UPSC Prelims PYQ 2025: IBRD — purpose and features

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

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

Which of the statements given above are correct?

1. I and II only
2. II and III only
3. I and III only
4. I, II and III

Explanation

Statement I is correct

• IBRD is an international financial institution that offers loans to middle-income developing countries.

Statement II is incorrect

• The IBRD does not work single-handedly. It collaborates with other institutions within the World Bank Group, such as the International Development Association (IDA), as well as with public and private-sector actors.

Statement III is correct

• It was established in 1944 under the World Bank, as part of the Bretton Woods Twins along with the IMF, with the mission of financing the reconstruction of European nations devastated by World War II. Following the reconstruction of Europe, the Bank’s mandate expanded to advancing worldwide economic development and eradicating poverty.
• The IBRD provides commercial-grade or concessional financing to sovereign states to fund projects that seek to improve transportation and infrastructure, education, domestic policy, environmental consciousness, energy investments, healthcare, access to food, potable water, and sanitation.
• Members: 189 member countries.

Answer: (c) I and III only; Difficulty Level: Medium