Robert McNamara, who served as secretary of Defense under presidents Kennedy and Johnson, has been president of the World Bank since 1968. He recently announced that he will retire next summer -- reportedly in order to give President Carter time to choose his own appointement to the bank presidency before the election.
Although in theory the bank president is chosen by the executive board, in practice the board supports the candidate of the U.S. president. One of McNamara's vice presidents, American Hollis Chenery, is expected to resign a few months after his boss. Chenery is head of the Development Policy Staff in the bank, which in some ways McNamara uses like a secretariat on policy matters, and which also does the bulk of the bank's research and policy planning.
The new president could chanage the emphasis of the bank considerably. McNamara recently has been advocating development projects aimed at helping the poorest, in particular the rural poor, in the bank's debtor countries.
There are now 135 members of the International Bank for Reconstruction and Development, the official title of the main part of the World Bank. Each of them had a member on the board of governors, which meets annually. It has three affiliates -- International Development Association (IDA), International Finance CORP. (IFC) and the nonfinancial International Center for the Settlement of Investment Disputes (ICSID).
The first was set up in 1960 to lend money to the poorest developing countries for the same sorts of projects as the bank, but on easier terms, thus saddling the borrowing countries with a lighter burden of debt repayment. Whereas the bank finances itself out of the money it makes on its loans, IDA lendiang is subsidized by the rich countries.
The IFC works with the private sector in developing countries rather than with governments.
As its name suggests, the ICSID is supposed to help reconcile disputes between member states and foreign private investors which may arise when countries nationalize foreign companies' assets in their countries.
The bank and IDA made loan commitments totaling $11.5 billion went to rural development projects, and the rest to industrial projects, including $2.8 billion for energy development.
Although the bank supported 144 projects in 48 developing countries, while IDA put up money to help finance 103 projects in 40 countries.
The bank's capital is made up of members' subscriptions, which are detemined by their economic and financial strength. The United States is the largest shareholder, with just under one-quarter of the total voting power.
The bank borrows substantial sums on international capital markets -- where it has an AAA rating -- and then lends the money, mostly earmarked for specific projects, to governments. It can boast that it never has lost a dollar on a loan -- and makes money on its business. The last thing any borrowing country wants to do is default on a World Bank loan.
Whereas IDA money may be repayable over 50 years, with a 10-year grace period when no interest is being paid, World Bank loans are for up to 20 years, with a five-year grace period. The bank has an executive board, similar to that of the IMF, with 20 members representing the 135 countries. The top five shareholders -- the United States, Britain, Japan, Germany and France -- have their own seats on the board, while the rest are elected by groups of countries. Three of the bankhs executive directors are also on the fund board.
McNamara oftem presents staff papers to the board; he is its chairman as well as head of the staff. He has a reputation for being an authoritarion boss, and for running the bank in a highly centralized way.
He has two senior vice presidents, American Ernest Stern, who is in charge of operations and to whom all six of the regional vice presidents report, and Moeen A. Qureshi from Pakistan, who is also treasurer. Five other vice presidents report to McNamara.
The bank is beginning to make loans for government economic programs rather than just for individual projects.