In the post-globalization world, almost every country thrives on the import and export of goods. To ensure the growth and development of global trade, it is necessary that it must be regulated and controlled by international organizations. The emerging global economy, in the post-globalization era, paved the way for international economic institutions that are entrusted with setting common rules and regulations for the participating countries to ensure a viable and profitable trading system across economies of different countries.
In this article, we have discussed some of the most important economic institutions that are important from the RBI Grade-B Phase 2 Exam perspective. You should be familiar with the functions of each of these organizations.
|International Economic Institution||Headquarters||Head (As of April 2020)|
|World Bank||Washington DC||David Malpass|
|International Monetary Fund||Washington DC||Kristalina Georgieva|
|World Trade Organization||Geneva, Switzerland||Roberto Azevêdo|
|Asian Infrastructure Investment Bank||Beijing, China||Jin Liqun|
|Asian Development Bank||Mandaluyong, Philippines||Masatsugu Asakawa|
|New Development Bank||Shanghai, China||K. V. Kamath|
Let us look at them briefly:
Founded in 1944 in Washington DC, at the Bretton Woods Conference, along with the IMF, the primary goal of the World Bank is to foster economic growth & development in middle-income and low-income countries to alleviate poverty. The motto of the World Bank is “Working for a world free of poverty”.
The World Bank Group consists of five international organizations, namely, the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Centre for Settlement of Investment Disputes (ICSID). All these organizations work together to fulfill the objectives of the World Bank.
Read more about the World Bank group here.
The International Monetary Fund was founded at the Bretton Woods Conference in 1944, along with the World Bank. Headquartered in Washington D.C, the primary goal of IMF is to oversee the stability of the monetary system of the world. It facilitates international monetary cooperation, provides assistance in the establishment of a multilateral system of payments and elimination of foreign exchange restrictions.
Read more about the IMF here.
The World Trade Organization is the only organization at an international level that deals with the rules of trade among different countries. It was founded on January 1, 1995, under the Marrakesh Agreement; and replaced the General Agreement on Tariffs and Trade (GATT). WTO deals with the regulation in trade of intellectual property rights, goods, and services among the participating countries by providing them a framework for negotiation.
Read more about the WTO here.
Established in 1966, the Asian Development Bank is headquartered in Manila, Philippines. India is one of the founding members of the Asian Development Bank. The primary aim of this bank is to eradicate poverty; and encourage prosperity, inclusivity, resilience, and sustainability in the Asia-Pacific region. The first President of ADB was Takeshi Watanabe. Currently, it is headed by Masatsugu Asakawa. Japan is the largest shareholder in Asian Development Bank followed by the USA, China, and India, in that order.
Headquartered in Shanghai, China, New Development Bank was formerly known as the BRICS Development Bank established by the member countries of BRICS (Brazil, Russia, India, China, and South Africa). The idea of a BRICS bank was conceived at the fourth BRICS Summit in 2012 (New Delhi). The idea was brought to fruition during the sixth Summit in 2014, when the leaders of the member-countries signed an agreement for establishing the New Development Bank. This declaration is known as the Fortaleza Declaration under which the leaders of five members agreed on establishing the New Development Bank with a corpus of $100 billion.
The key areas of operation for the New Development Bank are clean energy, transport infrastructure, irrigation, sustainable urban development, and economic cooperation among the member countries.
This was a brief overview of some of the important international economic institutions. Go through each one of them in detail to ensure full coverage of the topic.
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