International organizations & their role in creating and maintaining control systems

Detailed Write-Up

International organizations & their role in creating and maintaining control systems As markets globalize and an increasing proportion of business activity transcends national borders, institutions need to help manage, regulate, and police the global marketplace, and to promote the establishment of multinational treaties to govern the global business system. International Organisations are useful to powerful and weak states alike, because they can extend credibility and legitimacy of efforts / actions in International arena. The challenges posed by an increasingly interdependent global economy typically demand coordinated responses. All these International Organisaiotn were created by voluntary agreement between individual nation-states, and their functions are enshrined in international treaties. These organizations have many important roles in creating international business controls, rules and regulations. United Nations (UN) objective is to provide leadership in fostering peace and stability around the world. To support this objective, its functional area encompasses dealing with economic issues such as sustainability and promoting harmonization of trade law between nations. World Bank objective is to improve the international economic environment and aid international business. International Monetary Fund (IMF) deals with the International Monetary System and 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. Food and Agricultural Organization (FAO) a UN specialized agency facilitates the intergovernmental adoption of international standards and development of codes on food safety and environment sustainability by facilitating Global Agricultural Marketing Management. International Labour Organisation (ILO) role is to work on the cooperation between governments and employers and workers organizations in fostering social and economic progress. United Nations Industrial Development Organization (UNIDO) role is to promote and accelerate sustainable industrial development in developing countries and economies in transition through International trade and work towards improving living conditions in the world's poorest countries. World Intellectual Property Organisation (WIPO) role is to protect and effectively use intellectual property rights and works with member States to develop international laws and standards for trademarks.

 The World Trade Organization (WTO) is primarily responsible for policing the world trading system and making sure nation states adhere to the rules laid down in trade treaties signed by WTO member states. United Nations Conference on Trade and Development (UNCTAD) furthers the development of emerging nations. It seeks to improve the prices of primary goods exports through commodity agreements. It also established a tariff preference system favouring developing nations. Asian Development Bank (ADB) main objective is to promote growth and remove property in Asia and Pacific regions through economic development and international trade. Organisation of Economic Co-operation and Development (OECD) is an International economic organisation of 34 countries to stimulate economic progress and world trade. International Chamber of Commerce (ICC) main objective is to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital.

UN:
Headquarters: New York, U.S.A Established in 1945 Membership: 193 countries United Nations (UN) is a political organisation but deals with economic issues such as sustainability and promotes harmonization of trade law between nations. The United Nations Commission of International Trade Law (UNCITRAL) established by UN deals with the modernization and harmonization of rules on international business. UNCITRAL functional framework includes dispute resolution, international contract practices, transport, insolvency, electronic-commerce, and international payments, secured transactions, procurement and sale of goods.

World Bank:
Headquarters Washington D.C., United States of America Established in 1944 Owned by 187 countries Five institutions together make up the World Bank Group: The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries. IBRD has an impact on the world economy in which international business operates. Whereas the IMF is concerned with the provision of short-term liquidity, the IBRD supplies long term capital to aid economic development.

The International Development Association (IDA) provides interest-free loanscalled credits and grants to governments of the poorest countries. The World Bank is parent to the International Development Association (IDA), created for the purpose of giving soft loans to the least developed countries, that is, long-term loans at very low interest rates. Lending by these two groups supports all aspects of development, including infrastructure, industrial, agricultural, educational, tourist, and population-control projects. World Bank activities have improved the international economic environment and aided international business. The supply of capital has meant a higher level of economic activity and, therefore, better markets. The International Finance Corporation (IFC) provides loans, equity and technical assistance to stimulate private sector investment in developing countries. IFC's 182 member countries provide its authorized share capital of $2.4 billion, collectively determine its policies, and approve investments. IFC financial products & services for investment include: Loans Syndicated Loans Equity Finance Quasi-Equity Finance Equity and Debt Funds Structured Finance Intermediary Services Risk Management Products Local Currency Financing Subnational Finance Trade Finance The Multilateral Investment Guarantee Agency (MIGA) provides guarantees against losses caused by non-commercial risks to investors in developing countries. MIGAs guarantees protect investments against-non-commercial risks and can help investors obtain access to funding sources with improved financial terms and conditions. The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.

IMF:
Established in 1944 Headquarters Washington D.C., United States of America Membership - 187 countries The International Monetary Fund (IMF) is an organization of 187 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. Objectives of IMF: The IMF deals with the International Monetary System. It lends, on a short-term basis, to countries with payment problems to help them continue trading.

The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction. A major goal of business is to make a profit, so firms pay close attention to financial matters. International companies must be even more concerned with financial matters than national firms are because they must deal with many currencies and many national financial markets where conditions differ from one to the other. The IMF provides a forum for international monetary cooperation that lessens the chances of nations taking arbitrary actions against others, as occurred in the 1930s. Its members are represented through a quota system broadly based on their relative size in the global economy. Through its economic surveillance, the IMF keeps track of the economic health of its member countries, alerting them to risks on the horizon and providing policy advice. It also lends to countries in difficulty, and provides technical assistance and training to help countries improve economic management. The IMF provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty. Key IMF activities Helping a country benefit from globalization while avoiding potential downsides is an important task for the IMF. The global economic crisis has highlighted just how interconnected countries have become in todays world economy. The IMF supports its membership by providing: Policy advice to governments and central banks based on analysis of economic trends and cross-country experiences; Research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets; Loans to help countries overcome economic difficulties; Concessional loans to help fight poverty in developing countries; and Technical assistance and training to help countries improve the management of their economies. Agreement between IMF member nations, regarding the Special Drawing Rights (SDR) in settling reserve transactions. Now an international reserve facility maintained by IMF is available.

ILO:
Established in 1919 Headquarters - Geneva, Switzerland Membership - 176 countries

The International Labour Organization (ILO) is the only tripartite U.N. agency with government, employer, and worker representatives. This tripartite structure makes the ILO a unique forum in which the governments and the social partners of the economy of its 183 Member States can freely and openly debate and elaborate labour standards and policies. ILO Objectives: The ILO aims to ensure that it serves the needs of working women and men by bringing together governments, employers and workers to set labour standards, develop policies and devise programmes. It ensures that the views of the social partners are closely reflected in ILO labour standards, policies and programmes. Functions of ILO: In the Global Jobs Pact, the ILOs tripartite membership encourages the Organization to promote effective and coherent social and economic recovery policies and shape a fair globalization. The ILO is the only United Nations agency with a constitutional mandate to protect migrant workers and labour migration in a globalizing world. ILO works on labour migration, the connections between migration and development, decent work for migrant workers, the normative framework for protection of migrant rights, the governance of international labour migration, and the role of social dialogue and international cooperation. In so doing, it brings together the elements of a rights-based approach to labour migration as identified by its constituents.

UNIDO:
Established in 1966 Headquarters - Vienna, Austria Membership - 176 countries The United Nations Industrial Development Organization (UNIDO) is a specialized agency of the United Nations. Its mandate is to promote and accelerate sustainable industrial development in developing countries and economies in transition, and work towards improving living conditions in the world's poorest countries by drawing on its combined global resources and expertise. UNIDO is one of the largest providers of trade-related development services, offering customer-focused advice and integrated technical assistance in the areas of competitiveness, trade policies, industrial modernization and upgrading, compliance with trade standards, testing methods and metrology.

FAO:
Established in 1943 Headquarters - Rome, Italy Membership - 130 countries

The Food and Agriculture Organisation facilitates the intergovernmental adoption of international standards and development of codes, based on sound science, that help ensure food safety and protect biodiversity. The application of these international standards and codes protects all stakeholders such as farmers, foresters and fishers, processors, brokers, retailers and consumers, nongovernmental organizations and governments. FAO actively support Global Agricultural Marketing Management. FAO collates and disseminates food and agricultural statistics globally. The Codex Alimentarius Commission, established jointly by FAO and the World Health Organization (WHO), has been setting food standards since 1963. The international application of the Commissions standards makes food safer for consumers and ensures fair practices in the growing global food trade to the benefit of farmers and other food producers. These international standards serve as a basis for national standards.

WIPO:
1967 Headquarters Geneva, Switzerland Membership - 185 countries WIPO objective is to develop a balanced and accessible international intellectual property (IP) system and contributes to economic development while safeguarding the public interest. The functions of WIPO includes: Promoting intellectual property Registration of Patents Preparation and enforcement of Patent and IP laws Dispute Resolution related to Patents and IP

WTO:
Location: Geneva, Switzerland Established: 1 January 1995 Created by: Uruguay Round negotiations (1986-94) Membership: 157 countries

Until the General Agreement on Tariffs and Trade (GATT) after World War II, discriminating trade practices had restricted the world trading system. GATT had the intention of producing a set of rules and principles to liberalise trade. The most favoured nation concept (MFN), whereby each country agrees to extend to all countries the most favourable terms that it negotiates with any country, helped reduce barriers. The conclusion of the Uruguay Round (UR) in 1994 saw the establishment of a new trading system and related agreements under the auspices of the World Trade

Organization (WTO). The WTO oversees implementation of the agreements by member countries. The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible WTO objectives include: Consumers and producers know that they can enjoy secure supplies and greater choice of the finished products, components, raw materials and services that they use. Producers and exporters know that foreign markets will remain open to them. Trade friction is channeled into the WTO's dispute settlement process where the focus is on interpreting agreements and commitments, and how to ensure that countries trade policies conform with them. That way, the risk of disputes spilling over into political or military conflict is reduced. By lowering trade barriers, the WTOs system also breaks down other barriers between peoples and nations. At the heart of the system known as the multilateral trading system are the WTOs agreements, negotiated and signed by a large majority of the worlds trading nations, and ratified in their parliaments. These agreements are the legal ground-rules for international commerce. Essentially, they are contracts, guaranteeing member countries important trade rights. They also bind governments to keep their trade policies within agreed limits to everybodys benefit. Though the agreements were negotiated and signed by governments, their main purpose is to help producers of goods and services, exporters, and importers conduct their business. The ultimate goal is to improve the welfare of the peoples of the member countries The WTOs main functions are: Enforcement of negotiated multilateral trade rules (including dispute settlement). Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to liberalize trade. WTO agreements, negotiated and signed by the bulk of the worlds trading nations provide the legal ground-rules for international commerce. To help trade flow as freely as possible so long as there are no undesirable sideeffects because this is important for economic development and well-being. WTO helps to settle trade disputes between member countries. Development and trade- back: Over three quarters of WTO members are developing or least-developed countries. All WTO agreements contain special provision for them, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities and support to help them build the infrastructure for WTO work, handle disputes, and implement technical standards

UNCTAD:
Location: Geneva, Switzerland Established: 1964

 Membership: 153 countries The first United Nations Conference on Trade and Development (UNCTAD) was held in Geneva in 1964. Given the magnitude of the problems at stake and the need to address them, the conference was institutionalized to meet every four years. Simultaneously, the developing countries under UNCTAD established the Group of 77 to voice their concerns. (Today, the G77 has 131 members.) The United Nations Conference on Trade and Development (UNCTAD) was established as a permanent intergovernmental body. It is the principal organ of the United Nations General Assembly dealing with trade, investment, and development issues. Objectives of UNCTAD: The organization's goals are to "maximize the trade, investment and development opportunities of developing countries and assist them in their efforts to integrate into the world economy on an equitable basis." Functions of UNCTAD: Trade o General System of Trade Preference (GSP): Developing countries receive preferential treatment in developed country markets due to the GSP. o Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices. o Global Trade Point Network (GTPNet) Commodities o International commodity agreements covering, among others, cocoa, sugar, natural rubber, jute and jute products, tropical timber, tin, olive oil and wheat. o The Common Fund for Commodities, set up to provide financial backing for the operation of international stocks and for research and development in the field of commodities. Debt Management o Adjustment of the Overseas Development Aid debt of low-income developing countries. o Guidance for international action in the area of debt rescheduling. o Least Developed, Land-locked and Transition Countries

ADB:
1966 Manila, Philippines Membership - 67 countries ADB main function is to provide development financing for the Asia and Pacific region. ADBs financial products help developing member countries build economic growth and social development. As a catalyst for private investments, ADB provides direct financial assistance to private sector projects. ADB funds activities in various sectors or for specific themes through loans and grants. ADBs Trade Finance Facilitation Program (TFFP)

provides loans and guarantees through, and in conjunction with, international banks and ADB's developing member country banks to support trade transactions in developing nations.

OECD:
Established in 1961 Headquarters - Paris, France Membership - 34 countries The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade. The OECD objectives include: To achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; To contribute to sound economic expansion in Member as well as nonmember countries in the process of economic development; and To contribute to the expansion of world trade on a multilateral, nondiscriminatory basis in accordance with international obligations. Functions of OECD: OECD has taken a role in co-ordinating international action on corruption and bribery, creating the OECD Anti-Bribery Convention, which came into effect in February 1999. It has been ratified by thirty-eight countries. The OECD has also constituted an anti-spam task force, which submitted a detailed report, with several background papers on spam problems in developing countries, best practices for ISPs, e-mail marketers, etc., appended. It works on the information economy and the future of the Internet economy. Taxation The OECD publishes and updates a model tax convention that serves as a template for bilateral negotiations regarding tax coordination and cooperation.

OECD is also concerned with money -laundering. The OECD gray list reports monitor the implementation of the internationally agreed tax standard in select jurisdictions tax havens or other financial centers of interest. OECD functions include: To work with governments, in-order to understand the key drivers of economic, social and environmental change. To measure productivity and global flows of trade and investment. To analyse and compare data to predict future trends.

 To set international standards on a wide range of things, from agriculture and tax to the safety of chemicals.

ICC:
1946 Paris Membership Companies of every size in over 120 countries worldwide ICC (International Chamber of Commerce) is the voice of world business championing the global economy as a force for economic growth, job creation and prosperity. ICC main objective is to serve world business by promoting trade and investment, open markets for goods and services, and the free flow of capital. ICC makes policy in: Anti-Corruption, Arbitration, Banking Technique & Practice, Commercial Law & Practice, Trade Competition, Corporate Responsibility & Anticorruption, Customs & Trade Regulations, E-business, IT & Telecoms, Economic Policy, Environment & Energy, Financial Services & Insurance, Intellectual Property, Marketing & Advertising, Taxation, Trade & Investment Policy, Transport & Logistics Rules and Standards set by ICC includes: Arbitration rules of the ICC International Court of Arbitration ICC's Uniform Customs and Practice for Documentary Credits (UCP 600) are the rules that banks apply to finance billions of dollars worth of world trade every year. ICC Incoterms are standard international trade definitions used in contracts. ICC model contracts are used across International trade. ICC is a pioneer in business self-regulation of e-commerce. ICC Codes on advertising and marketing

Limitations of International Organisations and its control systems

International governance is largely accomplished by International Organisations and in this process IOS have extended their reach in to the details of domestic political economy in their member states. Some of the IOS such as IMF, WTO command significant resources and wield considerable authority. The legitimacy and independence of International Organisations are always provisional because they exist in a system of states and states enjoy unequal power resources. When powerful states abuse their informal prerogatives (bestowed by IOS to ensure their participation), they undermine the legitimacy and usefulness of IOS. Other issues that limit the usefulness of IOS and its control systems are: (a) Evolving Global architecture (b) Power Politics (c) Limits of International Law (d) Crisis and Response (e) Unilateral actions and Bilateral negotiations