Global systems Flashcards
how many countries are in the world bank
188
what does the world bank aim to do
promote financial cooperation between countries to reduce poverty - normally through the promotion of trade and high employment
what does the United Nations promote
the development of poorer nations through work with the IMF and world bank
what does the world trade organisation (WTO) do
deals in the rules of trade between countries ensuring trade flows freely
what is the international monetary fund (IMF)
it is an important source of financial and technical assistance to developing countries. its main aim is to reduce poverty
what is a transnational corporation (TNC)
a global company which operates in more than one country
where are the headquarters and where are the factories for TNCs
headquarters are usually in MEDCs with factories in LEDCs where labour is cheaper
what is the main difference between the IMF and the World Bank
world bank focusses on development projects (specific eg building schools) whereas the IMF seeks to maintain the global economy
what does the IMF promote
international monetary cooperation and provides policy advice to help countries build and maintain strong economies
what does the IMF provide compared to the world bank
IMF gives actual money and loans
world bank provides skills and assistance (has the goal to reduce poverty)
negatives of the IMF for poorer countries
decisions about which countries may borrow money are made by rich countries. poor countries have little say about loans and the conditions attached to them
conditions attached to borrowing money from the IMF
reduce government borrowing - higher taxes and lower spending
higher interest rates to stabilise the currency
allow failing firms to go bankrupt
privatisation, deregulation, reduce corruption
example of the IMF
in the Asian crisis of 1997 many countries such as Thailand were forced by the IMF to put in high interest rates and tight policy to strengthen exchange rates. but these changes caused a recession and high unemployment levels
benefits of IMF assistance
if a country has a balance of payments deficit the IMF steps in and fills the gap
serves as a council and advisor to countries attempting a new economic policy
publishes papers on new economic policies
where does the IMF get its money from
the quota system
bilateral borrowing
lending capacity
gold holdings
what is the aim of the WTO
to ensure that trade flows as smoothly as possible. want to remove as many barriers to trade as possible but have to ensure the highest levels of security
where does the WTO get its money from
the WTO’s regular budget
voluntary contributions from WTO members
cost-sharing either by countries involved in an event or by international organisations
