Scope of Discussion:

INTERNATIONAL FINANCIAL INSTITUTIONS

WORLD BANK
GOALS OF WORLD BANK
THE FIVE ORGANIZATIONS OF WORLD BANK
INTERNATIONAL MONETARY FUND
MARKET INTEGRATION
THE EUROPEAN INTEGRATION
LEGAL BASIS OF EUROPEAN UNION
THE BENEFITS OF EURO
ASEAN INTEGRATION
THE GLOBAL ECONOMY AND OUTSOURCING
INTERNATIONAL
FINANCIAL
INSTITUTIONS
• are institutions that provide financial
support via grants and loans for
economic and social development
activities developing countries.
• International financial institutions include
public banks, such as World Bank,
International Monetary Fund and regional
development countries.

• They provide loans, grants, and technical

assistance to governments, as well as loans
to private businesses investing in
developing countries.
The following are usually classified as
international financial institutions:

1. World Bank
2. International Monetary Fund
3. European Investment Bank
4. Islamic Development Bank
5. Asian Development Bank
6. European Bank for Reconstruction and
Development
7. CAF- Development Bank of Latin
America
8. Inter-American Development Bank
Group
9. African Development Bank
10. Asian Infrastructure Investment Bank
 WORLD BANK
It is an international organization dedicated to providing
financing advice and research to developing nations to aid
their economic advancement.

CURRENT PRESIDENT: David Malpass

 FACT FILES
• Founded: July 1, 1944
• Headquarters: Washington, DC
• Type: International Financial Organization
• It was first called as International Bank of Reconstruction
and Development.
• It is the largest development institution
• It was created after the World War 2 in order to support the
financial needs of European and Asian countries.
 TWIN GOALS OF WORLD BANK

1. End extreme poverty by decreasing the percentage of

people living on less than $1.90 a day to no more than
3%
2. Promote shared prosperity by fostering the income
growth of the bottom 40% for every country.
5 INSTITUTIONS OF WORLD BANK
1. International Bank for Reconstruction and
Development
2. International Development Association
3. International Finance Corporation
4. Multilateral Investment Guarantee Agency
5. International Centre for Settlement of Investment
Disputes
5 LARGEST SHAREHOLDERS
• France
• Germany
• Japan
• UK
• US
INTERNATIONAL MONETARY
FUND
• is an organization of 189 countries, working
to foster global monetary cooperation,
secure financial stability , facilitate
international trade, promote high
employment and sustainable economic
growth and reduce poverty around the
world.
• IMF is governed by and accountable to
the 189 countriss that make up it
near-global membership.

• The IMF's primary purpose is to ensure the

stability of the international monetary
system-the system of exchange rates and
international payments that enables
countries and their citizens to transact with
each other.
The Mission of International Monetary Fund

SURVEILLANCE

• The IMF oversees the international

monetsry system and monitors the
economic and financial policies of its 189
member countries.
• The IMF highlights possible risks to
stability and advises on needed policy
adjustments.
LENDING

• A core responsibility of the IMF is to

provide loans to member countries
experiencing actual or potential
balance of payments problem.
• Unlike development banks, the IMF
does not lend for specific projects.
CAPACITY DEVELOPMENT
• IMF capacity development-technical
assistance and training-helps member
countries design and implement economic
policies that foster stability and growth by
strengthening their institutional capacity
and skills.
• The IMF seeks to build on synergies
between technical assistance and training
to maximize their effectiveness.
 MARKET INTEGRATION AND HOW
IT WORKS
Koester (2017) states that market integration is a state of
affairs or a process involving attempts to combine separate
national economies into larger economic regions

Integration – as a means of stimulating trade and

improving divisions of the labor among countries
GENERAL AGREEMENT OF TARIFFS AND TRADE
(GATT) in 1948 gave further impetus to integration by
promoting greater acceptance of the most favored nation
principle.

The Article 1 of the GATT states: “All contracting

parties must accord any advantage, favour, privilege of
immunity granted to any product from any other country
immediately and unconditionally to all other members.”
 NEGATIVE INTEGRATION

● reducing non-tariff and tariff barriers to trade can be the

main tool for integrating markets

● the term implies that a government’s only role if to

withdraw from interference in the movement of goods and
factors of production across national boarders
 FORMS OF INTEGRATION

Preferential Agreement – involves lower trade barriers

between those countries which have signed the agreement; the
first and smallest step on the road to further integration

Free Trade Agreement – reduces barriers to trade among

member countries to zero, but each member country still has
autonomy in deciding on the external rate or tariff
Customs Union – represents a higher stage of
economic integration than a Free Trade Area as the member
countries adopt a common external tariff

Common Market – goes beyond a Customs Union in allowing for

free movement of labor and capital within the Union; to integrate
both product and factors markets of member countries

Economic Union – the highest form of economic

integration
 THE EUROPEAN INTEGRATION
The European Union is a unique economic and political union
between 28 European countries that together cover much of
the continent.

The result was the European Economic Community (EEC),

created in 1958, and initially increasing economic cooperation
between six countries: Belgium, Germany, France, Italy,
Luxembourg and the Netherlands. Since then, a huge single
market has been created and continues to develop towards
its full potential.
 LEGAL BASIS OF EUROPEAN UNION
The European Union is based on the rule of law. This
means that every action taken by the EU is founded on
treaties that have been approved voluntarily and
democratically by all EU member countries.

A TREATY – is a binding agreement between EU member

countries. It sets out EU objectives, rules for EU
institutions, how decisions are made and the
relationship between the EU and its member countries
 According to europa.eu (2017), the main treaties that help
created European Union are:

● Treaty of Lisbon
● Treaty of Nice
● Treaty of Amsterdam
● Treaty on European Union
● Single European Act
● Merger Treaty – Brussels Treaty
● Treaties of Rome: EEC and EURATOM treaties
● Treaty establishing the European Coal
and Steel Community
 European Union, an Economic Union to
Political Union
A name change from the European Economic
Community (EEC) to the European
Union (EU) in 1993

The EU is based on the rule of law: everything it does is

founded on treaties, voluntarily and democratically agreed by
its member countries.
 A Union of Single Currency
In 2012, the EU was awarded by the Nobel Peace Prize for
advancing the causes of peace, reconciliation, democracy and
human rights in Europe.

The single or ‘internal’ market is the EU’s main economic

engine, enabling most goods, services, money and people to move
freely. another key objective is to develop this huge resource also
in other areas like energy, knowledge, and capital markets to
ensure the European can draw the maximum benefit from it.
The Benefits of Euro

1. People no longer need to change

money
2. It cost much less (or nothing at all)
to make cross-border payments.
3. Consumers and businesses can
compare prices more easily.
ASEAN INTEGRATION

•August 8, 1967 - five foreign ministries of

Indonesia, Philippines, Malaysia, Singapore
and Thailand signed a document in the main
hall of DFA in Bangkok, Thailand.
•Founding Fathers of ASEAN
-Adam Malik (Indonesia), Narciso Ramos
(Philippines), Tun Abdul Razak (Malaysia), S.
Rajaratnam (Singapore) and Thanat Khoman
(Thailand).
Establishment of the ASEAN Economic
Community (2015)
- has been seen as a way to promote
economic, political, social and cultural
cooperation across the region.

AEC’s vision for the next nine years, laid out

in the AEC Blueprint 2025
1. A highly integrated and cohesive economy
2. A competitive, innovative, and dynamic
ASEAN
3. Enhanced connectivity and sectoral
cooperation
4. A resilient, inclusive, people-oriented
and people-centred region
5. A global ASEAN.
The ASEAN Free Trade Area (AFTA)

- ASEAN member Countries have

made significant progress in the
lowering of intra-regional tariffs
through the Common Effective
Preferential Tariff (CEPT) scheme for
AFTA.
 4 Pillars of the ASEAN Economic
Community

1. Single Market and Production Base

Core principles:
a. Free flow of goods
b. Free flow of services
c. Free flow of investment
d. Free flow of capital
e. Free flow of skilled labor
2. Competitive Economic Region

3. Equitable Economic Development

4. ASEAN's integration into the globalized

economy.
The Global Economy and Outsourcing

Outsourcing means finding a partner with

w/c a firm can establish a bilateral
relationship and having the partner
undertake relationship-specific investments
so that it becomes able to produce goods or
services that fit the particular needs.
 The Call Center Industry in the
Philippines

-sub sector of Business Processes

Outsourcing
-major contributor of our economy
 Global Corporation
( Multi national Company )
- a business that operates in two or more
countries.

Global Corporations and

Globalization
• economies of scope
• economies of scale