Question

Describe the roles of the World Bank (WB), International Monetary Fund (IMF), and World Trade Organization (WTO) in the acceleration of globalization.

Answer 1

The IMF and WTO work is complimentary. To promote vibrant foreign trade, a stable international financial system is required as smoothly flowing trade helps reduce the risk of payment imbalances and financial crisis. The two agencies are working closely to ensure a stable foreign exchange and payment system which is available to all countries. Such a program is vital to promoting economic development, rising living standards and reducing global poverty.

Technical assistance and training: The IMF, WTO and other international organizations and donors regularly work together to help countries develop their trading ability. The Enhanced Integrated Framework (EIF) for Least Developed Countries (LDCs) trade-related technical assistance helps LDCs to become more involved players in the global trading environment by helping them overcome supply-side trade constraints.

The WTO agreements mandate that it consult with the IMF as it deals with issues related to monetary reserves, balance of payments and plans for foreign exchange. For example, in the event of balance of payments problems, these agreements allow countries to impose trade restrictions. The WTO's Balance of Payments Committee based its restriction judgments on the IMF's evaluation of the balance of payments situation of a member in a considerable portion.

By providing customers more affordable goods and services, free trade brings substantial, yet ignored benefits to lower-income households. Trade will help slash food costs for the severe poor. Trade will build jobs for women, and increase girls 'opportunities to stay in school.

Developing countries also struggle with indirect factors impeding their access to global markets, such as anti-competitive business practices, regulatory conditions unfavorable to business growth and investment, or limited infrastructure capability. Only a country with a free and open trade policy loses if its markets are not linked, and many of the world's poorest people live in areas where foreign trading ties are landlocked, remote or otherwise ill-served. Through addressing these obstacles, the World Bank Group helps its member countries increase their access to developed country markets and strengthen their participation in the world economy.