MARCH 20, 20132013 – 1 S T SEMESTERYOUNG LEADERS &

INTERNATIONAL ORGANIZATIONS

O R G A N I Z E D B Y S A O R I KA K I H A R A

Global Governance&

Inter-governmental Organizations (IGOs)~ United Nation, IMF, World Bank &Regional Development Organization ~

Who holds power?

Questions: Which country do you think holds the power in the world?

Who benefits?

US power shaped many pieces of global governance, especially the international economic system.

Politics of global governance is not only about who gets included in decision making, but also about who gets excluded.

Global Governance is dominated by the largest economies. Most small and poor developing countries are excluded.

Problems: “market-driven poverty,” Widening inequality between rich and poor; environmental crises; labor conditions.

There are 3 critical challenges: • Legitimacy

Rules and law must be obeyed. • Accountability

Accountability and Transparency is important.

• Effectiveness.What are the outcomes of rules and actions?

United Nations (UN)

What is the UN’s role in Global Governance?

When did it begin?

The United Nations is made up of 192 countries from around the world.

It was set up in 1945, after the Second World War, as a way of bringing people together and to avoid further wars.

It started with 51 countries.

Source: commons.wikimedia.org

United Nations Member Countries

Main Purposes:

1. To keep peace throughout the world;2. To develop friendly relations among

nations;3. To help nations work together to improve

the lives of poor people, to conquer hunger, disease and illiteracy, and to encourage respect for each other’s rights and freedoms;

4. To be a centre for harmonizing the action of countries to achieve these goals.

Sourse: blogs.ubc.ca

Structure of the United Nations

WHAT IS THE DIFFERENCE?

International Monetary Fund (IMF) vs.

The World Bank (WB)

Purposes of the IMF and the World Bank

The International Monetary Fund (IMF) maintains international monetary cooperation among its members

The World Bank aids in the development and reconstruction of it members

History behind the IMF and World Bank

After the Great Depression in the 1930s there was a need for an organization to create a system for exchange rate stability Uncertainty of the value of paper money (no

longer used the gold standard) Countries began cheating other countries in trade

Countries’ economies affected by WWII need for reconstruction in well-developed nations need for development in the lesser developed

nations

Bretton Woods Conference

1940s proposals for monetary system by Harry Dexter White (U.S.) and John Keynes (UK) establish the value of each currency eliminate restrictions and certain practices on

trade assistance for post-war reconstruction

Bretton Woods Conference, New Hampshire, July 1944 with delegates of 44 nations final negotiations of the IMF and the World Bank

took place

IMF

Exchange rate stability and growth of international trade

Currently 188 member countries

By sharing economic policies the system of buying and selling currencies would be stable

Where the IMF gets its money

Most comes from the quota subscriptions the money each member contributes when

joining the IMF

General Arrangements to Borrow (1962) line of credit set up with several

governments and banks throughout the world

Power among the members

Size of the quotas determine voting power.

IMF decides on the quota for each member. richer countries have larger quota

US provides largest quota = US has largest voting power

Quotas also determine how much each member can borrow from the IMF when in need of aid.

When is a country in need ?

A country that had not taken in enough foreign currency to pay the other countries for what they have boughtspends more money than it takes in

IMF will lend foreign exchange to that memberhoping to stabilize its currency which will

strengthen its trade

Asian Crisis

Financial crisis broke out in Asia in 1997 large declines in currencies, stock

markets, and other asset prices

affected emerging markets outside of Asia

IMF arranged programs of economic stabilization and reform with Indonesia, Korea, and Thailand

World Bank

Founded in 1944 at the Bretton Woods Conference to finance the reconstruction of countries

affected by WWII help with development of impoverished

nations

188 member countriesHeadquarter: Washington D.C.

World Bank

Made up of 5 different organizations International Bank for Reconstruction and

Development (IBRD)

International Development Association (IDA) International Finance Corporation (IFC) Multilateral Investment Guarantee Agency

(MIGA) International Center for the Settlement of

Investment Disputes (ICSID)

Lends to countries with relatively high per capita incomes.

Money is used for: development projects (i.e. highways, schools) programs to help governments change the way

they manage their economies

Provides technical assistance in projects.

Source: wbi.worldbank.org

Source: www.guardian.co.uk

How would you understand these cartoons?

EXAMPLE OF THE ASIAN DEVELOPMENT

BANK (ADB)

Regional Development Organizations

Asian Development Bank (ADB)

Founded 1966 – Modeled on the World Bank

Other examples of Regional Development Organizations:Inter-American Development Bank Group (1959)African Development Bank (1966)European Bank for Reconstruction and Development

(1991)

Interests: “Selection”

Japanese Interests: Japanese trading partners Countries favored by Japanese bilateral aid are more likely

to receive ADB funds

US Interests Countries favored by U.S. bilateral aid are more likely to

receive ADB funds

higher Japanese bilateral aid and higher U.S. bilateral aid are both associated with more ADB funding

Players:

Regional development organizations have a similar governance structure to the World Bank

Big players:Asian Development Bank: Japan & USAfrican Development Bank: Nigeria & US Inter-American Development Bank: US & Brazil,

ArgentinaDo governments use these International Institutions

to pursue foreign policy goals?

Why is it important to have an organisation that is bigger than any one country?

Then, who controls the world?

The powerful country? UN or other IGO?

Thank you!