Role of International Organisations in the Global Economy
Uploaded by joeydaprof on Jun 12, 2006
Explain the role in the global economy of International organizations
Globalization is the actual movement or potential to move across borders of nations in areas of trade, investment, technology, finance and labor. It has resulted in increasing financial flows and trade between countries, as each country tries to establish itself into the global economy, and gaining the benefits associated with globalization. This has resulted in the formation of numerous International organizations that aim at promoting policy coordination amongst countries and attempt to provide rules and investment transactions and a forum for discussion of trade related issues. Such international organizations are, the World Trade Organization (WTO), International Monetary Fund (IMF), The World Bank, Organization for economic cooperation and development (OECD), Organization of Petroleum Exporting Countries (OPEC), and the Group Seven (G7).
The WTO is the main multilateral trading agreement which provides a forum for countries to promote free trade and resolve trade disputes. Its various roles include enforcing the existing WTO agreement, resolving disputes, and liberalising world trade by implementing global trade agreements. These agreements lay ground rules, that promote cooperation between countries. The WTO also exists in order to provide non-discrimination between member countries, liberalisation of trade which involves the removal of all tariff and non-tariff barriers, stability of trading relations where WTO mechanisms are set up to discuss and solve trade disputes between countries, and Transparancy of trade agreements, where trade preferences between countries are scrutinised and discussed in the WTO forum thereby reducing corruption. Without the WTO, globalisation would be a struggling process as countries would have difficulty organising trade policies, often resulting in many countries at a disadvantage. In essence the WTO serves as a forum to ensure that all its member countries benefit from globalisation.
The IMF is an international organisation established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth, a stable economic environment, high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment. This assistance is given to countries if economic policy is met, known as “structural adjustment policies”. These policies are aimed to decrease the size of the government, privitising government business enterprises and deregulating markets. Without the IMF, poorer countries will find themselves without assistance, and at a point where they cannot acheive economic growth, poorer areas within the country will be stagnate, and contrasting to the growing richer economies...