IMF GATT AND WTO OBJECTIVES Understand European Monetary

IMF, GATT AND WTO

OBJECTIVES • Understand European Monetary System • Discuss the Activities, Aims, Structure, Surveillance, History and Governance of IMF • Understand the members quotas and voting power of members of IMF

OBJECTIVES • Analyze the reforms taken place in the IMF. • Elaborate the GATT. • Understand • Discuss WTO the principles of trading system.

INTERNATIONAL MONITORY FUND • The IMF is an organization of 188 countries. • Working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduces poverty around the world.

• INTERNATIONAL MONETARY FUND The IMF tracks global economic trends and performance. • It alerts its member countries when it sees problems on the horizon. • It provides a forum for policy dialogue, and passes on know-how to governments on how to tackle economic difficulties.

KEY IMF ACTIVITIES The IMMF supports its membership by providing • Policy advice to governments and central banks based on analysis of economic trends and cross-country experiences. • Research, statistics, forecasts and analysis based on tracking of global, regional, and individual economies and markets. .

KEY IMF ACTIVITIES • Loans too help countries overcome economic difficulties. . • Concessional loans to help fight poverty in developing countries and • Technical assistance and training too help countries improve the management of their economies.

• The ORIGINAL AIMS founders aimed to build a framework for economic cooperation that would avoid a repetition of the disastrous economic policies the had contributed to the great depression of the 19300 s and the global conflict that followed.

ORIGINAL AIMS The IMF continues to � Provide a forum for co operation on international moneetary problems. � Facilitate the growth of international trade, thus promoting job creation, economic growth, and poverty reduction; � Promote exchange rate stability and an open system of international payments and � Lend countries foreign exchange when needed, on a temporary basis and under adequate safeguards, to help them dress balance of payments problems.

AN ADAPTING IMF � � � As the world economy struggles to restore growth and jobs after the worst crisis since the great depression, the IMF has emerged as a very different institution. It increased its lending during the to support its member countries. It supported global policy coordinating, and reformed the way it makes decisions.

AN ADAPTING IMF � � � Stepping up crisis lending Greater lending flexibility Providing analysis and advice Drawing lessons from the crisis Historic reform of Governance

SURVEILLANCE � � � It promotes economic stability and global growth by encouraging countries to adopt sound economic and financial policies. It regularly monitors global, regional, and national economic developments. It seeks to assess the impact of the policies of individual countries on other economies.

SURVEILLLANCE � � � This process of monitoring and discussing countries’ economic and financial policies is known as bilateral surveillance. It discusses with the country’s authorities the policies that are most conducive to a stable and prosperous economy, drawing on experience across its membership. IMF recently agreed on a series of actions to enhance multilateral, financial and bilateral surveillance.

TECHNICAL ASSISTANCE AND TRAINING � � 1. 2. 3. 4. The IMF provides technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. It is mainly focused in 4 areas Monetary and Financial policies. Fiscal policy and Management. Complication, management, dissemination and improvement of statistical data Economic and financial legislation.

LENDING � � IMF financing provides member countries the breathing room they need to correct balance of payments problems. In the most recent reforms, IMF lending instruments were improved further to provide flexible crisis prevention tools to a broad range of members with sound fundamentals, policies, and institutional policy frameworks.

LENDING � 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.

COLLABORATING WITH OTHERS � � � The IMF collaborates with the world bank, regional development bank, the WTO, UN agencies, and other international bodies. While all of these organizations are involved in global economic issues, each has its own unique areas of responsibility and specialization. They even work closely with the (G-20)

HISTORY � � � The IMF has played a part in shaping the global economy since the end of world war 2. Cooperation and Reconstruction (1944 -71) The end of the Breton woods system (1972 -81) Debt and painful reforms (1982 -89) Societal change for eastern Europe and Asian upheaval (1990 -2004) Globalization and the crisis (2005 - present)

THE REFORM OF THE IMF � � 1. 2. 3. Unlike the general assembly of the united nations, where each country has one vote, decision making at the IMF was designed to reflect the position of each member country in the global economy. 3 main issues in the area The surveillance Conditionality Reserve system together with the function of the bank of last resort.

THE REFORM OF THE IMF � � � Giving more say to emerging markets Protecting the voice of low income countries Timeline for implementing the reform Accountability Country representation

General Agreement on Tariffs and (GATT) � � � It was a multilateral agreement regulating international trade. The purpose was the substantial reduction of tarrifs and other trade barriers and the elimination of preferences on a reciprocal and mutually advantageous basis. It was signed in 1947 and lasted until 1994 when it was replaced by the WTO in 1995.

FUNCTIONS � � � Administering WTO trade agreements Forum for trade negotiations Handling trade disputes Monitoring national trade policies Technical assistance and training developing countries. for

PRINCIPLES OF THE TRADING SYSTEM 1. 2. 3. 4. 5. 6. Most favored nation (MEN) National Treatment Freer trade : Gradually, through negotiation Predictability : Through binding and transparency. Promoting fair competition Encouraging development and economic reform

ACTIVITIES OF WTO � � � Eliminating the obstacles and agreeing on rules governing the conduct of international trade. Administering and monitoring the application of the WTO agreed rules for trade in goods, trade in services, and trade related intellectual property rights. Monitoring and reviewing the trade policies.

ACTIVITIES OF WTO � � � Settling disputes among our members regarding the interpretation and application of the agreements. Building capacity of developing country government officials in international trade matters. Assisting the process of accession of some 30 countries who are not yet members of the organisation.

ACTIVITIES OF WTO � � Conducting economic research and collecting and disseminating trade data in support of the WTO other main activities. Explaining to and educating the public about the WTO its mission and its activities.

STRUCTURE OF WTO � 1. 2. 3. HIGHEST AUTHORITY The ministerial conference SECOND LEVEL The general council The dispute settlement body The trade policy review body

STRUCTURE OF WTO � 1. 2. 3. � 1. 2. THIRD LEVEL The council for trade in Goods The council for trade in services The council for trade related aspects of intellectual property rights (TRIPS) FOURTH LEVEL Each of the higher level councils has subsidiary bodies. The GOODS COUNCIL has 11 committees dealing with specific subjects.

STRUCTURE OF WTO � It deals with financial services, domestic regulations, GATS rules and specific commitments.

WORLD BANK � The World Bank is an international financial institution that provides loans to countries of the world for capital programs. It comprises two institutions: the International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA).

Goals of world bank � The World Bank's stated official goal is the reduction of poverty. However, according to its Articles of Agreement, all its decisions must be guided by a commitment to the promotion of foreign investment and international trade and to the facilitation of capital investment.

Member countries repay the share amount to the World Bank in the following ways: � � 1. 2% of allotted share repaid in gold, US dollar or Special Drawing Rights (SDR). 2. Every member country is free to repay 18% of its capital share in its own currency. ADVERTISEMENTS: 3. The remaining 80% share deposited by the member country only on demand by the World Bank.

Objectives: The following objectives are assigned by the World Bank: � 1. To provide long-run capital to member countries for economic reconstruction and development. � 2. To induce long-run capital investment for assuring Balance of Payments (Bo. P) equilibrium and balanced development of international trade. � 3. To provide guarantee for loans granted to small and large units and other projects of member countries. � 4. To ensure the implementation of development projects so as to bring about a smooth transference from a war-time to peace economy. � 5. To promote capital investment in member countries by the following ways; (a) To provide guarantee on private loans or capital investment. (b) If private capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions. �

Functions: World Bank is playing main role of providing loans for development works to member countries, especially to underdeveloped countries. The World Bank provides long-term loans for various development projects of 5 to 20 years duration. � The main functions can be explained with the help of the following points: 1. World Bank provides various technical services to the member countries. For this purpose, the Bank has established “The Economic Development Institute” and a Staff College in Washington. 2. Bank can grant loans to a member country up to 20% of its share in the paid-up capital. 3. The quantities of loans, interest rate and terms and conditions are determined by the Bank itself. 4. Generally, Bank grants loans for a particular project duly submitted to the Bank by the member country. 5. The debtor nation has to repay either in reserve currencies or in the currency in which the loan was sanctioned. 6. Bank also provides loan to private investors belonging to member countries on its own guarantee, but for this loan private investors have to seek prior permission from those counties where this amount will be collected. �