China gains power in World Bank

Meeting at World Bank headquarters in Washington D.C.

On Sunday the World Bank decided to increase China’s influence in the organization to about 4.42% of the voting power which is up significantly from the 2.78% it had thus far. This might not seem like a big increase and still might seem small since it’s less than 5%. However, it is a significant increase as it puts China in the third most influential position, only behind Japan with 6.84% and the United States with 15.85%.

The move gives not only China more say in how the World Bank operates, but by giving a developing nation a bigger role than most advanced nations, including Germany, Britain and France among others, it gives the other developing countries like Brazil, Russia and India more say as well. This has been a point of criticism about the World Bank in recent years.

This new order of power within the World Bank more accurately reflects the actual economic power in the world today. The U.S. has much more voting power in the World Bank because their economy is much larger and more crucial than all others. With almost 16% of the vote, this acts almost like a veto power for the U.S. which is how it should be as they are also the largest contributor to the World Bank.

The World Bank, and the IMF for that matter, are always being criticized by people who, for the most part are anti-business and have only a partial understanding of the organization and of how the world works. Yes, the World Bank has funded some projects than went poorly and have in some cases placed restrictive conditions on countries that may have hurt more than they helped. However, if you look at the entire body of work, the World Bank has done a lot more positive for its members than negative.

The fact is that like it or not, the World Bank and IMF are necessary lifelines for countries when they encounter extremely tough times that they cannot recover from alone. Although they are imperfect systems and sometimes make mistakes, they are the best the world currently has and therefore, should be looked upon with less hate with more accuracy in the criticism. That’s not to say that they should be given free reign, because that would be just as counter-productive. Large institutions like these need to be held accountable and a healthy level of criticism is useful, but the criticism needs to come from a constructive and factual place rather than the uneducated and hateful place they usually come from today.

It is a simple fact that the world would be worse off if the World Bank and IMF did not exist and for those that only talk about how bad these institutions are, please, provide a better solution that can realistically work and perhaps the world will take notice. So far, no one has been able to come up with a better idea to replace the World Bank and/or the IMF.