World Trade Organization World Bank International Monetary Fund Members 153 Countries 187 Countries 187 Countries UN affiliation Purpose Head Founded Structure Not a UN specialized agency but maintains strong relations with the UN Deals with rules of trade between nations at a global or near global level. Pascal Lamy (Directory- General) 1995 Marrakech Agreement General council and sub councils A sitting observer in the UN development group To be a source of financial and technical assistance to developing nations. Robert B. Zoellick (President) Institution within the UN Ensure stability of the international monetary system Christine Lagarde (Director) 1944 1944 (Bretton Woods conference) Each member is a shareholder represented by a Tasks are delegated to the executive board
All the MDGs are connected. Better management of finances and trade will lead to improvements in all areas. The most directly related MDG
Opening markets for trade But also maintaining trade barriers to protect consumers/ prevent distribution of diseases Present undesirable side effects Educate governments on trade laws and policy
Accounts for 97% of the world s trade Decisions made on consensus, rarely by majority Ministerial Conference (meets at least once every two years) General Council (Ambassadors and heads of state- meet several times a year) Also meet as Trade Policy and Review body and Disputes Settlement body Goods Council Services Council Intellectual Property Council
1) Trade Without Discrimination International: MFN treatment (non-discrimination) Domestic: National Treatment- treating foreign and local group equally 2) Gradual Freer Trade Lowering of tariffs multilaterally 3) Predictability International: Stability for the business community Domestic: Transparency 4) Fair Competition Intellectual property, tariffs, dumping (exporting at below cost to gain market share) Comparative advantage versus absolute advantage 5) Encouraging Development Special and differential treatment
2/3rds of members are DN By 2050 DN will account for 70% of world trade Special Provisions in GATT and GATS Extra time Increase trading opportunities (Ricardo s comparative advantage) Non reciprocal advantage Legal assistance (Advisory center on WTO law) Technical assistance Problems with S and D? Open or closed? Legal language- shall versus will
Safe Guards Short term, Compensation, domestic injury Countervailing duties Longer term, no compensation, caused by subsidies Amber box) Antidumping laws Longer term, most used, under pricing product to gain a larger market share Wax in China 27%
The Chief Executive Board: meets twice a year, heads of bodies coordinate policy action report their work back to ECOSOC ECOSOC: collaborate during the year UN Conference on Trade and Development ECOSOC in Geneva on MDGS UNITAR- development workshop
Funding projects in developing nations Fight poverty through low interest loans and interest free credit (MDG 1) Help LDCs and DN invest in health, agriculture, education and public sanitations Developing MDGs Encourage sustainable globalization
Board of Governors ~Meet once a year ~One from each of the 187 member nations ~Review operations and basic policies Delegate tasks to President Three managing directors 25 full time executive directors 100 country offices
In this organization voting power is NOT equal Nations have 250 votes initially and then can increase their number by one buying more shares in the bank (one share= one more vote) Those with larger economies normally have larger shares in the bank and thus have more voting power. Top five shares = appoint the top five executive directors Recently, under Voice Reform- Phase Two specific developing nations were given more power China, Russia and Saudi Arabia each elect their own director The rest of the directors are elected by the remaining members Nation Share (by %) USA 15.85% Japan 6.84% China 4.42% Germany 4.0% UK 3.75%
The International Development Association and the International Bank for Reconstruction and Development are World Bank funds. IDA- focuses on the l e a s t d e v e l o p e d c o u n t r i e s Work in the areas of climate change, gender disparity, post conflict situations, crisis and regional integration IBRD- reduces poverty in d e v e l o p i n g n a t i o n s who are credit worthy with middle income populations Works in the areas of social development, crisis, anti corruption, institutional change and creating an investment sector IDA IBRD WB
The World Bank has a huge project data base online here is an overview of a few examples Goal Region Project Improving labor markets Africa- Ghana Skills and technology development Health system performance South Asia- Bangladesh Improve health services for the poor Public sector governance Latin America and the Caribbean- Honduras Make structural reforms in the tax systems
Four pillar project Developing institutions to train workers (TVET- Technical, Vocational, Education and Training) Strengthening the science and technology sector (STI- Science, Technology and Innovation) Financing of skills and technology development program Project management, monitoring and evaluation Financier/amount: IDA (International Development Association) $70,000,000 Borrower 10,000,000
Enable the government of Bangladesh to strengthen health systems and improve health care for the poor Two part project: A) improve the actual services- continue on going projects and begin more B) Strengthen service delivery- response time, availability Financer/amount: IDA $358,9000,000
Four pillar project Closing tax loopholes, tax sector reform, improving tax administration Wage reform for civil service workers Tariffs to maintain competitiveness for state-owned electricity sector Strengthening public financial management Financier/amount: IDA $74,000,000
Problems Yemen s Third Public Work s Project to boost economic growth was funded by the IDA. They recently released the projects report Unemployment at 30% Health services only covered 58% of the population Only 11% of rural roads are paved Illiteracy at 46% Project Implement small, job creating infrastructure projects Use local contractors to increase flow of capital into the communities Ensure sustainability through community participation Conclusion 740,000 job opportunities created, 1,900 local contractors and 1,250 local consultants given new projects Immunization in children increased by 62%, childbirth under medical supervision reached 31% Over 100% increases in school attendance by both boys and girls Reached 68% of Yemen s rural poor
Stability! AKA the opposite of what is currently happening the in the Euro zone Dominos Gives policy advice to governments and central banks Has a major financial research component Provides loans to nations to prevent catastrophes, which could have rippling effects
IMF Components Surveillance Yearly appraisals of member nations Is there a risk to external stability? Most opt to publish results Technical Assistance and Training Monetary policy Fiscal policy Data collection and management Lending Difficulties rebalancing debt payments Support is normally conditional Also give low interest loans to LDCs and DNs Economic legislation
When a nation joins its given a quota based on its relative share of the world s economy Quota determines: Amount of financial resources a nation must provide (subscriptions) Voting power Access to financing- 200% annually 600% cumulatively SDR allocations
World Bank Bretton Woods Relationships Countries must join the IMF to be eligible for World Bank membership IMF research and strategies are implemented with the help of World Bank loans World Trade Organization IMF has observer status in WTO WTO has to consult the IMF when it deals with monetary reserves and balance of trade (GATT article 11) WTO uses IMF s research United Nations IMF supports the MDGs Poverty Reduction Papers
WTO- http://www.wto.org/ http://www.wto.org/english/tratop_e/adp_e/adp_e.htm World Bank- http://www.worldbank.org/ http://web.worldbank.org/external/projects/main?pagepk=64312881&pipk=64302848&thesitepk=40941&projectid=p1181 12 http://web.worldbank.org/external/projects/main?pagepk=64283627&pipk=73230&thesitepk=40941&menupk=228424&p rojectid=p121220 http://web.worldbank.org/external/projects/main?pagepk=64283627&pipk=73230&thesitepk=40941&menupk=228424&p rojectid=p118708 http://data.worldbank.org/country/yemen-republic IMF- http://www.imf.org/external/ind http://www.imf.org/external/np/exr/facts/quotas.htmex.htm UN- http://www.un.org/millenniumgoals/