global systems - the world bank, IMF and WTO (bk 4)

• Outsourcing


  Hiring workers in other countries to do a set of jobs - usually cheaper location
• Bilateral agreement


  an agreement between two nations
• Multilateral agreement


  an agreement between more than two nations
• Bottom up


  when local people are consulted and supported in making decisions to undertake projects or developments to meet needs
• Top down


  When the decisions to undertake projects or developments is made by central authority with little to no consultation with locals
• World bank


  A specialized agency of the United Nations that makes loans to countries for economic development, trade promotion, and debt consolidation. Its formal name is the International Bank for Reconstruction and Development.
• Role of world bank

  - finance the development of nations through loans

  - official goal is the reduction in poverty by promoting foreign direct investment and trade
• Evaluating the World Bank

  World bank imposes strict conditions on its loans and grants like the IMF
• International Monetary Fund (IMF)

  an international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation
• Role of IMF


  -provide monetary reserves so countries could maintain exchange rates

  -offer credit for reserve payments

  -reduce foreign exchange control

  -monetary policies to prevent inflation/devaluation
• Evaluating the IMF


  the rules and regulations of the IMF are controversial - strict financial conditions imposed on borrowing governments, who may be required to make cut on healthcare etc
• Structural adjustment programmes


  Strict conditions imposed on countries receiving loans from the IMF and the World Bank. Receiving governments may be required to cut back on healthcare, education, sanitation and housing programmes.
• Differences between the IMF and World Bank

  
• World Trade Organisation (WTO)

  An international organisation that provides a forum for its members to discuss trade agreements and settle disputes, with the aim of making trade as free as possible. It is a multilateral trade agreement
• Role of WTO


  - Set and enforce rules of international trade

  - Resolve trade disputes

  - Provide a forum for negotiating trade liberalisation

  - To monitor further trade liberalisation

  - Increase transparency of decision making process

  - Help developing countries benefit

  - Cooperate with other major economic institutions
• Evaluating role of WTO

  failed to stop the worlds richest countries like USA from subsidising their own food producers - this is harmful to farmers in developing countries who want to trade equally