7.4A - Influence through IGOs
Superpowers influence the global economy (promoting free trade and capitalism) through a variety of IGOs (World Bank, IMF, WTO, World Economic Forum (WEF))
Superpowers have a disproportionate influence on the global economy. The USA, EU and Japan - which in 2016 accounted for 60% of GDP:
- are capitalist, i.e. people own businesses and employ workers, and make profits for themselves
- promote free trade in goods and services across borders.
- (free from import/export taxes and quotas restricting volume of trade)
- are dominated by private enterprise, rather than government-owned companies
- promote wealth creation and accumulation by companies and individuals
Just after the end of the Second World War in 1945, Europe and the USA created a range of global Inter-Governmental Organisations (IGOs) to promote this model, which still exists today. These IGOs are dominated by Western capitalist countries and their views.
World Bank
- 1944
- Lends money to developing and emerging economies to promote economic development
- This is done within a Western capitalist model
- The money originates from developed economies
IMF
- 1945
- Promotes global economic stability
- Aids economies in opening up to world trade and investment
- Comes to the aid of countries in economic difficulty
WTO
- 1995 (replaced GATT Rounds from 1948)
- Works to remove barriers to international trade
- Has negotiated a sequence of global free trade agreements that have gradually removed trade taxes and quotas
WEF
- 1971
- A Swiss non-profit organisation
- It acts as a forum for discussion between business, politicians and IGOs
- It is pro-free trade and pro-TNCs