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International Organisations
History Theory and Practice (HIST 430)
Pittsburg State University
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International Organisations
Discuss the contribution of international organisations and trade agreements to global economic growth and development.
International organisations and trade agreements contribute greatly to global economic growth and development, as they invest in future streams of economic gain, as well as encouraging financial stability in emerging economies. Trade agreements promote freer trade amongst nations and break down political barriers which would lead to global economic inefficiency. Organisations such as the World Bank, the World Trade Organisation (WTO), the United Nations (UN), the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) all play a significant role in encouraging and sustaining economic growth and development.
The World Bank focuses on long term development projects in developing and emerging economies which will lead to a greater global economic contribution from the country in the future. This organisation provides low interest loans to developing countries in order to encourage economic development and growth which leads to a greater quality of life for the citizens, as well as creating the conditions for greater economic efficiency. An example of where the World Bank has contributed to the development of a country's society is in Rio de Janeiro, where the world bank issued a $212 million loan to the Brazilian government to improve the rail infrastructure in the city. This investment not only improves the lives of the people living in RIo de Janeiro, but also increases their capacity to contribute to the global economy, as better infrastructure improves the overall efficiency of the economy.
The World Trade Organisation (WTO) deals with trade rules between countries, aiming to resolve trade disputes and therefore encourage free trade. The WTO, with its 164 members, aims to ensure that trade moves as freely, predictably and smoothly as possible. The WTO agreements, which are negotiated and signed by the bulk of the world’s trading nations and are ratified in national parliaments are essential in global economic growth and development, as they ensure that free trade can occur, and therefore that global economic growth can occur at an adequate rate. The General Agreement on Tariffs and Trade, signed initially in 1947 by 23 nations, and renewed in 1994, to form the WTO forms the basis of all the agreements that follow, as this initial agreement encourages the removal of tariffs and encourages free trade between nations. More recently, The WTO stated that “Trade must be a cornerstone of climate action” following the release of COP27, which detailed the urgent nature of the situation regarding climate change. The WTO, through its encouragement of free trade agreements and its implementation of agreements directly encourages global economic growth and development.
The United Nations (UN) is also an organisation that is integral to the maintenance of not only the global economy, but also aims to sustain “Peace, dignity and equality on a healthy planet.” Through the UN’s work in encouraging peaceful, dignified and equal operations, the UN is
contributing to a less hostile international community, which therefore would lead to far more global trade, thus growing and developing the global economy. This is exhibited through the UN’s work in various parts of the world such as West Africa, where they aim to maintain peace, which, in turn, leads to a more efficient economy within a country, which in turn leads to the growth of the global economy.
The International Monetary Fund (IMF) is of great importance to the global economy, as they provide loans on conditions to economies with external instabilities, which positively influences that country’s capacity to participate in the global economy. The IMF also provides advice and assistance to those governments which are experiencing financial instability. Such as Egypt in October of 2022, when The IMF loaned Egypt $3 billion in order to assist with issues regarding inflation and decreasing tourism. As a result of the war in Ukraine, wheat and oil prices have increased within Egypt, which, when compounded by 15% inflation and decreasing tourism, has led to a lower quality of life for Egyptian citizens, as well as incapacitating Egypt on it’s ability to contribute to the global economy. Furthermore, the Egyptian pound decreased by 23% in a matter of days compared to USD, leading to lesser foreign direct investment. To combat this, through the assistance of the IMF, Egypt has committed to a flexible exchange rate (set by market supply and demand) as determined by the IMF, as the central bank of Egypt has been advised by the IMF to intensify economic reforms. Through it’s work in advising and assisting struggling economies globally, the IMF contributes greatly to the growth and development of the global economy.
Finally, the Organisation for Economic Cooperation and Development (OECD), as a slightly smaller organisation, does not play as significant a role as the other organisations, but is still important in maintaining democracy and a market economy. The OECD’s goal is to promote policies which achieve the highest sustainable economic growth and employment possible, as well as raise the standard of living within member countries, whilst maintaining fiscal stability. To do this, the OECD conducts vast amounts of research in order to present member countries with the most accurate and applicable data sets possible, in order to achieve the best economic and societal outcomes.
Trade Agreements play a greatly significant role in the growth and development of the global economy, as they break down national barriers that would otherwise cause inefficiency and artificial growth within the closed national economy. FTA’s such as the ASEAN (Association of South-East Asian Nations) agreement hope to achieve freer regional trade in order to encourage growth in an emerging region of the world on the global economic stage. Moreover, the implementation of FTAs into the global economy has led to the opening up of political barriers that have led to inefficiency in the global economy, such as through the WTO, which promotes global financial compliance. Conversely, trade agreements are often implemented between advanced economies exclusively, which can lead to emerging and developing economies remaining excluded from the global market. Agreements such as USMCA have created exclusivity in international trade therefore increasing the difficulty for developing nations to enter the global market.
International Organisations
Course: History Theory and Practice (HIST 430)
University: Pittsburg State University
