INTRODUCTION

International financial institutions, or IFIs, refers to financial institutions that have

been established (or chartered) by more than one country, and hence are subjects of
international law. Their owners or shareholders are generally national governments,
although other international institutions and other organisations occasionally figure as
shareholders. The most prominent IFIs are creations of multiple nations, although some
bilateral financial institutions (created by two countries) exist and are technically IFIs.
Many of these are multilateral development banks.
The best-known IFIs are the World Bank, the IMF, and the regional development banks.
Some of the IFIs are considered UN agencies.
International financial institutions (IFIs)--such as the World Bank (WB) and regional
multilateral development banks (MDBs), the International Monetary Fund (IMF) and
World Trade Organization (WTO)--are among the most powerful institutions in the world
today.
In general, the stated purpose of these institutions is to develop rules to govern global
trade and investment and provide policy advice and financial support (e.g. loans) to
enable governments and corporations to meet national development objectives. In
actuality, the organizations function to advance the interests of the wealthier nations and
the multinational corporations that stand to profit the most from neoliberal trade
arrangements and from the new global economic order. They do so by promoting a vision
of economic development characterized by hyper-reliance on unregulated markets (while
ironically leaving untouched the growing consolidation of industry players). Together
these institutions exert enormous influence over national and international approaches to
rural development and the management of natural and agricultural resources.
Lending institutions such as the World Bank and the regional development banks provide
loans, frequently in exchange for specified economic policy "reforms" to be undertaken
or adhered to by the borrower country. These institutions maintain intense pressure on
borrower countries to adopt policies of "free" (unregulated) trade and macroeconomic
structural adjustments that prioritize foreign investment, hard currency earnings and, in
recent years, the privatization of social services and public goods. Forced by loan
conditionalities to cut domestic spending, most governments sacrifice the social,
economic and environmental programs that are vital to safeguarding the livelihoods of
millions of poor farmers, fishers and rural communities the world over.
For decades, civil society groups and movements have condemned the IFIs for the
devastating effects of their policies and practices. In recent years, popular protests have
swelled into a global movement challenging the legitimacy of the IFIs, and putting these
institutions on the defensive. New partnerships and coalitions between Southern and
Northern movements and organizations and across issues and sectors of society are
forming and will be required in order to successfully expose and challenge the systemic
and deep-rooted problems of global governance today.
BRIEF HISTORY OF IFIs
The history of financial institutions must be differentiated from economic history and
history of money. In Europe, it may have started with the first commodity exchange, the
Bruges Bourse in 1309 and the first financiers and banks in the 1400–1600s in central
and western Europe. The first global financiers the Fuggers (1487) in Germany; the first
stock company in England (Russia Company 1553); the first foreign exchange market
(The Royal Exchange 1566, England); the first stock exchange (the Amsterdam Stock
Exchange 1602).
Milestones in the history of financial institutions are the Gold Standard (1871–1932), the
founding of International Monetary Fund (IMF), World Bank at Bretton Woods, and the
abolishment of fixed exchange rates in 1973.
The best-known IFIs were established after World War II to assist in the reconstruction of
Europe and provide mechanisms for international cooperation in managing the global
financial system. They include the World Bank, the IMF, the International Finance
Corporation, and other members of the World Bank Group.

Regional development banks

The regional development banks consist of several regional institutions that have
functions similar to the World Bank group's activities, but with particular focus on a
specific region. Shareholders usually consist of the regional countries plus the major
donor countries. The best-known of these regional banks cover regions that roughly
correspond to United Nations regional groupings, including the Inter-American
Development Bank (which works in the Americas, but primarily for development in
Latin America and the Caribbean); the Asian Development Bank; the African
Development Bank; and the European Bank for Reconstruction and Development.

Bilateral development banks

Bilateral development banks are financial institutions set up by individual countries to

finance development projects in developing countries and emerging markets. Examples
include the Netherlands Development Finance Company FMO and the German
Development Bank DEG.

Other regional financial institutions

Several regional groupings of countries have established international financial

institutions to finance various projects or activities in areas of mutual interest. The largest

and most important of these is the European Investment Bank, an institution established
by the members of the European Union. Other examples include the Black Sea
Development Bank, the International Investment Bank (established by the countries of
the former Soviet Union and Eastern Europe), the Islamic Development Bank and the
Nordic Investment Bank.

United Nations

The United Nations (UN) is an international organization that describes itself as a "global
association of governments facilitating co-operation in international law, international
security, economic development, and social equity"; It is the most prominent
international institution. Many of the legal institutions follow the same organizational
structure as the UN.

Perspectives
There are three primary approaches to viewing and understanding the global financial
system.

The liberal view holds that the exchange of currencies should be determined not by state
institutions but instead individual players at a market level. This view has been labelled
as the Washington Consensus. This view is challenged by a social democratic front which
advocates the tempering of market mechanisms, and instituting economic safeguards in
an attempt to ensure financial stability and redistribution. Examples include slowing
down the rate of financial transactions, or enforcing regulations on the behaviour of
private firms. Outside of this contention of authority and the individual, neoMarxists are
highly critical of the modern financial system in that it promotes inequality between state
players, particularly holding the view that the political North abuse the financial system
to exercise control of developing countries' economies.

TYPES OF INTERNATIONAL INSTITUTIONS

Economic Institutions

 The World Bank headquarters in Washington, D.C.

 Asian Development Bank
 African Development Bank
 Inter-American Development Bank
 International Monetary Fund
 World Bank
 World Trade Organization
 International legal bodies

Human rights Institutions

 European Court of Human Rights

 Human Rights Committee
 Inter-American Court of Human Rights
 International Criminal Court
 International Criminal Tribunal for Rwanda
 International Criminal Tribunal for the Former Yugoslavia
 United Nations Human Rights Council

Legal Institutions

 African Court of Justice

 European Court of Justice
 International Court of Justice
 International Tribunal for the Law of the Sea
 [edit] Regional security arrangements
 Main article: Collective Security
 NATO E-3A flying with USAF F-16s in a NATO exercise.
 ASEAN
 Arab League
 CIS
 European Union
 CSCAP
 GUAM
 Maritime security regime
 NATO
What are International Financial Institutions (IFIs) and what roles do
they play?

IFIs are public investment and development institutions owned by their member
governments that provide funding, technical assistance and policy advice, research and
other non-financial support to governments in “developing” and “transition” countries.
Many IFIs also provide financing to companies investing in the developing world. The
most well-known IFIs are the World Bank and International Monetary Fund (IMF). They
are generally considered to take on three broad roles:

Lenders and Investors

IFIs, of which the World Bank and IMF are the best known, are the largest source of
development finance in the world, lending between US$30 and $50 billion to low- and
middle-income countries each year. These IFIs take on different roles. Some provide
loans and grants to governments, for specific projects or for policy reforms and technical
assistance. Others invest in private businesses or provide guarantees (insurance) for
private sector projects
markets.

Knowledge Brokers

IFIs, and in particular the World Bank, are also a dominant source of development
“knowledge” and policies, and de-facto standard-setters for international finance and
investment. Because of their roles as lenders and as knowledge brokers, IFIs wield
significant influence over policy-making in many countries across Latin America, Asia,
Africa, the Middle East, and Central and Eastern Europe

Gatekeepers

IFIs influence the overall amount and composition of development financing available
to countries, directly and indirectly. Research and analysis from the World Bank and
International Monetary Fund (IMF) about a country’s economic policies often affect how
much other donors are willing to contribute or how much businesses invest there. The
role of the Bank and Fund as “gatekeepers” for international finance and credit is much
stronger for aid-dependent countries without credit ratings than for countries that have
access to international capital markets.
 IFIs in 21st CENTURY

Transforming Global Scenario

Since the World Bank and the International Monetary Fund (IMF) were launched at
Bretton Woods more than 55 years ago, and the regional development banks in
subsequent decades, the global economy has undergone transformation in several
important respects1. Two fundamental transformations have taken place in the role of the
international financial institutions (IFIs); both of which are of high significance for the
global financial architecture. These changes are: First, globalisation has progressed a
great deal over the preceding quarter century. This implies that foreign trade and private
capital now play a far greater role in economic development than ever before. Second, the
poor performance of statist models of development—so popular in the past—led to a re-
examination of the role of the state, which motivated a strong shift towards private,
market-based approaches. As a result of these transformations, the private sector and
private international finance have become prime agents of economic development.

A world of private capital flows

World financial markets have witnessed profound changes over the last few decades.
This has included the strong growth of private capital flows to developing countries. Net
long-term private flows rose from $ 48 billion in 1980 (58 per cent of total long-term
flows) to $ 239 billion in 1999 (82.6 per cent of total long-term flows). While 2001 was a
turbulent year for the global economy and the global financial markets, long-term private
capital flows to developing economies were $160 billion (81.5 percent of the total long-
term flows). The share of net official flows has correspondingly declined, both in
absolute and relative terms. They steadily declined and in 2001, they were measured at a
paltry $36.5 billion.2 If capital flight were taken into account net private flows would,
however, be smaller. Private capital flows contribute not only to filling the savings-
investment gap in developing countries but also reducing dependencies by diversifying
funding sources and, especially in the form of strategic investment. Private capital flows
have played a more direct role by transferring technologies, market-oriented behaviour,
management skills and distribution channels. Gross flows are therefore as important as
net flows in assessing the impact of private capital flows on recipient economies
The role of IFIs in the changing market place
In general terms the objectives of IFIs have always been poverty alleviation, economic
growth and protection of the environment.12 Traditionally, IFIs have promoted these
objectives by working with governments and government agencies. This reflects the ideas
and the capital structures which prevailed at the time of their creation. Broadly speaking,
the IFIs have pursued these objectives with loans for public sector projects or
programmes, technical assistance, and policy-based lending. IFI loans have generally
been made to,
or guaranteed by, the borrowing states.
The EBRD is different from the other IFIs. Its later foundation and the special
circumstances of this foundation pointed to a rather specific objective, namely
to foster the transition of its countries of operations to open market economies. The
founders took it that the transition would indeed raise living standards over time as well
as expanding basic choices and rights of the population.

IFIs as participants in the process of private sector development

Partnership with the private sector implies that IFIs must, in important respects, act and
think like the private sector and subject themselves to the shifting opportunities and
constraints of the market. The challenge, which we discuss in the next section, is to
combine such an approach with the active pursuit of IFI public policy objectives. But it is
clear that creativity and flexibility are of the essence in responding to market needs and
IFIs will have to develop their expertise in a number of aspects of banking which have, so
far, been less familiar to them.
There are also a host of other practical implications of partnerships between IFIs and the
private sector that will need to be considered. It is likely, for instance, that procedures of
most IFIs would have to adapt to the flexibility and confidentiality required of private
sector operations. This does not always sit easily with public sector accountability. A
move away from sovereign guaranteed lending will also call for a new risk culture and
the know-how required for the analysis of commercial risk
 World BANK
World Bank is a term used to describe an international financial institution that provides
leveraged loans[2] to developing countries for capital programs. The World Bank has a
stated goal of reducing poverty.

The World Bank differs from the World Bank Group, in that the World Bank comprises
only two institutions: the International Bank for Reconstruction and Development
(IBRD) and the International Development Association (IDA), whereas the latter
incorporates these two in addition to three more:[3] International Finance Corporation
(IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for
Settlement of Investment Disputes (ICSID).

HISTORY
The World Bank is one of five institutions created at the Bretton Woods Conference in
1944. The International Monetary Fund, a related institution, is the second. Delegates
from many countries attended the Bretton Woods Conference. The most powerful
countries in attendance were the United States and United Kingdom which dominated
negotiations.[4]

Although both are based in Washington, D.C., the World Bank is by custom headed by
an American, while the IMF is led by a European.

1945–1968

From its conception until 1967 the bank undertook a relatively low level of lending.
Fiscal conservatism and careful screening of loan applications was common. Bank staff
attempted to balance the priorities of providing loans for reconstruction and development
with the need to instill confidence in the bank.[5]

Bank president John McCloy selected France to be the first recipient of World Bank aid;
two other applications from Poland and Chile were rejected. The loan was for $987
million, half the amount requested and came with strict conditions. Staff from the World
Bank monitored the use of the funds, ensuring that the French government would present
a balanced budget and give priority of debt repayment to the World Bank over other
governments. The United States State Department told the French government that
communist elements within the Cabinet needed to be removed. The French Government
complied with this diktat and removed the Communist coalition government. Within
hours the loan to France was approved.
The Marshall Plan of 1947 caused lending by the bank to change as many European
countries received aid that competed with World Bank loans. Emphasis was shifted to
non-European countries and until 1968, loans were earmarked for projects that would
enable a borrower country to repay loans (such projects as ports, highway systems, and
power plants).

1968–1980

From 1968 to 1980 the bank concentrated on meeting the basic needs of people in the
developing world. The size and number of loans to borrowers was greatly increased as
loan targets expanded from infrastructure into social services and other sectors.

These changes can be attributed to Robert McNamara who was appointed to the
presidency in 1968 by Lyndon B. Johnson. McNamara imported a technocratic
managerial style to the Bank that he had used as United States Secretary of Defense and
President of the Ford Motor Company. McNamara shifted bank policy toward measures
such as building schools and hospitals, improving literacy and agricultural reform.
McNamara created a new system of gathering information from potential borrower
nations that enabled the bank to process loan applications much faster. To finance more
loans, McNamara told bank treasurer Eugene Rotberg to seek out new sources of capital
outside of the northern banks that had been the primary sources of bank funding. Rotberg
used the global bond market to increase the capital available to the bank. One
consequence of the period of poverty alleviation lending was the rapid rise of third world
debt. From 1976 to 1980 developing world debt rose at an average annual rate of 20%.

1980–1989

In 1980 A.W. Clausen replaced McNamara after being nominated by US President

Jimmy Carter. Clausen replaced a large number of bank staffers from the McNamara era
and instituted a new ideological focus in the bank. The replacement of Chief Economist
Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank.
Krueger was known for her criticism of development funding as well as third world
governments as rent-seeking states.

Lending to service third world debt marked the period of 1980–1989. Structural
adjustment policies aimed at streamlining the economies of developing nations (at the
expense of health and social services) were also a large part of World Bank policy during
this period. UNICEF reported in the late 1980s that the structural adjustment programs of
the World Bank were responsible for the "reduced health, nutritional and educational
levels for tens of millions of children in Asia, Latin America, and Africa".[12]

1989–present

From 1989 World Bank policy changed in response to criticism from many groups.
Environmental groups and NGOs were incorporated in the lending of the bank in order to
mitigate the effects of the past that prompted such harsh criticism.[13] Bank projects
"include" green concerns.

Key Factors of World Bank

The World Bank sees the five key factors necessary for economic growth and the creation
of an enabling business environment as:

1. Build capacity: Strengthening governments and educating government officials.

2. Infrastructure creation: implementation of legal and judicial systems for the
encouragement of business, the protection of individual and property rights and
the honoring of contracts.
3. Development of Financial Systems: the establishment of strong systems capable
of supporting endeavors from micro credit to the financing of larger corporate
ventures.
4. Combating corruption: Support for countries' efforts at eradicating corruption.
5. Research, Consultancy and Training: the World Bank provides platform for
research on development issues, consultancy and conduct training programs (web
based, on line, tele-/video conferencing and class room based) open for those who
are interested from academia, students, government and non-governmental
organization (NGO) officers etc.

The Bank obtains funding for its operations primarily through the IBRD's sale of AAA-
rated bonds in the world's financial markets. The IBRD's income is generated from its
lending activities, with its borrowings leveraging its own paid-in capital, plus the
investment of its "float". The IDA obtains the majority of its funds from forty donor
countries who replenish the bank's funds every three years, and from loan repayments,
which then become available for re-lending.
Criteria

Many achievements have brought the MDG targets for 2015 within reach in some cases.
For the goals to be realized, six criteria must be met: stronger and more inclusive growth
in Africa and fragile states, more effort in health and education, integration of the
development and environment agendas, more and better aid, movement on trade
negotiations, and stronger and more focused support from multilateral institutions like the
World Bank.

1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the
proportion of people living in extreme poverty fell from almost a third to less than
a fifth. Although results vary widely within regions and countries, the trend
indicates that the world as a whole can meet the goal of halving the percentage of
people living in poverty. Africa's poverty, however, is expected to rise, and most
of the 36 countries where 90% of the world's undernourished children live are in
Africa. Less than a quarter of countries are on track for achieving the goal of
halving under-nutrition.
2. Achieve Universal Primary Education: The number of children in school in
developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72
million children of primary school age, 57% of them girls, were not being
educated as of 2005.
3. Promote Gender Equality and Empower Women: The tide is turning slowly
for women in the labor market, yet far more women than men- worldwide more
than 60% - are contributing but unpaid family workers. The World Bank Group
Gender Action Plan was created to advance women's economic empowerment and
promote shared growth.
4. Reduce Child Mortality: There is some improvement in survival rates globally;
accelerated improvements are needed most urgently in South Asia and Sub-
Saharan Africa. An estimated 10 million-plus children under five died in 2005;
most of their deaths were from preventable causes.
5. Improve Maternal Health: Almost all of the half million women who die during
pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are
numerous causes of maternal death that require a variety of health care
interventions to be made widely accessible.
6. Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new
HIV infections and AIDS deaths have fallen, but the number of people living with
HIV continues to grow. In the eight worst-hit southern African countries,
prevalence is above 15 percent. Treatment has increased globally, but still meets
only 30 percent of needs (with wide variations across countries). AIDS remains
the leading cause of death in Sub-Saharan Africa (1.6 million deaths in 2007).
There are 300 to 500 million cases of malaria each year, leading to more than 1
million deaths. Nearly all the cases and more than 95 percent of the deaths occur
in Sub-Saharan Africa.
 7. Ensure Environmental Sustainability: Deforestation remains a critical problem,
particularly in regions of biological diversity, which continues to decline.
Greenhouse gas emissions are increasing faster than energy technology
advancement.
8. Develop a Global Partnership for Development: Donor countries have renewed
their commitment. Donors have to fulfill their pledges to match the current rate of
core program development. Emphasis is being placed on the Bank Group's
collaboration with multilateral and local partners to quicken progress toward the
MDGs' realization

Voting power

In 2010, voting powers at the World Bank were revised to increase the voice of
developing countries, notably China. The countries with most voting power are now the
United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United
Kingdom (3.75%), and France (3.75%). Under the changes, known as 'Voice Reform -
Phase 2', other countries that saw significant gains included Brazil, India, South Korea
and Mexico. Most developed countries' voting power was reduced. Russia's voting power
was unchanged.

POVERTY REDUCTION STRATIGIES

For the poorest developing countries in the world, the bank's assistance plans are based
on poverty reduction strategies; by combining a cross-section of local groups with an
extensive analysis of the country's financial and economic situation the World Bank
develops a strategy pertaining uniquely to the country in question. The government then
identifies the country's priorities and targets for the reduction of poverty, and the World
Bank aligns its aid efforts correspondingly.

Forty-five countries pledged US$25.1 billion in "aid for the world's poorest countries",
aid that goes to the World Bank International Development Association (IDA) which
distributes the gifts to eighty poorer countries. While wealthier nations sometimes fund
their own aid projects, including those for diseases, and although IDA is the recipient of
criticism, Robert B. Zoellick, the president of the World Bank, said when the gifts were
announced on December 15, 2007, that IDA money "is the core funding that the poorest
developing countries rely on"

Clean Technology Fund management

The World Bank has been assigned temporary management responsibility of the Clean
Technology Fund (CTF), focused on making renewable energy cost-competitive with
coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen
climate change conference in December, 2009, because of the Bank's continued
investment in coal-fired power plants
Clean Air Initiative

Clean Air Initiative (CAI) [21] is a World Bank initiative to advance innovative ways to
improve air quality in cities through partnerships in selected regions of the world by
sharing knowledge and experiences. It includes electric vehicles.

Country assistance strategies

As a guideline to the World Bank's operations in any particular country, a Country

Assistance Strategy is produced, in cooperation with the local government and any
interested stakeholders and may rely on analytical work performed by the Bank or other
parties

Criticism

The World Bank has long been criticized by non-governmental organizations, such as the
indigenous rights group Survival International, and academics, including its former Chief
Economist Joseph Stiglitz who is equally critical of the International Monetary Fund, the
US Treasury Department, US and other developed country trade negotiators.[22] Critics
argue that the so-called free market reform policies which the Bank advocates are often
harmful to economic development if implemented badly, too quickly ("shock therapy"),
in the wrong sequence or in weak, uncompetitive economies.

Knowledge production

The World Bank has been criticised for the manner in which it engages in "the
production, accumulation, circulation and functioning" of knowledge. The Bank's
production of knowledge has become integral to the funding and justification of large
capital projects. The Bank relies on "a growing network of translocal scientists,
technocrats, NGOs, and empowered citizens to help generate data and construct
discursive strategies".[40] Its capacity to produce authoritative knowledge is a response to
intense scrutiny of Bank projects resulting from the successes of growing anti-Bank and
alternative-development movements.[41] "Development has relied exclusively on one
knowledge system, namely, the modern Western one. The dominance of this knowledge
system has dictated the marginalization and disqualification of non-Western knowledge
systems".[42] It has been remarked that in these alternative knowledge systems, researchers
and activists might find alternative rationales to guide interventionist action away from
Western (Bank-produced) ways of thinking. Knowledge production has become an asset
to the Bank, and "it is generated and used in highly strategic ways"[41] to provide
justifications for development.
Structural adjustment

The effect of structural adjustment policies on poor countries has been one of the most
significant criticisms of the World Bank. The 1979 energy crisis plunged many countries
into economic crises.[43] The World Bank responded with structural adjustment loans
which distributed aid to struggling countries while enforcing policy changes in order to
reduce inflation and fiscal imbalance. Some of these policies included encouraging
production, investment and labour-intensive manufacturing, changing real exchange rates
and altering the distribution of government resources.[44] Structural adjustment policies
were most effective in countries with an institutional framework that allowed these
policies to be implemented easily.[44] For some countries, particularly in Sub-Saharan
Africa, economic growth regressed and inflation worsened.[44] The alleviation of poverty
was not a goal of structural adjustment loans, and the circumstances of the poor often
worsened, due to a reduction in social spending and an increase in the price of food, as
subsidies were lifted.[44]

By the late 1980s, international organizations began to admit that structural adjustment
policies were worsening life for the world's poor. The World Bank changed structural
adjustment loans, allowing for social spending to be maintained, and encouraging a
slower change to policies such as transfer of subsidies and price rises.[45] In 1999, the
World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to
replace structural adjustment loans.[46] The Poverty Reduction Strategy Paper approach
has been interpreted as an extension of structural adjustment policies as it continues to
reinforce and legitimize global inequities.[47] Neither approach has addressed the inherent
flaws within the global economy that contribute to economic and social inequities within
developing countries.[48] By reinforcing the relationship between lending and client states,
many believe that the World Bank has usurped indebted countries' power to determine
their own economic policy.[49]

Water privatization

Sociologist Michael Goldman has argued that "Industry analysts predict that private
water will soon be a capitalized market as precious, and as war-provoking, as oil".[50]
Goldman says "These days, an indebted country cannot borrow capital from the World
Bank or IMF without a domestic water privatization policy as a precondition".[50] The
Bank is utilizing "the 'Washington Consensus' model of "development" to promote water
privatization. Following this model, the World Bank is forcing many countries to
commodify their water resources, rather than using their expertise in the public sector to
acknowledge water as a universal human right and an essential public service".[50] The
push for water privatization development plays upon "the shocking tragedy that much of
the world lacks affordable clean water". This image creates "new opportunities in
development, though it may have little to do with ultimately quenching" the needs of
impoverished countries. "The problem of water scarcity for the world's poor has been
analyzed by the World Bank as one in which the public sector has failed to deliver, and
has therefore prevented development from "taking off", and the economy from
modernizing. If the state cannot deliver something as basic as water and sanitation, the
argument goes, it is a strong indication of a general failure of public-sector capacity".[50]
However, "with the sale or lease of a public good comes more than simply a privatized
service; alongside it comes a wide set of postcolonial institutional forces that intervene in
state-citizen relations and North-South dynamics".[51] One notable example is the
privatation of water forced upon Bolivians by the World Bank which led to multiple
protests including the 2000 Cochabamba protests.

Sovereign immunity

Despite claiming goals of "good governance and anti-corruption″[52] the World Bank
requires sovereign immunity from countries it deals with.[53][54][55][56][57] Sovereign
immunity waives a holder from all legal liability for their actions. It is proposed that this
immunity from responsibility is a "shield which [The World Bank] wants resort to, for
escaping accountability and security by the people."[53] As the United States has veto
power, it can prevent the World Bank from taking action against its interests.[53]

Environmental strategy

The World Bank's ongoing work to develop a strategy on climate change and
environmental threats has been criticized for (i) lacking of a proper overall vision and
purpose, (ii) having a limited focus on its own role in global and regional governance,
and (iii) having limited recognition of specific regional issues, e.g. issues of rights to food
and land, and sustainable land use. Critics have also commented that only 1% of the
World Bank's lending goes to the environmental sector, narrowly defined.[58]

Environmentalists are urging the Bank to stop worldwide support for the development of
coal plants and other large emitters of greenhouse gas and operations that are proven to
pollute or damage the environment. For instance, protesters in South Africa and abroad
have criticized the 2010 decision of the World Bank's approval for a $3.75 billion loan to
build the world's 4th largest coal-fired power plant in South Africa. The plant will greatly
increase the demand for coal mining and corresponding harmful environmental effects of
coal