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WTO,IMF and World Bank

WTO,IMF and World Bank

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Published by: tallalbasahel on Aug 30, 2010
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DQ-Analyse the roles played by the World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank in the world economy. Why do their actions often generate hostility, and is it deserved? Explain your answer. Week 4 TABLE OF CONTENT 1. Introduction 2. World Trade Organization (WTO) 3. International Monetary Fund (IMF) 4. World Bank References



1. Introduction Financial uniformity is linked to the removal of trade hurdles or complications between a minimum of two particular countries and the development of mutual agreements and amicability in their trade relations. Financial uniformity can assist in directing the globe to the path of internationalization. The World Trade Organization (WTO), the World Bank and the International Monetary Fund (IMF) are the three key bodies which impact world-scale agreements among nations. While the World Bank and the IMF are the basic forums for global economic and monetary functioning, the WTO is the main forum which regulates global trade functions. 2. World Trade Organization (WTO) The World Trade Organization (WTO) and GATT which was the organisation preceding it have pitched in towards the freeing up of global trade and have encouraged the expansion of the global economy. Off late though, the WTO appears to be at a bend in the road and is facing new difficulties. In this section, we shall pay attention to two matters in particular-one, area specific free trade agreements have increased in number so much so as to pose a danger to the main tenets of WTO/GATT regulations which promote agreements between multiple nations and uniform fee curbing. It is already known that Article 24 of the GATT endorses the entering into FTAs subject to some factors. With the global sprouting up of FTAs, it is becoming increasingly mandatory to review and also revise these factors. Two, the internationalisation of world economies have come to the point that manpower and environment agreements normally viewed as regional or country specific issues are fast evolving into common worries for the global economy. As the 1999 Seattle disaster clearly demonstrated, several clusters of individuals think of WTO as threatening to the prospect of bring about solid environment and manpower regulations. It is necessary to revise the part played by the WTO to bring about the alignment of WTO driven freeing of global trade with new requirements. Bagwell and Staiger (2001) have expertly argued that the main purpose of WTO regulations is to evolve a bargaining platform where participating nations can on their enter into market


accessibility agreements, with the guarantee that land entitlements are secure from the discussed accessibility agreements which could be used to attempt encroachment by a government. This indicates the perspective that WTO is an instrument for broadening and protecting market accessibility estate entitlements which pinpoints the manner in which endorsers of quality market, manpower and environment conditions can have some advantage from the correct operations of the WTO and will try to diffuse the criticism aimed at WTO. Though, they did not take into account the consequences for FTA because of GATT criteria. 3. International Monetary Fund (IMF) The International Monetary Fund (IMF) was established in the year 1984 to dodge the possibility of yet another economic slump. The aim was to assist nations in sustaining the greatest possible value for their money without having to put up trade hurdles and spiralling interest rates. The need of the IMF has heightened since the advent of the world economic difficulties in 2007. The IMF has been increasingly asked to make available world level financial monitoring. It is in the most convenient place to do so owing to its participant preconditions. The 180 member nations have also permitted their financial regulations to be examined by IMF. They agreed to adopt regulations which would help in at least moderate cost steadiness, not resort to fiddling with their exchange rates to gain unjust benefits and to give IMF information regarding its economy. An IMF monitoring report had tried to caution nations about the impending catastrophe but was not heeded. 4. World Bank The absence of agreement regarding the World bank¶s particular duties and the manner in which it ought to be manifested in a functional mission, tangible aims and regulations has been plaguing the body for several years now. Varied outlooks about its basic duties transcend the fact that some participant nations take from the Bank while others give resources. Though there are a number of theories regarding the most basic duty of the World Bank, four theories or outlooks are popular. The first is the idea that the World Bank is an economic agent,


the model of bank acting like a bank. Another view is that is a monitoring body responsible for transforming the attitudes of regimes in growing nations. Many think of the World Bank as a means to shift economic assets from well off nations to needy ones. References: 1. G. Dufey and I.H. Giddy. The International Money Market, 2nd Ed. Englewood Cliffs, NJ: Prentice-Hall, 1994. 2. International Monetary Fund. World Economic Outlook, Washington, DC, May 1998.


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