International Organisations

WTO
Roles:

Implement and advance global trade agreements and to

resolve trade disputes between countries
First international organisation with power to enforce trade
agreements across the world
Set up via the Uruguay round
1. Promote free trade between countries
Increase efficiency of global economy (increase GWP)
Increase standards of living in developing nations (which can
benefit more from the increased free trade)
2. Dispute resolution between countries
More effective in smaller countries
If a country feels like it is suffering harm because another economy
is not complying with its WTO obligations, it can lodge a complaint
with the WTO.
If a resolution is not reached between the two economies
directly, the process of dispute resolution by the WTO
begins.
WTO panel hears the complaint, and issues a decision, if
countries do not comply, other countries may issue high trade
sanctions, such as high tariffs on imports from this country

Actions and effectiveness

Smaller Countries
o Anti-dumping agreement allows governments to take
action against dumping in their economy
o Settles disputes regarding protectionism, if another
country is unhappy with trading partners protection,
WTO may intervene
o Effective in resolving disputes between smaller
countries
Large Countries
o EU and US reducing agricultural trade barriers
o Ineffective in resolving disputes, although they dont
formally disobey WTO directives, they delay and lodge
appeals rather than complying
Doha Round
o Began in 2001

o Goals
Reducing agricultural protection
Lowering tariffs on manufactured goods
Reducing restrictions on trade in services
o Could increase global economic activity by $250 billion
in 2015
o Talks broke down in 2008 due to disagreements
stalled.
Disagreements on: access to agricultural markets,
restrictions to production of pharmaceuticals,
arguments surrounding manufacturing protection
etc.
o However two broad agreements were reached on:
The abolition of agricultural export subsidies by
2013
Giving the 50 poorest WTO members tariff free
and quota free access to 97% of all goods from
high-income nation markets

International Monetary Fund

Roles

To maintain global financial stability

Before fixed exchange rate system collapsed: oversee the
system of exchange rates that would stabilise economic
relations between countries
Minimising crises when financial crisis occurs in country,
region, or across the world
o In individual economies makes a rescue package to
stabilise
o Short term loans that are taken from donations from
members of IMF
Long term: supports free trade of goods and services, free
movement of capital and finance through the world markets

Actions

GFC 2008
o World crisis
o Initially in 2008, injected $250 billion into the system to
promote liquidity in the global financial system
o Provided specific support for countries particularly hit by
crisis

Suspends interest payments on loans for countries in

economic downturn
Ongoing sovereign debt crisis in Europe
o Large scale loans and relief programs for 11 European
economies
Assistance packages from $19 to $23 billion to
Greece, Ireland, Portugal etc.
Emergency package $1 billion for Cyprus in 2013
Jordan was experiencing severe debt due to the overreach of
its war with Iraq and civil unrest.
o In the period from 1993 to 1999, the IMF extended to
Jordan three extended fund facility loans.
o As a result the government undertook massive reforms
of privatization, taxes, foreign investment and easier
trade policies.
o By 2000 the country was admitted to the (WTO), and
one year later signed a free trade accord with the United
States. Jordan was also able to bring down its overall
debt payment and restructure it at a manageable level.
o Jordan is an example of how the IMF can foster strong,
stable economies that are productive members of the
global economy.

Effectiveness

Jordan is an example of how the IMF can foster strong, stable

economies that are productive members of the global
economy
Effective in reducing detrimental economic effects of financial
crises such as GFC, European debt crisis
Criticism after Asian economic crisis of the late 1990s, where
it promoted contractionary policies, which made conditions
even worse.
o Indonesia and Thailand were especially affected
o IMF admitted that they made mistakes during this crisis
xd
In recent years, such as GFC, they have allowed governments
greater control of macroeconomic policies, lending to
governments that were spending more to avoid recession
However IMF has still been strict in the European sovereign
debt crisis, requiring reduced government spending, higher
taxes, the sale of government assets and reductions in size of
public sector workforces

World Bank
Roles

Helps poorer countries with their economic development

o Funding investment in infrastructure
o Reducing poverty
o Help nations adjust to demands in globalisation
Particularly to poorest countries in Africa and South America

Actions

Makes loans to poorer countries at lower than standard

commercial rates
o Funds infrastructure projects such as powerplants
Attracts private sector investment to the Banks projects
Provides risk insurance to private investors (promoting
investment)
Funded by member countries contributions
In recent years, the World Banks major aim is to reach the
Millenium development goal of halving the proportion of
people living under $1 a day from 1990 numbers by 2015.
o This goal was achieved in 2010 due to China lifting 600
million people out of poverty
In 2013 outlined its new major aims for next two decades
o Reducing the rate of extreme poverty to less than 3% of
worlds population by 2030 (mostly frictional poverty,
those in poverty because of short-term disasters rather
than long term poverty)
o Reducing inequality by fostering income growth for
bottom 40%
Also played an important role in 2008, stabilising economies
after GFC, tripled its annual lending to low income economies
from $14billion to $35billion , to address a sudden shortage in
short-term finance for trade contracts
One of the most important actions of the World Bank in the
past two decades 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 worlds poorest countries in Africa,
South Asia and Latin America, whose debt levels are
considered unsustainable. By 2012, 36 countries had received
debt relief estimated to have saved them more than US$76
billion.

Effectiveness

Ethical issue: social + environmental implications for

population in affected areas

Undemocratic government structure (biased to industrialised

countries)
Countries that receive funding are not necessarily better off
(e.g. Niger)
o Received $637 million between 1965-1995 and capita
GNP fell more than 50%

United Nations
Roles

Maintains international peace and security, promoting

cooperation among states and international development
For sustainable development, linkages between economies
and promoting globalisation
Developed international labour standards, and enforced
human rights and political freedoms

Actions

Recently have been working to achieve the Millennium

Development Goals, to achieve significant improvements in
other aspects of development for people in the worlds lowest
income nations
In 2015 led the process for international agreement on a new
set of Sustainable Development Goals for the period 20152030
Held conferences regarding the financing of suitable
development
o Global Conferences on Financing for Development
(2002, 2008,2015)

Effectiveness

Very effective in seting global standards for working

conditions, preventing child labour etc
Distributes emergency relief during natural disasters and wars

Organisation for Economic Co-operation and

Development
Roles

34 member countries

Promotes politices that will improve the economic and social

well-being orf people around the world
Promotes policies to achieve the highest sustainable
economic growth and employment and a rising standard of
living in member countries, while maintaining fiscal stability

Actions

Conducts and publishesr research on a wide range of

economic policy issues, and coordinates economic cooperation
among member nations
2008 GFC, OECD coordinated global macroeconomic
stimulus dring the GFC and allowed member countries to
avoid the full detrimental economic effects of the GFC
Supports globalisation, free markets, privatisation and
deregulation

Effectiveness

Effective in coordinating stimulus during GFC for global

recovery
However they have limited effectivenesss as they have no
formal power to conduct policy but rather promote policy
making
Organising summits of world leaders is very effective in
assuring the goals of the global economy are aligned

G7
Roles

7 largest, industrialised nations

unofficial forum in coordinating global macroeconomic policy
because of its influence over the fiscal and monetary policies
of the worlds largest economies.
Discusses conditions in global economy, as well as other
priorities such as climate change, poverty, and security

Actions

2005-2012 summits, agreed to increase total official

development assistance to developing countries
Funds dedicated to helping countries achieve the MDGs and
other important initiatives
Aimed to reduce the world poverty rate
In 2012, USA leaders agreed to greater Fiscal discipline to
prevent the European soverign debt crisis from undermining
global growth

In 2006, G8 leaders urged WTO negotiators in the Doha Round

to reach an agreement on liberalising world trade

Effectiveness

G7s significance is declining due to the shift in the global

balance of power towards emerging economies, particularly
China
Doesnt represent the most important forces of the global
economy (China and Brazil more important to growth than
Canada and Italy)
G7 has 46% of world GDP but 10% of worlds population
Attempts have been made to expand group to Outreach Five
(O5): Brazil, China, India, Mexico, and South Africa.
Has become more important to coordinate and discuss goals
with the economies with the most power in influencing future
world growth

G20
Roles

Has become the leading forum for coordinating the global

response to avert a depression
Supervisies global financial institutions, promotes reduction of
deficits and establishes conditions conducive to long-term
growth
Discuss important world issues, coordinating fiscal stimulus

Actions

Most important forum to counter the GFC, seeks to reduce

global debt while supporting global economic recovery
At 2014 G20 members agreed to increase growth by 2%
Finance ministers and Central Bank Governors meet regularly
at request, to coordinate finance and policy across the world

Effectiveness

Has seen to have limited effectiveness, highlighted in 2014,

where the goal of increasing economic growth by 2% was
made, but research showed that this growth goal did not lead
to real changes in economic policies among its members.