Changes in the size of the World Bank’s operations refer to [originaltext] Th

The World Bank is one of the major channels through which the development aid is passed from the industrial west to the poor and developing nations of the world. Its scale of operations is vast, which is why its lending program exceeds 7 billion a year and its work force numbers about 4,500.
    In the last decade important changes have taken place in the size of the bank’s operations and in its emphasis of the lending policies. What immediately strikes anyone looking at the lending figures over the past ten years is the tremendous expansion in the bank’s loan program. This has increased from 1 billion to nearly 7 billion. The figure includes hard loans which are made at current rates of interest and soft loans which are allocated to poor countries at concessionary rates and usually channeled through the bank’s affiliate—the International Development Association.
    In deciding the emphasis of its lending policy, the bank has had to take into account the population explosion which is occurring in many poor countries of the world. It is a fact that the fertility rate of poor countries is often very high. This is one of the main reasons for these countries’ remaining poor. Unfortunately, wide-ranging contraception programs do not usually reduce this rate because there is a strong and deeply rooted tradition among people in these countries to have big families. What the Bank discovered was that there was a link between economic and social development on the one hand, and reduction of fertility rate on the other. Thus, by improving basic health service, by introducing better nutrition, by increasing literacy, and by promoting more even income distribution in a poor country, a lower and more acceptable fertility rate would be achieved. This advance in thinking persuaded the bank to change its overall lending strategy. While previously it had concentrated on the big infrastructure projects, such as dams, roads and bridges, it began to switch to projects which directly improve the basic services of a country. There was a shift, if you like, from building dams to digging waterholes to provide clean water.
    A second reason for the changes in the approach was that the bank had learned a bitter lesson from the project financed in the 1960s. Many of its major capital investments have scarcely touched the lives of the urban and rural poor. Nor had they created much employment. The projects did not have the trickle-down effect they had in industrialized countries. Instead, the huge dams, steel mills and so on were left as monuments to themselves. This redirection of its lending has meant that the bank has tended to support labor-intensive activities rather than capital-intensive ones both in rural and urban areas. There is a better chance in the first case that its funds will benefit the bottom 40% of a country’s population. The bank is also looking at ways of stimulating the growth of small businesses in many developing countries, since this would create employment opportunities for people with low incomes.
    Being such a big and obvious target, the bank has often come under fire. For example, its officials have been taken to task for using the Concord Supersonic Aircraft so frequently, about 500 times in one year. Also the large growth in the organization’s personnel has not pleased some critics. A more substantial criticism has concerned the bank’s policy of setting annual targets for lending to specified countries. This could lead to a deterioration in the quality of loans, some say. One former bank official has said, "rather than encourage growth for its own sake, the bank should begin to think of itself less as a foreign aid agency and more of a financial deal maker combining official with private resources for its specific purposes."
    Finally, some people maintain that the impact of the projects funded by the bank has been modest. When one looks around the world at regions or countries that have successfully transformed to industrial status, it seems that one should beware of overestimating the bank’s impact. Take Hong Kong as an example. Its changes have come about as a result of a trade offensive. The purpose has been to flood western markets with iow price goods made by capitalist methods of production. The example seems to indicate that some regions can prosper without the bank’s aid as well.