The key agencies that create, monitors, and manage international financial development and stability are facing challenges on how to control the global financial system. These institutions include the International Monetary Fund (IMF), the World Bank, World Trade Organization (WTO), and other high-level government policy framers of the developed nations. Also, there are other multilateral investment and development banks at continental and regional levels that contribute to economic sustainability in local and international capacities. These include banks such as the Asian Development Bank, African Development Bank, European Bank for Reconstruction and Development, and the Inter-American Development Bank among others. These institutions monitor economic activities and provide policy directives and coordination that involves international financial and trade modus operandi for the benefit of both the developed and developing countries. However, certain constraints have hindered the United Nations and its subsidiaries from ensuring that there is uniform economic growth in member nations. Restructuring of the institutions is necessary if the effort in globalization and integration will be achieved.
In the 63rd session of the United Nation as documented in Midwest Model 1 , it was noted that a “restructured international financial practices could allow developing countries, and especially least developed countries, to attain adequate resources necessary for halting the recession and returning to economic growth.” (para.2). A raft of restructuring measures and resolutions were made that revolved around the financial and trade institutions. International trade, under the management and facilitation of the WTO also needed restructuring to provide support to developing countries with economic growth. This is particularly in the area of trade liberalization. One of its commitment initiatives is that the WTO should have a “universal, rules-based, open, non-discriminatory and equitable multilateral trading system.” 2 For, it is critical to international trade.
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Trade liberalization is intended to result in economic integration and growth. This is reinforced by market reforms and policies that are coordinated by international financial and trade institutions. The IMF 3 observed that trade integration has been disproportionate among countries in recent years, but significant progress is seen in Asia and Latin America. In IMF view, these countries, such as China are where they are because they liberalized their trade. Liberalized markets, decline in the protection of trade, and tariff peak de-escalation will be part of the need reforms in the international financial trade institutions and the developing countries.
The areas of focus by the international financial institutions (IFIs) have seen to be narrow and often country specific instead of global. This is because most of the problems facing many countries are similar. Meltzer 4 argues that “to restore the effectiveness of IFIs, these institutions [IFIs] must undergo structural changes.” Meltzer wrote that the reforms have to expand and focus on improving the quality of life, offer grant, allow independent agencies to certify programs and project progress, the institutions should also avoid being country-specific.
Significant steps have been made in the area of reforms in the past decades in financial policies and efforts in urging countries to be pragmatic in policies implementation. Of the financial policies, the percentage of cross-border flow of securities is bigger than bank loans, there is an increase in private capital flow, and there is an interconnection of financial markets caused by IFIs past reforms 5 (Taylor 2004, para 7-8). Thus, it is in these achievements in reforms that indicate the need for more structural arrangements from the institutions because of the global challenges that are facing both the developed and developing nations. The World Bank, IMF, regional banks and the subsidiaries need to be restructured to meet the growing challenges of economic sustainability.
Bibliography
Midwest Model United Nations. Gateway to Diplomacy. Economic and Social Council .
International Monetary Fund. Global Trade Liberalization and the Developing Countries . November 2001.
Meltzer, Allan H. IFI Reforms: A plan for financial stability and economic development. Journal of the U.S. Department of State . Vol. 6, No. 1, February 2001.
Topic B: High-level policy with international financial and trade institutions
Taylor, John B. Policy Regime Change and the International Financial Institutions. [Online] from http:// web.stanford.edu/.../ Policy %20Regime%20Change%
United Nations General Assembly, A/RES/63/303 , 2013
