INTERNATIONAL ECONOMIC ORGANIZATIONS

INTERNATIONAL MONETARY FUND (IMF)

The International Monetary Fund (IMF) is a global financial institution comprising 190 member countries. Each member country is represented on the IMF’s Executive Board, and its voting power is determined by its quota, which broadly reflects the country’s relative position in the world economy.

The IMF was conceived at the United Nations Monetary and Financial Conference held at Bretton Woods, New Hampshire, USA, in July 1944. It officially came into existence in 1945. The IMF is commonly referred to as the “Fund” and, along with the World Bank, is known as one of the Bretton Woods Institutions.

Formation: 1944 (Bretton Woods Conference)
Headquarters: Washington D.C., USA

Objectives of IMF

• Promote international monetary cooperation
• Ensure exchange rate stability
• Facilitate balanced growth of international trade
• Provide temporary financial assistance to member countries facing balance of payments crises
• Promote global financial stability and reduce poverty

India and IMF

• The Finance Minister of India is the ex-officio Governor on the Board of Governors of the IMF.
• The Governor of the Reserve Bank of India acts as the Alternate Governor.
• India is represented at the IMF by an Executive Director, who also represents Bangladesh, Sri Lanka and Bhutan.
• During the early 1990s balance of payments crisis, India secured an emergency loan of USD 2.2 billion from the IMF by pledging 67 tonnes of gold as collateral.
• India’s IMF quota has increased to about 2.76 percent, making India the 8th largest quota holder. Quotas determine a country’s voting power and access to IMF resources.
• Quotas are denominated in Special Drawing Rights (SDRs).

Special Drawing Rights (SDRs)

• SDRs are international reserve assets created by the IMF.
• They are not a currency but represent a claim on freely usable currencies.
• The SDR basket includes the US Dollar, Euro, Chinese Renminbi, Japanese Yen and Pound Sterling.

WORLD BANK (WB)

The World Bank is an international financial institution that provides loans and grants to low- and middle-income countries for development purposes. It was established in 1944 and is headquartered in Washington D.C.

The World Bank Group consists of five institutions:

• International Bank for Reconstruction and Development (IBRD)
• International Development Association (IDA)
• International Finance Corporation (IFC)
• Multilateral Investment Guarantee Agency (MIGA)
• International Centre for Settlement of Investment Disputes (ICSID)

IBRD and IDA together are commonly referred to as the World Bank.

Objectives of the World Bank

• Reduce poverty
• Promote sustainable economic development
• Support infrastructure, health, education and governance reforms

India and World Bank

• India was one of the original signatories of the Bretton Woods Agreements.
• India became a member of IFC in 1956, IDA in 1960 and MIGA in 1994.
• India is not a member of ICSID, citing concerns over fairness to developing countries.
• The first World Bank loan to India was given in 1949 for the development of Indian Railways.
• The Eastern Dedicated Freight Corridor project is one of the major World Bank-supported projects in India.

Major World Bank Reports and Indices

• World Development Report
• Ease of Doing Business Report
• Global Economic Prospects
• India Development Update
• Remittance Report
• Universal Health Coverage Index

ASIAN DEVELOPMENT BANK (ADB)

• The Asian Development Bank is a regional development bank established in 1966 to promote economic growth and cooperation in Asia and the Pacific.
• Headquarters: Manila, Philippines
• ADB has 68 members, including 49 regional and 19 non-regional members.
• Japan and the United States are the largest shareholders, followed by China and India.

India and ADB

• India is a founding member of ADB and is currently its fourth-largest shareholder.
• India has been the largest borrower from ADB since 2010.
• ADB supports India in sectors such as transport, energy, urban development, water, agriculture and human development.

Important ADB Reports

• Asian Development Outlook
• Asia Bond Monitor
• Social Protection Index

NEW DEVELOPMENT BANK (NDB)

• The New Development Bank was established by the BRICS countries – Brazil, Russia, India, China and South Africa.
• The idea was proposed by India at the 4th BRICS Summit in 2012.
• The NDB Agreement was signed at the 6th BRICS Summit in Fortaleza, Brazil, in 2014.
• Formation: 2014
• Headquarters: Shanghai, China
• Authorized Capital: USD 100 billion

Unique Features

• Equal voting rights for all founding members
• No veto power
• Focus on infrastructure and sustainable development
• Lending in local currencies

India and NDB

• India has received funding for metro rail projects, renewable energy and rural infrastructure.
• NDB has approved more than USD 4 billion for Indian projects.
• In 2020, India signed a USD 1 billion loan agreement with NDB to boost rural employment.

ASIAN INFRASTRUCTURE INVESTMENT BANK (AIIB)

• AIIB is a multilateral development bank proposed by China in 2013 and operational since 2016.
• Headquarters: Beijing, China
• Initial Capital: USD 100 billion
• AIIB focuses on infrastructure development in Asia.
• China is the largest shareholder, followed by India, Russia and Germany.

India and AIIB

• India is the largest borrower from AIIB.
• Major projects include metro rail projects, rural roads and power sector reforms.
• AIIB has provided funding to the National Investment and Infrastructure Fund (NIIF).

WORLD TRADE ORGANIZATION (WTO)

• The World Trade Organization regulates international trade among nations.
• It replaced the General Agreement on Tariffs and Trade (GATT) in 1995.
• Formation: 1 January 1995
• Headquarters: Geneva, Switzerland

Objectives of WTO

• Promote free and fair trade
• Reduce trade barriers
• Resolve trade disputes
• Ensure predictability and transparency in trade rules

Key Agreements

• Agreement on Agriculture
• General Agreement on Trade in Services (GATS)
• Trade Related Investment Measures (TRIMS)
• Trade Related Aspects of Intellectual Property Rights (TRIPS)

India and WTO

• India has been a WTO member since 1995.
• India has actively advocated for food security, public stockholding and special and
• differential treatment for developing countries.

ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD)

• OECD is an intergovernmental organization that promotes economic cooperation, policycoordination and development.
• Formation: 1961
• Headquarters: Paris, France
• India is not a member but is a key partner of the OECD.
• India participates in OECD initiatives such as the Inclusive Framework on BEPS.

ORGANIZATION OF PETROLEUM EXPORTING COUNTRIES (OPEC)

• OPEC is a cartel of major oil-exporting countries established in 1960.
• Headquarters: Vienna, Austria
• OPEC coordinates petroleum policies of its members to stabilize oil markets.
• OPEC Plus includes non-OPEC oil-exporting countries such as Russia.

India and OPEC
India is one of the world’s largest crude oil importers and heavily depends on OPECcountries for energy security.

WORLD ECONOMIC FORUM (WEF)

• The World Economic Forum is an international organization for public-private cooperation.
• Formation: 1971
• Headquarters: Geneva, Switzerland
• The annual Davos meeting brings together global leaders to discuss economic, social and political issues.

Major WEF Reports

• Global Risks Report
• Global Competitiveness Index
• Global Gender Gap Report
• Energy Transition Index
   

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Subject: Economics

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