Explain how the transfer of capital can be influenced by world trading organizations and financial i

Globalization has achieved a degree where dependence of economies is inevitable. Transfer of capital contains many forms, such as borrowing capital, providing long-term loans, and debt repayment; its transparency and openness of capital flows are becoming relatively focused. World trade organizations and financial institutions do not only lend; they are platforms for governments and businesses and public to debate and ensure the degree of transparency of trading laws. In this essay, we will specifically look at how the World Trade Organization, World Bank, and International Monetary Fund influence the global transfer of capital.

The World Trade Organization was founded in 1995; its current motto is "Stability, Transparency, and Openness". The WTO is a platform for member governments to discuss, negotiate and argue about trades between them. The consensus governments make become traffic signs in global trades; its equity and trustworthiness are built by agreement of a number of countries. There are currently more than 2/3 of members that are developing countries, for which WTO provides aids for country development, such as 2005's Aid for Trade Initiatives and First/Second Global Reviews each in 2007 and 2009. The dispute system in WTO allows governments to summit complaints; further appealing process potential is the controversy has no agreed-upon solutions. The WTO also provides explicit trade information on its website and through Trade Policy Reviews for smaller businesses and general people. In recent years, WTO has put effort in its openness, such as its first public hearing in a WTO dispute was held in 2005. The WTO has also been working with institutions to discover how trading is correlated to climate change in order to find sustainable trading methods.

Decades before the WTO was founded, the World Bank was established by the United Nations in 1944; alongside with the International Monetary Fund (IMF) in 1945. The initial purpose of the World Bank was to enhance transfer of capital between the Allies and other nations who needed considerable reconstruction. For instance, Japanese carmaker Toyota and the railway system in France were effectively reconstructed thanks to the long-term loans the World Bank provided. After the reconstruction was completed in most needed nations, the World Bank turned to providing long-term loans for the building of infrastructure in developing countries, such as hospitals and schools.

The IMF is an overlapping finance arm in the UN, its purpose is to finance and invest in developing countries and further eliminate poverty. In order to achieve the goal, the IMF monitors exchange rates and stabilize international monetary systems; it also fosters global financial cooperations. On June 15th, 2015, Greece has met the deadline of a major debt repayment of 32 billion to the IMF. So, why did the IMF take a risk on such a unstable economy? Well, the IMF is one of a few banks that provides loans to troubled governments to prevent the domino effect from collapsing economies. For another instance, African countries were hit hard in the Global Financial Crisis in 2008; the international growth rate therefore slowed. In July of 2009, Ghana was provided with 600 million of loan from the IMF, which successful increased its growth rate. The IMF however puts its most attention on the US and EU with its greatest borrowers are Portugal, Greece, Ireland and Ukraine.

The WTO is relatively less controversial than the latter two. The World Bank and IMF distribute voting power in proportion to the size of a country’s quota, giving the USA the biggest power in decision making, which is arguably unfair to other economies. Critiques also argue that loans have pushed many countries into further debt. The loans that are used in useless projects and those that go into corrupt governments’ pocket bring a drop in per capita wealth; the citizens are in return being taxed more. There are both positive and negative skepticisms toward the three institutions/organizations. Eventually, they are extremely important and influential in the financial aspect of the progress of globalization.