INTERNATIONAL FINANCIAL INSTITUTIONS

INTERNATIONAL FINANCIAL INSTITUTIONS

The IMF

The IMF’s job is to promote a stable international monetary system, in which member countries can achieve high rates of employment, low inflation, and sustainable economic growth. The IMF does this by:

• overseeing the international monetary system by regularly reviewing national, regional, and global economic and financial developments;
• providing economic monitoring and policy advice to its 188 member countries, encouraging them to adopt policies that foster economic stability, reduce their vulnerability to economic and financial crises, and raise living standards; and
• analyzing the impact of countries’ policies on others; applying lessons from cross-country experiences to each country’s unique situation; and providing a forum for international cooperation on global economic and financial issues.

It has three main tools at its disposal to carry out its mandate: surveillance, technical assistance and training, and lending. These functions are underpinned by the IMF’s research and statistics.

Surveillance

The IMF promotes economic stability and global growth by encouraging countries to adopt sound economic and financial policies. To do this, it regularly monitors global, regional, and national economic developments. It also seeks to assess the impact of the policies of individual countries on other economies.

Technical assistance and training

IMF offers technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including fiscal policy, monetary and exchange rate policies, banking and financial system supervision and regulation, and statistics.

The IMF provides technical assistance and training mainly in four areas:

• monetary and financial policies
• fiscal policy and management compilation, management, dissemination, and improvement of statistical data; and
• Economic and financial legislation.

Lending

IMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by financing is designed by the national authorities in close cooperation with the IMF. Continued financial support is conditional on the effective implementation of this program.

In low-income countries, the IMF has doubled loan access limits and is boosting its lending to the world’s poorer countries, with loans at a concessional interest rate.

Research and data

Supporting all three of these activities is the IMF’s economic and financial research and statistics.

WORLD BANK

The World Bank Group has set two goals for the world to achieve by 2030:

• End extreme poverty by decreasing the percentage of people living on less than $1.25 a day to no more than 3%
• Promote shared prosperity by fostering the income growth of the bottom 40% for every country

The World Bank is a vital source of financial and technical assistance to developing countries around the world. We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. Established in 1944, the World Bank Group is headquartered in Washington, D.C. We have more than 10,000 employees in more than 120 offices worldwide.

Financial Products and Services

The Bank provides low-interest loans, interest-free credits, and grants to developing countries. These support a wide array of investments in such areas as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management

Innovative Knowledge Sharing

The Bank offer support to developing countries through policy advice, research and analysis, and technical assistance.

What is the World Trade Organization?

The World Trade Organization (WTO) deals with the rules of trade between nations at a global or near-global level.

There are a number of ways of looking at the World Trade Organization. It is an organization for trade opening. It is a forum for governments to negotiate trade agreements. It is a place for them to settle trade disputes. It operates a system of trade rules. Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other.

The WTO is run by its member governments. All major decisions are made by the membership as a whole, either by ministers (who usually meet at least once every two years) or by their ambassadors or delegates (who meet regularly in Geneva).

Functions/objectives of WTO

Trade negotiations

The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They include individual countries’ commitments to lower customs tariffs and other trade barriers, and to open and keep open services markets. They set procedures for settling disputes.

Implementation and monitoring

WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. WTO seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented

Dispute settlement

Countries bring disputes to the WTO if they think their rights under the agreements are being infringed. Judgments by specially appointed independent experts are based on interpretations of the agreements and individual countries’ commitments.

Building trade capacity

WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them build their trade capacity, to handle disputes and to implement technical standards.

Outreach

The WTO maintains regular dialogue with non-governmental organizations, parliamentarians, other international organizations, the media and the general public on various aspects of the WTO, with the aim of enhancing cooperation and increasing awareness of WTO activities.

WTO IN DEVELOPING COUNTRIES
The WTO deals with the special needs of developing countries in three ways:

·         the WTO agreements contain special provisions on developing countries

·         The Committee on Trade and Development is the main body focusing on work in this area in the WTO, with some others dealing with specific topics such as trade and debt, and technology transfer.

·          the WTO Secretariat provides technical assistance (mainly training of various kinds) for developing countries

Other measures concerning developing countries in the WTO agreements include:

·         extra time for developing countries to fulfil their commitments (in many of the WTO agreements)

·         provisions designed to increase developing countries’ trading opportunities through greater market access (e.g. in textiles, services, technical barriers to trade)

·         provisions requiring WTO members to safeguard the interests of developing countries when adopting some domestic or international measures (e.g. in anti-dumping, safeguards, technical barriers to trade)

·         Provisions for various means of helping developing countries (e.g. to deal with commitments on animal and plant health standards, technical standards, and in strengthening their domestic telecommunications sectors).

·         Legal assistance: The WTO Secretariat has special legal advisers for assisting developing countries in any WTO dispute and for giving them legal counsel.