March 20, 2013 2013 – 1 st semester Young Leaders & International Organizations

1. Global Governance&Inter-governmental Organizations (IGOs)~ United Nation, IMF, World Bank &Regional Development Organization ~ March 20, 2013 2013 – 1st semester Young Leaders & International Organizations Organized by Saori Kakihara

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

3. Who benefits? US power shaped many pieces of global governance, especially the international economic system. Politics of global governance is not only about who gets included in decision making, but also about who gets excluded. Global Governance is dominated by the largest economies. Most small and poor developing countries are excluded. Problems: “market-driven poverty,” Widening inequality between rich and poor; environmental crises; labor conditions.

4. There are 3 critical challenges: • Legitimacy • Rules and law must be obeyed. • Accountability • Accountability and Transparency is important. • Effectiveness. • What are the outcomes of rules and actions?

5. United Nations (UN) What is the UN’s role in Global Governance?

6. When did it begin? The United Nations is made up of 192 countries from around the world. It was set up in 1945, after the Second World War, as a way of bringing people together and to avoid further wars. It started with 51 countries.

7. United Nations Member Countries Source: commons.wikimedia.org

8. Main Purposes: To keep peace throughout the world; To develop friendly relations among nations; To help nations work together to improve the lives of poor people, to conquer hunger, disease and illiteracy, and to encourage respect for each other’s rights and freedoms; To be a centre for harmonizing the action of countries to achieve these goals.

9. Structure of the United Nations Sourse: blogs.ubc.ca

11. International Monetary Fund (IMF) vs. The World Bank (WB) What is the difference?

12. Purposes of the IMF and the World Bank • The International Monetary Fund(IMF) maintains international monetary cooperation among its members • The World Bankaids in the development and reconstruction of it members

13. History behind the IMF and World Bank • After the Great Depression in the 1930s there was a need for an organization to create a system for exchange rate stability • Uncertainty of the value of paper money (no longer used the gold standard) • Countries began cheating other countries in trade • Countries’ economies affected by WWII • need for reconstruction in well-developed nations • need for development in the lesser developed nations

14. Bretton Woods Conference • 1940s proposals for monetary system by Harry Dexter White (U.S.) and John Keynes (UK) • establish the value of each currency • eliminate restrictions and certain practices on trade • assistance for post-war reconstruction • Bretton Woods Conference, New Hampshire, July 1944 with delegates of 44 nations • final negotiations of the IMF and the World Bank took place

15. IMF • Exchange rate stabilityand growth of international trade • Currently 188 member countries • By sharing economic policies the system of buying and selling currencies would be stable

16. Wherethe IMF gets its money • Most comes from the quota subscriptions • the money each member contributes when joining the IMF • General Arrangements to Borrow (1962) • line of credit set up with several governments and banks throughout the world

17. Power among the members • Size of the quotas determine voting power. • IMF decides on the quota for each member. • richer countries have larger quota • US provides largest quota = US has largest voting power • Quotas also determine how much each member can borrow from the IMF when in need of aid.

19. When is a country in need ? • A country that had not taken in enough foreign currency to pay the other countries for what they have bought • spends more money than it takes in • IMF will lend foreign exchange to that member • hoping to stabilize its currency which will strengthen its trade

21. Asian Crisis • Financial crisis broke out in Asia in 1997 • large declines in currencies, stock markets, and other asset prices • affected emerging markets outside of Asia • IMF arranged programs of economic stabilization and reform with Indonesia, Korea, and Thailand

22. World Bank • Founded in 1944 at the Bretton Woods Conference • to finance the reconstruction of countries affected by WWII • help with development of impoverished nations • 188 member countries • Headquarter: Washington D.C.

23. World Bank • Made up of 5 different organizations • International Bank for Reconstruction and Development (IBRD) • International Development Association (IDA) • International Finance Corporation (IFC) • Multilateral Investment Guarantee Agency (MIGA) • International Center for the Settlement of Investment Disputes (ICSID)

24. Lends to countries with relatively high per capita incomes. • Money is used for: • development projects (i.e. highways, schools) • programs to help governments change the way they manage their economies • Provides technical assistance in projects.

26. Source: wbi.worldbank.org

27. How would you understand these cartoons? Source: www.guardian.co.uk

28. Regional Development Organizations Example of The Asian Development Bank (ADB)

29. Asian Development Bank (ADB) • Founded 1966 – Modeled on the World Bank Other examples of Regional Development Organizations: • Inter-American Development Bank Group (1959) • African Development Bank (1966) • European Bank for Reconstruction and Development (1991)

30. Interests: “Selection” • Japanese Interests: • Japanese trading partners • Countries favored by Japanese bilateral aid are more likely to receive ADB funds • US Interests • Countries favored by U.S. bilateral aid are more likely to receive ADB funds • higher Japanese bilateral aid and higher U.S. bilateral aid are both associated with more ADB funding

31. Players: • Regional development organizations have a similar governance structure to the World Bank • Big players: • Asian Development Bank: Japan & US • African Development Bank: Nigeria & US • Inter-American Development Bank: US & Brazil, Argentina • Do governments use these International Institutions to pursue foreign policy goals?

32. Why is it important to have an organisation that is bigger than any one country? Then, who controls the world? The powerful country? UN or other IGO? Thank you!