SUPRANATIONAL ORGANIZATIONS

AN INTERNATIONAL BUSINESS ASPECT

Presented to:
Maam Rakhshinda…..

DEPARTMENT OF COMMERCE
UNIVERSITY OF KARACHI

INTERNATIONAL BUSINESS

SEMESTER VII

Presented by:
Esha Waheed Awan
Nouman Baig

May 26, 2021

 ACKNOWLEDGEMENT

We owe a great many thanks to a great many people who helped and supported us during the
completion of this report. Our deepest thanks to our course supervisor, Madam Rakhshinda, for
giving us an opportunity to do such a work and then for guiding and correcting the various
documents of the report with attention and care. She has given her precious time to go through
the project again and again, and make necessary correction as and when needed.

Also we would like to thank all those links and contacts who helped us gathering up the data,
helping out in understanding critical points and making it an ease for us to reach so far.

Sincerely,

Esha Waheed Awan

Nouman Baig

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 CONTENT

S. No. Topic Page No.

1 Introduction 1

2 List of Supranational Organizations 2

3 Financial Stability Board 3

4 International Financial Reporting Standards 6

5 International Monetary Funds 9

6 Organization for Economic Co-operation and Development 18

7 World Trade Organization 22

8 The World Bank 26

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 INTRODUCTION

A Supranational Organization, as the name tells, is an international organization working in and

the help of different countries for public welfare in different aspects of international business and
trade, and monitoring and moderating different aspects of international governance.

There are more than 30 recognized supranational organizations, out of which more than 20 are
directly associated to the international business and trade. A common goal of these supranational
organizations is to achieve harmony and prosperity all across the world as the world is being
treated as a global village. In this global village there are more than 200 recognized countries
which are constantly in the process of foreign exchange, international business, across border
production, diversity of labor, etc. To monitor all such activities, there should be some globally
responsible organizations working totally for the public interest and development of the world,
being a neutral party.

Some common and popular names of supranational organizations are the United Nations (UN),
International Monetary Fund (IMF), The World Bank, World Trade Organization (WTO), World
Health Organization (WHO), etc. and some widely working but less popular organizations like
International Labor Organization (ILO), Financial Stability Institute (FSI), Financial Stability
Board, etc.

As mentioned earlier, there are more than 30 supranational organizations and more than 20 are
directly related to the international business, so it is not possible to cover all the organizations in
this report. Therefore, following is the list of supranational organizations covered:

 Financial Stability Board (FSB)

 International Financial Reporting Standards (IFRS)
 International Monetary Funds (IMF)
 Organization for Economic Co-operation and Development (OECD)
 World Bank
 World Trade Organizations (WTO)

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LIST OF SUPRANATIONAL ORGANIZATIONS

Source: www.actuaries.org

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 FINANCIAL STABILITY BOARD

(FSB)

INTRODUCTION

The Financial Stability Board (FSB) was established in April 2009, being the successor of
Financial Stability Forum (FSF). As the name suggests, emphasizes on the financial stability on
international scale; and it does by bringing the national financial authorities and the global
standard-setting powers and bodies on one platform to work toward formulating and functioning
the strong regulatory, supervisory, monitoring and other financial sector policies. It also provides
complete roadmap, along with full supervision, to the different financial sectors and jurisdictions
so that these policies are well-understood and applied finely.

The core purpose of FSB is to develop a stronghold for the financial systems and to strengthen
the stability of the international financial markets, surely through the work of its members. To
fulfill this purpose, the policies are formulated and implemented by the jurisdictions and the
national financial authorities.

FRAMEWORK

Embedded within the FSB’s structure could be a framework for the identification of systemic
risk within the financial sector, for framing the policy sector policy actions that can address these
risks, and for overseeing implementation of these responses. The FSB’s structure comprises the
plenary because the sole decision-making body, a steering committee to require forward
operational work in between plenary meetings, and three Standing Committees, each with
specific however complementary responsibilities towards the above process:

 The Standing Committee on Assessment of Vulnerabilities (SCAV), which is the FSB’s

main mechanism for identifying and assessing risks in the financial system.
 The Standing Committee on Supervisory and Regulatory Cooperation (SRC), which is
charged with undertaking further supervisory analysis or framing a regulatory or
supervisory policy response to a material vulnerability identified by SCAV.

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  The Standing Committee on Standards Implementation (SCSI), which is responsible for
monitoring the implementation of agreed FSB policy initiatives and international
standards.

Additionally, the standing committee on Budget and Resources (SCBR) provides oversight of
the FSB’s resources and budget and presents recommendations as necessary to the plenary.

The FSB’s decisions are not lawfully binding on its members – instead the organization operates
by ethical persuasion and peer pressure, in order to line internationally united policies and
minimum standards that its members plan to implement at national level. As obligations of
membership, members of the FSB plan to pursue the maintenance of financial stability, maintain
the openness and transparency of the financial sector implement international financial standards
and conform to undergo periodic peer reviews, using among other proof IMF/World Bank public
Financial Sector Assessment Program (FSAP) reports.

FSB members' adherence to international standards is important to reinforce the credibility of the
FSB's efforts to strengthen adherence by all countries and jurisdictions. Their commitment to
implementing international financial standards and revealing their level of adherence reflects
their intent to guide by example. The FSB will foster a race to the maximum, wherein
encouragement from peers motivates all countries and jurisdictions to raise their level of
adherence to international financial standards.

FUNCTIONS

To be precise, following are the various major purposes for which the FSB was formed:

 Assess vulnerabilities affecting the global financial system as well as to identify and
review, on a timely and ongoing basis within a macro-prudential perspective, the
regulatory, supervisory and related actions needed to address these vulnerabilities and
their outcomes.
 Promote coordination and information exchange among authorities responsible for
financial stability.
 Monitor and advise on market developments and their implications for regulatory policy.

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 Monitor and advise on best practice in meeting regulatory standards.
 Undertake joint strategic reviews of the international standard-setting bodies and
coordinate their respective policy development work to ensure this work is timely,
coordinated, focused on priorities and addresses gaps.
 Set guidelines for establishing and supporting supervisory colleges.
 Support contingency planning for cross-border crisis management, particularly with
regard to systemically important firms.
 Collaborate with the International Monetary Fund (IMF) to conduct Early Warning
Exercises.
 Promote member jurisdictions’ implementation of agreed commitments, standards and
policy recommendations, through monitoring of implementation, peer review and
disclosure.

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 INTERNATIONAL FINANCIAL REPORTING STANDARDS

(IFRS)

INTRODUCTION

The International Financial Reporting Standards (IFRS) Foundation is an international

organization which deals with setting and managing the high-quality global accounting
standards, popularly known as IFRS Standards, to be followed by all recognized businesses
keeping the accounting records. The IFRS Foundation is a non-profit international organization.

The mission of the IFRS Foundation is to develop the standards of reporting (in accounting) to
ensure three key elements, i.e. transparency, accountability and efficiency to the global financial
markets and international business. Being a non-profit organization, their work serves the public
interest by ensuring trust, development, growth and long-term financial stability in the
international economy.

As the organization grew significantly in past few decades, there are numerous international
organizations associated to IFRS and supports them for the wellbeing of the global economy.
These huge names include World Bank, Financial Stability Board, G20, Asian Banking Board,
etc. Currently, IFRS Standards are required in more than 145 jurisdictions, which are covering
more than 80% of the global market.

IFRS originated within the European Union, with the intention of creating business affairs and
financials accessible across the continent. The concept quickly unfolds globally, as a typical
language allowed bigger communication worldwide. Though the U.S. and a few alternative
countries do not use IFRS, most do, and that they are unfold everywhere the world, creating
IFRS the foremost common international set of standards.

IFRS are sometimes confused with International Accounting Standards (IAS), which are the
older standards that IFRS replaced. IAS was issued from 1973 to 2000, and the International
Accounting Standards Board (IASB) replaced the International Accounting Standards
Committee (IASC) in 2001.

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IFRS VS. GAAP

Differences exist between IFRS and Generally Accepted Accounting Principles (GAAP) that has
an effect on the method a monetary magnitude relation is calculated. As an example, IFRS isn't
as strict on process revenue and permits corporations to report revenue sooner, thus
consequently, a record beneath this technique would possibly show a better stream of revenue
than GAAP's. IFRS conjointly has totally different necessities for expenses; as an example, if an
organization is cash on development or an investment for the longer term, it does not essentially
have to be compelled to be reportable as an expense (it can be capitalized).

Another distinction between IFRS and accumulation is that the specification of the manner
inventory is accounted for. There are two ways in which to stay track of this, First in First out
(FIFO) and Last in Last out (LIFO). FIFO means the foremost recent inventory is left unsold till
older inventory is sold; LIFO means the foremost recent inventory is that the first to be sold.
IFRS prohibits LIFO, whereas GAAP standards and others permit participants to freely use
either.

FRAMEWORK

International Financial Reporting Standards (IFRS) set common rules in such an order that
financial statements are consistent, clear, and comparable round the world. IFRS are issued by
the International Accounting Standards Board (IASB). They specify however firms should
maintain and report their accounts, shaping sorts of transactions, and different events with money
impact. IFRS were established to make a standard accounting language in order that businesses
and their financial statements are consistent and reliable from company to company and country
to country.

IFRS are designed to bring consistency to accounting language, practices and statements and to
assist businesses and investors build educated financial analyses and selections. The IFRS
Foundation sets the standards to “bring transparency, accountability, and efficiency to financial
markets around the world… fostering trust, growth, and long-term financial stability in the
global economy.” corporations enjoy the IFRS as a result of investors area unit a lot of
seemingly to place cash into an organization if the company's business practices area unit clear.

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FUNCTIONS

The goal of IFRS is to form international comparisons as simple as doable. That goal hasn't
totally been achieved. Additionally to the U.S. using GAAP, Canada uses a variant of collection
and still different countries use entirely completely different standards. Synchronizing
accounting standards across the world is in progress method within the international accounting
community.

IFRS covers almost every area of accounting bookkeeping and record management. There are
few aspects to which it is mandatory for the recognized business to follow the IFRS in order to
meet the global financial market’s terms and conditions. There are termed as the rules of IFRS.

 Statement of Financial Position: This is also known as a balance sheet. IFRS influences
the ways in which the components of a balance sheet are reported.

 Statement of Comprehensive Income: This can take the form of one statement, or it can
be separated into a profit and loss statement and a statement of other income, including
property and equipment.

 Statement of Changes in Equity: Also known as a statement of retained earnings, this

documents the company's change in earnings or profit for the given financial period.

 Statement of Cash Flows: This report summarizes the company's financial transactions
in the given period, separating cash flow into Operations, Investing, and Financing.

In addition to these basic reports, a company must also give a summary of its accounting
policies. The full report is often seen side by side with the previous report, to show the changes
in profit and loss. A parent company must create separate account reports for each of its
subsidiary companies.

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 INTERNATIONAL MONETARY FUND

(IMF)

INTRODUCTION

The International Monetary Fund (IMF) is an organization working in and for more than 190
countries of the world; working to nurture global monetary cooperation, secure financial stability
globally, facilitate international trade, promote more and more employment and sustainable
economic growth to different economies, and reduce poverty all around the globe.

The origin of the IMF goes back to the times of international chaos of the 1930s. Throughout the
Second World War, plans for the development of a global establishment for the institution of
financial and monetary order were taken up.

In July 1944, at the Bretton Woods Conference, delegates from 44 non-communist countries
negotiated an agreement on the formation, functionality and operation of the international
monetary system.

The Articles of Agreement of the IMP provided the premise of the international monetary
system. The IMF started financial operations on March 01, 1947, though it came into official
existence on December 27, 1945, after 29 countries signed its Articles of Agreement (its charter).
By May 2012, the IMF had near-global membership of 188 member countries, which by today
(2021) has crossed over 190 member countries. It can be said that, virtually, the whole world
belongs to the IMF.

Article 1 of the Articles of Agreement (AGA) dictates 6 purposes for which the IMF was set up.
These are directly quoted from Article 1:

I. To promote international monetary cooperation through a permanent institution that

provides the machinery for consolation and collaboration on international monetary
problems.
II. To facilitate the expansion and balanced growth of international trade, and to contribute
thereby to the promotion and maintenance of high levels of employment and real income

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 and to the development of the productive resources of all members as primary objective
of economic policy.
III. To promote exchange stability, to maintain orderly exchange arrangements among
members, and to avoid competitive exchange depreciation.
IV. To assist in the establishment of a multilateral system of payments in respect of current
transactions between members and in the elimination of foreign exchange restrictions that
hamper the growth of world trade.
V. To give confidence to members by making the general resources of the Fund temporarily
available to them under adequate safeguards, thus providing them with the opportunity to
correct maladjustments in their balance of payments, without resorting to measures
destructive of national or international prosperity.
VI. In accordance with the above, to shorten the duration and lessen the degree of
disequilibrium in the international balance of payments of members.

These core objectives of the IMF can be summarized as follows:

 To promote international cooperation;

 to facilitate the growth and balanced growth of international trade;
 to push exchange stability;
 to help within the institution of a multilateral system of payments;
 to create its general resources accessible to its members experiencing balance of
payments difficulties below adequate safeguards;
 and to shorten the period and reduce the degree of disequilibrium within the international
balance of payments of members.

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FRAMEWORK

There are two phases within the operating of the IMF over the last 65 years. The first phase
covers the era of late 1940s (i.e. 1947) to 1971. This phase is popularly referred to as the
‘Bretton Woods System’. The IMF system or the Bretton Woods System provides foreign
exchange rate stability within the short run however allowed for the chance of rate adjustment
when an economy of country experienced ‘fundamental’ disequilibrium situation in its BOP
accounts. Thus, the pegged exchange rate was adjusted in accordance with the IMF. Hence the
name ‘adjustable peg system’ was given to it.

As the system was the supply of some major issues, it absolutely was abandoned in 1971 and
additional flexibility was introduced within the measure. In alternative words, the dying of the
Bretton Woods System created area for the floating rate regime, requiring changes within the
role of the IMF. Once prolonged negotiations (1973-78), the IMF started its second-leg journey
in 1978.

FUNCTION

The principal function of the IMF is to supervise the international criterion. Many functions are
derived from this. These are:

 granting of credit to member countries within the thick of temporary balance of

payments deficits,
 surveillance over the financial and charge per unit policy of member countries, and
 making and issuing policy recommendations.

It is to be noted that each one these functions of the IMF is also combined into three further
functions which are regulatory, financial and consultative functions.

Regulatory Function

The Fund functions as the guardian of a code of rules set by its (AOA— Articles of Agreement).

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Financial Function:

It functions as an agency of providing resources to meet short term and medium term BOP
disequilibrium faced by the member countries.

Consultative Function:

It functions as a centre for international cooperation and a source of counsel and technical
assistance to its members.

The main perform of the IMF is to produce temporary support to its members in order that
‘fundamental’ BOP situation are often corrected. However, such granting of credit is subject to
strict state. The state may be a direct consequence of the IMF’s police investigation performs
over the rate of exchange policies or adjustment method of members. The most state clause is
that the introduction of structural reforms. Low financial gain countries thespian attraction of the
IMF within the early years of Eighties once several of them sweet-faced terrible BOP difficulties
and severe debt compensation issues. Against this backcloth, the Fund took up ‘stabilization
program’ moreover as ‘structural adjustment program’. Stabilization program may be a demand
management issue, whereas structural program concentrates on offer management. The IMF
insists member countries to implement these programs to tackle economics instability. Its key
elements are:

1) Application of the principles of market economy;

2) Opening up of the economy by removing all barriers of trade; and
3) Prevention of deflation.

The Fund provides financial aid. It includes credits and loans to member countries with balance
of payments issues to support policies of adjustment and reform. It makes its monetary resources
obtainable to member countries through a spread of economic facilities. It conjointly provides
concessional help underneath its financial condition reduction and growth facility and debt relief
initiatives. It provides fund to combat money- wash and coercion seeable of the attack on the
globe Trade Centre of the USA on September 11, 2001.

In addition, technical help is additionally given by the Fund. Technical help consists of
experience and support provided by the IMF to its members in many broad areas: the planning

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and implementation of financial and financial policy; institution-building, the handling and
accounting of transactions with the IMF; the gathering and retirement of statistical data and
training of the officials.

Maintenance of stable charge per unit is another vital performs of the International Monetary
Fund. It prohibits multiple exchange rates. It is to be remembered that in contrast to the World
Bank, the IMF is not a development agency. Rather than providing development help, it provides
resource to suffice BOP difficulties to its members.

ORGANIZATIONAL STRUCTURE

Like many international organizations, the IMF is run by the Board of Governors, an Executive
Board and an international staff. Every member country selects and sends a representative as the
delegate (usually heads of central banks or ministers of finance) to the Board of Governors—the
top link of the chain of command. It meets at least once a year, or whenever called, and forms
decision on fundamental matters such as electing new members or changing quotas.

The Executive Board is responsible and liable to the management of day-to-day policy decisions.
The Board comprises 24 executive directors who overlook the implementation of policies set by
the member governments through the Board of Governors.

For running the operations, the IMF is led by the Managing Director who is elected by the
Executive Board for a 5-year term of working.

Rights and obligations, i.e. the balance of Powers in the Fund is ensured by a system of quotas.
Quotas are decided by a vote of the Board of Governors. Quotas or subscriptions generally
reflect the importance of members in the world economy. It is the quota on which payment
obligation, credit facilities, and voting rights of members are determined and the structure is
strengthened.

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FINANCIAL STRUCTURE

The finances, capital and the resources of the Fund come from two sources primarily. These
sources are:

 Subscription or quota of the member nations

 Borrowings

SUBSCRIPTIONS

Each member country is needed to subscribe associate quantity similar to its quota. It is the quota
on those payment obligations, credit facilities, and rights of members are determined. As before
long as a rustic joins the Fund, it's appointed a quota that is expressed in Special Drawing Rights
(SDRs). At the time of formation of the IMF, the quota of every member was created of 25% in
gold or 10% of its net official holdings of gold US dollars (whichever was less). Currently this
has been revised.

The capital subscriptions or quota is now made up of 25% of its quota in SDRs or widely
accepted currencies (such as the US dollar, Euro, Yen or Pound Sterling) instead of gold and 75
% in country’s own currency. The size of the Fund equals the sum of the subscriptions of
members.

The Fund is authorized to borrow in special circumstances if its own resources prove to be
insufficient. It sells gold to member countries to replenish currency holdings. It is entitled to
borrow even from international capital market. Though the Articles of Agreement permit the
Fund to borrow from the private capital market, till today no such use has been made by the IMF.

Special Drawing Rights (SDRs)

The Special Drawing Rights (SDRs) as an international reserve asset or reserve money in the
international monetary system was established in 1969 with the objective of alleviating the
problem of international liquidity. The IMF has two accounts of operation—the General Account
and the Special Drawing Account.

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The former account uses the national currencies of the countries to conduct all business of the
Fund, while the second account is transacted by the SDRs. The SDR is defined as a composite of
five currencies:

 Dollar
 Mark
 Franc
 Yen
 Pound

Only the IMF members can participate in SDR facility. The SDRs are authorized to the member
countries in proportion to their quota subscriptions. SDRs being costless, often called paper gold,
is just a book entry in the Special Drawing Account of the IMF. Whenever such paper gold is
authorized, it gets a credit entry in the name of the participating countries in the said account. It
is to be noted that SDRs, once allocated to a member, are owned by it and operated by it to
overcome BOP deficits. Since its inception, there have been only four allocation to SDRs—the
first in 1970, and the last in 2008-09—mainly to the developing countries.

Instruments of IMF Lending

The IMF Articles of Agreement clearly state that the resources of the Fund are to be accustomed
used to temporary help to members in funding BOP deficit on current account. Of course, the
monetary help provided by the Fund is loan. The subsequent technique is employed: If a country
calls on the Fund it buys foreign currencies from the IMF reciprocally for the equivalent within
the domestic currency.

This, in legal and technical terms, is termed a ‘drawing’ on the Fund. The technique, therefore,
suggests that the IMF does not lend, however sells the desired currency to the members on
certain terms. This distinctive financial structure of the Fund clearly suggests that the Fund’s
resources cannot be lent for very long time. It is meant to cover short run gaps in BOP.

The IMF’s distinctive financial structure does not enable any member to enjoy monetary help
over a long time period. The total quantity that a country is entitled to draw is decided by the
quantity of its quota. A member is entitled to draw an amount not exceeding 25 percent of its

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quota. The primary 25 percent is called the ‘gold tranche’ (‘tranche’ a French word meaning
slice) or ‘reserve tranche’ will simply be drawn by countries with BOP issues.

This 25 percent of the quota is that the members’ owned reserves and so no conditions are
connected to such drawings. This may be known as ‘ordinary, drawing rights; even the Fund
cannot deny its use. However, no interest for the first credit tranche is needed to be paid though
such drawings are subject to repayment within 3-5 years period. The ‘credit tranche’ of 100%
each equaling 25 percent of a member’s quota are available subject to the IMF approval and
therefore, ‘conditional’.

Originally, it had been possible to borrow equal to 125 percent of one’s quota. At present,
borrowing limit has been raised to 450 percent of one’s quota that must be redeemed inside five
years.

BORROWING

Borrowing methods used by the Fund are:

Stand-by Arrangements

This method of borrowing has become the most normal form of assistance by the Fund. Under
this form of borrowing, a member state obtains the assurance of the Fund that, usually over 12-
18 months, requests for drawings of foreign exchange (i.e., to meet short- term BOP problems)
up to a certain amount will be allowed if the country concerned wishes.

Extended Fund Facility (EFF)

Stand-by arrangements to stabilize a member’s BOP run usually for a period of 12-18 months.
Developing countries suffer from chronic BOP problems which could not be remedied in the
short run. Such protracted BOP difficulties experienced by the LDCs were the result of structural
imbalances in production and trade. It then necessitated an adjustment program and redemption
scheme of longer duration.

Compensatory Financing Facility (CFF)

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Apart from the ordinary drawing rights, there are some ‘special finances’ windows to assist the
developing countries to tide over BOP difficulties. CFF, introduced in 1963, is one such special
drawing provision. Its name was changed to Compensatory and Contingency Financing Facility
(CCFF) in 1980, but the ‘contingency’ was dropped in 2000. Under it, members were allowed to
draw up to 25 % of its quota when CFF was introduced. It can now draw up to 45 % since the
mid- 1990s, this has been the least-used facility.

Structural Adjustment Facility (SAF) and the Enhanced SAF (ESAF)

In 1986 a new facility—the SAF—was introduced for the benefit of low income countries. It was
increasingly realized that the so-called stringent and inflexible credit arrangements were too
inadequate to cope with the growing debt problems of the poorest members of the Fund. In view
of this, SAF was introduced which stood quite apart from the monetary character of the Fund.

Poverty Reduction and Growth Facility (PRGF)

The PRGF that replaced the ESAF in November 1999 provides concessional lending to help the
poorest member countries with the aim of making poverty reduction and economic growth —the
central objectives of policy programs. Under this facility, low-income member countries are
eligible to borrow up to 140 % of its quota for a 3-year period. Rate of interest that is charged is
only 0.5 p. c and repayment period covers 5 1/2-10 years, after disbursement of such facility.
However, financial assistance under this facility is, of course, ‘conditional’.

Supplemental Reserve Facility (SRF)

This instrument provides additional short-term financing to member countries facing exceptional
BOP difficulties because of a sudden and disruptive loss of market confidence reflected in capital
outflows of countries concerned. Consequent upon the eruption of East Asian financial crisis, the
SRF was introduced in 1997.

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 ORGANIZATION FOR ECONOMIC CO-OPERATION AND
DEVELOPMENT

(OECD)

INTRODUCTION

The Organization for Economic Co-operation and Development (OECD) is in actual a group of
countries, termed to be as a supranational organization that develops and implements the
economic and social policies. The OECD is comprised on 37 member countries, which are
mostly democratic countries that support and emphasize on the free-market economies.

The OECD is multifariously brought up as a think factory or an observance group. Its expressed
goal is to form policies that foster prosperity, equality, chance and well-being for all. Over the
years, it's restrained a spread of problems, as well as raising the quality of living in member
countries, conducive to the enlargement of world trade, and promoting economic stability.

The main purpose of the OECD is to boost the worldwide economy and promote world trade. It
provides an outlet for the governments of various countries to figure along to seek out solutions
to common issues. It includes operating with democratic nations that share a commitment to up
the economy and well-being of the overall population.

The OECD was established on December 14, 1960, by 18 European nations, and the United
States and Canada. It is swollen over time to incorporate members from South America and also
the Asia-Pacific region. It includes most of the world's extremely developed economies.

In 1948, within the aftermath of World War II, the Organization for European Economic Co-
operation (OEEC) was established to administer the preponderantly U.S.-funded European
Recovery Program for post-war reconstruction on the continent. The cluster emphasized the
importance of operating along for economic development, with the goal of avoiding from now
on decades of European warfare. The OEEC was instrumental in serving to the European
Economic Community (EEC) that has since evolved into the European Union (EU), to ascertain
a European trade space.

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In 1961, the OECD articles from the December 1960 convention went into impact, and therefore
the United States and Canada joined the European members of the OEEC that modified its name
to OECD to mirror the broader membership. The organization is headquartered within the
country house De la Muette in Paris, France.

FRAMEWORK

The OECD publishes economic reports, statistical data, analyses, and forecasts on the outlook for
economic process worldwide. Reports are diversely international, regional, or national in
orientation. The group analyzes and reports on the impact of policy problems–such as gender
discrimination on economic growth–and makes policy recommendations designed to foster
growth with sensitivity to environmental issues. The organization additionally seeks to eliminate
graft and different financial crime worldwide.

The OECD maintains a questionable "black list" of countries that are thought-about
uncooperative tax havens, though there aren't any nations presently on the list since by 2009, all
nations on the first list had created commitments to implement the OECD standards of
transparency. The OECD is leading a shot with the Group of Twenty (G20) countries to
encourage tax reform worldwide and eliminate minimization by profitable firms. The
recommendations conferred for the project enclosed an estimate that such dodging prices the
world's economies between $100 billion and $240 billion in tax revenue annually.

The group also provides consulting assistance and support to nations in central Asia and Eastern
Europe that implement market-based economic reforms.

FUNCTIONS

The OECD uses information on numerous topics to fight economic condition, facilitate
governments prosper, and stop monetary instability. The organization monitors the economies of
member and non-member nations, and therefore the Secretariat collects and analyzes info on
totally different aspects of society.

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The committee discusses relevant policies to be enforced exploitation the knowledge, and
therefore the council makes the ultimate choices on the policies. The governments of the various
states execute the suggested methods.

1. Peer Reviews

There are processes wherever individual member countries’ performance is supervised by the
other members of the OECD. This is often a core operate of the organization and helps them
produce simpler policies. It also can facilitate governments gain support for the implementation
of adverse policies in their home country. Associate degree example of a review is once the
United Kingdom was told to stay aid at a commendable 0.7% level. It had been done to make
sure that the additional cash is spent within the most effective approach attainable.

2. Standards and Recommendations

At the committee level, member countries of the OECD discuss general policies and rules for
international cooperation. There are formal agreements on problems like exports, imports,
investments, and combating graft. They additionally set the standards that all countries have to
be compelled to follow relating to the legal system and treaties, and supply recommendations on
environmental practices and company rules.

3. Publications

The OECD publishes articles on economic outlooks, statistics, and a general summary.

1. OECD Economic Outlook – Provides a forecast for member and non-member nations
2. OECD Factbook – is a guide-book for economies that are implementing new policies
3. Going for Growth – A comparison of states, supported national performance

The peer reviews, standards, and agreements, and publications facilitate the OECD deliver the
goods economic process for nations whereas additionally providing a base for the
implementation of future policies.

ORGANIZATIONAL STRUCTURE
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The organization is structured in three tiers: the Council, the Secretariat, and also the
Committees.

The Council

The Council consists of ambassadors from the member nations. They exercise authority over
decision-making and establishing goals for the organization. They are responsible of the strategic
direction of the OECD.

The Secretariat

The second tier is that the Secretary-General, the deputy, and also the directorates. This OECD
Secretary-General is Jose Angel Gurria, a Mexican economic expert and diplomat. The
Secretariat lists a pair of, 500 members and includes economists, scientists, and lawyers World
Health Organization are guilty of the gathering of information and analysis and analysis. The
council and also the Secretary-General administrate the work of the Secretariat.

The Committees

The third tier is that the committees, that embody representatives from completely different
member nations that meet to debate the atmosphere, education, trade, and investment.

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 WORLD TRADE ORGANIZATION

(WTO)

INTRODUCTION

The World Trade Organization (WTO) is the only global international organization dealing with
the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed
by the majority of the world's trading nations and legal in their parliaments.

The World Trade Organization (WTO) is an international organization constituted by of 164

member countries that deals with the foundations of trade between nations. Its goal is to make
sure that trade flows as smoothly and predictably as possible. It was officially constituted on
January 1, 1995, and replaced the General Agreement on Tariffs and Trade (GATT) which was
formerly formed in 1948.

WTO has faced several threats in different eras. Recently, as a part of his broader tries to
renegotiate the United States' international trade deals, President Donald Trump threatened to
withdraw from the WTO in August 2018, calling it a “disaster”. If the U.S. had enraptured to
withdraw from the organization, trillions of dollars in international trade would have been
discontinuous. However, this was not the first time the WTO has come beneath scrutiny. Earlier,
there had been a protest at the doors of the world Trade Organization's (WTO) Third Ministerial
Conference held in Seattle, Washington in 1999, where the protesters tried to bring down this
organization. Similar demonstrations against the WTO have conjointly occurred in Canada and
Switzerland. So what does actually WTO do that triggers a lot of people to go against it, or is it
just a brainwashed act? Therefore, it is very necessary to understand the framework and
functions of the World Trade Organization.

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FRAMEWORK

The World Trade Organization was born out of the General Agreement on Tariffs and Trade
(GATT) that was established in 1947. GATT was a part of the Bretton Woods-inspired family, as
well as the International monetary fund (IMF) and IBRD. A series of trade negotiations, GATT
rounds began at the end of World War II and were geared toward reducing tariffs for the
facilitation of world trade.

The explanation for GATT was based on the most-favored-nation (MFN) clause, which, once
assigned when country by another, the chosen the chosen country privileged trading rights. As
such, GATT aimed to assist all countries acquires MFN-like status therefore no single country
would hold a trading advantage over others.

The World Trade Organization replaced GATT because the world's world global body in 1995
and the current set of governing rules stems from the Uruguay Round of GATT negotiations that
took place from 1986 to 1994. GATT trading rules established between 1947 and 1994 (and
especially those negotiated throughout the Uruguay Round) stays the first rule book for
multilateral trade in product. Specific sectors like agriculture have been addressed, as well as
problems coping with anti-dumping.

The Uruguay Round additionally ordered the foundations for control regulating services. The
General Agreement on exchange Services (GATS) is that the guideline leading multilateral trade
in services. Intellectual property rights were addressed within the establishment of regulations
protecting the trade and investment of ideas, concepts, designs, patents, and then forth.

The purpose of the WTO is to make sure international trade commences smoothly, freely, and
predictably. The WTO creates and embodies the ground rules for international trade among
member nations, giving a system for international commerce. The WTO aims to make economic
peace and stability within the world through a multilateral system supported based on member
states. The WTO has 164 members that have legal the rules of the WTO in their individual
countries further. This suggests WTO rules become a part of a country's domestic legal system.

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The rules therefore apply to native corporations conducting business within the international
arena.

If a corporation decides to speculate in a foreign country by, for instance, setting up an

workplace in that country, the rules of the WTO (and thus, a country's local laws) will govern
how that can be done. Theoretically, if a country is a member of the WTO, its local laws cannot
contradict WTO rules and regulations that currently govern around 96.4% of all world trade.

FUNCTION

The current director-general of the world Trade Organization is Ngozi Okonjo-Iweala from
Nigeria. Choices are made by consensus; though a majority vote might also rule (this is very
rare). Primarily based in Geneva, Switzerland, the Ministerial Conference, that holds conferences
at least every two years, makes the top decisions.

There is conjointly a goods council, services council, and intellectual property rights council, that
all report back to a general council, additionally to several operating groups and committees. If a
trade dispute occurs, the WTO works to resolve it. If for example, for instance erects a trade
barrier within the kind of a customs duty against a particular country or a specific good, the
WTO could issue trade sanctions against the violating country. The WTO will also work to
resolve the conflict through negotiations.

The anti-WTO protests we have seen round the world are a response to the results of establishing
a multilateral trading system. Critics say the after-effects of WTO policies are undemocratic
attributable to the dearth of transparency throughout negotiations. Opponents also argue since the
WTO functions as a world authority on trade, and it's within its rights to review a country's
domestic trade policies, national sovereignty is compromised. for instance, regulations a country
might need to establish to protect its industry, workers, or environment could be considered
barriers to the WTO's aim to facilitate free trade.

A country could need to sacrifice its own interests to avoid violating WTO agreements. Thus, a
country becomes limited in its selections. Moreover, brutal regimes that are pernicious to their

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own countries could inadvertently be receiving concealed support from foreign governments
World Health Organization continue, within the name of free trade, to try and do business with
these regimes. Unfavorable governments in favor of huge business, therefore, stay in power at
the cost of a representative government.

One high-profile WTO controversy has to do with intellectual property rights and a government's
duty to its citizens versus a world authority. One well-known example is HIV/AIDS treatments
and therefore the cost of patented medicines. Poor countries, like those in South America and
sub-Saharan Africa, merely cannot afford to buy these patented medicine. If they were to buy or
manufacture these same drugs beneath an affordable generic label, which might save thousands
of lives, these countries would, as members of the WTO, be in violation of intellectual property
rights agreements and subject to potential trade sanctions.

Free trade fosters investment into different countries, which can facilitate boost the economy and
eventually the standard of living of all countries involved. As most investment flows from the
developed and economically powerful countries into the developing and less-influential
economies, there is, however, a tendency for the system to provide the investor an advantage.

Regulations that facilitate the investment method are within the investor's interest as a result of
these regulations facilitate foreign investors maintain an edge over native competition. As many
countries, including the United States, strengthen their protectionist stance on trade, the long run
of the world Trade Organization remains complex and unclear.

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 WORLD BANK

INTRODUCTION

The World Bank is an international financial organization that has loans and grants for low-
income countries following capital comes that they're unable to fund otherwise. The World Bank
was after the World War II, when several European countries were physically and financially
destroyed. It absolutely was created to lend money with no charge per unit so these countries
may build themselves and eventually pay back the Bank. Now, the World Bank provides loans to
countries everywhere the world operating to eliminate economic condition. The Bank
additionally offers loans to non-governmental organizations, or NGOs, that give aid in low-
income and developing countries. Since 1947, the Bank has funded over 12,000 development
projects. In accordance with the UN Sustainability Development Goals, the World Bank intends
to finish extreme economic condition and increase the financial income of the bottom 40% in
each country by 2030.

Currently, around 10% of the world population lives in extreme economic condition. This is
often about 700 million people living on but $1.90 per day. To overcome this in perspective, this
is often regarding double the population of the US that may be a very little over three hundred
million people. However, this range won’t to be tons higher. Though 700 million people are a
lot, the quantity of individuals living in extreme economic condition round the world has truly
declined steady since the first 90s. This is often thanks to efforts to extend education, scale back
death rate, and improve several alternative factors that have an effect on financial gain. Yet,
however can we recognize that these factors influence a country’s level of economic condition
and the way have we have a tendency to been ready to track this progress? A lot of this
information is well accessible because of the World Bank that collects knowledge on a range of
topics from 189 countries. It is one amongst the World’s largest analysis centers, providing
analyses of development knowledge and coaching to governments throughout the globe.

The World Bank tracks indicators of development in every of its member countries and publishes
this knowledge on its web site. Individual countries report back to the World Bank that then
compiles this info. Countries, companies, and standard folks will use their free info to seek out

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statistics on public health, income, education, and alternative indicators of development.
However, the World Bank is way more than a database.

The World Bank was created in 1944 out of the Bretton Woods Agreement that was secured
below the auspices of the international organization within the latter days of World War II. The
Bretton Woods Agreement enclosed many components: a collective international measure, the
formation of the World Bank, and also the creation of the International money (IMF). Since their
founding each the World Bank and also the International money have worked along toward
several of constant goals. The first goals of each the World Bank and International Monetary
Fund were to support European and Asian countries needing funding to fund post-war
reconstruction efforts.

Both the World Bank and International Monetary Fund outlasted the collective international
measure that was central to the Bretton Woods Agreement. President Nixon halted the Bretton
Woods international measure within the Nineteen Seventies. However, the World Bank and
International Monetary Fund remained open and continuing to thrive on providing worldwide
aid.

The World Bank and International Monetary Fund are headquartered in Washington, D.C. the
World Bank presently has over 10000 staff in additional than 120 offices worldwide.

Though titled as a bank, the World Bank, is not essentially a bank within the ancient, hired
meanings of the word. The World Bank and its subsidiary teams operate among their own
provisions and develop their own proprietary monetary help product, all with constant goal of
serving countries' capital desires internationally. The World Bank’s counterpart, the IMF, is
structured a lot of sort of a credit fund. The differing within the structuring of the 2 entities and
their product offerings permits them to supply differing kinds of economic loaning and funding
support. Every entity conjointly has many of its own distinct responsibilities for serving the
world economy.

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FRAMEWORK

The World Bank consists of two institutions i.e. the International Bank for Reconstruction and
Development (IBRD) and also the International Development Association (IDA). The IDA is
that the branch that gives interest-free loans to low-income countries, and also the IBRD branch
collects data and helps developing countries implement their comes.

Countries will qualify for loans if their Gross National Income (GNI), is low. But first, they need
to spot a necessity and develop an idea to utilize the cash they will borrow for a capital project. A
capital project refers to up a country’s capital, like infrastructure, or maybe eliminating barriers
to human capital, like lack of nutrition or education.

The World Bank is accessible to low-income countries as a result of, not like most banks; its
loans are interest-free. This suggests that though the countries eventually got to pay back the
World Bank, they are doing not got to pay an extra proportion of what they borrowed.

FUNCTIONS

Although the World Bank works to eliminate poverty, critics believe that it uses “shock medical
care,” which might be harmful to developing countries. In economics, therapy is once the
government quickly and radically changes economic policy. This could seem like a unexpected
withdrawal of subsidies by the state and also the unleash of controls on the value of products.
This transition is usually tough for citizens and may cause political unrest.

Another critique of the World Bank is that poorer countries are under-represented in its decision-
making processes. Countries get a vote for each share they need within the World Bank’s capital
stock. The amount of shares that a country has relies on however large its economy is. Countries
with larger economies, primarily the United States, Japan, China, and European countries, hold
the best variety of shares and, therefore, the foremost choice power. The countries keen about the
loans, however, have little or no management. The United States features a distinctive influence
over the World Bank because the largest single shareowner. Traditionally, the president of the
World Bank has continually been a U.S. citizen.

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Some other critiques of the World Bank embrace that there are unfair conditions to qualify for a
loan, which the World Bank has “sovereign immunity.” exemption means the World Bank will
do no legal wrong and cannot be reprehensively charged. Some additionally blame the planet
Bank for will increase in economic condition in elements of geographic region because of its
structural readjustment policies. Since then, the World Bank has started a economic condition
Reduction Strategy, though critics argue that the Bank’s efforts are still not sufficiently targeting
root issues. These criticisms of the World Bank inform us of the importance of equal illustration
in bodies of power, whether or not on the international level or during a student council.
Illustration is critical to make sure that everybody features a voice concerning selections which
will have an effect on them.

Through the years, the World Bank has expanded from a single institution to a group of five
unique and cooperative institutional organizations, known as the World Banks or collectively as
the World Bank Group.

International Bank for Reconstruction and Development

The first organization is the International Bank for Reconstruction and Development (IBRD), an
institution that provides debt financing to governments that are considered middle income.

International Development Association

The second organization within the World Bank Group is the International Development
Association (IDA), a group that gives interest-free loans to the governments of poor countries.

International Finance Corporation

The International Finance Corporation (IFC), the third organization, focuses on the private sector
and provides developing countries with investment financing and financial advisory services.

Multilateral Investment Guarantee Agency

The fourth part of the World Bank Group is the Multilateral Investment Guarantee Agency
(MIGA), an organization that promotes foreign direct investments in developing countries.

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International Centre for Settlement of Investment Disputes

The fifth organization is the International Centre for Settlement of Investment Disputes (ICSID),
an entity that provides arbitration on international investment disputes.

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