GE 4 - MIDTERM 4.

Free movement of persons – is achieved through the loosening or

abolition of visa restrictions and barriers to migration.
Introduction to Globalization
Liberalization and Deregulation
Words to go by
- are economic processes that typically require special laws and/or
Social movement- people and organizations advocating for positive policies. Such policies and laws are products of deliberation and even
change through a variety of means and approaches. confrontation between conflicting interests.

Free trade- exchange of goods or products between nations without October 30, 1947 - modern globalization jumpstarted by 20 nations
tariff or taxes. that signed the General Agreement on Tariffs and Trade (GATT).

Deregulation- loosening or lifting of government regulations, usually General Agreement on Tariffs and Trade (GATT) - primarily aims to
to favor private corporations‟ flexibility of operations and profitability. regulate international trade.

Liberalization- process or policy of removal or reduction of World Trade Organizations (WTO)- global international organization
restrictions or barriers on the free trade between nations. that deals with trade between nations.

Globalization 1. Help producers, exporters, importers conduct their business.

 refers to the existence of free exchange of goods, services, Thomas Friedman (American political commentator and author)
culture, and even people, between and among countries.
“The Lexus and the Olive Tree”
Because of globalization:
“Globalization is not static, but a dynamic ongoing process”.
 Countries discarded taxes on imported goods (tariffs) and
opened their doors to highly skilled workers and Globalization involves:
professionals.
 People became more interested to travel, learn new  inexorable integration of markets
languages, and immerse themselves into new cultures and  nation-states
lifestyle.  technologies to a degree never witnessed before
 Modern innovations bring countries closer together through
British Broadcasting Corporation (BBC)
decreased travel time, efficient communication means.
 Globalization is the process by which the world is becoming
COMPETING CONCEPTIONS OF GLOBALIZATION
increasingly interconnected as a result of massively
1960s – the term globalization has been used in both popular and increased trade and cultural exchange.
academic literature.
Benedict Anderson (Anglo-Irish political scientist and historian)
Manfred Steger
He explained the “early globalization in the last two decades of the
 Globalization is a contested concept used to describe 19th century involves:
process, a condition, a system, a force and an age.
 inventions of the telegraphs
United Nations Conference on Trade and Development (UNCTAD)  inauguration of Universal Postal Union
 wide use of steamship
 Globalization is the closer integration of national economies  thickening latticework of railways
through trade and financial flows as well as cross- border
migration of people. Internationalization and Globalization Distinctions Leslie Sklair
(Professor of Sociology at the London School of Economics and
European Union (EU) Political Science)

“four freedoms” “a clear distinction must drawn between the inter-national and the
global because some writers appear to use the two terms
1. free movement of goods or products- abolition of taxes
interchangeably”
2. free movement of services
Definition Example
3. free movement of capital or investment- deregulating or lifting of Internationalization - hyphen in inter-national The cultural
is to distinguish titles⁶ and
strict banking (inadequate)conceptions economic
of the „global‟
4. free movement of persons- abolishing visa trade between
- refers to processes and
system that pertain to members of
Four Freedoms relationships between ASEAN or the
nation-states members of
1. Free movement of goods or products – is facilitated by liberalization EU are
or the abolition of tax on imported goods (tariffs). international in
nature.
2. Free movement of services

3. Free movement of capital or investment – is implemented through Globalization -is broader and more Interactions
deregulation or the lifting strict banking and financial regulations. complicated than between
internationalization. entities such
as the ASEAN
 - encompasses and EU are on many issues ranging from climate change and poverty
processes and systems global. eradication.
related to “global social
NEGATIVE ASPECTS
relations”
1. Linguistic hegemony of English- Globalization compels other
countries to use English language, even prioritizing it over their
own national languages.
PHILOSOPIES AND IDEOLOGIES OF/ON AGAINST 2. Cultural homogenization- Big corporations such as fast food
GLOBALIZATION chains dominate markets in many countries because of their
enormous financial power and presence in almost every country.
Globalization’s backers, supporters, and ideologues Six Core Claims: 3. Third World dependence on the First World- Despite
globalization‟s obvious contribution to the successful leap of
1. Globalization is about the liberalization and global integration of some countries from Third to First World status, more Third World
markets. countries still complain that the current setup favors developed
countries more.
2. Globalization is inevitable and irreversible. 4. Global income and wealth inequality- As only the biggest
corporations seem to benefit from stiff competition and unbridled
3. Nobody is in charge of globalization. free trade.
5. Tax injustice- Under globalization, countries compete for foreign
4. Globalization benefits everyone (… in the long run). investments and are forced to lower corporate taxes.
6. Racism and anti-migrant sentiment- As corporations in many
5. Globalization furthers the spread of democracy in the world. First World countries hire more migrants to save on wages, First
World working-class citizens complain about being left behind in
6. Globalization requires war on terror. their own countries, hence partly fueling the rise of racism and
anti-migrant sentiment.
Capitalism Globalization is more favorable to developed countries because:

• dominant economic framework and system in many parts of the world 1. Developed countries‟ investments in developing countries earn
today. profits which the former typically repatriate rather than in the latter.

• primarily premised on the “profit motive” 2. Developed countries control multilateral financial institutions that are
capable of bankrolling.
Neoliberalism
3. Technology transfer on a massive scale seldom happens.
• adherents further build on the profit motive
4. The bulk prices of the developing countries‟ main exports (raw
• markets should be free from government interventions materials and semi-manufactured goods) is lower than the bulk price of
their typical imports from developed countries (technology/machinery
• claiming that “free markets and trade will set free the creative
and high-value products).
potential and the entrepreneurial spirit.
5. The migration of workers and professionals from developing
Pro-globalization – defends its adherence to neoliberal capitalism
countries to the developed countries depletes the former’s human
CRITICS OF GLOBALIZATION resources.

• Anti-globalization side- wants an end to what it considers as a 6. The education system of developing countries is aligned with the
highly imbalanced system of globalization that favors the First World needs of developed/capital-rich countries.
over Third World, corporations over citizens and communities, and
The Structures of Globalization
profit seeking over environmental sustainability.
GLOBAL ECONOMY vs WORLD ECONOMY
• Alter-globalization current- latter favors the current system of
globalization to make it more humane, more pro-environment, and Global economy
more grassroots-driven rather than staying as a top down imposition.
• Is also referred to as world economy.
POSITIVE AND NEGATIVE ASPECTS OF GLOBALIZATION
• This term refers to the international exchange of goods and services
POSITIVE ASPECTS that is expressed in monetary units of money.

1. Multiculturalism and Multilingualism- Free exchange of goods • It may also mean as the free movement of goods, capital, services,
and services need swift communication, hence the need to learn technology, and information.
as many languages as possible.
2. Free trade- Reduces cost on selling products almost worldwide World economy
provided huge profits for a number of big transnational
corporations, and resulted in cheaper prices of some consumer • Is exclusively limited to human economic activity and is typically
goods such as cellphones and computers.
judged in monetary terms.
3. Cultural and education exchanges- The rise of multilingualism
inevitably leads to the study of diverse cultures and eventually,
• Typical examples are illegal drugs and other black market goods
more educational exchanges such as EU‟s Erasmus Mundus
Program between universities in all continents. which by any standard are a part of the world economy, but for which
4. Migration- Citizens can freely visit and work in any country and these is by definition no legal market of any kind.
Third World migrants can relatively easily find jobs in and
eventually migrate to more developed countries. GLOBAL ECONOMY
5. Global cooperation- Globalization‟s rules and mechanisms are
created and governed by global entities such as WTO- where  In some contexts, "global" or "International" economy is
almost countries are represented, encourage global cooperation distinguished and measured separately from national
 economies while the world economy" is simply an aggregate b) African Development Bank
of the separate country's measurements. c) Asian Development Bank
 Global economy or economic globalization is concerned d) Inter-American Development Bank
on the globalization of production, finance, markets, e) European Bank for Reconstruction and Development
technology, organizational regimes, institutions, corporations,
and labor. • The last four (4) of these each focus on a single world region and
 While economic globalization has been expanding since the thus are often called Regional Development Banks (RDB).
emergence of trans-national trade, it has grown at an
• Global in scope are International Monetary Fund and the World Bank.
increased rate due to an increase in communication and
technological advances under the framework of General • They are also specialized agencies in the United Nation system but
Agreement on Tariffs and Trade and World Trade are governed independently of it.
Organization, which made countries gradually cut down
trade barriers and open up their current accounts and capital MEMBERSHIP COMPOSITION OF IFIS:
accounts.
 This recent boom has been largely supported by developed × only sovereign countries are admitted as member-owner
economies integrating with majority world through foreign
× broad country membership to include borrowing developing countries
direct investment and lowering costs of doing business, the
and developed donor countries
reduction of trade barriers, and in many cases cross border
migration. × membership in regional development banks include countries around
the world as members (not limited to countries from the region)
MARKET INTEGRATION
× has its own independent legal and operational states
 When prices among different location or related goods
follow the same patterns over a long period of time, market MAIN OBJECTIVES:
integration exist.
 Similarly, when groups of prices often move proportionally 1. IMF provides temporary financial assistance to member
to each other and when this relation is very clear among countries to help ease balance of payments adjustments.
different markets it is said that the markets are integrated. 2. MDBS provide financing for development to developing
 Hence, it could be concluded that market integration is an countries through:
indicator that explains how much different markets are  long term loans (with maturities of up to 20 years)
related to each other. at interest rates way below market rates. Funding
comes from international capital markets and
ROLE OF INTERNATIONAL FINANCIAL relend to borrowing government in developing
countries.
INSTITUTIONS IN THE CREATION OF GLOBAL ECONOMY
 very long-term loans (sometimes called credits
International Financial Institution (IFIS) with maturities of 30 40 years) at interest rates
below market rates. Funding for loans come from
• It is chartered by more than one country and therefore are subjects to direct contributions by government in the donor
international law. countries.
 Grant financing by some MDBs for technical
• Its owners or shareholders are generally national governments, assistance advisory service or project preparation.
although other international institutions and other organizations
occasionally figure as shareholders. • All IFIS are active in supporting programs that are for the global
economy - in addition to their primary role of financing and providing
• The most prominent IFIS are creations of multiple nations, although technical assistance to programs at the country level.
some bilateral financial Institutions (created by two countries) exist and
are technically IFIs. HISTORY OF GLOBAL MARKET INTEGRATION IN THE
TWENTIETH CENTURY
• The best known IFls were established after World War II to assist in
the reconstruction of Europe and provide mechanisms for international • Labor market integration occurred between 1882 and 1936 in an area
cooperation in managing the global financial system. of Asia stretching from South India to South-eastern China and
encompassing the three Southeast Asian countries of Burma, Malaya
• Today, the world's largest IFI is the European Investment Bank: and Thailand.
1. with a balance sheet size of €573 billion in 2016. • By the late nineteenth century, globalization, of which a principal
feature was the mass migration nineteenth century, globalization of
2. This compares to the two components of the World Bank, the IBRD
which a principal feature was the mass migration of Indians and
(assets of $358 billion in 2014)
Chinese to Southeast Asia, gave rise to both an integrated Asian labor
3. and the IDA (assets of $183 billion in 2014). market and a period of real wage convergence. Integration did not,
however, extend beyond Asia to include core industrial countries. Asian
• For comparison, the largest commercial banks each have assets of and core areas, in contrast to globally integrated commodity markets,
$2,000-3,000 billion. showed divergent trends in unskilled real wages.

The International Financial Institutions (IFIS) are: • By the 1880s steamships had largely replaced sailing vessels for
transport within Asia as well as to Western markets, and shipping fares
1. International Monetary Fund (IMF) had begun to fall sharply.

2. Multilateral Development Banks (MDB) which include: • Also, already underway was the mass migration of Indian and
Chinese workers, principally from the labor-abundant areas of Madras
a) World Bank Group
in India and the provinces of Kwangtung (Guangdong) and Fukien
(Fujian) in Southeastern China, to land-abundant but labor-scarce • Such company would be governed by U.S. regulations, assuming its
parts of Asia. headquarters remain in U.S., but may also have foreign subsidiaries
such as the Philippines which is governed by local laws.
• Chief among the immigrant-receiving countries were Burma, Malaya
and Thailand (Siam) in Southeast Asia. GLOBAL GOVERNANCE

• Indian and Chinese labor inflows to these countries constituted the • This term global governance is sometimes referred to as world
bulk of two of three main late nineteenth- and early twentieth-century governance.
global migration movements, the other being European immigration to
the New World. • Global is a movement towards political cooperation among
transnational actors, negotiating responses to problems that affect
• Immigration to Southeast Asia was almost entirely in response to its more than one state or region.
growing demand for workers which in turn derived from rapidly
expanding demand in core industrial countries for Southeast Asian • Institutions of global governance-the United Nations, the International
exports. Criminal Court, the World Bank, etc. -tend to have limited or
demarcated power to enforce compliance.
• Studies by Latham and Neal (1983) and by Brandt (1985, 1989)
established the development of an integrated Asian rice market • The modern question of world governance exists in the context of
beginning in the latter part of the nineteenth century. globalization and globalizing regimes of power: politically, economically
and culturally.
GLOBAL CORPORATION
• In response to the acceleration of worldwide interdependence, both
• While many use "global" in the same way as international when it between human societies and between humankind and the biosphere,
comes describing a business, some analysts make distinctions the term "global governance" may mean the process of designating
between how each operates. laws, rules, or regulations intended for a global scale.

• On a basic level, a global corporation is one that operates in more • Global governance is not a singular system. There is no "world
than one country. government" but the many different regimes of global governance do
have commonalities.
• Particularly in the United States, the term can mean different things to
different contexts, with the characteristics of a global corporation • While the contemporary system of global political relations is not
varying accordingly. integrated, the relation between the various regimes of global
governance is not insignificant, and the system does have a common
• Business analysts and academics, such as the ground-breaking dominant organizational form.
Michael Porter at Harvard University, defined global businesses more
narrowly and distinguish them from other operations overseas. • The dominant mode of organization today is bureaucratic rational –
regularized and codified.
• He defined a global business as one that maintains a strong
headquarters in one country, but has investments in multiple foreign • It is common to all modern regimes of political power and frames the
locations. transition from classical sovereignty to what David Held describes as
the second regime of sovereignty - liberal international sovereignty.
• Such investments may involve direct investments in foreign assets,
such as manufacturing facilities or sales offices. EFFECTS OF GLOBALIZATION GOVERNANCE

• The headquarters generally is its home country, though some moves • According to the disciplining hypothesis, globalization restrains
to more favorable regulatory or taxation locations over time. governments by inducing increased budgetary pressure.

• Global corporations strive to create economies of scale by selling the • As a consequence, governments may attempt to curtail the welfare
same products in multiple locations and limiting local customization. state, which is often seen as a drag on international competitiveness,
by reducing especially their expenditures on transfers and subsidies.
• In the world of finance and investment, a global corporation is one
that has significant investments and facilities in multiple countries but • This globalization-induced welfare state retrenchment is potentially
lacks a dominant headquarters. mitigated by citizens' preferences to be compensated for the risks of
globalization ("compensation hypothesis").
• Global corporations are governed by the laws of the country where
they are incorporated. WORLD SYSTEM

• A global business connects its talents, resources and opportunities • World system deals with inter-regional and transnational division of
across political boundaries. labor, which divides the world into core countries, semi-periphery
countries, and the periphery countries.
• Because a global corporation is more invested in its overseas
locations, it can be more sensitive to local opportunities --and also • Core countries focus on higher skill, capital-intensive production, and
more vulnerable to threats. the rest of the world focuses on low-skill, labor-intensive production
and extraction of raw materials.
• A company that does business in Africa, for example, might find itself
dealing with the implication from a local Ebola outbreak as well as its • This constantly reinforces the dominance of the core countries.
commercial operations.
• Nonetheless, the system has dynamic characteristics, in part as a
• In contrast, an international company is one that has a headquarters, result of revolutions in transport technology, and individual states can
for example in the United States, but also does business overseas and gain or lose their core (semi-periphery, periphery) status over time.
might have a large presence in multiple areas.
• This structure is unified by the division of labor.
• It is a world-economy rooted in a capitalist economy. -One of the primary objectives of the Bretton Woods System
was to address concerns related to trade imbalances among nations.
• For a time, certain countries become the world hegemon; during the Countries with substantial trade surpluses utilized interventions to sell
last few centuries, as the world-system has extended geographically their currencies, thus preventing excessive appreciation that could
and intensified economically, this status has passed from the harm export competitiveness. Conversely, nations facing significant
trade deficits intervened by purchasing their own currencies to prevent
Netherlands, to the United Kingdom and (most recently) to the United
depreciation, thereby averting potential spikes in domestic prices. This
States. mechanism aimed to stabilize currency values and promote equilibrium
in global trade.
WORLD SYSTEM THEORY
-In essence, the Bretton Woods System was instrumental in
• This theory is also known as world-systems analysis or would
establishing a framework for international monetary cooperation
systems perspectives. and exchange rate management. By allowing currencies to ‘float’
within a managed regime, it aimed to promote stability while
• World system theory is a multidisciplinary, macro scale approach to accommodating necessary interventions to prevent extreme
world history and social change which emphasizes the world-system fluctuations. However, the system's effectiveness hinged on the ability
(and not nation states) as the primary (but not exclusive) unit of social of countries to manage their trade balances and navigate the
analysis. constraints of intervention without depleting their reserves to
unsustainable levels.
CONTEMPORARY GLOBAL GOVERNANCE
-Ultimately, the Bretton Woods System represented an
• Global governance or world governance is a movement towards ambitious effort to foster stability and cooperation in the post-
political cooperation among transnational actors, aimed at negotiating World War II era. While its mechanisms for managing exchange rates
responses to problems that affect more than one state or region. provided a degree of stability, they also underscored the complex
interplay between trade imbalances, currency interventions, and the
• Institutions of global governance-the United Nations, the International limitations of international reserves. Despite its eventual demise, the
system laid the groundwork for subsequent developments in
Criminal Court, the World Bank, etc. – have limited or demarcated
international monetary policy and continues to inform discussions on
power to enforce compliance. the management of global financial systems.
• The modern question of world governance exists in the context of
globalization and globalizing regimes of power: politically, economically
and culturally. In response to the acceleration of worldwide CONCEPT of Bretton Woods System
interdependence, both between human societies and between
humankind and the biosphere, the term "global governance" may name -After the World War 2, the world needed a financial
the process of designating laws, rules, or regulations intended for a system but economist encountered devaluing issues. On the July 1,
global scale. 1944 in Bretton Woods, New Hampshire. A conference was held in
Bretton Woods by delegates from 44 countries. The concept of the
• Global governance is not a singular system. There is no "world Bretton Woods system was creating an efficient foreign exchange
system, to prevent competitive devaluations of currencies, and
government" but the many different regimes of global governance do
promoting international economic growth.
have commonalities.
-All of the countries agreed to a fixed peg against the U.S
The Bretton Woods System dollar with diversions of only 1% allowed. Countries were required to
monitor and maintain their currency pegs which they achieved primarily
-was the FIRST SYTEM used to control the value of MONEY by using their currency to buy or sell U.S dollars as needed.
in the different countries.
-Two important organizations was created in the Bretton
-this mean that each country had to have a MONITARY Woods Agreement which was the International Monetary Fund (IMF)
POLICY that kept the EXCHANGE RATE within a FIXED VALUE of that helps other countries when facing economic crisis and the World
plus (+) or minus (-) 1% in terms of GOLD. Bank that was previously called the International Bank for
Reconstruction and Development (IBRD) which supposed help less
HISTORY developed countries grow and provide financial support.

-The United Nations Monetary and Financial Conference -With the Bretton Woods System international currency
was held in July 1944 at the Mount Washington Hotel in Bretton exchange rate volatility was minimized which helped international trade
Woods, New Hampshire, where delegates from forty-four nations relations.
created a new international monetary system known as the Bretton
Woods system. IMPACTS

-These countries saw the opportunity for a new -provided a stable exchange rate environment that nurtured
international system after World War II that would draw on the lessons the reconstruction of the world economy and the growth of international
of the previous gold standards and the experience of the Great trade and finance.
Depression and provide for postwar reconstruction. It was an
unprecedented cooperative effort for nations that had been setting up -They were created in 1944 to help restore and sustain the
barriers between their economies for more than a decade. benefits of global integration by promoting international economic
cooperation.
PURPOSE
-It provided guidelines for both state and non-state actors on
-The Bretton Woods System was established with the aim of the international scene.
fostering stability in the international monetary system. Central to
its design was the implementation of a managed float regime, which The Bretton Woods system faced several significant issues
allowed exchange rates for most currencies to float while still permitting during its existence:
central bank intervention to prevent drastic fluctuations. This
framework sought to strike a balance between the flexibility of floating
1. Trade Imbalances- Fixed exchange rates under the Bretton Woods
exchange rates and the stability provided by controlled interventions.
system led to persistent trade imbalances between countries. Some
nations ran chronic trade surpluses, while others accumulated deficits, The International Bank for Reconstruction and Development (IBRD)
contributing to economic tensions and imbalances. was the official name of the World Bank, which was founded in 1944 to
aid in the reconstruction of Europe and Japan following World War II. It
2. US Dollar Dominance- The system relied heavily on the US dollar had 38 members when it started operating in 1946. Currently, the
as the primary reserve currency. This led to concerns about the majority of nations on Earth are members.
stability of the dollar's value, especially as the US experienced inflation
and trade deficits, eroding confidence in the currency. Owned by 187 nations, the World Bank is an international
development agency. Its mission is to lessen poverty by providing
3. Gold Reserves Strain- Maintaining fixed exchange rates required loans to the governments of its less wealthy members so they can
countries to hold significant reserves of gold and US dollars. As global develop their economies and raise their citizens' standards of living.
trade expanded, the demand for reserves increased, straining the
limited gold reserves and leading to doubts about the sustainability of The Bank is also one of the biggest research and development
the system. facilities in the world. Through its specialist departments, it provides
countries with advice in areas such as health, education, nutrition,
4. Speculative Attacks- The fixed exchange rates made currencies economics, justice, law, and the environment. Through local research
vulnerable to speculative attacks. Investors could exploit perceived and teaching institutions, the World Bank Institute, another division of
weaknesses in a country's currency peg, leading to currency crises the Bank, provides training to government and other officials
and destabilizing capital flows. worldwide.
5. Inflexibility- Fixed exchange rates limited countries' ability to pursue Purpose
independent monetary policies to address domestic economic
conditions. This lack of flexibility exacerbated economic shocks and The World Bank purpose is to promote long-term economic
imbalances, making it difficult for countries to manage their economies development and poverty reduction by providing technical and financial
effectively. support to help countries implement reforms or projects, such as
building schools, providing water and electricity, fighting disease, and
6. External Pressures- Geopolitical tensions and external shocks, protecting the environment.
such as the Vietnam War and the oil crisis of the 1970s, put further
strain on the Bretton Woods system. These events highlighted the World Bank assistance is generally long-term and is funded by
system's vulnerability to external shocks and its inability to adapt to member country contributions and by issuing bonds. The International
changing global economic conditions. Monetary Fund (IMF) one of the cooperative institution, the World Bank
share a common goal of raising living standards in their member
Issues countries. Their approaches to achieving this shared goal are
complementary, the IMF focuses on macroeconomic and financial
2. These issues ultimately culminated in the collapse of the
stability while the World Bank concentrates on long-term economic
Bretton Woods system in the early 1970s when the United
development and poverty reduction.
States suspended the convertibility of the dollar into gold,
effectively ending the fixed exchange rate regime. World Bank staff are often specialists on specific issues, such as
climate, or sectors, such as education.
World Bank
Concept
What is World Bank?
The World Bank is a vital source of financial and technical
The World Bank is an international development organization owned
assistance to developing countries around the world. We are not a
by 189 countries. Its role is to reduce poverty by lending money to the
bank in the ordinary sense but a unique partnership to reduce poverty
governments of its poorer members to improve their economies and to
and support development. The World Bank Group comprises five
improve the standard of living of their people.
institutions managed by their member countries.
The Bank is also one of the world's largest research centers in
World Bank provide low-interest loans, zero to low-interest credits,
development. It has specialized departments that use this knowledge
and grants to developing countries. These support a wide array of
to advise countries in areas like health, education, nutrition, finance,
investments in such areas as education, health, public administration,
justice, law and the environment.
infrastructure, financial and private sector development, agriculture,
Another part of the Bank, the World Bank Institute, offers training to and environmental and natural resource management. Some of our
government and other officials in the world through local research and projects are cofinanced with governments, other multilateral
teaching institutions. institutions, commercial banks, export credit agencies, and private
sector investors.
How the World Bank is Organized?
World Bank also provide or facilitate financing through trust fund
The World Bank has created new organizations within itself that partnerships with bilateral and multilateral donors. Many partners have
specialize in different activities. All these organizations together are asked the Bank to help manage initiatives that address needs across a
called the World Bank Group. It consists of: wide range of sectors and developing regions.

• International Bank for Reconstruction and Development (IBRD) World Bank offer support to developing countries through policy
advice, research and analysis, and technical assistance. Our analytical
• International Development Association (IDA) work often underpins World Bank financing and helps inform
developing countries’ own investments. In addition, we support
• International Finance Corporation (IFC)
capacity development in the countries we serve. We also sponsor,
• Multilateral Investment Guarantee Agency (MIGA) host, or participate in many conferences and forums on issues of
development, often in collaboration with partners.
• International Centre for Settlement of Investment Disputes (ICSID)
To ensure that countries can access the best global expertise and
History help generate cutting-edge knowledge, the Bank is constantly seeking
to improve the way it shares its knowledge and engages with clients 12. Facilitating trade and integration - The World Bank works
and the public at large. with governments to design and implement policies to
maximize trade competitiveness in both goods and services.
Impact
Issues
The World Bank brings innovative financing, global knowledge and
experience, and long-term commitment to each of its partnerships with 1. Gender Equality – The World Bank promotes gender
countries that aspire to grow their economies and provide greater equality and women’s empowerment through various
opportunities for their people. projects and initiatives aimed at reducing gender disparities
in access to education, healthcare, employment, and
1. Accelerating Sustainable and Inclusive Economic decision-making roles.
Growth - The World Bank supports investments in countries 2. Rural Development - Addressing rural poverty and
that underpin long-term growth and that help to meet the promoting agricultural development are key priorities for the
needs of their citizens. World Bank. It supports initiatives to improve agricultural
2. Pursuing low-carbon energy - The World Bank works with productivity, enhance food security, and create livelihood
governments to provide low-carbon options for energy opportunities in rural areas.
access that fit every country’s circumstances, including 3. Conflict and Fragility - The World Bank works in conflict-
renewable sources like solar. affected and fragile states to support peacebuilding efforts,
3. Providing safe water and sanitation for all – They also promote social cohesion, and rebuild infrastructure and
prioritize works that promotes inclusive access to the institutions to mitigate the impact of conflicts on
benefits of water, institutions that manage water equitably, development.
and resilience to help countries cope with the impact of 4. Urbanization - With rapid urbanization occurring worldwide,
external shocks on water. the World Bank focuses on urban development projects to
4. Reaping the benefits of digital technologies - They address challenges such as slum upgrading, affordable
support in expanding affordable Internet access to the more housing, transportation infrastructure, and sustainable urban
than 4 billion people who remain unconnected, developing planning.
digital infrastructure, and building the digital skills and 5. Digital Transformation – Recognizing the importance of
institutions necessary to participate in the digital economy. digital technology in driving economic growth and innovation,
5. Growing through better transport connectivity - They the World Bank supports initiatives to promote digital
support in the creation of Rural roads that can unlock a world transformation, expand access to broadband internet, and
of opportunities for isolated communities, while urban build digital infrastructure in developing countries.
transport that benefits low-income communities can promote
access to affordable ways to reach jobs. WHAT ARE THE REQUIREMENTS, CONDITIONS, RULES, FOR A
6. Partnering with the private sector on infrastructure - COUNTRY TO BORROW MONEY?
They have public-private partnerships to help governments
make informed decisions about improving access to quality, How to have a membership?
and sustainable infrastructure services. With partners from
 To become a member of the Bank, under the IBRD Articles
across the multilateral development community, the Bank
of Agreement, a country must first join the International
released an updated online Public-Private Partnerships:
Monetary Fund (IMF). Membership in IDA, IFC and MIGA
Reference Guide, which included new contributors and the
are conditional on membership in IBRD.
addition of topics ranging from environmental and social
issues to risk mitigation and credit enhancement. How does this project work?
7. Boosting agriculture to create jobs - The Bank-supported
Bihar Rural Livelihoods Project, popularly known as  The World Bank is composed of two institutions:
”JEEViKA,” improved the livelihoods of more than 1.8 million the International Bank for Reconstruction and
women from rural households in Bihar, India since boosting Development, or IBRD, and the International
agriculture can be one of the most powerful tools against Development Association, or IDA. The IDA is the
poverty as the food system currently provides more jobs than branch that provides interest-free loans to low-
any other sector. income countries, and the IBRD branc’ collects
8. Strengthening protection for natural resources – The information and helps developing countries
World Bank is helping clients to better manage the use of implement their projects.
natural resources with it’s fast depletion, which typically  Countries can qualify for loans if their GNI, or
make up about 36 percent of total wealth in developing Gross National Income, is low. But first, they have
countries. to identify a need and develop a plan to utilize the
9. Promoting investment through reforms to reduce risk - money they intend to borrow for a capital project.
The joint World Bank–International Finance Corporation  A project begins when a country identifies a need,
(IFC) Haiti Investment Generation Program brought together develops a plan, and asks the Bank for a loan.
public officials, the private sector, and foreign investors on Experts from the borrowing country and the World
promotion strategies and special economic zones. Bank then study the plan carefully.
10. Tapping new sources of financing - With the IFT they  Bank staff carefully review the project and ask
promotes the capital market development in emerging questions.
countries by supporting liquid, diverse, long-tenor financing  Negotiations take place on how to implement the
and well-regulated local capital markets. strategy. Once an agreement is reached, and the
11. Mobilizing domestic resources for effective services - loans are approved, work can begin. The Bank
The World Bank has a Global Tax Team that has a duty in carefully monitors progress and pays out the loan
coordinating across institutions on international tax issues to in installments.
provide and deliver country-based interventions so countries
can effectively deliver services grow faster, innovate, and MAJOR TERMS AND CONDITIONS OF THE IBRD FIXED SPREAD
respond more quickly to internal and external shocks. LOAN (FSL)
 1. LIBOR: LIBOR is used as the recognized commercial bank money, trade issues, and countries fighting over money. Leaders from
reference for floating rate instruments in markets where it is many countries met to make rules for working together on money and
applicable. Different reference rates may be used for trade. They wanted to prevent another Great Depression and help
countries rebuild after the war. They decided on a plan to keep money
currencies other than euro, Japanese yen, and US dollars.
values stable, stop countries from cheating with their money, and help
2. Day-Count Conventions: The day-count conventions for poor countries develop. This was a big step towards making the
calculating interest are as follows: actual/360 days for U.S. world's economy safer and fairer for everyone.
dollars, Japanese yen, and euro, and actual/365 days for
pounds sterling. WHAT IS THE PURPOSE
3. Commitment Charges and Waivers: Commitment charges,
The International Monetary Fund (IMF) works to achieve
lending rate waivers, and commitment charge waivers are sustainable growth and prosperity for all of its 190 member
expressed and accrued based on an actual/365-366 day- countries. It does so by supporting economic policies that promote
count convention. The World Bank Treasury website financial stability and monetary cooperation, which are essential to
provides more information on these waivers. increase productivity, job creation, and economic well-being. The IMF
4. Unwinding Amount: The mark-to-market value of any swap is governed by and accountable to its member countries.
executed for the conversion is used to compute the
The IMF's main objectives encompass maintaining exchange rate
“Unwinding Amount” in the event that any conversion is stability, ensuring balance of payments equilibrium, providing
terminated early. The Bank may incur expenses or benefit temporary financial assistance, offering policy advice, and
from this. Any gain is deducted from the amount that must be furnishing technical assistance, all geared towards fostering
prepaid or paid by the borrower, and if a cost is incurred, the sustainable economic growth and stability among member nations.
borrower must pay the Bank an additional sum.
Exchange rate stability: Promotes confidence in international trade
5. Transaction Fee: A transaction fee is applied to the principal
and investment, facilitating smooth transactions and minimizing risks
amount being prepaid. The World Bank Treasury website from currency fluctuations, fostering economic growth.
provides information on transaction fee rates.
6. Conversion Fees: Pricing of currency conversions, interest Balance of payments equilibrium: Assists countries in managing
rate conversions, interest rate caps, and interest rate collars external accounts to prevent financial instability, providing resources
is based on market terms. The terms are usually determined and policy advice to address economic imbalances.
by the execution terms achieved by the IBRD in an offsetting Temporary financial assistance: Helps countries facing balance of
swap with financial intermediaries or calculated using pre- payments difficulties, stabilizing economies and promoting sustainable
specified, widely available screen quotes. growth through short-term liquidity support and policy adjustments.
7. Amendment of Approved Terms: The document mentions
the possibility of amending the approved terms of the loan, Policy advice and technical assistance: Supports countries in
formulating and implementing sound macroeconomic policies,
including the use of a swap or collar for all or part of the
structural reforms, and capacity-building initiatives to enhance
disbursed amount and remaining maturity of the loan. economic performance and global stability.
INTERNATIONAL MONETARY FUNDS (IMF) IMPACTS OF THE INTERNATIONAL MONETARY FUND
The International Monetary Fund (IMF), established in 1944 at the Economic Stability: The IMF has played a crucial role in promoting
Bretton Woods Conference in New Hampshire, USA, is a global stability by providing financial assistance and policy advice to countries
financial institution aimed at promoting international monetary facing economic crises, helping to stabilize exchange
cooperation, exchange rate stability, and balanced growth of
international trade, playing a pivotal role in fostering economic stability rates, restore investor confidence, and prevent contagion effects that
and facilitating financial assistance to member countries in need. could lead to wider financial instability.

IMF comprises 190 member countries, making it one of the most Crisis Management: During financial crises, the IMF has acted as a
influential and comprehensive international organizations in the world, lender of last resort, offering financial support and technical expertise
functioning as a forum for cooperation on monetary issues, policy to affected countries, facilitating debt restructuring and macroeconomic
advice, and economic surveillance to ensure the stability and resilience stabilization measures to mitigate the impact of crises on vulnerable
of the global financial system. populations.

The International Monetary Fund (IMF) functions through its 190 Structural Reforms: IMF programs often include conditions aimed at
member countries contributing funds based on their economic size, promoting structural reforms and policy adjustments to address
determining their quotas and voting power within the institution. IMF underlying economic vulnerabilities and improve long-term growth
provides tailored financial assistance to address member countries' prospects, fostering sustainable development and resilience in member
balance of payments issues, often conditional on policy reforms. countries
Regular assessments inform IMF's policy advice and
recommendations, promoting economic stability and growth. Capacity Building: Through technical assistance and capacity-
Additionally, IMF offers technical assistance to strengthen economic building initiatives, the IMF helps strengthen institutional frameworks,
institutions and governance frameworks. Serving as a platform for governance structures, and policymaking capabilities in member
international cooperation, IMF facilitates collective action to address countries, empowering them to implement effective economic policies
global economic challenges. and reforms independently.

Global Cooperation: As a forum for international

HISTORY OF IMF
cooperation, the IMF fosters dialogue and collaboration among
The establishment of the International Monetary Fund (IMF) member countries, facilitating policy coordination and collective action
occurred at the Bretton Woods Conference, which took place in Bretton to address global economic challenges, promote inclusive growth, and
Woods, New Hampshire, United States. The conference was held from enhance the resilience of the international financial system.
July 1 to July 22, 1944. Delegates from 44 Allied nations attended the
conference, which aimed to establish a framework for international ISSUES
economic cooperation after World War II. The agreements reached at
Bretton Woods led to the creation of both the IMF and the World Bank. -IMF lending increases the risks in the international financial system.
By minimizing the moral hazard problem, the IMF avoids recognizing
The Bretton Woods Conference and the creation of the IMF that it is part of the problem. Its behavior encourages too much short-
happened after World War II to fix economic problems like unstable term lending by financial institutions and too few losses on risky loans.
-The IMF is its perceived tendency to impose strict austerity measures  As World War II was about to end in 1945, nations were in
on borrowing countries as part of loan conditions, which can ruins, and the world wanted peace. Representatives of 50
exacerbate social and economic inequalities and lead to discontent countries gathered at the united Nations Conference on
among affected populations.
International Organization in san Francisco, California from
-The governance structure, which has been criticized for favoring 25 April to 26 June 1945. For the next two months, they
developed countries and lacking sufficient representation from proceeded to draft and then sign the UN Charter, which
emerging economies. This imbalance can undermine the effectiveness created a new international organization, the united Nations,
and legitimacy of the IMF's decision-making processes, potentially which, it was hoped, would prevent another world war like
hindering its ability to address global economic challenges equitably. the one they had just lived through. Four months after the
san Francisco Conference ended, the united Nations
QUALIFICATIONS TO BORROW FROM THE IMF officially began, on 24 October 1945, when it came into
existence after its Charter had been ratified by China,
To borrow from the IMF, countries must demonstrate a need for France, the soviet union, the united Kingdom, the united
financial assistance due to problems with their balance of states and by a majority of other signatories
payments. This means they're having trouble paying for their imports
 Now, more than 75 years later, the united Nations is still
or meeting other international financial obligations. Additionally,
countries must be members of the IMF and have contributed working to maintain international peace and security, give
money to its funds, known as quotas. humanitarian assistance to those in need, protect human
rights, and uphold international law.
BORROWING FROM THE IMF When a country needs to borrow  At the same time, the united Nations is doing new work not
from the IMF, it typically follows these steps envisioned for it in 1945 by its founders. the united Nations
Request: The country formally requests assistance from the IMF, has set sustainable development goals for 2030, in order to
explaining its economic situation and the reasons it needs financial achieve a better and more sustainable future for us all. UN
help. member states have also agreed to climate action to limit
global warming.
Assessment: IMF staff evaluate the country's economic conditions
and determine the appropriate type and amount of assistance needed. Structure of U.N.
Negotiation: If the IMF approves the request, the country and the IMF  there are five principal bodies: the U.N. General Assembly,
negotiate the terms and conditions of the loan, including any policy
the U.N. secretariat, the International Court of Justice, the
reforms the country must undertake.
U.N. security Council, and the U.N. Economic and social
Approval: Once the negotiations are complete, the IMF's Executive Council. A sixth, the U.N. trusteeship Council, has been
Board reviews and approves the loan arrangement. inactive since 1994.

Disbursement: The IMF disburses the funds to the borrowing country, U.N. General Assembly
usually in installments, as the country meets the agreed-upon
conditions and milestones.  this is the U.N.'s main deliberative body, in which all
members have equal representation. It is headquartered in
 When a country borrows money from the International New York City, and its responsibilities include setting the
Monetary Fund (IMF), it often comes with conditions. These
U.N.'s budget, appointing rotating members to the security
conditions are like rules that the borrowing country
needs to follow in exchange for getting the loan. They're Council, and passing non- binding resolutions that express
designed to help the country fix its economic problems and the opinions of the international community.
become more stable in the long run.
BORROWING FROM THE IMF loan conditions can vary depending on U.N. Secretariat
the specific situation of the borrowing country. Some common types of
conditions include:  The U.N. secretariat is the executive wing of the U.N.,
charged with implementing policies set by its deliberative
Fiscal Policy: Countries may be required to reduce government bodies. Its head, the secretary-General, is the U.N.’s top
spending or increase taxes to improve their budget deficits and overall official. The secretariat, which is based in New York City,
financial health.
includes the Department of Peacekeeping Operations, which
Monetary Policy: Central banks may need to adjust interest rates or dispatches U.N. soldiers—known as “blue helmets”—on
control inflation to stabilize the country's currency and promote missions authorized by the security Council.
economic growth.
International Court of Justice
Structural Reforms: Borrowing countries may need to make changes
to their economic systems, such as privatizing state-owned enterprises  the International Court of Justice is based in the Hague and
or improving regulatory frameworks, to make their economies more has two main functions: to settle disputes submitted by
efficient and competitive. member states according to international law and to issue
Social Safety Nets: To protect vulnerable populations, IMF programs advisory opinions on legal questions submitted by U.N.
may include measures to ensure that social welfare programs remain agencies. there are 15 judges, and the court's official
in place or are strengthened during economic reforms. languages are French and English. Appeals are not allowed,
making the judgments final.
United Nations
U.N. Security Council
The United Nations is aninternationalorganizationfoundedin1945
after the Second World War by 51 countries committed to Maintaining  the U.N. security Council is charged with maintaining
international peace and security, developing friendly relations among international security. It authorizes peacekeeping missions,
nations and promoting social progress, better living standards and accepts new U.N. members, and approves changes to the
human rights. There area total of193 countries area member of UN. U.N. charter.11 the security Council's structure allows a few
powerful member states to dominate the U.N.: Russia, the
History U.K., France, China, and the U.S. hold permanent seats on
 the council and enjoy veto power. the security Council's - the UN Charter, in its Preamble, set an objective: "to establish
other 10 seats rotate on a staggered two-year schedule; as conditions under which justice and respect for the obligations arising
of 2021, they are occupied by Estonia, India, Ireland, Kenya, from treaties and other sources of international law can be
Mexico, Niger, Norway, saint Vincent and the Grenadines, maintained". Ever since, the development of, and respect for
Tunisia, and Vietnam. international law has been a key part of the work of the Organization.

U.N. Economic and Social Council Issues

 the UN. Economic and social Council coordinates the 1. Gender Equality
activities of the U.N.'s 15 specialized agencies. these include
the Food and Agriculture Organization (FAO), which leads - Women and girls represent half of the world’s population and,
efforts to improve food security; the International Labor therefore, also half of its potential. Gender equality, besides being a
Organization (ILO), which promotes workers' interests; and fundamental human right, is essential to achieve peaceful societies,
the World Bank and the International Monetary Fund (IMF), with full human potential and sustainable development.
two of the Bretton Woods institutions, which were founded to
2. Youth
shore up international financial stability.
- Rising Internet connectivity has the potential to transform children and
Concept
young people’s lives for the better, but also makes them vulnerable to
 The United Nations (UN) is an intergovernmental organization sexual abuse, cyberbullying, and other risks. the UN is actively working
whose stated purposes are to maintain international peace and to protect children and youth online through various programmes
security, develop friendly relations among nations, achieve and initiatives.
international cooperation, and serve as a center for harmonizing the
3. Climate Change
actions of nations. The organization is based on the principle of the
sovereign equality of all its Members. - Climate change is one of the major challenges of our time. From
shifting weather patterns that threaten food production, to rising sea
Importance of United Nations
levels that increase the risk of catastrophic flooding, the impacts of
since 1948, the UN has helped end conflicts and foster reconciliation climate change are global in scope and unprecedented in scale.
by conducting successful peacekeeping operations in dozens of
4. AIDS
countries, including Cambodia, El Salvador, Guatemala, Mozambique,
Namibia and Tajikistan. The united Nations protects human rights, - HIV infections have been reduced by 59% since the peak in 1995, (by
delivers humanitarian aid, promotes sustainable development and 58% among children since 2010) and AIDS-related deaths have fallen
upholds international law. We all know the grand, over-arching benefits by 69% since the peak in 2004 and by 51% since 2010. Globally 46%
to a UN membership set out in the Charter, Coordinating actions to of all new HIV infections were among women and girls in 2022. The
maintain international peace and security; developing friendly relations UN family has been in the vanguard of this progress.
among nations; achieving international cooperation to address
economic, social, and humanitarian problems; and promoting respect 5. Big Data for Sustainable Development
for human rights and fundamental freedoms.
- The volume of data in the world is increasing exponentially. New
Role of United Nations sources of data, new technologies, and new analytical approaches, if
applied responsibly, can allow to better monitor progress toward
Maintain International Peace achievement of the SDGs in a way that is both inclusive and fair.
- The UN accomplishes this by working to prevent conflict, helping 6. Ending Poverty
parties in conflict make peace, deploying peacekeepers, and creating
the conditions to allow peace to hold and flourish. These activities often - At current rates of progress, the world is unlikely to meet the global
overlap and should. goal of ending extreme poverty by 2030, with estimates suggesting that
nearly 600 million people will still be living in extreme poverty.
Deliver Humanitarian Aid
Impact of UN
-"to achieve international co- operation in solving international
problems of an economic, social, cultural, or humanitarian character."  The work of the United Nations impacts people around the
the UN first did this in the aftermath of the second World War on the world on issues related to peace and security, development
devastated continent of Europe, which it helped to rebuild. and human rights; from disarmament to efforts to combat
terrorism and extremism; from conflict prevention to
Protect International Rights peacekeeping and peace-building; from disease prevention
to the promotion of gender equality and universal education;
- In 1948, the universal Declaration of Human Rights lay down the
from refugee resettlement to humanitarian assistance; from
principles that brought human rights into the realm of international law.
the rule of law to the fight against transnational crime.
since then, the Organization has diligently protected human rights
through legal. How to become a member of the United Nations?
Support Sustainable Development and Climate Action  The State submits an application to the Secretary-General
and a letter formally stating that it accepts the obligations
-the united Nations launched its sustainable development agenda in
under the Charter.
2015, reflecting the growing understanding by Member states that a
development model that is sustainable for this and future generations  The Security Council considers the application. Any
offers the best path forward for reducing poverty and improving the recommendation for admission must receive the affirmative
livesof people everywhere. votes of 9 of the15 members of the
 Council, provided that none of its five permanent members
Uphold International law — China, France, the Russian Federation, the United
 Kingdom of Great Britain and Northern Ireland and the
United States of America —have voted against the
application.
 If the Council recommends admission, the recommendation
is presented to the General Assembly for consideration. A
two-thirds majority vote is necessary in the Assembly for
admission of anew State.
 Membership becomes effective the date there solution for
admissions adopted