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
positives of WTO involvement
cut living costs and raise living standards
stimulate economic growth and employment
help countries develop
contribute to peace and stability
negatives of WTO involvement for poorer nations
benefits the wealthy nations as they have more of a say (more negotiation power as they have more TNCs) eg developed countries were forced to open their agricultural markets which damaged their economy)
who controls the WTO
the WTO is controlled by its members - the countries make their decisions through various councils and committees whose membership consists of WTO members
how many members does the world bank have
188 member countries
where does the world bank get its money
interest from the loans they hand out
what does the world bank promote
financial cooperation between countries to reduce poverty. normally done through the promotion of trade and high employment
examples of the aims of the world bank
eradicate extreme poverty and hunger gender equality universal primary education environmental sustainability combat diseases such as AIDS
how many staff in how many countries does the world bank have
7000 staff from 185 countries
name 3 positives of the world bank
provides qualifying governments with low interest loans, zero-interest credits and grants
debt borrowings and cash infusions help with global education, healthcare, infrastructure and development
shares information with world governments through advice, research and analysis
name 3 negatives of world bank involvement
some criticism over ethical issues (eg hydroelectric damns financed by WB displaced people downstream)
loan conditions mean countries can end up in more debt than before
WB works with private sector can cause role of state to be undermined- may result in a shortfall of necessary services (eg healthcare)
who controls the world bank
is run by its members
why does the voting system for the WB and IMF cause inequality
governments get votes based on the amount of money they put into the organisation
which country has the largest share of votes in the IMF and WB
the USA
what is the aim of the UN
maintain international peace and security and promoting better living standards and human rights
strengths of the UN (3)
affects more countries than regional organisations
many (but not all) states are sensitive to UN opinion about their actions- so can lead to positive outcome
works to support refugees and under privileged people
has become a forum to discuss and address important issues
weakness of the UN (3)
states are still independent- so the UN is only as effective as its members allow it to be
in order to reach a compromise, political compromises are made and its founding principles are often undermined
UN security council does not hold much power - there is not an international army
where does the UN get its money from
get money from demanding a certain percentage of a member country’s GDP per year, but this amount of money is examined every 3 years to take into account recent events
what was the UN’s budget in 2011
129 billion euros
which country is the UNs largest contributor
the USA
who controls the UN
run by its members on a council
why is the UN board not completely democratic
some nations have ‘veto’ power over certain decisions- can stop a policy going through
name the organisations which deal with trade and how they help
WTO - remove barriers and tariffs, equal trade
free trade! but UN can put on embargos to stop it
which institutions help LEDCs with financial issues
IMF- assistance
World Bank- loans are long term and low interest
describe the role of the UN in helping countries during times of conflict
the UN send peacekeepers to try and maintain the peace among the citizens. they may also set up provisional governments. neutralise and threaten people. help with negotiations
what are the criteria for a TNC
headquarters in HIC (eg London) and factories in LICs (eg India/Vietnam/Bangladesh)
how could the IMF help an LEDC become more industrialised and globalise its economy
give assistance to LEDCs about economics and help them develop in ways they normally wouldn’t be able to. helps them with links to other countries/companies
describe how a TNC may help a country become developed and improve their economy
TNCs invest with FDI which improves the economy
