International_Organisations

2.5 International Organisations -The major institutions of the global economy are the World Trade Organisation, the International Monetary Fund and the World Bank. Other organisations with substantial influence in the global economy include the Organisation for Economic Cooperation and Development and the United Nations. World Trade Organisation * The WTO is one of the most powerful global economic institutions. The role of the WTO is to implement and advance global trade agreements and to resolve trade disputes between economies. * The responsibility for developing trade agreements was borne by the General Agreement on Tariffs and Trade(GATT) process that began in 1947. * Under the GATT process, regular rounds of trade negotiations were conducted; once agreements were reached, it was up to the individual countries who belong to GATT to put those agreements in place. * The weakness of GATT process was that there was no effective mechanism to enforce the trade agreements and as a result, many countries only implemented parts of the GATT agreements. * The Uruguay Round led to the WTO agreement. * One of the WTO’s role is settling disputes between countries. If a country believes that it is suffering harm as a result of another country’s failure to comply with its WTO obligations can lodge a complaint with the WTO. A process of dispute resolution is then commenced and if no agreement can be reached directly, a WTO panel will hear the complaint and then issue a decision. * The WTO’s membership is growing with 153 countries in 2010. * The WTO’s major focus in recent years has been the Doha Round of trade liberation talks(ambitious goals to free up global trade). The aim is to lift millions of people in developing countries out of poverty. International Monetary Fund (IMF) * 186 members * Role is to maintain international financial stability. * When a crisis occurs in an individual economy, the IMF will often develop a ‘rescue package’ to help stabilise the economy. * The IMF’s policies are to support the free trade of g&s, and the free movement of finance and capital throughout world markets. * The policies that the IMF requires countries to adopt are generally known as ‘structural adjustment’ policies. * The IMF’s structural adjustment policies have played an important role in the process of globalisation, effectively ensuring that most economies have adopted similar economic strategies in recent years. * The IMF’s support for reducing the size of government, privatising government businesses, deregulating markets and balancing government budgets has been a major reason why economies around the world have adopted these policies. World Bank * The WB’s role in the global economy is primarily concerned with helping poorer countries with their economic development * It’s main organisation, the International Bank for Reconstruction and Development, focuses on funding investment in infrastructure, reducing poverty, and to help countries adjust their economies to the demands of globalisation. * The WB also has a number of organisations that provide specific assistance to lower income countries, including: # The International Development Association,- which provides soft loans. # The International Finance Corporation, whose role is to attract private sector investment to the Bank’s project. # The Multilateral Insurance Guarantee Agency,-which provides risk insurance to private investors. * The WB makes loans to developing nations at rates that are below standard commercial rates, to fund infrastructure projects. * One of the most important actions of the WB in recent years has been its support of the Heavily Indebted Poor Countries Initiative in which it aims to reduce debt by two thirds in 46 of the world’s poorest countries in Africa, Latin America, South Asia. United Nations * Established in 1945 and has grown to cover 192 member states. * It covers the global economy, international security, the environment, poverty& development, international law & global health issues. * The UN has played an important role in supporting greater linkages between econmies and promoting globalisation. * A range of different UN agencies have developed international standards that make it easier for trade and investment flows to occur between nations. * One of the most important role played by the UN in recent years is the initiative to achieve the Millennium Development Goals, which by 2015 aim to halve global poverty and achieve significant improvements in other aspects of development for people in the World’s lowest income nations. Organisation for Economic Co-operation and Development * The OECD is an international economic organisation of 31 countries committed to democracy and to the market economy. * The primary goal of the OECD is to promote policies “to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining fiscal stability, and thus contribute to the development of the world economy”. * The main role played by the OECD is to conduct and publish research in a wide range of economic policy issues and to coordinate economic cooperation among member nations. * The OECD publications generally advocate policies in favour of globalisation, free markets, privatisation and deregulation.