Consider the following statements in respect of the International Bank for Reconstruction and Development (IBRD) :

I. It provides loans and guarantees to middle income countries.
II. It works single-handedly to help developing countries to reduce poverty.
III. It was established to help Europe rebuild after the World War II.

Which of the statements given above are correct?

(a) I and II only
(b) II and III only
(c) I and III only
(d) I, II and III

The correct answer is (c) I and III only.

Explanation

Statement I: Correct. This is the primary function of the IBRD today. It is the main lending arm of the World Bank Group, and it provides financial products, including loans, guarantees, and risk management tools, to middle-income and creditworthy low-income countries.
Statement II: Incorrect. The IBRD does not work “single-handedly.” It is just one of five institutions that make up the World Bank Group. Its sister organization, the International Development Association (IDA), is the one that specifically helps the world’s poorest countries. The IBRD also works in close partnership with the IMF, regional development banks, and national governments.
Statement III: Correct. This was the IBRD’s original purpose. Its full name is the International Bank for Reconstruction and Development. It was established at the Bretton Woods Conference in 1944 with the primary initial goal of financing the reconstruction of European nations devastated by World War II. Its mission later shifted from “reconstruction” to global “development.”

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The World Bank Group vs. “The World Bank”

This is a common point of confusion. The “World Bank Group” is a family of five international organizations. “The World Bank” specifically refers to the first two of these:

The International Bank for Reconstruction and Development (IBRD): (The subject of this question). Lends to middle-income countries.
The International Development Association (IDA): Provides interest-free loans (called “credits”) and grants to the world’s poorest countries.
The International Finance Corporation (IFC): Focuses on the private sector, investing in and advising private companies in developing countries.
The Multilateral Investment Guarantee Agency (MIGA): Provides political risk insurance (guarantees) to investors and lenders.
The International Centre for Settlement of Investment Disputes (ICSID): Provides a forum for resolving disputes between foreign investors and national governments.

The Bretton Woods “Twins”

The IBRD was created in 1944 at the Bretton Woods Conference alongside its “twin” institution, the International Monetary Fund (IMF). They were designed to work together:

IBRD: Provides long-term loans for (at first) reconstruction and (later) development projects (e.g., building roads, dams, schools).
IMF: Provides short-term loans to help countries with financial crises, stabilize their currencies, and fix balance of payments problems.