International Economic Organization
Economics S.S.S 3 Second Term
WEEK 5
International Economic Organization
Performance Objectives
Student should be able to:
- Discuss the contributions of IMF, IBRS, ECA, etc to the economic growth and development of Nigeria.
Content
Meaning of International Economic Organization
International economic organization refers some groups of organizations with a common interest and goals, with a view of promoting economic co-operation and development among member state, to promote and protect the economic and business interest of members, and to stimulate the socio-economic and cultural development among their members. They include Economic Community of West African States (ECOWAS), International Monetary Fund (IMF), International Bank for Reconstruction and Development (IBRD), African Development Bank (ADB), European Economic Community (EEC), Organization of Petroleum Exporting Countries (OPEC), United Nations Conference on Trade and Development (UNCTAD), Economic Commission of Africa (ECA), West African Clearing House (WACH) etc.
Economic Community of West African States (ECOWAS)
The Economic Community of West African States (ECOWAS) was founded on 28th May 1975 in Lagos, Nigeria. It comprised all the 16 independent nations of West Africa. Abuja is the administrative headquarters of the community and Lome, the fund headquarters. Nigeria, under the leadership of General Yakubu Gowon and Togo under President Eyadema, initiated the formulation of the sub-regional economic grouping. Nigeria, Ghana, The Gambia, Sierra Leone and Liberia are the English speaking or Anglophone countries. Senegal, Guinea, Togo, Mali, Benin Republic, Burkina Faso, Cote de Ivoire, Mauritania and the Niger Republic are French-speaking or Francophone countries while Cape Verde and Guinea Bissau are Busophone or Portuguese speaking countries.
Aims and objectives of ECOWAS
1. Trade Liberalization: One of the aims of ECOWAS was the establishment of a common market to liberalize trade within the region.
2. To abolish trade barriers and restrictions: One of the aims of ECOWAS as an economic as to abolish trade barriers among the member nations.
3. To foster closer relations: This can be achieved by encouraging free movement of citizens, goods and services.
4. To raise the standard of living: ECOWAS was also designed to promote and raise the standard of living of the people through cooperation within the sub-region.
5. Establishment of common funds: The need for the establishment of this fund is for compensation, cooperation and development within the sub-region.
6. Development of the African continent: It is also aimed at encouraging the process and development of the African continent.
7. Poverty reduction: To reduce poverty in West Africa by working towards having variable economies.
Economic Commission for Africa (E.C.A)
The Economic Commission for Africa (E.C.A) also known as the United Nations Economic Commission for Africa was established in 1957 with its headquarters in Addis Ababa, Ethiopia. It is an organ of the United Nations Organization (UNO). Its major aim is to promote the social and economic development of Africa.
Objectives and role of ECA
1. To promote regional economic cooperation.
2. To accelerate economic growth and integration of Africa.
3. To ensure the economic development of the African continent.
4. To create uniformity where possible and fashion out economic policies for the African continent.
5. To embark on manpower training and development for the entire African continent.
International Monetary fund (IMF)
The International Monetary Fund (IMF) was set up after the Second World War, to encourage the development of foreign trade. It began operation in 1947 with headquarters in the United States of America.
The IMF was established as a result of proposals adopted at an international conference held at Bretton Woods in 1945. At present, it has about 188 member countries; South Sudan is currently the youngest country to join the IMF in April 2012. IMF was established to encourage the balance of payment equilibrium and to stabilize the exchange rate among member countries.
Objectives and roles of IMF
1. To make fund available to member to finance balance of payments deficit.
2. To establish and stabilize the exchange rate among member countries.
3. To encourage the development of international trade.
4. To promote co-operation among member countries on financial matters.
5. To make recommendations to members concerning economic policies to be adopted.
International Bank for Reconstruction and Development (IBRD)
The international bank for reconstruction and development (IBRD) popularly known as World Bank, was established in 1944 at the same time with the IMF at Betton Woods. Its headquarters are in Washington, United States of America. Its capital was subscribed by members of the IMF on a quota basis, thus membership was restricted to the IMF member countries alone. The World Bank started with 45 members at the beginning and as of 1992, membership has risen to 178 nations.
Objective and roles of IBRD
1. Granting long term loans for infrastructural development.
2. Giving expert advice on development problems
3. Provision of experts to solve development problems
4. Provision of training experts.
5. It makes available the experience of other countries.
6. To develop the productive resources of member nations.
African Development Bank (ADB)
African Development Bank was established in 1964 with its headquarters in Abidjan, Cote d’Ivoire. It is a bank owned by African countries, which belonged to the organization of African Unity (O.A.U), now the African Union. The ADB was jointly set up by the effort of the O.A.U and Economic Commission for Africa (ECA). It started full operations in 1966, with an initial membership of 23 African countries and as at 1970 membership had risen to 31.
Objectives and roles of ADB
1. Provision of loans to aid the social and economic development of member- nations.
2. Provision of technical assistance for development projects and programmes embarked upon by member-nations.
3. It fosters economic integration among member-nations
4. Provision of fund for the supply and development of infrastructural facilities such as electricity, water, transport and telecommunications.
5. Provision of fund for the agricultural development of member-nations.
West African Clearing House (WACH)
The West African Clearing House (WACH) was established in June 1975 with its headquarters in Freetown, Sierra Leone. It has English and French as the official working languages. WACH is a multi-lateral clearing house which comprises 15 member central banks of West African states of Nigeria, Republic of Benin, Cote d'Ivoire, Niger, Senegal, Togo, Burkina Faso, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania and Sierra Leone.
Objectives and roles of WACH
1. To promote the use of members national currencies for intra-sub-regional transactions.
2. To bring about savings in the use of foreign reserves.
3. To promote monetary co-operation in the sub-region.
4. To encourage trade liberalization.
General Agreement on Tariffs and Trade (GATT)
In 1974, representatives from twenty-three countries signed a general agreement in Geneva, intending to maintain trade by removing trade barriers among themselves. Since that time, many countries have joined the agreement.
Objectives and roles of GATT
1. To improve the possible unfavourable situation in any member country.
2. To remove or reduce trade barriers between member countries.
3. To promote international confidence in tariff policies trough consultation between member nations.
Organization of petroleum exporting countries (OPEC)
The Organization of the Petroleum Exporting Countries (OPEC) is a group consisting of 14 of the world’s major oil-exporting nations. OPEC was founded in 1960 to coordinate the petroleum policies of its members and to provide member states with technical and economic aid. OPEC is a cartel that aims to manage the supply of oil to set the price of oil on the world market, to avoid fluctuations that might affect the economies of both producing and purchasing countries. Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela (the five founders), plus the United Arab Emirates, Libya, Algeria, Nigeria, Gabon, Ecuador, Indonesia, Libya, Qatar. The organization’s secretariat is in Vienna, Austria.
Objectives and roles of OPEC
1. To coordinate & unify the petroleum policies of member countries and to determine the best means for safeguarding their individual and collective interests;
2. To seek ways and means of ensuring the stabilization of prices in international oil markets to eliminate harmful and unnecessary fluctuations; and
3. To provide an efficient economic and regular supply of petroleum to consuming nations and a fair return on capital to those investing in the petroleum industry
4. It fixes and allocates production quota to member nations.
5. Encouragement of member nations to participate in the oil exploration.
United Nations Conference on Trade and Development (UNCTAD)
The UNCTAD was established in 1964 with its headquarters in Geneva Switzerland. It was created as an organ of the United Nations by a resolution passed by the United Nations Organization (UNO). This was in response to a call to the UNO by the developing nations, to convene a meeting to discuss their growing international trade problems and their poor level of development, and the wide gap between the standard of living of the advanced and the underdeveloped countries. The first conference was held in Geneva, Switzerland in 1968, and the second in New Delhi, India in 1978.
Objectives and roles of UNCTAD
1. To assist in solving the international trade problems of the underdeveloped countries.
2. It also helped to solve the increasing balance of payments difficulties of developing countries.
3. To aid the increase in the pace of economic development of underdeveloped nations, to reduce the gap between them and the rich countries in the world.