INTERNATIONAL

ORGANIZATIONS
THE UNITED NATIONS
 United Nations
 Established in 1945, after the end of WWII.
 Spends over $800 million annually for
goods & services from businesses world-
wide.
 Characterized by decentralization.
 Has six (6) main organs.
 General Assembly

 Sometimes called the nearest thing to a world

parliament, it is the main deliberative body.
 All Member States are represented in it, and each
has one vote.
 Decisions on ordinary matters are taken by simple
majority. Important questions require a two-thirds
majority.
 The Assembly has the right to discuss and make
recommendations on all matters within the scope
of the UN Charter.
 The Security Council

 Performs “peace-keeping” function.

 It can be convened at any time, whenever peace is
threatened. Member States are obligated to carry
out its decisions.
 Council consists of 15 members.
– Five of these China, France, the Russian Federation,
the United Kingdom and the United States are
permanent members.
– The other 10 are elected by the Assembly for two-year
terms.
 The Security Council
 All decisions require a minimum of 9 votes.
 Any of the five permanent members have veto
power; a decision can not be taken if there is a
negative vote by a permanent member.
 The Economic & Social Council
 Main activities are aimed at:
– Promoting economic growth in LDC’S.
– Administering development projects.
– Promoting & observing human rights.
– Developing family planning projects.
– Spreading benefits of science & technology.
– Safeguarding the interests of minorities.
 The Trusteeship Council

 The Trusteeship Council was established to ensure

that Governments responsible for administering
Trust Territories take adequate steps to prepare
them for self-government or independence.
 In 1994, the Security Council terminated the UN
Trusteeship Agreement for the last of the original
11 Trusteeships the Trust Territory of the Pacific
Islands (Palau), administered by the United States.
 It now will meet as and when required.
 The International Court of Justice

 The International Court of Justice (also known as

the World Court) is the main judicial organ of the
UN.
 Consists of 15 judges elected by the General
Assembly and the Security Council.
 If a country does not wish to take part in a
proceeding it does not have to do so, but if it
accepts, it is obligated to comply with the Court's
decision.
 The Secretariat
 The Secretariat works for all the other organs of
the UN and administers their programs. Made up
of a staff working at Headquarters and all over the
world, it carries out the day-to-day work of the
UN. At its head is the Secretary-General. Staff
members are drawn from some 170 countries.
 Specialized Agencies of the UN

 UN Children’s Fund
 World Health Organization
 International Telecom Union
 Food & Agriculture Organization
 UN Industrial Development Organization
 UN Conference on Trade & Development
 Universal Postal Union
 International Atomic Energy Agency
 UN Development Program
THE WORLD BANK GROUP
 THE WORLD BANK GROUP

The World Bank Group comprises of five

organizations:
 The International Bank for Reconstruction and
Development (IBRD)
 The International Development Association (IDA)
 The International Finance Corporation (IFC)
 The Multilateral Investment Guarantee Agency
(MIGA)
 The International Center for the Settlement of
Investment Disputes (ICSID).
 The International Bank for
Reconstruction & Development
 Founded in 1944
 Purpose:To provide loans to the relatively high per
capita income-developing countries and countries
undergoing economic transition for development
projects, such as building highways, schools, and
hospitals, and for programs to help governments
change the way they manage their economies.
 Commitments in fiscal 1998: $21.1 billion for 151
new operations in 44 countries.
 The International Bank for
Reconstruction & Development

 Largest borrowers in fiscal 1998: Korea ($5

billion), China ($2.3 billion), Mexico ($1.8
billion).
 Interest rate: 0.35 percent above LIBOR, with a
1.0 percent up-front fee on loan effectiveness.
 Maturity on loans: 15 to 20 years, with a grace
period of about five years.
 Source of funds: Paid-in capital, borrowings,
repayments on earlier loans, retained earnings.
 International Development
Association (IDA)

 Founded in 1960.
 Purpose: To provide low-interest loans to the
poorest developing countries that cannot afford to
borrow from the IBRD. IDA “credits” go mainly
to countries with annual per capita incomes of
$925 or less (about seventy countries are eligible),
to finance the same kind of development projects
as does the IBRD.
 Commitments in fiscal 1998: $7.5 billion for 135
new operations in 56 countries.
 International Development
Association (IDA)

 Largest borrowers in fiscal 1998: India ($1.1

billion), Ethiopia ($669.2 million), Bangladesh
($646.4 million).
 Interest rate: 0.0 percent.
 Terms on credits: 35 or 40 years, with a 10-year
grace period.
 Sources of funds: Contributions from
governments, transfers from IBRD profits, and
repayments on earlier IDA credits.
 International Finance Corporation
(IFC)
 Founded in 1956.
 Purpose: To foster economic growth in the
developing world by financing private sector
investments, mobilizing capital in the international
financial markets, and providing technical
assistance and advice to governments &
businesses.
 Investments in fiscal 1998: $5.1 billion.
 Interest rate: Market rates, which vary between
countries and projects.
 International Finance Corporation
(IFC)
 Maturity on loans: 8 to 13 years, with grace
periods as long as eight years.
 Source of funds: About 80 percent borrowed in
international financial markets through public
bond issues or private placements, 20 percent
borrowed from IBRD.
 Multilateral Investment Guarantee
Agency (MIGA)
 Founded in 1988.
 Purpose: To assist the flow of foreign direct
investment to developing member countries by
providing investment guarantees (insurance)
against political risks such as transfer restriction,
expropriation, and war, and by extending
investment marketing services to better promote
investment opportunities in developing member
countries.
 Multilateral Investment Guarantee
Agency (MIGA)
 Coverage: may insure up to $75 million per
project. Additional amounts of coverage are
obtained through reinsurance and coinsurance
arrangements with other insurers.
 Guarantees issued in fiscal 1998: Coverage
totaling $830 million was issued, facilitating $6.1
billion in foreign investments in 26 developing
countries.
 International Center for Settlement
of Investment Disputes (ICSID)
 Founded in 1966.
 Purpose: To promote increased flows of
international investment by providing facilities for
the conciliation and arbitration of disputes
between governments and foreign investors. Also
provides advice, carries out research, and produces
publications in the area of foreign investment law.
 Cases in fiscal 1998: Eight new requests for
arbitration registered and eighteen cases pending
before the Center.
THE INTERNATIONAL
MONETARY FUND
 The International Monetary Fund

 Established in 1945, at Bretton Woods, New

Hampshire

 Originallysigned by 29 countries, today

about a 170 countries are signed on

 Deals solely with governments

 The International Monetary Fund
 Objectives:
– Orderly Foreign Exchange arrangements
– Exchange Rate stability
– Promote currency convertibility
– Eliminate currency restrictions
– Avoid currency devaluations
 THE WORLD TRADE
ORGANIZATION (WTO)
 The World Trade Organization

 Established in 1995.
 Deals with the rules of trade between nations.
 The main objective:to help trade flow as freely as
possible, to achieve further liberalization gradually
through negotiation, and to set up an impartial
means of settling disputes.
 Principles of trade:A number of simple,
fundamental principles run throughout all the
WTO agreements.
The World Trade Organization

 They include:
– non-discrimination ("most-favored-nation” treatment
and "national" treatment),
– freer trade,
– predictable policies,
– encouraging competition,
– extra provisions for less developed countries.
 The GATT agreement has been amended and
incorporated into the new WTO agreements.