Economy 11: Global Economic Institutions Video Lecture | General Knowledge (GK) for LIC AAO Exam (English) - Banking Exams

hello I'm gonna Sharma from impose I'd
calm and in this lecture we shall study
about international institutions which
have affected the global economy going
through the history we see that the
economy of the world was initially based
upon primarily mercantilism and with
certain global powers were bent upon
having colonialism and imperialism as
their foreign policy but we see that
there was a change after the Second
World War in which they were certainly
international institutions like World
Bank and IMF which give effect to the
changing world order which were very
essential in globalizing the world
economy but again they were certain
drawbacks of such international
institutions and some leader who leaders
like Kwame Nkrumah
and so had also claimed that such
institutions are only propagating
neocolonialism so again they were
certain developing nations like bricks
that is Brazil Russia India China and
South Africa they formed a new
Development Bank which was called
succour last BRICS Bank and again there
was another integer international
institution that was called as Asia
infrastructure investment bank so a we
began after the first world war the
major institutions that the origin can
be attributed towards a Content switch
channel which was held in 1944 in Petra
were New Hampshire
now the first tin ship institution was
the IMF and the World Bank which were
together called as brenton with twins
and then there was a agreement that was
called as general agreement on trade and
tariffs which eventually gave way to
World Trade Organization which came into
effect after the Marrakesh agreement in
1944 now one of the brenton were twins
was
International Monetary Fund the major
objectives of such an institution sought
to survey the international financial
systems now VF in the previous lectures
balance of payment now this it is a
record of the economic transactions of a
country with foreign or other countries
now IMF is the guiding body which guides
the monetary authorities of each country
towards having a stable monetary policy
or a foreign trade policy now this is
the primary objective of IMF and
moreover again coordination of monetary
policy with the central banks in India
which would be RBI and it is a lender of
last resort in case of a balance of
premium crisis and of course it provides
technical assistance training and
advisory towards all its members and
it's fund one of the fundamental duties
is to support global growth and
employment generation so these are the
primary objective of International
Monetary Fund now one of the very
important aspects which was originated
by the IMF in the previous lecture has
also started the currency exchange rate
and how it was determined how it evolved
from a gold standard to a double
standard and in the 1960 1970s that is
in 1967 SDR that is Special Drawing
rights came into being and eventually
fine SDR became equal to one u.s. dollar
or 0.8 grams of code this will also
called ask paper good now in the present
system when STRs and it's as a
cumulative price which has certain
currencies in its basket at present its
Dollar Euro Pound any SD ourselves not
minted but they're a part of the
interest reserve asset foreign exchange
reserves are also composed of SDR
along with gold and reserve
transposition and of course current
foreign currency asset so as DRS are a
part of the foreign exchange reserves of
which are maintained by the central
banks of each country and of course
these can be treated and moreover STS
can be used to draw money for example as
years can
we exchanged with respect to dollars
depending upon the exchange rate of
which is determined by the International
Monetary Fund and let's just briefly see
and review the working of IMF IMF
executive board decides the Kuta of each
member on basis of various parameters
including GDP and tariff barriers so the
higher the GDP the greeter Dakota and
lesser the tariff barriers again greater
Dakota now india's Kota has risen from
two point four so five to two point
seven five that is it has become that
one of the top ten kuda borders in the
world which also includes USA as well as
china the higher quota higher voting
rights and of course borrowing
permissions five largest quota holders
permanently decide five over twenty four
directors now at present the director of
IMF is Christine Lagarde she's from
France and of course eventually we see
that I am F need certain regulations
because we see that the brenton were to
it's twins
both World Bank and IMF are both
dominated by Western pass so in the
future we see that certain evolution of
certain institutions which promotes the
interests of developing and
underdeveloped countries will take place
the World Bank also came into existence
as the result of the printed wood
conference in 1944 and as they go is the
other number of the brenton were twins
now it now consists of five
organizations artists IBRD
International Bank for Reconstruction
and Development International
Development Agency now these two
basically consists consisted of the
World Bank initially now three more
organizations international finance
cooperation multilateral investment
guarantee agency and exit International
Centre for settlement of international
disputes the World Bank was IBRD
and ITA initially so
this all together is called as the World
Bank Group now the third important
economic institutions which was very
very important the to rate in order to
regulate the international trade was the
general agreement on trade and tariffs
which came into effect in 1948 but again
this was not a binding it was not a
legally binding so there was no legal
enforcement power associated with g8
ability and eventually after the Uruguay
Round WTO was came into being in order
to replace the g8 ability and Marrakesh
agreement was formed and the major
important part was that eath WTA was a
legally binding agreement on the member
countries now after the Marrakesh
agreement WT was formed and the major
objectives which were kept in mind while
forming the WTO that it should create a
transparency in world economy and should
be free and rule-based trading system
that means that it should not be biased
toward certain countries for example
developed countries of Western nations
but it should be transparent system in
which the interests of the developing
and underdeveloped countries should also
be taken care of
second the provision of common
institutional framework for the conduct
of trade relations third facilitation of
implementation administration and
administration of multilateral trade
agreements for example free trade
agreements FTAs they shall be
facilitated by the WTO and of course
provision for dispute settlement and
mechanisms trade policy review
mechanisms the major principles on which
the WTO was formed was it shall be
non-discriminatory in nature most
favored nation and national treatment
this means that the interest of each
member country shall be taken care of
and no bias shall be done and of course
market access a reduction of bindings
and tariff elimination of quantitative
restrictions of imports and exports
in the other lectures we have also
covered in the International foreign
trade we've seen that there are certain
trade barriers and/or which are also
called as tariffs and non-tariff
barriers so please have a look on that
and WTO was responsible towards creating
a globalized economy and these barriers
or futa restrictions should be reduced
such that the world trade flourishes so
in order to facilitate the International
global trade there are certain subsidies
which were classified by the WTO such
that they can be trained termed as trade
distorting or non distorting greenbook
subsidy and Blubaugh subsidy and called
as non trade distorting on the other
hand amber wok subsidies are considered
at distortionary in nature and thus are
restricted 5% for developed countries
and 10% for developing countries for a
detailed of you please watch the video
which relates to such subsidy and
foreign trade
they've already discussed that initially
though these economic institutions did
globalize the economy but eventually
they were certain problems which are
associated with this for example the
dominance of Western countries an
American citizen has always headed the
World Bank and on the other hand
International Monetary Fund was always
headed by a European and thus the
interest of these nations always were on
the main agenda of these brenton were
twins
the rise of BRICS nations of course the
most developed the most fast developing
countries formed a group called as
brakes which was Brazil Russia India
China and South Africa and of course
they had to keep their interests in mind
so therefore they formed certain
international institutions to propagate
their interest as well 40 voting system
which was based upon quota and majority
of the quota lied with the major
economic powers but skewed the
international trade in their favor
conditional loans I am a
also gave loan to India in case of
balance of payment rice of 1991 but on
the other hand and I had to open up its
market reduce its tariffs which were
very very harmful for the domestic
Indian industry and thus such
conditional loans are very harmful for
the national economies are such the
rising financing needs for developing
world we see that there are certain
limitations to which these institutions
can give loan to certain areas for
example World Bank can give a certain
khuda it for example 20 billion to the
South Asian economy and to Latin and
other African nations as well so India
on the other hand needs quite a lot of
capital and these institutions were not
able to provide that capital so we had
to look for other options for creating
capital and investment in India and thus
the BRICS nations together form a new
Development Bank now it was founded are
the 6th BRICS summit at Fortaleza
present in July 2014 the operations may
start this year the headquartered at
Shanghai the first president is kV
Kamath from India and all the five
members have equal voting rights the
major functions that were associated
with new Development Bank were the loans
for infrastructure and sustainable
development projects thus it promoted
the growth of such countries see India
always needs investment for propagation
we do not have the capital so bean we
will take you ones from new Development
Bank secondly helping member countries
in balance of payment crisis therefore
if any country faces the balance of
payment crisis we have another option of
going towards the NDB and not going for
IMF and not having certain conditions
associated with such roads the initial
subscribed capital was of 50 billion and
the contingency reserve arrangement of
hundred billion which was reserved for
balance of payment crisis to occur India
yeah South Africa yeah kisi
BRICS nation boo as he crises are giant
though they can always appeal this fund
so how many IMF s on occasion he Peggy
masa condition who made up any terrific
a tonic nahi pending gay
how may I lost my yoga Hamada to export
potential who gabumon danger connects at
them so this is the benefit of having a
new Development Bank and another Asian
institutions which came into fray was
the Asian infrastructure and investment
bank the idea of such a Bank was given
by a China there were 57 perspective
founding members the authorized
capitalist hundred billion and the
voting rights with respect to India we
have the second largest voting right
with 7.5% and China obviously has the
largest here the headquarters of I will
be meeting ok another economic
institutions which were more effective
in Europe in promoting their economy was
the European Union which came into being
after the Maastricht Treaty
Massachusetts as a place and Netherlands
it established a European Union and
European citizenship political nama
union of 28 states the economic major
economic institutions are in European
Commission the code of justice of
European Union European Central Bank and
European Parliament the monetary union
was established in 1999 and came into
force in 2002 that is establishment of a
euro zone with a common currency called
euro it has 19 members now another
economic institution which was important
with respect to India was the Asian
Development Bank which was headquarter
in Manila Philippines and as of now has
66 members
the main drawback of Asian Development
Bank was it was dominated by Japan and
India did not receive him as many loans
through ADB and thus the major functions
were loans
equity investment in member countries
technical assistance
is formulating development points so the
main a functions were similar to those
of World Bank or IMF but again but did
not get as much loans that we would have
wanted because there was a quota system
Asia under ADB can give only certain
amount of loans quantitative amount of
loans to South Asia and thus we did not
actually get too many loans from such
institutions but again as a whole it was
very important for the Asian economy
another important economic institutions
with respect to Europe is the
Organization for Economic Cooperation
and Development initially there was an
organization for European economic and
cooperation that is called the EEC which
was established in 1947 to run the
Marshall Plan now Marshall Plan was
something which was run by the Americans
USA to facilitate the unity and
propagation of NATO forces north
atlantic tito TD organization against
the soviet union this was a part of all
the cold war which was present at the
time and later in after in 1960s
transformed into
ECD that is the present form and today
it has 34 members now in this lecture we
have studied how the international
economy was influenced by international
institutions which were formed after the
Second World War
the World Bank IMF and how the changing
dynamics have led to the formation of
new Development Bank or BRICS Bank and
the AI IB and I believe that it shall be
very very important that India grows as
an economy because we have a high
enriched human resource now with this we
have completed the series on
international business environment till
we meet next time good luck work hard
and hit the bull's eye
thank you