Page 258 - International Marketing

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260 International Marketing BRILLIANT'S

3. Interference: Certain conditions are im-
posed at the time of providing the loan, such as Criticisms of World
reduction in tariff, changes in domestic budget, Bank
interference in economic planning, management 1. Inadequate finance
of public enterprises, etc. Thus, this promotes 2. High rate of interest
unnecessary interference in the domestic affairs 3. Interference
of the loan receiving country. 4. Discrimination
4. Discrimination: The World Bank treats 5. Inadequate loan
rich and poor countries differently. It is more in- policy
clined towards, European countries. The finan- 6. Repayment in
cial assistance provided to the developing and foreign currencies
under-developed countries is also less in com-
parison to developed ones. Thus, it has not been much successful in
eradicating poverty from poor countries.
5. Inadequate loan policy: The bank has rigid loan policy. It takes
long time to receive loan from it. The repaying capacity of under-developed
countries is not much and they need, sufficient time for that. The bank
lays more stress on the repaying capacity of the borrowing country.
6. Repayment in foreign currencies: The bank has put a condition
in front of the country which is borrowing loan, i.e., they had to repay the
amount of loan in foreign currency only. This condition is hard to be ful-
filled by the developing and under-developed countries.
India and World Bank
India has been a founder member of World Bank along with Interna-
tional monetary Fund. India is one of those 44 countries who signed the
initial draft for the establishment of the World Bank. The benefits that India
has derived out of the membership of the World Bank are as follows:
1. Specific Loans: World Bank has provided many loans to India for its
development projects. In the year 2008-09, World Bank's lending to India
was US $ 2.2 billion. India is the largest borrower of the World Bank. India
was borrowed around US $ 73.9 billion from the World Bank till June 2009.
The various development projects to which the loans are sanctioned
are Railways, Power projects, Irrigation projects, Purchase of aircrafts,
Port development, Thermal power projects, Coal industry, Telecommuni-
cations, Water supply and sanitation, Road construction, Cement indus-
try, Electronic industry, etc.
2. General Loan: India has obtained facilities for general loans from
the World Bank. General loans are those loans which can be utilized in
any field, as per our own discretion.