Activity 1

Research and explain briefly the following financial institution and economic organization.

1. The Bretton Woods System

- It was clear during the Second World War that a new international system would be needed to
replace the Gold Standard after the war ended. The design for it was drawn up at the Bretton
Woods Conference in the US in 1944. US political and economic dominance necessitated the
dollar being at the center of the system. After the chaos of the inter-war period there was a
desire for stability, with fixed exchange rates seen as essential for trade, but also for more
flexibility than the traditional Gold Standard had provided. The Bretton Woods system was
drawn up and fixed the dollar to gold at the existing parity of US$35 per ounce, while all other
currencies had fixed, but adjustable, exchange rates to the dollar. Unlike the classical Gold
Standard, capital controls were permitted to enable governments to stimulate their economies
without suffering from financial market penalties.
During the era of the Bretton Woods system, the world economy grew rapidly. Keynesian
economic policies enabled governments to dampen economic fluctuations, and recessions were
generally minor. However, strains started to show in the 1960s. Persistent, albeit low-level,
global inflation made the price of gold too low in real terms. A chronic US trade deficit drained
US gold reserves, but there was considerable resistance to the idea of devaluing the dollar
against gold; in any event this would have required agreement among surplus countries to raise
their exchange rates against the dollar to bring about the needed adjustment. Meanwhile, the
pace of economic growth meant that the level of international reserves generally became
inadequate; the invention of the ‘Special Drawing Right’ (SDR)[1] failed to solve this problem.
While capital controls still remained, they were considerably weaker by the end of the 1960s
than in the early 1950s, raising prospects of capital flight from, or speculation against, currencies
that were perceived as weak.

Reference: https://www.gold.org/about-gold/history-of-gold/bretton-woods-system

2. The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO)
- The General Agreement on Tariffs and Trade (GATT), signed on October 30, 1947, by 23
countries, was a legal agreement minimizing barriers to international trade by eliminating or
reducing quotas, tariffs, and subsidies while preserving significant regulations. The GATT was
intended to boost economic recovery after World War II through reconstructing and liberalizing
global trade.
The GATT went into effect on January 1, 1948. Since that beginning it has been refined,
eventually leading to the creation of the World Trade Organization (WTO) on January 1, 1995,
which absorbed and extended it. By this time 125 nations were signatories to its agreements,
which covered about 90% of global trade.
The Council for Trade in Goods (Goods Council) is responsible for the GATT and consists of
representatives from all WTO member countries. As of September 2020, the chair of the Goods
Council is Swedish Ambassador Mikael Anzén. The council has 10 committees that address
subjects including market access, agriculture, subsidies, and anti-dumping measures.
 Reference: https://www.investopedia.com/terms/g/gatt.asp

3. The International Monetary Fund (IMF) and the World Bank

- The World Bank Group works with developing countries to reduce poverty and increase shared
prosperity, while the International Monetary Fund serves to stabilize the international monetary
system and acts as a monitor of the world’s currencies. The World Bank Group provides
financing, policy advice, and technical assistance to governments, and also focuses on
strengthening the private sector in developing countries. The IMF keeps track of the economy
globally and in member countries, lends to countries with balance of payments difficulties, and
gives practical help to members. Countries must first join the IMF to be eligible to join the
World Bank Group; today, each institution has 189 member countries.
The World Bank Group is one of the world’s largest sources of funding and knowledge for
developing countries. Its five institutions share a commitment to reducing poverty, increasing
shared prosperity, and promoting sustainable development.
The IMF works to foster global monetary cooperation, secure financial stability, facilitate
international trade, promote high employment and sustainable economic growth, and reduce
poverty around the world.

Reference: https://www.worldbank.org/en/about/history/the-world-bank-group-and-the-imf

4. The Organization for Economic Cooperation and Development (OECD)

- The Organization for Economic Co-operation and Development (OECD) is a group of 37 member
countries that discuss and develop economic and social policy. OECD members are typically
democratic countries that support free-market economies.
The OECD is variously referred to as a think tank or a monitoring group. Its stated goal is to
shape policies that foster prosperity, equality, opportunity and well-being for all. Over the years,
it has dealt with a range of issues, including raising the standard of living in member countries,
contributing to the expansion of world trade, and promoting economic stability.
In 1948, in the aftermath of World War II, the Organization for European Economic Co-
operation (OEEC) was established to administer the predominantly U.S.-funded Marshall Plan
for post-war reconstruction on the continent. The group emphasized the importance of
working together for economic development, with the goal of avoiding any more decades of
European warfare.
The OEEC was instrumental in helping the European Economic Community (EEC), which has
since evolved into the European Union (EU), to establish a European Free Trade Area.

Reference: https://www.investopedia.com/terms/o/oecd.asp

5. The Organization of Petroleum Exporting Countries (OPEC), and the European Union (EU)
- The Organization of the Petroleum Exporting Countries (OPEC) is a permanent
intergovernmental organization of oil-exporting developing nations that coordinates and unifies
the petroleum policies of its Member Countries. OPEC seeks to ensure the stabilization of oil
prices in the international oil markets, with a view to eliminating harmful and unnecessary
fluctuations, due regard being given at all times to the interests of oil-producing nations and to
the necessity of securing a steady income for them. Equally important is OPEC’s role in securing
an efficient, economic and regular supply of petroleum to consuming nations and a fair return
on capital to those investing in the petroleum industry.
OPEC was founded on September 14, 1960, the result of a meeting that took place in the Iraqi
capital of Baghdad, attended by the five Founder Members of the Organization: Iran, Iraq,
Kuwait, Saudi Arabia and Venezuela. Once the original agreement for establishing OPEC was
signed, it was registered with the United Nations Secretariat on November 6, 1962, following UN
Resolution No. 6363.
Currently, the Organization comprises 15 Member Countries – namely Algeria, Angola, Congo,
Ecuador, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia,
United Arab Emirates and Venezuela.

Reference: https://www.jodidata.org/about-jodi/partners/opec.aspx

Activity 2

1. With the information revolution, global market patterns are rapidly changing. This blog
discusses a variety of topics, including market disruptions caused by hacking or hacking-
related power outages, policy changes such as trade barriers, economic shifts such as oil
shocks, and changing demographics such as an aging population.
Organizations all around the world have been able to connect easily across boundaries
thanks to the digital age. Online marketplaces allow consumers and sellers from all over the
world to connect with one another. However, this has posed new difficulties for foreign
market transactions. Let's take a look at what this means for the worldwide market today.
Increasing global connectedness affects prices, tastes, and preferences for goods and
services for both producers and consumers. This pin explores the current impact of the
information revolution on global economies.

2. Multinational corporations provide money into developing countries. For example, on the
financial account of the balance of payments, the investment to develop the plant is
counted as a capital flow. This capital investment aids in the development of the economy
and the expansion of its productive potential and that is an advantage in a developing
country like the Philippines, but it may cause also Environmental Cost, and Profit
repatriated. Multinational companies could outsource parts of the production process to
developing economies with weaker environmental legislation. When it comes to Profit
repatriated Although multinationals invest in emerging economies, profits are returned to
the multinational's home country, resulting in lower net capital inflows than appears. So
basically, the effect of Multinational corporations to our country its either good or bad.

3. According to OSIKHOTSALI MOMOH “The terms capitalism and socialism are both used to
describe economic and political systems. On a theoretical level, both of these terms also
describe specific schools of economic thought. One of the most fundamental differences
between the systems of capitalism and socialism lies in the scope of government
 intervention within an economy.” In Socialism the production was owned by the public,
while in capitalism the production was owned privately. I think socialism would work in our
country because socialism creates a society that focuses on economic equality. In capitalism
the opportunities are not equal, which mean there is systemized inequality, resulting in
social division and anger between classes (upper and lower classes).

Activity 3
1. Multinational corporation is one that has business operations in two or more countries.
These companies are often managed from and have a central office headquartered in their
home country, but with offices worldwide. Simply exporting goods to be sold abroad does
not make a company a multinational. The word “Global Nature” means influencing to other
countries. I think that based on the definition of Multinational corporation already show us
that they are “Global Nature” itself because they exporting products and goods in multiple
countries which means they already influence globally.

2. Yes, because they are the one who creating jobs even though that the multinational
corporation has a negative impact still it helps many countries to create opportunities and
provide jobs to the people who needs job. Multinational corporation creates large profits
which can be used for researched and development.