Supranational Organization

7/31/2019 Supranational Organization

1/22

By Mihir / Baljit / Alpesh / KiranXMBA11


2/22

An International Organization or Union, whereby member statestranscend national boundaries or interests to share in the decision-making and vote on issues pertaining to the wider grouping.

WTO

WORLD BANKWIPOWHOUNICEF United NationsADB Asian Development BankCIDA Canadian InternationalDevelopment Agency

DFID Danish Foundation ofInternational Development)IMFUNESCO United NationsEducation, Scientific and CulturalOrganization


3/22


4/22

International and supra-national organizations

play a very important role in maintaining the

global economic order that exists today through

their efforts to: maintain peace,

fight diseases,

ensure the smooth functioning of a global monetary system,

provide a mechanism for peaceful dispute resolution,

harmonize industrial standards in different countries,

Lower tariff and non-tariff barriers, and

forge closer ties among different nations.


5/22

Most of the major states of history owed theirexistence to conquest. The conquering peoplesestablished themselves, legally and economically,as the privileged class of the conquered country.

They seized for themselves a monopoly of the landownership and appointed a priesthood fromamong their own ranks. The priests in control ofeducation, made a class division of society into a

permanent institution and created a system ofvalues by which the people were thenceforth, to alarge extent unconsciously, guided in their socialbehaviour


6/22


7/22

Failed to bring peace between Israel andPalestine

Failed to resolve the Kashmir issue between

India and Pakistan Failed to intervene and stop genocide in

Rwanda and ethnic cleansing in Bosnia-Herzegovina and Kosovo (in formerYugoslavia)

Failed to stop US invasion of Iraq in 2003


8/22


9/22


10/22

Privatization should be comprehensive program. Jobs must be created in tandem with the jobs destruction that often

results. Macroeconomic policies, including low interest rates that create jobs have

to be put in place. Trade liberalization can enhance a countrys income by forcing resources

to move from less productive uses to more productive ones. The IMF approach also does not acknowledge that development requires

a transformation of society. IMF has forced liberalization before safety nets and regulatory framework

have been put in place. It has introduced policies that led to jobdestruction before the essentials of job creation were in place. Many of thesequencing mistakes reflect fundamental misunderstandings of botheconomic and political processes, due to a blind faith in the marketmechanism.

East Asia was vastly different from Latin America. Governments hadsurpluses and the economy enjoyed low inflation. In the highlyinflationary environment of Latin America, excess demand had to bereduced. In East Asia, the problem was insufficient demand. Dampeningdemand only made matters worse.


11/22

The IMF plays a particularly important role in the following areas:

Exchange rates, monetary and fiscal policies of member countries.

Structural policies of member countries such as their internationaltrade relations, labor issues, public sector reforms, etcetera.

Assessing the strengths and weaknesses of the financial sectors ofmember countries.

Addressing institutional issues such as the independence of theCentral Bank, financial sector regulation, corporate governance,accountability and transparency in government economic policies,

etcetera. Assessment of risks and vulnerabilities stemming from large and

volatile capital flows.

Lending in case of financial crisis.

Lessening the degree of disequilibria in the international balance

of payments of members.


12/22


13/22


14/22

The World Bank (WB) is one of the largest sourcesof development assistance. In 2002, the WorldBank provided over $8.1 billion as foreign aid todeveloping countries. As stated in its official web

site, The World Bank works to turn rich countryresources into poor country growth. It helps thedeveloping nations in their efforts to: build infrastructures

build educational institutions, provide water, electricity and sanitation services,

protect the environment, and

fight corruption and deadly diseases.


15/22

The IMF and the WB play an important role in promotingglobalization. They encourage developing countries to:

initiate reforms in their banking and insurance sectors, open their economies to foreign competition and to slash tariffs,

provide incentives for promoting export, privatize state-owned enterprises and stop giving subsidies, developed stock markets; enact and reform legislations related to land ownership,

intellectual property rights, and dispute resolution, and build the institutional and legal frameworks necessary for

attracting FDI.

Without such changes, developing countries would not have beenable to make much progress in their efforts to integrate theireconomies with the global economy.


16/22

Some of the criticisms against the IMF and the WorldBank are:

Their prescriptions cause economic stagnations

They do not pay attention to social costs that theirprescriptions may cause

Both institutions are, to a great extent, driven by theinterests of key political and economic institutions inthe G-7 countries- particularly the US Government andUS financial interests

The dynamics of both institutions derive not so muchfrom the external demands of poverty alleviation orpromoting growth as from the internal imperative ofbureaucratic empire building.


17/22

Top 20% of Population controls 80% wealth andbottom 20% controls 1%

The Rich Countries maintain a high level of TradeBarriers and subsidies for their own protection butforce third-world countries to lift barriers andsubsidies.

The Conditions imposed by IMF and nothing likethe policies of Industrialized Economies.Partnership between industry and state

Since 1996 the debt burden of all developingCountries has climbed from $2.2 Trillion to $2.6Trillion


18/22

Cameroons annual debt payment will bereduced by 40% over the next 5 years. ButCameroon will still pay on average $280Million per year during this period. Theprojected payment exceeds the amount thecountry will spend annually oneducation($239) and Health care ($87). Therelief amount is $2 Billion spread over 20 -25

years. It is inadequate in light of extreme highlevel of poverty with 1/3rd children beingmalnourished and 60% population lack accessto clean water


19/22

If conventional financial standards are applied to3rd World debt, a substantial portion of it would bewiped away overnight. How?

All Credit card companies will cancel charges on

stolen card also known as odious Debt becauseof the belief that the cardholder must not be heldliable for such charges.

Yet the IMF refuses to employ the Odious-Debt

approach. As a consequence, the largely youthful3rd world masses continue to have their health andeducation budget slashed to pay for the debt ofcorrupt regimes from long ago.


20/22

According to a policy paper published by the HarvardUniversity, the CSOs play an important role in

globalization through seven key activities. Theseactivities are:

identifying problems and globalization consequences thatmight otherwise be ignored articulating new values and norms to guide and constrain

international practice building transnational alliances that advocate otherwise

ignored alternatives altering international institutions to respond to unmet needs disseminating social innovations that have internationalapplications negotiating resolutions to transnational conflicts and

disagreements mobilizing resources and acting directly on important public

problems.


21/22

There are three major concerns about the CSOs:

Many public representatives from developing countriesquestion the legitimacy of disbursing official aid throughCSOs/NGOs, which are not run by elected publicrepresentatives, and, as such, lack accountability andtransparency.

Since most CSOs are organized around specific issues, theymay remain focused on single issues to the exclusion oflarger national, regional, and global interests.

Many people from the developing world also complain thatCSOs/NGOs, leveraging their access to powerful groups indeveloped countries, often bypass their nationalgovernments and influence donors in supporting policiesdetrimental to the interest of developing countries.


22/22

Given the overall views and experience, it isessential the balance the involvement /intervention of the supranational organization

for maximizing the benefits and minimizingthe risk of being influenced by developedcountries.

If followed systematically by looking at macro

/ micro and global perspective, Supranationalorganization can irradiate poverty andinequality in our society

Supranational Organization

Documents

Transcript of Supranational Organization