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26. The Specialized Agencies of the United Nations

The Specialized Agencies of the United Nations
     “Specialized agencies” is a term used in the Charter of the United Nations referring to the intergovernmental agencies related to (affiliated with) the United Nations (UN) by special agreements;  a special agreement concluded between the United Nations and each of these agencies has brought each agency into relation with the United Nations.
     Specialized agencies are separate, autonomous organizations which work with the UN and each other through the coordinating machinery of the Economic and Social Council of the United Nations.  They report annually to the Economic and Social Council.  “The Administrative Committee on Coordination” composed of the Secretary General of the United Nations and the executive heads of the specialized agencies was established by the Economic and Social Council in 1946 to supervise the implementation of the specialized agreements concluded between the United Nations and the specialized agencies, and to ensure that their activities are fully coordinated.
     Each specialized agency possesses full juridical personality.[1]  It enjoys full immunities and privileges in the territories of the member states; it is immune from judicial process and other actions, and from taxation; its property, assets and archives are immune; and it enjoys the privilege of communication.
     The general executive manager, officers and staff of a specialized agency are exclusively international in character. They are international civil servants.   Their loyalty is to the agency they relate to.  In performing their functions, they are under the duties not to seek or receive instruction from any government or from any other authority outside their agency, and to refrain from any action which might reflect on their position as international officials responsible only to the agency.  They enjoy the same immunities and privileges accorded to the agency.
     States members of an agency are under a duty to respect the exclusive international character of the responsibilities of the general manager, officers and staff of that agency.  They must not seek to influence these persons in the discharge of their responsibilities.
     Representatives of member states and their alternates in an agency enjoy the immunities and privileges accorded to diplomats and to the agency they relate to.      
     There are fifteen specialized agencies affiliated with the United Nations.  They are the following:
  1. International Labour Organization (ILO)
  2. Food and Agriculture Organization (FAO)
  3. United Nations Educational, Scientific and Cultural Organization (UNESCO)
  4. World Health Organization (WHO)
  5. World Bank Group
    1. International Bank for Reconstruction and Development (IBRD)
    2. International Development Association (IDA)
    3. International Finance Corporation (IFC)
    4. Multilateral Investment Guarantee Agency (MIGA)
    5. International Center for Settlement of Investment Disputes (ICSID)
  6. International Monetary Fund (IMF)
  7. International Civil Aviation Organization (ICAO)
  8. International Maritime Organization (IMO)
  9. International Telecommunication Union (ITU)
  10. Universal Postal Union (UPU)
  11. World Meteorological Organization (WMO)
  12. World Intellectual Property Organization (WIPO)
  13. International Fund for Agricultural Development (IFAD)
  14. United Nations Industrial Development Organization (UNIDO)
  15. United Nations Children’s Fund (UNICEF)
   There are two intergovernmental organizations not affiliated with the United Nations, although they are under its supervision.  These two organizations are the International Atomic Energy Agency (IAEA) and the World Trade Organization (WTO).  IAEA is represented in “the Administrative Committee on Coordination” which supervises the implementation of the agreements concluded between the United Nations, the IAEA and the specialized agencies related to the UN.  IAEA reports annually to the General Assembly of the United Nations and, if necessary, to the Security Council and the Economic and Social Council.  Cooperation and coordination between the WTO and the UN are done through the special arrangement concluded between the two organizations.
     In the following chapters we will deal with some of these agencies, namely: International Labor Organization (ILO), Food and Agriculture Organization (FAO), United Nations Educational, Scientific and Cultural Organization (UNESCO), World Health Organization (WHO), International Bank for Reconstruction and Development (IBRD), and International Monetary Fund (IMF).


   









Chapter One
International Labor Organization (ILO)[2]

     The International labor organization (ILO) was established in 1919, under the Treaty of Versailles, as an autonomous institution associated with the League of Nations.  It was founded on the idea that “universal and lasting peace can be established only if it is based upon social justice”, and for the aim to improve the labor conditions of the working peoples.[3]  ILO Constitution constituted Part XIII of the Treaty of Versailles.[4]  ILO was brought into affiliation with the United Nations when an agreement establishing the relationship between it and the United Nations was approved in 1946, thus ILO became the first specialized agency affiliated with the United Nations.
     The ILO is composed of 177 member states.  Its headquarters is located in Geneva, Switzerland.

I. Aims and Functions of ILO  [5]
       The aim of ILO is to promote social justice and internationally recognized human and labor rights for the working peoples everywhere.  In order to achieve this aim, ILO performs the following functions:
(1)  It formulates international policies and programmes to help improve working and living conditions for the working peoples. 
(2)  It establishes international labor standards to serve as guidelines for national authorities in putting their policies into action.  The ILO sets standards that cover child labor, disabled workers, discrimination, equality of treatment, freedom of association, human rights, maternity protection, pensions, and the elimination of forced labor.
(3)  It provides technical assistance to member nations in order to facilitate the adoption and enforcement of ILO standards. Technical cooperation programs cover employment promotion, management, and training; labor administration and industrial relations; social security; and working conditions, occupational safety, and health.
(4)  It engages in training, education and research to help advance its works.  Opportunity for study and training are offered at the ILO’s International Institute for Labor Studies in Geneva, Switzerland, and the International Training Center in Turin, Italy.
(5)  It supervises the application of ratified conventions in national law and practice.  It has a special procedure for investigating complaints of infringements of conventions.  Employers’ and workers’ organizations and member governments have the right to lodge formal complaints with the ILO.
     One of the most important functions of ILO (the Conference of ILO) is the adoption of conventions and recommendations which set international labor standards in such areas as freedom of association, wages, hours and conditions of work, workmen’s compensation, social insurance, vacation with pay, industrial safety, employment services, and labor inspection.  While recommendations provide guidance for national policy, legislation and practice, the conventions create upon the states that ratify them binding obligations to put their provisions into effect.[6] Since its establishment, ILO adopted more than 350 conventions and recommendations on various areas.

II. Organizational Structure of ILO
        The International Labour Organization is a unique among world organization because workers’ and employers’ representatives have an equal voice with those of governments in formulating its policies.[7]  ILO accomplishes its work through three main bodies,[8] all of which encompass the unique feature of the Organization: its tripartite structure (governments, employers, and workers).
1.  The International Labor Conference [9]
     The member states of ILO meet at the International Labour Conference in June of each year, in Geneva.  Each member state is represented by two government delegates, an employer delegate and a worker delegate.  They are accompanied by technical advisors. It is generally the Ministers responsible for labor affairs in their own countries who head the delegations, take the floor and present their governments' points of view.  Employer and worker delegates can express themselves and vote according to instructions received from their organizations. They sometimes vote against each other or even against their government representatives.
     The Conference plays a very important role.  It establishes and adopts international labor standards by means of conventions, which are subject to voluntary ratification by member nations, and recommendations that provide nations with detailed guidelines for legislation.  It acts as a forum where social and labor questions of importance to the entire world are discussed.  The Conference also adopts the budget of the Organization and elects the Governing Body.

2.  The Governing Body [10]
     The Governing Body is the executive council of the ILO.  It meets three times a year in Geneva. It takes decisions on ILO's policy.  It establishes the programme and drafts the budget which then submits to the Conference for adoption.  It elects the Director-General.
     The Governing Body is composed of 56 members: 28 government members, 14 employer members and 14 worker members.  Ten of the government seats are permanently held by states of chief industrial importance. Representatives of other member countries are elected at the Conference every three years, taking into account geographical distribution. The employers and workers elect their own representatives respectively.


3.  The International Labor Office [11]
     The International Labor Office is the permanent secretariat of the International Labor Organization and focal point for the overall activities that it prepares under the scrutiny of the Governing Body and under the leadership of a Director-General, who is elected for a five-year renewable term. The Office employs some 1,900 officials of over 110 nationalities at the Geneva headquarters and in 40 field offices around the world. In addition, some 600 experts undertake missions in all regions of the world under the programme of technical cooperation. The Office also constitutes a research and documentation centre and a printing house issuing a broad range of specialized studies, reports and periodicals














Chapter Two

Food and Agriculture Organization (FAO) [12]



     The Food and Agriculture Organization of the United Nations (FAO) was originated at a conference called for by U.S President Franklin D. Roosevelt, and held in Hot Springs, Virginia (U.S.A), in May 1943.  The 34 nations represented in the conference established the United Nations Interim Commission on Food and Agriculture.  On October 16, 1945, the first session of the Food and Agriculture Organization of the United Nations (FAO) was held in Quebec City, Canada.  Since 1981, October 16 has been observed annually as World Food Day.
     Today FAO has 187 member states plus the European Union.[13]  Its Headquarters is located in Rome, Italy.

I. Aims and Functions of FAO [14]
     The major aim of FAO is to eliminate hunger on a world scale.  The specific aims are the following:
(1)  To raise levels of nutrition and standards of living of all peoples.
(2)  To improve the production and distribution of all food and agricultural products.
(3)  To promote rural development and improve the living conditions of rural populations.
(4)  To contribute towards an expanding world economy and ensuring humanity's freedom from hunger.
        In order to achieve its aims, FAO works through technical assistance and all necessary and appropriate actions: (a) to collect, analyze, interpret and disseminate information relating to nutrition, food and agriculture; (b) to encourage sustainable agriculture and rural development; (c) to ensure availability of adequate food supplies; (d) to maximize stability in the flow of supplies; and (e) to secure access to food by the poor.
     The works of FAO are performed by means of FAO’s programmes, particularly the following:      
 1.  FAO’s People’s Participation Programme promotes the involvement of rural people and disadvantaged groups in decision-making and the design and implementation of policies and activities affecting their lives.  The purpose is to strengthen rural people’s organizations and encourage collaboration between them, governments and development agencies.
     In this regard, FAO promotes investment in agriculture, better soil and water management, improved yields of corps and livestock, the transfer of technology and the development of agriculture research in development countries.  It also promotes the conversation of natural resources, the rational use of fertilizers, and combats animal diseases.  Technical assistance is provided in all these fields and in others such as nutrition, agricultural engineering, and the prevention of food losses.
2.  FAO’s special programmes help countries prepare for emergency food situations and provide relief when necessary.  Its Global Information and Early Warning System provides current information on the world food situation and identifies countries threatened by shortage, to guide planners and potential donors.  Assistance Scheme is designed to assist developing countries set up national food reserves.
3.  FAO’s programmes aim at improving seed production and distribution in developing countries, and assisting countries in supply and use of fertilizers.
4.  FAO’s programme aims to control animal diseases.



II. Organizational Structure of FAO    
     FAO is administered by three main organs:  The Conference, the Council, and the Director General.    

1.  The Conference of FAO [15]
     The Conference of FAO gathers all the member states of the Organization and the European Union.  Each member state has one vote.  All decisions of the Conference are taken by a majority of the votes cast, except as otherwise expressly provided in FAO Constitution or by rules made by the Conference.  The Conference meets once in every two years in regular session; it may meet in special session.  The Conference is entrusted mainly: (a) to determine the policy and approve the budget of the Organization and to exercise the other powers conferred upon it by FAO Constitution; (b) to make recommendations to Members concerning questions relating to food and agriculture, for consideration by them with a view to implementation by national action; (c) to review any decision taken by the Council or by any commission or committee of the Conference or Council, or by any subsidiary body of such commissions or committees.

2.  The Council of FAO [16]
     The Council of FAO consists of 49 member states elected by the Conference.  Each member serves three-year term.  Each member state has one representative and has only one vote. Each member may appoint alternates, associates and advisers to its representative.
     The Council serves as the governing body of the Organization between sessions of the Conference.  It meets between the sessions of the Conference to monitor the world food situation and suggest necessary action.  In performing its functions, the Council is assisted by several committees dealing with the various aspects of the works of the Organizations. 
3.  The Director General of FAO [17]
     The Director General is the administrative officer of FAO.  He is at the head of the Staff of the Organization, whom he appoints, and who are responsible to him.  He is appointed by the Conference for a term of six years renewable once for a further term of four years.  He has the powers and authority to direct the work of the Organization and implement FAO programmes.  
     FAO employs more than 3600 staff members, about 1600 professional and 2000 general service staff.  Currently, FAO maintains five regional offices, nine subregional offices, five liaison offices and 74 fully-fledged country offices (excluding those hosted in Regional and Subregional Offices), in addition to its headquarters in Rome.













Chapter Three
United Nations Educational, Scientific and Cultural Organization (UNESCO) [18]

     The United Nations Educational, Scientific and Cultural Organization (UNESCO) was founded at a conference convened in London in October 1945 where the constitution of UNESCO was signed.[19]   UNESCO came into being in 1946.
     UNESCO is today composed of 191 member states and 6 associate members.[20]   Its headquarters is located in Paris, France.

I. Aims and Functions of UNESCO [21]
    The primary aim of UNESCO is to contribute to peace and security by promoting collaboration among nations through education, science and culture in order to further universal respect for justice, for the rule of law and for the human rights and fundamental freedoms which are affirmed for the peoples of the world, without distinction of race, sex, language or religion, by the Charter of the United Nations.  To realize this aim, UNESCO works:
1.     To promote a culture of peace and human and sustainable development.
2.     To promote education for all adapted to today’s need, and to develop higher education.
3.     To encourage national cultural values and the preservation of cultural heritage.
4.     To promote the social sciences as instruments for the realization of human rights, justice and peace.
5.     To promote the free flow of information, press freedom and the development of pluralistic and diverse media.
6.     To support the strengthening of the communication capacities of developing countries.
7.     To promote environmental research through international scientific programmes.
      The works of UNESCO are performed by means of UNESCO’s programmes concerning education, natural sciences, social and human sciences, culture, and communication.
(a)      In education: UNESCO helps train teachers, educational planners and administrators and encourages local building and equipping of schools.
(b)     In social and human sciences: UNESCO focuses on teaching and promoting human rights and democracy, combating all forms of discrimination, improving the status of women, and encouraging action for the prevention of AIDS.
(c)      In culture:  UNESCO concentrates chiefly on safeguard cultural heritage; it established the World Heritage List which includes 400 sites, both cultural and natural, in 100 countries. It also concentrates on promoting the cultural dimension of development, encouraging creation and creativity, preserving cultural identities and oral traditions, as well as promoting books and reading.
(d)     In communication:  UNESCO surveys needs and assists developing countries to set up infrastructures in the field of communication. 
     In its works, UNESCO cooperates with international and regional organizations, as well as with more than 600 non-governmental organizations and foundations.




II. Organizational Structure of UNESCO
     UNESCO is governed by three main organs, namely the General Conference, the Executive Board and the Secretariat.[22]

1.  General Conference [23]
     The General Conference of UNESCO consists of representatives of member states.  It meets in ordinary session every two years; it may meet in extraordinary sessions.  Member states and associate members, together with observers for non-member states, intergovernmental organizations and non-governmental organizations attend these meetings.    Each member state has one vote.  Decisions are made by a simple majority of the members present and voting, except in cases in which a two-third majority is required. 
     The General Conference determines the policies and the main lines of works of the Organization.   It approves the programmes and the budget of UNESCO.  It summons international conferences of states, or non-governmental conferences, on education, the sciences of humanities or dissemination of knowledge.  It elects the members of the Executive Board, and appoints the Director General.
    
2.  Executive Board [24]   
       The Executive Board consists of 58 members elected by the General Conference.[25]  It meets twice a year.   It is entrusted to assure the overall management of the Organization.  It prepares the work of the General Conference, supervises the implementation of the decisions of the Conference, and ensures the execution of the programmes adopted by the Conference.  It also performs the tasks and functions entrusted to it by the General Conference, or under agreements concluded between UNESCO and the United Nations, the specialized agencies and other intergovernmental organizations.  

3.  The Secretariat [26]
     The Secretariat is the administrative organ of UNESCO.  It consists of the Director General and the Staff.   The Director General is nominated by the Executive Board and appointed by the General Conference for a period of four years.  He is the chief administrative officer of the Organization.  He formulates proposals for appropriate action taken by the General Conference and the Executive Board.  He prepares for submission to the Board draft programmes of work for the Organization with their estimated budgets.  He prepares and communicates to member states and the Executive Board periodical reports on the activities of the Organization.  He also appoints the Staff of the Secretariat.
     As of January 2007, the Secretariat employs around 2,100 civil servants from some 170 countries. The staff is divided into Professional and General Service categories. Under a recent decentralization policy, more than 700 staff members work in UNESCO's 58 field offices around the world.









Chapter Four
World Health Organization (WHO) [27]


     The World Health Organization (WHO) was established in 1948; it came into being on 7 April 1948, when 26 member states of the United Nations had ratified its constitution.[28]  This date is observed annually as World Health Day. 



I. Purposes and Functions of the WHO

     The ultimate objective of the World Health Organization, as stated in its constitution, is the attainment by all peoples of the highest possible level of health.[29]  This objective is based on the premise that the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being.[30]  The Constitution defines health as a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity.[31]
     In order to achieve its objective, WHO is entrusted to perform the following main functions:[32]
(a)  acting as the directing and coordinating authority on international health work;
(b) assisting Governments, upon request, in strengthening health services;
(c)  furnishing appropriate technical assistance and, in emergencies, necessary aid upon the request or acceptance of Governments;
(d) stimulating and advancing work to eradicate epidemic, endemic and other diseases;
(e)  stimulating the generation, translation and dissemination of valuable knowledge;
(f)   setting norms and standards and promoting and monitoring their implementation;
(g)  promoting co-operation among scientific and professional groups which contribute to the advancement of health;
(h) monitoring the health situation and assessing health trends; and
(i)    proposing conventions, agreements and regulations, and make recommendations.
     In collaboration with national governments and other international aid agencies, WHO works to reduce human disease, to fund medical research, to provide emergency aid during disasters, and to improve nutrition, housing, sanitation, and working conditions in developing countries.



II. Organizational Structure of the WHO

     The work of WHO is carried out by the following main organs: (1) The World Health Assembly; (2) The Executive Board; and (3) The Secretariat.[33]

1. World Health Assembly [34]
     The World Health Assembly is the supreme decision-making organ of WHO.  It is composed of delegates representing all 193 member states.  It generally meets in Geneva in May each year.  Its main function is to determine the policies of the Organization.
     The Assembly appoints the Director-General, supervises the financial policies of the Organization, and reviews and approves the proposed programme budget.  It considers reports of the Executive Board, which it instructs in regard to matters upon which further action, study, investigation or report may be required.

2. Executive Board [35]
     The Executive Board is the executive arm of the Organization.  It is composed of 34 members technically qualified in the field of health.  Members are elected for three-year terms.  The main meeting of the Board is held in January, at which the agenda for the forthcoming Health Assembly is agreed upon and resolutions for forwarding to the Health Assembly are adopted.  The second shorter meeting is held in May, immediately after the Health Assembly, for more administrative matters.  The main functions of the Board are to give effect to the decisions and policies of the Health Assembly, to advise it and generally to facilitate its work.


3. The Secretariat [36]       
     The secretariat is the administrative organ of the Organization.  It consists of the Director General and the technical and administrative staff.  The Director General is the head of Organization.  He is appointed by the Health Assembly on the nomination of the Executive Board.
     The Secretariat is staffed by some 3500 health and other experts and support staff on fixed-term appointments, working at headquarters, in the six regional offices, and in countries.  The headquarters of WHO is in Geneva, Switzerland.
    




Chapter Five
International Bank for Reconstruction and Development (IBRD) [37]

     The International Bank for Reconstruction and Development (IBRD) was created at the United Nations Monetary and Financial Conference, known as the Bretton Woods Conference, held in July 1944 at Bretton Woods, New Hampshire (United States of America) for the purpose of shaping a program for international economic cooperation that would avoid a repetition of the disastrous economic policies which contributed to the Great Depression of the 1930s.   The Conference was attended by representatives of 44 nations; it resulted in the creation of the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF).  The IBRD came into being in 1945 when its Articles of Agreement, drawn at Bretton Woods Conference, was signed by the required 28 member nations.[38]
     Initially, IBRD helped rebuild Europe after the Second World War.  Its first loan of $250 million was to France in 1947 for post-war reconstruction.  Reconstruction has remained an important focus of the Bank’s works.  The Bank, however, today focuses on poverty reduction as the overarching goal of its work.   Today’s Bank is a vital source of financial and technical assistance to developing countries around the world.
     The IBRD is one of four institutions of the World Bank Group.  The other institutions are:  the International Finance Corporation (IFC),[39] established in 1956; the International Development Association (IDA),[40] established in 1960; and the Multilateral Investment Guarantee Agency (MIGA),[41] established in 1988.  Although these four institutions are legally and financially separate, they share the same President, Executive Directors, and Board of Governors.  IBRD and IDA share the same staff, while each of IFC and MIGA has its own staff, nevertheless, each uses administrative and other services of the IBRD and IDA.  The common objective of all four institutions is to reduce poverty and improve people’s living standards by promoting sustainable economic growth and development.  Affiliated with these four institutions is the International Center for Settlement of Investment Disputes (ICSID) which was established in 1966, and the International Monetary Fund (IMF) which was established at the same time as of the IBRD.
     The IBRD has 185 member states, the shareholders of the Bank.[42]  Membership in the IMF is a prerequisite for membership in the Group of the World Bank.  The World Bank Group’s headquarters is located in Washington, D.C. (U.S.A).

I. Purposes and Activities of IBRD 
     The IBRD was established for the following purposes:[43]
(1)     To assist in the reconstruction and development of territories of its members by facilitating the investment of capital for productive purposes.
(2)     To promote private foreign investment and, when private capital is not readily available on reasonable terms, to supplement private investment by providing finance for productive purposes.
(3)     To promote the long-range balanced growth of international trade and the maintenance of equilibrium in balances of payments by encouraging international investment for the development of productive resources of members.
     IBRD achieves its purposes by means of loans, and technical assistance.[44]
(A) IBRD provides low interest loans (or guarantees loans, or participates in loans) to member states, to their political subdivisions or to private business enterprises in their territories.[45]  These operations by IBRD are governed by specified rules.  (1) IBRD must lend for productive purposes, such as agriculture and rural development, energy, education, health, family planning and nutrition, roads and railways, telecommunications, ports and powers facilities. (2) IBRD must pay due regard to the prospects for repayments.  (3) IBRD must assure itself that the necessary funds are unavailable from other sources on reasonable terms.  (4) A loan must be guaranteed by the Government concerned.  (5) Except in specific circumstances, a loan must be for specific projects. (6) IBRD’s decisions to lend must be based only on economic consideration.
     Before the Bank can make a loan, advisers and experts representing the Bank must determine that the prospective borrower can meet conditions stipulated by the Bank.  After the loan has been made, the Bank requires periodic reports both from the borrower and from its own observers on the use of the loan and on the progress of the project.  
     Since 1960, most of the loans have been granted to developing countries in Africa, Asia and Latin America.  Since 1980, IBRD has made loans supporting projects benefiting the poorest peoples in developing countries by helping them to raise their productivity and to gain access to such necessities as safe water and waste-disposal facilities, health care, nutrition, family planning, education, and housing, and also supporting programmes of specific policy changes and institutional reforms.  Notably, the IDA, the affiliated institution to IBRD, provides no interest loans to countries that are not qualified for loans at market-based interest rates.
(B)  IBRD provides a wide range of technical assistance services to member states.  It provides analysis, advice and information to member countries (or to development professionals and the public) so they can deliver the lasting economic and social improvements to their people need.  It does this in several ways: through economic research on broad issues such as the environment, poverty, trade and globalization, and through country-specific economic and sector work, where it evaluates a country's economic prospects by examining its banking systems, financial markets and public expenditure, as well as trade, infrastructure, poverty and social safety net issues.  It also draws upon the resources of its “knowledge bank” to educate clients so they can equip themselves to solve their development problems and promote economic growth.[46]  The ultimate aim of the IBRD is to encourage the knowledge revolution in developing countries.

II. Sources of IBRD’s Fund
      IBRD finances its operations from its own capital, borrowing or selling AAA-rated bonds in the world financial markets, retained earnings, [47] and the flow of repayments on its loans; these constitute the resources of the IBRD (the sources of IBRD’s Fund).
     The authorized capital stock of the IBRD consists of the money paid (shares subscribed) by the185 member states (shareholders) of the Bank; the IBRD capital is available for subscription only by member states.   Before April 27, 1988, the authorized capital stock of the IBRD was $10,000,000,000 divided into 100,000 shares having a par value of $100,000 each.[48]  As of April 27, 1988, the authorized capital stock has been increased to 1,420,500 shares.[49]   Each member state subscribes a number of shares determined by the Bank in accordance with the relative strength of its national economy.[50]   20% of the value of the shares subscribed by a member state are to be paid when joining the Bank or subject to a call as needed by the Bank; the remaining 80% must be paid when the Bank calls for if required to meet its obligations (such a call has never been made).[51]  Payments for the shares are paid in gold or United States dollars and in the currencies of the members.
 III. Organizational Structure of IBRD 
     The IBRD is administered by the Board of Governors, the Executive Directors and the President of the Bank. [52]  

1.  Board of Governors [53]
     All the 185 member states of the IBRD are represented on the Board of Governors of the Bank.  The Board of Governors consists of one governor and one alternate appointed by each member state of the Bank.  The Governors are usually member states’ ministers of finance or ministers of development.
     The Board of Governors is the ultimate policy maker of the Bank.  All the powers of the Bank are vested in the Board of Governors.  However, because the Board meets only once annually,  it delegates to the Executive Directors the authority to exercise its powers, except those which are reserved to it  by the Articles of Agreement, such as, for example, the powers to admit new members, to suspend a member, to increase or decrease the capital stock, to make cooperative arrangements with international organizations, to suspend permanently the operations of the Bank and to distribute its assets, and to determine the distribution of the net income of the Bank.
     The Board of Governors holds an ordinary meeting once a year; it may hold other meetings if necessary.  It is chaired by a chairman whom it selects from the governors.  A quorum of any meeting is the majority of the governors, having not less than two-third of the total voting powers.   Each Governor (member of the Board) has 250 votes plus one additional vote for each share of stock held by the member state he represents.  The Board decides all its matters by a majority of votes cast, except otherwise specifically provided.     


2.  Executive Directors [54]
     There are 24 Executive Directors appointed or elected for a two-year term.  They make the Board of Directors of the Bank.  Each of the five member states having the largest number of shares, namely France, Germany, Japan, United Kingdom and the United States of America, appoints one executive director; while the rest member states of the Bank elect the rest 19 executive directors.  Each Executive Director appoints an alternate with full powers to act for him when he is not present.
     The Executive Directors are responsible for the conduct of the general operations of the Bank.  They exercise all the powers delegated to them by the Board of Governors.  They function in a continuous session at the principal office of the Bank.  They normally meet at least twice a week to oversee the Bank’s business, including the approval of loans and guarantees, new policies, the administrative budget, country assistance strategies, and borrowing and financial decisions.  The quorum of any meeting is the majority of the Directors, exercising not less than one-half of the total voting power.[55]  The Executive Directors may appoint committees as they deem advisable to assist them in performing their functions.

3.  President of the World Bank [56]
     The President of the World Bank (the World Bank Group) is the manager of the Bank.  He is elected by the Executive Directors for a five-year, renewable term.  He should not be a governor or an executive director or alternate for either.  By tradition, the President is a national of and is nominated by the largest shareholder in the Bank, which is the United States of America.
    The President of the Bank is the Chairman of the Executive Directors.  He has no vote in the meetings of the Executive Board except a deciding vote in case of an equal division.   He may participate in the meetings of the Board of Governors, but with no right to vote.
    The President is responsible for the overall management of the Bank.  He is the chief of the operating staff of the Bank.  He conducts, under the direction of the Executive Director, the ordinary business of the Bank.  Subject to the general control of the Executive Directors, he is responsible for the organization, appointment and dismissal of the officers and staff of the Bank.
     The day-to-day operations of the Bank are performed under the leadership and direction of the President, senior officers, and the vice presidents in charge of regions, sectors, network and functions.  The Bank once had a homogenous staff of engineers and functional analysts, base solely at its headquarters in Washington, D.C.  Today, it has multidisciplinary and diverse staff including economists, public policy experts, sectoral experts, and social scientists.  40 percent of the Bank’s staff are now based in regional and country offices.









Chapter Six
International Monetary Fund (IMF) [57]

     The International Monetary Fund (IMF) was created, with the International Bank for Reconstruction and Development (IBRD), at the United Nations Monetary and Financial Conference (known as Bretton Woods Conference) held in July 1944 at Bretton Woods, New Hampshire, United States of America (USA).[58]  It came into being in 1945.
     The IMF was created primarily to ensure the stability of international monetary and financial system, and thereby to promote healthy world economy.  Since the establishment of the IMF, its purposes have remained unchanged, but its activities and operations have developed to meet the changing needs of its member states in an evolving world economy.  The IMF has 185 member states.  Its headquarters is in Washington, D.C. (USA).

I. Purposes and Activities of IMF   
     The purposes of the IMF as stated in Article I of its Articles of Agreements are:
(1)      To promote international monetary cooperation by providing the machinery for consultation and collaboration on international monetary problems.
(2)      To facilitate the balanced growth of international trade, and to contribute thereby to the promotion of high levels of employment and real income, and to the development of the productive resources of all members as primary objectives of economic policy.
(3)      To promote exchange stability and orderly exchange arrangements among members, and to avoid competitive exchange depreciation.
(4)      To assist in the establishment of a multilateral system of payments in respect of current transactions between members, and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
(5)      To make the general resources of the Fund temporarily available to members, under adequate safeguards, to permit them to correct maladjustments in their balance of payments without resorting to measures destructive to national or international prosperity.
(6)      To shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.
          Generally, the IMF is responsible for ensuring the stability of the international monetary and financial system, which is the system of international payments and exchange rates among national currencies that enables trade to take place between countries.  In order to achieve its purposes, the IMF works to promote global growth and economic stability, prevent and help resolve economic crises, encourage countries to adopt sound economic policies, and alleviate poverty.  In this regard, it employs three main functions (activities): surveillance, technical assistance, and lending.
(A)  Surveillance:[59]   Surveillance is both the regular monitoring of national, regional and global economic and financial developments which the IMF undertakes, and the regular dialogue and policy advice that the IMF offers to each of its members.  On a regular basis, usually once a year, IMF monitors and conducts in depth appraisals of each member state’s economic situation.[60]  It discusses with the authorities of each state the policies that are most conducive to stable exchange rates, a growing and prosperous economy, crisis prevention, and high living standards.   It also discusses with a member state the ways to strengthen its financial sectors and trade competitiveness. The consultations also consider potential national and international consequences of domestic policies, and possible domestic consequences of developments in other countries or regions.
     The IMF closely monitors economic and financial developments at the regional and global levels.  It promotes dialogue among member countries on the regional and international consequences of their economic and financial policies, and reviews global economic trends and developments that affect the health of the international monetary and financial system.
     The IMF combines information from individual consultations to form assessments of global and regional developments and prosperous. The views of the IMF on the multilateral surveillance are published twice a year.       
(B) Technical assistance and training: Technical assistance and training are offered, mostly free of charge, to help states strengthen their capacity to design and implement effective policies.  Technical assistance is offered on a range of institutional and policy issues within the Fund’s areas of responsibility, including fiscal policy, monetary and exchange rate policies, the regulation and supervision of banking and financial systems, and statistics.
(C) Financial assistance:[61]  Financial assistance is available to enable member states to correct their balance of payments problems, to overcome financial difficulties, and to reduce poverty.  A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF.  IMF makes financial resources available temporary to members, under a range of policies and facilities.  In lending to its members, the IMF is guided by two principles.  Firstly, the pool of currencies at its disposal exists for all members, and therefore, a member borrowing currency is expected to return it as soon as its payments problems have been solved, so as not to limit other members’ access.  Secondly, before the IMF releases any money from the pool, the member must demonstrate how it intends to solve its payments problems, so that it can repay the IMF within the repayment period, which is normally three to five years, however, the period can be up to ten years under certain facilities.
     Any member country, rich or poor, can turn to the IMF for financing if it has a balance of payments need, that is, if it cannot find sufficient financing on affordable terms in the capital markets to make its international payments and maintain an appropriate level of reserves.  The IMF is not an aid agency or a development bank.  Its loans are intended to help members tackle balance of payments problems, stabilize their economies, and restore sustainable economic growth.  Unlike the World Bank and other development agencies, the IMF does not finance projects.  Technically, countries do not receive loans from the IMF; they "purchase" foreign exchange from the IMF's reserve assets, paying with their own currency.  The loan is considered repaid when the borrower "repurchases" its currency from the IMF in exchange for reserve assets (SDR).
(i)                Financial assistance is available to member states with payments problems to give them the breathing room they need to correct or ease balance of payments problems.  The IMF lends under the so-called “special drawing rights” (SDRs).[62]  The SDR is an asset allocated to members by the IMF as an international reserve asset and for use in support of their currencies.  It is valued by reference to a “basket” of specialized amounts of the four key international currencies (US Dollar, the Euro, the Sterling Pound, and Japanese Yen) and by reference to their exchange rates.  SDRs are allocated to member states in proportion to their IMF quotas.  The use of SDRs enables members to acquire hard currencies against their own national currencies.[63]  The amount of financing a member can obtain from the IMF (its access limit) is based upon its quota.  Under Stand-By and Extended Arrangements, for instance, a member can borrow from the IMF up to 100% of its quota annually and 300% cumulatively; however, access may be higher in exceptional circumstances.
(ii)             The IMF provides financial assistance to members experiencing financial difficulties, to support policy programs that will correct underlying macroeconomic problems, to limit disruption to the domestic and global economies, and to help restore confidence, stability and growth.  The IMF financial assistance can also support crisis prevention.
(iii)           Financial assistance is also available to assist member states in reducing poverty.  The IMF works to reduce poverty in low-income countries, independently or in collaboration with the World Bank and other organizations.  It provides financial support through its poverty reduction and economic growth lending facility (concessional lending), and debt relief facility.[64]
(iv)           The IMF assists in encouraging actions by debtor countries and their creditors to facilitate a more orderly process for debt restructuring.  

II. Sources of IMF’s Fund
     Resources of IMF are provided by the member states, primarily through their payment of quotas.  Each member of the IMF is assigned a quota,[65] based broadly on its relative size in the world economy, which determines its contribution to the IMF's financial resources.  Upon joining the IMF, a country normally pays up to one-quarter of its quota in the form of widely accepted foreign currencies (such as the US Dollar, the Euro, the Sterling Pound, or the Japanese Yen) or Special Drawing Rights (SDRs).  The remaining three-quarters are paid in the country's own currency.  Quotas are reviewed at least every five years.  As of March 31, 2007, the total IMF quotas are SDR 217 billion (about $327 billion).[66]
     The IMF can only use its quota-funded holdings of currencies of financially strong economies to finance lending.  The IMF's Executive Board selects these currencies every three months.  Most are issued by industrial countries, but the list also includes currencies of certain developing countries. The IMF's holdings of these currencies, together with its own SDR holdings, make up some of its usable resources.
     If the IMF believes that its forward commitment capacity might fall short of its members' needs, for example in the event of a major financial crisis, it can activate supplementary borrowing arrangements, under which it can borrow money from specified countries.
     Concessional lending and debt relief for low-income countries are financed through separate contribution-based trust funds.  There is also a separate administered account financed by a group of member countries for interest subsidies on IMF emergency assistance to certain eligible countries in post-conflict or natural disaster situations.
     All the above, in addition to the loan repayments to the IMF and the returns on IMF’s investment accounts constitute IMF’s usable resources for its operations.[67] 

III. Organizational Structure of IMF
     The IMF is governed by three organs:  the Board of Governors, the Executive Board, and the Managing Director and the staff.[68]

1.  Board of Governors [69]
     The Board of Governors consists of one governor and one alternate appointed by each of the 185 member states of the IMF.  The governor is usually the minister of finance or the governor of the central bank of the member state.  The Board of Governors is the highest authority of the IMF.  All the powers are vested in it, except those conferred directly on the Executive Council or the Managing Director.  However, it delegates to the Executive Board authority to exercise any of its powers, except those conferred directly by the IMF’s Articles of Agreement on the Board of Governors.
     The Board of Governors normally meets once a year; it may meet when it is needed.  It appoints one governor to be its chairman.  The quorum of its meetings is a majority of the Governors having not less than two-thirds of the total voting power.  Each Governor is entitled to cast the number of votes allotted to the member state appointing him.[70]

2.  Executive Board [71]
      The Executive Board is composed of 24 Executive Directors, who are appointed or elected by the member states or by groups of member states (5 are appointed by states having the largest quotas, and 19 by the other states).  It is responsible for conducting the day-to-day business of the IMF, and for performing the powers directly conferred on it by the IMF’s Articles of Agreement and the powers delegated to it by the Board of Governors.  It usually meets several times each week.  The quorum for its meetings is the majority of the Governors having not less than two-thirds of the total voting power.  Each Governor is entitled to cast the number of votes allotted to the member appointing him or the members elected him.  The Board appoints the Managing Director of the IMF, who serves as its Chairman.

3.  Managing Director [72]        
     The Managing Director of the IMF is the Chairman of the Executive Board and the Chief of the IMF’s Staff.  He has no vote on the Executive Board except a deciding vote in case of equal division.  He is appointed by the Executive Board for a renewable five-year term.  He should not be a Governor or an Executive Director.  He may participate in the meetings of the Board of Governors, but with no right to vote.
     The Managing Director is the chief of the operating staff of the IMF.  He conducts, under the direction of the Executive Board, the ordinary business of the IMF.   Subject to the general control of the Executive Board, he is responsible for the organization, appointment, and dismissal of the staff of the IMF.  He is assisted by the First Deputy Managing Director and two other Deputy Managing Directors.
     The IMF employs approximately 2,716 staff members, who come from over 165 countries.  About one-half of the IMF's employees are economists.  Most staff work at the IMF's Washington, D.C., headquarters, but the IMF also has over 85 resident representatives posted in member countries around the world.  In addition, it maintains offices in Brussels, Paris, and Tokyo, which are responsible for liaison with other international and regional institutions and civil society organizations, as well as in New York and Geneva, which focus on liaison with institutions in the UN system. The Geneva office is also responsible for liaison with the World Trade Organization.
[1] See the relevant articles in the constitutive instruments of the specialized agencies.  The texts of these instruments are found on the web sites of the agencies.
[2] For the materials on ILO, see the ILO web site at //www.ilo.org/
[3] The Preamble of the ILO Constitution.
[4] Text of the ILO Constitution is found on the ILO web site.
[5] See the Preamble of the ILO Constitution, and the Declaration Concerning the Aims and Purposes of the International Labor Organization adopted at Philadelphia on 10 May 1944 (the text is annexed to the ILO Constitution).
[6] See the ILO Constitution arts. 19-21 & 35.
[7] See id. art. 3.
[8] Id. art. 2.
[9] See id. arts. 3-6.
[10] See id. art. 7.
[11] See id. arts. 8-11 & 14-15.
[12] For the materials on FAO, see the FAO web site at //www.fao.org/.
[13] Regional economic integration organizations are eligible to apply for membership of FAO. See the FAO Constitution art. II. (Text of the Constitution is found on FAO web site).
[14] See the FAO Constitution, the Preamble & art. I.
[15] See id. arts. III & IV.
[16] See id. art. V.
[17] See id. arts VII & VIII.
[18] For the materials on UNESCO, see the UNESCO web site at //www.unesco.org/.
[19] The Text of the UNESCO Constitution is found on UNESCO web site.
[20] Note that in 1984 United States of America (U.S.A) and United Kingdom (U.K) left UNESCO.  U.K returned in 1997; U.S.A returned in 2003.
[21] See the UNESCO Constitution art. I.
[22] The UNESCO Constitution art. III.
[23] See id. art. IV.
[24] See id. art. V.
[25] The choice of these representatives is largely a matter of the diversity of the cultures and their geographical origin. Skilful negotiations may be needed before a balance is reached among the different regions of the world in a way to reflect the universality of the Organization.
[26] See the UNESCO Constitution art. VI.
[27] For the materials on WHO, see the WHO web site at //www.who.org/.
[28] The Constitution was adopted by the International Health Conference held in New York from 19 June to 22 July 1946, signed on 22 July 1946 by the representatives of 61 States. Text of the WHO Constitution is found 0n the WHO web site.
[29] WHO Constitution art. 1.
[30] Id. the preamble.
[31] Id.
[32] Id. art. 2.
[33] Id. art. 9.
[34] See id. arts. 10-23.
[35] See id. arts. 24-29.
[36] See id. arts. 30-37.
[37] For the materials on the IBRD, see the IBRD web site at //www.worldbank.org/.
[38] Text of the IBRD Articles of Agreement is found on the IBRD web site.
[39] IFC’s function is to invest in private sector enterprises in developing countries.
[40] IDA’s function is to provide no-interest loans (credits) to poorest countries. IDA provides “soft loans” which are for longer term than those of the IBRD and bear no interest; only an annual service charge of 0.75 percent is required. IDA accounts for nearly 40% of the lending of the World Bank (IBRD and IDA). IDA also provides grants designed to facilitate development projects by encouraging innovation, co-operation between organizations and local stakeholders’ participation in projects. In recent years, IDA grants, which are either funded directly or managed through partnerships, have been used mainly to relieve the debt burden of heavily indebted poor countries, improve sanitation and water supplies, support vaccination and immunization programs to reduce the incidence of communicable diseases, and support civil society organizations.
[41] MIGA’s function is to facilitate investments of foreign private capital in developing countries. It mitigates the major political risks involved in investing in these countries by providing insurance (guarantees) in them.
[42] Total member states of each institution:  IDA, 166; IFC, 179; MIGA, 171; IMF, 185.
[43] See the IBRD Articles of Agreement art. I.
[44] See id. art. III & IV.
[45] IBRD offers two basic types of loans and credits: investment loans and development policy loans. Investment loans are made to countries for goods, works and services in support of economic and social development projects in a broad range of economic and social sectors. Development policy loans (formerly known as adjustment loans) provide quick-disbursing financing to support countries’ policy and institutional reforms. 
[46] “Knowledge bank” means the wealth of contacts, knowledge, information and experience IBRD has acquired over the years, country by country and project by project, in its development work.
[47] Since 1947, IBRD has earned profits from its lending operations.
[48] IBRD Articles of Agreement art. II sect. 2.
[49] Id. art. II sects. 3.
[50] Id.
[51] Id. art. II sect. 5.  Not all the funds subscribed are immediately available to the Bank; less than 10% of the capital subscription of each member state actually is paid into the Bank.
[52] Id. art. V sect. 1
[53] See id. art. V sects. 2 & 3.
[54] See id. art. V sect. 4.
[55] Each appointed director is entitled to cast the number of votes allotted to the member appointing him. Each elected director is entitled to cast the number of votes which counted toward his election. All the votes which a director is entitled to cast must be cast as a unit.  The IBRD Articles of Agreement art. V sect. 4 (g).
[56] The IBRD Articles of Agreement art. V sect. 5.
[57] For the Materials on the International Monetary Fund (IMF), see the IMF web site at //www.imf.org/.
[58] Text of the Articles of Agreements establishing the IMF is found on the IMF web site.
[59] See id. art. IV sect. 3.
[60] Every country that joins the IMF accepts the obligation to subject its economic and financial policies to the scrutiny of the international community.

[61] See the IMF Articles of Agreement art. V.
[62] See id. arts. XV-XX.
[63] The SDR is neither a currency, nor a claim on the IMF.  Rather, it is a potential claim on the freely usable currencies of IMF members. Holders of SDRs can obtain these currencies in exchange for their SDRs in two ways: first, through the arrangement of voluntary exchanges between members; and second, by the IMF designating members with strong external positions to purchase SDRs from members with weak external positions. Today, SDR serves as the unit of account of the IMF and some other international organizations.  
[64] The interest rate on these loans is only 0.5 percent, and loans are repaid over a period of 10 years (with 5½ years' grace). 
[65] See the IMF Articles of Agreement art. III.
[66] Valued at market prices, the IMF's gold holdings are worth about $68 billion as of end-March 2007, making the Fund one of the largest official holders of gold in the world. However, the IMF's Articles of Agreement strictly limit its use. Under some circumstances, the IMF may sell gold or may accept gold as payment by member countries; but the IMF is prohibited from buying gold or engaging in other gold transactions.
[67] The IMF’s total usable resources are $246.
[68] The IMF Articles of Agreement art. XII sect. 1.
[69] See id. art. XII sect. 2.
[70] See id. art. XII sects. 2 & 5. Each member has two hundred fifty votes plus one additional vote for each part of its quota equivalent to one hundred thousand special drawing rights.  Compare:  USA has 37,149.3 million SDRs (17.14% of total SDRs) and 371,743 votes (16.83% of total votes);  and Lebanon has 203 million SDRs (0.09% of total SDRs) and 2,280 votes (0.1% of total votes).  
[71] See id. art. XII sect. 3.
[72] See id. Art. XII sects. 3 & 4.
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