Important International Institutions, Agencies and Fora – Their Structure, Mandate

What are the Important International Institutions, Agencies and Fora? Read to know more about their structure and mandate.

What are international institutions?

What is the difference between International Non-governmental organizations and International organizations?

What are the important International Economic Organizations?

Read to know more.

Important International Institutions, Agencies and Fora

Organizations, like the United Nations, the World Health Organization, and NATO, may be created by a treaty or be a tool governed by international law and endowed with its legal personality.

International organizations are composed of primarily member states, but may also include other entities, such as other international organizations, firms, and nongovernmental organizations. Additionally, entities (including states) may hold observer status.

Notable examples include the United Nations (UN), Organization for Security and Co-operation in Europe (OSCE), Bank for International Settlements (BIS), Council of Europe (COE), International Labour Organization (ILO) and International Criminal Police Organization (INTERPOL).

What are international institutions?

An international organization includes members from more than one nation. Some international organizations are very large, such as corporations. Others are small and dedicated to a specific purpose, such as the conservation of a species. Many international organizations are intergovernmental.

International organizations can function for the aggregation and articulation of the national interests of its members into the international system. Thus, they bring the interested states into the same framework to articulate their interests into the world society.

Difference between International Non-governmental organizations and International organizations

The following are the differences between international NGOs and International organizations.

Nongovernmental organizations (INGOs)

• Non-governmental organizations (NGOs) that operate internationally. These include international non-profit organizations and worldwide companies such as the World Organisation of the Scout Movement, and the International Committee of the Red Cross.

International organizations, also known as International Governmental Organizations (IGOs)

• The type of organization most closely associated with the term international organization. These are organizations that are made up primarily of sovereign states. Notable examples include the United Nations (UN), Organisation for Security and Cooperation in Europe (OSCE), Council of Europe (COE), International Labour Organisation (ILO), and International Police Organisation (INTERPOL).
• The UN has used the term “Intergovernmental organization” instead of “international organization” for clarity.

Important International Economic Organizations

The following are the important economic organizations.

Bretton Woods Institutions

The following are the Bretton Woods institutions.

World Bank Group (WBG)

• The World Bank Group (WBG) is a family of five international organizations that make leveraged loans to developing countries. It is the largest and most famous development bank in the world and is an observer at the United Nations Development Group.
• Its five organizations are the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).

International Bank for Reconstruction and Development or the World Bank

• The International Bank for Reconstruction and Development (IBRD), better known as the World Bank, was established at the same time as the International Monetary Fund to tackle the problem of international investment.
• Since the IMF was designed to provide temporary assistance in correcting the balance of payments difficulties, an institution was also needed to assist with long-term investment purposes. Thus, IBRD was established to promote long-term investment loans on reasonable terms.
• The World Bank (IBRD) is an inter-governmental institution, corporate in form, whose capital stock is entirely owned by its member governments. Initially, only nations that were members of the IMF could be members of the World Bank; this restriction on membership was subsequently relaxed.

The International Development Association (IDA)

• The International Development Association (IDA) is part of the World Bank Group that helps the world’s poorest countries. Overseen by 173 shareholder nations, IDA aims to reduce poverty by providing loans (called “credits”) and grants for programs that boost economic growth, reduce inequalities, and improve people’s living conditions.
• IDA complements the World Bank’s original lending arm—the International Bank for Reconstruction and Development (IBRD). IBRD was established to function as a self-sustaining business and provides loans and advice to middle-income and credit-worthy poor countries. IBRD and IDA share the same staff and headquarters and evaluate projects with the same rigorous standards.

 International Finance Corporation (IFC)

• The IFC was established in 1956 to support the growth of the private sector in the developing world. The IFC’s stated mission is “to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives.”
• While the World Bank (IBRD and IDA) provides credit and non-lending assistance to governments, the IFC provides loans and equity financing, advice, and technical services to the private sector. The IFC also plays a catalytic role, by mobilizing additional capital through loan syndication and by lessening the political risk for investors, enabling their participation in a given project. The IFC has worked with more than 3319 companies in 140 countries since its inception in 1956.

The Multilateral Investment Guarantee Agency (MIGA)

• It is an international financial institution that offers political risk insurance and credit enhancement guarantees. Such guarantees help investors protect foreign direct investments against political and non-commercial risks in developing countries. MIGA is a member of the World Bank Group and is headquartered in Washington, D.C., United States.
• It was established in 1988 as an investment insurance facility to encourage confident investment in developing countries. MIGA’s stated mission is “to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives”. It targets projects that endeavor to create new jobs, develop infrastructure, generate new tax revenues, and take advantage of natural resources through sustainable policies and programs.

International Monetary Fund (IMF)

• The World Bank and the IMF perform different functions, but they are often confused with each other either concerning their functions or with their operation.
• The International Monetary Fund functions The IMF is a lending institution that gives advances to members in need, It is the mentor of its members’ monetary and exchange rate policies and maintains the stability in the Exchange rate system around the World.

Asian Development Bank (ADB)

• Asian Development Bank (ADB) was set up to fight poverty in Asia and the Pacific. ADB is a multilateral development finance institution dedicated to reducing poverty in Asia and the Pacific. Established in 1966, ADB is now owned by 63 members, mostly from the region.  The headquarters is in Manila with 24 other offices around the world.

The New Development Bank (NDB)

• The New Development Bank (NDB) was established by The BRICS states (Brazil, Russia, India, China, and South Africa). According to the Agreement on the NDB, “the Bank shall support public or private projects through loans, guarantees, equity participation, and other financial instruments.” Moreover, the NDB “shall cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank.
• The initial authorized capital of the bank is $100 billion divided into 1 million shares having a par value of $100,000 each. The initial subscribed capital of the NDB is $50 billion divided into paid-in shares ($10 bln) and callable shares ($40 bln). The initial subscribed capital of the bank was equally distributed among the founding members. The Agreement on the NDB specifies that the voting power of each member will be equal to the number of its subscribed shares in the capital stock of the bank.
• The bank is headquartered in Shanghai, China. The first regional office of the NDB will be opened in Johannesburg, South Africa.

Asian Infrastructure Investment Bank (AIIB)

• India is preparing to start a large number of infrastructure projects, but they’re short of money, so they need help from China. Of course, they can get money from ADB or WB, but they also need to find a balance between China and the USA.
• It’s a great chance to develop economic links between India and China. These two countries both have a huge market, and they also keep a rapid growth of the economy.
• Though AIIB is a Chinese-led financial institution, India is welcome to play an important role in it. It’s the reason why the UK, Germany, and France all want to be a member of AIIB.

World Trade Organization (WTO)

• World Trade Organization, as an institution was established in 1995. It replaced the General Agreement on Trade and Tariffs (GATT) which had been in place since 1946. In pursuance of World War II, western countries came out with their version of development, which is moored in the promotion of free trade and homogenization of the world economy on Western lines. This version claims that development will take place only if there is seamless trade among all the countries and there are minimal tariff and non-tariff barriers.
• That time along with two Bretton Wood institutions – IMF and World Bank, an International Trade Organization (ITO) was conceived. ITO was successfully negotiated and agreed upon by almost all countries. It was supposed to work as a specialized arm of the United Nations, toward the promotion of free trade. However, the United States along with many other major countries failed to get this treaty ratified in their respective legislatures and hence it became a dead letter.

Read to know more about International Affairs,  UN agencies, and other Important international institutions.

Article written by Aseem Muhammed