Development financial institution ( DFI ), also known as a Development bank , is a financial institution that provides risk capital for economic development projects on a non-commercial basis.
117-703: The International Development Association ( IDA ) (French: Association internationale de développement ) is a development finance institution which offers concessional loans and grants to the world's poorest developing countries . The IDA is a member of the World Bank Group and is headquartered in Washington, D.C. in the United States. It was established in 1960 to complement the existing International Bank for Reconstruction and Development by lending to developing countries which suffer from
234-703: A blend country ). The IDA is a unique part of the World Bank as it requires continuous replenishment of its resources. Member countries replenish its funds through contributions in addition to supplementary funds provided by the International Bank for Reconstruction and Development and the International Finance Corporation (IFC). Whereas the IBRD acquires most of its funds by raising capital on international financial markets,
351-407: A company that provides loans for projects that a government or nonprofit wants to encourage for non commercial reasons. They can be at a local, national or international level. DFIs include multilateral development banks , national development banks , bilateral development banks, microfinance institutions , community development financial institution and revolving loan funds . DFIs can play
468-804: A German rebuilding effort set forth by western European countries in 1948, the US, Britain and France spearheaded the establishment of the Federal Republic of Germany from the three Western zones of occupation in April 1949. The Soviet Union proclaimed its zone of occupation in Germany the German Democratic Republic that October. Media in the Eastern Bloc was an organ of the state , completely reliant on and subservient to
585-526: A comparatively generous gift to European nations. In the late 1940s and early 1950s, developing countries began calling for the United Nations (UN) to create a development agency that would offer technical support and concessional financing, with a particular desire that the agency adhere to other UN bodies' convention of each country having one vote as opposed to a weighted vote. However, the United States ultimately opposed proposals of that nature. As
702-586: A crisis arise that meets the mechanism's criteria. The replenishment rounds are typically agreed every three years . The eighteenth was finalised in December 2016, the nineteenth was being discussed in October 2019. Because African countries face some of the most severe poverty and underdevelopment , and because 39 of those countries are the IDA's poorest member states, the association allocates approximately half of
819-428: A crucial role in financing private and public sector investments in developing countries, in the form of higher risk loans, equity positions, and guarantees. DFIs often provide finance to the private sector for investments that promote development and to help companies to invest, especially in countries with various restrictions on the market. As of November 2020 , development banks and private finance had not reached
936-646: A general term, in his essay "You and the Atomic Bomb", published 19 October 1945 in the British newspaper Tribune . Contemplating a world living in the shadow of the threat of nuclear warfare , Orwell looked at James Burnham 's predictions of a polarized world, writing: Looking at the world as a whole, the drift for many decades has been not towards anarchy but towards the reimposition of slavery... James Burnham's theory has been much discussed, but few people have yet considered its ideological implications—that is,
1053-522: A major propaganda effort began in 1949 was Radio Free Europe/Radio Liberty , dedicated to bringing about the peaceful demise of the communist system in the Eastern Bloc. Radio Free Europe attempted to achieve these goals by serving as a surrogate home radio station, an alternative to the controlled and party-dominated domestic press in the Soviet Bloc. Radio Free Europe was a product of some of
1170-567: A need for the association to carefully examine its financial models and business operations to determine an appropriate strategy going forward. The center recommended that the World Bank leadership begin discussing the long-term future of the IDA. The IDA has 173 member countries which pay contributions every three years as replenishments of its capital. On 12 December 2008, Samoa joined UNIDO as its 173rd member. The IDA lends to 75 borrowing countries, over half of which (39) are in Africa. Membership in
1287-642: A neutral Germany to prevent West Germany's incorporation into NATO, but his attempts were cut short after he was executed several months later during a Soviet power struggle. The events led to the establishment of the Bundeswehr , the West German military, in 1955. In 1949, CCP Chairman Mao Zedong 's People's Liberation Army defeated Chiang Kai-shek 's United States-backed Kuomintang (KMT) Nationalist Government in China. The KMT-controlled territory
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#17327647465621404-675: A new war". On 6 September 1946, James F. Byrnes delivered a speech in Germany repudiating the Morgenthau Plan (a proposal to partition and de-industrialize post-war Germany) and warning the Soviets that the US intended to maintain a military presence in Europe indefinitely. As Byrnes stated a month later, "The nub of our program was to win the German people ... it was a battle between us and Russia over minds ..." In December,
1521-647: A plan envisioning an economically self-sufficient Germany, including a detailed accounting of the industrial plants, goods and infrastructure already taken by the Soviets. In June 1947, in accordance with the Truman Doctrine , the United States enacted the Marshall Plan , a pledge of economic assistance for all European countries willing to participate, including the Soviet Union. Under the plan, which President Harry S. Truman signed on 3 April 1948,
1638-629: A resource allocation index. It then prioritizes its lending to those countries which are indicated to be most promising in terms of favorable policies and aid effectiveness . The IDA adopted the Crisis Response Window in 2007 to enable the rapid provision of emergency financing in response to crises. The association adopted the Immediate Response Mechanism in 2011 to provide IDA borrowers with immediate access to withdraw undisbursed portions of their loans, should
1755-629: A secret 1950 document, the National Security Council proposed reinforcing pro-Western alliance systems and quadrupling spending on defense. Truman, under the influence of advisor Paul Nitze , saw containment as implying complete rollback of Soviet influence in all its forms. United States officials moved to expand this version of containment into Asia , Africa , and Latin America , in order to counter revolutionary nationalist movements, often led by communist parties financed by
1872-480: A source of intelligence. During the late 1970s and 1980s, the KGB perfected its use of espionage to sway and distort diplomacy. Active measures were "clandestine operations designed to further Soviet foreign policy goals," consisting of disinformation, forgeries, leaks to foreign media, and the channeling of aid to militant groups. Retired KGB Major General Oleg Kalugin , former head of Foreign Counter Intelligence for
1989-502: A time. In 1979, the toppling of pro-US governments in Iran and Nicaragua and a Soviet invasion of Afghanistan again raised fears of war. In the 1980s, the US provided support for anti-communist forces in Africa, Asia, and Latin America, and the leadership of the USSR changed with the rise of Mikhail Gorbachev , who expanded political freedoms in his country and the Eastern Bloc. This led to
2106-448: A total US$ 238 billion in loans and grants since its launch in 1960. Thirty-six of the association's borrowing countries have graduated from their eligibility for its concessional lending. However, nine of these countries have relapsed and have not re-graduated. During the 1940s and 1950s, low-income developing countries began to realize that they could no longer afford to borrow capital and needed more-favorable lending terms than offered by
2223-542: A unified and neutral Germany was undesirable, with Walter Bedell Smith telling General Eisenhower "in spite of our announced position, we really do not want nor intend to accept German unification on any terms that the Russians might agree to, even though they seem to meet most of our requirements." Shortly thereafter, Stalin instituted the Berlin Blockade (June 1948 – May 1949), one of the first major crises of
2340-629: Is evaluated by the Bank's Independent Evaluation Group . In 2009, the group identified weaknesses in the set of controls used to protect against fraud and corruption in projects supported by IDA lending. In 2011, the group recommended the Bank provide recognition and incentives to staff and management for implementing activities which implement the Paris Declaration on Aid Effectiveness principles of harmonization and alignment, promote greater use of sector-wide approaches to coordination, and explain
2457-520: Is governed by the World Bank's Board of Governors which meets annually and consists of one governor per member country (most often the country's finance minister or treasury secretary). The Board of Governors delegates most of its authority over daily matters such as lending and operations to the Board of Directors. The Board of Directors consists of 25 executive directors and is chaired by the President of
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#17327647465622574-701: Is necessary for executing a replenishment. The threshold was implemented with the aim to compel the United States to participate in replenishment rounds. Though countries intended for the triggers to hold the United States to its commitments, the threshold ultimately provided the United States a de facto veto power over replenishment and capital increase negotiations due to its ability to bring replenishment negotiations to an impasse by threatening to withhold support. The U.S. has used this influence to further its long-term foreign policy objectives and short-term political and economic goals by imposing conditionality on replenishment negotiations. The IDA lends to countries with
2691-774: Is so prohibitive that they cannot afford to borrow commercially or from the Bank's other programs. The IDA's stated aim is to assist the poorest nations in growing more quickly, equitably , and sustainably to reduce poverty. The IDA is the single largest provider of funds to economic and human development projects in the world's poorest nations. From 2000 to 2010, it financed projects which recruited and trained 3 million teachers, immunized 310 million children, funded $ 792 million in loans to 120,000 small and medium enterprises , built or restored 118,000 kilometers of paved roads, built or restored 1,600 bridges, and expanded access to improved water to 113 million people and improved sanitation facilities to 5.8 million people. The IDA has issued
2808-513: The Baltic to Trieste in the Adriatic ". A week later, on 13 March, Stalin responded vigorously to the speech, saying Churchill could be compared to Adolf Hitler insofar as he advocated the racial superiority of English-speaking nations so that they could satisfy their hunger for world domination, and that such a declaration was "a call for war on the USSR." The Soviet leader also dismissed
2925-859: The Berlin Wall to prevent the citizens of East Berlin from fleeing to West Berlin , at the time part of United States-allied West Germany . Major crises of this phase included the Berlin Blockade of 1948–1949, the Chinese Communist Revolution of 1945–1949, the Korean War of 1950–1953, the Hungarian Revolution of 1956 and the Suez Crisis of that same year, the Berlin Crisis of 1961 ,
3042-758: The Cuban Missile Crisis began after deployments of U.S. missiles in Europe and Soviet missiles in Cuba; it is widely considered the closest the Cold War came to escalating into full-scale nuclear war . Another major proxy conflict was the Vietnam War of 1955 to 1975; the Soviets solidified their domination of Eastern Europe with operations such as the Warsaw Pact invasion of Czechoslovakia in 1968. Both powers used economic aid in an attempt to win
3159-719: The Cuban Missile Crisis of 1962, and the Vietnam War of 1964–1975. Both superpowers competed for influence in Latin America and the Middle East , and the decolonising states of Africa , Asia , and Oceania . Following the Cuban Missile Crisis, this phase of the Cold War saw the Sino-Soviet split . Between China and the Soviet Union's complicated relations within the Communist sphere, leading to
3276-847: The Eastern Bloc . Cominform faced an embarrassing setback the following June, when the Tito–Stalin split obliged its members to expel Yugoslavia, which remained communist but adopted a non-aligned position and began accepting financial aid from the US. Besides Berlin, the status of the city of Trieste was at issue. Until the break between Tito and Stalin, the Western powers and the Eastern bloc faced each other uncompromisingly. In addition to capitalism and communism, Italians and Slovenes, monarchists and republicans as well as war winners and losers often faced each other irreconcilably. The neutral buffer state Free Territory of Trieste , founded in 1947 with
3393-813: The International Bank for Reconstruction and Development (IBRD). At the onset of his inaugural term in 1949, then- President of the United States Harry S. Truman assembled an advisory group to suggest ways to accomplish his Point Four Program , of which a significant component was an effort to strengthen developing countries, especially those nearest to the Eastern Bloc , to dissuade them from aligning with other communist states . The advisory group recommended an international mechanism that would function somewhere in between providing strictly-loaned and strictly-granted funds. The UN and United States government published reports expressing support for
3510-511: The KGB and involved in its intelligence operations, adhered to Moscow's line, although dissent began to appear after 1956. Other critiques of the consensus policy came from anti-Vietnam War activists , the Campaign for Nuclear Disarmament , and the anti-nuclear movement . In early 1947, France, Britain and the United States unsuccessfully attempted to reach an agreement with the Soviet Union for
3627-518: The Kingdom of Greece in its civil war against Communist-led insurgents. In the same month, Stalin conducted the rigged 1947 Polish legislative election which constituted an open breach of the Yalta Agreement . The US government responded to this announcement by adopting a policy of containment , with the goal of stopping the spread of communism . Truman delivered a speech calling for
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3744-569: The Sino-Soviet border conflict , while France, a Western Bloc state, began to demand greater autonomy of action. The Warsaw Pact invasion of Czechoslovakia occurred to suppress the Prague Spring of 1968, while the United States experienced internal turmoil from the civil rights movement and opposition to United States involvement in the Vietnam War . In the 1960s–1970s, an international peace movement took root among citizens around
3861-746: The Soviet boycott of the Allied Control Council and its incapacitation, an event marking the beginning of the full-blown Cold War and the end of its prelude, as well as ending any hopes at the time for a single German government and leading to formation in 1949 of the Federal Republic of Germany and German Democratic Republic . The twin policies of the Truman Doctrine and the Marshall Plan led to billions in economic and military aid for Western Europe, Greece, and Turkey. With
3978-608: The Space Race . The US and USSR were both part of the Allies of World War II , the military coalition which had defeated Nazi Germany and Imperial Japan in 1945. After the war, the USSR installed satellite governments in the territories of Eastern and Central Europe it had occupied, and promoted the spread of communism to North Korea in 1948 and created an alliance with the People's Republic of China in 1949. The US declared
4095-568: The Truman Doctrine of " containment " in 1947, launched the Marshall Plan in 1948 to assist Western Europe's economic recovery, and founded the NATO military alliance in 1949 (which was matched by the Soviet-led Warsaw Pact in 1955). Germany's split occupation zones solidified into East and West Germany in 1949. The first major proxy war of the period was the Korean War from 1950 to 1953, which ended in stalemate. In 1962,
4212-609: The Turkish Straits crisis and Black Sea border disputes were also a major factor in increasing tensions. In September, the Soviet side produced the Novikov telegram, sent by the Soviet ambassador to the US but commissioned and "co-authored" by Vyacheslav Molotov ; it portrayed the US as being in the grip of monopoly capitalists who were building up military capability "to prepare the conditions for winning world supremacy in
4329-735: The United Nations Development Programme . By the end of January 1960, fifteen countries signed the articles of agreement which established the International Development Association. The association launched in September of that same year with an initial budget of $ 913 million ($ 7.1 billion in 2012 dollars). Over the next eight months following its launch, the IDA grew to 51 member states and loaned $ 101 million ($ 784.2 million in 2012 dollars) to four developing countries. The IDA
4446-515: The United Nations Security Council Resolution 82 and 83 backed the defense of South Korea, although the Soviets were then boycotting meetings in protest of the fact that Taiwan (Republic of China), not the People's Republic of China , held a permanent seat on the council. A UN force of sixteen countries faced North Korea, although 40 percent of troops were South Korean, and about 50 percent were from
4563-463: The Cold War was in its essence a war of ideas. The United States, acting through the CIA, funded a long list of projects to counter the communist appeal among intellectuals in Europe and the developing world. The CIA also covertly sponsored a domestic propaganda campaign called Crusade for Freedom . The rearmament of West Germany was achieved in the early 1950s. Its main promoter was Konrad Adenauer ,
4680-465: The Cold War, preventing Western food, materials and supplies from arriving in the West Germany's exclave of West Berlin . The United States (primarily), Britain, France, Canada, Australia, New Zealand, and several other countries began the massive "Berlin airlift", supplying West Berlin with food and other provisions despite Soviet threats. The Soviets mounted a public relations campaign against
4797-777: The Communist governments militarily. The fall of the Iron Curtain after the Pan-European Picnic and the Revolutions of 1989 , which represented a peaceful revolutionary wave with the exception of the Romanian revolution and the Afghan Civil War (1989–1992) , overthrew almost all of the Marxist–Leninist regimes of the Eastern Bloc. The Communist Party of the Soviet Union itself lost control in
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4914-623: The IBRD Eugene R. Black, Sr. began circulating the notion of an International Development Association, as opposed to an idea of a concessional named the Special United Nations Fund for Economic Development (SUNFED) governed by the United Nations. Paul Hoffman, the Marshall Plan's former Administrator, proposed the idea of a soft-loan facility within the World Bank, where the US would have a preponderant voice in
5031-505: The IDA adopted an economic plan of action which established organizations to improve education and healthcare, with a focus on reducing poverty across Asian nations in ways that are compatible with local culture. [REDACTED] World Bank Group Development finance institution DFIs are often established and owned by governments or nonprofit organizations to finance projects that would otherwise not be able to get financing from commercial lenders. They are often structured as
5148-485: The IDA as featuring the most transparency and best practices among donors of development aid. Researchers from the Center for Global Development expect that the IDA's collection of eligible borrowing countries will decrease by half by the year 2025 (marking the 65th anniversary of the association's establishment) due to graduations and that remaining borrowers will consist primarily of African countries and will face substantial population declines . These changes will imply
5265-466: The IDA heavily depends on contributions from its member states. The IDA received 2 billion in special drawing rights ($ 3 billion USD ) from the IBRD and IFC. Approximately half of the IDA's resources come from the 45 donating member countries. In its early years, the IDA received most of its replenishments from the United Kingdom and United States but, because they were not always reliable sources of funding, other developed nations began to step in and fill
5382-675: The IDA is available to only the countries who are members of the World Bank, particularly the IBRD. Throughout its lifetime, 44 borrowing countries have graduated from the association, although 9 of these countries have relapsed as borrowers after not sustaining their graduate status. To be eligible for support from the IDA, countries are assessed by their poverty and their lack of creditworthiness for commercial and IBRD borrowing. The association assesses countries based on their per capita income, lack of access to private capital markets , and policy performance in implementing pro-growth and anti-poverty economic or social reforms. As of 2019, to borrow from
5499-427: The IDA lending program, including the Philippines, China, South Korea, Thailand, and India. Of the association's borrowing countries, approximately 20 are in Asia. The association's efforts in South Asia have focused primarily on projects for education, healthcare, transportation , agriculture, and energy . Due to rapid growth in Asian countries' populations, some pockets of poverty have emerged. To mitigate this effect,
5616-479: The IDA's 16th replenishment of US$ 49.3 billion. The IDA's loans and grants are usually not paid in full to the borrower at the outset, but rather disbursed incrementally as needed by the project. Most of the donor countries such as the United States commit letters of credit to the IDA which bear no interest and are not able to be transferred or revoked, and which are exchanged for cash as needed for project disbursal. Other countries pay their contributions in full on
5733-424: The IDA's concessional lending programs, a country's gross national income (GNI) per capita must not exceed $ 1,145. The following 75 countries are IDA borrowing countries. The following countries have graduated from their eligibility for IDA lending. The following countries have relapsed to their eligibility for IDA lending and have not yet re-graduated or have instead become partially eligible (also referred to as
5850-419: The IDA's resources toward financing projects in those countries. As a result of its efforts to improve the region, the IDA has helped bring electricity to an additional 66 million Africans since 1997, helped build or restore 240,000 kilometers of paved roads, and helped enroll an additional 15 million African children in school since 2002. The IDA was approved in May 2012 to provide US$ 50 million worth of credit to
5967-400: The KGB (1973–1979), described active measures as "the heart and soul of Soviet intelligence ." During the Sino-Soviet split , "spy wars" also occurred between the USSR and PRC. In September 1947, the Soviets created Cominform to impose orthodoxy within the international communist movement and tighten political control over Soviet satellites through coordination of communist parties in
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#17327647465626084-428: The Marshall Plan, seeing it as an effort by the US to impose its influence on Europe. In response, the Soviet Union established Comecon (Council for Mutual Economic Assistance) to foster economic cooperation among communist states. The United States and its Western European allies sought to strengthen their bonds and used the policy of containment against Soviet influence; they accomplished this most notably through
6201-446: The Russian Civil War further complicated relations, and although the Soviet Union later allied with Western powers to defeat Nazi Germany , this cooperation was strained by mutual suspicions. In the immediate aftermath of World War II, disagreements about the future of Europe, particularly Eastern Europe , became central. The Soviet Union's establishment of communist regimes in the countries it had liberated from Nazi control—enforced by
6318-404: The SUNFED. The resolution passed the senate in 1958, and then- U.S. Treasury Secretary Robert B. Anderson encouraged other countries to conduct similar studies. In 1959, the World Bank's Board of Governors approved a U.S.-born resolution calling for the drafting of the articles of agreement. SUNFED later became the Special Fund and merged with the Expanded Programme of Technical Assistance to form
6435-421: The Soviet Union and its communist party , which had an influence across the Second World and was also tied to a network of authoritarian states. The Soviet Union had a command economy and installed similarly communist regimes its in satellites. United States involvement in regime change during the Cold War included support for anti-communist and right-wing dictatorships , governments, and uprisings across
6552-408: The Soviet Union was used to monitor dissent from official Soviet politics and morals. Although to an extent disinformation had always existed, the term itself was invented, and the strategy formalized by a black propaganda department of the Soviet KGB. Based on the amount of top-secret Cold War archival information that has been released, historian Raymond L. Garthoff concludes there probably
6669-400: The Soviet Union, which at the time was undergoing the Era of Stagnation . This phase saw the new Soviet leader Mikhail Gorbachev introducing the liberalizing reforms of glasnost ("openness") and perestroika ("reorganization") and ending Soviet involvement in Afghanistan in 1989. Pressures for national sovereignty grew stronger in Eastern Europe, and Gorbachev refused to further support
6786-499: The Soviet Union. A number of self-proclaimed Marxist–Leninist governments were formed in the second half of the 1970s in developing countries , including Angola , Mozambique , Ethiopia , Cambodia , Afghanistan , and Nicaragua . Détente collapsed at the end of the decade with the beginning of the Soviet–Afghan War in 1979. Beginning in the 1980s, this phase was another period of elevated tension. The Reagan Doctrine led to increased diplomatic, military, and economic pressures on
6903-455: The Soviets accumulated after broken promises by Stalin and Molotov concerning Europe and Iran. Following the World War II Anglo-Soviet invasion of Iran , the country was occupied by the Red Army in the far north and the British in the south. Iran was used by the United States and British to supply the Soviet Union, and the Allies agreed to withdraw from Iran within six months after the cessation of hostilities. However, when this deadline came,
7020-425: The Soviets agreed to withdraw from Iran after persistent US pressure, an early success of containment policy. By 1947, US president Harry S. Truman was outraged by the perceived resistance of the Soviet Union to American demands in Iran, Turkey, and Greece, as well as Soviet rejection of the Baruch Plan on nuclear weapons. In February 1947, the British government announced that it could no longer afford to finance
7137-404: The Soviets had permitted to retain democratic structures. The public brutality of the coup shocked Western powers more than any event up to that point, set in motion a brief scare that war would occur, and swept away the last vestiges of opposition to the Marshall Plan in the United States Congress. In an immediate aftermath of the crisis, the London Six-Power Conference was held, resulting in
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#17327647465627254-426: The Soviets remained in Iran under the guise of the Azerbaijan People's Government and Kurdish Republic of Mahabad . Shortly thereafter, on 5 March, former British prime minister Winston Churchill delivered his famous " Iron Curtain " speech in Fulton, Missouri . The speech called for an Anglo-American alliance against the Soviets, whom he accused of establishing an "iron curtain" dividing Europe from " Stettin in
7371-455: The Truman Doctrine marked the beginning of a US bipartisan defense and foreign policy consensus between Republicans and Democrats focused on containment and deterrence that weakened during and after the Vietnam War , but ultimately persisted thereafter. Moderate and conservative parties in Europe, as well as social democrats, gave virtually unconditional support to the Western alliance, while European and American Communists , financed by
7488-434: The US assistance, the Greek military won its civil war . Under the leadership of Alcide De Gasperi the Italian Christian Democrats defeated the powerful Communist – Socialist alliance in the elections of 1948 . All major powers engaged in espionage, using a great variety of spies, double agents , moles , and new technologies such as the tapping of telephone cables. The Soviet KGB ("Committee for State Security"),
7605-476: The US government gave to Western European countries over $ 13 billion (equivalent to $ 189 billion in 2016) to rebuild the economy of Europe . Later, the program led to the creation of the OECD . The plan's aim was to rebuild the democratic and economic systems of Europe and to counter perceived threats to the European balance of power , such as communist parties seizing control through revolutions or elections. The plan also stated that European prosperity
7722-419: The US was trying to buy a pro-US re-alignment of Europe. Stalin therefore prevented Eastern Bloc nations from receiving Marshall Plan aid. The Soviet Union's alternative to the Marshall Plan, which was purported to involve Soviet subsidies and trade with central and eastern Europe, became known as the Molotov Plan (later institutionalized in January 1949 as the Council for Mutual Economic Assistance ). Stalin
7839-426: The US$ 100 billion per year investment of climate financing stipulated in the UN climate negotiations for 2020. However, in the face of the COVID-19 pandemic's economic downturn , 450 development banks pledged to fund a " Green recovery " in developing countries. Development banks include: This finance-related article is a stub . You can help Misplaced Pages by expanding it . Cold War The Cold War
7956-424: The USSR. In this way, this US would exercise " preponderant power ," oppose neutrality, and establish global hegemony . In the early 1950s (a period sometimes known as the " Pactomania "), the US formalized a series of alliances with Japan (a former WWII enemy), South Korea , Taiwan , Australia , New Zealand , Thailand and the Philippines (notably ANZUS in 1951 and SEATO in 1954), thereby guaranteeing
8073-412: The United Nations, was split up and dissolved in 1954 and 1975, also because of the détente between the West and Tito. The US and Britain merged their western German occupation zones into " Bizone " (1 January 1947, later "Trizone" with the addition of France's zone, April 1949). As part of the economic rebuilding of Germany, in early 1948, representatives of a number of Western European governments and
8190-445: The United States a number of long-term military bases. One of the more significant examples of the implementation of containment was the United Nations US-led intervention in the Korean War . In June 1950, after years of mutual hostilities, Kim Il Sung 's North Korean People's Army invaded South Korea at the 38th parallel . Stalin had been reluctant to support the invasion but ultimately sent advisers. To Stalin's surprise,
8307-401: The United States announced an agreement for a merger of western German areas into a federal governmental system. In addition, in accordance with the Marshall Plan , they began to re-industrialize and rebuild the West German economy, including the introduction of a new Deutsche Mark currency to replace the old Reichsmark currency that the Soviets had debased. The US had secretly decided that
8424-526: The United States grew more concerned over the growth of the Cold War , it made a concession in 1954 at the behest of its Department of State by backing the conception of the International Finance Corporation (IFC). Despite the launch of the IFC in 1956, developing countries persisted in demanding the creation of a new concessional financing mechanism and the idea gained traction within the IBRD. Then-President of
8541-510: The Warsaw Pact's primary function was to safeguard Soviet hegemony over its Eastern European satellites, with the pact's only direct military actions having been the invasions of its own member states to keep them from breaking away; in the 1960s, the pact evolved into a multilateral alliance, in which the non-Soviet Warsaw Pact members gained significant scope to pursue their own interests. In 1961, Soviet-allied East Germany constructed
8658-423: The Western agencies paid special attention to debriefing Eastern Bloc defectors . Edward Jay Epstein describes that the CIA understood that the KGB used "provocations", or fake defections, as a trick to embarrass Western intelligence and establish Soviet double agents. As a result, from 1959 to 1973, the CIA required that East Bloc defectors went through a counterintelligence investigation before being recruited as
8775-700: The Women Entrepreneur Development Project as part of an effort to help women in Ethiopia participate in business as skilled employees or leaders. Although the positive outcomes of the IDA's efforts in Africa had been historically slow, the large allocation of funding to African countries led to positive outcomes particularly within agriculture and infrastructure development efforts. The IDA's efforts in Asia have been particularly successful. Numerous Asian countries have graduated from
8892-559: The World Bank Group . The executive directors collectively represent all 187 member states of the World Bank, although decisions regarding IDA matters concern only the IDA's 172 member states. The president oversees the IDA's overall direction and daily operations. As of May 2024, Ajay Banga serves as the President of the World Bank Group. The association and IBRD operate with a staff of approximately 10,000 employees. The IDA
9009-462: The accusation that the USSR was exerting increasing control over the countries lying in its sphere. He argued that there was nothing surprising in "the fact that the Soviet Union, anxious for its future safety, [was] trying to see to it that governments loyal in their attitude to the Soviet Union should exist in these countries." Soviet territorial demands to Turkey regarding the Dardanelles in
9126-482: The aim to finance projects that will develop infrastructure and improve education, healthcare , access to clean water and sanitation facilities, and environmental responsibility. It is considered to be the soft lending window of the World Bank, while the IBRD is considered to be the hard lending window. The association offers grants and loans with maturities ranging from 25 to 40 years, grace periods of 5 to 10 years, and interest rates of 2.8% or 1.25% depending on whether
9243-613: The allocation of $ 400 million to intervene in the war and unveiled the Truman Doctrine , which framed the conflict as a contest between free peoples and totalitarian regimes. American policymakers accused the Soviet Union of conspiring against the Greek royalists in an effort to expand Soviet influence even though Stalin had told the Communist Party to cooperate with the British-backed government. Enunciation of
9360-472: The allocation of such loans. Democratic Senator Mike Monroney of Oklahoma supported this idea. As Chairman of the Senate Subcommittee on International Finance, Monroney proposed a resolution recommending a study of the potential establishment of an International Development Association to be affiliated with the IBRD. Monroney's proposal was more preferred received within the United States than
9477-427: The borrower is a blend country and to which degree it is eligible. Regular IDA-eligible borrowers may take advantage of no-interest loans. Financial resources are allocated to eligible countries based on their success at implementing pro-growth and a poverty-reducing domestic policies. The IDA uses the World Bank's Country Policy and Institutional Assessment (CPIA) development indicator to determine each country's place in
9594-482: The bureau responsible for foreign espionage and internal surveillance, was famous for its effectiveness. The most famous Soviet operation involved its atomic spies that delivered crucial information from the United States' Manhattan Project , leading the USSR to detonate its first nuclear weapon in 1949, four years after the American detonation and much sooner than expected. A massive network of informants throughout
9711-716: The chancellor of West Germany, with France the main opponent. Washington had the decisive voice. It was strongly supported by the Pentagon (the US military leadership), and weakly opposed by President Truman; the State Department was ambivalent. The outbreak of the Korean War in June 1950 changed the calculations and Washington now gave full support. That also involved naming Dwight D. Eisenhower in charge of NATO forces and sending more American troops to West Germany. There
9828-515: The communist party. Radio and television organizations were state-owned, while print media was usually owned by political organizations, mostly by the local communist party. Soviet radio broadcasts used Marxist rhetoric to attack capitalism, emphasizing themes of labor exploitation, imperialism and war-mongering. Along with the broadcasts of the BBC and the Voice of America to Central and Eastern Europe,
9945-441: The country and was banned following the 1991 Soviet coup attempt that August. This in turn led to the formal dissolution of the Soviet Union in December 1991 and the collapse of Communist governments across much of Africa and Asia. The Russian Federation became the Soviet Union's successor state, while many of the other republics emerged from the Soviet Union's collapse as fully independent post-Soviet states . The United States
10062-420: The creation of a multilateral , concessional lending program for the poorest developing countries. However, the United States was largely unresponsive and ultimately distracted by its involvement in the Korean War and unconvinced that development needed greater financial stimulation. Developing countries grew increasingly frustrated with not being able to afford IBRD lending and perceived the Marshall Plan as
10179-448: The date of commitment to the IDA so that it may cover its operating expenses . Donors receive no return of funds and repayments from borrowers are again loaned to future projects such that donors won't need to commit those funds again in the future. Although the IDA's funds are now regularly replenished, this does not happen without some financial and political challenges for the donating countries. When donor countries convene to negotiate
10296-567: The economic gaps not met by these two countries. Every three years, member nations that provide funds to the IDA gather together to replenish the IDA's resources. These funds come primarily from well-developed countries including the United States, Japan, France, Germany, and the United Kingdom with 58% from the US, 22% from France, and 8% from the UK. As of 2016, there have been 18 IDA replenishment rounds. Fifty-one member countries participated in
10413-463: The fall of the communist governments of Europe from 1989, which concluded with the fall of the Soviet Union in 1991. The Western Bloc included the US and a number of First World nations that were generally capitalist and liberal democratic but tied to a network of often authoritarian Third World states, most of which were the European powers' former colonies . The Eastern Bloc was led by
10530-401: The formation of NATO , which was essentially a defensive agreement in 1949. The Soviet Union countered with the Warsaw Pact in 1955, which had similar results with the Eastern Bloc. As by that time the Soviet Union already had an armed presence and political domination all over its eastern satellite states, the pact has been long considered superfluous. Although nominally a defensive alliance,
10647-529: The kind of world-view, the kind of beliefs, and the social structure that would probably prevail in a state which was at once unconquerable and in a permanent state of "cold war" with its neighbours. In The Observer of 10 March 1946, Orwell wrote, "...after the Moscow conference last December, Russia began to make a 'cold war' on Britain and the British Empire." The first use of the term to describe
10764-565: The lowest gross national income , from troubled creditworthiness , or from the lowest per capita income . Together, the International Development Association and International Bank for Reconstruction and Development are collectively generally known as the World Bank , as they follow the same executive leadership and operate with the same staff. The association shares the World Bank's mission of reducing poverty and aims to provide affordable development financing to countries whose credit risk
10881-402: The loyalty of non-aligned countries , such as India . By the 1970s, Japan and Western Europe rebuilt their economies, allowing them more diplomatic independence. After the Sino-Soviet split between the USSR and China in 1961, the U.S. initiated contacts with China in 1972 . In the same year, the US and USSR signed a series of treaties limiting their nuclear arsenals, which eased tensions for
10998-414: The most prominent architects of America's early Cold War strategy, especially those who believed that the Cold War would eventually be fought by political rather than military means, such as George F. Kennan. Soviet and Eastern Bloc authorities used various methods to suppress Western broadcasts, including radio jamming . American policymakers, including Kennan and John Foster Dulles , acknowledged that
11115-671: The policy change. Once again, the East Berlin communists attempted to disrupt the Berlin municipal elections , which were held on 5 December 1948 and produced a turnout of 86% and an overwhelming victory for the non-communist parties. The results effectively divided the city into East and West, the latter comprising US, British and French sectors. 300,000 Berliners demonstrated and urged the international airlift to continue, and US Air Force pilot Gail Halvorsen created " Operation Vittles ", which supplied candy to German children. The Airlift
11232-441: The political decision-making level on either side. Similarly, there is no evidence, on either side, of any major political or military decision that was prematurely discovered through espionage and thwarted by the other side. There also is no evidence of any major political or military decision that was crucially influenced (much less generated) by an agent of the other side. According to historian Robert L. Benson, "Washington's forte
11349-479: The presence of the Red Army —alarmed the US and UK. Western leaders saw this as a clear instance of Soviet expansionism, clashing with their vision of a democratic Europe. Economically, the divide was sharpened with the introduction of the Marshall Plan in 1947, a US initiative to provide financial aid to rebuild Europe and prevent the spread of communism by stabilizing capitalist economies. The Soviet Union rejected
11466-423: The reasons why when a country's financial management system is not used so that the client country may address those shortcomings. It also recommended that the Bank collaborate with development partners to strengthen country-level leadership of development assistance coordination by offering greater financial and technical support. Development economists, such as William Easterly , have conducted research which ranked
11583-525: The replenishments, there is often intense discussion about redefining the association's goals and objectives or even about reforming the IDA. Due to delays in the United States Congress impeding the approval of IDA funding, the association's members implemented a set of policy triggers outlining the commitment threshold necessary for replenishment to take effect. The threshold imposed a requirement that an aggregate share of 85% in voting stock
11700-469: The source of the term, Lippmann traced it to a French term from the 1930s, la guerre froide . The roots of the Cold War can be traced back to diplomatic and military tensions preceding World War II. The 1917 Russian Revolution and the subsequent Treaty of Brest-Litovsk , where Soviet Russia ceded vast territories to Germany, deepened distrust among the Western Allies. Allied intervention in
11817-463: The specific post-war geopolitical confrontation between the Soviet Union and the United States came in a speech by Bernard Baruch , an influential advisor to Democratic presidents, on 16 April 1947. The speech, written by journalist Herbert Bayard Swope , proclaimed, "Let us not be deceived: we are today in the midst of a cold war." Newspaper columnist Walter Lippmann gave the term wide currency with his book The Cold War . When asked in 1947 about
11934-405: The two superpowers , though each supported opposing sides in major regional conflicts known as proxy wars . Aside from the nuclear arms race starting in 1949 and conventional military deployment , the struggle for dominance was expressed indirectly via psychological warfare , propaganda campaigns , espionage , far-reaching embargoes , sports diplomacy , and technological competitions such as
12051-411: The world, while Soviet involvement in regime change included the funding of left-wing parties , wars of independence , revolutions and dictatorships. As nearly all the colonial states underwent decolonization and achieved independence in the period from 1945 to 1960, many became Third World battlefields in the Cold War. At the end of World War II, English writer George Orwell used cold war , as
12168-486: The world. Movements against nuclear weapons testing and for nuclear disarmament took place, with large anti-war protests . By the 1970s, both sides had started making allowances for peace and security, ushering in a period of détente that saw the Strategic Arms Limitation Talks and the 1972 visit by Richard Nixon to China that opened relations with China as a strategic counterweight to
12285-505: Was 'signals' intelligence - the procurement and analysis of coded foreign messages." leading to the Venona project or Venona intercepts, which monitored the communications of Soviet intelligence agents. Moynihan wrote that the Venona project contained "overwhelming proof of the activities of Soviet spy networks in America, complete with names, dates, places, and deeds." The Venona project
12402-606: Was a period of global geopolitical tension and struggle for ideological and economic influence between the United States and the Soviet Union (USSR) and their respective allies, the Western Bloc and the Eastern Bloc , that started in 1947, two years after the end of World War II , and lasted until the fall of the Soviet Union in 1991. The term cold war is used because there was no direct fighting between
12519-412: Was a strong promise that West Germany would not develop nuclear weapons. Widespread fears of another rise of German militarism necessitated the new military to operate within an alliance framework under NATO command. In 1955, Washington secured full German membership of NATO. In May 1953, Lavrentiy Beria , by then in a government post, had made an unsuccessful proposal to allow the reunification of
12636-567: Was also fearful of a reconstituted Germany; his vision of a post-war Germany did not include the ability to rearm or pose any kind of threat to the Soviet Union. In early 1948, following reports of strengthening "reactionary elements", Czech Communists executed a coup d'état in Czechoslovakia (resulting in the formation of the Czechoslovak Socialist Republic (9 May 1948)), the only Eastern Bloc state that
12753-484: Was as much a logistical as a political and psychological success for the West; it firmly linked West Berlin to the United States. In May 1949, Stalin backed down and lifted the blockade. In 1952, Stalin repeatedly proposed a plan to unify East and West Germany under a single government chosen in elections supervised by the United Nations, if the new Germany were to stay out of Western military alliances, but this proposal
12870-679: Was contingent upon German economic recovery. One month later, Truman signed the National Security Act of 1947 , creating a unified Department of Defense , the Central Intelligence Agency (CIA), and the National Security Council (NSC). These would become the main bureaucracies for US defense policy in the Cold War. Stalin believed economic integration with the West would allow Eastern Bloc countries to escape Soviet control, and that
12987-472: Was kept highly secret even from policymakers until the Moynihan Commission in 1995. Despite this, the decryption project had already been betrayed and dispatched to the USSR by Kim Philby and Bill Weisband in 1946, as was discovered by the US by 1950. Nonetheless, the Soviets had to keep their discovery of the program secret, too, and continued leaking their own information, some of which
13104-506: Was left as the world's sole superpower. In February 1946, George F. Kennan 's " Long Telegram " from Moscow to Washington helped to articulate the US government's increasingly hard line against the Soviets, which would become the basis for US strategy toward the Soviet Union for the duration of the Cold War. The telegram galvanized a policy debate that would eventually shape the Truman administration 's Soviet policy. Washington's opposition to
13221-545: Was now restricted to the island of Taiwan , the nationalist government of which exists to this day. The Kremlin promptly created an alliance with the newly formed People's Republic of China. According to Norwegian historian Odd Arne Westad , the communists won the Civil War because they made fewer military mistakes than Chiang Kai-Shek made, and because in his search for a powerful centralized government, Chiang antagonized too many interest groups in China. Moreover, his party
13338-403: Was parity in the quantity and quality of secret information obtained by each side. However, the Soviets probably had an advantage in terms of HUMINT (human intelligence or interpersonal espionage) and "sometimes in its reach into high policy circles." In terms of decisive impact, however, he concludes: We also can now have high confidence in the judgment that there were no successful "moles" at
13455-494: Was still useful to the American program. According to Moynihan, even President Truman may not have been fully informed of Venona, which may have left him unaware of the extent of Soviet espionage. Clandestine atomic spies from the Soviet Union, who infiltrated the Manhattan Project at various points during WWII, played a major role in increasing tensions that led to the Cold War. In addition to usual espionage,
13572-655: Was turned down by the Western powers. Some sources dispute the sincerity of the proposal. Britain, France, the United States, Canada and eight other western European countries signed the North Atlantic Treaty of April 1949, establishing the North Atlantic Treaty Organization (NATO). That August, the first Soviet atomic device was detonated in Semipalatinsk , Kazakh SSR . Following Soviet refusals to participate in
13689-487: Was weakened during the war against Japan . Meanwhile, the communists told different groups, such as the peasants, exactly what they wanted to hear, and they cloaked themselves under the cover of Chinese nationalism . Confronted with the communist revolution in China and the end of the American atomic monopoly in 1949, the Truman administration quickly moved to escalate and expand its containment doctrine. In NSC 68 ,
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