India will soon host the annual G20 summit in New Delhi, marking the end of its year as the President of the global forum. The G20 was founded in 1999 after the Asian financial crisis, to allow Finance Ministers and Central Bank Governors to discuss global economic and financial issues. Since then, it has evolved its own unique structures and a rotational presidency system to further dialogue among countries on a range of issues, such as health and tourism.
What are some other notable groupings that India is a part of and what is their mandate? We take a look.
The World Bank is a developmental institution established with the aim of eradicating poverty and improving living standards for vulnerable people, by promoting sustainable development through loans, guarantees, risk management products, and advisory services. It is a specialised agency of the United Nations. The member countries are jointly responsible for how the institution is financed and how its money is spent.
It further includes:
1. The International Bank of Reconstruction and Development (IBRD) or the World Bank. IBRD was established in 1945 and has 189 members at present. Its aim is to promote sustainable development, through loans, guarantees, etc. The IBRD is owned by the member countries whose voting power is linked to its capital subscription based on the country’s relative economic strength. This forms the basis of their votes’ weightage. The US has the largest vote share at around 15 per cent, with India at 3.08 per cent.
2. The International Development Association (IDA). IDA was established in 1960 and currently has 174 member countries. IDA is the concessional arm of the World Bank and plays a key role in supporting the Bank’s poverty reduction mission. IDA’s assistance is focused on the world’s 79 poorest countries, to which it provides interest-free loans or low-interest loans (known as ‘credits’) and other non-lending services.
3. International Finance Corporation (IFC). Established in 1956, it is owned by 186 member countries, a group that collectively determines the policies. It works in more than 100 developing countries, allowing companies and financial institutions in emerging markets to create jobs, generate tax revenues, and improve corporate governance and environmental performance.
4. Multilateral Investment Guarantee Agency (MIGA). In 1988, an international convention established MIGA and it now has 182 countries with its membership. MIGA was created to complement public and private sources of investment insurance against non-commercial risks in developing countries. Its mission is to promote foreign direct investment (FDI) into developing countries to help support economic growth, reduce poverty, and improve people’s lives.
5. International Centre for Settlement of Investment Disputes (ICSID). ICSID is an autonomous international institution established under the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (the ICSID or the Washington Convention) with over 160 member States, but this is the only World Bank institution that does not have India as a signatory to it. The primary purpose of ICSID is to provide facilities for conciliation and arbitration of international investment disputes.
International Monetary Fund (IMF)
The International Monetary Fund (IMF) was established along with the World Bank at the Conference of 44 nations held at Bretton Woods, New Hampshire, USA, in July 1944. It was created to promote international monetary cooperation, for the balanced growth of international trade, promote exchange stability and to help establish a multilateral system of payments. With 190 members at present, India’s current quota in the IMF is SDR (Special Drawing Rights) 13,114.4 million, giving it a shareholding of 2.63 per cent. The Finance Minister is the ex-officio Governor on the Board of Governors of the IMF. RBI Governor is the Alternate Governor at the IMF.
According to Abhijit Mukhopadhyay of the Observer Research Foundation (ORF), India’s economic growth has helped it move from being a recipient of foreign assistance to being a contributor to other countries. The Net Official Development Assistance and foreign aid received by India, as a percentage of GDP, declined between 1960 and 2019, as the Indian economy grew, he wrote.
On the other hand, he added, “The amount of Indian development assistance and foreign aid grew. Budget allocation for foreign aid went from around US$ 500 million in 2010 to US$ 1.5 billion in 2015, and further to US$ 1.32 billion in 2019-20—or 0.3 percent of the entire budget that fiscal year.”
Asian Development Bank (ADB)
India became a member of the Asian Development Bank (ADB) as a founding member in 1966. The Bank is engaged in promoting the economic and social progress of its developing member countries (DMCs) in the Asia Pacific Region. The main instruments that it uses to do this are loans and equity investments, providing technical assistance for development projects and programs, along with other advisory services, loan guarantees, grants and policy dialogues.
ADB has 68 members, with its headquarters in Manila, Philippines. India holds 6.317 per cent of shares, with 5.347 per cent voting rights. Japan and the US represent the largest shareholders, followed by China and India. Between 1986 and 1996, ADB provided assistance mainly for India’s national programs through central public utilities in the transport and energy sectors. In the mid-1990s, the ADB began to shift focus to state-level operations in the transport, power, and urban sectors.
World Trade Organisation (WTO)
The WTO began on January 1, 1995, but its trading system is half a century older. Since 1948, the General Agreement on Tariffs and Trade (GATT) provided the rules for a global system and was later replaced by the WTO. India has been a member since its inception. WTO also serves as a forum for its members to negotiate trade agreements and resolve the trade problems they face with each other.
According to the Trade Promotion Council of India, India is involved in a number of trade disputes: most related to its concern regarding developed nations like the United States raising objections to India’s protections for its producers. This mechanism for resolving disputes stopped functioning in 2019, but India recently said at a G20 meeting that it is seeking its re-establishment based on the principle of ‘common but differentiated responsibility’.
International Fund for Agricultural Development (IFAD)
The International Fund for Agricultural Development (IFAD), a specialised agency of the United Nations, was one of the major outcomes of the 1974 World Food Conference in Rome. The conference was organised by the United Nations in response to the food crises of the early 1970s, when global food shortages were causing widespread famine and malnutrition.
It was decided that “an International Fund for Development should be established immediately to finance agricultural development projects, primarily for food production in the developing countries … The Fund shall provide financing primarily for projects and programmes specifically designed to introduce, expand or improve food production systems and to strengthen related policies and institutions…”
India is its founding member and the largest recipient of IFAD investments. Its contributions to IFAD’s regular resources amount to over US $218.2 million. Projects in states such as Chhattisgarh, Rajasthan, Mizoram and Odisha range from developing women’s enterprises to programmes for Particularly Vulnerable Tribal Groups (PVTGs).
The Convergence of Agricultural Interventions in Maharashtra’s Distressed Districts Programme led to partnerships with the private sector, to link farmers with input and output markets and aid contract farming arrangements with multiple market players.
Global Environment Facility (GEF)
Established in 1991 on the eve of the 1992 Rio Summit, the Global Environment Facility (GEF) provides grant funds to developing countries for projects and activities that aim to protect the global environment. This is to cover areas like biodiversity, climate change, international waters, ozone depletion, land degradation, primarily desertification, deforestation and persistent organic pollutants.
GEF is a global partnership among 185 member countries, international institutions, NGOs and the private sector to address global environmental issues while supporting national sustainable development initiatives.
It further assists countries in meeting their obligations under the conventions that they have signed and ratified. Responsibility for implementing GEF activities is shared by the United Nations Development Program (UNDP), the United Nations Environment Program (UNEP), the World Bank and some other agencies.
GEF was to serve as the financial mechanism for five international environmental conventions: the Convention on Biological Diversity (CBD), the United Nations Framework Convention on Climate Change (UNFCCC), the Stockholm Convention on Persistent Organic Pollutants (POPs), the UN Convention to Combat Desertification (UNCCD), and Minamata Convention on Mercury.
African Development Bank (AfDB)
The African Development Bank Group (AfDB) comprises (i) the African Development Bank, (ii) the African Development Fund and (iii) the Nigeria Trust Fund. It was established in 1963 with membership being open only to regional countries, initially. To mobilise external resources for the development of Regional Member Countries, AFDB extended its membership.
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With the overall objective of fostering south-south cooperation and keeping in view the historical ties India had with Africa, India was one of the first few countries to become a non-regional member, in 1983. It now has 81 members.
According to its website, apart from trade, “India has undertaken significant investment initiatives in recent years to strengthen its strategic partnership with Africa, and has become one of the largest investors, mainly in energy, construction, ICT, and the railway and auto industries.” However, India’s voting share is only 0.233 per cent.
Here are some other such organisations you can read more about:
BRICS
SCO
SAARC
