Free Custom Essay on «International Organizations and Their Roles»

International Organizations and Their Roles

Introduction

The objective for establishing global organizations is to offer the solutions to the regimes which experience global challenges, such as humanitarian emergencies, civil wars and outbreaks of diseases. All these challenges to certain extent have an impact on global economy. Nevertheless, the role of global organizations in the world economy is still marred by controversy. Some scholars view global organizations as an efficient and genuine option to the unilateral state laws. On the other hand, some scholars regard them as an exercise for control by global superpowers. Moreover, there is a tendency to lump all united organizations as one, when in essence the functions, efficiency and authority of these organizations vary widely. The authorities of some organizations have impact on the legislative frameworks of the States in which global trade takes place, however, they cannot regulate the legislative process of respective nations that ignore the declarations of these organizations. This paper will report on the roles and limitations of the most influential international organizations: United Nations (UN), World Trade Organization (WTO), International Monetary Fund (IMF), and World Bank (WB). 

United Nations

The UN refers to an international organization established by 51 nations in 1945 after the Second World War. The initial aim of establishing this organization was to foster global peace and cooperation among countries. However, this objective had changed as new global needs emerged. Political and economic relationships among nations have forced the organization to assume various roles.

The role of UN, as the most representative international organization, cannot be replaced by any regional or global organization. UN has significantly contributed to the maintenance of peace and security, offering cooperation and coordination among nations, and helping their international development. People around the world witness two crucial issues related to peace and development that influence global economy. The UN attempts to solve these problems through global cooperation. In order to ensure the cooperation, the UN formulated the United Nations General Assembly (UNGA) Resolution 377A. Despite establishing this peace resolution, the UN still faces challenges implementing it because of its incapability to influence the law making process of respective member states.

In order to strengthen its role, the UN upholds the principles and purposes of the Charter. The charter is essentially a primary treaty of the global organization, binding over 50 counties. Consequently, the countries must enforce the contents of UN charter through their constitutional laws.

World Trade Organization (WTO)

The WTO was formed as a replacement of the General Agreement on Tariffs and Trade (GATT), which was formed in 1947. Several trade conferences responded to the results of the World War II, focusing on decreasing tariffs, and enabling international trade. The Most Favoured Clause (MFN) influenced the motivation for GATT. The MFN offers the selected nation some form of advantageous trading rights by assigning it to another nation. The GATT underwent a substitution by the WTO during mid-1995. The current legislations governing the WTO were established at the Uruguay GATT Negotiations Round which occurred in 1986-94. The trading legislations of the GATT remain the major manual for international trade of goods. Furthermore, it is justifiable to point out that the manual (rulebook) acts as an effective legislative framework for member countries of WTO, which are actually not mandated to adopt the manual regulations.

The WTO has four major roles. The first one is a conductor role. Essentially, multilateral trade is governed by extremely accurate legislations established by the member countries of the WTO. The member nations must adhere to these rules when conducting multilateral trade. Consequently, the WTO serves as the ensemble conductor, which ensures that the legislations are commemorated. Since the establishment of the WTO, member nations have adapted the legislations in coping with new developments. For instance, services have witnessed significant development, and have been adopted among the leading economic sectors in the world. As a result, the members of the WTO formulated legislations that govern global trading in service sector. Interestingly, regardless of the WTO member states having formulated these legislations, the organization has no control over the law making process of the respective member nations. It gives an opportunity for the member states to adopt trading legislations that suit their internal trading demands rather than global trading requirements. In such scenario, internal trading legislations might conflict with the global trading laws established by the WTO.

 
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The second role of the WTO is acting as a tribunal. The organization settles trading disputes between member nations. There is no doubt that disputes are bound to arise when trading legislations of countries vary. Variations of trading legislations arise since the WTO has no authority to control the law making process of respective nations. Consequently, the organization cannot enforce its laws on a member country even though it has signed an agreement. The WTO’s dispute resolution strategy incorporates three critical stages. The first stage involves the member states attempting to negotiate and find solutions to their differences between themselves. For instance, if the differences in internal trade laws cause disputes, the two nations can turn to the global regulations established by the WTO. In this case, the trade regulation laws established by the WTO serve as a dispute resolution framework. Countries are free to choose whether to adopt or ignore them. However, if the first stage fails, the WTO will constitute a panel for resolving the dispute. The third stage is the possibility for appeal.

The third role of WTO is monitoring. The organization constantly analyses the trade conditions of member nations. The analysis aims to reveal whether the members are adhering to the WTO legislations. The analysis also measures the effect of domestic legislations of member nations on multilateral trade. The motivation for conducting the analysis is not to control the legislative process of formulating trade policies, but to ensure that trade flows evenly and openly. The member nations are at liberty to formulate their own legislations, preferably that are not conflicting with the established global policies.

The fourth role of WTO is acting as an adviser to member nations. In relation to this role, the WTO offers training programmes for government authorities of developing economies, such as ministers or customs authorities. Through these programmes, the organization is capable to influence the legislative processes but is not enforcing regulations on individual countries. The WTO, like any other international organization, respects the sovereignty of the member states.

International Monetary Fund (IMF)

The International Monetary Fund refers to an international organization established in 1944. The IMF was established with the purpose to assist countries around the world in stabilizing the rates of exchange, and offering monetary loans to nations in need. Almost all member states of the UN are a part of the IMF. However, few exceptions of Andorra, Cuba and Lichtenstein have not joined the IMF. Despite being an agency of the UN, it is a sovereign institution. The IMF does not depend on the WTO and World Bank, and mainly aims at improving living standards.

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The first role of the Internal Monetary Fund is economic surveillance. The IMF produces reports concerning the economic situations of member states. It also offers suggestions concerning the areas of weaknesses in the economies. Surveillance is essential in preventing economic crisis through highlighting the imbalances in critical areas. The IMF does not show any attempts to exert control on domestic economic policies of member nations. The reports presented by IMF to member states are essentially a supportive and informative analysis to these nations, but not a form of regulation. In other words, through the reports the IMF advises the member countries to consider weak areas when formulating economic policies. The organization fulfils its role of economic surveillance not by interfering with the economic policies of a country, but through conducting surveys. The reports do not only indicate the economic performance of the member country, but also point at the areas of crises.

The second role of the IMF is loaning money to nations experiencing economic crisis. The prepared reports make it possible for the IMF to identify nations in economic crisis before offering financial assistance. The organization has approximately 300 billion dollars of loanable funds. The member countries contribute to the fund as they are joining the organization. These nations can also increase the amount of loanable funds during their membership period. The IMF raises funds through several ways, including requesting the member countries for additional funds. The amount asked depends on the economy of a nation. During the economic crisis, the organization might be willing to offer loans as a part of economic readjustments. However, there are certain conditions that must be fulfilled before the country can be granted with a loan.

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The third role of the IMF is to provide technical help and economic trainings. Technical help enables nations to develop more efficient institutions and to formulate policies and legal frameworks that foster economic stability and economic growth. They achieve this role through offering practical-oriented courses, seminars, and workshops. The management of technical assistance comes from the headquarters of the organization in Washington, DC, and via a network of Regional Training Assistance Centres (RTACs), topical trust funds, and various bilateral activities supported by donors. The training aims to enable member countries to develop legal frameworks, and does not control the legal process of formulating economic policies.

The World Bank (WB)

There is no consensus concerning precise role of the World Bank. In fact, some shareholding nations borrow from the World Bank whereas others offer the finances. In spite of the fact that there are several descriptions of the main role of the Word Bank, four of them have gained the most attention.

The first model describes the World Bank as a financial intermediary. In this case, the World Bank acts as a typical bank. Consequently, the role of the World Bank is maintaining its long-term financial integrity. Other goals depend on the critical purpose. Member countries can give the bank money, while others can borrow at an interest, like in any other bank. Therefore, it can be argued that interests are a source of financial income to the World Bank, what can encourage the bank to have higher interest rates. Therefore, the member countries determine the interest rate. The economic status of the borrowing countries might also be considered in determining the rate of interest on a loan. In addition, the WB has established the standards which determine who qualifies for a loan. These standards influence the laws, especially economic/financial policies, of the respective member states but do not regulate the actual law making process. As such, these member countries are free to adhere to the standards established by the World Bank. They can also decide to ignore them. The WB similarly to other UN agencies respects the sovereignty of respective member states.

Others describe the World Bank as an instrument advancing the national interests of the members that are more influential and play important role in economic and political stability decision making. The WB creates policies towards the member nations, which allow the projects funded by the WB to expand, or improve employment possibilities for the citizens of the WB members. However, it can only influence policies but cannot enforce the WB’s policies on the respective nations.

The third view of the World Bank describes its function as serving an evangelical model. An increase of constituency of the World Bank shows that the amalgamation of access, knowledge, money and expertise is a powerful tool which can be used for the implementation of indiscreet policies. This seems to reveal the anticipation of the World Bank to take action in supporting liberal economic system, promote liberal trade and invest in governments.

Some scholars also view the World Bank to be responsible for transferring resources to economically deprived nations. However, it is not possible for an organization to focus only on the development of poor countries. Moreover, the World Bank cannot extend its capacity to supply capital to economically deprived nations. This view contradicts to the WB’s financial intermediary role.

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Limitations of the UN, IMF, WTO and WB

The main limitation affecting these organizations is the lack of coherence in the multilateral system. The incoherence fosters conflict of purpose in positions and actions of respective governments and within international organizations in different domains of global interdependence. The lack of authority among international organizations restricts them to impose their regulations on member states. The member states are at liberty of deciding whether to adopt the rules or deny them. Consequently, these organizations fail to establish some uniformity in the adoption and execution of the rules. Perhaps global trade serves as one of the most obvious examples of incoherence. For this reason, the majority of UN, IMF, WB and WTO global policies revolve around global trade and finance. Governments will follow the rules, resolutions and legislations proposed by these organizations if they are likely to benefit from them. The success in maintenance of the multilateral global trading economic system needs more than addressing reductions in tariffs, subsidies, quotas and other factors hindering trade expansion and economic development.

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Conclusions

This paper has discussed the various roles of the IMF, WB, WTO and UN, as well as the limitation these organizations face. The UN plays a crucial role in the maintaining peace and security, offering cooperation and coordination among nations, and international development. The WTO plays the role of conductor, tribunal, monitor and trainer. As a conductor, the WTO makes sure that the legislations are adhered to. As a tribunal, the WTO settles trading disputes between member nations. And as a tribunal, WTO constantly analyses and reports the trade conditions of the member nations. The roles of IMF include offering economic surveillance, loans and technical assistance to the member nations. The main limitation experienced by these organizations is incoherence arising from their inability to influence the law making process of the respective member nations.

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