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Topic: International Economic Organisations
Lesson Objectives: At the end of the lesson, learners should be able to:
i. Explain international economic organisation,
ii. Explain the formation of International Monetary Fund,
iii. State the objectives and functions of International Monetary Fund,
iv. Explain the formation of International Bank for Reconstruction and Development,
v. State the objectives and functions of International Bank for Reconstruction and Development,
vi. Explain the formation of European Economic Community,
vii. State the objectives and functions of European Economic, Community
viii. Explain the formation of African Development Bank,
ix. State the objectives and functions functions of African Development Bank,
x. Explain the formation of Economic Commission for Africa,
xi. State the objectives and functions of Economic Commission for Africa,
xii. Explain the formation of United Nations Conference on Trade and Development,
xiii. State the objectives of United Nations Conference on Trade and Development,
xiv. Explain the formation of West African Clearing House,
xv. State the objectives and functions of West African Clearing House,
xvi. Explain the formation of Niger Basin Commission,
xvii. State the objectives and functions of Niger Basin Commission.
An international economic organisation may be defined as the coming together of different countries with a common economic interest and goals, with a view to promoting economic cooperation and development among member states, to protect and promote the economic and business interest of members, and to stimulate the socio-economic and cultural development among their members.
Some of the major international economic organisation include the following:
International Monetary Fund
Formation: The International Monetary Fund (IMF) was set up after the second world war, in order 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 1944. Presently, it has about 138 member countries. IMF was established to encourage balance of payment equilibrium and to stabilise exchange rate among member countries.
Objectives and Functions of IMF
i. To establish and stabilise exchange rate among member nations.
ii. To make fund available to members to financing balance of payment deficit.
iii. To make recommendations to members concerning economic policies to be adopted.
iv. To encourage the development of international trade.
v. To promote co-operation among member.
vi. To facilitate settlement of debts in foreign transactions.
International Bank for Reconstruction and Development (IBRD)
Formation: 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 Bretton Woods. Its headquarters is in Washington, United States of America. Its capital was subscribed by members of the IMF on quota basis, thus membership was restricted to the IMF member countries alone. The World Bank started with 45 members at the beginning and as at 1992, the member has rise to 178 member nations.
Objectives and Functions of IBRD
i. Granting of long term loans for infrastructure development.
ii. Giving expert advice on development problems.
iii. Provision of experts to solve development problems.
iv. Provision of training for experts.
v. Undertaking feasibility studies relating to economic development.
vi. Making available the experience of other countries.
vii. To develop the production resources of member nations.
European Economic Community (EEC)
Formation: The European Economic Community (EEC) was established by the treaty of Rome, Italy in 1957 by six European countries. These countries were France, West Germany, Italy, Belgium, The Netherlands and Luxembourg. The EEC actually became a reality on the 1st of January, 1958 after the national parliaments of the six countries ratified the Rome Treaty with overwhelming majority. Denmark, Britain and Ireland later join the EEC in 1973, thereby increasing its membership to nine.
Objectives and Functions of EEC
i. To adopt a common tariff policy.
ii. To eliminate barriers to free mobility of labour and capital between member states.
iii. To adopt a common transport policy among member nations.
iv. To eliminate trade restrictions, thereby ensuring free trade between member nations.
v. Removing existing, a balanced trade and fair competition.
vi. To strengthen the solidarity which binds European and overseas countries and to ensure the development of their economies.
African Development Bank (ADB)
Formation: African Development Bank (ADB) was established in 1964 with its headquarters in Abidjan, Cote d’Ivoire. It is a bank owned by African countries, which belonged to the Organisation of African Unity (O.A.U), now 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 initial membership of 23 African countries and as at 1970, membership had risen to 31.
Objectives and Functions of ADB
i. Provision of loans to aid social and economic development of member nations.
ii. Provision of technical assistance for development projects and programmes embarked upon by member nations.
iii. Promotion of both private and public investment in projects which contribute to the economic and social development of member states.
iv. It fosters economic integration among member nations.
v. Provision of fund for the supply and development of infrastructural facilities such as electricity, water, transport and telecommunications.
vi. Provision of fund for the agricultural development of member nations.
Economic Commission for Africa (E.C.A)
Formation: The Economic Commission for Africa also known as the United Nations Economic Commission for Africa, was established in 1958 with its headquarters in Addis Ababa, Ethiopia. It is an organ of the United Nations Organisation (UNO). Its major aim is to promote the social and economic development of Africa.
Objectives and Functions of ECA
i. To ensure the economic development of African continent.
ii. To promote regional economic co-operation.
iii. To create uniformity where possible, fashion out economic policies for African continent.
iv. To accelerate economic growth and integration in Africa.
v. To embark on manpower training and development for the entire African continent.
vi. To conduct researches in the areas of production and technology, to aid Africa in economic development.
vii. To ensure with the cooperation of O.A.U, now African Union (A.U), in the establishment of African Development Bank (ADB).
United Nations Conference on Trade and Development (UNCTAD)
Formation: 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 Organisation (UNO). This was in response to a call to the UNO by the developing nations, to convene a meeting for the purpose of discussing their growth international trade problems and their poor level of development and wide gap between the standard of living of the advanced and the underdeveloped countries. The first conference was held in Geneva, Switzerland in 1968, the second in New Delhi, India in 1968.
Objectives and Functions of UNCTAD
i. To assist in solving the international trade problems of the underdeveloped countries.
ii. It also helped to solve the increasing balance of payments difficulties of the developing countries.
iii. To also aid the increase in the pace of economic development of underdeveloped nations, in order to reduce the gap between them and the rich countries of the world
West African Clearing House (WACH)
Formation: The West African Clearing House was established in June, 1975 with its headquarters in Freetown, Sierra Leone. It has English and French as official working languages. WACH is a multi-lateral clearing house which comprises of 15-member central banks of West African States of Nigeria, Republic of Benin, Cote d’Ivorie, Niger, Senegal, Togo, Burkina Faso, The Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania and Sierra Leone.
Objectives and Functions of WACH
i. To promote the use of members national currencies for intra-sub-regional transactions.
ii. To bring about savings in the use of foreign reserves.
iii. To promote monetary co-operation in the sub-region.
iv. To encourage trade liberalisation.
Niger Basin Commission (NBC)
Formation: The Niger Basin Commission (NBC) was established by countries located in the Niger Basin to mainatain better co-operation on the use of the River Niger. The treaty establishing the commission was signed by the countries in October, 1963. These countries are: The Republic of Benin, Chad, Cameroun, Guinea, Burkina Faso, Nigeria, Mail, Cote d’Ivorie and Niger Republic.
River Niger is one of the longest and largest rivers in Africa. It flows through the above named countries in the West African sub-region. The headquarters of the commission is located in Niamey, Niger Republic.
Objectives and Functions of NBC
i. To guide navigations on the Niger river.
ii. To ensure the most effective utilisation of the resources of the river.
iii. To stimulate the construction of dams on the Niger.
iv. To undertake schemes to control floods and erosion.
v. To promote studies on the agricultural potentials of the River Niger.
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Take a quick test for this lesson
i. Explain the formation, objectives of European Economic Community
ii. Briefly describe the functions of African Development Bank to African countries.
iii. Write short notes on WACH and UNCTAD
iv. What is Niger Basin Commission?
v. Discuss the usefulness of Niger Basin Commission to its member nations.
vi. Describe the functions of the International Monetary Fund.
vii. How can the International Bank for Reconstruction and Development contribute to the economic development of your country?
Questions answered correctly? Bravo!!
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