Prepared By:

Dr. Sangeeta
Assistant professor
Management
 International Economic Institutions

Several international economic and trade organizations affect the

environment of international business in a variety of ways, such as
assessing the country’s economic environment, extending credit
facilities to national governments as well as individual organizations,
undertaking equity investments, providing multilateral guarantees for
trade and investment, settling disputes, keeping surveillance of
international monetary systems, compiling and disseminating
information, protecting intellectual property, providing technical
assistance, and funding development projects.
• The explanation of the logo: "A hint of the
globe is suggested by the six graphic arcs
symbolizing world trade with member nations
meeting to forge strategic alliances. Dynamism
and optimism prevail as the swirls integrate,
encapsulating WTO's united spirit of
promoting fair and open trade."
 Wo rld Tra de Or gan iz a tion (W TO ): Ob jec tive s a nd Fu ncti on s

• GATT (1986-93) gave birth to World Trade

Organization. The members of GATT singed on an
agreement of Uruguay round in April 1994 in
Morocco for establishing a new organization named
WTO.
•
It was officially constituted on January 1, 1995 which
took the place of GATT as an effective formal,
organization. GATT was an informal organization
which regulated world trade since 1948.
• Contrary to the temporary nature of GATT,
WTO is a permanent organization which has
been established on the basis of an
international treaty approved by participating
countries. It achieved the international status
like IMF and IBRD, but it is not an agency of
the United Nations Organization (UNO).
 Structure:

• The WTO has nearly 153 members accounting for over

97% of world trade. Around 30 others are negotiating
membership. Decisions are made by the entire
membership. This is typically by consensus.
• A majority vote is also possible but it has never been
used in the WTO and was extremely rare under the
WTO’s predecessor, GATT. The WTO’s agreements
have been ratified in all members’ parliaments.
 Secretariat:
• The WTO secretariat, based in Geneva, has around 600 staff
and is headed by a Director-General. Its annual budget is
roughly 160 million Swiss Francs. It does not have branch
offices outside Geneva. Since decisions are taken by the
members themselves, the secretariat does not have the
decision making the role that other international bureaucracies
are given.
• The secretariat s main duties to supply technical support for the
various councils and committees and the ministerial
conferences, to provide technical assistance for developing
countries, to analyze world trade and to explain WTO affairs to
the public and media. The secretariat also provides some forms
of legal assistance in the dispute settlement process and
advises governments wishing to become members of the WTO.
 From 1 Sept 2013, till now
st

• Director General –WTO (Roberto Azevêdo of

Brazil)
 Objectives
•  To improve the standard of living of people in the
member countries.
• 2. To ensure full employment and broad increase in
effective demand.
• 3. To enlarge production and trade of goods.
• 4. To increase the trade of services.
• 5. To ensure optimum utilization of world resources.
• 6. To protect the environment.
• 7. To accept the concept of sustainable development.
 Functions
• 1. To implement rules and provisions related to trade policy review
mechanism.
• 2. To provide a platform to member countries to decide future
strategies related to trade and tariff.
• 3. To provide facilities for implementation, administration and
operation of multilateral and bilateral agreements of the world
trade.
• 4. To administer the rules and processes related to dispute
settlement.
• 5. To ensure the optimum use of world resources.
• 6. To assist international organizations such as, IMF and IBRD for
establishing coherence in Universal Economic Policy determination.
 Latest News
• Japan has requested WTO dispute
consultations with Korea regarding alleged
subsidies provided by the Korean government
to its shipbuilding industry. Japan’s request
was circulated to WTO members on 10
February.
 Origin of IMF:
• The origin of the IMF goes back to the days of international chaos
of the 1930s. During the Second World War, plans for the
construction of an international institution for the establishment
of monetary order were taken up.
• At the Bretton Woods Conference held in July 1944, delegates
from 44 non-communist countries negotiated an agreement on
the structure and operation of the international monetary system.
• The IMF com­menced financial operations on 1 March 1947,
though it came into official existence on 27 December 1945, when
29 countries signed its Articles of Agreement (its charter). Today
(May 2012), the IMF has near-global membership of 188 member
countries. Virtually, the entire world belongs to the IMF. India is
one of the founder- members of the Fund.
 Objectives
Article 1 of the Articles of Agreement (AGA) spell out 6 purposes for which
the IMF was set up.
I. To promote international monetary coope­ration through a permanent
institution which provides the machinery for consolation and collaboration
on international monetary problems.
II. To facilitate the expansion and balanced growth of international trade, and
to contribute thereby to the promotion and maintenance of high levels of
employment and real income and to the development of the productive
resources of all members as primary objective of economic policy.
III. To promote exchange stability, to maintain orderly exchange
arrangements among members, and to avoid competitive exchange
depreciation.
IV. To assist in the establishment of a multila­teral system of payments in
respect of current transactions between members and in the elimination of
foreign exchange restrictions which hamper the growth of world trade.
 Contd..
• V. To give confidence to members by making the
general resources of the Fund tempo­rarily available
to them under adequate safeguards, thus providing
them with the opportunity to correct
maladjustments in their balance of payments,
without resor­ting to measures destructive of
national or international prosperity.
• VI. In accordance with the above, to shorten the
duration and lessen the degree of dis­equilibrium in
the international balance of payments of members.
 Functions:

Regulatory Function:
The Fund functions as the guardian of a code of rules set by its (AOA—
Articles of Agreement).
Financial Function:
It functions as an agency of providing resources to meet short term and
medium term BOP disequilibrium faced by the member countries.
Consultative Function:
It functions as a centre for international cooperation and a source of
counsel and technical assistance to its members.
The main function of the IMF is to provide temporary financial support
to its members so that ‘fundamental’ BOP disequilibrium can be
corrected. However, such granting of credit is subject to strict
conditionality. The conditionality is a direct consequence of the IMF’s
surveillance function over the exchange rate policies or adjustment
process of members.
Organisation and Management of the IMF:

• Like many international organisations, the IMF is run by a Board of

Governors, an Exe­cutive Board and an international staff. Every member
country delegates a representative (usually heads of central banks or
ministers of finance) to the Board of Governors—the top link of the chain
of command. It meets once a year and takes decision on fundamental
matters such as electing new members or changing quotas.
• The Executive Board is entrusted to the management of day-to-day
policy decisions. The Board comprises 24 executive directors who
supervise the implementation of policies set by the member
governments through the Board of Governors.
• The IMF is headed by the Managing Director who is elected by the
Executive Board for a 5 year term of office.
M.D IMF- Kristalina Georgieva(Bulgaria)
 Financial Structure of the IMF:

• The capital or the resources of the Fund

come from two sources:
• (i) Subscription or quota of the member
nations, and
• (ii) Borrowings.
 Contd..
• At the time of formation of the IMF, the quota of each
member was made up of 25 p.c. in gold or 10 p.c. of its net
official holdings of gold and US dollars (whichever was
less). Now this has been revised.
• The capital subscriptions or quota is now made up of 25
p.c. of its quota in SDRs or widely accepted currencies
(such as the US dollar, euro, the yen or the pound sterling)
instead of gold and 75 p.c. in country’s own currency. The
size of the Fund equals the sum of the subscriptions of
members. Total quotas at the end-August 2008 were SDR
217.4 billion (about $341 billion).
 Special Drawing Rights (SDRs):

• The IMF has two accounts of operation—the General

Account and the Special Drawing Account.
• The former account uses national currencies to
conduct all business of the fund, while the second
account is transacted by the SDRs. The SDR is defined
as a composite of five currencies—the Dollar, Mark,
Franc, Yen and Pound. The SDRs are allocated to the
member countries in proportion to their quota
subscriptions. Only the IMF members can participate
in SDR facility.
 Contd…
• SDRs being costless, often called paper gold, is just a book
entry in the Special Drawing Account of the IMF.
Whenever such paper gold is allocated, it gets a credit
entry in the name of the participating countries in the said
account. It is to be noted that SDRs, once allocated to a
member, are owned by it and operated by it to overcome
BOP deficits. Since its inception, there have been only four
allocation to SDRs—the first in 1970, and the last in 2008-
09—mainly to the developing countries.
 Currency Basket of IMF

Fixed Number of
Weights Units of Currency
Currency Determined in the for a 5-Year Period
2015 Review Starting Oct 1,
2016
  U.S. Dollar 41.73 0.58252
  Euro 30.93 0.38671
  Chinese Yuan 10.92 1.0174
  Japanese Yen 8.33 11.900
  Pound Sterling 8.09 0.085946
 Asian Development Bank
• The Asian Development Bank (ADB) is
established on 19 December 1966, which is
headquartered located in Manila, Philippines.
The purpose of this regional development
bank is Economic development in Asia. There
are 68 countries member’s of the Asian
Development Bank (ADB).
President: Masatsugu Asakawa
Japanese 
 Contd….
• ADB’s 52 Annual Meeting: 
• The 2019 Annual Meeting of the Board of
Governors of the Asian Development Bank
was held in Fiji from Wednesday, 1
May to Sunday, 5 May 2019.
 Functions of the Asian Development Bank (ADB)

• 1. To make loans and equity investments for

economic and social development of its developing
members countries.
• 2. To provide for technical assistance for the
preparation and implementation of development
projects and advisory services.
• 3. To respond to the request for assistance in
coordinating developmental policies and plans in
developing member countries.
• 4. This bank constituted Asian Development Fund in
1974, which provides loans to Asian countries on
 Li s t of a rea s o f Fo cu s b y A s ia n D ev elo pm en t Ba nk:

• Health
• Education
• Environment
• Public sector management
• Finance sector development
• Agriculture and natural resources
• Regional cooperation and integration
• ADB also operates on a limited scale in other areas, including
• Infrastructure (urban development, information, water, energy,
transport, and communications technology)
 ADB and India
• As a multilateral development finance institution, ADB
provides
I. Loans
• II. Technical assistance
• III. Grants
• ADB maximizes the development impact of its assistance by
I. Facilitating policy dialogues,
• II. Providing advisory services, and
• III. Mobilizing financial resources through co-financing
operations that tap official, commercial, and export credit
sources.
 Its key areas are as follows:

I. Infrastructure (water, energy, transport, urban

development, information and communications technology)
• II. Environment
• III. Regional cooperation and integration
• IV. Finance sector development
• V. Education
• VI. Health
• VII. Agriculture and natural resources
• VIII. Public sector management
 UNCTAD
United Nations Conference on Trade and Development
 Structure
• To remove the disparities between the rich
and the poor countries the United Nations
Conference on Trade and Development
UNCTAD came to be established on 30th
December, 1964.
Headquarters location: Geneva, Switzerland
Head: Mukhisa Kituyi
Founder: United Nations General Assembly
Founded: 30 December 1964
Formation: 30 December 1964; 55 years ago
Parent organizations: 
United Nations General Assembly, 
United Nations Secretariat
 Organization
• The UNCTAD was set up as the permanent organ of
the UN General Assembly. It has its own structure of
subsidiary bodies and a full time secretariat. It has
established a Trade and Development Board to take
policy decisions when the conference is not in
session. It has 155 members, elected from among its
members in proportion to geographical distribution.
The Board meets twice a year.
 Four subsidiary committees to assist the
Trade and Development Board
• the committee on commodities
• the committee on manufacture
• the committee on shipping and
• the committee on invisible items and financing
related to trade.
 Functions of UNCTAD
• 1. To promote international trade between the
developed and underdeveloped countries with a
view to accelerating economic development,
special emphasis should be laid upon the
accelerated development of the underdeveloped
countries.
• 2. To formulate the principles and policies on
International trade.
• 3. To negotiate multinational trade agreements.
• 4. To make proposals for implementing its
principles and policies.
• 5. To promote research and support negotiations for
commodity agreements, technical elaboration of
new trade activities designed to assist in the areas of
trade and capital for developing countries.
• 6. To generally review and coordinate the activities of
other institutions within the fold of United Nations
relating to international trade and economic
development.
• 7. To act as a centre for harmonious trade related
policies of governments and regional economic
groupings in pursuance of Article 7 of the Charter of
the United Nations.
• First Session- 23 March, 16 June 1964 (Geneva
Switzerland)

• 15th Session- 18-23 Oct,2020 (Bridgetown)

Thank You