Unit III
International Institution
Q1) Explain IMF.
A1)
IMF
The formation of the IMF was initiated in 1944 at the Bretton Woods Conference. IMF came into operation on 27th December 1945 and is today an international organisation that consists of 189 member countries. Headquartered in Washington, D.C., IMF focuses on fostering global monetary cooperation, securing financial stability, facilitating and promoting international trade, employment and economic growth around the world. The IMF is a specialised agency of the United Nations.
Formation of IMF:
The breakdown of international monetary cooperation during the Great Depression led to the development of the IMF, which aimed at improving economic growth and reducing poverty around the world. The International Monetary Fund (IMF) was initially formed at the Bretton Woods Conference in 1944. 45 government representatives were present at the Conference to discuss a framework for postwar international economic cooperation.
The IMF became operational from 27th December 1945 with 29 member countries that agreed to bound to this treaty. It began its financial operations on 1st March 1947. Currently, the IMF consists of 189 member countries.
The IMF is regarded as a key organisation of the international economic system which focuses on rebuilding the international capital along with maximizing the national economic sovereignty and human welfare.
Organizational Structure of International Monetary Fund (IMF):
The United Nations is the parent organization that handles the proper functioning and administration of the IMF. The IMF is headed by a Managing Director who is elected by the Executive Board for a 5-year term of office. The International Monetary Fund (IMF) consists of the Board of Governors, Ministerial Committees, and the Executive Board.
Structure of the International Monetary Fund (IMF) | |
Governing Bodies of IMF | Roles and Responsibilities |
Board of Governors |
|
Ministerial Committees
|
|
Executive Board |
|
Objectives of the IMF
The main objectives of the International Monetary Fund (IMF) are mentioned below:
What are the functions of the IMF?
The functions of the International Monetary Fund can be categorized into three types:
Q2) Explain role of IMF.
A2)
IMF
The formation of the IMF was initiated in 1944 at the Bretton Woods Conference. IMF came into operation on 27th December 1945 and is today an international organisation that consists of 189 member countries. Headquartered in Washington, D.C., IMF focuses on fostering global monetary cooperation, securing financial stability, facilitating and promoting international trade, employment and economic growth around the world. The IMF is a specialised agency of the United Nations.
Formation of IMF:
The breakdown of international monetary cooperation during the Great Depression led to the development of the IMF, which aimed at improving economic growth and reducing poverty around the world. The International Monetary Fund (IMF) was initially formed at the Bretton Woods Conference in 1944. 45 government representatives were present at the Conference to discuss a framework for postwar international economic cooperation.
The IMF became operational from 27th December 1945 with 29 member countries that agreed to bound to this treaty. It began its financial operations on 1st March 1947. Currently, the IMF consists of 189 member countries.
The IMF is regarded as a key organisation of the international economic system which focuses on rebuilding the international capital along with maximizing the national economic sovereignty and human welfare.
Organizational Structure of International Monetary Fund (IMF)
The United Nations is the parent organization that handles the proper functioning and administration of the IMF. The IMF is headed by a Managing Director who is elected by the Executive Board for a 5-year term of office. The International Monetary Fund (IMF) consists of the Board of Governors, Ministerial Committees, and the Executive Board.
Structure of the International Monetary Fund (IMF) | |
Governing Bodies of IMF | Roles and Responsibilities |
Board of Governors |
|
Ministerial Committees 3. International Monetary and Financial Committee (IMFC) 4. Development Committee |
|
Executive Board |
|
Objectives of the IMF:
The main objectives of the International Monetary Fund (IMF) are mentioned below:
What are the functions of the IMF?
The functions of the International Monetary Fund can be categorized into three types:
Role of IMF
Q3) Explain IBRD.
A3)
IBRD
The International Bank for Reconstitution and Development (popularly known as World Bank) was set up as a result of the decision taken in Bretton Woods Conference New Hampshire.
The conference was held in July 1944 and attended by 44 nations.
There it was decided to set up two organisations i.e., (a) the I.M.F. and (b) the I.B.R.D., to solve the monetary and financial problems of the less developed countries likely to be faced in Post-World War II period.
When I.B.R.D. was Set Up?
The I.B.R.D. or World Bank was set up on December 27, 1945. When its Articles of Agreement was signed by 29 members Government in Washington. On 30th June, 1996, 185 countries were its members. If a country resigns its membership, it is required to pay back all loans with interest on due dates. If the Bank incurs a financial loss in the year in which a member resigns, it is required to pay its share of the loss on demand.
Capital Structure:
The I.B.R.D. was started with an authorised capital of $ 10 billion divided into 1,00,000 shares of $ 1,00,000 of this $ 9,400 million was actually subscribed. On 30th June 1988 the authorised Capital Stock of the I.B.R.D. Comprised 7,16,500 authorised Shares of the par value of S.D.R. (Special Drawing Rights) 1,00,000 each. In July 1994 the total authorised bank capital was $ 185 billion with a capital increase of $ 9.3 billion.
Objectives of World Bank:
i. To provide long term capital to members countries for economic reconstruction and development.
ii. To induce long term capital investment for assuring BOP equilibrium and balanced development of international trade
iii. To promote capital investment in members countries by following ways
a. To provide guarantee on private loans or capital investment
b. If capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.
iv. To ensure the implementation of development projects so as to bring about a smooth transference from a war time to peace economy.
Q4) Explain features of IBRD.
A4)
IBRD
The International Bank for Reconstitution and Development (popularly known as World Bank) was set up as a result of the decision taken in Bretton Woods Conference New Hampshire.
The conference was held in July 1944 and attended by 44 nations.
There it was decided to set up two organisations i.e., (a) the I.M.F. and (b) the I.B.R.D., to solve the monetary and financial problems of the less developed countries likely to be faced in Post-World War II period.
When I.B.R.D. was Set Up?
The I.B.R.D. or World Bank was set up on December 27, 1945. When its Articles of Agreement was signed by 29 members Government in Washington. On 30th June, 1996, 185 countries were its members. If a country resigns its membership, it is required to pay back all loans with interest on due dates. If the Bank incurs a financial loss in the year in which a member resigns, it is required to pay its share of the loss on demand.
Capital Structure:
The I.B.R.D. was started with an authorised capital of $ 10 billion divided into 1,00,000 shares of $ 1,00,000 of this $ 9,400 million was actually subscribed. On 30th June 1988 the authorised Capital Stock of the I.B.R.D. Comprised 7,16,500 authorised Shares of the par value of S.D.R. (Special Drawing Rights) 1,00,000 each. In July 1994 the total authorised bank capital was $ 185 billion with a capital increase of $ 9.3 billion.
Objectives of World Bank:
i. To provide long term capital to members countries for economic reconstruction and development.
ii. To induce long term capital investment for assuring BOP equilibrium and balanced development of international trade
iii. To promote capital investment in members countries by following ways
a. To provide guarantee on private loans or capital investment
b. If capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.
iv. To ensure the implementation of development projects so as to bring about a smooth transference from a war time to peace economy.
Features of IBRD
The principal functions of the I.B.R.D are set forth in Article (1) of the Agreement as follows.
The objectives of I.B.R.D as incorporated in the Articles of Agreement are as follows.
1. To help in the reconstruction and development of member countries by facilitating the investment of capital for the productive purposes, including the restoration and reconstruction of economies devastated by war.
2. To encourage the development of productive resources in developing countries by supplying them investment capital.
3. To promote private foreign investment through guarantees and participation in loans and other investment made by private investors.
4. To supplement private foreign investments by direct loans out of its own capital for productive purposes.
5. To promote long term balances growth of international trade and the maintenance of equilibrium in the balance payments of member countries by encouraging long term international investments.
6. To bring about an easy transition from a war economy to a peace time economy.
7. To help in raising productivity, the standard of living and the conditions of labour in member countries.
Purpose:
1. To assist in the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting long range growth of international trade and improvements in standard of living.
2. To promote private foreign investment by guarantees of and participation in loans and other investments made by private investors.
3. When private capital is not available or reasonable terms to make loans for productive purposes out of its own resources or the funds borrowed by it.
4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.
Q5) Explain Role and Advantages of WTO India’s patent policy and trips.
A5)
The World Trade Organization (WTO) is the international organization dealing with the rules of trade between nations. As of February 2005, 148 countries are Members of the WTO. In becoming Members of the WTO, countries undertake to adhere to the 18 specific agreements annexed to the Agreement establishing the WTO.
Of these agreements, Trade-Related Aspects of Intellectual Property Rights (TRIPS) is expected to have the greatest impact on the pharmaceutical sector and access to medicines. The TRIPS Agreement has been in force since 1995 and is to date the most comprehensive multilateral agreement on intellectual property. The TRIPS Agreement introduced global minimum standards for protecting and enforcing nearly all forms of intellectual property rights (IPR), including those for patents. International conventions prior to TRIPS did not specify minimum standards for patents. At the time that negotiations began, over 40 countries in the world did not grant patent protection for pharmaceutical products. The TRIPS Agreement now requires all WTO members, with few exceptions, to adapt their laws to the minimum standards of IPR protection. In addition, the TRIPS Agreement also introduced detailed obligations for the enforcement of intellectual property rights.
However, TRIPS also contains provisions that allow a degree of flexibility and sufficient room for countries to accommodate their own patent and intellectual property systems and developmental needs. This means countries have a certain amount of freedom in modifying their regulations and, various options exist for them in formulating their national legislation to ensure a proper balance between the goal of providing incentives for future inventions of new drugs and the goal of affordable access to existing medicines.
India’s Patent Policy:
The philosophy of India’s Patent Act of 1970 varies enormously from the framework being established under TRIPs. There are several knowledge and information areas which India considers unpatentable. India has a large community of scientists and researchers among whom publication rather than gaining patents has been a concern. G.V. Ramakrishna, Chairman of the Disinvestment Commission points out that in India, “We (Indians) are accustomed to the notion that knowledge is free. Our whole orientation has to change from one that stresses intellectual attainment to one that protects intellectual property.” Industrialised nations conceive of patents as a fundamental right comparable to the right of physical property, whereas developing nations view it as “fundamentally as an economic policy question.” From the perspective of developed countries, intellectual property is a private right that should be protected as any other tangible property, but for developing nations, intellectual property is a public good that should be used to promote economic development. The following table illustrates the basic differences between India’s patent system and TRIPs:
Comparison of India’s Patent Act and TRIPs
Indian Patent Act of 1970 TRIPs
Only process not product patents in food, medicines, chemicals
| Process and product patents in almost all fields of technology |
Term of patents 14 years; 5-7 in chemicals, drugs | Term of patents 20 years
|
Compulsory licensing and license of right | Limited compulsory licensing, no license of right
|
Several areas excluded from patents (method of agriculture, any process for medicinal surgical or other treatment of humans, or similar treatment of animals and plants to render them free of disease or increase economic value of products)
| Almost all fields of technology patentable. Only area conclusively excluded from patentability is plant varieties; debate regarding some areas in agriculture and biotechnology |
Government allowed to use patented invention to prevent scarcity | Very limited scope for governments to use patented inventions |
These differences in patent systems led to disputes in the GATT negotiations on the inclusion of IPRs in the WTO. The type of patent system that India established was clearly against the global IP regime promoted by the US. The main objection of the US is to the provision in India's patent law that allows for process but not product
patents in the area of food, drug or medicine. The United States terms the activities of India to find alternative processes as “piracy”. According to the US, Indian firms are copying technology developed by advanced nations. This is leading to large-scale losses for the US. The Pharmaceutical industry in the US has been especially vocal on this issue. Phrma, the association that represents US based pharmaceutical companies points out, “Based on the refusal of the Government to provide pharmaceutical patent protection, India has become a haven for bulk pharmaceutical manufacturers who pirate the intellectual property of the world’s research- based pharmaceutical industry.”
Q6) Explain Regional Economic Integration.
A6)
Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors.
There are four main types of regional economic integration.
Free trade area - This is the most basic form of economic cooperation. Member countries remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember nations. An example is the North American Free Trade Agreement (NAFTA).
Customs union- This type provides for economic cooperation as in a free-trade zone. Barriers to trade are removed between member countries. The primary difference from the free trade area is that members agree to treat trade with nonmember countries in a similar manner.
Common market- This type allows for the creation of economically integrated markets between member countries. Trade barriers are removed, as are any restrictions on the movement of labor and capital between member countries. Like customs unions, there is a common trade policy for trade with nonmember nations. The primary advantage to workers is that they no longer need a visa or work permit to work in another member country of a common market. An example is the Common Market for Eastern and Southern Africa (COMESA).
Economic union- This type is created when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies. An example is the European Union (EU).
Pros-
The pros of creating regional agreements include the following:
Trade creation- These agreements create more opportunities for countries to trade with one another by removing the barriers to trade and investment. Due to a reduction or removal of tariffs, cooperation results in cheaper prices for consumers in the bloc countries. Studies indicate that regional economic integration significantly contributes to the relatively high growth rates in the less-developed countries.
Employment opportunities - By removing restrictions on labor movement, economic integration can help expand job opportunities.
Consensus and cooperation - Member nations may find it easier to agree with smaller numbers of countries. Regional understanding and similarities may also facilitate closer political cooperation.
Cons-
The cons involved in creating regional agreements include the following:
Trade diversion- The flip side to trade creation is trade diversion. Member countries may trade more with each other than with nonmember nations. This may mean increased trade with a less efficient or more expensive producer because it is in a member country. In this sense, weaker companies can be protected inadvertently with the bloc agreement acting as a trade barrier. In essence, regional agreements have formed new trade barriers with countries outside of the trading bloc.
Employment shifts and reductions- Countries may move production to cheaper labor markets in member countries. Similarly, workers may move to gain access to better jobs and wages. Sudden shifts in employment can tax the resources of member countries.
Loss of national sovereignty- With each new round of discussions and agreements within a regional bloc, nations may find that they have to give up more of their political and economic rights. In the opening case study, you learned how the economic crisis in Greece is threatening not only the EU in general but also the rights of Greece and other member nations to determine their own domestic economic policies.
Q7) Explain IBRD, Features of IBRD.
A7)
IBRD
The International Bank for Reconstitution and Development (popularly known as World Bank) was set up as a result of the decision taken in Bretton Woods Conference New Hampshire.
The conference was held in July 1944 and attended by 44 nations.
There it was decided to set up two organisations i.e., (a) the I.M.F. and (b) the I.B.R.D., to solve the monetary and financial problems of the less developed countries likely to be faced in Post-World War II period.
When I.B.R.D. was Set Up?
The I.B.R.D. or World Bank was set up on December 27, 1945. When its Articles of Agreement was signed by 29 members Government in Washington. On 30th June, 1996, 185 countries were its members. If a country resigns its membership, it is required to pay back all loans with interest on due dates. If the Bank incurs a financial loss in the year in which a member resigns, it is required to pay its share of the loss on demand.
Capital Structure:
The I.B.R.D. was started with an authorised capital of $ 10 billion divided into 1,00,000 shares of $ 1,00,000 of this $ 9,400 million was actually subscribed. On 30th June 1988 the authorised Capital Stock of the I.B.R.D. Comprised 7,16,500 authorised Shares of the par value of S.D.R. (Special Drawing Rights) 1,00,000 each. In July 1994 the total authorised bank capital was $ 185 billion with a capital increase of $ 9.3 billion.
Objectives of World Bank:
i. To provide long term capital to members countries for economic reconstruction and development.
ii. To induce long term capital investment for assuring BOP equilibrium and balanced development of international trade
iii. To promote capital investment in members countries by following ways
a. To provide guarantee on private loans or capital investment
b. If capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.
iv. To ensure the implementation of development projects so as to bring about a smooth transference from a war time to peace economy.
Features of IBRD
To assist in the reconstruction and development of the territories of its members by facilitating the investment of capital fro productive purposes.
The objectives of I.B.R.D as incorporated in the Articles of Agreement are as follows.
1. To help in the reconstruction and development of member countries by facilitating the investment of capital for the productive purposes, including the restoration and reconstruction of economies devastated by war.
2. To encourage the development of productive resources in developing countries by supplying them investment capital.
3. To promote private foreign investment through guarantees and participation in loans and other investment made by private investors.
4. To supplement private foreign investments by direct loans out of its own capital for productive purposes.
5. To promote long term balances growth of international trade and the maintenance of equilibrium in the balance payments of member countries by encouraging long term international investments.
6. To bring about an easy transition from a war economy to a peace time economy.
7. To help in raising productivity, the standard of living and the conditions of labour in member countries.
Purpose:
1. To assist in the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting long range growth of international trade and improvements in standard of living.
2. To promote private foreign investment by guarantees of and participation in loans and other investments made by private investors.
3. When private capital is not available or reasonable terms to make loans for productive purposes out of its own resources or the funds borrowed by it.
4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.
Q8) Explain IMF, Role of IMF.
A8)
IMF
The formation of the IMF was initiated in 1944 at the Bretton Woods Conference. IMF came into operation on 27th December 1945 and is today an international organisation that consists of 189 member countries. Headquartered in Washington, D.C., IMF focuses on fostering global monetary cooperation, securing financial stability, facilitating and promoting international trade, employment and economic growth around the world. The IMF is a specialised agency of the United Nations.
Formation of IMF
The breakdown of international monetary cooperation during the Great Depression led to the development of the IMF, which aimed at improving economic growth and reducing poverty around the world. The International Monetary Fund (IMF) was initially formed at the Bretton Woods Conference in 1944. 45 government representatives were present at the Conference to discuss a framework for postwar international economic cooperation.
The IMF became operational from 27th December 1945 with 29 member countries that agreed to bound to this treaty. It began its financial operations on 1st March 1947. Currently, the IMF consists of 189 member countries.
The IMF is regarded as a key organisation of the international economic system which focuses on rebuilding the international capital along with maximizing the national economic sovereignty and human welfare.
Organizational Structure of International Monetary Fund (IMF)
The United Nations is the parent organization that handles the proper functioning and administration of the IMF. The IMF is headed by a Managing Director who is elected by the Executive Board for a 5-year term of office. The International Monetary Fund (IMF) consists of the Board of Governors, Ministerial Committees, and the Executive Board.
Structure of the International Monetary Fund (IMF) | |
Governing Bodies of IMF | Roles and Responsibilities |
Board of Governors |
|
Ministerial Committees 5. International Monetary and Financial Committee (IMFC) 6. Development Committee |
|
Executive Board |
|
Objectives of the IMF
The main objectives of the International Monetary Fund (IMF) are mentioned below:
What are the functions of the IMF?
The functions of the International Monetary Fund can be categorized into three types:
Role of IMF
Q9) Explain WTO, Role and Advantages of WTO India’s patent policy and trips.
A9)
WTO
The Uruguay round of GATT (1986-93) gave birth to World Trade Organization. The members of GATT singed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new organization named WTO.
It was officially constituted on January 1, 1995 which took the place of GATT as an effective formal, organization. GATT was an informal organization which regulated world trade since 1948.
Contrary to the temporary nature of GATT, WTO is a permanent organization which has been established on the basis of an international treaty approved by participating countries. It achieved the international status like IMF and IBRD, but it is not an agency of the United Nations Organization (UNO).
Objectives:
The important objectives of WTO are:
Functions:
The main functions of WTO are discussed below:
Role and Advantages of WTO India’s patent policy and trips
The World Trade Organization (WTO) is the international organization dealing with the rules of trade between nations. As of February 2005, 148 countries are Members of the WTO. In becoming Members of the WTO, countries undertake to adhere to the 18 specific agreements annexed to the Agreement establishing the WTO.
Of these agreements, Trade-Related Aspects of Intellectual Property Rights (TRIPS) is expected to have the greatest impact on the pharmaceutical sector and access to medicines. The TRIPS Agreement has been in force since 1995 and is to date the most comprehensive multilateral agreement on intellectual property. The TRIPS Agreement introduced global minimum standards for protecting and enforcing nearly all forms of intellectual property rights (IPR), including those for patents. International conventions prior to TRIPS did not specify minimum standards for patents. At the time that negotiations began, over 40 countries in the world did not grant patent protection for pharmaceutical products. The TRIPS Agreement now requires all WTO members, with few exceptions, to adapt their laws to the minimum standards of IPR protection. In addition, the TRIPS Agreement also introduced detailed obligations for the enforcement of intellectual property rights.
However, TRIPS also contains provisions that allow a degree of flexibility and sufficient room for countries to accommodate their own patent and intellectual property systems and developmental needs. This means countries have a certain amount of freedom in modifying their regulations and, various options exist for them in formulating their national legislation to ensure a proper balance between the goal of providing incentives for future inventions of new drugs and the goal of affordable access to existing medicines.
India’s Patent Policy-
The philosophy of India’s Patent Act of 1970 varies enormously from the framework being established under TRIPs. There are several knowledge and information areas which India considers unpatentable. India has a large community of scientists and researchers among whom publication rather than gaining patents has been a concern. G.V. Ramakrishna, Chairman of the Disinvestment Commission points out that in India, “We (Indians) are accustomed to the notion that knowledge is free. Our whole orientation has to change from one that stresses intellectual attainment to one that protects intellectual property.” Industrialised nations conceive of patents as a fundamental right comparable to the right of physical property, whereas developing nations view it as “fundamentally as an economic policy question.” From the perspective of developed countries, intellectual property is a private right that should be protected as any other tangible property, but for developing nations, intellectual property is a public good that should be used to promote economic development. The following table illustrates the basic differences between India’s patent system and TRIPs:
Comparison of India’s Patent Act and TRIPs
Indian Patent Act of 1970 TRIPs
Only process not product patents in food, medicines, chemicals
| Process and product patents in almost all fields of technology |
Term of patents 14 years; 5-7 in chemicals, drugs | Term of patents 20 years
|
Compulsory licensing and license of right | Limited compulsory licensing, no license of right
|
Several areas excluded from patents (method of agriculture, any process for medicinal surgical or other treatment of humans, or similar treatment of animals and plants to render them free of disease or increase economic value of products)
| Almost all fields of technology patentable. Only area conclusively excluded from patentability is plant varieties; debate regarding some areas in agriculture and biotechnology |
Government allowed to use patented invention to prevent scarcity | Very limited scope for governments to use patented inventions |
These differences in patent systems led to disputes in the GATT negotiations on the inclusion of IPRs in the WTO. The type of patent system that India established was clearly against the global IP regime promoted by the US. The main objection of the US is to the provision in India's patent law that allows for process but not product
patents in the area of food, drug or medicine. The United States terms the activities of India to find alternative processes as “piracy”. According to the US, Indian firms are copying technology developed by advanced nations. This is leading to large-scale losses for the US. The Pharmaceutical industry in the US has been especially vocal on this issue. Phrma, the association that represents US based pharmaceutical companies points out, “Based on the refusal of the Government to provide pharmaceutical patent protection, India has become a haven for bulk pharmaceutical manufacturers who pirate the intellectual property of the world’s research- based pharmaceutical industry.”
Q10) Explain Role of IMF and Features of IBRD.
A10)
Role of IMF
Features of IBRD
The principal functions of the I.B.R.D are set forth in Article (1) of the Agreement as follows.
The objectives of I.B.R.D as incorporated in the Articles of Agreement are as follows.
1. To help in the reconstruction and development of member countries by facilitating the investment of capital for the productive purposes, including the restoration and reconstruction of economies devastated by war.
2. To encourage the development of productive resources in developing countries by supplying them investment capital.
3. To promote private foreign investment through guarantees and participation in loans and other investment made by private investors.
4. To supplement private foreign investments by direct loans out of its own capital for productive purposes.
5. To promote long term balances growth of international trade and the maintenance of equilibrium in the balance payments of member countries by encouraging long term international investments.
6. To bring about an easy transition from a war economy to a peace time economy.
7. To help in raising productivity, the standard of living and the conditions of labour in member countries.
Purpose:
1. To assist in the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting long range growth of international trade and improvements in standard of living.
2. To promote private foreign investment by guarantees of and participation in loans and other investments made by private investors.
3. When private capital is not available or reasonable terms to make loans for productive purposes out of its own resources or the funds borrowed by it.
4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.
Q11) Explain India’s patent policy and trips.
A11)
India’s Patent Policy:
The philosophy of India’s Patent Act of 1970 varies enormously from the framework being established under TRIPs. There are several knowledge and information areas which India considers unpatentable. India has a large community of scientists and researchers among whom publication rather than gaining patents has been a concern. G.V. Ramakrishna, Chairman of the Disinvestment Commission points out that in India, “We (Indians) are accustomed to the notion that knowledge is free. Our whole orientation has to change from one that stresses intellectual attainment to one that protects intellectual property.” Industrialised nations conceive of patents as a fundamental right comparable to the right of physical property, whereas developing nations view it as “fundamentally as an economic policy question.” From the perspective of developed countries, intellectual property is a private right that should be protected as any other tangible property, but for developing nations, intellectual property is a public good that should be used to promote economic development. The following table illustrates the basic differences between India’s patent system and TRIPs:
Comparison of India’s Patent Act and TRIPs
Indian Patent Act of 1970 TRIPs
Only process not product patents in food, medicines, chemicals
| Process and product patents in almost all fields of technology |
Term of patents 14 years; 5-7 in chemicals, drugs | Term of patents 20 years
|
Compulsory licensing and license of right | Limited compulsory licensing, no license of right
|
Several areas excluded from patents (method of agriculture, any process for medicinal surgical or other treatment of humans, or similar treatment of animals and plants to render them free of disease or increase economic value of products)
| Almost all fields of technology patentable. Only area conclusively excluded from patentability is plant varieties; debate regarding some areas in agriculture and biotechnology |
Government allowed to use patented invention to prevent scarcity | Very limited scope for governments to use patented inventions |
These differences in patent systems led to disputes in the GATT negotiations on the inclusion of IPRs in the WTO. The type of patent system that India established was clearly against the global IP regime promoted by the US. The main objection of the US is to the provision in India's patent law that allows for process but not product
patents in the area of food, drug or medicine. The United States terms the activities of India to find alternative processes as “piracy”. According to the US, Indian firms are copying technology developed by advanced nations. This is leading to large-scale losses for the US. The Pharmaceutical industry in the US has been especially vocal on this issue. Phrma, the association that represents US based pharmaceutical companies points out, “Based on the refusal of the Government to provide pharmaceutical patent protection, India has become a haven for bulk pharmaceutical manufacturers who pirate the intellectual property of the world’s research- based pharmaceutical industry.”
Q12) Explain IMF, Role of IMF, IBRD, Features of IBRD.
A12)
IMF
The formation of the IMF was initiated in 1944 at the Bretton Woods Conference. IMF came into operation on 27th December 1945 and is today an international organisation that consists of 189 member countries. Headquartered in Washington, D.C., IMF focuses on fostering global monetary cooperation, securing financial stability, facilitating and promoting international trade, employment and economic growth around the world. The IMF is a specialised agency of the United Nations.
Formation of IMF
The breakdown of international monetary cooperation during the Great Depression led to the development of the IMF, which aimed at improving economic growth and reducing poverty around the world. The International Monetary Fund (IMF) was initially formed at the Bretton Woods Conference in 1944. 45 government representatives were present at the Conference to discuss a framework for postwar international economic cooperation.
The IMF became operational from 27th December 1945 with 29 member countries that agreed to bound to this treaty. It began its financial operations on 1st March 1947. Currently, the IMF consists of 189 member countries.
The IMF is regarded as a key organisation of the international economic system which focuses on rebuilding the international capital along with maximizing the national economic sovereignty and human welfare.
Organizational Structure of International Monetary Fund (IMF)
The United Nations is the parent organization that handles the proper functioning and administration of the IMF. The IMF is headed by a Managing Director who is elected by the Executive Board for a 5-year term of office. The International Monetary Fund (IMF) consists of the Board of Governors, Ministerial Committees, and the Executive Board.
Structure of the International Monetary Fund (IMF) | |
Governing Bodies of IMF | Roles and Responsibilities |
Board of Governors |
|
Ministerial Committees 7. International Monetary and Financial Committee (IMFC) 8. Development Committee |
|
Executive Board |
|
Objectives of the IMF
The main objectives of the International Monetary Fund (IMF) are mentioned below:
What are the functions of the IMF?
The functions of the International Monetary Fund can be categorized into three types:
Role of IMF
IBRD
The International Bank for Reconstitution and Development (popularly known as World Bank) was set up as a result of the decision taken in Bretton Woods Conference New Hampshire.
The conference was held in July 1944 and attended by 44 nations.
There it was decided to set up two organisations i.e., (a) the I.M.F. and (b) the I.B.R.D., to solve the monetary and financial problems of the less developed countries likely to be faced in Post-World War II period.
When I.B.R.D. was Set Up?
The I.B.R.D. or World Bank was set up on December 27, 1945. When its Articles of Agreement was signed by 29 members Government in Washington. On 30th June, 1996, 185 countries were its members. If a country resigns its membership, it is required to pay back all loans with interest on due dates. If the Bank incurs a financial loss in the year in which a member resigns, it is required to pay its share of the loss on demand.
Capital Structure:
The I.B.R.D. was started with an authorised capital of $ 10 billion divided into 1,00,000 shares of $ 1,00,000 of this $ 9,400 million was actually subscribed. On 30th June 1988 the authorised Capital Stock of the I.B.R.D. Comprised 7,16,500 authorised Shares of the par value of S.D.R. (Special Drawing Rights) 1,00,000 each. In July 1994 the total authorised bank capital was $ 185 billion with a capital increase of $ 9.3 billion.
Objectives of World Bank:
i. To provide long term capital to members countries for economic reconstruction and development.
ii. To induce long term capital investment for assuring BOP equilibrium and balanced development of international trade
iii. To promote capital investment in members countries by following ways
a. To provide guarantee on private loans or capital investment
b. If capital is not available even after providing guarantee, then IBRD provides loans for productive activities on considerate conditions.
iv. To ensure the implementation of development projects so as to bring about a smooth transference from a war time to peace economy.
Features of IBRD
The principal functions of the I.B.R.D are set forth in Article (1) of the Agreement as follows.
The objectives of I.B.R.D as incorporated in the Articles of Agreement are as follows.
1. To help in the reconstruction and development of member countries by facilitating the investment of capital for the productive purposes, including the restoration and reconstruction of economies devastated by war.
2. To encourage the development of productive resources in developing countries by supplying them investment capital.
3. To promote private foreign investment through guarantees and participation in loans and other investment made by private investors.
4. To supplement private foreign investments by direct loans out of its own capital for productive purposes.
5. To promote long term balances growth of international trade and the maintenance of equilibrium in the balance payments of member countries by encouraging long term international investments.
6. To bring about an easy transition from a war economy to a peace time economy.
7. To help in raising productivity, the standard of living and the conditions of labour in member countries.
Purpose:
1. To assist in the reconstruction and development of its member countries by facilitating the investment of capital for productive purposes, thereby promoting long range growth of international trade and improvements in standard of living.
2. To promote private foreign investment by guarantees of and participation in loans and other investments made by private investors.
3. When private capital is not available or reasonable terms to make loans for productive purposes out of its own resources or the funds borrowed by it.
4. To arrange the loans made or guaranteed by it in relation to international loans through other channels so that more useful and urgent small and large projects are dealt with first.
Q13) Explain WTO.
A13)
The Uruguay round of GATT (1986-93) gave birth to World Trade Organization. The members of GATT singed on an agreement of Uruguay round in April 1994 in Morocco for establishing a new organization named WTO.
It was officially constituted on January 1, 1995 which took the place of GATT as an effective formal, organization. GATT was an informal organization which regulated world trade since 1948.
Contrary to the temporary nature of GATT, WTO is a permanent organization which has been established on the basis of an international treaty approved by participating countries. It achieved the international status like IMF and IBRD, but it is not an agency of the United Nations Organization (UNO).
Objectives:
The important objectives of WTO are:
Functions:
The main functions of WTO are discussed below:
