FINANCIAL FLOWS 2

WHAT THE SYLLABUS SAYS

‘Examine the influence of governments, world trading organisations and financial institutions in the transfer of

capital’.

MAJOR FINANCIAL INSTITUTIONS

The following are the main institutions responsible for the transfer of capital between

countries and therefore with a direct influence on the level of development of countries:

• WORLD TRADE ORGANISTION• INTERNATIONAL MONETARY FUND• WORLD BANK• NATIONAL GOVERNMENTS

WORLD TRADE ORGANISATION WTO

• INTRODUCTION• Brief notes from link on website to

describe the work of the WTO,

INTERNATIONAL MONETARY FUND IMF

• The IMF's primary purpose is to ensure the stability of the international monetary system, the system of exchange rates and international payments that enables countries (and their citizens) to buy goods and services from each other.

• The IMF also makes financing temporarily available to member countries to help them address balance of payments problems that is, when they find themselves short of foreign exchange because their payments to other countries exceed their foreign exchange earnings.

COUNTRIES USING IMF CREDIT 2005-9

RECENT EXAMPLES OF IMF INTERVENTION

• Greece – 45 billion euros financial support

• Ireland 2010 – 85 billion euros financial support

WORLD BANK

• INTRODUCTION• Brief notes from link on website

WORLD BANK PROJECTS

WTO, IMF AND WORLD BANK

• Together these three institutions have been responsible for encouraging countries to undertake policies to encourage free trade and export-led development.

• Use the Geofile ‘Trade Versus Aid’ to briefly summarise the working of these policies.

• Supplement your notes by using the information from pages 24-25 ‘Globalisation’

GLOBAL WEB CROSS-BORDER INVESTMENTS 2008

CRITICISM OF THE NEO-LIEBERAL APPROACH OF THE WTO, IMF, WORLD BANK

• The approach used by these international institutions has not always led to success.

• Use the Geofile ‘Trade Versus Aid’ to highlight the drawbacks of the policies encouraged by these organisations.

• If you are interested the film ‘Life and Debt’ makes great viewing and is an example of how these policies have been detrimental to the economic development of Jamaica.

NATIONAL AND REGIONAL GOVERNMENTS

• National and regional government organisations (e.g. EU) can also influence the transfer of capital

MAP TO SHOW ECONOMIC

ASSISTANCE FROM EU TO EU REGIONS.