GATT – General Agreement on Tariffs and Trade.
- On 30 Oct. 1947, 23 countries at Geneva including India, sign as agreement related to tariffs on trade.
- It came into force on 1 Jan, 1948.
- Main functions of GATT:-
- (a) The policy of equal tariffs.
- (b) To remove the quantitative ban.
- (c) Disposal of business dispute in a democratic way.
- World Trade Organization (WTO) took the place of GATT on 1 Jan., 1995.
Bretton woods’ twins – world Bank and IMF.
- Came into force on Dec 27, 1945.
- Headquartered in Washington
- The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enable countries (and their citizens) to transact with each other.
- Main functions:-
- (a) Exchange rate regulation
- (b) Allocating special Drawing Right (SDRs) to the member nations.
- (c) Bailor to the member nations.
- (d) Purchase short – term foreign currency liabilities from around the world.
- For India, Finance Minister is ex-officio governor while RBI Governor is alternate Governor on board.
- IMF reviews members quotas once in five years.
- Present Managing Director is Christina Lagarde (France)
2. World Bank – consists of five institutions.
- President – Jim Yong Kim
- Kaushik Basu – senior vice-president and chief economist at world Bank.
- World Bank’s Motto – working for a world free of poverty.
- The international Bank for Reconstruction and Development is the oldest of the world Bank institutions.
- Started functioning in 1945 for reconstruction for war-ravaged regions.
- Offers loans to middle-income developing countries.
- IBRD finances projects across all sectors and provides technical support and expertise at various stages of a project
(ii) IDA (International Development Agency)
- Also known as ‘Soft window of world Bank’.
- Basic aim of developing infrastructural support among the member nations.
- Long-term lending for the development of economic services.
- India has been the biggest beneficiary of the IDA support.
(iii) IFC (International Finance Corporation)
- Setup in 1956
- Known as ‘private arm of world Bank’
- It lends money to the private sector companies of member nations.
- IFC is a separate legal entity with separate Articles of Agreement
(iv) MIGA (Multilateral Investment Guarantee Agency)
- setup in 1988
- encourages foreign investment in developing economies by offering insurance guarantee to foreign loss caused.
(v) ICSID (International Centre for Settlement of Investment Disputes)
- Setup in 1966
- Investment dispute settlement body.
India is not a member
- Its decisions are binding on the parties.
BIPA (Bilateral Investment Promotion & Protection Agreement)
- to protect and promote investment of the investors.India has signed it with several countries.
- BIPA is India’s version of ICSID.
OECD (Organisation for Economic co-operation and Development)
- Established in 1947
- to run the US – financed Marshall plan
- officially born on sep 30, 1961
- headquarters in Paris
- prior to 1961, it was known as OEEC
- Secretary General – Angel Guria
- 35 member countries.