also a coordinator for donor assistance and grants to countries that cannot relieve their debt (IDA, 2020).

➢ IFC: The International Finance Corporation (IFC) focuses on the private sectors of developing countries functioning as a sister organization to the World Bank. They address the biggest development issues through financial products and services as well as mobilizing third-party resources for projects (IFC, n.d.).

➢ MIGA: The Multilateral Investment Guarantee Agency (MIGA) promotes cross- border investments in developing countries by giving political risk insurance and credit enhancement to investors and lenders. In simpler words, the MIGA provides guarantees against noncommercial risks to international projects (MIGA, n.d.).

➢ ICSID: The International Centre for Settlement of Investment Disputes (ICSID) and as its name states it provides conciliation and arbitration of international investment disputes (ICSID, 2020).

However, The World Bank itself is only composed of the first two, which complement each other in the lending of loans and advice to member nations; both of these organizations share the same staff and headquarters. A country must join the International Monetary Fund first, to join the bank; and once it joins its integration to IBRD, IDA, IFC, and MIGA are mandatory.

The World Bank is composed of a Board of Governors and a Board of Directors. The Board of Governors is constituted by all the 189 member nations. Each nation has the representation of a Governor and an Alternate Governor, one of which is usually the Minister of Finance. All governors meet annually and act as the ultimate policymakers in matters respecting the inner workings of the bank such as the suspension of a member, the distribution of net income, approve amendments to the Articles of Agreement, arrange cooperation with another organization, among others.

The Board of Directors is elected by the Board of Governors and has responsibilities closer to the handling of the finances of the Bank like approving or denying loans, creating new policies, administering the budget, and taking financial decisions. The Board of Directors is constituted of 25 members, 6 of which are directly appointed by the biggest shareholders and the rest being voted for. Each Director elects an Alternate Executive Director, to take his or her place when they are not present. Directors themselves do not count with the power to act and make decisions in the representation of the Bank unless instructed by the rest of the Board. Both Directors and Governors are led by the President

of the World Bank Group, which at the time is David Malpass. As well, both boards count with voting powers proportional to the number of shares they hold, however, to ensure equal opportunities for all representatives to participate in the sessions, the committee in UDEMUN 2021 will provide an only and equal vote to all participants.

In the present day, the World Bank has been able to supervise and aid in a wide range of topics, all having to do with fighting for poverty, supporting economic growth, and sustainable gaining in people’s lives. It is important to understand that the World Bank distinguishes itself as an institution aimed at reducing poverty, promoting development, and increasing prosperity, unlike others like the International Monetary Fund that stabilizes the international monetary system and supervises international currencies, meaning that the World Bank does take action and interest to solve modern- day problems through economics. Its concern has been so big, that ever since the establishment of the Millennium Development Goals, it has closely cooperated with the United Nations as both a resource to fund resolutions and an observer member. Its 2030 agenda tries to lower the number of people living under 1.90 dollars a day to only 3% of the population and to bring economic growth to the 40% lowest population in each country. (World Bank, n.d.)

II. Forum

Appointed Members:

➢ Arnaud Fernand Buissé (Appointed by France) ➢ Jennifer D. Nordquist (Appointed by the United States) ➢ Juergen Zattler (Appointed by Germany) ➢ Junhong Chang (Appointed by China) ➢ Masanori Yoshida (Appointed by Japan) ➢ Richard Montgomery (Appointed by the United Kingdom)

Elected Members:

➢ Abraham Weintraub (From Brazil) ➢ Adrian Fernandez (From Uruguay) ➢ Anne Kabagambe (From Uganda) ➢ Geir H. Haarde (From Iceland)

➢ Guenther Schoenleitner (From Austria) ➢ Hesham Alogeel (From Saudi Arabia) ➢ Jean-Claude Tchatchouang (From Cameroon) ➢ Jorge Alejandro Chavez Presa (From Mexico) ➢ Koen Davidse (From the Netherlands) ➢ Kulaya Tantitemit (From Thailand) ➢ Kunil Hwang (From the Republic of Korea) ➢ Larai Shuaibu (From Nigeria) ➢ Louise Levonian (From Canada) ➢ Merza Hasan (From Kuwait) ➢ Mohammad Shafiul Alam * (From Bangladesh) ➢ Patrizio Pagano (From Italy) ➢ Roman Marshavin (From the Russian Federation) ➢ Shahid Ashraf Tarar (From Pakistan) ➢ Werner Gruber (From Switzerland)

Mohammad Shafiul Alam was elected to participate in the forum as Alternate Executive Director because the Executive Director position seems to be vacant by India at the time of writing of this background guide.

III. Committee Dynamics

a. Special Committee Format and Parliamentary Procedure

This year, UDEMUN 2021 presents the World Bank as a Special Committee, meaning that it will not follow the parliamentary Procedure of General Assemblies. The committee also will not follow the usual Crisis nor court Procedure, but rather an innovative and different order of events during sessions. Executive Directors should know that the new procedure presents no new motions or points than the classic Model UN procedure, however, these motions and points will be used in a different order and at different times. All steps of the procedure will be explained by the chair and be part of the situation Directors discover on the day of the simulation. First Person speaking is also allowed for participants as they represent Executive Directors, and not their countries of origin. Participants will not know the topic presented to them before the event, still, they can be sure it will relate to one of the Development Topics the World Bank tackles and its functions; these being:

➢ Climate Change ➢ Agriculture and Food ➢ Economic Growth and Planning ➢ Education ➢ Financial Inclusion ➢ Fragility, Conflict, and Violence ➢ Poverty ➢ Social Inclusion ➢ Urban and Rural Development ➢ Trade ➢ Health ➢ Jobs & Development

b. Executive Directors

Through sessions, participants will not represent a Delegation, but rather Executive Directors of the Board of Directors of the World Bank. The reason why participants will be Executive Directors instead of governors or a nation member is that participants will have to carry out different functions exclusive to this board. As mentioned before, each of the directors will count on an only and equal vote and for practicality matters, they’ll be referred to by their last names (example: Director Haarde, Director Hasan, Director Gruber).

Another important thing to note is that directors, although assigned a real person, they do not need to develop a character profile or extensive research on their personal lives as that will be irrelevant during the debate. As mentioned in the History of the committee, 6 of the members of the board are appointed by the biggest shareholders of the bank, while the other 19 are voted upon by the Governors; the following link will provide the official registry of votes the Directors received so that participants get an idea of which countries economic views and ideas they represent: [http://pubdocs.worldbank.org/en/241041541103873167/BankExecutiveDirectors.pdf] (Corporate Secretariat, 2020).

c. Guidance

During the 2 days of the event, Executive Directors will be led by the chair and Secretariat. The chair will consist of 3 members: the moderator, the Sr. Vice President, and the Managing Director of Operations. The Moderator will preside over the forum in each session, keeping track of the time, and ensuring an equal opportunity for all Directors to participate. He or She will have complete knowledge of the Parliamentary Procedure of the committee, therefore all points of inquiry respecting the next step in the debate, what motions are in order or the explanation of a certain step should be directed to him or her.

The committee Director, referred to as the Sr. Vice President of the World Bank Sandie Okoro, will be the maximum authority within the committee, with the exception of the secretariat. He or she will supervise the development of the committee and will have complete knowledge of the solutions and ideas that seem “credible” under the situation’s standards. He or She will be able to guide Directors into solving the problems they face with greater legitimacy to reality.

Finally, the Sub-Director, referred to as the Managing Director of Operations, Axel van Trotsenburg, will aid the Sr. Vice President in supervising the forum, as well as keep track of their management of the situation and alert the Secretariat when an update or the next step in the procedure should begin. He or She will also be of great help to the Directors as he or she will be able to provide general knowledge about the institutions and complex economic concepts when needed.

The member of the Secretariat in charge of overseeing the board’s affairs, will act as the President of the World Bank Group, David Malpass. He or she will constantly supervise the committee and trigger different actions depending on the forum’s performance. Both the Chair’s and the Secretariat’s authority within and outside the committee session should not be questioned or challenged.

d. Working in Session and Technological Use

There are two scenarios that need to be addressed about the Executive Director’s participation: their work done during session hours and their use of technology for research during the debate. Regarding the prior, Directors are motivated to communicate and socialize with their fellow participants during breaks, however, the chair and Secretariat will not accept and will condemn the creation of action plans, frameworks,

blocs, resolutions, or unofficial meetings to discuss debate topics outside session hours. This is done to guarantee the fair, equal, and quick-thinking participation of Directors the moment updates and developments in the situation happen, considering that extra time to work on them will present an obvious disadvantage to the rest of the forum. In order to be graded with flying colors, Directors should show that their solutions and proposals were done when in session.

Regarding the second matter, it is undeniable that the online modality of the simulation proves it impossible for the chair to avoid the usage of technology during sessions. That is why technological devices and research mechanisms will be allowed to be used only during unmoderated debates for the purpose of deepening the Directors’ proposals and deepening their knowledge of the situation; this tells the participants that the situation presented to them will be of higher difficulty in a way that it still presents a challenge to them despite the availability of the internet at any second. The Chair and Secretariat will always recommend for the delegates to do their research prior to the events, since the fast-paced rhythm of the procedure imposed will limit the time of Directors, possibly cornering them into a situation of either properly writing their proposals or continuing researching. Outside of these exceptions, technology usage will be limited during the sessions and the chair is in the full power of asking Directors what they are using technology for, and when appropriate, penalizing them for distraction.

e. Peaceful Debate and Respectful Argumentation

Once in session, Directors will see that some parts of the procedure require them to generate counterarguments, expose pros and cons, and adapt a slightly competitive tone to the debate. Recognizing the enthusiasm faced in Model UN and especially in committees such as this one, it is understandable that participants find themselves excited. Still, it is not in order for Directors to in any shape or form insult, mock, or offend fellow participants, their ideas, or their work. The debate should always maintain peaceful and friendly among Directors following UDEMUN’s vision; and in case of disrespect, the right of reply will be in order, as well as a penalization to the Director in question.

f. Economic Factor of the Committee

It must be assumed by the Directors that the committee will always focus on the economic factors of the different Development Topics to be debated. Unlike traditional

Model UN debates, the World Bank will submerge itself into the economic factors behind policy and resolution-making in the UN, so this requires a greater investigation from participants to keep debate flow constant and fluid. General information the Director believes to know without research will prove to be not enough for the committee standards; however, the participants must not see this different focus of the committee as a burden or element to be afraid of, but rather an opportunity to learn and participate in unusual debates for a Model UN. In the following Section of the Background Guide, the Chair and Secretariat provide ways in which the Directors prepare for the event, always knowing that they will count on the help of their Sub-Director to understand and apply concepts during the session.

IV. Student preparation

Directors do not need to count on a character profile or position paper for the event. However, it is heavily recommended for them to conduct extensive research about the role of Directors in the World Bank and the functioning of this organization. Participants are recommended to firstly, understand the economic position each of the Nations that voted them into their board position has, including their history and credit with the bank, this in order to make sure to implement close to real solutions and reflect the way the Director would vote on matters in real life when talking about a specific country, even if they do not represent them.

Secondly, Directors are recommended to understand the full implications of the position they hold in the bank, its power limits, and its differences between the President and the Governors; as well as the different specifications of the projects they do. Similar to the previous idea, it is also recommended to research the annual reports and recent actions the bank has done to comprehend how the organization operates and how it gives out advice, support, loans, guarantees, and supervision of today's problems. These activities and fields of research provided are optional and with the intention of aiding the Executive Directors through debate.

V. Closing Remarks

The World Bank is an organization not very commonly heard of in the Model UN scene, nevertheless, it is a very interesting one that creates a great space for debating and creating an impact on the lives of millions of people. The committee is a challenge

to participants due to its format and topics revised, still, UDEMUN assures that Directors will properly take on it with great enthusiasm, motivation, and desire to learn and outdo themselves. The Chair and the Secretariat expect to see great collaboration in the forum, teamwork, exposition skills, well-structured arguments and counterarguments, and quick- thinking Directors. When in doubt, participants should always feel confident about asking the Chair and the Secretariat. This new committee, protocol, and format serves the purpose of being enjoyed completely by the forum and used as a platform to increase their leadership and investigation skills.

VI. Guiding Questions

1. What countries appointed or voted me into the Board of Directors? What is their general economic ideology and stance?

2. What kind of history do those countries have with the World Bank? Would they be considered to have good credit?

3. What are my powers and limitations as an Executive Director?

4. What recent projects has the World Bank funded or supported?

5. In order to be funded or supported, what changes or requirements does a nation need to implement?

6. How are typical UN resolutions Funded?

VII. Bibliography

Corporate Secretariat. (2020). Executive Directors and Alternates. Retrieved on October 12, 2020, from http://pubdocs.worldbank.org/en/241041541103873167/BankExecutiveDirectors.pdf

IBRD. (2020). International Bank for Reconstruction and Development. Retrieved on October 10, 2020, from https://www.worldbank.org/en/who-we-are/ibrd

International Center for Settlement of Investment Disputes. (2020). About ICSID. Retrieved on October 11, 2020, from https://icsid.worldbank.org/about

International Development Association. (2020). What Is IDA? Retrieved on October 10, 2020, from https://ida.worldbank.org/about/what-is-ida

International Finance Corporation. (n.d.). International Finance Corporation. Retrieved on October 10, 2020, from https://www.ifc.org/wps/wcm/connect/corp_ext_content/ifc_external_corporate_site/ho me

Multilateral Investment Guarantee Agency. (n.d.). About Us. Retrieved October 19, 2020, from https://www.miga.org/about-us

UK Trade & Investment. (2014). The World Bank Aid-Funded Business Factfile. [PDF] Retrieved on October 9, 2020.

World Bank. (2020). About David R. Malpass. Retrieved on October 12, 2020, from https://president.worldbankgroup.org/

World Bank. (2020). Boards of Directors. Retrieved on October 11, 2020, from https://www.worldbank.org/en/about/leadership/directors

World Bank. (2020). Boards of Governors. Retrieved on October 11, 2020, from https://www.worldbank.org/en/about/leadership/governors

World Bank. (2020). History. Retrieved on October 12, 2020, from https://www.worldbank.org/en/about/history

World Bank. (2020). Partners. Retrieved on October 12, 2020, from https://www.worldbank.org/en/about/partners

World Bank. (2020). Projects By Theme. Retrieved on October 13, 2020, from https://projects.worldbank.org/en/projects-operations/project-theme?lang=en

World Bank. (2020). What We Do. Retrieved on October 11, 2020, from https://www.worldbank.org/en/about/what-we-do