This document provides information on several international institutions: - UNCTAD deals with development issues and trade, established in 1964 with 194 member states, aims to promote equitable global development. - IMF was established in 1945 with goals of monetary cooperation and financial stability, has 187 member countries and provides loans and policy advice. - IBRD offers loans to middle-income countries for development projects and is part of the World Bank Group. - WTO established in 1995 as the successor to GATT, has 167 members and oversees global trade rules and agreements through negotiation and dispute resolution.

1. INTERNATIONAL INSTITUTIONS
PRESENTED BY
SIMRAN KAUR
MBA 2ND YEAR
IGICM

2. UNCTAD
• United Nations Conference on Trade and Development
• 194 states are members
• Established in 1964 as a permanent intergovernmental body of UNO assembly
• Responsible for dealing with developmental issues particularly international trade, the main driver of
development
• UNCTAD Secretriat : Geneva Secretriat headed by Mukhisa Kituyi from Kenya
• Meets every 4 years
• 11 conferences have been held up to 2004
• Aim to help take informed decision and promote macro-economic policies best suitable to ending global
economic inequalities

3. ROLE OF UNCTAD
• Globalization and development
• Provide technical assistance on the management of public debt
• Promote integrated approach to trade, environment and sustainable development
• Focus on contribution of commodity sector to development, advocating diversification and risk
management
• Inform policy makers about the structure and evolution of FDI in the world
• Participate in setting international accounting standards
• Focus on issue related to international investment agreements

4. FUNCTIONS OF UNCTAD
• To promote international trade with a view to accelerating economic development
• To formulate principles of and policies on international trade and related problems of economic
development
• To negotiate multinational trade agreements
• To make proposals for putting its principles and policies into effect

5. PRINCIPLES OF UNCTAD
• Every country has the sovereign right freely to dispose of its natural resources in the interest of
economic development and freely to trade with other countries
• Economic relations including trade relations shall be based on the respect for the principles of sovereign
equality of states, self determination of people, and non-interference in internal affairs of other
countries
• There shall be no discrimination on the basis of differences in socio-economic systems

6. INTERNATIONAL MONETARY FUND(IMF)
• Established on December 27, 1945 with 29 countries
• Began financial operations on March 1, 1947
• Central institution of international monetary system
• Aims to prevent crises in the system by encouraging countries to adopt sound economic policies
• 187 countries on September 30, 2010

7. PURPOSES OF IMF
• Promote international monetary cooperation through a permanent institution
• Facilitate expansion and balanced growth of international trade
• Promote exchange stability
• Assist in establishment of multilateral system of payments
• Monitors economic and financial developments and policies
• Provides the governments and central banks of its member countries with technical assistance and
training in its area of expertise

8. VISION OF IMF
• Strive to promote sustained non-inflationary economic growth that benefits all people
• Be the centre of competence for the stability of the international financial system
• Focus on its core macroeconomic and financial areas of responsibility
• Be an open institution, learning from experience and dialogue

9. ORGANIZATION OF IMF
• Board of Governors, all member countries are represented, highest authority : meets once a year
• Executive Board – 24 Executive Directors with Managing Director as Chairman : meets three times a
week in Washington DC
• 5 largest shareholders : United States, Japan, Germany, France and United Kingdom – along with China,
Russia, Saudi Arabia, have their own seats on the Board
• Other 16 Executive Directors elected for 2-year terms by group of countries known as constituencies
• Key policy issues considered twice-yearly in International Monetary and Financial Committee (IMFC)
• Committee of Board of Governors of IMF and World Bank called Development Committee advises on
development policy
• IMF has weighted voting system

10. PROCESS OF IMF LENDING
• IMF loans are provided under an “arrangement”
• All arrangements are based on economic programmes and must be approved by Executive Board
through a “letter of intent”
• Loans are then released in phased installments as the programme is carried out
• Low-income countries may borrow at a concessional interest rate through Poverty Reduction and
Growth Facility (PRGF)
• Non-concessional loans are provided through five facilities : Stand-By Arrangements (SBA), Extended
Fund Facility (EFF), Supplemental Reserve Facility (SRF), Contingent Credit Lines (CCL), Compensatory
Financing Facility (CFF)
• Rate of charge is currently about 2.9%

11. IMF FACILITIES
• Poverty Reduction and Growth Facility (PRGF)
 Interest rate : 0.5%
 Repaid over period of 5.5-10 years
• Stand-By Arrangements (SBA)
 Short-term balance of payment problems
 Length: 12-18 months
 Repayment: 2.25-4years
• Extended Fund Facility (EFF)
 Established in 1974
 Repayment : 4.5-7 years

12. IMF FACILITIES
• Supplemental Reserve Facility (SRF)
 Introduced in 1997
 Surcharge : 3-5%
 Repayment : 1-1.5 years
• Contingent Credit Lines (CCL)
 Established in 1999
 Repayment :1-1.5 years
 Surcharge : 1.5-3.5%
• Compensatory Financing Facility (CFF)
 Established in 1960s
 No surcharge
 Same as SBA

13. IBRD
• International Bank for Reconstruction and Development
• International financial institution
• Offers loans to middle-income developing countries
• Established in 1944
• Main lending organization of the World Bank Group
• Headquarters at Washington, D.C.

14. ORGANIZATIONAL STRUCTURE OF IBRD
• President
• Board of Governors
• Board of Executive Directors
• Board Committee
• Development Committee

15. FUNCTIONS OF IRBD
• To assist in the reconstructions and development of territories of its member countries by facilitating
the investment of capital for productive purpose
• To promote private foreign investment by means of guarantees or participations in loans and other
investment made by private investors
• To arrange the loans made or guaranteed by it in relation to international loans through other channels
so that more useful and urgent small and large projects are dealt with first
• To promote the long ranged balanced growth of international trade and maintenance of equilibrium in
the balance of payments of member countries

16. FUNDING STRATEGY OF IBRD
• Ensure the availability of funds to the Bank
• Minimise the effective cost of those funds to its borrowers
• Control volatility in net income and over all loan charges
• Provide an appropriate degree of maturity transformation between its borrowing and lending

17. WORLD TRADE ORGANIZATION (WTO)
• Only global international organization dealing with the rules of trade between nations
• Formed on 1 January 1995
• Headquarter : Central William, Geneva, Switzerland
• Members : 167 nations
• India joined on 1 January, 1995
• Older form : GATT (General Agreement of Tarriffs and Trade)
• Official language : English, French, Spanish
• Current Director General : Roberto Azeuedo

18. PRINCIPLES OF WTO
• Non-discrimination
• Freer trade, predictable policies, encouraging competition
• Extra provisions for less developed countries
• Achieve further liberalization gradually through negotiation

19. FUNCTIONS OF WTO
• Administering the WTO trade agreements
• Monitoring national trade policies
• Providing technical assistance and training for developing countries
• Administering mechanism for settling trade disputes
• Cooperating with other international organizations like IMF and IBRD
• Providing the forum for negotiations among its members concerning their multilateral trade relations

20. BENEFITS OF WTO
• Achievements in reducing the tariff and non-tariff barriers to trade
• Liberalization of investments has been fostering economic growth of a number of countries
• Increase in competition, efficiency of resource utilization, improvement in quality and productivity and
fall in prices and acceleration of economic development
• Provides forum for multilateral discussion of economic relations
• Mechanism to deal with violation of trade agreements
• Considerable research related to global trade and disseminates a wealth of information

21. DRAWBACKS OF WTO
• Negotiations and decision making dominated by the developed countries
• Many developing countries don’t have the financial and knowledge resources to effectively participate
in WTO discussions and negotiations
• The developing countries have been getting a raw deal from WTO
• WTO has not been successful in imposing organization’s disciplines on the developed countries
• Because of dependence of developing countries on developed countries, developed countries are able
to resort to arms-twisting tactics

22. ORGANIZATION STRUCTURE OF WTO
• Top level decision-making body is the Ministerial Conference which meets at least once every two years
• General Council : ambassadors and heads of delegations in Geneva which meets several times a year
• General Council also meets as Trade Policy Review Body and Dispute Settlement Body
• Goods Council, Services Council and Intellectual Property (TRIPs) Council report to General Council
• Numerous specialized committees, working groups and working parties deal with individual agreements
• All WTO members may participate in all councils, committees, etc except Appellate Body, Dispute
Settlement panels, Textiles Monitoring Body and plurilateral committees

23. PROCESS OF SETTLING A DISPUTE BY WTO
• 60 days: Consultations, meditation, etc
• 45 days: Panel set up and panelists appointment
• 6 months: Final panel report to parties
• 3 weeks: Final panel report to WTO members
• 60 days: Dispute Settlement Body adopts report (if no appeal)
• 60-90 days: Appeals report
• 30 days: Dispute Settlement Body adopts appeals report

24. ECONOMIC INTEGRATION
• Type of arrangement that removes artificial trade barriers between integrating economies
• Balassa drew distinction between integration and cooperation
• Abolition of discrimination within an area

25. DEGREES OF ECONOMIC INTEGRATION
• Free trade area
• Customs union
• Common market
• Economic union
• Economic integration

26. EUROPEAN UNION (EU)
• Most successful of regional economic integration schemes
• Originally comprised 6 countries, namely, Belgium, France, Federal Republic of Germany, Italy,
Luxembourg and Netherlands
• Brought on January 1, 1958 by virtue of Treaty of Rome, 1957
• Expanded in 1973 with inclusion of UK, Denmark and Ireland
• Greek joined in 1981
• Spain and Portugal in 1986
• Abolished tariffs on trade among themselves
• Largest market in the world
• Boost competitiveness of European industry against its rivals particularly USA, SAARC, Japan

27. BARRIERS TO EU
• Border control
• Limitations on movement of people and their right to establishment
• Differing internal taxation regimes
• Lack of a common legal framework for business
• Controls on movement of capital
• Heavy-and differing- regulation of services
• Divergent product regulations and standards
• Protectionist public procurement policies

28. BENEFITS OF EU
• Uniform policy and regulatory environment of Union and reduction in transaction costs
• Expansion of markets
• Availability of new ports reducing transportation costs
• Removal of quota restrictions for textiles and clothing will reduce protection presently available to
Acs(accession countries) exports in EU market
• Harmonization of tariff structures will increase import duty of some countries above pre-accession level
and reduce those of others

29. CHALLENGES OF EU
• Many Indian products will have to face stiffer competition in EU market
• Low labour costs give rise to competition
• As Acs are labour abundant and low income countries, it could affect BPO by EU to India
• Acs may affect FDI inflow to India
• Exports of textiles may be adversely affected with low cost production in Central and Eastern European
Countries(CEECs) eating into India’s EU(15) markets

30. INDO-EU TRADE
• EU is India’s largest trading partner
• India’s exports to EU grew from Rs.282 crore in 1970-71 to Rs.1447 crore in 1980-81 and Rs.8951 crore
in 1990-91. Correspondingly, imports were Rs.320 crore, Rs.2639 crore andRs.12,680 crore
• Within EU, largest trade partners of India have been UK, Germany, Belgium, France
• Exports include textiles, jute, leather, polished diamonds, chemicals, engineering goods, etc
• Imports include edible oils, dairy products, capital goods, optical instruments, synthetic rubber, etc
• India should pay sufficient attention in order to take advantage of “enlarging opportunity”

31. ENLARGED EU & INDIA
• Accession of 10 new members
• Exports were insignificant and imports were lower than exports
• Main exports include gems and jewellery, drugs and pharmaceuticals, leather, textiles, plastics and
agricultural commodities

32. NAFTA
• Signed between USA and Canada in 1988, enlarged by inclusion of Mexico in 1994
• Eliminate all tariffs on products moving among three countries and end other barriers to services and
investment capital within North America

33. AREAS OF NAFTA
• Market access
• Trade rules
• Services
• Investment
• Intellectual property
• Dispute settlement

34. ADVANTAGES OF NAFTA
• Reduced Tariffs
• The Three Countries Take Advantage Of Real Income Increases
• Increased Of Trade Between, Canada, Mexico and the United States
• Provided More Employment Opportunities for the US Workers

35. DISADVANTAGES OF NAFTA
• Less Benefits To Mexican Workers Than Expected
• Increased Tariffs Yet Not Regulations

36. ASEAN
• Association of South East Asian Nations
• Formed by Bangkok Declaration,1967
• 5 countries viz Indonesia, Malaysia, Philippines, Singapore and Thailand
• Brunei joined in 1984
• Economic growth rate has been very high
• Important producer of coffee, sugar, timber, petroleum, nickel, bauxite, tungsten and charcoal
• ASEAN Free Trade Area(AFTA) created in 1992 which calls for elimination of all custom duties
• ASEAN-India summit held in November 2002
• Free Trade Agreement was signed between ASEAN and India in 2009

37. SAARC
• South Asian Association for Regional Cooperation
• Seven countries: India, Bangladesh, Pakistan, Nepal, Bhutan, Sri Lanka, Maldives
• Formally launched in December, 1985
• Secretriat of Association: Kathmandu, Nepal
• Fundamental goal: accelerate economic and social development through optimum utilization of their
human and material resources

38. OBJECTIVES OF SAARC
• To promote welfare of people of South Asia
• To accelerate economic growth, social progress and cultural development in the group
• To promote and strengthen collective self-reliance among countries of South Asia
• To contribute to mutual trust, understanding and appreciation of each other’s problems
• To strengthen cooperation with other developing countries
• To strengthen cooperation among themselves in international forums
• To cooperate with international and regional organizations with similar aims and purposes
• To promote active collaboration and mutual assistance in economic, social, cultural, technical and
scientific fields

39. PRINCIPLES OF SAARC
• Cooperation should be based on respect for principles of sovereign equality, territorial integrity, political
independence, non-interference in the internal affairs of other States and mutual benefits
• Such cooperation shall not be a substitute for bilateral cooperation but shall complement them
• Such cooperation shall not be inconsistent with bilateral and multilateral obligations

40. ADVANTAGES OF SAARC
• Greater cultural co-operation
• Promoted global objective of shelter for all
• SAFTA : a Free Trade Agreement confined to goods reduced custom duties to zero
• Provided forum for bilateral and regional agreements to the small poor nations for collaboration among
themselves for development

41. LIMITATIONS OF SAARC
• Domination of India
• Political differences
• Inequality among members
• Excludes bilateral and contentious issues discussion on forum
• No progress in road and rail connectivity which is obstacle for trade
• Lack of financial resources and technology
• Most of the countries are poor except for India and lack full fledged democratic structure

42. ECONOMIC INTEGRATION OF BUSINESS
• Provides opportunity for free trade with other countries that are at similar levels of development
• Presents a way to trade with advanced countries without being harmed by their superior economic
power
• Generate economic growth and development

43. THANK YOU!!!