The World Bank Group

Along with the IMF, the WBG is one of the international institutions created by the Bretton Woods agreements. With a staff of employees and consultants of around 10,000 scattered in 130 countries, the WBG comprises the Internal Bank for Reconstruction and Development (IBRD) and the associated International Development Association (IDA), as well as the International Finance Corporation (IFC). The IBRD, IDA and their subsidiaries aim to reduce poverty in the middle-income and creditworthy poorer countries. IDA focuses on the poorest countries. They assist these countries by providing both technicians and monies in a project-based approach. Credit support is made through loans and guarantees. The IFC provides credit to the private sector in poor countries and also finances infrastructure projects in any country if private finance is lacking. In 2011, $46.9 billion was lent for 303 new projects. The total of ongoing projects was 1800. In 2012, $35 billion was lent for new projects while the Multilateral International Guarantee Agency (MIGA), created in 1988, was revived to provide guarantees including political risk insurance for the financing of long-term heavy infrastructures which are difficult to finance with the banking system.

To illustrate what international monetary institutions and their financing arms have to address in terms of development, we provide in Table 7.1 a schedule of life expectancies in some major countries.

TABLE 7.1 Life expectancy in major countries

Source: CIA with exceptions (China).

The World Trade Organization

The WTO is a more recent multilateral international institution. It resulted in 1995 from the GATT (General Agreement on Tariff and Trade) and governed the execution of the 60 agreements that concluded the Uruguay round in 1994. With 159 member countries or custom unions – the latest countries joining being the Russian Federation on August 28, 2012 and in the first quarter of 2013, Laos and Tajikistan – its primary purpose is to open trade for the benefit of all. See Figure 7.1.

All WTO members may participate in all councils, committees, etc., except Appellate Body, Dispute Settlement panels, and plural-lateral committees.

To achieve its purpose, it has a statistical follow-up on international trade, conducts studies on the obstacles met and also operates on disputes.

FIGURE 7.1 WTO structure

Source: WTO website.

Major disputes creating obstacles to a level playing field are often raised at the WTO by major industries. An emblematic example is disputes about the governmental subsidies or loans to aircraft projects for aircraft manufacturers. This is the dispute between Boeing and Airbus. Currently, there are 182 dispute cases before the WTO arbitration. 27 new disputes were filed in 2012 and a big one, the “banana dispute”, was settled. The WTO also tries to assist the 30 non-member countries in meeting the conditions to join.