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 ✓ UPSC's answer
- (d) I, II and III
Why the answer is (c)
• The IBRD, founded at Bretton Woods in 1944, was created to finance the reconstruction of war-torn Europe after the Second World War; its first loan went to France in 1947 — statement III is correct.
• Today it lends and provides guarantees mainly to middle-income and creditworthy low-income countries, raising funds on capital markets on the strength of its AAA rating — statement I is correct.
• Statement II is wrong: the IBRD does not work single-handedly; it is one of five institutions of the World Bank Group and works alongside the IDA (which serves the poorest countries), IFC, MIGA and ICSID, as well as with the IMF and other partners.
• Together the IBRD and IDA constitute the 'World Bank'.
• Hence I and III only, option (c).
Why the other options are wrong
- (a) I and II only
- Statement II is wrong: the IBRD works with the IDA and other partners, not alone.
- (b) II and III only
- Statement II is wrong; statement I on middle-income lending is correct.
- (d) I, II and III
- Statement II is wrong, so all three cannot be correct.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2025, held on 25 May 2025. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.