8.2.10

International Institutions 2

Test yourself

IGOs - WEF and WTO

The World Economic Forum and World Trade Organisation are also important IGOs in trade and economic development.

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World Economic Forum

  • The WEF is a slightly different IGO as it works with businesses and governments.
  • It is a Swiss not-for-profit organisation that was founded in 1971. It holds an annual conference in Davos, Switzerland that promotes public-private co-operation.
  • The WEF is an IGO that wants to bring together businesses and governments and other members of society to ‘improve the world’.
  • The WEF has a wider remit than the other IGOs as it discusses wider issues like corruption and terrorism.
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World Trade Organisation

  • The WTO focuses on trade and the rules of trade. It wants to ensure that capitalism thrives and so trade is free, allowing the market to act independently of government involvement.
  • The WTO negotiates free-trade agreements.
    • In 2016, it had 164 members. Over three-quarters of its members are developing or the least-developed countries.
  • It is noticeable that North Korea, as a switched-off country is not part of the WTO.
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World Trade Organisation cont.

  • Some people argue that the explosion in global trade since 1950 is a sign of the WTO’s success.
  • Others argue that this explosion in global trade is the result of globalization, rather than the work of one IGO.

Financial IGOs and the Developing World

Since the 1970s, tougher rules and strict conditions have been applied for large-scale lending, especially for developing countries. These have included the SAP and HIPC schemes:

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SAPs

  • SAP stands for Structural Adjustment Programmes. They are usually made up of loans from the IMF and World Bank.
  • SAPs have made countries that receive lending follow specific routes to development, such as privatisation.
  • Africa Action, an NGO, is critical of SAPs, claiming that the assumption that the market leads to benefits for the rich and poor is flawed.
  • Ghana launched its structural adjustment plan in 1983. The IMF and World Bank say it is one of the most successful SAPs in Africa.
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HIPC schemes

  • HIPC stands for Heavily Indebted Poor Countries. There are 37 nations in this group, including Ghana, Ethiopia, Afghanistan and Senegal.
  • HIPC schemes aim to make sure that no country faces an unmanageable debt burden (amount of debt).
  • Under HIPC schemes, countries must reduce poverty over time and meet other criteria. If they meet all of these criteria, then they may have all their external debt cancelled.
    • Chad achieved this in 2015.
  • Some people argue that SAPs and HIPCs mean the sovereignty of these nations is questionable - are they perhaps neo-colonial?

Jump to other topics

1Introduction to Markets

2Market Failure

3The UK Macroeconomy

4The UK Economy - Policies

5Business Behaviour

6Market Structures

7A Global Perspective

8Finance & Inequality

9Examples of Global Policy

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