OPEC, ADB, NAM, NATO, BRICS-BANK
Organization of the Petroleum Exporting Countries (OPEC)
- Organization of the Petroleum Exporting Countries (OPEC) is an international organization and economic cartel whose mission is to coordinate the policies of the oil-producing countries.
- The goal is to secure a steady income to the member states and to collude in influencing world oil prices through economic means.
||Vienna, Austria (Previously, At Geneva, Switzerland)
||Baghdad Conference on 10–14 September 1960
|Founding Members ( 5 Members)
||Iraq, Iran, Kuwait, Saudi Arabia and Venezuela.
|Later Joined By ( 9 Members)
||Libya, UAE, Qatar, Indonesia, Algeria, Nigeria, Ecuador, Angola, and Gabon
- OPEC membership is open to any country that is a substantial exporter of oil and that shares the ideals of the organization → (Currently 13 members)
- The 13 countries account for 40 percent of global oil production and 73 percent of the world’s “proven” oil reserves, making OPEC a major influence on global oil prices
Being an organization consisting of the world’s major oil-exporting nations, OPEC is a cartel that aims to manage the supply of oil in an effort to set the price of oil on the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
Asian Development Bank (ADB)
- The Asian Development Bank (ADB) is a regional development bank established on 19 December 1966
- Headquarter at Metro Manila, Philippines
- Aimed to facilitate social and economic development of countries in Asia
- From 31 members at its establishment, ADB now has 67 members, of which 48 are from within Asia and the Pacific and 19 outside
- The ADB was modeled closely on the World Bank, and has a similar weighted voting system where votes are distributed in proportion with members’ capital subscriptions
United States 56%
Non Aligned Movement (NAM)
- Founded in Belgradein 1961 by Nehru (India), Unu (Burma), Sukarno (Indonesia), Nasser (Egypt), Nkumarah (Ghana) & Tito (Yugoslovakia)
- Objective → A group of states which are not formally aligned with or against any major power bloc
- Membership is particularly concentrated in countries considered to be developing or part of the Third World
- At present NAM has 120 member states & 15 observer states
- The 17th Summit of the Non Aligned Movement is to be held in Venezuela in 2016
Five principles of NAM
- Mutual respect for each other’s territorial integrity and sovereignty
- Mutual non-aggression
- Mutual non-interference in domestic affairs
- Equality and mutual benefit
- Peaceful co-existence
North Atlantic Treaty Organization (NATO)
- North Atlantic Treaty Organization (NATO) is basically a military alliance, born out of the North Atlantic Treaty on 4th of April, 1949.
- It is a political and military alliance whose primary goals are the collective defence of its members and the maintenance of a democratic peace in the North Atlantic area.
- Headquartered at the Belgium capital city of Brussels, the NATO introduced a collection of defense systems, as a result of which, its member-states agreed upon a common defense system, in the face of external invasions.
- All 28 Allies have an equal say, the Alliance’s decisions must be unanimous and consensual, and its members must respect the basic values that underpin the Alliance, namely democracy, individual liberty and the rule of law.
NATO’s Core Tasks
- Collective Defence
- Crisis management
- Cooperative security through partnerships
New Development Bank (BRICS Bank)
- Agreed in 5th BRICS summit held in Durban, South Africa in 2013
- 6th BRICS summit held in Fortaleza, Brazil, 2014, signed the document for $100 billion BRICS Development Bank and a reserve currency pool worth over another $100 billion
- Headquartered at Shanghai with African Regional Centre at Johannesburg
- 1st President – India, Chairman of the Board of directors – Brazil, Chairman of Board of governors – Russians
Terms & Objectives
- Primary focus of lending will be infrastructure projectswith authorized lending of up to $34 billion annually
- Will have starting capital of $50 billion, with capital increased to $100 billion over time
- Brazil, Russia, India, China & South Africa will initially contribute $10 billion each to bring the total to $50 billion
- No member can increase its share of capital without other 4 members agreeing – a primary requirement of India
- The bank will allow new members to join but the BRICS capital share cannot fall below 55%
- Official Languages – Chinese, English, Russian, Portuguese, 22 official languages of India
|Initial authorized capital
|Initial subscribed capital
||50 billion (each member gave 10 billion)
|Contingency reserve arrangement (CRA)
||Total → 100 billion
China → 41 Billion
Brazil, India, Russia → 18 Billion Each
S Africa → 5 billion
22 Official Languages of India
Contingent Reserve Arrangement (CRA)
- Provision of support through liquidity & precautionary instruments in response to potential short-term balance of payments pressures
- To provide protection against global liquidity pressures including currency issues where members’ national currencies are being adversely affected by global financial pressures.
- Total $100 Billion – China will contribute $41 billion, Brazil, Russia and India would give $18 billion each, and South Africa would contribute $5 billion
IMF, World Bank & BRICS
|By which summit?
||Bretton Woods, USA
||6th BRICS summit at Fortaleza, Brazil
||2014, July. Although ops may by 2016.
||188 (IBRD); 172 (IDA)
||Different voting powers based on Quota system.
||Differs according to shareholding
||All five members have equal voting power.
||IBRD, IDA, IFC, ICSID & MIGA
- Loans to solve Balance of Payment (BoP) crisis.
- Technical assistance in policy making
- Surveillance over International economy
- Poverty reduction to 3% by 2030.
- Soft loans for development projects.
- Promoting foreign investment and international trade.
- Loans for infrastructure and sustainable development projects
- Helping country in balance of payment (BoP) crisis
Why BRICS Bank Born
- BRICS – Collectively 1/5thof World GDP and 2/5th of world population
- No reforms in IMF or Word Bank → Highly dominated by USA & G7
- To defend BRICS economy from volatility in dollar exchange rate
- In the long run, it’ll make Chinese Yuan as an alternative to US Dollar, for global financial system
RBI Ex- Governor Rajan- “we did not setup BRICS bank to challenge World bank and IMF. This bank is setup only to provide “patient money” to BRICS nations, because World Bank and IMF are taking too much time to reform themselves.”
Article by AZAD