International Organisations

UN had its origin in August, 1944 at Dumbarton Oaks Conference where the representatives of USA, UK, USSR and China met to form an association for the maintenance of international peace and security. Finally, on June 26, 1945, the charter of the United Nations was signed in a conference called at “San Fransisco”, which included the representatives of 51 states. The charter then came into force on 24 Octobar, 1945; thus 24 October has been celebrated as the UN day.

Headquarters, Flag, Languages: United Nation’s Headquarter is situated in Manhattan Island of New York and the European office at Geneva.The Flag of the UNO was adopted in Octobar 1947. The flag includes white UN emblem (two bent olive branches, open at the top and between them is the world map) on a light blue background. the flag was adopted by the UNO in Octobar, 1947. Official Language of UNO are French, Chinese, English, Russian, Arabic and Spanish. While the working languages are only French and English.

Aims and Objectives of UNO: The main objectives of UNO are:

• To maintain international peace and security.
• To develop spirit of co-operation and friendly relations among the nations.
• To promote respect for human rights, dignity and freedom.
• To solve international problems of social, economic, agricultural and humanitarian character.
• To employ international machinery for the promotion of economic and social advancement of all people.

Organs of the UN:

There are six main organs of UN:1. General Assembly : It is the main body of UN and consists of the representatives of all the states. Each state may send 5 representatives in the general assembly but has only 1 vote. It meets regularly once a year, special and emergency sessions can also be sumoned at the request of security council. Decision of an important matters are taken by the 2/3rd majority,

while in simple matters, only simple majority is enough. The assembly may discuss any matter within the scope of charter except those already referred to the Security Council. The assembly generally discusses ways of preserving peace, economic development and social progress, well being of people, peaceful use of atomic energy, human right etc. It elects its own President & Vice-President every year.

Functional of General Assembly:

• The membership of new states is done by the general assembly on the recommendation of Security Council.
• The Judges of the International Court of Justice are elected by general assembly.
• It elects the non-permanent members of security council, members of Economic and Social Council, and certain members of Trusteeship Council.
• It passes entire budget of UNO.

2. Security Council : It is the executive body of UN which is responsible for maintaining international peace in the world. Its session can be summoned at 24 hour notice and if functions almost continuously. the council consists of 15 members–5 permanent (USA, UK; Russia, France and China) and 10 non- ermanent members which are elected for a term of 2 years by the General Assembly. the distribution of the numbers of non-permanent members are (1) Five members from Asian and African countries (2) two from latin American countries (3) two from western Europes and other (which implies commonwealth countries) (4) and one from east European countries. Each member of the Security Council has one vote. The approval of all permanent members is necessary. If any permanent member casts a “Veto” to show its disagreement, then no decision can be taken. The number of affirmative votes needed for a decision are atleast nine which includes the vote of 5 permanent members. In the event of a threat to peace or occurence of war between two or more countries, the security council has the power to take appropriate measures to restore peace and security.
3. Economic and Social Council : The Economic and Social Council (ECOSOC) is the welfare council which coordiantes the economic and social activities of the United Nations and its specialised agencies and other organisations. This council meets at least thrice a year. It is composed of 54 members. General Assembly elects one-third members of ECOSOC every year for a period of 3 years. ECOSOC takes decision by a majority of those members present and voting. ECOSOC seeks to build a world of greater prosperity, stability and justice.
4. The Trusteeship Council : The Prime responsibility of this council is to supervise the administration of those territories which were placed under the International Trusteeship System. This council of UNO is also known as ‘Protector of Dependent People’ who are not yet able to Govern themselves. It consists of member of states administering trust territories and permanent members of the security council nto administering territories. Under the charter, the member states have to accept certain obligations to promote their development and to protect their interest and security so long as the trustee territories are not able to govern themselves.
   At present, USA is the only administering trust territory. So, the Trusteeship Council consists of only permanent members. This council meets at least once in a year.
5. Secretariat : All day today functions of the UN are performed by the Secretariat. the Secretariat is headed by the Secretary-General who is the chief Administrative Officer, and he is appointed by the General Assembly upon the recommendation of Security Council for a five-year term, which is renewable. It is his duty to implement all resolutions passed by the Security Council or the General Assembly. He makes the annual report of General Assembly and also bring to the notice of security council about any matter threatening the maintenance of international peace and Security.

Secretary General : Ban Ki Moom

• International Monetary Fund (IMF) : HQ – Washington, D.C. The IMF came into existence in December 1945, as one among the Bretton Wood twins when the first 29 countries signed its Articles of Agreement. The International Monetary Fund (IMF) is an international organisation that oversees the global financial system by observing exchange rates and balance of payments. An unwritten rule establishes that the IMF’s managing director must be non-Italian European and that the president of the World Bank must be from the United States. IMF describes itself as “an organisation of 185 countries, Montenegro being the 185th as of January 18th, 2007.
• World Bank Group : HQ–Washington, D.C. The World Bank Group is a group of five international organisations responsible for providing finance and advice to countries for the purposes of economic development and eliminating poverty. The Bank came into formal existence on 27 December, 1945 following international ratification of the Bretton Woods agreements, it approved its first loan to France for postwar reconstruction. The World Bank Group consists of:
  • The International Bank for Reconstruction and Development (IBRD), established in 1945, which provides debt financing on the basis of sovereign guarantees;
  • The International Finance Corporation (IFC), established in 1956, which provides various forms of financing without sovereign guarantees, primarily to the private sector;
  • The International Development Association (IDA), established in 1960, which provides concessional financing (interest-free loans or grants), usually with sovereign guarantees;
  • The Multilateral Investment Guarantee Agency (MIGA), established in 1988, which provides insurance against certain types of risk, including political risk, primarily to the private sector; and
  • The International Centre for Settlement of Investment Disputes (ICSID), established in 1966, which works with governments to reduce investment risk.
• Food and Agriculture Organisation (FAO) : HQ–Rome, Italy.
  The Food and Agriculture Organisation (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger. FAO was founded on 16 October 1945, in Quebec City, Canada. In 1951 its hadquarters were moved from Washington, D.C., United States, to Rome, Italy. As of 17 November 2007, it had 191 members (plus one member organisation, the European Community and one associate member, the Faroe Islands).
• International Labour Organisation (ILO) : HQ-Geneva, Switzerland. The International Labour Organisation (ILO) is a specialized agency of the United Nations that deals with labour issues. Founded in 1919, it was formed through the negotiations of the Treaty of Versailles, and was initially an agency of the League of Nations. The ILO hosts the International Labour Conference in Geneva every year in June. The organisation received the Nobel Peace Prize in 1969. Its secretariat is known as the International Labour Office. Its a tripartite intergovernmental body of governments, employers and workers.
• United Nations Educational, Scientific and Cultural Organisation (UNESCO) : HQ-Paris, France. UNESCO (United Nations Educational, Scientific and Cultural Organisation) is a specialized agency of the United Nations established in 1945. Its stated purpose is to contribute to peace and security by promoting international collaboration through education, science, and culture in order to further universal respect for justice, the rule of law, and the human rights and fundamental freedoms proclaimed in the UN Charter. As of October 2007, UNESCO had 193 member states and 6 associate members.
• International Civil Aviation Organisation (ICAO) : HQ–Montreal, Canada. The International Civil Aviation Organization (ICAO), an agency of the United Nations set up in 1944, codifies the principles and techniques of international air navigation and fosters the planning and development of international air transport to ensure safe and orderly growth. The ICAO defines the protocols for air accident investigation, followed by transport safety authorities in countries signatory to the Convention on International Civil Aviation, commonly known as the Chicago Convention.
• World Health Organisation (WHO) : HQ-Geneva, Switzerland. The World Health Organisation (WHO) is a specialized agency of the United Nations that acts as a coordianting authority on international public health. Established on 7 April 1948, the agency inherited the mandate and resources of its predecessor, the Health Organization, which had been an agency of the League of Nations. WHO complies the widely followed International Classification of Diseases (ICD).
• International Atomic Energy Agency (IAEA) : HQ-Vienna, Austria. The International Atomic Energy Agency (IAEA) was established as an autonomous organisation on July 29, 1957. It seeks to promote the peaceful use of nuclear energy and to inhibit its use for military purposes. United States President Dwight D. Eisenhower envisioned, in his “Atoms for Peace” speech before the UN General Assembly in 1953, the creation of this international body to control and develop the use of atomic energy.
• International Telecommunication Union (ITU) : HQ–Paris, France. The International Telecommunication Union (ITU) is an international organisation established to standardise and regulate international radio and telecommunications. It was founded as the International Telegraph Union in Paris in May 17, 1865, and is today the World’s oldest international organisation. Its main tasks include standardization, allocation of the radio spectrum, and organising interconnection arrangements between different countries to allow international phone calls.
• Universal Postal Union (UPU) : HQ–Berne, Switzerland The Universal Postal Union (UPU) is an international organisation that coordiantes postal policies between member nations, and hence the worldwide postal system. Each member country agrees to the same set of terms for conducting international postal duties. It is the second oldest, international organisation (after the ITU). It was created in 1874, under the name “General Postal Union”, as a result of the Treaty of Berne signed on 9 October 1874. In 1878, the name was changed to “Universal Postal Union”.
• International Maritime Organisation (IMO) : HQ–London, U.K The International Maritime Organisation (IMO), formerly known as the Inter-Governmental Maritime Consultative Organization (IMCO), was established in 1948, through the United Nations to coordinate international maritime safety and related practices. However the IMO did not enter into full force until 1958. The IMO promotes cooperation among government and the shipping industry to improve maritime safety and to prevent marine pollution.
• World Meteorological Organisation (WMO) : HQ–Geneva, Switzerland. The World Meteorological Organisation (WMO) is a specialized agency of the United Nations. It is the UN system’s authoritative voice on the state and behaviour of the Earth’s atmosphere, its interaction with the oceans, and the climate produces or the resulting distribution of water resources. It originated from the International Meteorological Organisation (IMO), which was founded in 1873. Established in 1950, WMO became the specialized agency of the United Nations for meteorology (weather and climate), operational hydrology and related geophysical sciences. The WMO helped create the Intergovernmental Panel on Climate Change (IPCC). It is also directly responsible for the creation of the Global Atmosphere Watch (GAW).
• Interpol (International Criminal Police Organisation) : HQ–Lyon, France
  Established as International Criminal Police Commission in 1923 to assist international criminal police co-operation. Its work focuses primarily on public safety, terrorism, organised crime etc. It is the world’s third largest international organisation after UN and FIFA.
• International Court of Justice (ICJ) : HQ-The Hague, The Netherlands The International Court of Justice (known colloquially as the World Court or ICJ) is the primary judicial organ of the United Nations. Established in 1945 by the Charter of the United Nations, the Court began work in 1946 as the successor to the Permanent Court of International Justice. The ICJ is composed of 15 judges elected to nine year terms by the UN General Assembly and the UN Security Council from a list of persons, nominated by the national groups in the Permanent Court of Arbitration. All 192 UN members are automatically parties to the Court’s statute. Article 94 establishes the duty of all UN members to comply with decisions of the Court involving them. If parties do not comply, the issue may be taken before the Security Council for enforcement action. It conducts its business in English and French.
• International Criminal Court (ICC) : HQ–The Hague, The Netherlands. It is a court created under the Rome Statute of 2002 as an independent, permanent court that tries persons accused of the most serious crimes of international concern, namely genocide, crimes against humanity and war crimes. The ICC is based on a treaty, joined by 104 countries. The ICC s a court of last resort. It will not act if a case is investigated or prosecuted by a national judicial system unless the national proceedings are not genuine. In addition, the ICC only tries those accused of the gravest crimes.
• Organisation for the Prohibition of Chemical Weapons (OPCW) : HQ–The Hague, The Netherlands. The Organisation for the Prohibition of Chemical Weapons (OPCW) is an international agency. Its mission is to promote membership of the Chemical Weapons Convention treaty which entered into force in 1997 and mandated the elimination of “the scourge of chemical weapons forever and to verify the destruction of the declared chemical weapons stockpiles within stipulated deadlines”.
• United Nations Children’s Fund (UNICEF) : HQ–New York City, USA The United Nations Children’s Fund (UNICEF) was created on December 11, 1946. In 1953, its name was shortened from United Nations International Children’s Emergency Fund. UNICEF provides long-term humanitarian and developmental assistance to children and mothers in developing countries. UNICEF was awarded the Nobel Peace Prize in 1965.
• United Nations Office on Drugs and Crime (UNODC) : HQ–Vienna, Austria. United Nations Office on Drugs and Crime (UNODC) is a United Nations agency which was founded in 1997 as the Office for Drug Control and Crime Prevention with the intent to fight drugs and crime on an international level. This intent is fulfilled through three primary functions: research, lobbying state government to adopt various crime and drug based laws and treaties and assistance of said governments on the ground level. In October 2002, the United Nations Drug Control Programme (UNDCP) was merged into the UNODC.
• United Nations Conference on Trade and Development (UNCTAD) : HQ–Geneva, Switzerland. The United Nations Conference on Trade and Development (UNCTAD) was established in 1963 as a permanent intergovernmental body, UNCTAD is the principal organ of the United Nations General Assembly dealing with trade, investment and development issues. UNCTAD has 191 member States.
• United Nations Environment Programme (UNEP) : HQ–Gigiri, Nairobi, Kenya.
  It was founded as a result of the United Nations Conference on the Human Environment in 1973. The World Meteorological Organisation and the UNEP established the Intergovernmental Panel on Climate Change (IPCC) in 1988. UNEP is also one of several implementing agencies for the Global Environment Facility (GEF). The year 2007 has been declared as International Year of the Dolphin by the United Nations and UNEP.
• United Nations Development Programme (UNDP) : HQ–New York City, USA.
  The United Nations Development Programme (UNDP), the United Nations’ global development network, is the largest multilateral source of development assistance in the world. The UNDP is an executive board within the United Nations Economic and Social Council. The UNDP Administrator is the third highest ranking member of the United Nations after the United Nations Secretary-General and Deputy Secretary-General. UNDP publishes an annual Human Development Report to measure and analyze developmental progress.
• United Nations High Commissioner for Refugees (UNHCR) : HQ–Geneva, Switzerland.
  The United Nations High Commissioner for Refugees (UNHCR) (established December 14, 1950) protects and supports refugees at the request of a government or the United Nations and assists in their return or resettlement. It succeeded the earlier International Refugee Organisation and the even earlier United Nations Relief and Rehabilitation Administration. UNHCR was awarded the Nobel Peace Prize in 1954 and 1981. UNHCR presently has major missions in Lebanon, South Sudan, Chad/Darfur, Iraq, Afghanistan as well as Kenya to assist and provide services to IDPs and refugees.
• United Nations Human Settlements Programme (UN-HABITAT) :HQ–Nairobi, Kenya. The United Nations Human Settlements Programme (UN-HABITAT) is the United Nations agency for human settlements. It was established in 1978. It is mandated by the United Nations General Assembly to promote socially and environmentally sustainable towns and cities with the goal of providing adequate shelter for all.
• United Nations Industrial Development Organisation (UNIDO) : HQ–Vienna, Austria. The United Nations Industrial Development Organisation (UNIDCO), is a specialized agency in the United Nations system. UNIDO was established as a UN programme in 1966 and became a specialized agency of the United Nations in 1985.
• United Nations Population Fund (UNFPA) : HQ–New York, USA.
  The United Nations Fund for Population Activities was started in 1969 and renamed the United Nations Population Fund (UNFPA) in 1987. The United Nations Population Fund is the world’s largest international source of funding for population and reproductive health programs.
• World Intellectual Property Organisation (WIPO) : HQ–Geneva, Switzerland.
  The World Intellectual Property Organisation (WIPO) is one of the specialized agencies of the United Nations. WIPO was created in 1967 with the stated purpose of encouraging creative activity and promoting the protection of intellectual property throughout the world. WIPO currently has 184 member states and administers 23 international treaties. Vatican City and almost all UN members are member of the WIPO. The predecessor to WIPIO was the BIRPI (French acronym for United International Bureau for the Protection of Intellectual Property), which had been set up in 1893 to administer the Berne Convention for the Protection of Library and Artistic Works and the Paris Convention for the Protection of Industrial Property. WIPO was formally created by the Convention Establishing the World Intellectual Property Organisation (signed at Stockholm on July 14, 1967 and as amended on September 28, 1979).
• World Trade Organisation (WTO) : HQ–Geneva, Switzerland.
  The World Trade Organisation (WTO) is an international organisation that establishes rules for international trade through consensus among its member states. It also resolves disputes between the members, which are all signatories to its set of trade agreements. Uruguay Round of General Agreement on Tariffs and Trade (GATT), negotiations culminating in the Marrakesh Agreement that established the WTO. There are 151 member states in the organisation, the latest to join being Tonga on July 27, 2007. Since its inception in 1995, the WTO has been a major focus for protests by civil society groups in many countries.
• International Red Cross and Red Crescent Movement : HQ–Geneva, Switzerland.
  The International Red Cross and Red Crescent Movement is an international humanitarian movement founded in 1863, whose stated mission is to protect human life and health, to ensure respect for the human being, and to prevent and alleviate human suffering, without any discrimination based on nationality, race, religious beliefs, class or political opinions. It adopted a new symbol a hollowed out red crystal on a white background in addition to the present symbols of red cross (1863) and red cresent (1876). Red star of David was used by Israel till now. Awarded the Nobel Peace prize in three times –1917, 1944 and 1963.
• World Social Forum (WSF)
  The World Social (WSF) is an annual meeting held by members of the anti-globalisation movement to coordiante world campaigns, share and refine organizing strategies, and inform each other about movements from around the world and their issues. It tends to meet in January when its “great capitalist rival”, the World Economic Forum is meeting in Davos, Switzerland.
• World Economic Forum (WEF)
  The World Economic Forum (WEF) is a Geneva-based foundation whose annual meeting of top business leaders, national political leaders (presidents, prime ministers and others), and selected intellectuals and journalists is usually held in Davos, Switzerland. There are also regional meetings throughout the year. It was founded in 1971 by Klaws M. Schwab, a business professor in Switzerland.
• Global Water Partnership (GWP)
  It is a network created by stakeholders including Sweden, The UNDP, World Bank and committee of Economic development of Australia. It has been established to ensure optimum use of scrace water resources in an integrated manner to benefit the world community.
• Asian Development Bank (ADB) : HQ–Manila, Philippines.
  The Asian Development Bank (ADB) is a regional development bank established in 1966 to promote economic and social development in Asian and Pacific countries through loans and technical assistance. It is a multilateral development financial institution owned by 66 members, 47 from the region and 19 from other parts of the globe. ADB’s vision is a region free of poverty. Its mission is to help its developing member countries reduce poverty and improve the quality of life of their citizens. The highest policy-making body of the bank is the Board of Governors composed of one representative from each member state. The Board of Governors also elect the bank’s President who is the chairperson of the Board of Directors and manages ADB. Traditionally, and because Japan is one of the largest shareholders of the bank, the President has always been Japanese.
• African Development Bank (ADBP): HQ–Abidjan, Cote D’Ivoire.
  Established officially in 1964 as a result of Monorovian Conference of 1961, under the auspices of the Economic Commission for Africa, the ADBP began operation in 1966 with. With the statute of a regional multilateral development bank, the African Development Bank engaged in promoting the economic development and social progress of its Regional Member Countries (RMCs) in Africa. The African Development Bank Group has two other entities: the African Development Fund (ADF) and the Nigeria Trust Fund (NTF).
• UN Democracy Fund (UNDEF)
  The UN Democracy Fund will be a voluntary fund housed in the UN Fund for International Partnerships (UNFIP), but with its own Executive Head who will report to an Advisory Board of Member States on substantive matters. In order to ensure transparency and accountability, a dedicated support office will arrange for monitoring, evaluation and auditing of the program. The idea for the Fund was first articulated by President Bush in a speech before the UN General Assembly last fall and has been embraced by the 141 nations that attended the third ministerial meeting of the Community of Democracies in Santiago, Chile in April 2005.

UN Secretaries General

Year	Name	Nation
1946	Trygve Lie	Norway
1953	Dag Hammarskjold	Sweden
1961	U Thant	Burma
1972	Kurt Waldheim	Austria
1982	Javier Peres De Cuellar	Peru
1992	Dr. Boutros Boutros Ghali	Egypt
1997	Kofi Annan	Ghana
2007	Ban Ki Moom	S. Korea

• Association of Southeast Asian Nations (ASEAN) : HQ–Jakarta, Indonesia.
  The Association of Southeast Asian Nations (ASEAN) is a geopolitial and economic organisation of 10 countries, located in Southeast Asia. ASEAN was established on 8 August, 1967 in Bangkok by the five original Member Countries namely–Indonesia, Malaysia, Phillippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.

ASEAN Plus Three (APT)

APT is a forum that functions as a coordinator of cooperation between Association of Southeast Asian Nations and the three East Asian nations of China, Japan, and South Korea. The first leaders’ meeting was held in 1997 and the group’s significance and importance was stregthened by the Asian Financial Crisis. The grouping was institutionalised by 1999.

ASEAN Regional Forum (ARF)

ASEAN Regional Forum is an informal multilateral dialogue of 25 members that seeks to address security issues in the Asia-Pacific region. ARF met for the first time in 1994. The current participants in the ARF are as follows: ASEAN, Australia, Canada, People’s Republic of China, European, Union, India, Japan, North Korea, South Korea, Mongolia, New Zealand, Pakistan, Papua New Guinea, Russia, East Timor, and the Unites States. Bangladesh was added to ARF as the 26th member, starting from July 28, 2006.

• European Union (EU)
  The European Union (EU) is a supranational and intergovernmental union of 27 democratic member states in Europe. It was established under that name by the Treaty on European Union (Maastricht Treaty) signed on February 7, 1992 in Maastricht, Netherlands. The Union has a single market consisting of a customs union, a currency called the euro (adopted by 13 member states), a Common Agricultural Policy, a common trade policy and a Common Fisheries Policy. The Schengen Agreement abolished passport control and customs checks for most member states within EU’s internal borders, creating, to some extent, a single area of free movement for EU citizens to live, travel, work and invest. A Common Foreign and Security Policy, and the Police and Judicial Co-operation in criminal matters have been initiated. Important EU institutions and bodies include the European Commission, the Council of the European Union, the European Council, the European Central Bank, the European Court of Justice, and the European Parliament which is directly elected by EU citizens once every five years.

Location of European Union Institutions

Brussels	seat of the European Commission and the Council of Ministers.
Strasbourg	Seat of the European Parliament.
Luxembourg	Seat of the European Court of Justice, the European Court of Auditors, the Secretariat of the European Parliament and the European Investment Bank.
Frankfurt	Seat of the European Central Bank.

Council of European Union

• Main EU decision making body.
• Also known as Council of Ministers.
• Represents interests of individual member states.
• Each member states represented by its own ministers.
• Presidency rotates between member states on six-monthly basis.

European Commission

• Proposes legislation to Council and Parliament.
• Manages implementation of EU legislation.
• Commissioners appointed on five-yearly basis by Council in agreement with member states.
• Appointments confirmed by parliament to which commission is answerable.

European Parliament

• Votes on and oversees implementation of EU budget.
• Considers Commission proposals on legislation.
• Works with Council on legislative decisions.
• Caribbean Community (CARICOM) : HQ–Georgetown, Guyana.
  The Caribbean Community and Common market or CARICOM was established by the Treaty of Chaguaramas which came into effect on August 1, 1973. The first four signatories were Barbados, Jamaica, Guyana and Trinidad and Tobago. CARICOM replaced the 1965–1972 Caribbean Free Trade Association (CARIFTA). Currently CARICOM has 15 full members, five associate members and seven observers. From March 2004, Haiti’s participation in CARICOM was suspended by its interim Prime Minister. But in early June 2006, Haiti was readmitted as a full member of the CARICOM.
• Economic Community of West African States (ECOWAS) : HQ–Abuja, Nigeria.
  The Economic Community of West African States (ECOWAS) is a regional group initially of sixteen countries, founded on May 28, 1975 when sixteen West African countries signed the Treaty of Lagos. Its mission is to promote economic integration.
• Economic and Monetary Community of Central Africa (CEMAC) : HQ-Bangui, Central African Republic.
  The Economic and Monetary Community of Central Africa (CEMAC) is an organisation of states of Central Africa established to promote economic integration among countries that share a common currency, the CFA franc. CEMAC is the successor of the Customs and Economic Union of Central Africa (UDEAC), which it completely superseded in June 1999 (through an agreement from 1994). Its six members states are Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea and Gabon. Equatorial Guinea joined in January 1984.
• Southern African Customs Union (SACU) : HQ–Windhoek, Namibia.
  SACU is the oldest customs union in the world. It was established in 1910 as a Customs Union Agreement between the then Union of South Africa and the High Commission Territories of Bechuanaland, Basutoland and Swaziland. With the advent of independence for these territories, the agreement was updated and on December 11, 1969 it was re-launched as the SACU was the signing of an agreement between the Republic of South Africa, Botswana, Lesotho and Swaziland. The updated union officially entered into force on March 1, 1970. After Namibia’s independence in 1990, it joined SACU as its fifth member.
• Cooperation Council for the Arab States of the Gulf (GCC) : HQ–Riyadh.
  The Cooperation Council for the Arab States of the Gulf, formerly named and still commonly called Gulf Cooperation Council (GCC) is a regional organisation involving the six Arab Gulf states with many economic and social objectives in mind. Created on May 25, 1981, the Council is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Not all of the countries neighboring the Persian Gulf are members of the council. Specifically, Iran and Iraq are not members. Yemen is currently (as of 2007) in negotiotions for GCC membership, and hopes to join by 2016. On the economic front, the GCC aims to create a common market by 2007 and to adopt a single currency, the Khaleeji, in 2010.
• South Asian Association for Regional Cooperation (SAARC) : HQ–Kathmandu, Nepal.
  South Asian Association for Regional Cooperation (SAARC) is the largest regional organisation in the world by population, covering approximately 1.5 billion people. SAARC is an economic and political organisation of eight countries in Southern Asia. The organisation was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. Afghanistan became a member (eighth) on April 3, 2007. It declared 2006–2015 as the’SAARC decade of poverty alleviation’. It was agreed in principle to the desire of China and Japan to become SAARC obsevers. The Islamic Republic of Iran is the only country in Southern Asia that is not a part of SAARC. In April 2006, the United States of America and South Korea made formal requests to be granted observer status. The European Union has also indicated interest in being given observer status, and made a formal request for the same to the SAARC Council of Ministers meeting in July 2006. On August 2nd, 2006 Foreign ministers of SAARC countries agreed in principle to grant observer status to the US, South Korea and the European Union.
• Group of 77 (G-77) : HQ–New York, USA
  The Group of 77 at the United Nations is a loose coalition of developing nations, designed to promote its members’ collectives, economic and interest to create an enhanced joint negotiating capacity in the United Nations. There were 77 founding members of the organisation, but the organisation has since expanded to 130 member countries. It is modelled on the Group of 7, which now contains 8 countries. The group was founded on June 15, 1964 by the “Joint Declaration of the Seventy Seven Countries” issued at the United Nations Conference on Trade and Development (UNCTAD).
• Intergovernmental Group of Twenty Four (G-24) : HQ–Washington D.C., USA
  The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24) was established in 1971. Its main objective is to concert the position of developing countries on monetary and development of finance issues. It consists of countries from three regions of Africa, Latin America and the Caribbean and Asia.
• North American Free Trade Area (NAFTA)
  The Noth American Free Trade Area is the trade bloc created by the North American free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC) whose members are Canada, Mexico and the United States. It came into effect on 1 January 1994. It is the world’s largest free trade area.
• Developing 8 (D-8) : HQ-Istanbul, Turkey.
  The Developing 8 (D-8) is a group of developing countries that have formed an economic development alliance. It consists of Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey.
• Bay of Bengal Initiative for Multi Sectoral Technical and Economic Co-operation (BIMSTEC)
  The organisation was formed in Bangkok, Thailand, on 6 June 1997. Initially, its name was BIST-EC (Bangladesh, India, Sri Lanka, Thailand Economic Cooperation). At that time, Myanmar was an observer, but later joined the organisation as a full member at a special ministerial meeting, held in Bangkok on 22 December 1997. Consequently, the name of the organisation was changed to BIMST-EC. Nepal was granted observer status by the second ministerial meeting in Dhaka, Bangladesh in December 1998. Later, full membership has been granted to Nepal and Bhutan in 2003. During the first summit in Bangkok on 31 July 2004, the organisation’s name was changed to its current name.
• Organisation for Economic Co-operation and Development (OECD) : HQ–Chateau de la Muette in Paris, France.
  The Organisation for Economic Co-operation and Development (OCED) is an international organisation of those developed countries that accept the principles of representative democracy and a free market economy. It originated in 1948 as the Organisation for European Economic Co-operation (OEEC) to help administer the Marshal Plan for the reconstruction of Europe after World War II. Later its membership was extended to non-European states, and in 1961 it was reformed into the Organisation for Economic Co-operation and Development. There are currently thirty full members; of these, 24 are described as high-income countries by the World Bank.
• Organisation of Petroleum Exporting Countries (OPEC) : HQ–Vienna, Austria.
  The Organisation of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organisation, created at the Baghdad Conference on September 10-14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding Members were later joined by nine other Members Indonesia’s membership currently under review as Indonesia is no longer considered by OPEC as a net oil exporter. Former Members are Gabon (full member from 1975 to 1995) and Ecuador (full member from 1963 to 1993). However Ecuador has expressed interest in rejoining. OPEC’s official language is English, although the official language of a majority of OPEC member-states is Arabic, as seven current members are Arab states. Only one member nation (Nigeria) has English as an official language. From 1976-2006 OPEC gained on new member nations. In November 2006, the Angolan Government announced its intention to apply for membership and subsequently joined on 1st January 2007. Sudan has also expressed intent for joining. Russia, though a net exporter of oil, has failed to gain membership into the grouping.
• Asia-Pacific Economic Cooperation (APEC) : HQ–Singapore.
  The Asia-Pacific Economic Cooperation (APEC) is an economic forum for a group of Pacific Rim countries to discuss matters on regional economy, cooperation, trade and investment. The current membership of APEC consists of 21 members, which includes most countries with a coasting on the Pacific Ocean. the last countries to have joined APEC, during its sixth leader’s summit in Kualalumpur, November 1998 were Peru, Russia and Vietnam.
• Organisation of the Islamic Conference (OIC) : HQ–Jeddah, Saudi Arabia.
  OIC is an inter-governmental organisation with a Permanent Delegation to the United Nations. It groups 57 mostly Islamic nations in the Middle East, North, West and Southern AFrica, Central Asia, Europe, Southeast Asia, the Indian subcontinent and South America.
• African Union (AU) : HQ-Addis Ababa, Ethiopia.
  The African Union (AU) is an organisation consisting of fifty-three African States. Established in 2001, the AU was formed as a successor to the amalgamated African Economic Community (AEC) and the Organisation of African Unity (OAU). The African Union was launched in Durban on July 9, 2002, by its first president, South African Thabo Mbeki, at the first session of the Assembly of the African Union. Eventually, the AU aims to have a single currency and a signle integrated defence force, as well as other institutions of state, including a cabinet for the AU Head of State. The AU covers the entire continent except for Morocco, which opposes the membership of Western Sahara/Sahrawi Arab Democratic Republic. However, Morocco has a special status within the AU and benefits from the services available to all AU states from the institutions of the AU.
• League of Arab States: HQ-Cairo, Egypt.
  The League of Arab States, or Arab League, is a voluntary association of countries whose peoples are mainly Arabic speaking. It aims to strengthen ties among member states, coordiante their policies and direct them towards the common good. The idea of the Arab League was mooted in 1942 by the British, who wanted to rally Arab countries against the Axis powers. However, idea did not take off until seven states formed the Arab League on March 22, 1945. It has 22 members, including Palestine, which the league regards as an independent state. In January 2003, Eritrea joined the Arab League as an observer.
• North Atlantic Treaty Organisation (NATO) : HQ–Brussels, Belgium.
  The North Atlantic Treaty Organisation (NATO) also called the North Atlantic Alliance, the Atlantic Alliance, the Western Alliance, is a military alliance established by the signing of the North Atlantic Treaty on 4 April 1949. The organisation establishes a system of collective security whereby its member states agree to mutual defense in response to an attack by any external party. The Treaty of Brussels, signed on 17 March 1948 by Belgium, the Netherlands, Luxembourg, France and the United Kingdom is considered the precursor to the NATO agreement. The 2006 NATO summit was held in Riga, Latvia, which had joined the Atlantic Alliance two years earlier. It is the first NATO summit in a former COMECON country. Membership went on expanding with the accession of seven more European countries to NATO–Estonia, Latvia and Lithuania and also Slovenia, Slovakia, Bulgaria, and Romania thereby taking the membership to 26. These 7 countries joined NATO on 29 march 2004.
• Commonwealth of Independent States (CIS) : HQ–Minsk, Belarus.
  The Commonwealth of Independent States (CIS) is the international organization, or alliance, consisting of 11 former Soviet Republics: Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Ukraine, and Uzbekistan and one associate member. Turkmenistan discontinued permanent membership as of August 26, 2005 and is now an associate member. The CIS is not a confederation. On December 21, 1991, the leaders of 11 of the 15 constituent republics of the Soviet Union met in Almata, Kazakhstan, and signed the charter, thus de facto ratifying the initial CIS treaty and launching the organisation.
• ANZUS
  The Australia, New Zealand, United States Security Treaty (ANZUS or ANZUS Treaty) is the military alliance which binds Australia and the United States, and separately Australia and New Zealand to cooperate on defence matters in the Pacific Ocean area, though today the treaty is understood to relate to attacks in any area. The treaty was concluded at San Francisco on
  1 September 1951, and entered into force on 29 april 1952. The treaty bound the signatories to recognize that an armed attack in the Pacific area on any of them would endanger the peace and safety of the others.
• Mercosur : HQ–Montevideo, Uruguay.
  Mercosur or Mercosul is a Regional Trade Agreement (RTA) between Brazil, Argentina, Uruguay, Venezuela and Paraguay, founded in 1991 by the Treaty of Asuncion, which was later amended and updated by the 1994 Treaty of Ouro Preto. It is known as the Common Market of the South. Its purpose is to promote free trade and the fluid movement of goods, peoples, and currency. Bolivia, Chile, Colombia, Ecuador and Peru currently have associate member status.
• Shanghia Cooperation Organisation (SCO) : HQ–Beijing, China.
  The Shanghai Cooperation Organisation (SCO) is an intergovernmental organisation which was founded on June 14, 2001 by leaders of the China, Russia, Kazakhastan, Kyrgyzstan, Tajikistan and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai Five; after the inclusion of uzbekistan in 2001, the members renamed the organisation.
• Benelux
  Benelux is an economic union in Western Europe comprising three neighbouring monarchies. Belgium, the Netherlands and Luxembourg. The treaty establishing the Benelux Customs Union was signed in 1944 by the governments in exile of the three countries in London, and entered into force in 1947. It ceased to exist in 1960, when it was replaced by the Benelux Economic Union. A Benelux Parliament (originally referred to as Interparliamentary Consultative Council) was created in 1955. The treaty establishing the Benelux Economic Union was signed in 1958 and came into force in 1960 to promote the free movement of workers, capital, services, and goods in the region. In 1965, the treaty establishing a Benelux Court of Justice was signed and it entered into force in 1975 with seat at Brussels.
• Indian Ocean Rim-Association for Regional Cooperation (IOR-ARC) : HQ–Mauritius.
  The IOR-ARC, initially known as the Indian Ocean Rim Initiative, is an international organization with 18 member states. It was first established in Mauritius on March 1995 and formally launched on 6-7 March 1997. Countries with the status of dialogue partners are China, Egypt, France, Japan and United Kingdom.

Reserve Bank of India

 

It is the Central Bank of the country. The Reserve Bank of India was established in 1935 with a capital of Rs. 5 crore. This capital of Rs. 5 crore was divided into 5 lakh equity shares of 100 each. In the beginning the ownership of almost all the share capital was with the non-government share holders. In order to prevent the centralisation of equity shares in hand of a few people The Reserve Bank of India was nationalised on January 1, 1949.

The general administration and direction of RBI is managed by a Central Board of Directors consiting of 20 members which includes one Governor, four Deputy Governors, one Government Official appointed by the Union Government of India to give representation to important strata in economic life of the country besides four directors are nominated by the Union Government to represent local boards. Apart from the central board there are four local boards also and their head offices are situated in Mumbai, Chennai, Kolkata and New Delhi. Five members of local boards are appointed by the Union Government for a period of four years. The local boards work according to the instructions and orders given by Board of Directors, and from time to time they also tender useful advice on important matter. The office of RBI is in Mumbai. At present Dr. D. Subbarao is the Governor of Reserve Bank of India.

Functions of Reserve Bank of India

1. Issue of Notes - The Reserve Bank has the monopoly of note issue in the country it has the sole right to issue currency notes of various denominations except one rupees notes. The Reserve Bank act as a only source of legal tender money because the one rupee note issued by the Ministry of Finance are also circulated through it. The Reserve Bank has adopted the Minimum Reserve System for note issue. Since 1957, it maintains the gold and foreign reserve of Rs. 200 crore, of which at least Rs. 115 crore should be in gold.
2. Banker to the Government - The second important function of the Reserve Bank of India is to act as the banker, agent, and adviser to the Government. It performs all the banking functions of the State and the Central Government and it also tenders useful advice to the Government on matters related to economic and monetary policy. It also manages the public debt for the Government.
3. Bankers' Bank - The Reserve Bank performs the same function for the other banks ordinarily perform for their customers. It is not only banker to the commercial bank, but it is the lender of the last resort.
4. Controller of Credit - The Reserve Bank undertakes the responsibility of controlling credit created by the commercial banks. To achieve this objective it makes extensive use of quantitative and qualitative techniques to control and regulate the credit effectively in the country.
5. Custodian of Foreign Reserves - For the purpose of keeping the foreign exchange rates stable the Reserve Bank buy and sells the foreign currencies and also protect the country's foreign exchange funds.
6. Other Functions - The bank performs a number of other developmental works. These works include the function of clearing house arranging  credit for agriculture (which has been transferred to NABARD), collecting and publishing the economic data, buying and selling of Government Securities and Trade Bill, giving loans to the Government, buying and selling of valuable commodities etc. It also act as representative of Government in IMF and represents the membership of India.

Securities and Exchange Board of India

 

Securities and Exchange Board of India (SEBI) was initially constituted on April 12, 1988 as a non-statutory body through a resolution of Government for dealing with all matters relating to development and regulation of securities market and investor protection and to advice the Government on all these matters. SEBI was given statutory status and powers through an ordinance promulgated on January 30, 1992.

The statutory powers and functions of SEBI were strengthened through the promulgation of the Securities Laws (Amendment) ordinance on January 25, 1995 which was subsequently replaced by an Act of Parliament. In terms of this Act, SEBI has been vested with regulatory powers over corporate in the issuance of capital, the transfer of securities, and other related matters. Besides, SEBI has also been empowered to impose monetary penalties on capital market intermediaries and other participants for a range of violation.

SEBI is managed by six members ~ one chairman (nominated by Central Government), two members (Officials of central ministries), one member from RBI, and remaining two members are also nominated by Central Government. The office of SEBI is situated in Mumbai with its regional offices in Kolkata, Delhi and Channai. In 1988 the initial capital of SEBI was 7.5 crore which was provided by its promoters (IDBI, ICICI, and IFCI). This amount was invested and its its interest amount day-to-day expenses of SEBI are met.

All statutory powers for regulating Indian capital market are vested with SEBI itself.

Functions of SEBI

1. To safeguard the interests of investors and to regulate capital market with suitable measures.
2. To regulate the business of stock exchanges and other securities market.
3. To regulate the working Stock Brokers, Sub-brokers, Share Transfer Agents, Trustees, Merchant Bankers, Underwriters, Portfolio Managers etc and also to make their registration.
4. To register and regulate collective investment plans of mutual funds.
5. To encourage self-regulatory organisation.
6. To eliminate malpractices of security markets.
7. To train the persons associated with security markets and also to encourage investors' education.
8. To check inside trading of securities.
9. To supervise the working of various organisations trading in security market and also to ensure systematic dealing.
10. To promote research and investigations for ensuring the attainment of above objectives.

Finance Commission

Financial Commission is constituted to define financial relations between the Center and the States. Under the provision of Article 280 of the constitution, the President appoints a Financial Commission for the specific purpose of devolution of non-plan revenues resources. The functions of the commission are to make recommendations to the President in respect of:

1. The distribution of net proceeds of taxes to be shared between the Union and the States and the allocation of share of such proceeds among the States.
2. The principles which should govern the payment of grant-in-aid by the Center to the States.
3. Any other matter concerning financial relations between the Center and the States.

In above context so far 11 Financial Commissions have been appointed which are as follows:

Finance Commission	Year of Establishment	Chairman	Operational Duration	Year of Submitting Report
I	1951	K.C.Niyogi	1952-1957	1952
II	1956	K. Santhanam	1957-1962	1956* and 1957
III	1960	A. K. Chanda	1962-1966	1961
IV	1964	P. V. Rajamannar	1966-1969	1965
V	1968	Mahavir Tyagi	1969-1974	1968* and 1969
VI	1972	Brahma Nand Reddy	1974-1979	1973
VII	1977	J. M. Shellet	1979-1984	1978
VIII	1983	Y.V. Chawan	1984-1989	1983* and 1984
IX	1987	N.K.P. Salve	1989-1995	1989
X	1992	K.C. Pant	1995-2000	Nov 26, 1994
XI	1998	A.M. Khusro	2000-2005	Jan 15, 2000*; July 7, 2000 and Aug 31, 2000
XII	2003	C. Rangarajan	2005-2010	Nov 30, 2004
XIII	2007	Vijay L. Kelkar	2010-2015	Constitued in Nov 2007

* Interim Report

All the above 11 Commissions have submitted their report in the year mentioned above. The recommendation of the various commissions can be divided in three heads

A. Division and distribution of income tax and other taxes.

B. Grants-in-aids

C. Loans to the state by the center

G-8

 

G-7 was an organisation of seven non-socialist countries which were highly industrialised in the world G-7. included USA, Canada, Germany, Britain, France, Italy and Japan. After opting free market policies in the economy, Russia was also made member of the organisation on June 21, 1997. At present it is known as G-8.

The first G-7 summit was held at Rambonilet near Paris in November 1975. Initially only five industrialised countries - USA, UK, West Germany, France, and Japan were its members. Later on, Canada and Itlay also joined it in 1976. Currently G-8 countries include Britain, Canada, France, Germany, Italy, Japan, Russia and United States. The member countries of G-8 account for a 49% of global export, 51% of industrial output and 49% of the assets in the International Monetary Fund.

The 32nd annual summit of G-8 countries held between July 15-17, 2006 at St. Petersburg (Russia). Energy security topped the agenda of the G-8 summit along with education and fight against infectious diseases.

The 33rd G-8 summit took place in Hellingendomm (Germany) between 6-8 June 2007. Five big developing countries India, China, Brazil, Mexico and South Africa were invited in this summit.

The 34th G-8 summit took place in Tokyo on the northern island of Hokkaido, Japan from July 7-9, 2008.

The 35th G8 summit took place in the city of L'Aquila, Abruzzo, Italy on July 8–10, 2009.

The 36th G8 summit was held in Huntsville, Ontario in Canada, from June 25 to June 26, 2010. In this year's meeting, the G8 leaders agreed in reaffirming the group's essential and continuing role in international affairs and "assertions of new-found relevance." The form and function of the G8 was reevaluated as the G-20 summits evolved into the premier forum for discussing, planning and monitoring international economic cooperation.

The 37th G8 summit was held between 26–27 May 2011 in the commune of Deauville in France.

Group of 20 (G-20)

• The finance ministers of G-7 countries in September 1999 established G-20 as an international forum to promote informal dialogue and cooperation among systematically important countries within the framework of Batton Woods institutional system with a view to preserving international financial stability.
• An important distinguishing characteristic of the G-20 from the G-7 is its broader participation from among both the industrialized countries as well as key emerging markets, thereby representing a wider range of view points.
• Members of the G-20 are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Indonesia, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, United States, and the chairman country of European Union.
• During the inaugural meeting of the G-20 held in Berlin during December 15-16, 1999, the group deliberated on various prerequisites for a sound international financial system and highlighted the importance of the following initiatives to avert global financial crisis.

1. Formulation of sound national economic and financial policies.
2. Strengthening of national balance sheet.
3. strengthening of sovereign debt management.
4. Greater attention to the impact of government policies on borrowing decisions of private firms.
5. Sustainable exchange rate regime supported by consistent exchange rate and monetary policy.
6. Widespread implementation of codes and standards including transparency, data dissemination, and financial sector policy.
7. Measures to strengthen domestic capacity, policies and institutions.

• The group welcomed the work of Bretton Woods Institutions and other bodies in the area of codes and standards and agreed to undertake the completion of Reports on Observance of Standard & Codes and Financial Sector Assessments.
• The group affirmed its commitment to progress towards multilateral trade liberalisation within WTO framework.

World Trade Organisation

 

The Uruguay round of GATT (1986-93) gave birth to World Trade Organisation. The members of the GATT signed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new organisation named WTO. It was officially constituted on January 1, 1995 which took the place of GATT as an effective formal organisation. GATT was an informal organisation which regulated world trade since 1948. Like GATT, the headquarter of WTO is also in Geneva.

Contrary to the temporary nature of GATT, WTO is a permanent organisation which has been established on the basis of an international treaty approved by participating countries. It achieved the international status like IMF and IBRD but it is not an agency of UNO.

WTO has a General Council for its administration which includes one permanent representative of each member nation. Generally, it has one meeting per month which is held in Geneva.

The highest authority of policy making is WTO's Ministerial Conference which is held after every two years.

The present strength of WTO membership is 151. this includes China and Nepal whose accession was approved by the WTO Ministerial  Conference held in Doha and Cancun in November 2001 and September 2003 respectively. There are presently 30 countries in the process of accession to the WTO. Vietnam joined WTO as 150th member. Tonga is the 151st member of WTO.

There are number of important committees for administration of WTO, out of which two committees play the pivotal role in WTO. They are :

1. Dispute Settlement Body (DSB)
2. Trade Policy Review Body (TRRB)

DSP considers the complaints of member countries against violation of rules by any member country. This body appoints a group of experts to investigate into such complaints. This body meets twice a month for such cases.
TPRB reviews the trade policy of member countries. The trade policy of all big trade powers of the world are reviewed after every 2 years. All the members of WTO are the members of TRPB.
Other important bodies of WTO are:

1. Council for Trade in Goods
2. Council for Trade in Services
3. Council for Trade related aspects of Intellectual Property Rights

Objectives of WTO

1. To improve standard of living of people in the member countries.
2. To ensure full employment and broad increase in effective demand.
3. To enlarge production and trade of goods.
   The above three objectives were also included in GATT, but WTO also included some other objectives which are :
4. To enlarge production and trade of services.
5. To ensure optimum utilisation of world resources.
6. To accept the concept of sustainable development.
7. To protect environment.

Functions of WTO

1. To provide facilities for implementation, administration and operation of multilateral and bilateral agreements of the world trade.
2. To provide a platform to member countries to decide future strategies related to trade and tariff.
3. To administer the rules and processes related to dispute settlement.
4. To implement rules and provisions related to trade policy review mechanism.
5. To assist IMF and IBRD for establishment coherence in universal economic policy determination.

International Monetary Fund

 

IMF is an international monetary organisation. It was established on December 27, 1945 in Washington on the recommendations of Bretton Woods Conference. But it started it's operation on March 1, 1947. At present 184 nations are members of the IMF. East Timor became the newest member in July 2002.

In place of Dominique Strauss-Kahn, Christine Lagard has been made as new Managing Director of IMF on July 5, 2011. She is serving as 11th MD of IMF.

Objective of IMF

According to Article of Agreement of the IMF, its main objectives are as follows:

1. To promote international monetary co-operation
2. To ensure balanced international trade
3. To ensure exchange rate stability
4. To eliminate or to minimize exchange restrictions by promoting the system of multilateral payments
5. To grant economic assistance to member countries for eliminating the adverse imbalance in balance payments.
6. To minimize imbalance in quantum and duration of international trade

Constitution, Membership and Capital of IMF

IMF is controlled and managed by a board of Governors. Each member country nominates a Governor. All the nominated Governors make a board of governors. Each country also nominates an alternate Governor who casts his vote in absence of the Governor. Each Governor is allotted a number of votes which is determined by the quota allotted to respective country in the capital of IMF. Each Governor has got the right of 250 votes on the basis of membership and one additional vote for each SDR 1,00,000 of quota. The additional of these two types of votes becomes the actual voting right of the member country. For example, India's voting right is 250 + 30555 = 30805 because India's quota is SDR 30555 lakh. It clearly indicates that the voting right depends on the quantum of quota of a particular country with IMF. This is the reason why the rich and industrialised countries got the higher voting rights due to their higher quotas. with the IMF.

The main source of IMF resources is the quota allotted to the member countries. Till 1971, all the amounts of quotas and the assistance provided were denominated in US dollar, but since December 1971, all the quotas and transactions are expressed in SDR (Special Drawing Right) which is also known as Paper Gold. In 1971, one SDR was assumed equivalent to 1 dollar but due to subsequent decline in dollar value  SDR 1 became equivalent to $1.585 by the end of April 1995. Since January 1, 1981 the value of SDR is being determined by the basket  of currency of 5 largest exporting member countries: US dollar, Deutsche Mark, Yen, Franc, and Pound Sterling.
In 1991, the weight to these 5 currencies in SDR price determination was as follows:

American Dollar	40 %
German Franc	21 %
Japanese Yen	17 %
British Pound	11 %
French Franc	11 %

The currency value of SDR is determined by the IMF each day by summarising the value in US dollars, based on the market exchange rates of a basket of fine currencies.

The IMF's financial year is from 1 May to 30 April. IMF lends to various member countries in the form of various facilities (Extended Fund Facility, Standby Facility, Contingent Credit Lines, Compensatory Facility etc.) designed to serve specific purpose, but essentially aimed at balance of payments stabilisation or meeting the emergent foreign exchange needs. The poor countries are also helped by funding from Poverty Reduction and Growth Facility. As on June 2004, the IMF was lending to 13 members in the from of standby facility, to two members under Extended Arrangements and 38 poor countries under poverty Reduction and Growth Facility.

The quota allotted by the IMF to each member has to be deposited partly in their own currency and remainder in form of foreign exchange.

India's 11th Place in IMF General Quota

After the review of IMF's General Quota, India's quota has been raised to 582.15 crore SDR from the existing level of 415.82 crore SDR. (at the time of increase time 1 SDR = $ 1.54 = Rs 69.48). This quota hike has raised India's vote share from 1.91% to 2.44%.

India has been placed at 11th place in IMF's General Quota. USA remains in biggest quota holder despite its quota share coming down to 17.09%.

Country Quota USA 17.09% Japan 6.13% Germany 5.99% UK 4.94% France 4.94% China 3.72%

Country Quota Italy 3.25% Saudi Arabia 3.21% Canada 2.93% Russia 2.74% India 2.44% - -

India and IMF

IMF has played an important role in Indian economy. IMF has provided economic assistance from time to time to India and has also provided appropriate consultancy in determination of various policies in the country. India is the founder member of IMF. The finance minster is ex-officio governor in IMF board of Governors. Till 1970, India was among the first five nation highest quota with IMF and due to this status India was allotted a permanent Place in executive Board of Directors.

India participate in FTP of the IMF from 2002. 43 countries, including India now participate in FTP. By participation in FTP India is allowing IMF to encash its rupee holding as a part of our quota contribution for hard currency which is then lent to other member countries who are debtors to the IMF. From 2002 to Feb 2006, India has made purchases transactions of SDRs 493.23 million and four repurchase transaction amounting to SDRs 466.474 million.

In July India and IMF joint training program at the National Institution of Bank Management, Pune was established. The training program will provide policy oriented training in economics and related operational fields to Indian officials and officials of countries in South Asia and East Africa. The first training program was held during July 2006. The RBI is a nodal body to co-ordinate the training program with the IMF.

Enhanced Structural Adjustment Facility (ESAF) was established in 1987 with an amount of SDR 6 billion to help the low income countries with heavy debt burdens in difficult external environment and implement comprehensive  macro-economic and structural policy program aiming at strengthening their balance of payments position and fostering growth. India contributes as donations to Subsidy Account and made a commitment to provide grant contribution to the extent of US $ 1 million per year over 15 years for a total of US $ 15 million.

United Nations Conference on Trade and Development (UNCTAD)

 

UNO declared 1960-70 as the development decade. In 1961 UNO attempted to increase the income of developing countries with the growth rate of 5% p.a. during that development decade. In July 1960 a conference of developing countries was held at Cairo which resolved to convene a world conference for this purpose. Economic and Social Council of UNO organise a World Trade and Development Conference from March 31, 1964 to July 16, 1964. A worldwide International Trade Policy was determined in this conference. Various issues related to extension of international trade of developing countries were also discussed in that conference. The conference came to be known as UNCTAD-I.

Presently, UNCTAD has become a permanent organisation for promoting international trade with its head quarter at Geneva (Switzerland), Mr. Allec Irwin is its present Chairman. Generally, UNCTAD has its session after four years. IMF has got the permanent representation in all its bodies. This is reason why IMF includes all UNCTAD proposals in its policies. UNCTAD recommendations are only suggestions and no country can be compelled to accept them.

The details of various UNCTAD are as follows:

UNCTAD I	Cairo	Mar 31 - June 16, 1964
UNCTAD II	New Delhi	Feb - March 1968
UNCTAD III	Santiago (Chile)	April - May 1972
UNCTAD IV	Nairobi (Africa)	May 1976
UNCTAD V	Manila (Philippines)	May 7 - June 2, 1979
UNCTAD VI	Belgrade (Yugoslavia)	June 6 - July 3, 1983
UNCTAD VII	Geneva (Switzerland)	1987
UNCTAD VIII	Cartegina DE Indias (Columbia)	1992
UNCTAD IX	Midrand (Africa)	April 27 - May 11, 1996
UNCTAD X	Bangkok (Thailand)	Feb 12 - Feb 19, 2000
UNCTAD XI	Sao-Paulo (Brazil)	June 13 - June 18, 2004
UNCTAD XII	Accra (Ghana)	April 20 - April 25, 2008

Objectives of UNCTAD

1. To promote international trade specially with the view to accelerating the economic development of underdeveloped countries.
2. To determine policies and principles for international trade and economic development.
3. To propose the strategy for implementing pre-approved principles and policies.
4. To assist Economic and Social Council of the UNO.
5. To provide a suitable platform for trade dialogues.

Members of UNCTAD

Though UNCTAD is functioning as a permanent agency of the UNO, but its membership is fully optional. Any country may join or quit UNCTAD. 

The functioning of UNCTAD on democratic principles every member has only one voting right. For general disputes, simple majority among present members but two third majority is needed for important issues.

Asian Development Bank (ADB)

ADB was established in Dec. 1966 on the recommendation of ECAFE (Economic Commission for Asia and Far East). The aim of this Bank is to accelerate economic and social development in Asia and Pacific region. The  Bank started its functioning on January 1, 1967. The head office of the Bank is located at Manila, Philippines. It is worth mentioning here the Chairmanship of ADB is always allotted to a Japanese while its three Deputy Chairman belong to USA, Europe and Asia. At present, 63 nations are partner members of ADB.

The principle functions of ADB are:

1. To make loans and equity investments for the economic and social advancement of its developing member countries.
2. To provide technical assistance for the preparation and execution of development projects and programs and advisory services.
3. To respond to the request for assistance in coordinating development policies and plans in developing member countries.

Asian Development Bank constituted 'Asian Development Fund'  in 1974, which provides loans to Asian countries on concessional interest rates. India started borrowing from ADB's Ordinary Capital Resources (OCR) in 1986.

South Asian Free Trade Area (SAFTA)

The most significant aspect of the 12th SAARC Summit (Jan 4-6, 2004) at Islamabad, the capital city of Pakistan, was the signing of a historic Agreement on Free Trade. The leaders of India, Pakistan, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka have agreed upon to create a "South Asian Free Trade Area".

SAFTA has come into force since January 1, 2006 replacing South Asian Preferential Trade Agreement (SAPTA) which was operative among SAARC countries since December 7, 1995. SAPTA was the success of 9th SAARC conference held in New Delhi in 1995 where this new concessional trade system SAPTA was approved. SAPTA was the factor which really opened all positive possibilities to to establish SAFTA.

SAFTA presupposes abolition of all kind of trade and tariff restrictions. Ultimately it will pave the way for the creation of common market with common currency.

Seven SAARC member countries agreed upon to reduce tariff between 0-5% by 2016. The SAFTA agreement allows any states to pull out of any treaty at any time.

• Formation of sensitive lists.
• Outlining the products whose tariffs will not be reduced.
• Rules of origin.
• Revenue loss compensation mechanism for LDCs. (Bangladesh, Bhutan, Maldives and Nepal) by comparatively developed nations (India, Pakistan, and Sri Lanka).
• An arbitration council or dispute settlement body.
• India and Pakistan will reduce their tariffs 0-5% level within 7 years, while Sri Lanka gets 8 years, and LDCs like Nepal, Bangladesh, Bhutan and Maldives in 10 years.
• Each of the countries will create two sensitive lists, one of more developed countries and other for less developed countries. 
• A SAFTA Ministerial council with membership of commerce/trade ministers.
• A committee of Exports for the administration and implementation of treaty.
• Removal of barriers to the intra-SAARC investment, harmonisation of custom facilities transit facilities for intra-SAARC trade and simplification of procedure for visa.

International Bank for Reconstruction and Development (IBRD)

 

IBRD and its associate institutions a group are known as the World Bank. The Second World War damaged economies of the most of the countries particularly of those who were directly involved in the war. The global war had completely dislocated the multilateral trade and dislocated multilateral trade and had caused massive destruction of life and property. In 1945, it was realised to concentrate on reconstructing these war affected economies in a planned way. IBRD was established in December 1945 with the IMF on the basis of recommendation of Bretton Wood Conference. This is the reason why IMF and IBRD are called 'Bretton Wood Twins'. IBRD started functioning in June 1946. World Bank and IMF are complementary institutions.

India is a member of four constituents of the World Bank Group i.e. IBRD, IDA, IFC, and MIGA (Multilateral Investment Guarantee Agency) but not of its fifth institute ICSID (International Centre for the Settlement of Investment Disputes).

Objective of World Bank

According to the Clause I of the agreement made at he time of establishment of World Bank, it was assigned the following objectives:

1. To Provide long-run capital to member countries for economic reconstruction and development. World Bank provides capital mainly for following purposes -
   (i) To rehabilitate war ruined economies (this objective is fully achieved)
   (ii) To finance productive efforts according to peace time requirement.
   (iii) To develop resources and production facilities in underdeveloped countries.
2. To induce long-run capital investment for assuring BOP equilibrium and balanced development of international trade. (This objective was adopted to increase increase the productivity of member countries and to improve economic condition and standard of living among them).
3. To promote capital investment in member countries in following ways:
   (i) To provide guarantee on private loans and capital investment.
   (ii) If private capital is not available even after providing guarantee, then IBRD provides loans for productive activities in considered conditions.
4. To provide guarantee for loans granted to small and large units and other projects of member countries.
5. To ensure the implementation of development projects so as to bring about a smooth transference from a war-time to peace economy.

IMF Vs. World Bank

IMF and World Bank are Bretton Wood Twins. Both the institutions were established to promote international economic cooperation but a basic difference is found in the nature of economic assistance given by these two institutions. World Bank provides long term loans for balanced economic development, while IMF provides short-term loans to member countries for eliminating BOP disequilibrium. Both these institutions are complementary to each other. The eminent world economist George Schultz had suggested in American Economic Association Conference in January 1995, for the merger of IMF and World Bank.

Membership of the World Bank and Voting Right

Generally every member country of the IMF automatically becomes member of World Bank. Similarly, any country which quit IMF automatically expelled from the World Bank's membership. But under a certain provision a country leaving the membership of IMF can continue its membership with World Bank. If 75% member of the bank gives their vote in its favour.

Any member country can be debarred from the membership of World Bank on following grounds:

1. Any member country can quit the bank simply by written notice to bank, but such country has to repay the granted loans on terms and conditions decided at the time of sanctioning the loan.
2. Any country working against the guidelines of bank can be debarred from membership by the board of governors.

Like IMF, World Bank has also two types of members: 'founder members' and 'general members' the world bank has 30 founder members who attained membership by December 31, 1945. India is also among these founder members. The countries joining the World Bank after December 13, 1945 come under the category of general members. At present total membership of the World Bank is 182. The voting right of member country is determined on the basis of member country's share in the total capital of the bank. Each member has 240 votes plus one additional vote for each 1,00,000 shares of the capital stock held.

Capital Resources of World Bank

The initial authorized capital of World Bank was $ 10,000 million, which was divided in 1 lakh share of $ 1 lakh each. The authorized capital of the bank has been increased from time to time with the approval of member countries. On June 30, 1996 the authorized capital of the bank was $ 188 billion out of which $ 180.6  billion (96% of total authorized capital) was issued to member country in the form of shares. Member countries repay the share amount to the world bank in following ways:

1. Two percent of allotted shares are repaid in Gold, USD or SDR. 
2. Every member country is free to repay 18% of its capital share in its own currency.
3. The remaining 80% share is deposited by member country only on demand by the World Bank.

Bank is managed by an elected President. On July 1, 2007, Robert B. Zoellick became the 11th President of the World Bank. The headquarter of World Bank is at Washington DC.

IDA (established on Spetemeber 24, 1960) and IFC (established in July, 1956) are the tow main associate institutions of IBRD. These institutions work under the supervision of World Bank. MIGA is also an associate institution in the World Bank group.

Banks Lending Operations

IBRD gives loan to members in anyone or more of the following ways:

1. By granting or participating in direct loans but its own funds.
2. By granting loans out of the fund raised in the market of a member or otherwise borrowed by the bans and 
3. By guaranteeing the whole or part loans made by private investors through the investment channels.

Before a lone is made or guaranteed the bank ensure that the -

1. Project fro which the loan is asked has been carefully examined by the competenet committee as regards the merits of the proposal.
2. Borrower has reasonable prospect for the repayment of loans.
3. The loan is meant for productive purposes and 
4. Tthe loan is meant for reconstruction and development.

Functions of the World Bank

Presently, The World Bank is playing the main role of providing loans for development works to member countries, specially to under-developed countries. The World Bank provides long-term loans for various development projects of 5 to 20 years duration. The loaning system of the bank can be explained with the help of following points:

1. Bank can grant loans to a member country upto 20% of its share in paid up capital.
2. Bank also provides loan to private investors belonging to member countries on its own guarantee, but for this loan private investors have to seek prior permission from those countries where the amount will be collected. For such loans the consent of that country is also required whose currency is given in loans. For granting such guarantee, the Bank charges 1% to 2% as service charge.
3. The quantum of loans, interest rate and term and conditions are determined by the Bank itself.
4. Generally, Bank grants loan for a particular project duly submitted by the member country.
5. The debtor nation has to repay either in reserve currencies or in the currency in which the loan was sanctioned.

Besides, granting loans for reconstruction and development, World Bank also provides various technical services to the member countries. For this purpose, the Bank has established 'The Economic Development Institute' and a Staff College in Washington.

Appraisal of the World Bank Activities

Bank has sanctioned 75% of its total loans to developing countries of Africa, Asia and Latin America while only 25% was given to developed nations of Europe. IFC, IDA and MIGA were established as the associate institutions of the World Bank in extending financial assistance to member countries. Besides, the Bank also tried its best to coordinate the functioning of nations granting loans to underdeveloped countries. In 1958, the Bank played an important role in establishing 'India Aid Club' for providing specific economic assistance to India. It has now been renamed as 'India Development Forum'. Such types of clubs and forums has also been established for other developing countries. The Bank has also established its mission in various developing countries for providing technical assistance for development project in these countries. The Bank also takes the guidance of experts of various international institutions like FAO, WHO, UNIDO, UNESCO for providing assistance for various projects related to agriculture, education and water supply.