This article explains the role of the three important international organizations, namely, World Bank, the International Monetary Fund, and the World Trade Organization in facilitating trade.
The excerpts of the functions and objectives are taken from their respective websites.
International Monetary Fund (IMF)
The purposes of the IMF are clearly expressed in Article I of its constitution, the Articles of Agreement:
- To promote international monetary cooperation
- To facilitate the expansion and balanced growth of international trade
- To promote exchange stability
- To assist in the establishment of a multilateral system of payments
- To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards
- To shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members
The World Bank is a vital source of financial and technical assistance to developing countries around the world.
We are not a bank in the ordinary sense but a unique partnership to reduce poverty and support development. We comprise two institutions managed by 188 member countries: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD aims to reduce poverty in middle-income and creditworthy poorer countries, while IDA focuses exclusively on the world’s poorest countries. These institutions are part of a larger body known as the World Bank Group.
Together these two institutions provide low-interest loans, interest-free credits and grants to developing countries for a wide array of purposes that include investments in education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management.
World Trade Organization (WTO)
The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.
Where countries have faced trade barriers and wanted them lowered, the negotiations have helped to open markets for trade. But the WTO is not just about opening markets, and in some circumstances its rules support maintaining trade barriers — for example, to protect consumers or prevent the spread of disease.
At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations. These documents provide the legal ground rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits. Although negotiated and signed by governments, the goal is to help producers of goods and services, exporters, and importers conduct their business, while allowing governments to meet social and environmental objectives. The system’s overriding purpose is to help trade flow as freely as possible.