Article Summary Essay Example | Topics and Well Written Essays - 750 words

Article Summary - Essay Example The bank not just possesses the financial might but also has a brilliant team of experts who have defined bank’s policies from time to time. Nobel laureate like Joseph Stiglit and prominent economists like Lawrence Summers have added to the intellectual capital of the bank. In spite of the major role played by the bank in global development, it’s financial might and the intellectual assets; the bank has been criticized by the Right wing as well as the Left wing for it’s functioning and this criticism is aimed at not just restricting the activities of the bank but has practically challenged the very existence of the bank. Revenue model of the bank involves selling bonds to investors in rich countries and receiving grants for raising the capital. While lending and soft lending to developing and underdeveloped countries complete the revenue model. In 1996, the bank acknowledged that some of the parts of soft lending were unrecoverable. Left wing wanted these debts to be written off by converting them to grants. Twice, in 1996 and 1999 the bank has ceded to these demands and partly written off the loans. However, there is another demand for completely writing off loans of 33 Highly Indebted Poor Countries (HIPCS). It is notable that some countries like Philippines and China have achieved growth from these soft loans and are yet to repay those loans. Writing-off such loans would mean big loss to the bank and reduced resources for future lending. In the past, bad debts of the World Bank had been compensated by the aid from rich countries. Britain still favors the same model. However, the US wants all the debts to be converted into grants. Under the US pressure, the soft loan fund is being converted into grant fund since 2003 and it is forecasted that by 2035, this fund will be reduced to just 10% of its present size. With no new support coming from the rich countries, this