The United Nations (UN) is an intergovernmental organization that aims to

maintain international peace and security, develop friendly relations among nations and
countries, achieve international cooperation, and serve as a centre for coordinating the actions of
member states. It is widely recognized as the world's largest international organization. The UN
headquarters is located in New York City, in international territory with certain
privileges extraterritorial to the United States, and has other offices in Geneva, Nairobi, Vienna,
and The Hague, where the International Court of Justice is headquartered at the Peace Palace.

The UN was established after World War II with the aim of preventing future world wars, and
succeeded the League of Nations, which was characterized as being ineffective. On 25 April
1945, 50 nations assembled in San Francisco, California, for a conference and initialized the
drafting of the UN Charter, which was adopted on 25 June 1945. The charter took effect on 24
October 1945, when the UN began operations. The UN's objectives, as outlined by its charter,
include maintaining international peace and security, protecting human rights,
delivering humanitarian aid, promoting sustainable development, and upholding international
law. At its founding, the UN had 51 member states; as of 2025, it has 193 sovereign states,
nearly all of the world's recognized sovereign states.

The UN's mission to preserve world peace was complicated in its initial decades due in part
to Cold War tensions that existed between the United States and Soviet Union and their
respective allies. Its mission has included the provision of primarily unarmed military
observers and lightly armed troops charged with primarily monitoring, reporting and confidence-
building roles. UN membership grew significantly following the widespread decolonization in
the 1960s. Since then, 80 former colonies have gained independence, including 11 trust
territories that had been monitored by the Trusteeship Council.[8] By the 1970s, the UN's budget
for economic and social development programmes vastly exceeded its spending
on peacekeeping. After the end of the Cold War in 1991, the UN shifted and expanded its field
operations, undertaking a wide variety of complex tasks.

The UN has several main objectives, including:

Maintaining international peace and security: The UN’s primary responsibility is to maintain
international peace and security. This includes preventing and resolving conflicts, as well as
taking collective action to maintain peace and security in the face of threats to international
peace and security, such as acts of aggression or terrorist attacks.

Promoting and protecting human rights: The UN is responsible for promoting and protecting
human rights, including the rights of women and children, and promoting social and economic
development.

Providing humanitarian assistance: The UN is responsible for providing humanitarian

assistance to those in need, including refugees and internally displaced persons.

Promoting sustainable development: The UN works to promote sustainable development and

reduce poverty, through programs such as the Sustainable Development Goals (SDGs).
Facilitating international cooperation: The UN serves as a forum for nations to cooperate on a
wide range of issues, including economic and social development, environmental protection, and
disarmament.
Representing collective interests: The UN is representative of the international community and
coordinates collective action to address global issues.

Providing peacekeeping: UN peacekeeping forces are deployed to help countries maintain

peace and security in regions affected by conflict.

Promote rule of law: the UN works with countries to strengthen the rule of law, including
through programs that promote human rights, democracy and justice.

The United Nations (UN) stands as the most prominent international organization, tasked with
addressing global challenges ranging from peace and security to human rights and sustainable
development. Its structure and functions can be complex, but understanding what constitutes the
‘UN system’ helps in appreciating how this organization operates on the world stage. In this
post, we’ll break down the components of the UN system, its key organs, specialized agencies,
and its overall role in fostering global cooperation.

The Main Organs of the UN

The United Nations operates through six main organs, each with distinct functions but
interconnected goals. These organs are crucial for the day-to-day operations and long-term
success of the organization. Here’s an overview:

1. The General Assembly (GA)

The General Assembly is one of the most visible organs of the UN, often viewed as its
‘parliament.’ Every member state (currently 193) has a seat in the General Assembly, where each
state has one vote. While the decisions of the General Assembly are generally non-binding, it
plays a vital role in shaping international law, setting the UN’s budget, and guiding global
political discourse on major issues.

Some key functions of the GA include:

 Deliberating on matters of global significance like international peace and security,

climate change, and human rights.
 Approving the UN budget and reviewing the work of other organs.
 Electing members to the other UN bodies, including the Security Council and the
International Court of Justice (ICJ).
The Security Council

The Security Council is the UN organ responsible for maintaining international peace and
security. It has 15 members, including 5 permanent members with veto power—China, France,
Russia, the UK, and the US. The other 10 members are elected for two-year terms by the General
Assembly.

The Security Council’s responsibilities include:

 Taking action to prevent conflicts, such as deploying peacekeeping missions or imposing

sanctions.
 Authorizing the use of force when necessary, typically through military interventions.
 Addressing threats to international peace, such as terrorism, weapons of mass destruction,
and civil wars.

The Economic and Social Council (ECOSOC)

ECOSOC is tasked with coordinating the economic and social work of the UN, promoting
international cooperation in solving social and economic challenges. It consists of 54 member
states, which are elected by the General Assembly for three-year terms.

ECOSOC works on issues related to development, human rights, education, and environmental
sustainability. It facilitates dialogues between governments, international organizations, and non-
governmental organizations (NGOs). It also monitors and evaluates progress toward the
achievement of the UN’s Sustainable Development Goals (SDGs).

The Trusteeship Council

The Trusteeship Council was established to oversee the administration of trust territories and
ensure that their inhabitants were prepared for self-government. However, with the last trust
territory gaining independence in 1994, the Trusteeship Council has effectively become inactive,
though it remains formally part of the UN system.

The International Court of Justice (ICJ)

The ICJ is the principal judicial organ of the UN and is responsible for settling legal disputes
between states according to international law. It also provides advisory opinions on legal
questions referred to it by the UN organs and specialized agencies.

The Court’s decisions are binding on the parties involved in a case, and its rulings contribute to
the development of international law.
The Secretariat

The Secretariat is responsible for carrying out the day-to-day work of the UN and is headed by
the UN Secretary-General. It implements decisions made by the General Assembly, the Security
Council, and other organs. The Secretariat’s work spans a wide range of activities, from
peacekeeping operations to drafting reports on global issues.

It employs tens of thousands of staff members who work on the ground in various countries to
address crises, conduct research, and facilitate communication between UN bodies and member
states.

Specialized Agencies of the UN

Alongside the main organs, the UN system includes several specialized agencies, each with its
own mandate and focus. These agencies work independently but are linked to the UN through
agreements that formalize their relationship. Here are a few of the most notable agencies:

The World Health Organization (WHO)

The WHO is responsible for promoting global health and addressing public health issues. It plays
a central role in combating diseases such as COVID-19, ensuring access to vaccines, and
coordinating health responses during global health emergencies.

The United Nations Educational, Scientific and Cultural Organization (UNESCO)

UNESCO focuses on fostering international cooperation in education, science, culture, and

communication. It is best known for its World Heritage program, which aims to protect cultural
and natural sites of global significance.

The International Labour Organization (ILO)

The ILO promotes social justice and fair labor practices across the globe. It sets international
labor standards and works to improve working conditions, ensure worker rights, and combat
child labor.

The United Nations Children’s Fund (UNICEF)

UNICEF works to protect the rights of children worldwide. It provides humanitarian aid in
emergencies, focuses on education, health, and child protection, and advocates for policies to
improve the welfare of children globally.

The United Nations Development Programme (UNDP)

The UNDP focuses on eradicating poverty, reducing inequalities, and promoting sustainable
development. It works with governments and local organizations to implement development
programs in areas such as governance, environment, and climate change.

The World Trade Organization (WTO)

The WTO is an intergovernmental organization that deals with the rules of trade between
nations. Although it operates independently, it is often linked to the UN system in terms of
promoting global economic stability and fairness in trade practices.

The UN’s Role in Global Governance

The UN system’s overall goal is to foster global cooperation in tackling international problems.
From addressing poverty and human rights violations to promoting peace and security, the UN
plays an essential role in shaping global governance. While it may face challenges—such as the
veto power of the Security Council or the slow pace of decision-making—it remains the
principal platform for multilateral diplomacy and the coordination of international responses to
crises.

Its broad mandate covers the following key areas:

 Peace and Security: Preventing wars, mediating conflicts, and deploying peacekeeping
forces.
 Human Rights: Promoting and protecting fundamental human rights and freedoms
worldwide.
 Humanitarian Assistance: Providing aid during natural disasters, conflicts, and refugee
crises.
 Sustainable Development: Addressing climate change, poverty, and social inequalities
through its SDGs.
 International Cooperation: Facilitating dialogue and cooperation between member
states on a range of global issues.

Conclusion:

The UN system, with its diverse set of organs, specialized agencies, and related organizations, is
crucial in maintaining international peace, addressing global challenges, and promoting
cooperation between nations. While it has faced criticism and challenges throughout its
existence, its role in global governance remains indispensable in today’s interconnected world.
Understanding how the UN operates and the roles of its various components can help individuals
grasp the complexity of international relations and the pursuit of global solutions.

The United Nations (UN) is an international organization that was established in 1945 with the
goal of promoting international cooperation and addressing global issues. The UN has 193
member countries and works to promote peace, protect human rights, and provide humanitarian
assistance. It plays a vital role in addressing global challenges and promoting international
cooperation. Its work includes peacekeeping operations, humanitarian assistance, arms control,
and the promotion of human rights and sustainable development.

Achievements of the UN

The United Nations (UN) has been involved in a wide range of activities and initiatives over the
years, and has made significant contributions to addressing global challenges and promoting
international cooperation. Some notable works of the UN include:

One of the most significant achievements of the U.N. includes its role in creating the
International Criminal Court (ICC). The ICC was founded based on the agreement of 160
countries over 25 years ago, on 17 July 1998. This historical conference advocated for the
introduction of the first treaty-based permanent international criminal court. This arm of global
justice is known as the Rome Statute of the International Criminal Court.

Peacekeeping: The UN has deployed peacekeeping missions to a number of countries around the
world in an effort to help restore peace and stability in areas affected by conflict. These missions
have helped to reduce violence and protect civilians, and have played a critical role in promoting
dialogue and reconciliation.

Humanitarian assistance: The UN provides humanitarian assistance to people affected by natural

disasters, armed conflict, and other crises. This includes providing food, shelter, and other basic
needs to people in need, as well as supporting the reconstruction of infrastructure and the
delivery of health and education services.

Development: The UN works to promote sustainable development and reduce poverty around the
world. This includes initiatives to improve health and education, promote gender equality, and
support economic growth and job creation.

Environmental protection: The UN has played a key role in promoting international cooperation
on environmental issues and has helped to raise awareness about the importance of protecting the
environment. The organization has also supported efforts to address climate change, including
through the negotiation of international agreements such as the Paris Agreement.

Human rights: The UN has played a leading role in promoting and protecting human rights
around the world. This includes the development of international human rights standards and the
promotion of human rights education and awareness. The organization has also supported efforts
to hold accountable those who violate human rights.

Failures of the UN

The United Nations (UN) is a complex international organization that has been subject to
criticism from various quarters. Some of the main failures of the UN include:
Ineffectiveness: The UN has been criticized for its inability to effectively address some of the
most pressing global challenges, such as armed conflict, terrorism, and human rights abuses.
Critics argue that the organization lacks the necessary resources and political will to effectively
address these issues.

Lack of enforcement powers: The UN is a voluntary organization and relies on the cooperation
of member states to implement its decisions. This has led to criticism that the UN lacks the
necessary enforcement powers to effectively address issues such as non-compliance with
international law and the failure of states to honor their commitments.
Bureaucracy: The UN is a large and complex organization with a bureaucracy that has been
criticized for being inefficient and slow to respond to crises.
Lack of accountability: The UN has been criticized for its lack of transparency and
accountability, particularly in regards to its financial management and the use of its resources.

Political bias: The UN has been accused of being biased in favor of certain member states or
groups of states, and of being swayed by the interests of the more powerful countries.

Inequality: Some critics argue that the UN is not representative of the global community, as the
decision-making bodies of the organization are dominated by a small group of powerful states.
This has led to concerns about the lack of representation and voice for smaller and poorer
countries.

Role of the UN in international relations

The United Nations (U.N.) is the most prominent international organization in the world, with
over 193 members. The U.N. was first created at the end of WWII in 1945. When the U.N. was
first founded, it only had 51 members. These countries formed a union dedicated to ensuring
international peace and security. Since then, the influence of the U.N. in international relations
has grown drastically. The organization is involved in nurturing friendly relations between
countries. They are highly concerned with the social injustices found in the world. To combat
these, they foster good relationships between nations and use diplomacy to advance social
progress. Social progress goals are often met through better living standards and improved
human rights. During this article, we will examine the effectiveness and impact of the U.N.
regarding their work in international relations management.

The U.N. has a global impact on society. The organization’s mammoth size helps ensure it can
reach almost every geographical area on earth. The group has worked for the good of humanity
through its peacekeeping, peacebuilding, and conflict prevention efforts. The U.N. provides
humanitarian assistance on a grand scale through its specialized agencies, funds, and programs.
The U.N. has directly maintained peace through peacekeeping missions and conflict resolution
efforts. It is an elite organization focusing on a broad range of social crises. They have numerous
sectors that handle sustainable development, disaster relief, counter-terrorism, promoting
democracy, human rights, and gender equality. The U.N. is a diverse non-governmental
organization that works to advance women, governance, and economic and social development.
Through all of these efforts, the U.N. has contributed to peace and stability in the world.

World Trade Organization (WTO), international organization established to supervise and

liberalize world trade. The WTO is the successor to the General Agreement on Tariffs and
Trade (GATT), which was created in 1947 in the expectation that it would soon be replaced by a
specialized agency of the United Nations (UN) to be called the International Trade Organization
(ITO). Although the ITO never materialized, the GATT proved remarkably successful in
liberalizing world trade over the next five decades. By the late 1980s there were calls for a
stronger multilateral organization to monitor trade and resolve trade disputes. Following the
completion of the Uruguay Round (1986–94) of multilateral trade negotiations, the WTO began
operations on January 1, 1995.

Structure of the World Trade Organization

The Ministerial Conference

The Ministerial Conference of the WTO meets every two years to make important decisions
about existing trade agreements. The Ministerial Conference holds the authority to make
decisions on any aspects of all multilateral agreements made under the WTO.

The Conference includes representatives from all members of the WTO. It gives equal
representation to all its members regardless of the size of their economy or share in international
trade. It can be thought of as the legislative branch of the WTO. The 12th Ministerial Conference
is now scheduled to take place in June 2021 in Kazakhstan.

The WTO is headed by the Ministerial Conference, while the daily operations are carried out by
three administrative bodies:

1. General Council

The General Council comprises the representatives of all member countries and acts as the
representative of the Ministerial Conference when it comes to daily operations. Its job is to carry
out the implementation and monitoring function of the WTO.

The General Council is further divided into multiple councils and committees that focus on
specific topics. Examples of such bodies include the Council on Goods, the Councils on
Services, the Committee on Textiles under the Council on Goods, etc.

2. Dispute Settlement Body

The Dispute Settlement Body is a part of the General Council and is responsible for settling trade
disputes between member states. There is also an Appellate Body, where member states can
appeal any decisions made against them during a dispute settlement.

3. Trade Policy Review Body

The Trade Policy Review Body is also a part of the General Council and is responsible for
ensuring the trade policies of member states are in line with the goals of the WTO. Member
countries are required to inform the WTO about changes in their laws and trade policies.

The body undertakes regular reviews of the policies to ensure they conform to the rules of the
WTO. This is part of the monitoring function of the WTO, and it helps the WTO to adapt to the
changing economic landscape.

Objectives of WTO
The six key objectives of the World Trade Organization have been discussed below.
1. Establishing and Enforcing Rules for International Trade
The international trading rules by the World Trade Organisation are established under
three separate agreements – rules relating to the international trade in goods; the
agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the
General Agreement on Trade in Services (GATS).
The enforcement of rules by the WTO takes place by way of a multilateral system of
disputes settlement in the instances of violation of trade rules by member countries. The
members are obligated under ratified agreements to honor and abide by the procedures
and judgments.
2. Acting As A Global Apex Forum
World Trade organization is the global forum for monitoring and negotiating further trade
liberalization. The premise of trade liberalization measures undertaken by WTO is based
on the benefits of member countries to optimally utilize the position of comparative
advantage due to a free and fair trade regime.
3. Resolution Of Trade Disputes
Trade disputes, before the WTO, usually arise out of deviation from agreements between
member countries. The resolution of such trade disputes does not take place unilaterally
but through a multilateral system involving set rules and procedures before the dispute
settlement body.
4. Increasing Transparency in The Decision-Making Process
The World Trade Organisation attempts to increase transparency in the decision-making
process by way of more participation in the decision-making and consensus rule, in
 particular. The combined effect of such measures helps to develop institutional
transparency.
5. Collaboration Between International Economic Institutions
The global economic institutions include the World Trade Organisation, the International
Monetary Fund, the United Nations Conference on Trade and Development, and the
World Bank.
With the advent of globalization, close cooperation has become necessary between
multilateral institutions. These institutions are functional in the sector of formulation and
implementation of a global economic policy framework. In the absence of regular
consultation and mutual cooperation, policymaking may be disrupted.
6. Safeguarding The Trading Interest of Developing Countries
Stringent regulations are implemented by the WTO to protect the trading interests of
developing countries. It supports such member countries to leverage the capacity for
carrying out the mandates of the organization, managing disputes, and implementing
relevant technical standards.

Features of WTO
The major features of the World Trade Organization are –
 The scope of WTO is far more expensive than the erstwhile General Agreement on Trade
and Tariff. For instance, GATT solely focused on goods while excluding textiles and
agriculture. On the other hand, WTO covers all goods, services, and investment policies
along with intellectual property.
 WTO Secretariat has formalized and bolstered the mechanisms for the review of policies
as well as the settlement of disputes. This aspect has become crucial due to the
proliferation of member countries and more goods and services being covered by the
WTO. Another important consideration in this regard is the substantial increase in open
access to different international markets.
 There are rules implemented for the protection of small and weak countries against the
discriminatory trade practices of developed countries.
 National Treatment articles and Most Favored Nation (MFN) clause permits equal access
to markets for just treatment of both domestic and foreign suppliers.
 Each member country of the WTO carries a single voting right and all members enjoy
privilege on the global scale.
 The WTO agreements encompass all the member states and act as a common forum of
deliberation for the members.

Roles and Functions of WTO

The broad reach of WTO and its functions have been mentioned below.
 Implementation of Rules for Review of Trade Policy
The international rules of trade provide stability and assurance and lead to a general
consensus among member countries. The policies are reviewed to ensure that even with
 the ever-changing trading scenarios, the multilateral trading system thrives. It also helps
in the facilitation of a transparent and stable framework for conducting business.
 Forum for Member Countries Discuss Future Strategies
The WTO, as a forum, allows for trade negotiations in the multilateral trading system. In
the absence of trade negotiations, growth may stunt, and issues related to tariff and
dumping may go unaddressed. Further liberalization of trade is also subject to consistent
trade negotiations.
 Implementing and Administering Bilateral and Multilateral Trade Agreements
The bilateral or multilateral trade agreements have to be necessarily ratified by the
parliaments of respective member countries. Unless such ratification comes through, the
non-discriminatory trading system cannot be put into practice. The executed agreements
will ensure that every member is guaranteed to be treated fairly in other members’
markets.
 Trade Dispute Settlement
The dispute settlement by the WTO is concerned with the resolution of trade disputes.
Independent experts of the tribunal interpret the agreements and give out judgment
mentioning the due commitments of the concerned member states. It is encouraged to
settle the disputes by way of consultation among the members as well.
 Optimal Utilization of the World's Resources
Resources across the world can be further optimally utilized by harnessing the trade
capacities of the developing economies. It requires special provisions in the WTO
agreements for the least-developed economies. Such measures may include providing
greater trading opportunities, longer duration to implement commitments, and also
support to build the sue infrastructure.

Role Of WTO In International Relations

Recognizing the WTO as a cornerstone in global economic governance, the paper elucidates how
this institution influences foreign policy strategies and fosters economic cooperation among
nations. Through a meticulous analysis of scholarly articles, official WTO documents, and
historical trade agreements, the study highlights the evolution of WTO's influence in steering
international trade norms and resolving disputes. It underscores the dynamic interaction between
WTO policies and national interests, mapping out how these interactions have shaped economic
alliances and rivalries. The review further delves into the critical discourse surrounding WTO's
efficacy and the challenges it faces in the modern geopolitical landscape, including emerging
trade wars and protectionist trends. By weaving together different strands of academic thought,
the paper aims to present a nuanced understanding of WTO's multifaceted impact on global trade
dynamics and international diplomacy. The findings of this review are intended to inform
policymakers, academicians, and trade practitioners about the intricate interplay of trade,
diplomacy, and international relations within the ambit of the WTO.
The World Health Organization (WHO) is a specialized agency of the United
Nations responsible for global public health. It is headquartered in Geneva, Switzerland, and has
six regional offices and 150 field offices worldwide. Only sovereign states are eligible to join,
and it is the largest intergovernmental health organization at the international level.

The WHO's purpose is to achieve the highest possible level of health for all the world's people,
defining health as "a state of complete physical, mental and social well-being and not merely the
absence of disease or infirmity." The main functions of the World Health Organization include
promoting the control of epidemic and endemic diseases; providing and improving the teaching
and training in public health, the medical treatment of disease, and related matters; and
promoting the establishment of international standards for biological products.

The WHO was established on 7 April 1948, and formally began its work on 1 September 1948.
[6]
It incorporated the assets, personnel, and duties of the League of Nations' Health Organization
and the Paris-based Office International d'Hygiène Publique, including the International
Classification of Diseases (ICD).[7] The agency's work began in earnest in 1951 after a significant
infusion of financial and technical resources.

The WHO's official mandate is to promote health and safety while helping the vulnerable
worldwide. It provides technical assistance to countries, sets international health standards,
collects data on global health issues, and serves as a forum for scientific or policy discussions
related to health. Its official publication, the World Health Report, provides assessments of
worldwide health topics.

The WHO has played a leading role in several public health achievements, most notably
the eradication of smallpox, the near-eradication of polio, and the development of an Ebola
vaccine. Its current priorities include communicable diseases, such
as HIV/AIDS, Ebola, malaria and tuberculosis; non-communicable diseases such as heart disease
and cancer; healthy diet, nutrition, and food security; occupational health; and substance abuse.
The agency advocates for universal health care coverage, engagement with the monitoring
of public health risks, coordinating responses to health emergencies, and promoting health
and well-being generally.

The WHO is governed by the World Health Assembly (WHA), which is composed of its 194
member states. The WHA elects and advises an executive board made up of 34 health specialists;
selects the WHO's chief administrator, the director-general (currently Tedros Adhanom
Ghebreyesus of Ethiopia); sets goals and priorities; and approves the budget and activities. The
WHO is funded primarily by contributions from member states (both assessed and voluntary),
followed by private donors. Its total approved budget for 2020–2021 is over $7.2 billion, while
the approved budget for 2022–2023 is over $6.2 billion. The budget is $6.83 billion for 2024–
2025.

Overall focus
The WHO's Constitution states that its objective "is the attainment by all people of the highest
possible level of health".[52]

The WHO fulfils this objective through its functions as defined in its Constitution:

a. To act as the directing and coordinating authority on international health work;

b. To establish and maintain effective collaboration with the United Nations, specialized
agencies, governmental health administrations, professional groups and such other
organizations as may be deemed appropriate;
c. To assist Governments, upon request, in strengthening health services;
d. To furnish appropriate technical assistance and, in emergencies, necessary aid upon the
request or acceptance of Governments;
e. To provide or assist in providing, upon the request of the United Nations, health services and
facilities to special groups, such as the peoples of trust territories;
f. To establish and maintain such administrative and technical services as may be required,
including epidemiological and statistical services;
g. To stimulate and advance work to eradicate epidemic, endemic and other diseases;
h. To promote, in co-operation with other specialized agencies where necessary, the prevention
of accidental injuries;
i. To promote, in co-operation with other specialized agencies where necessary, the
improvement of nutrition, housing, sanitation, recreation, economic or working conditions
and other aspects of environmental hygiene;
j. To promote co-operation among scientific and professional groups which contribute to the
advancement of health;
k. To propose conventions, agreements and regulations, and make recommendations with
respect to international health matters and to perform (Article 2 of the Constitution).

International Monetary Fund (IMF): Origin, Objectives and Functions

Article shared by:

Let us make an in-depth study of the origin, objectives and functions of International
Monetary Fund (IMF).

Origin of IMF:

The origin of the IMF goes back to the days of international chaos of the 1930s. During the
Second World War, plans for the construction of an international institution for the
establishment of monetary order were taken up.

At the Bretton Woods Conference held in July 1944, delegates from 44 non-communist
countries negotiated an agreement on the structure and operation of the international
monetary system.
The Articles of Agreement of the IMF provided the basis of the international monetary
system. The IMF commenced financial operations on 1 March 1947, though it came into
official existence on 27 December 1945, when 29 countries signed its Articles of Agreement
(its charter). Today (May 2012), the IMF has near-global membership of 188 member
countries. Virtually, the entire world belongs to the IMF. India is one of the founder-
members of the Fund.

Objectives:

Article 1 of the Articles of Agreement (AGA) spell out 6 purposes for which the IMF was
set up.

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These are:

I. To promote international monetary cooperation through a permanent institution which

provides the machinery for consolation and collaboration on international monetary
problems.

II. To facilitate the expansion and balanced growth of international trade, and to contribute
thereby to the promotion and maintenance of high levels of employment and real income
and to the development of the productive resources of all members as primary objective of
economic policy.

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III. To promote exchange stability, to maintain orderly exchange arrangements among

members, and to avoid competitive exchange depreciation.

IV. To assist in the establishment of a multilateral system of payments in respect of current

transactions between members and in the elimination of foreign exchange restrictions which
hamper the growth of world trade.

V. To give confidence to members by making the general resources of the Fund tempo rarily
available to them under adequate safeguards, thus providing them with the opportunity to
correct maladjustments in their balance of payments, without resorting to measures
destructive of national or international prosperity.

VI. In accordance with the above, to shorten the duration and lessen the degree of dis -
equilibrium in the international balance of payments of members.

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All these objectives of the IMF may be summarised:

To promote international cooperation; to facilitate the expansion and balanced growth of
international trade; to promote exchange stability; to assist in the establishment of a multi -
lateral system of payments; to make its general resources available to its members
experiencing balance of payments difficulties under adequate safeguards; and to shorten the
duration and lessen the degree of disequilibrium in the international balance of payments of
members.

Functions:

The principal function of the IMF is to supervise the international monetary system. Several
functions are derived from this. These are: granting of credit to member countries in the
midst of temporary balance of payments deficits, surveillance over the monetary and
exchange rate policy of member countries, issuing policy recommendations. It is to be noted
that all these functions of the IMF may be combined into three.

These are: regulatory, financial, and consultative functions:

Regulatory Function:

The Fund functions as the guardian of a code of rules set by its (AOA— Articles of
Agreement).

Financial Function:

It functions as an agency of providing resources to meet short term and medium term BOP
disequilibrium faced by the member countries.

Consultative Function:

It functions as a centre for international cooperation and a source of counsel and technical
assistance to its members.

The main function of the IMF is to provide temporary financial support to its members so
that ‘fundamental’ BOP disequilibrium can be corrected. However, such granting of credit is
subject to strict conditionality. The conditionality is a direct consequence of the IMF’s
surveillance function over the exchange rate policies or adjustment process of members.

The main conditionality clause is the introduction of structural reforms. Low income
countries drew attraction of the IMF in the early years of 1980s when many of them faced
terrible BOP difficulties and severe debt repayment problems. Against this backdrop, the
Fund took up ‘stabilisation programme’ as well as ‘structural adjustment programme’.
Stabilisation programme is a demand management issue, while structural programme
concentrates on supply management. The IMF insists member countries to implement these
programmes to tackle macroeconomic instability.

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Its main elements are:

(i) Application of the principles of market economy;

(ii) Opening up of the economy by removing all barriers of trade; and

(iii) Prevention of deflation.

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The Fund provides financial assistance. It includes credits and loans to member countries
with balance of payments problems to support policies of adjustment and reform. It makes
its financial resources available to member countries through a variety of financial facilities.

It also provides concessional assistance under its poverty reduction and growth facility and
debt relief initiatives. It provides fund to combat money- laundering and terrorism in view
of the attack on the World Trade Centre of the USA on 11 September 2001.

In addition, technical assistance is also given by the Fund. Technical assistance consists of
expertise and support provided by the IMF to its members in several broad areas : the design
and implementation of fiscal and monetary policy; institution-building, the handling and
accounting of transactions with the IMF; the collection and retirement of statistical data and
training of officials.

Maintenance of stable exchange rate is another important function of the IMF. It prohibits
multiple exchange rates.

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It is to be remembered that unlike the World Bank, the IMF is not a development agency.
Instead of providing development aid, it provides financial support to tide over BOP
difficulties to its members.

Organisation and Management of the IMF:

Like many international organisations, the IMF is run by a Board of Governors, an Exe -
cutive Board and an international staff. Every member country delegates a representative
(usually heads of central banks or ministers of finance) to the Board of Governors—the top
link of the chain of command. It meets once a year and takes decision on fundamental
matters such as electing new members or changing quotas.

The Executive Board is entrusted to the management of day-to-day policy decisions. The
Board comprises 24 executive directors who supervise the implementation of policies set by
the member governments through the Board of Governors.
The IMF is headed by the Managing Director who is elected by the Executive Board for a 5
year term of office.

Rights and obligations, i.e., the balance of Powers in the Fund is determined by a system of
quotas. Quotas are decided by a vote of the Board of Governors. Quotas or subscriptions
roughly reflect the importance of members in the world economy. It is the quota on which
payment obligation, credit facilities, and voting rights of members are determined.

Financial Structure of the IMF:

The capital or the resources of the Fund come from two sources:

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(i) Subscription or quota of the member nations, and

(ii) Borrowings.

Each member country is required to subscribe an amount equivalent to its quota. It is the
quota on which payment obligations, credit facilities, and voting right of members are
determined. As soon as a country joins the Fund, it is assigned a quota which is expressed in
Special Drawing Rights (SDRs). At the time of formation of the IMF, the quota of each
member was made up of 25 p.c. in gold or 10 p.c. of its net official holdings of gold and US
dollars (whichever was less). Now this has been revised.

The capital subscriptions or quota is now made up of 25 p.c. of its quota in SDRs or widely
accepted currencies (such as the US dollar, euro, the yen or the pound sterling) instead of
gold and 75 p.c. in country’s own currency. The size of the Fund equals the sum of the
subscriptions of members. Total quotas at the end-August 2008 were SDR 217.4 billion
(about $341 billion).

The Fund is authorised to borrow in special circumstances if its own resources prove to be
insufficient. It sells gold to member countries to replenish currency holdings. It is entitled to
borrow even from international capital market. Though the Articles of Agreement permit the
Fund to borrow from the private capital market, till today no such use has been made by the
IMF.

Special Drawing Rights (SDRs):

The Special Drawing Rights (SDRs) as an international reserve asset or reserve money in
the international monetary system was established in 1969 with the objective of alleviating
the problem of international liquidity. The IMF has two accounts of operation—the General
Account and the Special Drawing Account.

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The former account uses national currencies to conduct all business of the fund, while the
second account is transacted by the SDRs. The SDR is defined as a composite of five
currencies—the Dollar, Mark, Franc, Yen and Pound. The SDRs are allocated to the
member countries in proportion to their quota subscriptions. Only the IMF members can
participate in SDR facility.

SDRs being costless, often called paper gold, is just a book entry in the Special Drawing
Account of the IMF. Whenever such paper gold is allocated, it gets a credit entry in the
name of the participating countries in the said account. It is to be noted that SDRs, once
allocated to a member, are owned by it and operated by it to overcome BOP deficits. Since
its inception, there have been only four allocation to SDRs—the first in 1970, and the last in
2008-09—mainly to the developing countries.

Instruments of IMF Lending and Loan Conditionality:

The IMF Articles of Agreement clearly state that the resources of the Fund are to be used to
give temporary assistance to members in financing BOP deficit on current account. Of
course, the financial assistance provided by the Fund is loan. The following technique is
employed: If a country calls on the Fund it buys foreign currencies from the IMF in return
for the equivalent in the domestic currency.

This, in legal and technical terms, is called a ‘drawing’ on the Fund. The technique,
therefore, suggests that the IMF does not lend, but sells the required currency to the
members on certain terms. This unique financial structure of the Fund clearly suggests that
the Fund’s resources cannot be lent for long time. It is meant to cover short run gaps in
BOP.

The IMF’s unique financial structure does not allow any member to enjoy financial
assistance over a long time period. The total amount that a country is entitled to draw is
determined by the amount of its quota. A member is entitled to draw an amount not
exceeding 25 p.c. of its quota. The first 25 p.c. called the ‘gold tranche’ (‘tranche’ a French
Word meaning slice) or ‘reserve tranche’ can easily be drawn by countries with BOP
problems.

This 25 p.c. of the quota is the members’ owned reserves and therefore no conditions are
attached to such drawings. This may be called ‘ordinary, drawing rights; even the Fund
cannot deny its use. However, no interest for the first credit tranche is required to be paid
though such drawings are subject to repayment within 3-5 years period.

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The ‘credit tranche’ of 100 p.c. each equalling 25 p.c. of a member’s quota are also
available subject to the IMF approval and hence, ‘conditional’.

Originally, it was possible to borrow equal to 125 p.c. of one’s quota. At present, borrowing
limit has been raised to 450 p.c. of one’s quota which must be redeemed within five years.
Borrowing methods used by the Fund are:

(i) Stand-by Arrangements:

This method of borrowing has become the most normal form of assistance by the Fund.
Under this form of borrowing, a member state obtains the assurance of the Fund that,
usually over 12-18 months, requests for drawings of foreign exchange (i.e., to meet short-
term BOP problems) up to a certain amount will be allowed if the country concerned
wishes.

However, the stand-by arrangements can be extended up to 3 years while repayments are
required to be made within 3-5 years of each drawing. The term “stand-by” here means that,
subject to conditionality, a member has a right to draw the money made available, if needed.
In most cases, the member does, in fact, draw.

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(ii) Extended Fund Facility (EFF):

Stand-by arrangements to stabilise a member’s BOP run usually for a period of 12-18
months. Developing countries suffer from chronic BOP problems which could not be
remedied in the short run. Such protracted BOP difficulties experienced by the LDCs were
the result of structural imbalances in production and trade. It then necessitated an adjust-
ment programme and redemption scheme of longer duration.

In the 1970s, the Fund recognised this idea and built up the EFF in 1974. The EFF is
designed to provide assistance to members to meet their BOP deficits for longer period (3-4
years) and in amounts larger in relation to their quotas. Repayment provisions of EFF cover
a period of 4-10 years. However, conditions for granting loans are very stringent. Drawings
on this account since 2000 stand at over 50 billion dollar in SDRs.

(iii) Compensatory Financing Facility (CFF):

Apart from the ordinary drawing rights, there are some ‘special finances’ windows to assist
the developing countries to tide over BOP difficulties. CFF, introduced in 1963, is one such
special drawing provision. Its name was changed to Compensatory and Contingency
Financing Facility (CCFF) in 1980, but the ‘contingency’ was dropped in 2000. Under it,
members were allowed to draw up to 25 p.c. of its quota when CFF was introduced.

It can now draw up to 45 p.c. Since the mid- 1990s, this has been the least-used facility.

(iv) Structural Adjustment Facility (SAF) and the Enhanced SAF (ESAF):

In 1986 a new facility—the SAF—was introduced for the benefit of low income countries. It
was increasingly realised that the so-called stringent and inflexible credit arrangements were
too inadequate to cope with the growing debt problems of the poorest members of the Fund.
In view of this, SAF was introduced which stood quite apart from the monetary character of
the Fund.

Under it, credit facilities for economic reform programmes are available at a low interest
rate of 0.5 p. c compared to 6 p.c. for most Fund facilities. Loans are for 10 years with a
grace period of five and a half years. LDCs facing protracted BOP problems can get
assistance under SAF provided they agree to undertake medium-term structural adjustment
programmes to foster economic growth and improve BOP conditions. An extended version
of SAF—ESAF—was introduced in 1987. The ESAF has been replaced by a new facility,
called Poverty Reduction and Growth Facility in 1999.

What emerges from the structural adjustment facility is that the IMF’s loan is now available
to member countries in support of policy programmes. It now insists on the supply side
policy ‘as a condition’ for assistance, in addition to loans meant for short-term BOP
difficulties.

(v) Poverty Reduction and Growth Facility (PRGF):

The PRGF that replaced the ESAF in November 1999 provides concessional lending to help
the poorest member countries with the aim of making poverty reduction and economic
growth —the central objectives of policy programmes. Under this facility, low-income
member countries are eligible to borrow up to 140 p.c. of its quota for a 3-year period. Rate
of interest that is charged is only 0.5 p. c and repayment period covers 5 1/2-10 years, after
disbursement of such facility. However, financial assistance under this facility is, of course,
‘conditional’.

(vi) Supplemental Reserve Facility (SRF):

This instrument provides additional short-term financing to member countries facing

exceptional BOP difficulties because of a sudden and disruptive loss of market confidence
reflected in capital outflows of countries concerned. Consequent upon the eruption of East
Asian financial crisis, the SRF was introduced in 1997.

Till date (March, 2012), the top three largest borrowing nations are Greece, Portugal and
Ireland from the IMF.

Strings of Conditionality:

It is to be remembered here that the IMF lending is conditional. Further, the IMF lending is
temporary ranging from 1 year to 3 years. Repayment period varies from country to country
and from one facility to another. Repayment under PRGF for low income countries is 10
years with a 5 1/2 year grace period on principal payments.

The IMF may be viewed as both a financing and an adjustment-oriented international

institution for the benefit of its members. The distinguishing features of the Fund loans are
their cost and certain macroeconomic policy conditions. These conditionality requirements
range from rather general commitments to cooperate with the IMF in setting policies to
formulating a specific, quantified plan for monetary, trade, and fiscal policies.

The IMF practice of tying loans to conditions reflects the dominant influence of the
capitalist world. The strings of conditionality’s as well as the policy of sanctions that came
to the fore in the early 1960s made this international organisation the most controversial
institution. This is because of the fact that the conditions set by the Fund cannot constitute a
standard solution for deficit countries to the Fund’s finances. By attaching conditions to
credit facilities, the Fund has assumed the role of a ‘neo-colonist’. Some say that the IMF
has been acting as ‘a rubber stamp for the desires of the US administration’.

The conditionality is always intended to restore internal and external balance and price
stability. While formulating specific performance criteria (often referred to as ‘conditional
loans’ that is, ‘at the point of a gun’), the Fund prepares ‘stabilisation’ programme and
‘adjustment’ programme which member states will be required to adopt to tackle
macroeconomic instability.

The programme design involves monetary and fiscal policy measures so that structural
adjustment (i.e., reforms aimed at changing the structure of both production and
consumption) takes place. Stabilisation is generally regarded as a precondition of structural
adjustment policies’.

Thus, stabilisation and structural programmes not only includes monetary and fiscal policies
but also exchange rate policy (i.e., devaluation), liberalisation or deregulation, privatisation,
reforming institutions to carry governments’ new role, freeing markets to determine prices,
reforming the labour sector. Almost all stabilisation programmes intend to curb effective
demand.

Working of the IMF:

There are two phases in the working of the IMF over the last 65 years. The first phase
covers the period late 1940s (i.e., 1947) to 1971. This phase is popularly known as the
‘Bretton Woods System’. The IMF system or the Bretton Woods System provides for
exchange rate stability in the short run but allowed for the possibility of exchange rate
adjustment when a country experienced ‘fundamental’ disequilibrium in its BOP accounts.
Thus, the pegged exchange rate was adjusted in accordance with the IMF. Hence the name
‘adjustable peg system’.

As the system was the source of some major problems, it was abandoned in 1971 and more
flexibility was introduced in the monetary system. In other words, the demise of the Bretton
Woods System made room for the floating exchange rate regime, requiring changes in the
role of the IMF. After prolonged negotiations (1973-78), the IMF started its second-leg
journey in 1978.
The decade of the 1970s saw massive borrowing by the developing countries. It rose to $600
billion by 1982. Meanwhile, the rise in interest rates in the USA from 1979 and the
appreciation of dollar caused tremendous difficulties to the developing countries in
servicing their debts. On the other hand, the switch to the floating exchange rate system
coincided with the deteriorating economic conditions in the industrialised countries.

Debt crisis that emerged in many developing countries had a dramatic effect. Mexico a Latin
American country announced its failure to honour debt obligations. The IMF now played a
crucial role to put the international financial system in order. It came in for mobilisation of
additional financial resources so as to reduce the debt burden. As a result of this and other
related measures, many countries regained access to the international banks and creditors
and the severity of the debt problem moderated considerably in Latin America in the early
1990s.

With the breakup of the Soviet Union in 1989, a new category of countries, especially the
erstwhile communist countries, joined the IMF. The IMF now came forward to assist
countries undergoing transition from a centrally planned economy to a market-oriented
economy. Privatisation is indeed a crucial element of the transition process. That is why the
IMF is providing financial assistance and technical support for the develop ment of sound
economic management and the privatisation of state enterprises.

In 1997, the East Asian financial crisis began when the currencies of the ‘Asian tiger’
economies (South Korea, Singapore, Hong Kong, Taiwan) plummeted, and the stock market
crashed. Rescue packages were launched by the IMF under strong authority conditions.

Achievements:

From this balance sheet of the working of the IMF, we are now in a position to evaluate its
performance over the last 65 years or so. First, we state the achievements of the Fund.

The IMF acts both as a financing and an adjustment-oriented international institution for the
benefit of its members It has been providing financial assistance to the deficit countries to
meet their temporary disequilibrium in BOP.

The Fund aims at promoting exchange rate stability. In its early phase, the Fund made
arrangements of avoidance of competitive exchange depreciation.

It has made an attempt to solve the problem of international liquidity. To create

international liquidity. Special Drawing Rights (SDRs)—an artificial currency—were
created in 1969 as foreign exchange reserves to benefit the developing countries in
particular. SDR allocations are made to member countries to finance the BOP deficits.

It is an institution through which consultation in monetary affairs takes place in an on-going

way. It acts as a forum for discussions of the economic, fiscal and financial policies of
member countries, keeping the BOP problems in mind. Previously, the poorest developing
countries did not receive adequate treatment from the Fund. But from 1980s onwards—
when the debt crisis broke out in poor countries—the Fund decided to divert its financial
resources to these countries.

In 1980s, centrally planned economies were not hitherto members of the Fund. With the
collapse of the Soviet Union in 1989, ex-communist countries became members of the Fund
and the Fund is providing assistance to these countries so as to instill, the principles of
market economy. It has decided to finance resources to combat terrorism and money-
laundering.

Finally, the IMF has assisted its members in the formulation of appropriate monetary, fiscal,
and trade policies.

Failures:

Despite these achievements, its failures are glaring. In other words, its success is, on the
whole, limited. There are some serious charges against this institution that cannot escape
attention.

These are:

The Fund provides short-term finance to its members to tackle BOP disequilibrium. For this
purpose, it adopted an adjustable peg system in the first phase of its life. But it failed to
establish a stable exchange rate. Its role in controlling the competitive exchange
depreciation policies adopted by the members was subject to serious scrutiny, although it
was created to avoid devaluation as a BOP measure as much as possible.

Truly speaking, the IMF is incapable of taking independent policy decisions. It complies
with the ‘order’ of the superpowers. Further, it has minimal influence over the policy
decisions of the major industrial powers. In these cases, its mandate to exercise ‘firm
surveillance’ over some influential members or superpowers is virtually meaningless—it has
no influence over the US deficits or European interest rates.

Secondly, the Fund imposes conditions on the poor countries while sanctioning loans. Now,
it is ignoring its central concern—exchange rate management and the BOP problems. It is
now championing the issue of ‘market principle’. It suggests poor developing countries to
cut expenditure-borrowing-subsidy, raise prices of state enterprises, privatisation of state-
owned enterprises, etc. If such measures—most popularly known as structural adjustment
programmes—are adopted only then the IMF credit would follow. It is said that the third
world debt crisis is due to the Fund policies and working.

Thirdly, the Fund has failed to eliminate foreign exchange restrictions imposed by its
members that hamper the growth of trade.

In view of these, the developing countries are blaming the IMF for their economic malaise.
It is said that the IMF has outlived its mission and the time has come for it to go into
oblivion. Sixty- five years is long enough!
Role of IMF in Economic Development of LDCs:

Being a central institution of international monetary system, the IMF works for global
prosperity by promoting a balanced expansion of world trade. The IMF not only operates as
a BOP adjustment institution but also a BOP financing institution.

The IMF system provides for exchange rate stability in the short run but allows for
exchange rate adjustment if a country faces ‘fundamental’ disequilibrium in its BOP
accounts. Hence the name ‘adjustable peg system’ that lasted till 1971 since its birth. Till
the mid-60s of the 20th century, some progress had been achieved in the direction of
international cooperation and compliance with the Fund’s Articles of Agreement.

Continuous drop in its gold reserves and chronic BOP deficits resulting in a crisis of
confidence of dollar forced the USA to abandon the convertibility of dollars into gold in
1971. This is called breakdown of the Bretton Woods System that seriously raised questions
about the role of the IMF in the provisioning of international finance. Floating exchange
rate system thus introduced caused severe hardships to the LDCs. Meanwhile, many LDCs
faced serious BOP deficits because of a world recession, the first oil shock in the form of
ricocheting fuel prices, and a falling exports of LDCs.

Earlier, that is before 1971, the bulk of the Fund’s resources was used to maintain the value
of currencies of the developed world. The Fund had been also marginalised by the actions of
the G-7 and regional trading blocks. However, with the change in the exchange rate system,
the role of the IMF also underwent a change.

It shifted its focus of attention to the developing countries in the late 1970s. In the 1980s, it
became more generous in providing resources to the countries in difficulty. Since then, both
the IMF and the World Bank have been helping ex-communist countries to build a market
economy, though the IMF was created primarily as an institution for the promotion of
international monetary stability. The founding fathers of the Fund expected that it would
poke its nose in the affairs of the LDCs and, lately, of the former communist countries.

Today, the Fund is being labelled as an ‘anti- developmental’ institution, as far as structural
adjustment lending is concerned. The IMF now serves the needs of global finance instead of
the needs of global stability. The use of conditionality and the direct ‘surveillance’ on
macroeconomic policy by the Fund is suggestive of increasing involvement in the LDCs’
development process.

Drawings from the EFF, SRF, PRGF, etc., are available if the member countries agree to a
stabilisation programme. The IMF focuses mainly on a country’s macroeconomic stability
as well as structural adjustment programme that influences its macroeconomic performance.
Conditionality’s are attached when member countries opt for drawings from the above noted
sources of the Fund.

Structural adjustment programmes (that includes not only stabilisation programmes

associated with monetary and fiscal policy measures, but also trade liberalisation,
privatisation, globalisation, freeing markets to determine prices, reforming institutions, to
carry government’s new role, and so on) are said to be preconditions for securing Bank-
Fund loans. Its adverse impacts on the LDCs are varied and numerous.

First, SAP was justified as necessary to the LDC world as it would enable them to repay
their debt to banks of advanced countries. By the late 1980s, more than 70 LDCs had to
swallow the SAP medicine. But its impact on growth of these countries was negative. As
many as 77 p.c. of countries saw the most significant decline in their per capita incomes. In
Latin America, during the 1960s and 1970s, income grew by 75 p.c. when these economies
were relatively closed, but during the 1980s, income grew by 61 p.c. only. Average incomes
in sub-Saharan Africa actually contracted.

Latest research data (2006) for 98 countries during 1970-2000 revealed a negative impact of
the IMF programmes on the per capita income growth of 1.7 p.c. p.a. Another study (1991)
of 40 countries showed negligible growth in GDP, marginal increase in export growth and
the BOP situation and a decline in investment. The IMF aims at tackling BOP
disequilibrium but does little to learn the root causes of such disequilibrium.

Secondly, the costs of adjusting to greater openness of the LDC economy are shouldered
mainly by the poor. The Fund recommends privatisation so as to offset government failure.
It is said that the government-run enterprises are inefficient. Bureaucracies are corrupt. Thus
by ‘freeing the markets’, competitive efficiency could be improved. But the costs of such
adjustment programmes are expensive. Indeed, globalisation has triggered both poverty and
inequality. Today’s world see the “billionaires of capitalists” and the exponential growth
of poverty-stricken, malnourished people.

In compliance with the IMF demand, in Argentina during 1976-87, employment in public
administration was down by 11.5 p.c. and in State enterprises by 18.9 p.c. In India, during
the stabilisation period 1991-99, growth rates in employment in the organised sector
declined form 1.44 p.c. to 0.84 p.c. and further to -0.31 p.c. during 1994-2006. The
inevitable consequence of this is the rise in the number of unemployed and poor people. “In
the eyes of some, the acronym IMF stands for (I)inflation, (M)isery and
(F)amine!” (A.P Thirlwall).

Again, the IMF introduced economic shock therapy measures in command economies. All
these comprised the introduction of capitalism in Russia and other former Soviet-bloc
countries and hence a shift from the state-led development to market-led development.

Thirdly, Joseph Stiglitz has accused the IMF of promoting an agenda of ‘market fundamen -
talism’ thereby injuring the country’s social fabric. The Fund emphasises fiscal discipline—
cuts in government expenditures and subsidies—so as to pursue a free market economy
philosophy. But because of cuts in government expenditures and various subsidies on basic
necessities and a rise in the price of public services, vulnerable people bore the major brunt.

Following cuts in subsidies on food products, milk prices in Chile went up by 400 p.c.,
bread by 367 p.c., potatoes by 850 p.c. and carrot by 1.589 p.c. in 1975—the average rate of
inflation there was 340 p.c. Many LDCs saw their indicators of standard of living—infant
mortality, life expectancy, adult literacy, primary school enrolment, per capita calorie
supply, etc. — falling to an unimaginable proportion. The Fund is unresponsive
to “adjustment with a human face”.

Fourthly, structural adjustment conditionality is often criticised for the third world debt
crisis. Borrowing-dependent third world countries in the 1970s and 1980s went for private
commercial bank loans—thereby causing accumulation of external debt and ballooning of
debt service payments. Faced with this crisis, many of the LDC countries approached the
IMF for borrowing to avert the risk of default.

It then invented the structural adjustment lending, provided conditionality’s imposed by the
Fund-World Bank are respected by the borrowing nations. This debt burden also caused
severe BOP crises in many countries. The Fund- Bank do not find incentives to close
exchange gap; rather they decapitalise LDCs.

Finally, the Fund often brings political and social unrest. Many of the policy measures
suggested by the Fund (e.g., subsidy cut, labour retrenchment, golden handshake, etc.)
caused widespread strikes, riots, etc., in many countries. Actually, finding no other
alternatives, these countries had to swallow the bitter painful SAP medicine.

One author has remarked that the Fund has overthrown more governments than the
military’! Social unrest consequent upon strict conditionality’s brought more chaos, rather
than solution. Argentina faced military takeover in 1976, Brazil in 1964, Chile and
Uruguary in 1973, Turkey in 1960, 1971, and 1980. Military coups do not deserve the name
‘stabilisation’ and ‘structural adjustment’, in any case!

World Bank

The World Bank Group is one of the largest public development institutions in the world, with
funding commitments totalling $59.5 billion in FY 2019. The main purpose of the Bank, as
outlined in Article One of its Articles of Agreement is, “to assist in the reconstruction and
development of territories of members by facilitating the investment of capital for productive
purposes,” and, “to promote the long-range balanced growth of international trade and the
maintenance of equilibrium in balances of payments by encouraging international investment…
thereby assisting in raising the productivity, the standard of living and conditions of labour in
their territories.”
The World Bank comprises five institutions managed by its country members: The International
Bank for Reconstruction and Development (IBRD), which provides loans to middle-income and
creditworthy lower-income countries; the International Development Association (IDA), which
provides interest-free long-term loans, grants, technical assistance, and policy advice to low-
income developing countries; the International Finance Corporation (IFC), which provides loans
and loan guarantees and equity financing to the private sector in developing countries; the
Multilateral Investment Guarantee Agency (MIGA), which provides loan guarantees and
insurance to foreign investors against loss caused by non-commercial risks in developing
countries; and the International Centre for Settlement of Investment Disputes (ICSID), which
does not provide finance and is responsible for the settlement of investment disputes between
foreign investors and their clients.
The Bank´s 189 member countries share ownership, and while votes are allocated differently in
IBRD, IDA, IFC and MIGA, their voting power is based on the members’ capital subscriptions,
with 25 executive directors representing different constituencies. This means the members with
the greatest financial contributions have the greatest say in the Bank’s decision-making
processes. Currently, the United States holds 15.78 per cent of the votes, followed by Japan,
China, Germany, the UK and France. The top five shareholders, and Saudi Arabia, are
represented by a single executive director, whereas sub-Saharan Africa, for instance, is divided
into three constituencies, and many Asian constituencies are crowded, for example, in
comparison to European counterparts (see Inside the Institutions, IMF and World Bank
decision-making and governance, What are the main criticisms of the World Bank and the
IMF?).
Each member of the Bank contributes two per cent of its subscription, calculated by a formula,
in gold or US dollars and 18 per cent in its national currency. Members pay in 20 per cent of the
Bank’s capital while the remaining 80 per cent is kept “callable” (to be paid in the event of a
default). This guarantee allows the Bank to raise money for its lending purposes on international
capital markets by the sale of its bonds. In the case of IDA, though, its funds rely largely on the
voluntary donor contributions through periodic replenishments, which typically take place
every three years. Historically, additional contributions have been made by the IBRD and the
IFC’s income from borrowers’ repayments of earlier IDA credits. However, the IFC’s
contributions have reversed over the past few years, under the assumption that IDA countries
need more private investment in order to meet the UN Sustainable Development Goals (SDGs),
turning the IFC into a recipient of IDA funds rather than a contributor.
Interest rates charged by the Bank are adjusted periodically with capital accumulated from the
interest charged above its borrowing costs, and are used to pay the Bank’s operating costs and to
add to reserves (see IDA and IBRD interest rates).
How does the World Bank operate?

The Bank aims to achieve its goals through the provision of long-term loans, and in the case of
IDA, grants, to governments to finance development projects and structural reform in areas such
as education, health, public administration, infrastructure, financial and private sector
development, agriculture, environment, technical support and natural resource management. The
World Bank Group can also be seen as the provider of a number of products and services to
states and, in the case of the IFC, private sector actors.
In 2014, the Bank established its twin goals, aimed at measuring success in promoting
sustainable economic development: To end extreme poverty by 2030, by decreasing the
percentage of people living on less than $1.90 day (increased from $1.25 in 2015) to less than 3
per cent of the global population, and to promote shared prosperity, by improving the living
standards of the bottom 40 per cent of the population in every country. The poverty rate has
been criticised as being too low to be meaningful by critics and the shared prosperity approach
has also been challenged as significantly flawed.
The World Bank also presents itself as a ‘solutions bank’, combining its clout as a lender with
global development knowledge and experience. It does this through research publications, policy
advice and technical assistance. It is well-known for its influential annual flagship publication,
the World Development Report, which provides research and recommendations on a specific
aspect of economic development (see Observer Winter 2018, Winter 2017, Winter 2011). The
Bank also produces several publications which monitor and rank its members countries on
different policies, such as the Doing Business Report, Women, Business and the Law, and the
Human Capital Index (see Observer Winter 2019, Spring 2015). It conducts a range of research
and analysis on global economic trends, development policy data and impact evaluation.
However, it has been criticised for being self-referential, favouring its own research over critical
learning and independent evaluations that question its approach (see Update 54).
The Bank´s country programmes are reviewed, guided and analysed by its Country Partnership
Frameworks (CPF). The CPF guides the actions the Bank implements over a five-year period to
support a member country in its efforts to achieve the twin goals by identifying key objectives
and analysing development results. A CPF starts with a poverty focused national development
strategy drafted by the country. The country and the Bank then undertake a Systematic Country
Diagnostic (SCD) to identify the challenges country faces. This SCD helps develop the CPF
objectives, which will outline the Bank’s proposed actions – which often include leveraging the
private sector for development outcomes – and their alignment with the Bank’s twin goals
(see Observer Summer 2017). From this the CPF outlines a programme to help the country
achieve the CFP objectives.
An important source for development finance and partnership within the Bank are the so-
called trust funds. These complement IDA and IBRD and are designed to provide support for
global public goods, fragile and conflict-affected states, disaster prevention and relief, global
partnerships, knowledge and innovation. The amount of WBG funds held in trust as of the end
of FY2019 was estimated at $12.1 billion, of which over $11 billion were disbursed to IDA
and blend countries, which are “IDA-eligible based on per capita income levels and are also
creditworthy for some IBRD borrowing.”
There are also IFC trust funds and Financial Intermediary funds (FIFs). IFC trust funds seek to
create market opportunities, principally by unlocking private investment, through advisory
services and concessional lending (blended finance). The Bank implements large global or
regional projects through FIFs, which are developed through partnership with other
organisations such as multilateral development banks and UN agencies. FIFs provide large-scale
funding for broad, coordinated interventions, usually focused on themes, and typically aimed at
achieving global public goods. The financialisation of development assistance inherent in FIFs
and the World Bank’s Maximizing Finance for Development approach (see Observer Summer
2017) has been criticised as representing a new “Wall Street consensus”.
After the global debt crisis in the early 1980s, the Bank introduced adjustment lending under
structural adjustment programmes (SAPs) to provide financing to countries experiencing balance
of payments problems while stabilisation measures took effect. These loans were provided to
countries for social, structural and sectoral reforms, for example for the development of national
financial and judicial institutions. The World Bank attached conditions to its loans with the
stated aims of ensuring the country’s economy is structured towards loan repayment.
SAPs have been heavily criticised for decades for their negative impact on developing
economies, including increasing dependency on existing unequitable international trade and
financial systems. While the Bank no longer associates itself with SAPs, this type of lending
continues today through Development Policy Financing, by which the Bank provides financing
to borrowers in the form of loans, grants and credits. These contain a series of conditions (i.e.
‘prior actions’ which require specific legislative changes), which the Bank claims are aimed at
the maintenance of an adequate macroeconomic policy framework – as determined by the Bank
with inputs from IMF assessments.

NATO, or the North Atlantic Treaty Organization, is a military and political

alliance founded in 1949 and dedicated to ensuring the security and freedom
of its members. As the Cold War took shape and the Soviet Union threatened
European governments, the founding countries of NATO determined that a
transatlantic alliance was necessary to both deter Soviet aggression and
promote political integration rather than militarism. In the decades since,
NATO has grown in structure and members into the organization it is today.
The primary political council of NATO is the North Atlantic Council (NAC), and
it is chaired by NATO’s Secretary General. Each member has a seat on this
council and all decisions are made by consensus, so that any decision made
by NATO reflects the will of all members. If a decision reached under the NAC
or a political subcommittee has military implications, the Military
Committee is responsible for giving expert advice to the NAC and for
organizing and carrying out NATO’s military operations.

The United States is the largest financial contributor to NATO and a key
member of the alliance. The alliance promotes democratic ideas and
peaceful conflict resolution around the world. Countries looking to join must
have a functioning democratic government and a commitment to peacefully
resolve conflict. With a large network of members and resources, NATO aims
to hold its members to a standard of democracy and intervenes to defuse
conflicts before they happen. However, there is continuous debate over how
to handle NATO member states experiencing democratic backsliding. In
addition, conflict is deterred by the collective defense aspect of NATO, where
an attack on one member is an attack on all members. Despite its
shortcomings and the challenges it faces, it is often considered to be one of
the most successful international alliances in history.

There are currently thirty members of NATO and several countries are
aspiring to join. Other countries are engaged in working partnerships with
the alliance, while not being members.

Successes

1. The Cold War: During the Cold War, NATO’s efforts were centered
around three goals: controlling the Soviet Union, dissuading militant
 nationalism and communism across Europe, and establishing greater
European political unity. The alliance played a major role in maintaining the
tense peace of the Cold War and ensuring the war remained ‘cold’. With the
end of the war, NATO worked to further maintain peace. They established the
North Atlantic Cooperation Council and, in 1997, NATO encouraged bilateral
discussion between the United States and Russia through the Founding Act.
2. Modern Day Protection: Today, NATO continues to provide a level of
protection for its members. Since its founding, a NATO member has only been
attacked and evoked Article 5 once (the United States after 9/11). Member
countries are afforded collective security, just as NATO originally sought to
do. Additionally, NATO has created a global network of more than 40
countries and other partners around the globe—ranging from the African
Union to the Organization for Security and Cooperation in Europe (OSCE).
This network provides NATO support in its crisis management operations,
ranging from aid operations such as its delivery of relief supplies after the
2005 Kashmir Earthquake to counter-terrorism operations in the
Mediterranean and the coast of Somalia.
3. The Ukraine War: NATO has publicly denounced the Russian invasion of
Ukraine and NATO member countries and allies have provided substantial aid
to Ukraine. The United States has contributed roughly $54 billion to Ukraine.
Other countries have provided humanitarian aid and support for the more
than 5 million refugees of the war. The Ukraine war has reaffirmed the
importance of NATO, and even spurred Finland and Sweden to increase their
efforts to join the alliance. These countries’ membership would strengthen
the alliance militarily through increased air and submarine capabilities,
allowing for NATO to further dissuade Russian aggression.

Failures

1. Funding Issues: In 2006, NATO Defense Ministers agreed to a commitment

that 2% of their countries’ GDP would be allocated towards defense spending.
However, the majority of NATO members do not meet this goal. Currently,
the United States accounts for over two-thirds of the alliance’s defense
spending.
2. Afghanistan: After 9/11, NATO was a considerable presence in Afghanistan,
and their forces were crucial in their support of the Afghan government.
When President Donald Trump signed an agreement with the Taliban in 2020,
both NATO and American troops were withdrawn from Afghanistan. What
followed was an immediate fall in the Afghan government at the hands of the
Taliban. Despite the two decades NATO spent in Afghanistan, no long term
solution was reached, and without their presence, the nation’s former
government could not survive.
3. Right-Wing Nationalism: With the spread of right-wing nationalism across
Europe, discontent with international institutions like NATO and the EU grows.
If right-wing nationalist movements continue to increase in popularity across
Europe, there could be increased calls for countries to leave institutions like
NATO. The challenge NATO faces now is how to combat and address their
criticism, and how to unify a divided Europe.
4. Russian Aggression: Despite supposed verbal promises to Russia that it would
not expand to the east, NATO has admitted several former Warsaw Pact
 members since the fall of the Soviet Union. Now, with NATO members
bordering Russia and the promise of further expansion, Russia feels
increasingly threatened. The possibility of Ukraine joining NATO has been
cited as a significant reason for Vladmir Putin’s invasion of the country.

The Future of NATO

As the war in Ukraine continues, NATO is more relevant now than it has been
in decades. NATO plays a role in distributing military and humanitarian aid to
Ukraine, and the alliance will be influential in the outcome of the war. NATO
serves as a means of collective defense and security against Russia and the
increasing threat to international order that they represent. With debates
over how NATO can best assist Ukraine, and how to best avoid conflicts such
as this in the future, NATO will have to revisit its current deterrence strategy
in the upcoming years. Also at play is the growing role of China on the world
stage. NATO must consider that the world does not revolve solely around the
Euro-Atlantic region, and address questions about its role outside this region
and across the globe. NATO continues to be essential towards not only the
security of its members including the United States, but to the world.

The European Union (EU) is a political and economic union founded in the
aftermath of World War II. The mass violence of the war left many Europeans
feeling unsure of the future of the continent. With calls for cooperation
increasing, new organizations sprung up across Europe in an effort to foster
trust between nations and prevent war from breaking out again. These
organizations formed the basis of what eventually became known as the EU
in 1993. The union’s principal goals are the promotion of peace, freedom,
security and justice for its citizens, as well as greater economic stability and
growth within its market.

The EU is divided into four main institutions: the European Commission, the
European Parliament, the Council of the European Union and the European
Council. The European Commission is the executive body of the EU—they
propose new laws and ensure these laws are properly implemented if they
are approved. The Council of the European Union and the European
Parliament discuss, and adopt or reject, new laws. The key difference
between the two organizations is that the European Parliament represents
citizens of the EU, and is made up of democratically elected representatives,
while the Council of the European Union represents the governments of EU
members, and is made up of national ministers appointed by their country.
The European Council is made up of political leaders of EU member countries
and is responsible for defining the goals and overall priorities of the EU.
The EU, as of 2022, has twenty-seven member countries. Several other
countries are part of trade deals or other alliances with the EU and several
other countries are considered candidates for membership.

Successes

1. Post-WWII: After WWII, Europe was fractured. Western European

countries sought to establish and strengthen relationships with each
other. The EU, in its earliest forms, accomplished its difficult goal of
reconciliation and unity between member nations through various
trade deals and intergovernmental organizations. To this day, no two
EU member nations have ever been engaged in an armed conflict
against one another.
2. Economic Cooperation: The EU is the world’s largest single market. The
vast majority of trade barriers between EU member states have been
removed, allowing for the free movement of goods, services, capital
and people across the organization’s borders. This allows for greater
economic competition and promotes economic growth. However, it can
be challenging to balance competing economic interests among
member states, especially when it comes to monetary policy. Disputes
occur when some nations are experiencing inflation and others are
experiencing sluggish economic growth, which traditionally require
different monetary responses.
3. Unified European Identity: The EU not only creates a forum discussion,
it unifies the continent politically and economically. All citizens of
member nations of the EU are considered EU citizens, uniting people
from across the continent under a set of rights, which guarantee them
equal treatment no matter which EU state they are in. EU citizens’
rights are guaranteed in their Charter of Fundamental Rights and
include a wide range of privacy, employment, consumer and human
rights, as well as the right to vote in European Parliament elections.
4. Activism: The EU has taken a staunch stance against injustice and
inequality, both within their borders and beyond. The EU
provides aid for millions across the globe, and collectively, the union
and its member countries are the largest donor of humanitarian aid in
the world. The EU has several programs providing food, shelter, water,
healthcare and other forms of stability for more than eighty countries.
The EU won the Nobel Peace Prize in 2012.

Failures

1. Democratic Legitimacy: While EU citizens vote in EU Parliament

elections, most EU representatives are not democratically elected. In
addition, voter turnout for EU Parliament elections has been
decreasing since the Parliament was created and in 2019,
only 50.66% of eligible EU voters participated. Many still believe that it
 fails to represent the average EU citizen and that it is not being held
accountable for its decisions.
2. Yugoslav Wars: With the collapse of Yugoslavia in the early 1990s, the
EU was faced with its first major crisis since the end of the Cold War.
The early peace negotiations organized by the EU were mismanaged
and unorganized, and the EU failed to end the fighting or find a
solution to the conflict. This was largely due to continual disagreement
among member states, which also led to delays in military and
humanitarian aid. The lack of a unified policy ultimately exacerbated
the wars, leading to longer conflict, a larger death toll, and greater
economic and material damages.
3. Right-wing Nationalism: In recent years right-wing parties have gained
influence across Europe. A central focus of many of these parties is the
maintenance of their state identity and interests, or nationalism.
International organizations, like the EU, often do not align with
countries’ national interests. Euroscepticism, or political opposition to
the EU, has increased in recent years in countries such as France,
Poland and Hungary. Nationalism was also a central reason for
the United Kingdom’s decision to leave the EU. These sentiments
threaten the credibility and stability of the union, and by failing to
address them, the EU, and its place in Europe is weakened.
4. Covid-19: The health policy of the EU in response to the global Covid-
19 pandemic was somewhat successful in its economic response, but
largely a failure in terms of healthcare — specifically their vaccine
rollout. Vaccine distribution across the EU was slow and poorly
coordinated. This led to an increased death toll and greater economic
loss.

The EU and the United States

The European Union and the United States have a close relationship defined
by peace and cooperation. Relations between the two are further
strengthened by the existence of NATO, which includes many of the
same members of the EU, and the United States. The U.S. and the EU are
the largest economic and military powers in the world, dominating trade and
leading many global diplomatic and political discussions. What the EU does
therefore greatly impacts the United States—and vice versa. In order to
facilitate this relationship, members of the EU Parliament and the U.S. House
of Representatives meet biannually to discuss a wide range of topics from
foreign affairs to cyber security. This is known as the Transatlantic
Legislators Dialogue, and it allows both delegations to establish a united
statement and policy on certain issues.

The Future of the EU

As the Ukraine War continues, the EU enters a new challenge. The war has
become something for the EU to rally against, and has patched up some of
the divides created by growing Euroscepticism across the continent.
However, the EU’s response has still been lacking. Because all EU decisions
must be agreed upon by all members, and some nations—notably Hungary—
remain staunchly against stricter sanctions for Russia, the EU’s
overall economic response has been weak.

Beyond the war in Ukraine, the EU will have to face many additional
challenges in the coming years. With threats to leave by member nations
like Hungary, the EU may see more countries depart like the UK. The EU will
also be tasked with addressing issues of immigration, inflation, climate
change and healthcare. The EU’s response to these concerns as well as the
Ukraine War will define their future status.

The African Union (AU) is the premier international organization on the African continent. The Addis
Ababa–based organization brings together 54 independent African countries and Western Sahara to
promote continental political unity, security cooperation, and economic integration and to enhance
African agency on the world stage (Karbo & Murithi, 2018). Analytically, the AU has been conceptualized
as a three-dimensional (3D) or tripartite organization, comprising governments, international
bureaucrats, and outisiders (i.e., actors and institutions that are not formal members of the AU but
whose ideas and views shape practices, directions, priorities, and policies of the pan-African
organization (Tieku, 2018). Many of the AU outisiders are nongovernmental actors such as think tanks,
academics, independent consultants, transnational civil society groups, and independent commissions.
but some governmental agencies, such as the Chinese and American missions in Addis Ababa, as well as
international organizations (IOs), including the European Union (EU) and the United Nations (UN), are
major drivers of AU decisions, priorities, and policies.

Successes Insights drawn from several areas show the successes of the AU, but for the purposes of
brevity and clarity, here I examine seven areas where the AU has made inroads. The successes include
the enhancement of African agency on the world stage; the socialization of the majority of the African
political class to accept democracy and liberal values as the foundation for international cooperation in
Africa; the establishment of progressive and liberal rules; the creation of many useful norms regulating
state behavior; and the establishment of decision-making structures that have contributed to the
prevention, management, and resolution of conflicts in Africa. Enhancing African Agency The AU has
enhanced the agency of African states, governments, and political class in the international arena in
many ways. First, the AU serves as a forum for African governments to coordinate their policies and
decisions on key international issues. It does this by convening summits every winter and summer for
representatives of African states to discuss pertinent African as well as global issues and, if possible, take
a common position. These summits are often used by individual African states, groups of states, and by
African political class as a collective to mobilize regional and international support for a cause. The cause
can be setting the agenda for other international organizations such as the UN to address an issue of
concern to Africa or protecting member governments and governing elites of Africa from abuse by
powerful states in the international system or fighting perceived injustices against Africa as a whole or
exposing and/or addressing great power hypocrisy. The activism of the AU is largely responsible for the
discussions

The Association of Southeast Asian Nations (ASEAN) has come a long way
since its establishment in 1967. It has achieved remarkable progress in
economic integration, regional security, and cultural cooperation, but it has
also faced significant challenges along the way. This article explores
the Achievements And Failures Of Asean, providing insights into its journey
towards regional unity and its impact on the global stage.

Economic Integration: A
Symphony of Growth and
Disparity
One of ASEAN’s most notable achievements has been its remarkable
economic growth. The region has experienced sustained economic
expansion, fueled by trade, investment, and tourism. The ASEAN Free Trade
Area (AFTA) has facilitated tariff reductions and trade liberalization,
promoting intra-regional trade and investment. The establishment of the
ASEAN Economic Community (AEC) in 2015 further aimed to create a single
market and production base, enhancing competitiveness and attracting
foreign direct investment.

“ASEAN’s economic integration has played a crucial role in lifting millions out
of poverty and fostering regional prosperity. However, it has also
exacerbated economic disparities between member states.” – Dr. Minh Tran,
Economist, ASEAN Economic Research Institute

However, the economic landscape is not without its challenges. The region
faces persistent income inequality, with some member states enjoying
greater economic success than others. Infrastructure disparities remain a
significant obstacle, hindering connectivity and economic development.
Moreover, the region’s dependence on global markets makes it vulnerable to
external economic shocks, as witnessed during the 2008 global financial
crisis.
Regional Security: Navigating a
Complex Geopolitical Landscape
ASEAN has played a pivotal role in promoting regional security and stability.
The organization has adopted a policy of neutrality and non-interference in
the domestic affairs of its member states, fostering dialogue and cooperation
among countries with diverse political systems. The ASEAN Regional Forum
(ARF) provides a platform for security dialogue among ASEAN member states
and other regional partners, contributing to conflict prevention and
resolution.

“ASEAN’s commitment to regional security has been crucial in maintaining

peace and stability in a region prone to political tensions and territorial
disputes.” – Mr. David Lee, Security Analyst, Institute of Southeast Asian
Studies

Despite its efforts, ASEAN faces significant security challenges. Territorial

disputes in the South China Sea continue to strain regional relations and
pose a threat to maritime security. The rise of transnational crime, including
terrorism and human trafficking, necessitates greater regional cooperation
and intelligence sharing. The growing influence of external powers in the
region also demands careful navigation and strategic engagement.

Cultural Cooperation: Celebrating

Diversity and Fostering Unity
ASEAN’s cultural diversity is a source of richness and vibrancy. The region
celebrates a multitude of languages, religions, traditions, and artistic
expressions. The organization has promoted cultural exchange through
programs and initiatives aimed at fostering understanding and appreciation
for the diverse cultural heritage of its member states. The ASEAN Cultural
Fund supports projects that promote cultural preservation, education, and
artistic collaboration.

“ASEAN’s commitment to cultural cooperation has played a vital role in

bridging cultural divides and promoting a sense of shared identity among its
people.” – Ms. Maya Devi, Cultural Anthropologist, ASEAN Cultural Heritage
Center

However, cultural diversity can also present challenges. Linguistic and

religious differences can sometimes create communication barriers and
social tensions. The preservation of traditional cultures in the face of
globalization and modernization requires ongoing efforts to ensure the
sustainability of cultural heritage.

Future Outlook: Embracing

Opportunities and Addressing
Challenges
Looking ahead, ASEAN faces both opportunities and challenges. The region
has the potential to become a global economic powerhouse, harnessing its
growing middle class, abundant natural resources, and strategic location.
The growing demand for digital technology presents opportunities for
innovation and economic diversification.

“ASEAN’s future hinges on its ability to overcome its internal divisions and
address the growing regional and global challenges.” – Mr. Nguyen Tran,
Political Scientist, ASEAN Studies Center

However, ASEAN must address its internal challenges, including persistent

poverty, inequality, and infrastructure gaps. The region also needs to adapt
to the changing geopolitical landscape, navigate the complexities of the
digital age, and address the challenges of climate change.

The Organization of American States (OAS or OEA; Spanish: Organización de los

Estados Americanos; Portuguese: Organização dos Estados
Americanos; French: Organisation des États américains) is an international
organization founded on 30 April 1948 to promote cooperation among its member states
within the Americas.

Headquartered in Washington, D.C., United States, the OAS is a "multilateral regional

body focused on human rights, electoral oversight, social and economic development,
and security in the Western Hemisphere", according to the Council on Foreign
Relations.[1] As of November 2023, 32 states in the Americas are OAS members.

Luis Almagro of Uruguay was inaugurated as OAS secretary general in 2015. His term
ends in May 2025 and Albert Ramdin of Suriname has been elected as his successor.[

Goals and purpose

[edit]
In the words of Article 1 of the Charter, the goal of the member nations in creating the
OAS was "to achieve an order of peace and justice, to promote their solidarity, to
strengthen their collaboration, and to defend their sovereignty, their territorial integrity,
and their independence." Article 2 then defines eight essential purposes:

 To strengthen the peace and security of the continent.

 To promote and consolidate representative democracy, with due respect for
the principle of non-intervention.
 To prevent possible causes of difficulties and to ensure the pacific settlement of
disputes that may arise among the member states.
 To provide for common action on the part of those states in the event of aggression.
 To seek the solution of political, judicial, and economic problems that may arise
among them.
 To promote, by cooperative action, their economic, social, and cultural development.
 To eradicate extreme poverty, which constitutes an obstacle to the full democratic
development of the peoples of the hemisphere.
 To achieve an effective limitation of conventional weapons that will make it possible
to devote the largest amount of resources to the economic and social development
of the member states.
Over the course of the 1990s, with the end of the Cold War, the return to democracy
in Latin America, and the thrust toward globalization, the OAS made major efforts to
reinvent itself to fit the new context. Its stated priorities now include the following:

 Strengthening democracy: Between 1962 and 2002, the Organization sent

multinational observation missions to oversee free and fair elections in the member
states on more than 100 occasions. The OAS also works to strengthen national and
local government and electoral agencies, to promote democratic practices and
values, and to help countries detect and defuse official corruption.
 Working for peace: Special OAS missions have supported peace processes
in Nicaragua, Suriname, Haiti, and Guatemala. The Organization has played a
leading part in the removal of landmines deployed in member states and it has led
negotiations to resolve the continents' remaining border disputes
(Guatemala/Belize; Peru/Ecuador). Work is also underway on the construction of a
common inter-American counter-terrorism front.
 Defending human rights: The agencies of the inter-American human rights system
provide a venue for the denunciation and resolution of human rights violations in
individual cases. They also monitor and report on the general human rights situation
in the member states.
 Fostering free trade: The OAS is one of the three agencies currently engaged in
drafting a treaty aiming to establish an inter-continental free trade
area from Alaska to Tierra del Fuego.
 Fighting the drugs trade: The Inter-American Drug Abuse Control Commission was
established in 1986 to coordinate efforts and cross-border cooperation in this area.
 Promoting sustainable development: The goal of the OAS's Inter-American Council
for Integral Development is to promote economic development and combating
 poverty. OAS technical cooperation programs address such areas as river basin
management, the conservation of biodiversity, preservation of cultural diversity,
planning for global climate change, sustainable tourism, and natural disaster
mitigation.

The GCC was established in 1981 to congregate six relatively culturally homogenous states in Western
Asia – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The council has
multifaceted ambitions, and a central pillar of its foundation is economic cooperation. Despite the great
degree of homogeneity between the GCC member state’s economies, or because of it, the council was
founded to increase economic cooperation and even integration among the states. The earliest notable
achievement toward economic cooperation is the GCC Free Trade Area of 1983 and a much-needed first
step towards abandoning customs charges between the member states. Through this agreement, the
relatively homogenous GCC economies quadrupled trade between them in under two decades. In 2001,
the council signed an ‘Economic Agreement,’ which was quickly upgraded to a more concrete ‘Customs
Union’ in 2003, to abolish all trade barriers between the states and to increase the flow of goods
between the six nations.

The most important political objectives of the GCC can be summed up as follows:

During the eighties of the twentieth century, the most important GCC political and strategic objectives
focused on the GCC stability and security through facing the causes of instability and the sources of
threat mainly posed by the Iraq-Iran war, which required collective action by the GCC States to avoid
expansion of the war, and contribute towards reaching a cease fire.

In the nineties, the aggression by the former Iraqi regime against the State of Kuwait and the
subsequent occupation of the country, posed the most serious security challenge ever encountered
since the establishment of the GCC. Therefore, the liberation of Kuwait was the top priority of the GCC
then. After the war, intensive diplomatic common action was needed to support the United Nations
seeking to force Iraq to implement relevant resolutions of the Security Council.

Supporting the United Arab Emirates in exercising its right, through all peaceful means, to restore its
sovereignty over the its islands: the Greater Tunb, the Lesser Tunb, and Abu Musa, which have been
occupied by Iran since 1971 .

Within the Arab framework, the GCC Member States adopted collective action to support the Arab
issues and causes; the Palestinian issue being first priority, and the peace process in the Middle East.
Supporting and enhancing Islamic issues.

The most important achievements in the field of external policy Contribution to the containment and
termination of the Iraqi-Iranian war The Iraq-Iran war was at its first year when the GCC was established
and it was the concern of the sessions of the Supreme Council since the first Summit that was held on
my 1981, in Abu Dhabi. The GCC States used all their political and moral potentials to find a way out of
that bloody war, which inflicted substantial human and material losses on both sides and disturbed
regional security. Within the Arab framework, the GCC action came up with the seven-lateral committee
that was formed for reaching a cease-fire.

At the international level, the political efforts of the GCC States contributed to highlighting the war and
seeking the means for reaching a solution. Those efforts resulted in the issuance of the Security Council
Resolution No.540 in October 1983 that called for the immediate suspension of military operations in
the Gulf and avoiding targeting the vessels, economic installations and ports. Security Council Resolution
No.552 followed in June 1984, in response to a claim made by the GCC States against the attacks at the
commercial vessels navigating from and to the ports of the Kingdom of Saudi Arabia and the State of
Kuwait. The said resolution stressed the right of navigation in the territorial waters and marine routes
from and to the ports and installations of countries that were not parties in the war acts. Finally, the
GCC States effectively contributed to the issuance of the Security Council Resolution No.598 (July 1987),
an historical resolution which put an end to that destructive war after being accepted by both parties