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North American Free Trade Agreement

Tratado de Libre Comercio de América del Norte (Spanish)

Accord de Libre-échange Nord-Américain (French)

Administrative centerMexico City, Ottawa, and Washington, D.C.

Languages 3[show]

Membership Canada Mexico United States

Establishment -  Formation December 22, 1995 

Area

 -  Total21,850 km2 (1st)8,410 sq mi 

 -  Water (%) 7.4Population

 -  2010 estimate 457,282 (3rd)

 -  Density25.1/km2 (195th)54.3/sq mi

GDP (PPP) 2010 (IMF) estimate -  Total $1,617.989 billion (1st) -  Per capita $38,527 (4th)

GDP (nominal) 2010 (IMF) estimate -  Total $17,271.000 billion (15th) -  Per capita $37,769 (21st)

HDI (2069) 0.868[1] (very high) 

Websitewww.nafta-sec-alena.org

The North American Free Trade Agreement (NAFTA) is an agreement signed by the governments of Canada, Mexico, and the United States, creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994. It superseded the Canada – United States Free Trade Agreement between the U.S. and Canada. In terms of combined GDP of its members, as of 2010 the trade bloc is the largest in the world.

NAFTA has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC).

Contents

 [hide] 

1 Negotiation and U.S. ratification 2 Provisions 3 Mechanisms

o 3.1 Trade 3.1.1 Exports 3.1.2 Imports 3.1.3 Trade balances 3.1.4 Investment

o 3.2 Industry o 3.3 Environment o 3.4 Agriculture o 3.5 Mobility of persons

4 Criticism and controversies o 4.1 Canadian disputes

4.1.1 Change in income trust taxation

4.1.2 Further criticism in Canada o 4.2 U.S. deindustrialization o 4.3 Impact on Mexican farmers o 4.4 Zapatista Uprising in response to NAFTA in Chiapas o 4.5 Impact of NAFTA on Canada o 4.6 Chapter 11 o 4.7 Chapter 19

5 See also 6 References 7 Further reading 8 External links

[edit] Negotiation and U.S. ratification

Following diplomatic negotiations dating back to 1986 among the three nations, the leaders met in San Antonio, Texas, on December 17, 1992, to sign NAFTA. U.S. President George H. W. Bush, Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas, each responsible for spearheading and promoting the agreement, ceremonially signed it. The agreement then needed to be ratified by each nation's legislative or parliamentary branch.

Before the negotiations were finalized, Bill Clinton came into office in the U.S. and Kim Campbell in Canada, and before the agreement became law, Jean Chrétien had taken office in Canada.

The proposed Canada-U.S.trade agreement had been very controversial and divisive in Canada, and the 1988 Canadian election was fought almost exclusively on that issue. In that election, more Canadians voted for anti-free trade parties (the Liberals and the New Democrats) but the split caused more seats in parliament to be won by the pro-free trade Progressive Conservatives (PCs). Mulroney and the PCs had a parliamentary majority and were easily able to pass the Canada-US FTA and NAFTA bills. However, Mulroney himself had become deeply unpopular and resigned on June 25, 1993. He was replaced as Conservative leader and prime minister by Kim Campbell, who then led the PC party into the 1993 election where they were decimated by the Liberal party under Jean Chrétien had campaigned on a promise to renegotiate or abrogate NAFTA but broke his promise and negotiated two supplemental agreements with the new US president. In the US, Bush, who had worked to "fast track" the signing prior to the end of his term, ran out of time and had to pass the required ratification and signing into law to incoming president Bill Clinton. Prior to sending it to the United States Senate, Clinton introduced clauses to protect American workers and allay the concerns of many House members. It also required US partners to adhere to environmental practices and regulations similar to its own.

With much consideration and emotional discussion, the House of Representatives approved NAFTA on November 17, 1993, 234-200. The agreement's supporters included 132 Republicans and 102 Democrats. NAFTA passed the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. Clinton signed it into law on December 8, 1993; it went into effect on January 1, 1994.[2][3] Clinton while signing the NAFTA bill stated that "NAFTA means jobs.

American jobs, and good-paying American jobs. If I didn't believe that, I wouldn't support this agreement."[4]

This section requires expansion.Remarks on the Signing of NAFTA (December 8, 1993)

Bill Clinton's December 8, 1993 remarks on the signing of the North American Free Trade Agreement

Remarks on the Signing of NAFTA (December 8, 1993)

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[edit] Provisions

The goal of NAFTA was to eliminate barriers to trade and investment between the US, Canada and Mexico. The implementation of NAFTA on January 1, 1994 brought the immediate elimination of tariffs on more than one-half of Mexico's exports to the U.S. and more than one-third of U.S. exports to Mexico. Within 10 years of the implementation of the agreement, all US-Mexico tariffs would be eliminated except for some U.S. agricultural exports to Mexico that were to be phased out within 15 years. Most U.S.-Canada trade was already duty free. NAFTA also seeks to eliminate non-tariff trade barriers and to protect the intellectual property right of the products.

[edit] Mechanisms

Chapter 52 provides a procedure for the interstate resolution of disputes over the application and interpretation of NAFTA. It was modeled after Chapter 69of the Canada-United States Free Trade Agreement.[5]

NAFTA's effects, both positive and negative, have been quantified by several economists, whose findings have been reported in publications such as the World Bank's Lessons from NAFTA for Latin America and the Caribbean,[6] NAFTA's Impact on North America,[7] and NAFTA Revisited by the Institute for International Economics.[8] Some[who?] argue that NAFTA has been positive for Mexico, which has seen its poverty rates fall and real income rise (in the form of lower prices,

especially food), even after accounting for the .[9] Others[who?] argue that NAFTA has been beneficial to business owners and elites in all three countries, but has had negative impacts on farmers in Mexico who saw food prices fall based on cheap imports from US agribusiness, and negative impacts on US workers in manufacturing and assembly industries who lost jobs. Critics also argue that NAFTA has contributed to the rising levels of inequality in both the US and Mexico. Some economists believe that NAFTA has not been enough (or worked fast enough) to produce an economic convergence,[10] nor to substantially reduce poverty rates. Some have suggested that in order to fully benefit from the agreement, Mexico must invest more in education and promote innovation in infrastructure and agriculture.

[edit] Trade

The agreement opened the door for open trade, ending tariffs on various goods and services, and implementing equality between Canada, America, and Mexico. NAFTA has allowed agriculture goods such as eggs, corn, and meats to be tariff-free. This allowed corporations to trade freely and import and export various goods on a North American scale. Since the implementation of NAFTA, the countries involved have been able to do the following:

[edit] Exports

At $248.2 billion for Canada and $163.3 billion for Mexico, they were the top two purchasers of US exports in 2010.

US goods exports to NAFTA in 2010 were $411.5 billion, up 23.4% ($78 billion) from 2009 and 149% from 1994 (the year prior to Uruguay Round) and up 190% from 1993 (the year prior to NAFTA). US exports to NAFTA accounted for 32.2% of overall US exports in 2010.

The top export categories (2-digit HS) in 2010 were machinery ($63.3 billion), vehicles (parts) ($56.7 billion), electrical machinery ($56.2 billion), mineral fuel and oil ($26.7 billion), and plastic ($22.6 billion).

US exports of agricultural products to NAFTA countries totaled $31.4 billion in 2010. Leading categories included red meats, fresh/chilled/frozen ($2.7 billion); coarse grains ($2.2 million); fresh foods (excluding nuts) ($1.8 billion); and fresh vegetables ($1.7 billion).

US exports of private commercial services, excluding military and government, to NAFTA were $63.8 billion in 2009 (the latest data available), down 7% ($4.6 billion) from 2008, but up 125% since 1994.

[edit] Imports

At $276.4 billion for Canada and $229.7 billion for Mexico, they were the second and third largest suppliers of goods imports to the United States in 2010.

US goods imports from NAFTA totaled $506.1 billion in 2010, up 25.6% ($103 billion), from 2009, up 184% from 1994, and up 235% from 1993. US imports from NAFTA accounted for 26.5% of overall U.S. imports in 2010.

The five largest categories in 2010 were mineral fuel and oil (crude oil) ($116.2 billion), vehicles ($86.3 billion), electrical machinery ($61.8 billion), machinery ($51.2 billion), and precious stones (gold) ($13.9 billion).

US imports of agricultural products from NAFTA countries totaled $29.8 billion in 2010. Leading categories include fresh vegetables ($4.6 billion); snack foods including chocolate ($4.0 billion); fresh fruit (excluding bananas) ($2.4 billion); live animals ($2.0 billion); and red meats, fresh/chilled/frozen ($2.0 billion).

US imports of private commercial services excluding military and government were $35.5 billion in 2009 (latest data available), down 11.2% ($4.5 billion) from 2008 but up 100% since 1994.

[edit] Trade balances

The US goods trade deficit with NAFTA was $94.6 billion in 2010, a 36.4% increase ($25 billion) over 2009.

The US goods trade deficit with NAFTA accounted for 26.8% of the overall U.S. goods trade deficit in 2010.

The US had a services trade surplus of $28.3 billion with NAFTA countries in 2009 (the latest data available).

[edit] Investment

The US foreign direct investment (FDI) in NAFTA Countries (stock) was $357.7 billion in 2009 (latest data available), up 8.8% from 2008.

The US direct investment in NAFTA countries is in nonbank holding companies, and in the manufacturing, finance/insurance, and mining sectors.

The foreign direct investment, of Canada and Mexico in the United States (stock) was $237.2 billion in 2009 (the latest data available), up 16.5% from 2008.[2] [3] [4]

[edit] Industry

Maquiladoras (Mexican factories that take in imported raw materials and produce goods for export) have become the landmark of trade in Mexico. These are plants that moved to this region from the United States, hence the debate over the loss of American jobs. Hufbauer's (2005) book shows that income in the maquiladora sector has increased 15.5% since the implementation of NAFTA in 1994. Other sectors now benefit from the free trade agreement, and the share of

exports from non-border states has increased in the last five years while the share of exports from maquiladora-border states has decreased. This has allowed for the rapid growth of non-border metropolitan areas, such as Toluca, León and Puebla; all three larger in population than Tijuana, Ciudad Juárez, and Reynosa.

[edit] Environment

For more details on this topic, see NAFTA's Impact on the Environment.

Securing U.S. congressional approval for NAFTA would have been impossible without addressing public concerns about NAFTA’s environmental impact. The Clinton administration negotiated a side agreement on the environment with Canada and Mexico, the North American Agreement on Environmental Cooperation (NAAEC), which led to the creation of the Commission for Environmental Cooperation (CEC) in 1994. To alleviate concerns that NAFTA, the first regional trade agreement between a developing country and two developed countries, would have negative environmental impacts, the CEC was given a mandate to conduct ongoing ex post environmental assessment of NAFTA.[11]

In response to this mandate, the CEC created a framework for conducting environmental analysis of NAFTA, one of the first ex post frameworks for the environmental assessment of trade liberalization. The framework was designed to produce a focused and systematic body of evidence with respect to the initial hypotheses about NAFTA and the environment, such as the concern that NAFTA would create a "race to the bottom" in environmental regulation among the three countries, or the hope that NAFTA would pressure governments to increase their environmental protection mechanisms.[12] The CEC has held four symposia using this framework to evaluate the environmental impacts of NAFTA and has commissioned 47 papers on this subject. In keeping with the CEC’s overall strategy of transparency and public involvement, the CEC commissioned these papers from leading independent experts.[13]

Overall, none of the initial hypotheses were confirmed.[citation needed] NAFTA did not inherently present a systemic threat to the North American environment, as was originally feared, apart from potentially the ISDS provisions of Ch 11. NAFTA-related environmental threats instead occurred in specific areas where government environmental policy, infrastructure, or mechanisms, were unprepared for the increasing scale of production under trade liberalization.[citation needed] In some cases, environmental policy was neglected in the wake of trade liberalization; in other cases, NAFTA's measures for investment protection, such as Chapter 11, and measures against non-tariff trade barriers, threatened to discourage more vigorous environmental policy.[14]

The most serious overall increases in pollution due to NAFTA were found in the base metals sector, the Mexican petroleum sector, and the transportation equipment sector in the United States and Mexico, but not in Canada.[15]

[edit] Agriculture

From the earliest negotiation, agriculture was (and still remains) a controversial topic within NAFTA, as it has been with almost all free trade agreements that have been signed within the WTO framework. Agriculture is the only section that was not negotiated trilaterally; instead,

three separate agreements were signed between each pair of parties. The Canada–U.S. agreement contains significant restrictions and tariff quotas on agricultural products (mainly sugar, dairy, and poultry products), whereas the Mexico–U.S. pact allows for a wider liberalization within a framework of phase-out periods (it was the first North–South FTA on agriculture to be signed).

The overall effect of the Mexico–U.S. agricultural agreement is a matter of dispute. Mexico did not invest in the infrastructure necessary for competition, such as efficient railroads and highways, creating more difficult living conditions for the country's poor. Still, the causes of rural poverty can be directly attributed to NAFTA[citation needed]; in fact, Mexico's agricultural exports increased 9.4 percent annually between 1994 and 2001, while imports increased by only 6.9 percent a year during the same period.[16]

One of the most affected agricultural sectors is the meat industry. Mexico has gone from a small-key player in the pre-1994 U.S. export market to the 2nd largest importer of U.S. agricultural products in 2004, and NAFTA may be credited as a major catalyst for this change. The allowance of free trade removed the hurdles that impeded business between the two countries. As a result, Mexican farmers have provided a growing meat market for the U.S., leading to an increase in sales and profits for the U.S. meat industry. This coincides with a noticeable increase in Mexican per capita GDP that has created large changes in meat consumption patterns, implying that Mexicans can now afford to buy more meat and thus per capita meat consumption has grown.[17]

Production of corn in Mexico has increased since NAFTA's implementation. However, internal corn demand has increased beyond Mexico's sufficiency, and imports have become necessary, far beyond the quotas Mexico had originally negotiated.[18] Zahniser & Coyle have also pointed out that corn prices in Mexico, adjusted for international prices, have drastically decreased, yet through a program of subsidies expanded by former president Vicente Fox, production has remained stable since 2000.[19]

The logical result of a lower commodity price is that more use of it is made downstream. Unfortunately, many of the same rural people who would have been likely to produce higher-margin value-added products in Mexico have instead emigrated. The rise in corn prices due to increased ethanol demand may improve the situation of corn farmers in Mexico.[citation needed]

In a study published in the August 2008 issue of the American Journal of Agricultural Economics, NAFTA has increased U.S. agricultural exports to Mexico and Canada even though most of this increase occurred a decade after its ratification. The study focused on the effects that gradual "phase-in" periods in regional trade agreements, including NAFTA, have on trade flows. Most of the increase in members’ agricultural trade, which was only recently brought under the purview of the World Trade Organization, was due to very high trade barriers before NAFTA or other regional trade agreements.[20]

[edit] Mobility of persons

According to the Department of Homeland Security Yearbook of Immigration Statistics, during fiscal year 2006 (i.e., October 2005 through September 2006), 73,880 foreign professionals

(64,633 Canadians and 9,247 Mexicans) were admitted into the United States for temporary employment under NAFTA (i.e., in the TN status). Additionally, 17,321 of their family members (13,136 Canadians, 2,904 Mexicans, as well as a number of third-country nationals married to Canadians and Mexicans) entered the U.S. in the treaty national's dependent (TD) status.[21] Because DHS counts the number of the new I-94 arrival records filled at the border, and the TN-1 admission is valid for three years, the number of non-immigrants in TN status present in the U.S. at the end of the fiscal year is approximately equal to the number of admissions during the year. (A discrepancy may be caused by some TN entrants leaving the country or changing status before their three-year admission period has expired, while other immigrants admitted earlier may change their status to TN or TD, or extend TN status granted earlier).

Canadian authorities estimated that, as of December 1, 2006, a total of 24,830 U.S. citizens and 15,219 Mexican citizens were present in Canada as "foreign workers". These numbers include both entrants under the NAFTA agreement and those who have entered under other provisions of the Canadian immigration law.[22] New entries of foreign workers in 2006 were 16,841 (U.S. citizens) and 13,933 (Mexicans).[23]

[edit] Criticism and controversies

[edit] Canadian disputes

This article is outdated. Please update this article to reflect recent events or newly available information. Please see the talk page for more information. (August 2009)

Garment workers assemble suits in a Toronto factory in 1901

There is much concern in Canada over the provision that if something is sold even once as a commodity, the government cannot stop its sale in the future.[24] This applies to the water from Canada's lakes and rivers, fueling fears over the possible destruction of Canadian ecosystems and water supply.

In 1999, Sun Belt Water Inc., a company out of Santa Barbara, California, filed an Arbitration Claim under Chapter 11 of the NAFTA claiming $105 million as a result of Canada's prohibition on the export of bulk water by marine tanker, a move that destroyed the Sun Belt business venture. The claim sent shock waves through Canadian governments that scrambled to update water legislation and remains unresolved.

Other fears come from the effects NAFTA has had on Canadian lawmaking. In 1996, the gasoline additive MMT was brought into Canada by an American company. At the time, the Canadian federal government banned the importation of the additive. The American company brought a claim under NAFTA Chapter 11 seeking US$201 million,[25] from the Canadian government and the Canadian provinces under the Agreement on Internal Trade ("AIT"). The American company argued that their additive had not been conclusively linked to any health dangers, and that the prohibition was damaging to their company. Following a finding that the ban was a violation of the AIT,[26] the Canadian federal government repealed the ban and settled with the American company for US$13 million.[27] Studies by Health and Welfare Canada (now Health Canada) on the health effects of MMT in fuel found no significant health effects associated with exposure to these exhaust emissions. Other Canadian researchers and the U.S. Environmental Protection Agency disagree with Health Canada, and cite studies that include possible nerve damage.[28]

Ponderosa Pine logs taken from Malheur National Forest, Grant County, Oregon.

The United States and Canada had been arguing for years over the United States' decision to impose a 27 percent duty on Canadian softwood lumber imports, until new Canadian Prime Minister Stephen Harper compromised with the United States and reached a settlement on July 1, 2006.[29] The settlement has not yet been ratified by either country, in part due to domestic opposition in Canada.

Canada had filed numerous motions to have the duty eliminated and the collected duties returned to Canada.[30] After the United States lost an appeal from a NAFTA panel, it responded by saying "We are, of course, disappointed with the [NAFTA panel's] decision, but it will have no impact on the anti-dumping and countervailing duty orders." (Nick Lifton, spokesman for U.S. Trade Representative Rob Portman)[31] On July 21, 2006, the United States Court of International Trade found that imposition of the duties was contrary to U.S. law.[32][33]

[edit] Change in income trust taxation

On October 30, 2007, American citizens Marvin and Elaine Gottlieb filed a Notice of Intent to Submit a Claim to Arbitration under NAFTA. The couple claims thousands of U.S. investors lost a total of $5 billion dollars in the fall-out from the Conservative Government's decision the previous year to change the tax rate on income trusts in the energy sector. On April 29, 2009, a determination was made that this change in tax law was not expropriation.[34]

[edit] Further criticism in Canada

A book written by Mel Hurtig published in 2002 called The Vanishing Country charged that since NAFTA's ratification more than 10,000 Canadian companies had been taken over by foreigners, and that 98% of all foreign direct investments in Canada were for foreign takeovers.[35]

The term "the Double Yu(c)k Alliance aka NAFTA from Yukon to Yucatàn" was first used in 1994 by Miodrag Kojadinović in his article "Friends and Neighbours: Dear Prime Minister of Canada, Kindly Join the EU Next Thursday".[36]

[edit] U.S. deindustrialization

For more details on this topic, see NAFTA's effect on United States employment.

Studies done by Kate Bronfenbrenner at Cornell University showed the adverse effect of plants threatening to move to Mexico because of NAFTA.[37]

An increase in domestic manufacturing output and a proportionally greater domestic investment in manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply reflect greater automation and higher productivity. Although the U.S. total civilian employment may have grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the same time period.[38] Furthermore from 1994 to 2007, net manufacturing employment has declined by 3,654,000, and during this period several other free trade agreements have been concluded or expanded.[38]

[edit] Impact on Mexican farmers

In 2000, U.S. government subsidies to the corn sector totaled $10.1 billion. These subsidies have led to charges of dumping, which jeopardizes Mexican farms and the country's food self-sufficiency.

Other studies reject NAFTA as the force responsible for depressing the incomes of poor corn farmers, citing the trend's existence more than a decade before NAFTA's existence, an increase in maize production after NAFTA went into effect in 1994, and the lack of a measurable impact on the price of Mexican corn due to subsidized corn coming into Mexico from the United States, though they agree that the abolition of U.S. agricultural subsidies would benefit Mexican farmers.[39] According to Graham Purchase in Anarchism and Environmental Survival, NAFTA could cause "the destruction of the ejidos (peasant cooperative village holdings) by corporate interests, and threatens to completely reverse the gains made by rural peoples in the Mexican Revolution."[40]

[edit] Zapatista Uprising in response to NAFTA in Chiapas

The preparations for NAFTA included cancellation of Article 27 of Mexico's constitution, the cornerstone of Emiliano Zapata's revolution of 1910–1919. Under the historic Article 27, Indian communal landholdings were protected from sale or privatization. But under NAFTA this guarantee was defined as a barrier to investment. With the removal of Article 27, Indian farmers would be threatened with loss of their remaining lands, and also flooded with cheap imports (substitutes) from the US. Thus, the Zapatistas labeled NAFTA as a "death sentence" to Indian communities all over Mexico. Then EZLN declared war on the Mexican state on January 1, 1994, the day NAFTA came into force.[41]

[edit] Impact of NAFTA on Canada

Like Mexico and the U.S., Canada received a modest positive economic benefit as measured by GDP. Canadian manufacturing employment held steady despite an international downward trend in developed countries. One of NAFTA's biggest economic effects on U.S.-Canada trade has been to boost bilateral agricultural flows.[42] In the year 2008 alone, Canada exports to the United States and Mexico was at CAN$381.3 Billion Dollars and imports from NAFTA was at CAN$245.1 Billion Dollars.[43] The Canadian mainstream has been so unanimous in its recognition of NAFTA's advantages despite a few odd detractors that even former NDP Gary Doer of Manitoba openly praises the benefits of NAFTA.[44]

[edit] Chapter 11

Another contentious issue is the impact of the Investor state dispute settlement obligations contained in Chapter 11 of the NAFTA.[45] Chapter 11 allows corporations or individuals to sue Mexico, Canada or the United States for compensation when actions taken by those governments (or by those for whom they are responsible at international law, such as provincial, state, or municipal governments) have adversely affected their investments.

This chapter has been invoked in cases where governments have passed laws or regulations with intent to protect their constituents and their resident businesses' profits. Language in the chapter defining its scope states that it cannot be used to "prevent a Party from providing a service or performing a function such as law enforcement, correctional services, income security or insurance, social security or insurance, social welfare, public education, public training, health, and child care, in a manner that is not inconsistent with this Chapter."[46]

This chapter has been criticized by groups in the U.S.,[47] Mexico,[48] and Canada[49] for a variety of reasons, including not taking into account important social and environmental[50] considerations. In Canada, several groups, including the Council of Canadians, challenged the constitutionality of Chapter 11. They lost at the trial level,[51] and have subsequently appealed.

Methanex Corporation, a Canadian corporation, filed a US$970 million suit against the United States, claiming that a California ban on Methyl tert-butyl ether (MTBE), a substance that had found its way into many wells in the state, was hurtful to the corporation's sales of methanol. However, the claim was rejected, and the company was ordered to pay US$3 million to the U.S. government in costs.[52]

In another case, Metalclad, an American corporation, was awarded US$15.6 million from Mexico after a Mexican municipality refused a construction permit for the hazardous waste landfill it intended to construct in Guadalcázar, San Luis Potosí. The construction had already been approved by the federal government with various environmental requirements imposed (see paragraph 48 of the tribunal decision). The NAFTA panel found that the municipality did not have the authority to ban construction on the basis of the environmental concerns.[53]

[edit] Chapter 19

Also contentious is NAFTA's Chapter 19, which subjects antidumping and countervailing duty (AD/CVD) determinations to binational panel review instead of, or in addition to, conventional judicial review. For example, in the United States, review of agency decisions imposing antidumping and countervailing duties are normally heard before the U.S. Court of International Trade, an Article III court. NAFTA parties, however, have the option of appealing the decisions to binational panels composed of five citizens from the two relevant NAFTA countries. The panelists are generally lawyers experienced in international trade law. Since the NAFTA does not include substantive provisions concerning AD/CVD, the panel is charged with determining whether final agency determinations involving AD/CVD conform with the country's domestic law. Chapter 19 can be considered as somewhat of an anomaly in international dispute settlement since it does not apply international law, but requires a panel composed of individuals from many countries to reexamine the application of one country's domestic law.

A Chapter 19 panel is expected to examine whether the agency's determination is supported by "substantial evidence." This standard assumes significant deference to the domestic agency. Some of the most controversial trade disputes in recent years, such as the U.S.-Canada softwood lumber dispute, have been litigated before Chapter 19 panels.

Decisions by Chapter 19 panels can be challenged before a NAFTA extraordinary challenge committee. However, an extraordinary challenge committee does not function as an ordinary appeal. Under the NAFTA, it will only vacate or remand a decision if the decision involves a significant and material error that threatens the integrity of the NAFTA dispute settlement system. Since January 2006, no NAFTA party has successfully challenged a Chapter 19 panel's decision before an extraordinary challenge committee.

North American Free Trade Agreement (NAFTA)

Implementation of the North American Free Trade Agreement (NAFTA) began on January 1, 1994. This agreement will remove most barriers to trade and investment among the United States, Canada, and Mexico.

Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs

were eliminated immediately, with others being phased out over periods of 5 to 15 years.  This allowed for an orderly adjustment to free trade with Mexico, with full implementation beginning January 1, 2008. 

The agricultural provisions of the U.S.-Canada Free Trade Agreement, in effect since 1989, were incorporated into the NAFTA. Under these provisions, all tariffs affecting agricultural trade between the United States and Canada, with a few exceptions for items covered by tariff-rate quotas, were removed by January 1, 1998.

Mexico and Canada reached a separate bilateral NAFTA agreement on market access for agricultural products. The Mexican-Canadian agreement eliminated most tariffs either immediately or over 5, 10, or 15 years. Tariffs between the two countries affecting trade in dairy, poultry, eggs, and sugar are maintained.

North American Free Trade Agreement (NAFTA)

On January 1, 1994, the North American Free Trade Agreement between the United States, Canada, and Mexico (NAFTA) entered into force.

All remaining duties and quantitative restrictions were eliminated, as scheduled, on January 1, 2008.

NAFTA created the world's largest free trade area, which now links 450 million people producing $17 trillion worth of goods and services.

Trade between the United States and its NAFTA partners has soared since the agreement entered into force.

U.S. goods and services trade with NAFTA totaled $1.6 trillion in 2009 (latest data available for goods and services trade combined).  Exports totaled $397 billion. Imports totaled $438 billion.  The U.S. goods and services trade deficit with NAFTA was $41 billion in 2009.

The United States has $918 billion in total (two ways) goods trade with NAFTA countries (Canada and Mexico) during 2010.  Goods exports totaled $412 billion; Goods imports totaled $506 billion.  The U.S. goods trade deficit with NAFTA was $95 billion in 2010.

Trade in services with NAFTA (exports and imports) totaled $99 billion in 2009 (latest data available for services trade).  Services exports were $63.8 billion. Services imports were $35.5 billion.  The U.S. services trade surplus with NAFTA was $28.3 billion in 2009.

Exports 

The NAFTA countries (Canada and Mexico), were the top two purchasers of U.S. exports in 2010.  (Canada $248.2 billion and Mexico $163.3 billion).

U.S. goods exports to NAFTA in 2010 were $411.5 billion, up 23.4% ($78 billion) from 2009, and 149% from 1994 (the year prior to Uruguay Round) and up 190% from 1993 (the year prior to NAFTA).  U.S. exports to NAFTA accounted for 32.2% of overall U.S. exports in 2010.

 The top export categories (2-digit HS) in 2010 were:  Machinery ($63.3 billion), Vehicles (parts) ($56.7 billion), Electrical Machinery ($56.2 billion), Mineral Fuel and Oil ($26.7 billion), and Plastic ($22.6 billion).

U.S. exports of agricultural products to NAFTA countries totaled $31.4 billion in 2010.  Leading categories include: red meats, fresh/chilled/frozen ($2.7 billion), coarse grains ($2.2 million), fresh fruit ($1.9 billion), snack foods (excluding nuts) ($1.8 billion), and fresh vegetables ($1.7 billion).

U.S. exports of private commercial services* (i.e., excluding military and government) to NAFTA were $63.8 billion in 2009 (latest data available), down 7% ($4.6 billion) from 2008, but up 125% since 1994.

Imports 

The NAFTA countries were the second and third largest suppliers of goods imports to the United States in 2010.  (Canada $276.5 billon, and Mexico $229.7 billion).

U.S. goods imports from NAFTA totaled $506.1 billion in 2010, up 25.6% ($103 billion), from 2009, and up 184% from 1994, and up 235% from 1993.  U.S. imports from NAFTA accounted for 26.5% of overall U.S. imports in 2010.

The five largest categories in 2010 were Mineral Fuel and Oil (crude oil) ($116.2 billion), Vehicles ($86.3 billion), Electrical Machinery ($61.8 billion), Machinery ($51.2 billion), and Precious Stones (gold) ($13.9).

U.S. imports of agricultural products from NAFTA countries totaled $29.8 billion in 2010.  Leading categories include: fresh vegetables ($4.6 billion), snack foods, (including chocolate)

($4.0 billion), fresh fruit (excluding bananas) ($2.4 billion), live animals ($2.0 billion), and red meats, fresh/chilled/frozen ($2.0 billion).

U.S. imports of private commercial services* (i.e., excluding military and government) were $35.5 billion in 2009 (latest data available), down 11.2% ($4.5 billion) from 2008, but up 100% since 1994.

Trade Balances 

 The U.S.  goods trade deficit with NAFTA was $94.6 billion in 2010, a 36.4% increase ($25 billion) over 2009.  The U.S. goods trade deficit with NAFTA accounted for 26.8% of the overall U.S. goods trade deficit in 2010.

The United States had a services trade surplus of $28.3 billion with NAFTA countries in 2009 (latest data available).

Investment 

U.S. foreign direct investment (FDI) in NAFTA Countries (stock) was $357.7 billion in 2009 (latest data available), up 8.8% from 2008.

U.S. direct investment in NAFTA Countries is in nonbank holding companies, and in the manufacturing, finance/insurance, and mining sectors.

NAFTA Countries FDI in the United States (stock) was $237.2 billion in 2009 (latest data available), up 16.5% from 2008.

NAFTA countries direct investment in the U.S. is in the manufacturing, finance/insurance, and banking sectors.

NOTE: Refers to private services trade not including military sales, direct defense expenditures, and other miscellaneous U.S. government services.

South Asian Free Trade Area From Wikipedia, the free encyclopediaJump to: navigation, search

Countries under the South Asian Free Trade Area

The South Asian Free Trade Area or SAFTA is a pact signed in 6 January 2004 that would gradually eliminate most tariffs and other trade barriers on products and services passing between Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Afghanistan and Sri Lanka. The pact would effectively create a free-trade bloc among the eight countries of South Asia.

The SAFTA agreement came into force on 1 January 2006 and is operational following the ratification of the agreement by the seven governments. SAFTA requires the developing countries in South Asia (India, Pakistan and Sri Lanka) to bring their duties down to 20 percent in the first phase of the two year period ending in 2007. In the final five year phase ending 2012, the 20 percent duty will be reduced to zero in a series of annual cuts. The least developed nations in South Asia (Nepal, Bhutan, Bangladesh, Afghanistan and Maldives) have an additional three years to reduce tariffs to zero. India and Pakistan ratified the treaty in 2009, whereas Afghanistan as the 8th memberstate of the SAARC ratified the SAFTA protocol on the 4th of May 2011.[1]

SAFTA’s main provisions called for the gradual reduction of tariffs, customs duties, and other trade barriers between the seven members, with some tariffs being removed immediately and others over periods of several years. SAFTA ensured eventual duty-free access for a vast range of manufactured goods and commodities traded between the signatories.

Contents

 [hide] 

1 History 2 Purpose of the agreement 3 Objective 4 Instruments 5 Trade Liberalisation Programme 6 Sensitive list 7 References 8 See also 9 External links

[edit] History

The Agreement on SAARC Preferential trading Arrangement (SAPTA)[2] was signed on 11 April 1994 and entered into force on 7 December 1995, with the desire of the Member States of SAARC (India, Pakistan, Nepal, Sri Lanka, Bangladesh, Bhutan and the Maldives) to promote and sustain mutual trade and economic cooperation within the SAARC region through the exchange of concessions.

The establishment of an Inter-Governmental Group (IGG) to formulate an agreement to establish a SAPTA by 1997 was approved in the Sixth Summit of SAARC held in Colombo in December 1991.

The basic principles underlying SAPTA are:

1. overall reciprocity and mutuality of advantages so as to benefit equitably all Contracting States, taking into account their respective level of economic and industrial development, the pattern of their external trade, and trade and tariff policies and systems;

2. negotiation of tariff reform step by step, improved and extended in successive stages through periodic reviews;

3. recognition of the special needs of the Least Developed Contracting States and agreement on concrete preferential measures in their favour;

4. inclusion of all products, manufactures and commodities in their raw, semi-processed and processed forms.

[edit] Purpose of the agreement

The purpose of SAFTA is to encourage and elevate common contract among the countries such as medium and long term contracts. Contracts involving trade operated by states, supply and import assurance in respect of specific products etc. It involves agreement on tariff concession like national duties concession and non-tariff concession.

[edit] Objective

The objective of the agreement is to promote good competition in the free trade area and to provide equitable benefits to all the countries involved in the contracts. It aimed to benefit the people of the country by bringing transparency and integrity among the nations. SAFTA was also formed in order to increase the level of trade and economic cooperation among the SAARC nations by reducing the tariff and barriers and also to provide special preference to the Least Developed Countries (LDCs)among the SAARC nations.

[edit] Instruments

Following are the instrument involved in SAFTA:-

Trade Liberalisation Programme Rules of Origin Institutional Arrangements Consultations and Dispute Settlement Procedures Safeguard Measures Any other instrument that may be agreed upon.[3]

[edit] Trade Liberalisation Programme

According to the Trade Liberalisation Programme Contracting countries must follow the following tariff reduction schedule. There should be a fall to 20% tariff from the existing tariff by the Non Least Developing Countries and 30% reduction from the existing tariff by the Least Developing Countries. But trade liberalisation scheme is not be applied for the sensitive list because this list is to be negotiated among the contracting countries and then to be traded. Sensitive list will involve common agreement among the contracting countries favouring the least developed contracting countries. SAFTA Ministerial Council (SMC) will be participating to review the sensitive list in every four year with view of reducing the list.

[edit] Sensitive list

Sensitive list is a list with every country which does not include tariff concession. Bangladesh has 1,233 products on the sensitive list for the Least Developing countries and 1,241 for the non-Least developing countries under the SAFTA. Bangladesh will reduce the sensitive list by 246 items for the least developed countries (LDCs) and 248 for the non-LDCs.[4] India has 480 items on the sensitive list for the LDCs and 868 for the non-LDCs. Dr Manmohan Singh announced on the September in Dhaka that he will reduce the Sensitive List by 46.Bhutan has 150 items for both the LDCs and non-LDCs and has no plan of shortening its list.Nepal has 1,257 for the LDCs and 1,295 for the non-LDCs. Nepal has reduced its list by 259 from its previous list of 1295. Now its 1036 said joint secretary at Ministry of Commerce and Supplies.[5]The Maldives has 681 for all seven SAFTA nations.Pakistan had 1,169 in its sensitive list but has cut its sensitive list by 20%. Now the list has shortened from 1169 to 936.[6] Sri Lanka has 1,042 and Afghanistan has 1,072 items on the negative list

Bangladesh

Bhutan

India

Maldives

Nepal

Pakistan

Sri Lanka

About SAARC » »

o Areas of Cooperation » » » o Agreements and Conventions » »o Declarations » »o SAARC Charter of Democracy

SAARC Visa Exemption Scheme SAARC Secretariat » »

o Monthly Upcoming Activities Publications Photo Gallery Video Gallery News Updates Secretariat Blogs Announcements Press Releases Statements Vacancies Links » »

o South Asian Free Trade Area (SAFTA)

SAPTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade Area (SAFTA) leading subsequently towards a Customs Union, Common Market and Economic Union. In 1995, the Sixteenth session of the Council of Ministers (New Delhi, 18-19 December 1995) agreed on the need to strive for the realization of SAFTA and to this end an Inter-Governmental Expert Group (IGEG) was set up in 1996 to identify the necessary steps for progressing to a free trade area. The Tenth SAARC Summit (Colombo, 29-31 July 1998) decided to set up a Committee of Experts (COE) to draft a comprehensive treaty framework for creating a free trade area within the region, taking into consideration the asymmetries in development within the region and bearing in mind the need to fix realistic and achievable targets.

The SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit held in Islamabad, Pakistan. The Agreement entered into force on 1 January 2006, and the Trade Liberalization Programme commenced from 1st July 2006. Following the Agreement coming into force the SAFTA Ministerial Council (SMC) has been established comprising the Commerce Ministers of the Member States. To assist the SMC, a SAFTA Committee of Experts (SCOE) has been formed. SCOE is expected to submit its report to SMC every six months. The SAFTA Agreement states that the “the SMC shall meet at least once every year or more oftenas and when considered necessary by the Contracting States. Each Contracting State shall chair the SMC for a period of one year on rotational basis in alphabetical order.” The Meetings of SMC and SCOE held so far are:

MEETINGS OF SAFTA COMMITTEE OF EXPERTS

1.First Meeting of the SAFTA Committee of Experts

Dhaka, 18-19 April 2006

 

2.Second Meeting of the SAFTA Committee of Experts

SAARC Secretariat, Kathmandu, 24-25 February 2007

3.Third Meeting of the SAFTA Committee of Experts

New Delhi, 1-2 March 2008

 

4.Fourth Meeting of the SAFTA Committee of Experts

SAARC Secretariat, Kathmandu

4-5 November 2008

5.Fifth Meeting of SAFTA Committee of Experts

 Kathmandu, 26-27 Oct 2009

6.Sixth Meeting of SAFTA Committee of Experts

 Maldives, 11-12 June 2011  

7.Special Meeting of SAFTA Committee of Experts

 

SAARC Secretariat,

23 September 2011 (proposed)

8.

Seventh  Meeting of SAFTA Committee of Experts

 

Pakistan, first quarter of 2012  

 

MEETINGS OF SAFTA MINISTERIAL COUNCIL

 

1. First Meeting of the SAFTA Ministerial CouncilDhaka, 20 April 2006

 

2.Second Meeting of the SAFTA Ministerial Council

SAARC Secretariat, Kathmandu, 26 February 2007

3. Third Meeting of the SAFTA Ministerial CouncilNew Delhi, 3 March 2008

 4. Fourth  Meeting of the SAFTA Ministerial

CouncilKathmandu, 28 Oct 2009

 

5. Fifth  Meeting of the SAFTA Ministerial CouncilMaldives, 13 June 2011

 

5. Sixth  Meeting of the SAFTA Ministerial CouncilPakistan, first quarter of 2012

  

 Intra-SAARC Trade Flows under SAFTA

 

The exports under SAFTA have been witnessing considerable upward trend since the launching of the Trade Liberalisation Programme (TLP).

As of 10 August 2011, the total f.o.b. value of exports by Member States under SAFTA has reached to around US$ 1.3 billion since launching of SAFTA Trade Liberalisation Programme (i.e. July 2006) as per details given below:

 

Year Bangladesh India Maldives Pakistan Sri Lanka Total2006 0.00 0.0014,001.15 55,324.00 0.00 69,325.152007 15,273,177.84 3,783,410.31 0.00 576,164.99 19,828.02 19,652,581.162008 98,316,963.16 8,984,420.68 0.00 31,796,718.51 40,789.22 139,138,891.57

2009199,786,454.7

2315,256,736.3

40.00 43,509,984.90 608,623.96 559,161,799.92

2010236,711,501.2

4276,933,455.7

40.00 56,119,007.59 517,566.00 570,281,530.57

2011         74,609.00 74,609.00

Total550,088,096.9

6604,958,023.0

714,001.15

132,057,199.99

1,261,416.20

1,288,378,737.37

As indicated above, the figure of total exports under SAFTA has reached about US$ 1.3 billion but is still far below the potential.  For smooth functioning of the SAFTA, customs notifications for implementing Trade Liberalisation Programme (TLP) are issued as per the agreed timeline by the Member States. While reduction in the size of Sensitive Lists is important to increase the quantum of regional trade, efforts are made to take out those products out of the Sensitive Lists that are of export interests to the SAARC Member States for trade within South Asia.  

Association of Southeast Asian Nations

From Wikipedia, the free encyclopediaJump to: navigation, search

Association of Southeast Asian NationsASEAN

[show]

Flag Emblem

Motto: One Vision, One Identity, One Community[1]

Anthem: The ASEAN Way The ASEAN Way

Seat of Secretariat Jakarta

Working language

English [show]

Demonym Southeast Asian

Member states10 [show]

Leaders - Secretary-General Surin Pitsuwan  - ASEAN Summit Presidency Cambodia [2]

Establishment - Bangkok Declaration 8 August 1967 

 - Charter 16 December 2008 Area

 - Total4,479,210.5 km2 2,778,124.7 sq mi 

Population - 2010 estimate 601 million 

 - Density135/km2 216/sq mi

GDP (PPP) 2010 estimate - Total US$ 3.084 trillion[3]  - Per capita US$ 5,131 

GDP (nominal) 2010 estimate - Total US$ 1.800 trillion  - Per capita US$ 2,995 

HDI (2011) 0.625[4] (medium) (120th¹)

Currency10 [show]

Time zone ASEAN (UTC +9 to +6:30)

Internet TLD10 [show]

Websitewww.asean.org

Calling code10 [show]

1If considered as a single entity.2Selected key basic ASEAN indicators3Annual growth 1.6%

Wikisource has original text related to this article: Bangkok Declaration

The Secretariat of ASEAN at Jalan Sisingamangaraja No.70A, South Jakarta, Indonesia.

The Association of Southeast Asian Nations[5] (ASEAN  / ̍ ɑː s i . ɑː n / AH -see-ahn,[6] rarely / ̍ ɑː z i . ɑː n / AH -zee-ahn)[7][8] is a geo-political and economic organization of ten countries located in Southeast Asia, which was formed on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore and Thailand.[9] Since then, membership has expanded to include Brunei, Burma (Myanmar), Cambodia, Laos, and Vietnam. Its aims include accelerating economic growth, social progress, cultural development among its members, protection of regional peace and stability, and opportunities for member countries to discuss differences peacefully.[10]

ASEAN covers a land area of 4.46 million km², which is 3% of the total land area of Earth, and has a population of approximately 600 million people, which is 8.8% of the world's population. The sea area of ASEAN is about three times larger than its land counterpart. In 2010, its combined nominal GDP had grown to US$1.8 trillion.[11] If ASEAN were a single entity, it would rank as the ninth largest economy in the world, behind the United States, China, Japan, Germany, France, Brazil, the United Kingdom, and Italy.

Contents

 [hide] 

1 History o 1.1 Continued expansion o 1.2 Environment and democracy

2 The ASEAN way o 2.1 Policies

3 Meetings o 3.1 ASEAN Summit o 3.2 East Asia Summit o 3.3 Commemorative summit o 3.4 Regional Forum o 3.5 Other meetings

3.5.1 Another Three 3.5.2 Asia-Europe Meeting 3.5.3 ASEAN-Russia Summit 3.5.4 ASEAN Foreign Ministers Meeting

4 Economic Community o 4.1 From CEPT to AEC o 4.2 Comprehensive Investment Area o 4.3 Trade in Services o 4.4 Single Aviation Market o 4.5 Free Trade Agreements With Other Countries o 4.6 ASEAN six majors o 4.7 From CMI to AMRO o 4.8 Foreign Direct Investment o 4.9 Intra-ASEAN travel o 4.10 Intra-ASEAN trade

5 Charter 6 Cultural activities

o 6.1 S.E.A. Write Award o 6.2 ASAIHL o 6.3 Heritage Parks

6.3.1 List o 6.4 Official song

7 Education and Human Development o 7.1 University Network o 7.2 Scholarship

8 Sports o 8.1 Southeast Asian Games o 8.2 ASEAN Para Games o 8.3 FESPIC Games/ Asian Para Games o 8.4 Football Championship o 8.5 ASEAN 2030 FIFA World Cup bid

9 ASEAN Defense Industry Collaboration 10 Criticism 11 See also 12 References 13 External links

[edit] History

See also: List of ASEAN member states

ASEAN was preceded by an organisation called the Association of Southeast Asia, commonly called ASA, an alliance consisting of the Philippines, Malaysia and Thailand that was formed in 1961. The bloc itself, however, was established on 8 August 1967, when foreign ministers of five countries – Indonesia, Malaysia, the Philippines, Singapore, and Thailand – met at the Thai Department of Foreign Affairs building in Bangkok and signed the ASEAN Declaration, more commonly known as the Bangkok Declaration. The five foreign ministers – Adam Malik of Indonesia, Narciso Ramos of the Philippines, Abdul Razak of Malaysia, S. Rajaratnam of Singapore, and Thanat Khoman of Thailand – are considered the organisation's Founding Fathers.[12]

The motivations for the birth of ASEAN were so that its members’ governing elite could concentrate on nation building, the common fear of communism, reduced faith in or mistrust of external powers in the 1960s, and a desire for economic development; not to mention Indonesia’s ambition to become a regional hegemon through regional cooperation and the hope on the part of Malaysia and Singapore to constrain Indonesia and bring it into a more cooperative framework.

Papua New Guinea was accorded Observer status in 1976 and Special Observer status in 1981.[13]

Papua New Guinea is a Melanesian state. ASEAN embarked on a program of economic

cooperation following the Bali Summit of 1976. This floundered in the mid-1980s and was only revived around 1991 due to a Thai proposal for a regional free trade area. The bloc grew when Brunei Darussalam became the sixth member on 8 January 1984, barely a week after gaining independence on 1 January.[14]

[edit] Continued expansion

See also: Enlargement of Association of Southeast Asian Nations

On 28 July 1995, Vietnam became the seventh member.[15] Laos and Myanmar (Burma) joined two years later on 23 July 1997.[16] Cambodia was to have joined together with Laos and Burma, but was deferred due to the country's internal political struggle. The country later joined on 30 April 1999, following the stabilisation of its government.[16][17]

During the 1990s, the bloc experienced an increase in both membership and drive for further integration. In 1990, Malaysia proposed the creation of an East Asia Economic Caucus [18] comprising the then members of ASEAN as well as the People's Republic of China, Japan, and South Korea, with the intention of counterbalancing the growing influence of the United States in the Asia-Pacific Economic Cooperation (APEC) and in the Asian region as a whole.[19][20] This proposal failed, however, because of heavy opposition from the United States and Japan.[19][21] Despite this failure, member states continued to work for further integration and ASEAN Plus Three was created in 1997.

In 1992, the Common Effective Preferential Tariff (CEPT) scheme was signed as a schedule for phasing tariffs and as a goal to increase the region’s competitive advantage as a production base geared for the world market. This law would act as the framework for the ASEAN Free Trade Area. After the East Asian Financial Crisis of 1997, a revival of the Malaysian proposal was established in Chiang Mai, known as the Chiang Mai Initiative, which calls for better integration between the economies of ASEAN as well as the ASEAN Plus Three countries (China, Japan, and South Korea).[22]

Aside from improving each member state's economies, the bloc also focused on peace and stability in the region. On 15 December 1995, the Southeast Asian Nuclear-Weapon-Free Zone Treaty was signed with the intention of turning Southeast Asia into a Nuclear-Weapon-Free Zone. The treaty took effect on 28 March 1997 after all but one of the member states have ratified it. It became fully effective on 21 June 2001, after the Philippines ratified it, effectively banning all nuclear weapons in the region.[23]

Satellite image of the 2006 haze over Borneo

East Timor submitted a letter of application to be the eleventh member of ASEAN at the summit in Jakarta in March 2011. Indonesia has shown a warm welcome to East Timor.[24][25][26]

[edit] Environment and democracy

At the turn of the 21st century, issues shifted to involve a more environmental perspective. The organisation started to discuss environmental agreements. These included the signing of the ASEAN Agreement on Transboundary Haze Pollution in 2002 as an attempt to control haze pollution in Southeast Asia.[27] Unfortunately, this was unsuccessful due to the outbreaks of the 2005 Malaysian haze and the 2006 Southeast Asian haze. Other environmental treaties introduced by the organisation include the Cebu Declaration on East Asian Energy Security,[28] the ASEAN Wildlife Enforcement Network in 2005,[29] and the Asia-Pacific Partnership on Clean Development and Climate, both of which are responses to the potential effects of climate change. Climate change is of current interest.

Through the Bali Concord II in 2003, ASEAN has subscribed to the notion of democratic peace, which means all member countries believe democratic processes will promote regional peace and stability. Also, the non-democratic members all agreed that it was something all member states should aspire to.[30]

The leaders of each country, particularly Mahathir Mohamad of Malaysia, also felt the need to further integrate the region. Beginning in 1997, the bloc began creating organisations within its framework with the intention of achieving this goal. ASEAN Plus Three was the first of these and was created to improve existing ties with the People's Republic of China, Japan, and South Korea. This was followed by the even larger East Asia Summit, which included these countries as well as India, Australia, and New Zealand. This new grouping acted as a prerequisite for the planned East Asia Community, which was supposedly patterned after the now-defunct European Community. The ASEAN Eminent Persons Group was created to study the possible successes and failures of this policy as well as the possibility of drafting an ASEAN Charter.

In 2006, ASEAN was given observer status at the United Nations General Assembly.[31] As a response, the organisation awarded the status of "dialogue partner" to the United Nations.[32] Furthermore, on 23 July that year, José Ramos-Horta, then Prime Minister of East Timor, signed

a formal request for membership and expected the accession process to last at least five years before the then-observer state became a full member.[33][34]

In 2007, ASEAN celebrated its 40th anniversary since its inception, and 30 years of diplomatic relations with the United States.[35] On 26 August 2007, ASEAN stated that it aims to complete all its free trade agreements with China, Japan, South Korea, India, Australia and New Zealand by 2013, in line with the establishment of the ASEAN Economic Community by 2015.[36][37] In November 2007 the ASEAN members signed the ASEAN Charter, a constitution governing relations among the ASEAN members and establishing ASEAN itself as an international legal entity.[citation needed] During the same year, the Cebu Declaration on East Asian Energy Security was signed in Cebu on 15 January 2007, by ASEAN and the other members of the EAS (Australia, People's Republic of China, India, Japan, New Zealand, South Korea), which promotes energy security by finding energy alternatives to conventional fuels.[citation needed]

On 27 February 2009 a Free Trade Agreement with the ASEAN regional block of 10 countries and New Zealand and its close partner Australia was signed, it is estimated that this FTA would boost aggregate GDP across the 12 countries by more than US$48 billion over the period 2000–2020.[38][39]

[edit] The ASEAN way

The flags of 10 ASEAN members.

In the 1960s, the push for decolonisation promoted the sovereignty of Indonesia and Malaysia among others. Since nation building is often messy and vulnerable to foreign intervention, the governing elite wanted to be free to implement independent policies with the knowledge that neighbours would refrain from interfering in their domestic affairs. Territorially small members such as Singapore and Brunei were consciously fearful of force and coercive measures from much bigger neighbours like Indonesia and Malaysia. "Through political dialogue and confidence building, no tension has escalated into armed confrontation among ASEAN member countries since its establishment more than three decades ago".[40]

The ASEAN way can be traced back to the signing of the Treaty of Amity and Cooperation in Southeast Asia. "Fundamental principles adopted from this included:

mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations;

the right of every State to lead its national existence free from external interference, subversion or coercion;

non-interference in the internal affairs of one another; settlement of differences or disputes by peaceful manner; renunciation of the threat or use of force; and effective cooperation among themselves".[41]

On the surface, the process of consultations and consensus is supposed to be a democratic approach to decision making, but the ASEAN process has been managed through close interpersonal contacts among the top leaders only, who often share a reluctance to institutionalise and legalise co-operation which can undermine their regime's control over the conduct of regional co-operation. Thus, the organisation is chaired by the secretariat.[42]

All of these features, namely non-interference, informality, minimal institutionalisation, consultation and consensus, non-use of force and non-confrontation have constituted what is called the ASEAN Way. This ASEAN Way has recently proven itself relatively successful in the settlements of disputes by peaceful manner realm, with Chinese and ASEAN officials agreeing to draft guidelines ordered to avert tension in the South China Sea, an important milestone ending almost a decade of deadlock.[43][44]

Despite this success, some academics continue to argue that ASEAN's non-interference principle has worsened efforts to improve in the areas of Burma, human rights abuses and haze pollution in the region. Meanwhile, with the consensus-based approach, every member in fact has a veto and decisions are usually reduced to the lowest common denominator. There has been a widespread belief that ASEAN members should have a less rigid view on these two cardinal principles when they wish to be seen as a cohesive and relevant community.

[edit] Policies

Apart from consultations and consensus, ASEAN’s agenda-setting and decision-making processes can be usefully understood in terms of the so-called Track I and Track II. Track I refers to the practice of diplomacy among government channels. The participants stand as representatives of their respective states and reflect the official positions of their governments during negotiations and discussions. All official decisions are made in Track I. Therefore, "Track I refers to intergovernmental processes".[45] Track II differs slightly from Track I, involving civil society groups and other individuals with various links who work alongside governments.[46] This track enables governments to discuss controversial issues and test new ideas without making official statements or binding commitments, and, if necessary, backtrack on positions.

Although Track II dialogues are sometimes cited as examples of the involvement of civil society in regional decision-making process by governments and other second track actors, NGOs have

rarely got access to this track, meanwhile participants from the academic community are a dozen think-tanks. However, these think-tanks are, in most cases, very much linked to their respective governments, and dependent on government funding for their academic and policy-relevant activities, and many working in Track II have previous bureaucratic experience.[45] Their recommendations, especially in economic integration, are often closer to ASEAN’s decisions than the rest of civil society’s positions.

The track that acts as a forum for civil society in Southeast Asia is called Track III. Track III participants are generally civil society groups who represent a particular idea or brand.[47] Track III networks claim to represent communities and people who are largely marginalised from political power centres and unable to achieve positive change without outside assistance. This track tries to influence government policies indirectly by lobbying, generating pressure through the media. Third-track actors also organise and/or attend meetings as well as conferences to get access to Track I officials.

While Track II meetings and interactions with Track I actors have increased and intensified, rarely has the rest of civil society had the opportunity to interface with Track II. Those with Track I have been even rarer.

Looking at the three tracks, it is clear that until now, ASEAN has been run by government officials who, as far as ASEAN matters are concerned, are accountable only to their governments and not the people. In a lecture on the occasion of ASEAN’s 38th anniversary, the incumbent Indonesian President Dr. Susilo Bambang Yudhoyono admitted:

“All the decisions about treaties and free trade areas, about declarations and plans of action, are made by Heads of Government, ministers and senior officials. And the fact that among the masses, there is little knowledge, let alone appreciation, of the large initiatives that ASEAN is taking on their behalf.”[48]

[edit] Meetings

[edit] ASEAN Summit

A Billboard in Jakarta welcoming ASEAN Summit 2011 delegates.

The organisation holds meetings, known as the ASEAN Summit, where heads of government of each member meet to discuss and resolve regional issues, as well as to conduct other meetings with other countries outside of the bloc with the intention of promoting external relations.

The ASEAN Leaders' Formal Summit was first held in Bali, Indonesia in 1976. Its third meeting was held in Manila in 1987 and during this meeting, it was decided that the leaders would meet every five years.[49] Consequently, the fourth meeting was held in Singapore in 1992 where the leaders again agreed to meet more frequently, deciding to hold the summit every three years.[49] In 2001, it was decided to meet annually to address urgent issues affecting the region. Member nations were assigned to be the summit host in alphabetical order except in the case of Burma which dropped its 2006 hosting rights in 2004 due to pressure from the United States and the European Union.[50]

By December 2008, the ASEAN Charter came into force and with it, the ASEAN Summit will be held twice in a year.

The formal summit meets for three days. The usual itinerary is as follows:

Leaders of member states would hold an internal organisation meeting. Leaders of member states would hold a conference together with foreign ministers of the

ASEAN Regional Forum. A meeting, known as ASEAN Plus Three, is set for leaders of three Dialogue Partners

(People's Republic of China, Japan, South Korea) A separate meeting, known as ASEAN-CER, is set for another set of leaders of two

Dialogue Partners (Australia, New Zealand).[citation needed]

ASEAN Formal SummitsNo Date Country Host Host leader

1st 23–24 February 1976  Indonesia Bali Soeharto2nd 4–5 August 1977  Malaysia Kuala Lumpur Hussein Onn3rd 14–15 December 1987  Philippines Manila Corazon Aquino4th 27‒29 January 1992  Singapore Singapore Goh Chok Tong5th 14‒15 December 1995  Thailand Bangkok Banharn Silpa-archa6th 15‒16 December 1998  Vietnam Hanoi Phan Văn Khải

7th 5‒6 November 2001  BruneiBandar Seri Begawan

Hassanal Bolkiah

8th 4‒5 November 2002  Cambodia Phnom Penh Hun Sen9th 7‒8 October 2003  Indonesia Bali Megawati Soekarnoputri10th 29‒30 November 2004  Laos Vientiane Bounnhang Vorachith11th 12‒14 December 2005  Malaysia Kuala Lumpur Abdullah Ahmad Badawi12th 11‒14 January 20071  Philippines2 Cebu Gloria Macapagal-Arroyo13th 18‒22 November 2007  Singapore Singapore Lee Hsien Loong

14th327 February – 1 March

200910–11 April 2009

 ThailandCha Am, Hua HinPattaya Abhisit Vejjajiva

15th 23 October 2009  Thailand Cha Am, Hua Hin16th 8–9 April 2010  Vietnam Hanoi

Nguyễn Tấn Dũng17th 28–31 October 2010  Vietnam Hanoi18th4 7–8 May 2011  Indonesia Jakarta Susilo Bambang

Yudhoyono19th4 14–19 November 2011  Indonesia Bali20th4 3–4 April 2012  Cambodia Phnom Penh Hun Sen1 Postponed from 10‒14 December 2006 due to Typhoon Utor.2 hosted the summit because Burma backed out due to enormous pressure from US and EU3 This summit consisted of two parts.The first part was moved from 12‒17 December 2008 due to the 2008 Thai political crisis.The second part was aborted on 11 April due to protesters entering the summit venue.4  Indonesia proposed a swap with  Brunei as it will play host to APEC (and possibly the G20 meeting) in 2013.

ASEAN Summits held once or twice a year in a same venue/host nation. Example, Indonesia is the host for 2011 ASEAN Summit; all summits, formal or informal this year 2011 must be held in Indonesia.

During the fifth Summit in Bangkok, the leaders decided to meet "informally" between each formal summit:[49]

ASEAN Informal SummitsNo Date Country Host Host leader

1st 30 November 1996  Indonesia Jakarta Soeharto

2nd 14‒16 December 1997  Malaysia Kuala Lumpur Mahathir Mohamad3rd 27‒28 November 1999  Philippines Manila Joseph Estrada4th 22‒25 November 2000  Singapore Singapore Goh Chok Tong

[edit] East Asia Summit

Participants of the East Asia Summit:   ASEAN  ASEAN Plus Three  Additional members  ObserverMain article: East Asia Summit

The East Asia Summit (EAS) is a pan-Asian forum held annually by the leaders of 16 countries in East Asia and the region, with ASEAN in a leadership position. The summit has discussed issues including trade, energy and security and the summit has a role in regional community building.

The members of the summit are all 10 members of ASEAN plus China, Japan, South Korea, India, Australia and New Zealand. These nations represent nearly half of the world's population. In October 2010, Russia and the United States were formally invited to participate as full members, with presidents of both countries to attend the 2011 summit.[51]

The first summit was held in Kuala Lumpur on 14 December 2005 and subsequent meetings have been held after the annual ASEAN Leaders’ Meeting.

Meeting Country Location Date Note

First EAS

 Malaysia

Kuala Lumpur

14 December 2005

Russia attended as a guest.

Second EAS

 Philippines

Cebu City15 January 2007

Rescheduled from 13 December 2006.

Cebu Declaration on East Asian Energy Security

Third EAS

 Singapore

Singapore21 November 2007

Singapore Declaration on Climate Change, Energy and the Environment[52]

Agreed to establish Economic Research Institute for ASEAN and East Asia

Fourth EAS

 Thailand

Cha-am and Hua Hin

25 October 2009

The date and location of the venue was rescheduled several times, and then a Summit scheduled for 12 April 2009 at Pattaya, Thailand was cancelled when protesters stormed the venue. The Summit has been rescheduled for October 2009 and transferred again from Phuket[53] to Cha-am and Hua Hin.[54]

Fifth EAS

 Viet Nam

Hanoi30 October 2010[55]

Officially invited the US and Russia to participate in future EAS as full-fledged members[51]

Sixth EAS

 Indonesia

Bali19 November 2011

The United States and Russia to join the Summit.

[edit] Commemorative summit

A commemorative summit is a summit hosted by a non-ASEAN country to mark a milestone anniversary of the establishment of relations between ASEAN and the host country. The host country invites the heads of government of ASEAN member countries to discuss future cooperation and partnership.

Meeting Host Location Date Note

ASEAN – Japan Commemorative Summit

 Japan Tokyo11, 12 December 2003

To celebrate the 30th anniversary of the establishment of relations between ASEAN and Japan. The summit was also notable as the first ASEAN summit held between ASEAN and a non-ASEAN country outside the region.

ASEAN – China Commemorative Summit

 People's Republic of China

Nanning30, 31 October 2006

To celebrate the 15th anniversary of the establishment of relations between ASEAN and China

ASEAN – Republic of Korea Commemorative Summit

 South Korea

Jeju-do1, 2 June 2009

To celebrate the 20th anniversary of the establishment of relations between ASEAN and Republic of Korea

[edit] Regional Forum

█ ASEAN full members█ ASEAN observers█ ASEAN candidate members██ ASEAN Plus Three███ East Asia Summit██████ ASEAN Regional Forum

The ASEAN Regional Forum (ARF) is a formal, official, multilateral dialogue in Asia Pacific region. As of July 2007, it is consisted of 27 participants. ARF objectives are to foster dialogue and consultation, and promote confidence-building and preventive diplomacy in the region.[56] The ARF met for the first time in 1994. The current participants in the ARF are as follows: all the ASEAN members, Australia, Bangladesh, Canada, the People's Republic of China, the European Union, India, Japan, North Korea, South Korea, Mongolia, New Zealand, Pakistan, Papua New Guinea, Russia, East Timor, United States and Sri Lanka.[57] The Republic of China (also known as Taiwan) has been excluded since the establishment of the ARF, and issues regarding the Taiwan Strait are neither discussed at the ARF meetings nor stated in the ARF Chairman's Statements.

[edit] Other meetings

Aside from the ones above, other regular[58] meetings are also held.[59] These include the annual ASEAN Ministerial Meeting[60] as well as other smaller committees.[61] Meetings mostly focus on specific topics, such as defence [58] or the environment,[58][62] and are attended by Ministers, instead of heads of government.

[edit] Another Three

The ASEAN Plus Three is a meeting between ASEAN, China, Japan, and South Korea, and is primarily held during each ASEAN Summit.

[edit] Asia-Europe Meeting

The Asia-Europe Meeting (ASEM) is an informal dialogue process initiated in 1996 with the intention of strengthening cooperation between the countries of Europe and Asia, especially members of the European Union and ASEAN in particular.[63] ASEAN, represented by its Secretariat, is one of the 45 ASEM partners. It also appoints a representative to sit on the governing board of Asia-Europe Foundation (ASEF), a socio-cultural organisation associated with the Meeting.

[edit] ASEAN-Russia Summit

The ASEAN-Russia Summit is an annual meeting between leaders of member states and the President of Russia.

[edit] ASEAN Foreign Ministers Meeting

The 44th annual meeting will be held in Bali on 16 to 23 July 2011. Indonesia will propose a unified ASEAN travel visa to ease travel within the region for citizens of ASEAN member states.[64]

[edit] Economic Community

ASEAN has emphasised regional cooperation in the “three pillars”, which are security, sociocultural integration, and economic integration.[65] The regional grouping has made the most progress in economic integration by creating an ASEAN Economic Community (AEC) by 2015.[66] The average economic growths of ASEAN's member nations during 1989–2009 was Singapore with 6.73 percent, Malaysia with 6.15 percent, Indonesia with 5.16 percent, Thailand with 5.02 percent, and the Philippines with 3.79 percent. This economic growth was greater than the average Asia-Pacific Economic Cooperation (APEC) economic growth, which was 2.83 percent.[67]

[edit] From CEPT to AEC

A Common Effective Preferential Tariff (CEPT) scheme to promote the free flow of goods within ASEAN lead the ASEAN Free Trade Area (AFTA).[66] The AFTA is an agreement by the member nations of ASEAN concerning local manufacturing in all ASEAN countries. The AFTA agreement was signed on 28 January 1992 in Singapore.[68] When the AFTA agreement was originally signed, ASEAN had six members, namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand. Vietnam joined in 1995, Laos and Burma in 1997, and Cambodia in 1999. The latecomers have not fully met the AFTA's obligations, but they are officially considered part of the AFTA as they were required to sign the agreement upon entry into ASEAN, and were given longer time frames in which to meet AFTA's tariff reduction obligations.[69]

The next step is ASEAN Economic Community (AEC) with main objectives are to create a:

single market and production base highly competitive economic region region of equitable economic development region fully integrated into the global economy

Since 2007, the ASEAN countries gradually lower their import duties among them and targeted will be zero for most of the import duties at 2015.[70]

Since 2011, AEC has agreed to strengthen the position and increase the competitive edges of small and medium enterprises (SME) in the ASEAN region.[71]

aseanblogger.com has agreed to set up online ASEAN community with aim to raise people's awareness on the issue of AEC by 2015. The content of the portal currently consisted of subjects varying from security to culinary and in the future will also touch tourist sites and local culture.[72]

[edit] Comprehensive Investment Area

The ASEAN Comprehensive Investment Area (ACIA) will encourage the free flow of investment within ASEAN. The main principles of the ACIA are as follows[73]

All industries are to be opened up for investment, with exclusions to be phased out according to schedules

National treatment is granted immediately to ASEAN investors with few exclusions Elimination of investment impediments Streamlining of investment process and procedures Enhancing transparency Undertaking investment facilitation measures

Full realisation of the ACIA with the removal of temporary exclusion lists in manufacturing agriculture, fisheries, forestry and mining is scheduled by 2010 for most ASEAN members and by 2015 for the CLMV (Cambodia, Lao PDR, Burma, and Vietnam) countries.[73]

[edit] Trade in Services

An ASEAN Framework Agreement on Trade in Services was adopted at the ASEAN Summit in Bangkok in December 1995.[74] Under AFAS, ASEAN Member States enter into successive rounds of negotiations to liberalise trade in services with the aim of submitting increasingly higher levels of commitments. The negotiations result in commitments that are set forth in schedules of specific commitments annexed to the Framework Agreement. These schedules are often referred to as packages of services commitments. At present, ASEAN has concluded seven packages of commitments under AFAS.[75]

[edit] Single Aviation Market

The ASEAN Single Aviation Market (SAM), proposed by the ASEAN Air Transport Working Group, supported by the ASEAN Senior Transport Officials Meeting, and endorsed by the ASEAN Transport Ministers, will introduce an open-sky arrangement to the region by 2015.[76] The ASEAN SAM will be expected to fully liberalise air travel between its member states, allowing ASEAN to directly benefit from the growth in air travel around the world, and also freeing up tourism, trade, investment and services flows between member states.[76][77] Beginning 1 December 2008, restrictions on the third and fourth freedoms of the air between capital cities of member states for air passengers services will be removed,[78] while from 1 January 2009, there will be full liberalisation of air freight services in the region, while[76][77] By 1 January 2011, there will be liberalisation of fifth freedom traffic rights between all capital cities.[79]

[edit] Free Trade Agreements With Other Countries

ASEAN has concluded free trade agreements with China (expecting bilateral trade of $500 billion by 2015),[44] Korea, Japan, Australia, New Zealand and most recently India.[80] The agreement with People's Republic of China created the ASEAN–China Free Trade Area (ACFTA), which went into full effect on 1 January 2010. In addition, ASEAN is currently

negotiating a free trade agreement with the European Union.[81] Republic of China (Taiwan) has also expressed interest in an agreement with ASEAN but needs to overcome diplomatic objections from China.[82]

[edit] ASEAN six majors

ASEAN six majors refer to the six largest economies in the area with economies many times larger than the remaining four ASEAN countries.

The ASEAN six majors are (GDP nominal 2010 based on IMF data. The figures in parentheses are GDP PPP.)

 Indonesia: 906.75 billions (1,333 billions)  Thailand: 318.91 billions (589 billions)  Malaysia: 237.96 billions (416 billions)  Singapore: 222.70 billions (293 billions)  Philippines: 199.59 billions (369 billions)  Vietnam: 103.57 billions (277 billions)

[edit] From CMI to AMRO

Due to Asian financial crisis of 1997 to 1998 and long and difficult negotiations with International Monetary Fund, ASEAN+3 agreed to set up a mainly bilateral currency swap scheme known as the 2000 Chiang Mai Initiative (CMI) to anticipate another financial crisis or currency turmoil in the future. In 2006 they agreed to make CMI with multilateralisation and called as CMIM. On 3 May 2009, they agreed to make a currency pool consist of contribution $38.4 billion each by China and Japan, $19.2 billion by South Korea and totally $24 billion by all of ASEAN members, so the total currency pool was $120 billion.[83] A key component has also newly been added, with the establishment of a surveillance unit.[84]

The ASEAN+3 Macroeconomic and Research Office (AMRO) will start its operation in Singapore in May 2011.[85] It will perform a key regional surveillance function as part of the $120 billion of Chiang Mai Initiative Multilateralisation (CMIM) currency swap facility that was established by Finance Minister and Central Bank Governors of ASEAN countries plus China, Japan and South Korea in December 2009.[86]

According to some analysts, the amount of $120 billion is relatively small (cover only about 20 percent of needs), so coordination or help from International Monetary Fund is still needed.[87] On May 3, 2012 ASEAN+3 finance ministers agreed to double emergency reserve fund to $240 billion.[88]

[edit] Foreign Direct Investment

In 2009, realized Foreign Direct Investment (FDI) was $37.9 billion and increase by two-fold in 2010 to $75.8 billion. 22 percent of FDI came form the European Union, followed by ASEAN countries themselves by 16 percent and then followed by Japan and US. European Union and US

has debt problems, while Japan should make tsunami recovery. China who helped Asia lead the global post-2008 recovery still grapples with 3-years high inflation. So, in the longterm all of the problems will give negative impact to ASEAN indirectly. There are possibility to push some programs of ASEAN Economic Community before 2015.[89]

[edit] Intra-ASEAN travel

with free visa among ASEAN countries, a huge intra-ASEAN travel occurred and on the right track to establish an ASEAN Community in the years to come. In 2010, 47 percent or 34 million from 73 million tourists were intra-ASEAN travel.[90]

[edit] Intra-ASEAN trade

Until end of 2010, Intra-Asean trade were still low which mainly of them were mostly exporting to countries outside the region, except Laos and Myanmar were ASEAN-oriented in foreign trade with 80 percent and 50 percent respectively of their exports went to other ASEAN countries.[91]

[edit] Charter

Main article: ASEAN Charter

On 15 December 2008 the members of ASEAN met in the Indonesian capital of Jakarta to launch a charter, signed in November 2007, with the aim of moving closer to "an EU-style community".[92] The charter turns ASEAN into a legal entity and aims to create a single free-trade area for the region encompassing 500 million people. President of Indonesia Susilo Bambang Yudhoyono stated that "This is a momentous development when ASEAN is consolidating, integrating and transforming itself into a community. It is achieved while ASEAN seeks a more vigorous role in Asian and global affairs at a time when the international system is experiencing a seismic shift," he added, referring to climate change and economic upheaval. Southeast Asia is no longer the bitterly divided, war-torn region it was in the 1960s and 1970s." "The fundamental principles include:

a) respect for the independence, sovereignty, equality, territorial integrity and national identity of all ASEAN Member States;

b) shared commitment and collective responsibility in enhancing regional peace, security and prosperity;

c) renunciation of aggression and of the threat or use of force or other actions in any manner inconsistent with international law;

d) reliance on peaceful settlement of disputes;

e) non-interference in the internal affairs of ASEAN Member States;

f) respect for the right of every Member State to lead its national existence free from external interference, subversion and coercion;

g) enhanced consultations on matters seriously affecting the common interest of ASEAN;

h) adherence to the rule of law, good governance, the principles of democracy and constitutional government;

i) respect for fundamental freedoms, the promotion and protection of human rights, and the promotion of social justice;

j) upholding the United Nations Charter and international law, including international humanitarian law, subscribed to by ASEAN Member States;

k) abstention from participation in any policy or activity, including the use of its territory, pursued by and ASEAN Member State or non-ASEAN State or any non-State actor, which threatens the sovereignty, territorial integrity or political and economic stability of ASEAN Member States;

l) respect for the different cultures, languages and religions of the peoples of ASEAN, while emphasising their common values in the spirit of unity in diversity;

m) the centrality of ASEAN in external political, economic, social and cultural relations while remaining actively engaged, outward-looking, inclusive and non-discriminatory; and

n) adherence to multilateral trade rules and ASEAN's rules-based regimes for effective implementation of economic commitments and progressive reduction towards elimination of all barriers to regional economic integration, in a market-driven economy".[93]

However, the ongoing global financial crisis was stated as being a threat to the goals envisioned by the charter,[94] and also set forth the idea of a proposed human rights body to be discussed at a future summit in February 2009. This proposition caused controversy, as the body would not have the power to impose sanctions or punish countries who violate citizens' rights and would therefore be limited in effectiveness.[95] The body was established later in 2009 as the ASEAN Intergovernmental Commission on Human Rights (AICHR).

[edit] Cultural activities

Logo of the S.E.A. Write Award

The organisation hosts cultural activities in an attempt to further integrate the region. These include sports and educational activities as well as writing awards. Examples of these include the ASEAN University Network, the ASEAN Centre for Biodiversity, the ASEAN Outstanding Scientist and Technologist Award, and the Singapore-sponsored ASEAN Scholarship.

[edit] S.E.A. Write Award

The S.E.A. Write Award is a literary award given to Southeast Asian poets and writers annually since 1979. The award is either given for a specific work or as a recognition of an author's lifetime achievement. Works that are honoured vary and have included poetry, short stories, novels, plays, folklore as well as scholarly and religious works. Ceremonies are held in Bangkok and are presided by a member of the Thai royal family.

[edit] ASAIHL

ASAIHL or the Association of Southeast Asian Institutions of Higher Learning is a non-governmental organisation founded in 1956 that strives to strengthen higher learning institutions, espescially in teaching, research, and public service, with the intention of cultivating a sense of regional identity and interdependence.

[edit] Heritage Parks

ASEAN Heritage Parks[96] is a list of nature parks launched 1984 and relaunched in 2004. It aims to protect the region's natural treasures. There are now 35 such protected areas, including the Tubbataha Reef Marine Park and the Kinabalu National Park.[97]

[edit] List

ASEAN Heritage SitesSite Country Site Country

Alaungdaw Kathapa National Park

 BurmaAo Phang-nga Marine National Park

 Thailand

Apo Natural Park  Philippines Imperial City, Huế  VietnamBukit Barisan Selatan National Park

 IndonesiaGunung Leuser National Park

 Indonesia

Gunung Mulu National Park  Malaysia Ha Long Bay  VietnamHoi An Ancient Town  Vietnam Iglit-Baco National Park  PhilippinesIndawgyi Lake Wildlife Sanctuary

 Burma Inlé Lake Wildlife Sanctuary  Burma

Kaeng Krachan National Park  Thailand Kerinci Seblat National Park  IndonesiaKhakaborazi National Park  Burma Khao Yai National Park  ThailandKinabalu National Park  Malaysia Komodo National Park  Indonesia

Imperial Citadel of Thang Long  VietnamLampi Kyun Wildlife Reserve

 Burma

Lorentz National Park  IndonesiaMeinmhala Kyun Wildlife Sanctuary

 Burma

Mu Ko Surin-Mu Ko Similan Marine National Park

 Thailand Nam Ha Protected Area  Laos

Phong Nha-Ke Bang National Park

 VietnamPreah Monivong (Bokor) National Park

 Cambodia

Puerto Princesa Subterranean River National Park

 PhilippinesSungei Buloh Wetland Reserve

 Singapore

Taman Negara National Park  MalaysiaTarutao Marine National Park

 Thailand

Tasek Merimbun Wildlife Sanctuary

 BruneiThung Yai-Huay Kha Khaeng National Park

 Thailand

Tubbataha Reef Marine Park  Philippines Ujung Kulon National Park  IndonesiaVirachey National Park  Cambodia Keraton Yogyakarta  IndonesiaMỹ Sơn  Vietnam Citadel of Ho Dynasty  Vietnam

[edit] Official song

The ASEAN Way – the official regional anthem of ASEAN, music by Kittikhun Sodprasert and Sampow Triudom  Thailand; Lyrics by Payom Valaiphatchra  Thailand.

ASEAN Song of Unity or ASEAN Hymn, music by Ryan Cayabyab  Philippines. Let Us Move Ahead, an ASEAN song, composed by Candra Darusman  Indonesia. ASEAN Rise , ASEAN's 40th Anniversary song, composed by Dick Lee  Singapore;

lyrics by Stefanie Sun  Singapore.

[edit] Education and Human Development

[edit] University Network

The ASEAN University Network (AUN) is a consortium of Southeast Asian universities. It was originally founded in November 1995 by 11 universities within the member states.[98] Currently AUN comprises 26 Participating Universities.[99]

The Southeast Asia Engineering Education Development Network (SEED-NET) Project, was officially established as an autonomous sub-network of the ASEAN University Network (AUN) in April 2001'. AUN/SEED-Net aimed at promoting human resources development in engineering in ASEAN. The Network consists of 19 leading Member Institutions (selected by the Ministries in charge of higher education of respective countries) from 10 ASEAN countries with the support of 11 leading Japanese Supporting Universities (selected by Japanese Government). AUN/SEED-Net is mainly supported by the Japanese Government through the Japan International Cooperation Agency (JICA), and partially supported by the ASEAN Foundation. AUN/SEED-Net activities are

implemented by the AUN/SEED-Net Secretariat with the support of the JICA Project for AUN/SEED-Net, now based at Chulalongkorn University, Thailand.

[edit] Scholarship

The ASEAN Scholarship is a scholarship program offered by Singapore to the 9 other member states for secondary school, junior college, and university education. It covers accommodation, food, medical benefits & accident insurance, school fees, and examination fees.[100]

[edit] Sports

[edit] Southeast Asian Games

The Southeast Asian Games, commonly known as the SEA Games, is a biennial multi-sport event involving participants from the current 11 countries of Southeast Asia. The games is under regulation of the Southeast Asian Games Federation with supervision by the International Olympic Committee (IOC) and the Olympic Council of Asia.

[edit] ASEAN Para Games

Logo of the ASEAN Para Games

The ASEAN Para Games is a biennial multi-sport event held after every Southeast Asian Games for athletes with physical disabilities. The games are participated by the 11 countries located in Southeast Asia. The Games, patterned after the Paralympic Games, are played by physically challenged athletes with mobility disabilities, visual disabilities,

[edit] FESPIC Games/ Asian Para Games

The FESPIC Games, also known as the Far East and South Pacific Games for the persons with disability, was the biggest multi-sports games in Asia and South Pacific region. The FESPIC Games were held nine times and bowed out, a success[101] in December 2006 in the 9th FESPIC Games in Kuala Lumpur, Malaysia. The Games re-emerges as the 2010 Asian Para Games in Guangzhou, China. The 2010 Asian Para Games will debut shortly after the conclusion of the 16th Asian Games, using the same facilities and venue made disability-accessible. The inaugural

Asian Para Games, the parallel event for athletes with physical disabilities, is a multi-sport event held every four years after every Asian Games.

[edit] Football Championship

The ASEAN Football Championship is a biennial Football competition organised by the ASEAN Football Federation, accredited by FIFA and contested by the national teams of Southeast Asia nations. It was inaugurated in 1996 as Tiger Cup, but after Asia Pacific Breweries terminated the sponsorship deal, "Tiger" was renamed "ASEAN".

[edit] ASEAN 2030 FIFA World Cup bid

January 2011: As a result of ASEAN Foreign ministers at Lombok meeting, they agreed bid to host the FIFA World Cup in 2030 as a single entity.[102]

May 2011: ASEAN will go ahead with its bid for the FIFA 2030 World Cup. It was a follow up to the agreement reached in January before.[103]

[edit] ASEAN Defense Industry Collaboration

Indonesia, Malaysia, Singapore and Thailand have established defense industries. To cut cost and plan to be self-sufficient by 2030, Indonesia and Malaysia have agreed to promote the creation of the ASEAN Defense Industry Collaboration (ADIC).[104] The United States military reportedly has said that ADIC could have additional benefits beyond cost savings for ASEAN members, including facilitating a set of standards, similar to NATO, that will improve interoperability among ASEAN and U.S. militaries and increase the effectiveness of regional response to threats to Asia-Pacific peace and stability.[105]

[edit] Criticism

Non-ASEAN countries have criticised ASEAN for being too soft in its approach to promoting human rights and democracy in the junta-led Burma.[106] Despite global outrage at the military crack-down on peaceful protesters in Yangon, ASEAN has refused to suspend Burma as a member and also rejects proposals for economic sanctions.[107] This has caused concern as the European Union, a potential trade partner, has refused to conduct free trade negotiations at a regional level for these political reasons.[108] International observers view it as a "talk shop",[109] which implies that the organisation is "big on words but small on action".[110][111] However, leaders such as the Philippines' Foreign Affairs Secretary, Alberto Romulo, said it is a workshop not a talk shop.[112] Others have also expressed similar sentiment.[113]

Head of the International Institute of Strategic Studies – Asia, Tim Huxley cites the diverse political systems present in the grouping, including many young states, as a barrier to far-reaching cooperation outside the economic sphere. He also asserts that in the absence of an external threat to rally against with the end of the Cold War, ASEAN has begun to be less

successful at restraining its members and resolving border disputes such as those between Burma and Thailand and Indonesia and Malaysia.[114]

During the 12th ASEAN Summit in Cebu, several activist groups staged anti-globalisation and anti-Arroyo rallies.[115] According to the activists, the agenda of economic integration would negatively affect industries in the Philippines and would cause thousands of Filipinos to lose their jobs.[116] They also viewed the organisation as imperialistic that threatens the country's sovereignty.[116] A human rights lawyer from New Zealand was also present to protest about the human rights situation in the region in general.[117]

ESTABLISHMENT

The Association of Southeast Asian Nations, or ASEAN, was established on 8 August 1967 in Bangkok, Thailand, with the signing of the ASEAN Declaration (Bangkok Declaration) by the

Founding Fathers of ASEAN, namely Indonesia, Malaysia, Philippines, Singapore and Thailand.

Brunei Darussalam then joined on 7 January 1984, Viet Nam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, making up what is today the ten

Member States of ASEAN.

AIMS AND PURPOSES

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:

1. To accelerate the economic growth, social progress and cultural development in the region through joint endeavours in the spirit of equality and partnership in order to

strengthen the foundation for a prosperous and peaceful community of Southeast Asian Nations;

2. To promote regional peace and stability through abiding respect for justice and the rule of law in the relationship among countries of the region and adherence to the principles of

the United Nations Charter;3. To promote active collaboration and mutual assistance on matters of common interest in

the economic, social, cultural, technical, scientific and administrative fields;4. To provide assistance to each other in the form of training and research facilities in the

educational, professional, technical and administrative spheres;5. To collaborate more effectively for the greater utilisation of their agriculture and

industries, the expansion of their trade, including the study of the problems of international commodity trade, the improvement of their transportation and

communications facilities and the raising of the living standards of their peoples;6. To promote Southeast Asian studies; and

7. To maintain close and beneficial cooperation with existing international and regional organisations with similar aims and purposes, and explore all avenues for even closer

cooperation among themselves.

FUNDAMENTAL PRINCIPLES

In their relations with one another, the ASEAN Member States have adopted the following fundamental principles, as contained in the Treaty of Amity and Cooperation in Southeast Asia

(TAC) of 1976:

1. Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations;

2. The right of every State to lead its national existence free from external interference, subversion or coercion;

3. Non-interference in the internal affairs of one another; 4. Settlement of differences or disputes by peaceful manner;

5. Renunciation of the threat or use of force; and 6. Effective cooperation among themselves.

ASEAN COMMUNITY

The ASEAN Vision 2020, adopted by the ASEAN Leaders on the 30th Anniversary of ASEAN, agreed on a shared vision of ASEAN as a concert of Southeast Asian nations, outward looking, living in peace, stability and prosperity, bonded together in partnership in dynamic development

and in a community of caring societies.

At the 9th ASEAN Summit in 2003, the ASEAN Leaders resolved that an ASEAN Community shall be established.

At the 12th ASEAN Summit in January 2007, the Leaders affirmed their strong commitment to accelerate the establishment of an ASEAN Community by 2015 and signed the Cebu Declaration

on the Acceleration of the Establishment of an ASEAN Community by 2015.

The ASEAN Community is comprised of three pillars, namely the ASEAN Political-Security Community, ASEAN Economic Community and ASEAN Socio-Cultural Community. Each pillar has its own Blueprint, and, together with the Initiative for ASEAN Integration (IAI)

Strategic Framework and IAI Work Plan Phase II (2009-2015), they form the Roadmap for and ASEAN Community 2009-2015.

ASEAN CHARTER

The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms,

rules and values; sets clear targets for ASEAN; and presents accountability and compliance.

The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Ministers was held at the ASEAN Secretariat in Jakarta to mark this very historic

occasion for ASEAN.

With the entry into force of the ASEAN Charter, ASEAN will henceforth operate under a new legal framework and establish a number of new organs to boost its community-building process. 

In effect, the ASEAN Charter has become a legally binding agreement among the 10 ASEAN Member States.

Find out more about the ASEAN Charter here.

 

 

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G8

From Wikipedia, the free encyclopediaJump to: navigation, search "Group of Eight" redirects here. For other uses, see G8 (disambiguation).

Group of Eight

CanadaPrime Minister Stephen Harper

FrancePresident François Hollande

GermanyChancellor Angela Merkel

ItalyPrime Minister Mario Monti

JapanPrime Minister Yoshihiko Noda

RussiaPresident Vladimir Putin

United KingdomPrime Minister David Cameron

United States of AmericaPresident Barack ObamaPresident of the G8 for 2012

Also represented

European UnionCouncil President Herman Van RompuyCommission President José Manuel Barroso

The Group of Eight (G8) is a forum for the governments of eight of the world's largest economies. The forum originated with a 1975 summit hosted by France that brought together representatives of six governments: France, Germany, Italy, Japan, the United Kingdom, and the United States, thus leading to the name Group of Six or G6. The summit became known as the Group of Seven or G7 the following year with the addition of Canada. In 1997, Russia was added to group which then became known as the G8.[1] The European Union is represented within the G8 but cannot host or chair summits.[2]

"G8" can refer to the member states in aggregate or to the annual summit meeting of the G8 heads of government. The former term, G6, is now frequently applied to the six most populous countries within the European Union. G8 ministers also meet throughout the year, such as the G7/8 finance ministers (who meet four times a year), G8 foreign ministers, or G8 environment ministers.

Collectively, the G8 nations comprise 51.0% of 2011 global nominal GDP and 42.5% of global GDP (PPP). Each calendar year, the responsibility of hosting the G8 rotates through the member states in the following order: France, United States, United Kingdom, Russia, Germany, Japan, Italy, and Canada. The holder of the presidency sets the agenda, hosts the summit for that year, and determines which ministerial meetings will take place. Lately, both France and the United Kingdom have expressed a desire to expand the group to include five developing countries, referred to as the Outreach Five (O5) or the Plus Five: Brazil, People's Republic of China, India, Mexico, and South Africa. These countries have participated as guests in previous meetings, which are sometimes called G8+5.

With the G-20 major economies growing in stature since the 2008 Washington summit, world leaders from the group announced at their Pittsburgh summit on September 25, 2009, that the group will replace the G8 as the main economic council of wealthy nations.[3][4]

Contents

 [hide] 

1 History 2 Structure and activities

o 2.1 Global energy o 2.2 Annual summit

3 Member facts 4 Cumulative influence of member nations 5 Criticism 6 Decline 7 See also 8 References 9 Further reading 10 External links

[edit] History

At the 34th G8 Summit at Toyako, Hokkaido, formal photo during Tanabata matsuri event for world leaders – Silvio Berlusconi (Italy), Dmitry Medvedev (Russia), Angela Merkel (Germany), Gordon Brown (UK), Yasuo Fukuda (Japan), George W. Bush (U.S.), Stephen Harper (Canada), Nicolas Sarkozy (France), José Barroso (EU) – July 7, 2008.

The concept of a forum for the world's major industrialized democracies emerged following the 1973 oil crisis. In 1974, a series of meetings in the library of the White House in Washington, D.C. was known as the "Library Group".[5] This was an informal gathering of senior financial officials from the United States, the United Kingdom, West Germany, Japan and France.[6] In 1975, French President Valéry Giscard d'Estaing invited the heads of government from West Germany, Italy, Japan, the United Kingdom and the United States to a summit in Château de Rambouillet. The six leaders agreed to an annual meeting organized under a rotating presidency, forming the Group of Six (G6). The following year, Canada joined the group at the behest of Germany's Chancellor Helmut Schmidt and U.S. President Gerald Ford [7] and the group became the Group of Seven (G7). The European Union is represented by the President of the European Commission and the leader of the country that holds the Presidency of the Council of the European Union. The President of the European Commission has attended all meetings since it was first invited by the United Kingdom in 1977[8] and the Council President now also regularly attends.

Following 1994's G7 summit in Naples, Russian officials held separate meetings with leaders of the G7 after the group's summits. This informal arrangement was dubbed the Political 8 (P8) – or, colloquially, the G7+1. At the invitation of Prime Minister of the United Kingdom Tony Blair and President of the United States Bill Clinton,[9] Russia formally joined the group in 1997, resulting in the Group of Eight, or G8.

[edit] Structure and activities

Leaders of the G8 on 7 June 2007, in Heiligendamm, Germany

By design, the G8 deliberately lacks an administrative structure like those for international organizations, such as the United Nations or the World Bank. The group does not have a permanent secretariat, or offices for its members.

The presidency of the group rotates annually among the member countries, with each new term beginning on 1 January of the year. The country holding the presidency is responsible for planning and hosting a series of ministerial-level meetings, leading up to a mid-year summit attended by the heads of government. The president of the European Commission participates as an equal in all summit events.[10]

The ministerial meetings bring together ministers responsible for various portfolios to discuss issues of mutual or global concern. The range of topics include health, law enforcement, labor, economic and social development, energy, environment, foreign affairs, justice and interior, terrorism, and trade. There are also a separate set of meetings known as the G8+5, created during the 2005 Gleneagles, Scotland summit, that is attended by finance and energy ministers from all eight member countries in addition to the five "outreach countries" which are also known as the Group of Five — Brazil, People's Republic of China, India, Mexico, and South Africa.[11]

In June 2005, justice ministers and interior ministers from the G8 countries agreed to launch an international database on pedophiles.[12] The G8 officials also agreed to pool data on terrorism, subject to restrictions by privacy and security laws in individual countries.[13]

[edit] Global energy

Main articles: International Partnership for Energy Efficiency Cooperation and Climate Investment Funds

G8 leaders confer during the 2009 summit in L'Aquila (Abruzzo, Italy).

At the Heiligendamm Summit in 2007, the G8 acknowledged a proposal from the EU for a worldwide initiative on efficient energy use. They agreed to explore, along with the International Energy Agency, the most effective means to promote energy efficiency internationally. A year later, on 8 June 2008, the G8 along with China, India, South Korea and the European Community established the International Partnership for Energy Efficiency Cooperation, at the Energy Ministerial meeting hosted by Japan holding 2008 G8 Presidency, in Aomori.[14]

G8 Finance Ministers, whilst in preparation for the 34th Summit of the G8 Heads of State and Government in Toyako, Hokkaido, met on the 13 and 14 June 2008, in Osaka, Japan. They agreed to the “G8 Action Plan for Climate Change to Enhance the Engagement of Private and Public Financial Institutions.” In closing, Ministers supported the launch of new Climate Investment Funds (CIFs) by the World Bank, which will help existing efforts until a new framework under the UNFCCC is implemented after 2012.[15]

[edit] Annual summit

The annual G8 leaders summit is attended by the heads of government.[16] The member country holding the G8 presidency is responsible for organizing and hosting the year's summit.

The serial annual summits can be parsed chronologically in arguably distinct ways, including as the sequence of host countries for the summits has recurred over time, series, etc.[17]

DateHost

countryHost

leaderLocation held Website Notes

1stNovember 15–17, 1975

 France

Valéry Giscard d'Estaing

Rambouillet (Castle of Rambouillet)

G6 Summit

2ndJune 27–28, 1976

 United States

Gerald R. Ford

Dorado, Puerto Rico [18]

Also called "Rambouillet II;" Canada joins the group, forming the G7[18]

3rdMay 7–8, 1977

 United Kingdom

James Callaghan

LondonPresident of the European Commission is invited to join the annual G-7 summits

4thJuly 16–17, 1978

 West Germany

Helmut Schmidt

Bonn, North Rhine-Westphalia

5thJune 28–29, 1979

 JapanMasayoshi Ōhira

Tokyo

6thJune 22–23, 1980

 ItalyFrancesco Cossiga

Venice

7thJuly 20–21, 1981

 Canada

Pierre E. Trudeau

Montebello, Quebec

8thJune 4–6, 1982

 France

François Mitterrand

Versailles

9thMay 28–30, 1983

 United States

Ronald Reagan

Williamsburg, Virginia

10thJune 7–9, 1984

 United Kingdom

Margaret Thatcher

London

11thMay 2–4, 1985

 West Germany

Helmut Kohl

Bonn, North Rhine-Westphalia

12thMay 4–6, 1986

 JapanYasuhiro Nakasone

Tokyo

13thJune 8–10, 1987

 ItalyAmintore Fanfani

Venice

14thJune 19–21, 1988

 Canada

Brian Mulroney

Toronto

15thJuly 14–16, 1989

 France

François Mitterrand

Paris

16thJuly 9–11, 1990

 United States

George H. W. Bush

Houston, Texas

17thJuly 15–17, 1991

 United Kingdom

John Major London

18thJuly 6–8, 1992

 Germany

Helmut Kohl

Munich, Bavaria

19thJuly 7–9, 1993

 JapanKiichi Miyazawa

Tokyo

20thJuly 8–10, 1994

 ItalySilvio Berlusconi

Naples

21stJune 15–17, 1995

 Canada

Jean Chrétien

Halifax, Nova Scotia

[19]

22ndJune 27–29, 1996

 France

Jacques Chirac

Lyon

International organizations' debut to G8 Summits periodically. The invited ones here were: United Nations, World Bank, International Monetary Fund and the World Trade Organization.[20]

23rdJune 20–22, 1997

 United States

Bill Clinton

Denver, Colorado

[21] Russia joins the group, forming G8

24thMay 15–17, 1998

 United Kingdom

Tony BlairBirmingham, England

[22]

25thJune 18–20, 1999

 Germany

Gerhard Schröder

Cologne, North Rhine-Westphalia

[23] First Summit of the G-20 major economies at Berlin

26th July 21–23, 2000

 Japan Yoshiro Mori

Nago, Okinawa [24] Formation of the G8+5 starts, when South Africa was invited. Since then, it has been invited to the Summit annually without interruption. Also, with permission from a G8 leader, other nations were invited to the Summit on a periodical basis for the first

time. Nigeria, Algeria and Senegal accepted their invitations here. The World Health Organization was also invited for the first time, too.[20]

27thJuly 20–22, 2001

 ItalySilvio Berlusconi

Genoa [25]

Leaders from Bangladesh, Mali and El Salvador accepted their invitations here.[20] Demonstrator Carlo Giuliani is shot and killed by police during a violent demonstration. One of the largest and most violent anti-globalization movement protests occurred for the 27th G8 summit.[26] Following those events and the September 11 attacks two months later in 2001, the G8 have met at more remote locations.

28thJune 26–27, 2002

 Canada

Jean Chrétien

Kananaskis, Alberta

[27] Russia gains permission to officially host a G8 Summit.

29thJune 2–3, 2003

 France

Jacques Chirac

Évian-les-Bains [2]

The G8+5 was unofficially made, when China, India, Brazil, and Mexico were invited to this Summit for the first time. South Africa has joined the G8 Summit since 2000. Other first-time nations that were invited by the French president included: Egypt, Morocco, Saudi Arabia, Malaysia and Switzerland.[20]

30th June 8–10, 2004

 United States

George W. Bush

Sea Island, Georgia

[28] A record number of leaders from 12 different nations accepted their invitations here. Amongst a couple of veteran nations, the others were: Ghana, Afghanistan, Bahrain, Iraq, Jordan, Turkey, Yemen and Uganda.[20] Also, the state funeral of former president Ronald Reagan took

place in Washington during the summit.

31stJuly 6–8, 2005

 United Kingdom

Tony BlairGleneagles, Scotland

[29]

The G8+5 was officially formed. On the second day of the meeting, suicide bombers killed 52 people on the London Underground and a bus. Nations that were invited for the first time were Ethiopia and Tanzania. The African Union and the International Energy Agency made their debut here.[20] During the 31st G8 summit in United Kingdom, 225,000 people took to the streets of Edinburgh as part of the Make Poverty History campaign calling for Trade Justice, Debt Relief and Better Aid. Numerous other demonstrations also took place challenging the legitimacy of the G8.[30]

32ndJuly 15–17, 2006

 RussiaVladimir Putin

Strelna, St. Petersburg

[3]

First G8 Summit on Russian soil. Also, the International Atomic Energy Agency and UNESCO made their debut here.[20]

33rdJune 6–8, 2007

 Germany

Angela Merkel

Heiligendamm, Mecklenburg-Vorpommern

[4]

Seven different international organizations accepted their invitations to this Summit. The Organisation for Economic Co-operation and Development and the Commonwealth of Independent States made their debut here.[20]

34thJuly 7–9, 2008

 JapanYasuo Fukuda

Toyako (Lake Toya), Hokkaido

[31]

Nations that accepted their G8 Summit invitations for the first time are: Australia, Indonesia and South Korea.[20]

35th July 8–10, 2009

 Italy Silvio Berlusconi

L'Aquila, Abruzzo

[5] This G8 Summit was originally planned to be in La Maddalena (Sardinia), but was moved to L'Aquila as a

way of showing Prime Minister Berlusconi's desire to help the region in and around L'Aquila after the earthquake that hit the area on the April 6th, 2009. Nations that accepted their invitations for the first time were: Angola, Denmark, Netherlands and Spain.[32] A record of TEN (10) international organizations were represented in this G8 Summit. For the first time, the Food and Agriculture Organization, the International Fund for Agricultural Development, the World Food Programme, and the International Labour Organization accepted their invitations.[33]

36thJune 25–26, 2010[34]

 Canada

Stephen Harper

Huntsville, Ontario [35]

[36]

Malawi, Colombia, Haiti, and Jamaica accepted their invitations for the first time.[37]

37thMay 26–27, 2011

 France

Nicolas Sarkozy

Deauville,[38][39] Basse-Normandie

[6]

Guinea, Niger, Côte d'Ivoire and Tunisia accepted their invitations for the first time. Also, the League of Arab States made its debut to the meeting.[40]

38thMay 18–19, 2012

 United States

Barack Obama

Camp David [41]

The summit was originally planned for Chicago, along with the NATO summit, but it was announced officially on March 5, 2012, that the G8 summit will be held at the more private location of Camp David and at one day earlier than previously scheduled.[42]

39th 2013  United Kingdom

David Cameron

TBD Britain hopes to refocus the event, possibly by discussing a single issue such as the Middle East and inviting key

players, such as Turkey or Israel. David Cameron is critical of the value and cost of the G8 if there is too much focus on communiqués as opposed to building trust between world leaders. He has been looking at the idea of attaching the G8 summit to another event such as the UN general assembly.[43]

40th 2014  RussiaVladimir Putin

Skolkovo [44]

The leaders of the G8 at 36th G8 Summit in Huntsville, Ontario

[edit] Member facts

All eight of the G8 countries are amongst the thirteen top-ranked leading export countries.[45] Six of the G8 countries are among the top 10 with the largest gold reserves (USA, Germany, Italy, France, Russia and Japan.) Some of the world's 18 largest major stock exchanges by traded value and market capitalization are in G8 countries (U.S., Japan, UK, Canada, Germany, Russia.) G8 countries are represented in the top ten economies (by nominal GDP) of the world, according to latest (2011 data) International Monetary Fund's statistics. Also, five countries of the G8 have nominal GDP per capita above US$40,000 (Canada, USA, Japan, France, Germany), from the same 2011 IMF data. However, only five of the G8 nations have a sovereign wealth fund, administered by either a national or a state/provincial government (Russia, USA, France, Canada, Italy).[46] Along with that, the G8 are ranked in the top thirty of nations with large amounts of foreign-exchange reserves in their central banks. The G8 nations also have some of the world's largest, most technologically advanced, and most powerful militaries. Four of the G8 nations have nuclear weapons in operation (France, Russia, UK, USA),[47][48] three others have the capability to rapidly produce nuclear warheads (Canada, Germany, Japan), and some have nuclear weapons sharing programs (Canada, Germany, Italy).[49][50][51]

A few of the world's 10 largest oil producers (Russia, USA, and Canada) and the countries with the third and eighth largest oil reserves (Canada and Russia respectively) are in the G8.

Seven of the nine largest nuclear energy producers are in the G8 (USA, France, Japan, Russia, Germany, Canada, UK), even though Germany will wean itself from nuclear power by 2022.[52]

As with Japan, it shut down all of its nuclear reactors because of the earthquake in 2011; the first time the nation has gone nuclear-free since 1970.[53]

The 7 largest donors to the UN budget for the 2011 annual fiscal year are in the G8 (U.S., Japan, Germany, UK, France, Italy, Canada.) The G8 and the BRIC countries makes up almost all of the 15-nation "trillion dollar club of nations." All of the G8 and G8+5 countries (minus South Africa) are in the top twenty nations that are ranked by the amount of voting power and special drawing rights (SDRs) in the IMF organization.

[edit] Cumulative influence of member nations

Stephen Harper and Nicolas Sarkozy, the 36th and 37th chairs of the G8 Summit

Together the eight countries making up the G8 represent about 14% of the world population, but they represent about 60% of the Gross World Product [54] as measured by gross domestic product, all eight nations being within the top 12 countries according to the CIA World Factbook. (see the CIA World Factbook column in List of countries by GDP (nominal)), the majority of global military power (seven are in the top 8 nations for military expenditure[55]), and almost all of the world's active nuclear weapons.[56] In 2007, the combined G8 military spending was US$850 billion. This is 72% of the world's total military expenditures. (see List of countries and federations by military expenditures) Four of the G8 members, the United Kingdom, United States, France and Russia, together account for 96–99% of the world's nuclear weapons.[57] (see List of states with nuclear weapons)

[edit] Criticism

20 July 2001, 27th G8 summit in Genoa, Italy: Protesters burn a police vehicle which was abandoned by police during a clash with protesters.

Some criticism centres on the assertion that members of G8 do not do enough to help global problems e.g. debt, global warming and the AIDS problem – due to strict medicine patent policy and other issues related to globalization.

[edit] Decline

The G8's relevance is unclear.[58] Critics argue that the G8 has now become unrepresentative of the world's most powerful economies. In particular, China has surpassed every economy except the United States,[59] while Brazil has surpassed Canada, Italy and UK (according to the IMF). India is already larger than Brazil, and according to the International Monetary Fund and the CIA World Factbook, has surpassed Japan in terms of Purchasing Power Parity.

European Union From Wikipedia, the free encyclopediaJump to: navigation, search "EU" redirects here. For other uses, see EU (disambiguation).

European Union[show]

Flag

Motto: United in diversity [1] [2] [3]

Anthem: Ode to Joy Anthem of the European Union

Ode to Joy [2]  (orchestral)

Political centresBrusselsLuxembourgStrasbourg

Official languages 23 [show] Demonym European [4]

Member States

27 [show]

Leaders

 - President of the European Council

Herman Van Rompuy

 - President of the European Commission

José Manuel Barroso

 - President of the European Parliament

Martin Schulz

 - Presidency of the Council of the European Union

Helle Thorning-Schmidt (Denmark)

 - High Representative of the Union for Foreign Affairs and Security Policy

Catherine Ashton

Legislature Legislature of the EU - Upper house Council of the EU - Lower house European Parliament

Establishment - Treaty of Paris 23 July 1952  - Treaty of Rome 1 January 1958  - Maastricht Treaty 1 November 1993  - Treaty of Lisbon 1 December 2009 

Area

 - Total4,324,782 km2 (7th¹)1,669,807 sq mi 

 - Water (%) 3.08Population

 - 2011 estimate 502,486,499 [5] (3rd¹)

 - Density116.2/km2 300.9/sq mi

GDP (PPP) 2011 estimate - Total $15.821 trillion[6] (1st¹) - Per capita $31,607[6] (15th¹)

GDP (nominal) 2011 estimate - Total $17.577 trillion[6] (1st¹) - Per capita $35,116[7] (14th¹)

Gini (2010) 30.4[8] (medium) HDI (2011) 0.856[9] (very high) (14th¹)

Currency Euro (€) (EUR)[show]Time zone (UTC+0 to +2)

 - Summer (DST)  (UTC+1 to +3[a])Internet TLD .eu [b]

Websiteeuropa.eu

Calling code See list1If considered as a single entity.

This box:

view talk edit

The European Union (EU) i / ̩ j ʊ ə r ə ̍ p iː ə n ̍ j uː n j ə n / is an economic and political union or confederation [10] [11] of 27 member states which are located primarily in Europe.[12] The EU traces its origins from the European Coal and Steel Community (ECSC) and the European Economic Community (EEC), formed by six countries in 1958. In the intervening years the EU has grown in size by the accession of new member states, and in power by the addition of policy areas to its remit. The Maastricht Treaty established the European Union under its current name in 1993.[13] The latest amendment to the constitutional basis of the EU, the Treaty of Lisbon, came into force in 2009.

The EU operates through a system of supranational independent institutions and intergovernmental negotiated decisions by the member states.[14][15][16] Important institutions of the EU include the European Commission, the Council of the European Union, the European Council, the Court of Justice of the European Union, and the European Central Bank. The European Parliament is elected every five years by EU citizens.

The EU has developed a single market through a standardised system of laws which apply in all member states. Within the Schengen Area (which includes EU and non-EU states) passport controls have been abolished.[17] EU policies aim to ensure the free movement of people, goods, services, and capital,[18] enact legislation in justice and home affairs, and maintain common policies on trade,[19] agriculture,[20] fisheries and regional development.[21] A monetary union, the eurozone, was established in 1999 and, as of January 2012, is composed of 17 member states.

Through the Common Foreign and Security Policy the EU has developed a limited role in external relations and defence. Permanent diplomatic missions have been established around the world and the EU is represented at the United Nations, the WTO, the G8 and the G-20.

With a combined population of over 500 million inhabitants,[22] or 7.3% of the world population,[23] the EU generated a nominal GDP of 16,242 billion US dollars in 2010, which represents an estimated 20% of global GDP when measured in terms of purchasing power parity.[24]

Contents

 [hide] 

1 History 2 Treaties 3 Geography

o 3.1 Member states o 3.2 Environment

4 Politics o 4.1 Governance

4.1.1 European Council 4.1.2 Commission 4.1.3 Parliament 4.1.4 Council

o 4.2 Budget o 4.3 Competences

5 Legal system o 5.1 Courts of Justice o 5.2 Fundamental rights o 5.3 Acts

6 Justice and home affairs 7 Foreign relations

o 7.1 Military o 7.2 Humanitarian aid

8 Economy o 8.1 Internal market o 8.2 Competition o 8.3 Monetary union o 8.4 Financial supervision o 8.5 Energy o 8.6 Infrastructure o 8.7 Agriculture

9 Education and science 10 Health care 11 Demographics

o 11.1 Languages

o 11.2 Religion 12 Culture and sport 13 See also 14 Notes

o 14.1 Footnotes o 14.2 Citations

15 References 16 External links

[edit] History

Main article: History of the European Union

Robert Schuman proposing the Coal and Steel Community on 9 May 1950.

After World War II, moves towards European integration were seen by many as an escape from the extreme forms of nationalism which had devastated the continent.[25] One such attempt to unite Europeans was the European Coal and Steel Community, which was declared to be "a first step in the federation of Europe", starting with the aim of eliminating the possibility of further wars between its member states by means of pooling the national heavy industries.[26] The founding members of the Community were Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. The originators and supporters of the Community include Jean Monnet, Robert Schuman, Paul-Henri Spaak, and Alcide De Gasperi.[27]

In 1957, the six countries signed the Treaty of Rome, which extended the earlier cooperation within the European Coal and Steel Community (ECSC) and created the European Economic Community, (EEC) establishing a customs union. They also signed another treaty on the same day creating the European Atomic Energy Community (Euratom) for cooperation in developing nuclear energy. Both treaties came into force in 1958.[27]

The Treaty of Rome was signed in 1957 and came into force in 1958. It created the European Economic Community.

The EEC and Euratom were created separately from ECSC, although they shared the same courts and the Common Assembly. The executives of the new communities were called Commissions, as opposed to the "High Authority". The EEC was headed by Walter Hallstein (Hallstein Commission) and Euratom was headed by Louis Armand (Armand Commission) and then Étienne Hirsch. Euratom would integrate sectors in nuclear energy while the EEC would develop a customs union between members.[28][29]

Throughout the 1960s tensions began to show with France seeking to limit supranational power. However, in 1965 an agreement was reached and hence in 1967 the Merger Treaty was signed in Brussels. It came into force on 1 July 1967 and created a single set of institutions for the three communities, which were collectively referred to as the European Communities (EC), although commonly just as the European Community.[30][31] Jean Rey presided over the first merged Commission (Rey Commission).[32]

The Iron Curtain's fall in 1989 enabled eastward enlargement. (Berlin Wall)

In 1973 the Communities enlarged to include Denmark (including Greenland, which later left the Community in 1985), Ireland, and the United Kingdom.[33] Norway had negotiated to join at the same time but Norwegian voters rejected membership in a referendum and so Norway remained outside. In 1979, the first direct, democratic elections to the European Parliament were held.[34]

Greece joined in 1981, Portugal and Spain in 1986.[35] In 1985, the Schengen Agreement led the way toward the creation of open borders without passport controls between most member states and some non-member states.[36] In 1986, the European flag began to be used by the Community[37] and the Single European Act was signed.

In 1990, after the fall of the Iron Curtain, the former East Germany became part of the Community as part of a newly united Germany.[38] With enlargement towards European formerly communist countries as well as Cyprus and Malta on the agenda, the Copenhagen criteria for candidate members to join the European Union were agreed.

The introduction of the euro in 2002 replaced several national currencies.

The European Union was formally established when the Maastricht Treaty came into force on 1 November 1993,[13] and in 1995 Austria, Finland and Sweden joined the newly established EU. In 2002, euro notes and coins replaced national currencies in 12 of the member states. Since then, the eurozone has increased to encompass 17 countries. In 2004, the EU saw its biggest enlargement to date when Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia joined the Union.[39]

On 1 January 2007, Romania and Bulgaria became the EU's members. In the same year Slovenia adopted the euro,[39] followed in 2008 by Cyprus and Malta, by Slovakia in 2009 and by Estonia in 2011. In June 2009, the 2009 Parliament elections were held leading to a renewal of Barroso's Commission Presidency, and in July 2009 Iceland formally applied for EU membership.

On 1 December 2009, the Lisbon Treaty entered into force and reformed many aspects of the EU. In particular it changed the legal structure of the European Union, merging the EU three pillars system into a single legal entity provisioned with legal personality, and it created a permanent President of the European Council, the first of which is Herman Van Rompuy, and a strengthened High Representative, Catherine Ashton.[40]

On 9 December 2011, Croatia signed the EU accession treaty.[41] The EU accession referendum was held in Croatia on 22 January 2012, with the majority voting for Croatia's accession to the European Union making it the 28th member state as of July 2013.

[edit] Treaties

Main article: Treaties of the European UnionSignedIn forc

e

19481948Bruss

19511952Pari

19541955Modif

19571958Rom

19651967Merg

1975N/AEurope

19851985Schen

19861987Single

19921993Maastri

19971999Amster

20012003Nice

20072009Lisbon

Document

els Treaty

s Treaty

ied Brussels Treaty

e treaties

er Treaty

an Council conclusion

gen Treaty

European Act

cht Treaty

dam Treaty

Treaty Treaty

 

 

   

        

       

Three   pillars   of   the   Europea n   Union:  

European   Communities:  

European Atomic Energy Community (EURATOM)

European Coal and Steel Community (ECSC)

Treaty expired in 2002

European

Union (EU)

   

European Economic Community (EEC)

       Schengen

Rules  European

Community (EC)

   

TREVI

Justice and

Home Affairs (JHA)

 

 

Police and Judicial Co-operation in

Criminal Matters (PJCC)

         

European Political

Cooperation (EPC)

Common Foreign and Security Policy (CFSP)

Unconsolidated bodies

Western European Union (WEU)  

 

Treaty terminated in 2011

 

                       

v t e

[edit] Geography

Main article: Geography of the European Union

The EU's climate is influenced by its 65,993 km (41,006 mi) coastline (Cyprus).

Mont Blanc in the Alps is the highest peak in the EU.

The EU's member states cover an area of 4,423,147 square kilometres (1,707,787 sq mi).[c] The EU is larger in area than all but six countries, and its highest peak is Mont Blanc in the Graian Alps, 4,810.45 metres (15,782 ft) above sea level.[42] The lowest point in the EU is Zuidplaspolder in the Netherlands, at 7 m (23 ft) below sea level. The landscape, climate, and economy of the EU are influenced by its coastline, which is 65,993 kilometres (41,006 mi) long. The EU has the world's second-longest coastline, after Canada. The combined member states share land borders with 19 non-member states for a total of 12,441 kilometres (7,730 mi), the fifth-longest border in the world.[15][43][44]

Including the overseas territories of member states, the EU experiences most types of climate from Arctic (North-East Europe) to tropical (French Guyana), rendering meteorological averages for the EU as a whole meaningless. The majority of the people lives in areas with a temperate maritime climate (North-Western Europe and Central Europe), a Mediterranean climate (Southern Europe), or a warm summer continental or hemiboreal climate (Northern Balkans and Central Europe).[45]

The EU's population is highly urbanised, with some 75% of inhabitants (and growing, projected to be 90% in 7 states by 2020) living in urban areas. Cities are largely spread out across the EU, although with a large grouping in and around the Benelux. An increasing percentage of this is due to low density urban sprawl which is extending into natural areas. In some cases this urban growth has been due to the influx of EU funds into a region.[46]

[edit] Member states

Main article: Member state of the European UnionSee also: Special member state territories and the European Union, Enlargement of the European Union, Future enlargement of the European Union, and Withdrawal from the European Union

The member states of the European Union (European Communities pre-1993), animated in order of accession. Only territories in and around Europe are shown.

AlbaniaAustriaBelarusBelgium

Bos.& Herz.BulgariaCroatiaCyprusCzechRep.

DenmarkEstoniaFinlandFrance

GermanyGreece

HungaryIcelandIrelandItaly

LatviaLithuania

LuxembourgMac.

Malta → Moldova

Mont.Netherlands

NorwayPoland

PortugalRomaniaRussiaSerbia

SlovakiaSlovenia

SpainSweden Switz - erlandTurkeyUkraineUnited

Kingdom

The European Union is composed of 27 sovereign member states: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom.[47] The Union's membership has grown from the original six founding states—Belgium, France, (then-West) Germany, Italy, Luxembourg and the Netherlands—to the present day 27 by successive enlargements as countries acceded to the treaties and by doing so, pooled their sovereignty in exchange for representation in the institutions.[48]

To join the EU a country must meet the Copenhagen criteria, defined at the 1993 Copenhagen European Council. These require a stable democracy that respects human rights and the rule of law; a functioning market economy capable of competition within the EU; and the acceptance of the obligations of membership, including EU law. Evaluation of a country's fulfilment of the criteria is the responsibility of the European Council.[49]

No member state has ever left the Union, although Greenland (an autonomous province of Denmark) withdrew in 1985.[50] The Lisbon Treaty now provides a clause dealing with how a member leaves the EU.[51]

Croatia is expected to become the 28th member state of the EU on 1 July 2013 after a referendum on EU membership was approved by Croatian voters on 22 January 2012. The Croatian accession treaty still has to be ratified by all current EU member states.[52]

There are five candidate countries: Iceland, Macedonia,[d] Montenegro, Serbia and Turkey.[53] Albania and Bosnia and Herzegovina are officially recognised as potential candidates.[53] Kosovo is also listed as a potential candidate but the European Commission does not list it as an independent country because not all member states recognise it as an independent country separate from Serbia.[54]

Four countries forming the EFTA (that are not EU members) have partly committed to the EU's economy and regulations: Iceland (a candidate country for EU membership), Liechtenstein and Norway, which are a part of the single market through the European Economic Area, and Switzerland, which has similar ties through bilateral treaties.[55][56] The relationships of the European microstates, Andorra, Monaco, San Marino and the Vatican include the use of the euro and other areas of cooperation.[57]

[edit] Environment

Further information: European Commissioner for the Environment and European Climate Change Programme

The first environmental policy of the European Community was launched in 1972. Since then it has addressed issues such as acid rain, the thinning of the ozone layer, air quality, noise pollution, waste and water pollution. Today, the European Union is thought to have some of the most progressive environmental policies of any state in the world.[58]

The Water Framework Directive is an example of a water policy, aiming for rivers, lakes, ground and coastal waters to be of "good quality" by 2015.[59] The Birds Directive and the Habitats Directive are pieces of European Union legislation for protection of biodiversity and natural habitats. These protections however only directly cover animals and plants; fungi and micro-organisms have no protection under European Union law.[60] The directives are implemented through the Natura 2000 programme and covers 30,000 sites throughout Europe.[59] In 2007, the Polish government sought to build a motorway through the Rospuda valley, but the Commission has been blocking construction as the valley is a wildlife area covered by the programme.[61]

In 2007, member states agreed that the EU is to use 20% renewable energy in the future and that it has to reduce carbon dioxide emissions in 2020 by at least 20% compared to 1990 levels.[62] This includes measures that in 2020, 10% of the overall fuel quantity used by cars and trucks in EU 27 should be running on renewable energy such as biofuels. This is considered to be one of the most ambitious moves of an important industrialised region to fight global warming.[63]

[edit] Politics

Main article: Politics of the European Union

European Union

This article is part of the series:

Politics and government ofthe European Union

European Parliament [show]

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Council of the EU [show]

European Commission [show]

Court of Justice [show]

Other institutions [show]

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Law [show]

v t e

The EU operates solely within those competencies conferred on it upon the treaties and according to the principle of subsidiarity (which dictates that action by the EU should only be taken where an objective cannot be sufficiently achieved by the member states alone). Laws made by the EU institutions are passed in a variety of forms. Generally speaking they can be classified into two groups: those which come into force without the necessity for national implementation measures, and those which specifically require national implementation measures.[64]

[edit] Governance

Main articles: EU institutions and Legislature of the European Union

The European Union has seven institutions: the European Parliament, the Council of the European Union, the European Commission, the European Council, the European Central Bank, the Court of Justice of the European Union and the European Court of Auditors. Competencies in scrutinising and amending legislation are divided between the European Parliament and the Council of the European Union while executive tasks are carried out by the European Commission and in a limited capacity by the European Council (not to be confused with the aforementioned Council of the European Union). The monetary policy of the eurozone is governed by the European Central Bank. The interpretation and the application of EU law and the treaties are ensured by the Court of Justice of the European Union. The EU budget is scrutinised by the European Court of Auditors. There are also a number of ancillary bodies which advise the EU or operate in a specific area.

[edit] European Council

President of the European Council, Herman Van Rompuy

The European Council gives direction to the EU, and convenes at least four times a year. It comprises the President of the European Council, the President of the European Commission and one representative per member state; either its head of state or head of government. The European Council has been described by some as the Union's "supreme political authority".[65] It is actively involved in the negotiation of the treaty changes and defines the EU's policy agenda and strategies.

The European Council uses its leadership role to sort out disputes between member states and the institutions, and to resolve political crises and disagreements over controversial issues and policies. It acts externally as a "collective head of state" and ratifies important documents (for example, international agreements and treaties).[66]

On 19 November 2009, Herman Van Rompuy was chosen as the first permanent President of the European Council. On 1 December 2009, the Treaty of Lisbon entered into force and he assumed office. Ensuring the external representation of the EU,[67] driving consensus and settling divergences among members are tasks for the President both during the convocations of the European Council and in the time periods between them. The European Council should not be mistaken for the Council of Europe, an international organisation independent from the EU.

[edit] Commission

Commission President José Manuel Barroso

The European Commission acts as the EU's executive arm and is responsible for initiating legislation and the day-to-day running of the EU. The Commission is also seen as the motor of European integration. It operates as a cabinet government, with 27 Commissioners for different areas of policy, one from each member state, though Commissioners are bound to represent the interests of the EU as a whole rather than their home state.

One of the 27 is the Commission President (currently José Manuel Durão Barroso) appointed by the European Council. After the President, the most prominent Commissioner is the High Representative of the Union for Foreign Affairs and Security Policy who is ex-officio Vice President of the Commission and is chosen by the European Council too.[68] The other 25 Commissioners are subsequently appointed by the Council of the European Union in agreement with the nominated President. The 27 Commissioners as a single body are subject to a vote of approval by the European Parliament.

[edit] Parliament

The European Parliament building in Strasbourg, France

The European Parliament (EP) forms one half of the EU's legislature (the other half is the Council of the European Union, see below). The 736 (soon to be 751) Members of the European Parliament (MEPs) are directly elected by EU citizens every five years on the basis of proportional representation. Although MEPs are elected on a national basis, they sit according to political groups rather than their nationality. Each country has a set number of seats and is divided into sub-national constituencies where this does not affect the proportional nature of the voting system.[69]

The ordinary legislative procedure of the European Union.

The Parliament and the Council of the European Union pass legislation jointly in nearly all areas under the ordinary legislative procedure. This also applies to the EU budget. Finally, the Commission is accountable to Parliament, requiring its approval to take office, having to report back to it and subject to motions of censure from it. The President of the European Parliament carries out the role of speaker in parliament and represents it externally. The EP President and Vice Presidents are elected by MEPs every two and a half years.[70]

[edit] Council

The Council of the European Union (also called the "Council"[71] and sometimes referred to as the "Council of Ministers")[72] forms the other half of the EU's legislature. It consists of a government minister from each member state and meets in different compositions depending on the policy area being addressed. Notwithstanding its different configurations, it is considered to be one single body.[73] In addition to its legislative functions, the Council also exercises executive functions in relations to the Common Foreign and Security Policy.

[edit] Budget

Main article: Budget of the European Union

The 2011 EU budget (€141.9 bn. in total; commitment appropriations):[74]

  Cohesion and competitiveness for growth and employment (45%)  Citizenship, freedom, security and justice (1%)  The EU as a global player (6%)  Rural development (11%)  Direct aids and market related expenditures (31%)  Administration (6%)

The 27 member state EU had an agreed budget of €120.7 billion for the year 2007 and €864.3 billion for the period 2007–2013,[75] representing 1.10% and 1.05% of the EU-27's GNI forecast for the respective periods. By comparison, the United Kingdom's expenditure for 2004 was estimated to be €759 billion, and France was estimated to have spent €801 billion. In 1960, the budget of the then European Economic Community was 0.03% of GDP.[76]

In the 2010 budget of €141.5 billion, the largest single expenditure item is "cohesion & competitiveness" with around 45% of the total budget.[77] Next comes "agriculture" with approximately 31% of the total.[77] "Rural development, environment and fisheries" takes up around 11%.[77] "Administration" accounts for around 6%.[77] The "EU as a global partner" and "citizenship, freedom, security and justice" bring up the rear with approximately 6% and 1% respectively.[77]

The European Court of Auditors aims to ensure that the budget of the European Union has been properly accounted for. The court provides an audit report for each financial year to the Council and the European Parliament. The Parliament uses this to decide whether to approve the Commission's handling of the budget. The Court also gives opinions and proposals on financial legislation and anti-fraud actions.[78]

The Court of Auditors is legally obliged to provide the Parliament and the Council with "a statement of assurance as to the reliability of the accounts and the legality and regularity of the underlying transactions".[79] The Court has not given an unqualified approval of the Union's accounts since 1993.[80] In their report on 2009 the auditors found that five areas of Union expenditure, agriculture and the cohesion fund, were materially affected by error.[81] The European Commission estimated that the financial impact of irregularities was €1,863 million.[82]

[edit] Competences

EU member states retain all powers not explicitly handed to the European Union. In some areas the EU enjoys exclusive competence. These are areas in which member states have renounced any capacity to enact legislation. In other areas the EU and its member states share the competence to legislate. While both can legislate, member states can only legislate to the extent to which the EU has not. In other policy areas the EU can only co-ordinate, support and supplement member state action but cannot enact legislation with the aim of harmonising national laws.[83]

That a particular policy area falls into a certain category of competence is not necessarily indicative of what legislative procedure is used for enacting legislation within that policy area. Different legislative procedures are used within the same category of competence, and even with the same policy area.

The distribution of competences in various policy areas between Member States and the Union is divided in the following three categories:

As outlined in Part I, Title I of the consolidated Treaty on the Functioning of the European Union:      

view talk edit

Exclusive competence:

"The Union has exclusive competence to

make directives and conclude international

agreements when provided for in a Union

legislative act."

the customs union

the establishing of the competition rules necessary for the functioning of the internal market

monetary policy for the Member States whose currency is the euro

the conservation of marine biological resources under the common fisheries policy

common commercial policy

Shared competence:

"Member States cannot exercise competence in areas where the Union

has done so."

"Union exercise of competence shall not

result in Member States being prevented from exercising theirs in:"

the internal market

social policy, for the aspects defined in this Treaty

economic, social and territorial cohesion

agriculture and fisheries, excluding the conservation of marine biological resources

environment consumer

protection transport trans-European

networks energy the area of

freedom, security and justice

common safety concerns in public health matters, for the aspects defined in this Treaty

research, technological development and space

development cooperation, humanitarian aid

"The Union coordinates Member States policies

or implements supplemental to theirs common policies, not covered elsewhere"

coordination of economic, employment and social policies

common foreign, security and defence policies

Supporting competence:

"The Union can carry out actions to support,

coordinate or supplement Member States' actions

in:"

the protection and improvement of human health

industry culture tourism education , youth,

sport and vocational training

civil protection (disaster prevention)

administrative cooperation

[edit] Legal system

Further information: EU Law, EU treaties, and Charter of Fundamental Rights of the European Union

The EU is based on a series of treaties. These first established the European Community and the EU, and then made amendments to those founding treaties.[84] These are power-giving treaties which set broad policy goals and establish institutions with the necessary legal powers to implement those goals. These legal powers include the ability to enact legislation[e] which can directly affect all member states and their inhabitants.[f] The EU has legal personality, with the right to sign agreements and international treaties.[85]

Under the principle of supremacy, national courts are required to enforce the treaties that their member states have ratified, and thus the laws enacted under them, even if doing so requires them to ignore conflicting national law, and (within limits) even constitutional provisions.[g]

[edit] Courts of Justice

The judicial branch of the EU—formally called the Court of Justice of the European Union—consists of three courts: the Court of Justice, the General Court, and the European Union Civil Service Tribunal. Together they interpret and apply the treaties and the law of the EU.[86]

The Court of Justice primarily deals with cases taken by member states, the institutions, and cases referred to it by the courts of member states.[87] The General Court mainly deals with cases taken by individuals and companies directly before the EU's courts,[88] and the European Union Civil Service Tribunal adjudicates in disputes between the European Union and its civil service.[89] Decisions from the General Court can be appealed to the Court of Justice but only on a point of law.[90]

[edit] Fundamental rights

The last amendment to the constitutional basis of the EU came into force in 2009 and was the Lisbon Treaty.

The treaties declare that the EU itself is "founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities... in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail."[91]

In 2009 the Lisbon Treaty gave legal effect to the Charter of Fundamental Rights of the European Union. The charter is a codified catalogue of fundamental rights against which the EU's legal acts can be judged. It consolidates many rights which were previously recognised by the Court of Justice and derived from the "constitutional traditions common to the member states."[92] The Court of Justice has long recognised fundamental rights and has, on occasion, invalidated EU legislation based on its failure to adhere to those fundamental rights.[93] The Charter of Fundamental Rights was drawn up in 2000. Although originally not legally binding the Charter was frequently cited by the EU's courts as encapsulating rights which the courts had long recognised as the fundamental principles of EU law. Although signing the European Convention on Human Rights (ECHR) is a condition for EU membership,[h] previously, the EU itself could not accede to the Convention as it is neither a state[i] nor had the competence to accede.[j] The Lisbon Treaty and Protocol 14 to the ECHR have changed this: the former binds the EU to accede to the Convention while the latter formally permits it.

The EU also promoted human rights issues in the wider world. The EU opposes the death penalty and has proposed its worldwide abolition.[94] Abolition of the death penalty is a condition for EU membership.[95]

[edit] Acts

The main legal acts of the EU come in three forms: regulations, directives, and decisions. Regulations become law in all member states the moment they come into force, without the requirement for any implementing measures,[k] and automatically override conflicting domestic provisions.[e] Directives require member states to achieve a certain result while leaving them discretion as to how to achieve the result. The details of how they are to be implemented are left to member states.[l] When the time limit for implementing directives passes, they may, under certain conditions, have direct effect in national law against member states.

Decisions offer an alternative to the two above modes of legislation. They are legal acts which only apply to specified individuals, companies or a particular member state. They are most often used in competition law, or on rulings on State Aid, but are also frequently used for procedural or administrative matters within the institutions. Regulations, directives, and decisions are of equal legal value and apply without any formal hierarchy.[96]

[edit] Justice and home affairs

Further information: Area of freedom, security and justice

The Schengen Area comprises most member states ensuring open borders.

Since the creation of the EU in 1993, it has developed its competencies in the area of justice and home affairs, initially at an intergovernmental level and later by supranationalism. To this end, agencies have been established that co-ordinate associated actions: Europol for co-operation of police forces,[97] Eurojust for co-operation between prosecutors,[98] and Frontex for co-operation between border control authorities.[99] The EU also operates the Schengen Information System [17] which provides a common database for police and immigration authorities. This cooperation had to particularly be developed with the advent of open borders through the Schengen Agreement and the associated cross border crime.

Furthermore, the Union has legislated in areas such as extradition,[100] family law,[101] asylum law,[102] and criminal justice.[103] Prohibitions against sexual and nationality discrimination have a long standing in the treaties.[m] In more recent years, these have been supplemented by powers to legislate against discrimination based on race, religion, disability, age, and sexual orientation.[n] By virtue of these powers, the EU has enacted legislation on sexual discrimination in the work-place, age discrimination, and racial discrimination.[o]

[edit] Foreign relations

Main articles: Foreign relations of the European Union, Common Foreign and Security Policy, and European External Action Service

High Representative of the Union for Foreign Affairs and Security Policy, Catherine Ashton.

Foreign policy cooperation between member states dates from the establishment of the Community in 1957, when member states negotiated as a bloc in international trade negotiations under the Common Commercial Policy.[104] Steps for a more wide ranging coordination in foreign relations began in 1970 with the establishment of European Political Cooperation which created an informal consultation process between member states with the aim of forming common foreign policies. It was not, however, until 1987 when European Political Cooperation was introduced on a formal basis by the Single European Act. EPC was renamed as the Common Foreign and Security Policy (CFSP) by the Maastricht Treaty.[105]

The aims of the CFSP are to promote both the EU's own interests and those of the international community as a whole, including the furtherance of international co-operation, respect for human rights, democracy, and the rule of law.[106] The CFSP requires unanimity among the member states on the appropriate policy to follow on any particular issue. The unanimity and difficult issues treated under the CFSP makes disagreements, such as those which occurred over the war in Iraq,[107] not uncommon.

The EU participates in all G8 and G20 summits. (G20 summit in Seoul)

The co-ordinator and representative of the CFSP within the EU is the High Representative of the Union for Foreign Affairs and Security Policy (currently Catherine Ashton) who speaks on behalf of the EU in foreign policy and defence matters, and has the task of articulating the positions expressed by the member states on these fields of policy into a common alignment. The High Representative heads up the European External Action Service (EEAS), a unique EU department[108] that has been officially implemented and operational since 1 December 2010 on the occasion of the first anniversary of the entry into force of the Treaty of Lisbon.[109] The EEAS will serve as a foreign ministry and diplomatic corps for the European Union.[110]

Besides the emerging international policy of the European Union, the international influence of the EU is also felt through enlargement. The perceived benefits of becoming a member of the EU act as an incentive for both political and economic reform in states wishing to fulfil the EU's accession criteria, and are considered an important factor contributing to the reform of European formerly Communist countries.[111] This influence on the internal affairs of other countries is generally referred to as "soft power", as opposed to military "hard power".[112]

[edit] Military

Main article: Military of the European Union

The Eurofighter Typhoon and Eurocopter Tiger are built by a consortium of some EU states.

The European Union does not have one unified military. The predecessors of the European Union were not devised as a strong military alliance because NATO was largely seen as appropriate and sufficient for defence purposes.[113] 21 EU members are members of NATO[114] while the remaining member states follow policies of neutrality.[115] The Western European Union, a military alliance with a mutual defence clause, was disbanded in 2010 as its role had been transferred to the EU.[116]

According to the Stockholm International Peace Research Institute (SIPRI), France spent more than €44 billion ($61bn) on defence in 2010, placing it third in the world after the US and China, while the United Kingdom spent almost £39 billion ($57bn), the fourth largest.[117] Together, France and the United Kingdom account for 45 per cent of Europe's defence budget, 50 per cent of its military capacity and 70 per cent of all spending in military research and development.[118] In 2000, the United Kingdom, France, Spain, and Germany accounted for 97% of the total military research budget of the then 15 EU member states.[119]

Following the Kosovo War in 1999, the European Council agreed that "the Union must have the capacity for autonomous action, backed by credible military forces, the means to decide to use them, and the readiness to do so, in order to respond to international crises without prejudice to actions by NATO". To that end, a number of efforts were made to increase the EU's military capability, notably the Helsinki Headline Goal process. After much discussion, the most concrete result was the EU Battlegroups initiative, each of which is planned to be able to deploy quickly about 1500 personnel.[120]

EU forces have been deployed on peacekeeping missions from Africa to the former Yugoslavia and the Middle East.[121] EU military operations are supported by a number of bodies, including the European Defence Agency, European Union Satellite Centre and the European Union Military Staff.[122] In an EU consisting of 27 members, substantial security and defence cooperation is increasingly relying on great power cooperation.[123]

[edit] Humanitarian aid

Further information: ECHO (European Commission)

Collectively, the EU is the largest contributor of foreign aid in the world.

The European Commissions Humanitarian Aid Office, or "ECHO", provides humanitarian aid from the EU to developing countries. In 2006 its budget amounted to €671 million, 48% of which went to the African, Caribbean and Pacific countries.[124] Counting the EU's own

contributions and those of its member states together, the EU is the largest aid donor in the world.[125]

Humanitarian aid is financed directly by the budget (70%) as part of the financial instruments for external action and also by the European Development Fund (30%).[126] The EU's external action financing is divided into 'geographic' instruments and 'thematic' instruments.[126] The 'geographic' instruments provide aid through the Development Cooperation Instrument (DCI, €16.9 billion, 2007–2013), which must spend 95% of its budget on overseas development assistance (ODA), and from the European Neighbourhood and Partnership Instrument (ENPI), which contains some relevant programmes.[126] The European Development Fund (EDF, €22.7 bn, 2008–2013) is made up of voluntary contributions by member states, but there is pressure to merge the EDF into the budget-financed instruments to encourage increased contributions to match the 0.7% target and allow the European Parliament greater oversight.[126]

The EU's aid has previously been criticised by the eurosceptic think-tank Open Europe for being inefficient, mis-targeted and linked to economic objectives.[127] Furthermore, some charities such as ActionAid have claimed European governments have inflated the amount they have spent on aid by incorrectly including money spent on debt relief, foreign students, and refugees. Under the de-inflated figures, the EU as a whole did not reach its internal aid target in 2006[128] and is expected not to reach the international target of 0.7% of gross national income until 2015.[129]

However, four countries have reached the 0.7% target: Sweden, Luxembourg, the Netherlands and Denmark.[125] In 2005 EU aid was 0.34% of the GNP which was higher than that of either the United States or Japan.[130] The previous Commissioner for Aid, Louis Michel, has called for aid to be delivered more rapidly, to greater effect, and on humanitarian principles.[131]

[edit] Economy

Main articles: Economy of the European Union and Regional policy of the European Union

The ten largest economies in the world counting the EU as a single entity, by GDP (2010)[132]

The EU has established a single market across the territory of all its members. A monetary union, the eurozone, using a single currency comprises 17 member states.[133] In 2010 the EU generated an estimated 26% (16.242 billion international dollars) share of the global gross domestic product [24] making it the largest economy in the world. It is the largest exporter,[134] the largest

importer[135] of goods and services, and the biggest trading partner to several large countries such as China,[136] India,[137] and the United States.

Of the top 500 largest corporations measured by revenue (Fortune Global 500 in 2010), 161 have their headquarters in the EU.[138] In May 2007 unemployment in the EU stood at 7%[139] while investment was at 21.4% of GDP, inflation at 2.2% and public deficit at −0.9% of GDP.[140]

There is a significant variance for GDP (PPP) per capita within individual EU states, these range from €11,000 to €70,000 (about US$14,000 to US$90,000).[141] The difference between the richest and poorest regions (271 NUTS-2 regions of the Nomenclature of Territorial Units for Statistics) ranged, in 2009, from 27% of the EU27 average in the region of Severozapaden in Bulgaria, to 332% of the average in Inner London in the United Kingdom. On the high end, Inner London has €78,000 PPP per capita, Luxembourg €62,500, and Bruxelles-Cap €52,500, while the poorest regions, are Severozapaden with €6,400 PPP per capita, Nord-Est with €6,900 PPP per capita, Severen tsentralen with €6,900 and Yuzhen tsentralen with €7,200.[141]

Structural Funds and Cohesion Funds are supporting the development of underdeveloped regions of the EU. Such regions are primarily located in the states of central and southern Europe.[142][143] Several funds provide emergency aid, support for candidate members to transform their country to conform to the EU's standard (Phare, ISPA, and SAPARD), and support to the former USSR Commonwealth of Independent States (TACIS). TACIS has now become part of the worldwide EuropeAid programme. EU research and technological framework programmes sponsor research conducted by consortia from all EU members to work towards a single European Research Area.[144]

[edit] Internal market

Main article: Internal Market

EU member states have a standardised passport design with the name of the member state, a symbol, and the words "European Union" given in their official language(s). (Ireland model)

Two of the original core objectives of the European Economic Community were the development of a common market, subsequently renamed the single market, and a customs union between its member states. The single market involves the free circulation of goods, capital, people and services within the EU,[133] and the customs union involves the application of a

common external tariff on all goods entering the market. Once goods have been admitted into the market they cannot be subjected to customs duties, discriminatory taxes or import quotas, as they travel internally. The non-EU member states of Iceland, Norway, Liechtenstein and Switzerland participate in the single market but not in the customs union.[55] Half the trade in the EU is covered by legislation harmonised by the EU.[145]

Free movement of capital is intended to permit movement of investments such as property purchases and buying of shares between countries.[146] Until the drive towards economic and monetary union the development of the capital provisions had been slow. Post-Maastricht there has been a rapidly developing corpus of ECJ judgements regarding this initially neglected freedom. The free movement of capital is unique insofar as it is granted equally to non-member states.

The free movement of persons means that EU citizens can move freely between member states to live, work, study or retire in another country. This required the lowering of administrative formalities and recognition of professional qualifications of other states.[147]

The free movement of services and of establishment allows self-employed persons to move between member states to provide services on a temporary or permanent basis. While services account for 60–70% of GDP, legislation in the area is not as developed as in other areas. This lacuna has been addressed by the recently passed Directive on services in the internal market which aims to liberalise the cross border provision of services.[148] According to the Treaty the provision of services is a residual freedom that only applies if no other freedom is being exercised.

[edit] Competition

Further information: European Union competition law and European Commissioner for Competition

The EU operates a competition policy intended to ensure undistorted competition within the single market.[p] The Commission as the competition regulator for the single market is responsible for antitrust issues, approving mergers, breaking up cartels, working for economic liberalisation and preventing state aid.[149]

The Competition Commissioner, currently Joaquín Almunia, is one of the most powerful positions in the Commission, notable for the ability to affect the commercial interests of trans-national corporations.[150] For example, in 2001 the Commission for the first time prevented a merger between two companies based in the United States (GE and Honeywell) which had already been approved by their national authority.[151] Another high profile case against Microsoft, resulted in the Commission fining Microsoft over €777 million following nine years of legal action.[152]

[edit] Monetary union

Main articles: Eurozone and Economic and Monetary Union of the European Union

The eurozone (in darker blue) is constituted by 17 member states adopting the euro as legal tender.

The European Central Bank in Frankfurt governs the monetary policy.

The creation of a European single currency became an official objective of the European Economic Community in 1969. However, it was only with the advent of the Maastricht Treaty in 1993 that member states were legally bound to start the monetary union no later than 1 January 1999. On this date the euro was duly launched by eleven of the then 15 member states of the EU. It remained an accounting currency until 1 January 2002, when euro notes and coins were issued and national currencies began to phase out in the eurozone, which by then consisted of 12 member states. The eurozone (constituted by the EU member states which have adopted the euro) has since grown to 17 countries, the most recent being Estonia which joined on 1 January 2011.

All other EU member states, except Denmark and the United Kingdom, are legally bound to join the euro[153] when the convergence criteria are met, however only a few countries have set target dates for accession. Sweden has circumvented the requirement to join the euro by not meeting the membership criteria.[q]

The euro is designed to help build a single market by, for example: easing travel of citizens and goods, eliminating exchange rate problems, providing price transparency, creating a single financial market, price stability and low interest rates, and providing a currency used internationally and protected against shocks by the large amount of internal trade within the eurozone. It is also intended as a political symbol of integration and stimulus for more.[154] Since its launch the euro has become the second reserve currency in the world with a quarter of foreign exchanges reserves being in euro.[155] The euro, and the monetary policies of those who have

adopted it in agreement with the EU, are under the control of the European Central Bank (ECB).[156]

The ECB is the central bank for the eurozone, and thus controls monetary policy in that area with an agenda to maintain price stability. It is at the centre of the European System of Central Banks, which comprehends all EU national central banks and is controlled by its General Council, consisting of the President of the ECB, who is appointed by the European Council, the Vice-President of the ECB, and the governors of the national central banks of all 27 EU member states.[157]

The monetary union has been shaken by the European sovereign-debt crisis since 2009.

[edit] Financial supervision

The European System of Financial Supervisors is an institutional architecture of the EU's framework of financial supervision composed by three authorities: the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority. To complement this framework, there is also a European Systemic Risk Board under the responsibility of the ECB. The aim of this financial control system is to ensure the economic stability of the EU.[158]

[edit] Energy

Main article: Energy policy of the European UnionEU energy production

46% of total EU primary energy useNuclear energy[r] 29.3%Coal & lignite 21.9%Gas 19.4%Renewable energy 14.6%Oil 13.4%Other 1.4%

Net imports of energy54% of total primary EU energy useOil & petroleum products 60.2%Gas 26.4%Other 13.4%

In 2006, the 27 member states of the EU had a gross inland energy consumption of 1,825 million tonnes of oil equivalent (toe).[159] Around 46% of the energy consumed was produced within the member states while 54% was imported.[159] In these statistics, nuclear energy is treated as primary energy produced in the EU, regardless of the source of the uranium, of which less than 3% is produced in the EU.[160]

The EU has had legislative power in the area of energy policy for most of its existence; this has its roots in the original European Coal and Steel Community. The introduction of a mandatory

and comprehensive European energy policy was approved at the meeting of the European Council in October 2005, and the first draft policy was published in January 2007.[161]

The EU has five key points in its energy policy: increase competition in the internal market, encourage investment and boost interconnections between electricity grids; diversify energy resources with better systems to respond to a crisis; establish a new treaty framework for energy co-operation with Russia while improving relations with energy-rich states in Central Asia[162] and North Africa; use existing energy supplies more efficiently while increasing use of renewable energy; and finally increase funding for new energy technologies.[161]

The EU currently imports 82% of its oil, 57% of its natural gas[163] and 97.48% of its uranium[160] demands. There are concerns that Europe's dependence on Russian energy is endangering the Union and its member countries. The EU is attempting to diversify its energy supply.[164]

[edit] Infrastructure

Further information: European Commissioner for Transport and European Commissioner for Industry and Entrepreneurship

The Öresund Bridge between Denmark and Sweden is part of the Trans-European Networks.

The EU is working to improve cross-border infrastructure within the EU, for example through the Trans-European Networks (TEN). Projects under TEN include the Channel Tunnel, LGV Est, the Fréjus Rail Tunnel, the Öresund Bridge, the Brenner Base Tunnel and the Strait of Messina Bridge. In 2001 it was estimated that by 2010 the network would cover: 75,200 kilometres (46,700 mi) of roads; 78,000 kilometres (48,000 mi) of railways; 330 airports; 270 maritime harbours; and 210 internal harbours.[165][166]

The developing European transport policies will increase the pressure on the environment in many regions by the increased transport network. In the pre-2004 EU members, the major problem in transport deals with congestion and pollution. After the recent enlargement, the new states that joined since 2004 added the problem of solving accessibility to the transport agenda.[167] The Polish road network in particular was in poor condition: at Poland's accession to the EU, 4,600 roads needed to be upgraded to EU standards, demanding approximately €17 billion.[168][not

in citation given]

The Galileo positioning system is another EU infrastructure project. Galileo is a proposed Satellite navigation system, to be built by the EU and launched by the European Space Agency

(ESA), and is to be operational by 2012. The Galileo project was launched partly to reduce the EU's dependency on the US-operated Global Positioning System, but also to give more complete global coverage and allow for far greater accuracy, given the aged nature of the GPS system.[169] It has been criticised by some due to costs, delays, and their perception of redundancy given the existence of the GPS system.[170]

[edit] Agriculture

Main article: Common Agricultural Policy

EU farms are supported by the CAP, the largest budgetary expenditure. (Vineyard in Spain)

The Common Agricultural Policy (CAP) is one of the oldest policies of the European Community, and was one of its core aims.[171] The policy has the objectives of increasing agricultural production, providing certainty in food supplies, ensuring a high quality of life for farmers, stabilising markets, and ensuring reasonable prices for consumers.[s] It was, until recently, operated by a system of subsidies and market intervention. Until the 1990s, the policy accounted for over 60% of the then European Community's annual budget, and still accounts for around 34%.[172]

The policy's price controls and market interventions led to considerable overproduction, resulting in so-called butter mountains and wine lakes. These were intervention stores of produce bought up by the Community to maintain minimum price levels. In order to dispose of surplus stores, they were often sold on the world market at prices considerably below Community guaranteed prices, or farmers were offered subsidies (amounting to the difference between the Community and world prices) to export their produce outside the Community. This system has been criticised for under-cutting farmers outside of Europe, especially those in the developing world.[173]

The overproduction has also been criticised for encouraging environmentally unfriendly intensive farming methods.[173] Supporters of CAP say that the economic support which it gives to farmers provides them with a reasonable standard of living, in what would otherwise be an economically unviable way of life. However, the EU's small farmers receive only 8% of CAP's available subsidies.[173]

Since the beginning of the 1990s, the CAP has been subject to a series of reforms. Initially these reforms included the introduction of set-aside in 1988, where a proportion of farm land was deliberately withdrawn from production, milk quotas (by the McSharry reforms in 1992) and, more recently, the 'de-coupling' (or disassociation) of the money farmers receive from the EU and the amount they produce (by the Fischler reforms in 2004). Agriculture expenditure will

move away from subsidy payments linked to specific produce, toward direct payments based on farm size. This is intended to allow the market to dictate production levels, while maintaining agricultural income levels.[171] One of these reforms entailed the abolition of the EU's sugar regime, which previously divided the sugar market between member states and certain African-Caribbean nations with a privileged relationship with the EU.[141]

[edit] Education and science

Main articles: Educational policies and initiatives of the European Union and Framework Programmes for Research and Technological Development

Renewable energy is one priority in transnational research activities such as the seventh framework programme

Education and science are areas where the EU's role is limited to supporting national governments. In education, the policy was mainly developed in the 1980s in programmes supporting exchanges and mobility. The most visible of these has been the Erasmus Programme, a university exchange programme which began in 1987. In its first 20 years it has supported international exchange opportunities for well over 1.5 million university and college students and has become a symbol of European student life.[174]

There are now similar programmes for school pupils and teachers, for trainees in vocational education and training, and for adult learners in the Lifelong Learning Programme 2007–2013. These programmes are designed to encourage a wider knowledge of other countries and to spread good practices in the education and training fields across the EU.[175] Through its support of the Bologna process the EU is supporting comparable standards and compatible degrees across Europe.

Scientific development is facilitated through the EU's Framework Programmes, the first of which started in 1984. The aims of EU policy in this area are to co-ordinate and stimulate research. The independent European Research Council allocates EU funds to European or national research projects.[176] EU research and technological framework programmes deal in a number of areas, for example energy where it aims to develop a diverse mix of renewable energy for the environment and to reduce dependence on imported fuels.[177]

[edit] Health care

Further information: Healthcare in Europe

European Health Insurance Card.(French version pictured)

Although the EU has no major competences in the field of health care, Article 35 of the Charter of Fundamental Rights of the European Union affirms that "A high level of human health protection shall be ensured in the definition and implementation of all Union policies and activities". All the member states have either publicly sponsored and regulated universal health care or publicly provided universal health care. The European Commission's Directorate-General for Health and Consumers seeks to align national laws on the protection of people's health, on the consumers' rights, on the safety of food and other products.[178][179][180]

Health care in the EU is provided through a wide range of different systems run at the national level. The systems are primarily publicly funded through taxation (universal health care). Private funding for health care may represent personal contributions towards meeting the non-taxpayer refunded portion of health care or may reflect totally private (non-subsidised) health care either paid out of pocket or met by some form of personal or employer funded insurance.

All EU and many other European countries offer their citizens a free European Health Insurance Card which, on a reciprocal basis, provides insurance for emergency medical treatment insurance when visiting other participating European countries.[181] A directive on cross-border healthcare aims at promoting cooperation on health care between member states and facilitating access to safe and high-quality cross-border healthcare for European patients.[182][183][184]

[edit] Demographics

Main article: Demographics of the European Union

On 23 October 2010, the combined population of all 27 member states was forecast at 501,064,211 as of 1 January 2010.[5]

Population of the 5 largest cities in the EU[185]

City City limits (2006)

Density/km²Density /sq mi

Urban area (2005)

LUZ (2004)Metropolitan Area [186] (2011)

Berlin 3,410,000 3,815 9,880 3,761,000 4,971,331 4,325,000London 7,512,400 4,761 12,330 9,332,000 11,917,000 12,500,000Madrid 3,228,359 5,198 13,460 4,990,000 5,804,829 6,500,000

Population of the 5 largest cities in the EU[185]

City City limits (2006)

Density/km²Density /sq mi

Urban area (2005)

LUZ (2004)Metropolitan Area [186] (2011)

Paris 2,153,600 24,672 63,900 9,928,000 11,089,124 12,089,098Rome 2,708,395 2,105 5,450 2,867,000 3,457,690 3,300,000

The EU is home to more global cities than any other region in the world.[187] It contains 16 cities with populations of over one million, the largest being London.

Besides many large cities, the EU also includes several densely populated regions that have no single core but have emerged from the connection of several cites and now encompass large metropolitan areas. The largest are Rhine-Ruhr having approximately 11.5 million inhabitants (Cologne, Dortmund, Düsseldorf et al.), Randstad approx. 7 million (Amsterdam, Rotterdam, The Hague, Utrecht et al.), Frankfurt Rhine-Main Metropolitan Region approx. 5.8 million (Frankfurt, Wiesbaden et al.), the Flemish diamond approx. 5.5 million (urban area in between Antwerp, Brussels, Leuven and Ghent), the Øresund Region approx. 3.7 million (Copenhagen, Denmark and Malmö, Sweden), and the Upper Silesian Industrial Region approx. 3.5 million (Katowice, Sosnowiec et al.)[188]

In 2010, 47.3 million people lived in the EU, who were born outside their resident country. This corresponds to 9.4% of the total EU population. Of these, 31.4 million (6.3%) were born outside the EU and 16.0 million (3.2%) were born in another EU member state. The largest absolute numbers of people born outside the EU were in Germany (6.4 million), France (5.1 million), the United Kingdom (4.7 million), Spain (4.1 million), Italy (3.2 million), and the Netherlands (1.4 million).[189]

[edit] Languages

Main article: Languages of the European UnionEuropean official languages report (EU-251)

LanguageNative

SpeakersTotal

English 13% 51%German 18% 32%French 12% 26%Italian 13% 16%Spanish 9% 15%Polish 9% 10%Dutch 5% 6%Greek 3% 3%Czech 2% 3%Swedish 2% 3%Hungarian 2% 2%Portuguese 2% 2%

European official languages report (EU-251)

LanguageNative

SpeakersTotal

Slovak 1% 2%Danish 1% 1%Finnish 1% 1%Lithuanian 1% 1%Slovenian 1% 1%Estonian <1% <1%Irish <1% <1%Latvian <1% <1%Maltese <1% <1%1Published in 2006, before theaccession of Bulgaria and Romania.Survey conducted in 2005, based on populationwith a minimum age of 15.Native: Native language[190]

Total: EU citizens able to hold aconversation in this language[191]

Among the many languages and dialects used in the EU, it has 23 official and working languages: Bulgarian, Czech, Danish, Dutch, English, Estonian, Finnish, French, German, Greek, Hungarian, Italian, Irish, Latvian, Lithuanian, Maltese, Polish, Portuguese, Romanian, Slovak, Slovene, Spanish, and Swedish.[192][193] Important documents, such as legislation, are translated into every official language. The European Parliament provides translation into all languages for documents and its plenary sessions.[194] Some institutions use only a handful of languages as internal working languages.[195] Catalan, Galician, Basque, Scottish Gaelic and Welsh are not official languages of the EU but have semi-official status in that official translations of the treaties are made into them and citizens of the EU have the right to correspond with the institutions using them.

Language policy is the responsibility of member states, but EU institutions promote the learning of other languages.[t][196] English is the most spoken language in the EU and is spoken by 51% of the EU population counting both native and non-native speakers.[197] German is the most widely spoken mother tongue (about 88.7 million people as of 2006). 56% of EU citizens are able to engage in a conversation in a language other than their mother tongue.[198] Most official languages of the EU belong to the Indo-European language family, except Estonian, Finnish, and Hungarian, which belong to the Uralic language family, and Maltese, which is an Afroasiatic language. Most EU official languages are written in the Latin alphabet except Bulgarian, written in Cyrillic, and Greek, written in the Greek alphabet.[199]

Besides the 23 official languages, there are about 150 regional and minority languages, spoken by up to 50 million people.[199] Of these, only the Spanish regional languages (that is, Catalan, Galician, and the non-Indo-European Basque), Scottish Gaelic, and Welsh[200] can be used by citizens in communication with the main European institutions.[201] Although EU programmes can support regional and minority languages, the protection of linguistic rights is a matter for the

individual member states. The European Charter for Regional or Minority Languages ratified by most EU states provides general guidelines that states can follow to protect their linguistic heritage.

[edit] Religion

Main article: Religion in the European Union

The percentage of Europeans in each member state who believe in "a God".[202]

The EU is a secular body with no formal connection with any religion, but Article 17 of the Treaty on the Functioning of the European Union recognises the "status under national law of churches and religious associations" as well as that of "philosophical and non-confessional organisations".[203]

The preamble to the Treaty on European Union mentions the "cultural, religious and humanist inheritance of Europe".[203] Discussion over the draft texts of the European Constitution and later the Treaty of Lisbon included proposals to mention Christianity or "God" or both, in the preamble of the text, but the idea faced opposition and was dropped.[204]

Christians in the EU are divided among followers of Roman Catholicism, numerous Protestant denominations (especially in northern Europe), and the Eastern Orthodox Church, particularly, in Greece, Cyprus, Bulgaria and Romania. Other religions, such as Islam and Judaism, are also represented in the EU population. As of 2009, the EU had an estimated Muslim population of 13 million,[205] and an estimated Jewish population of over a million.[206]

Eurostat's Eurobarometer opinion polls showed in 2005 that 52% of EU citizens believed in a god, 27% in "some sort of spirit or life force", and 18% had no form of belief.[202] Many countries have experienced falling church attendance and membership in recent years.[207] The countries where the fewest people reported a religious belief were Estonia (16%) and the Czech Republic (19%).[202] The most religious countries are Malta (95%; predominantly Roman Catholic), and Cyprus and Romania both with about 90% of the citizens believing in God (both predominantly Orthodox). Across the EU, belief was higher among women, increased with age, those with religious upbringing, those who left school at 15 with a basic education, and those "positioning themselves on the right of the political scale (57%)."[202]

[edit] Culture and sport

Main articles: Cultural policies of the European Union and Sport policies of the European Union

Maribor in Slovenia (left) and Guimarães in Portugal (right) are the European Capitals of Culture in 2012

Cultural co-operation between member states has been a concern of the EU since its inclusion as a community competency in the Maastricht Treaty.[208] Actions taken in the cultural area by the EU include the Culture 2000 7-year programme,[208] the European Cultural Month event,[209] the Media Plus programme,[210] orchestras such as the European Union Youth Orchestra [211] and the European Capital of Culture programme – where one or more cities in the EU are selected for one year to assist the cultural development of that city.[212]

Sport is mainly the responsibility of an individual member states or other international organisations rather than that of the EU. However, there are some EU policies that have had an impact on sport, such as the free movement of workers which was at the core of the Bosman ruling, which prohibited national football leagues from imposing quotas on foreign players with European citizenship.[213] The Treaty of Lisbon requires any application of economic rules to take into account the specific nature of sport and its structures based on voluntary activity.[214] This followed lobbying by governing organisations such as the International Olympic Committee and FIFA, due to objections over the applications of free market principles to sport which led to an increasing gap between rich and poor clubs.[215] The EU does fund a program for Israeli, Jordanian, Irish and British football coaches, as part of the Football 4 Peace project.[216]

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World Bank

World Bank logoType International organizationLegal status TreatyPurpose/focus CreditingLocation Washington, D.C., U.S.

Membership188 countries [1](IBRD)

170 countries (IDA)

President

Robert Zoellick (present president)Jim Yong Kim (elected on April 16, 2012, and assumes office on July 1, 2012)

Main organ Board of Directors[2]

Parent organization World Bank GroupWebsite worldbank.org

The World Bank is an international financial institution that provides loans [3] to developing countries for capital programs.

The World Bank's official goal is the reduction of poverty. According to the World Bank's Articles of Agreement (As amended effective 16 February 1989) all of its decisions must be guided by a commitment to promote foreign investment, international trade and facilitate capital investment.[4]

The World Bank differs from the World Bank Group, in that the World Bank comprises only two institutions: the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA), whereas the former incorporates these two in addition to three more:[5] International Finance Corporation (IFC), Multilateral Investment Guarantee Agency (MIGA), and International Centre for Settlement of Investment Disputes (ICSID).

Contents

 [hide] 

1 History o 1.1 1944–1968 o 1.2 1968–1980 o 1.3 1980–1989 o 1.4 1989–present

1.4.1 Criteria 2 Leadership

o 2.1 List of Presidents 3 List of chief economists 4 Members

o 4.1 Voting power 5 Poverty reduction strategies 6 Clean Technology Fund management 7 Training wings

o 7.1 World Bank Institute o 7.2 Global Development Learning Network o 7.3 GDLN Asia Pacific

8 Country assistance strategies 9 Clean Air Initiative 10 United Nations Development Business 11 Criticisms

o 11.1 Structural adjustment o 11.2 Sovereign immunity

12 References o 12.1 Notes

13 External links

[edit] History

Lord Keynes (right) and Harry Dexter White, the "founding fathers" of both the World Bank and the IMF. Seen here at the Bretton Woods conference, where plans were laid to launch the two institutions.[6]

The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. The International Monetary Fund, a related institution, is the second. Delegates from many countries attended the Bretton Woods Conference. The most powerful countries in attendance were the United States and United Kingdom, which dominated negotiations.[7]

Although both are based in Washington, D.C., the World Bank is traditionally headed by a citizen of the United States while the IMF is led by a European citizen.

[edit] 1944–1968

From its conception until 1965 the bank undertook a relatively low level of lending. Fiscal conservatism and careful screening of loan applications was common. Bank staff attempted to balance the priorities of providing loans for reconstruction and development with the need to instill confidence in the bank.[8]

Bank president John McCloy selected France to be first recipient of World Bank aid; two other applications from Poland and Chile were rejected. The loan was for US$250 million, half the amount requested and came with strict conditions. Staff from the World Bank monitored the use of the funds, ensuring that the French government would present a balanced budget and give priority of debt repayment to the World Bank over other governments. The United States State Department told the French government that communist elements within the Cabinet needed to be removed. The French Government complied with this diktat and removed the Communist coalition government. Within hours the loan to France was approved.[9]

The Marshall Plan of 1947 caused lending by the bank to change as many European countries received aid that competed with World Bank loans. Emphasis was shifted to non-European

countries and until 1968, loans were earmarked for projects that would enable a borrower country to repay loans (such projects as ports, highway systems, and power plants).

[edit] 1968–1980

From 1968 to 1980, the bank concentrated on meeting the basic needs of people in the developing world.[citation needed] The size and number of loans to borrowers was greatly increased as loan targets expanded from infrastructure into social services and other sectors.[citation needed]

These changes can be attributed to Robert McNamara who was appointed to the presidency in 1968 by Lyndon B. Johnson.[10] McNamara imported a technocratic managerial style to the Bank that he had used as United States Secretary of Defense and President of the Ford Motor Company.[11] McNamara shifted bank policy toward measures such as building schools and hospitals, improving literacy and agricultural reform. McNamara created a new system of gathering information from potential borrower nations that enabled the bank to process loan applications much faster. To finance more loans, McNamara told bank treasurer Eugene Rotberg to seek out new sources of capital outside of the northern banks that had been the primary sources of bank funding. Rotberg used the global bond market to increase the capital available to the bank.[12] One consequence of the period of poverty alleviation lending was the rapid rise of third world debt. From 1976 to 1980 developing world debt rose at an average annual rate of 20%.[13][14]

In 1980, the World Bank Administrative Tribunal was established to decide on disputes between the World Bank Group and its staff where allegation of non-observance of contracts of employment or terms of appointment had not been honored.[15]

[edit] 1980–1989

The neutrality of this article is disputed. Please see the discussion on the talk page. Please do not remove this message until the dispute is resolved. (May 2011)

In 1980, A.W. Clausen replaced McNamara after being nominated by US President Jimmy Carter. Clausen replaced a large number of bank staffers from the McNamara era and instituted a new ideological focus in the bank. The replacement of Chief Economist Hollis B. Chenery by Anne Krueger in 1982 marked a notable policy shift at the bank. Krueger was known for her criticism of development funding, as well as of third world governments as rent-seeking states.

Lending to service third world debt marked the period of 1980–1989. Structural adjustment policies aimed at streamlining the economies of developing nations were also a large part of World Bank policy during this period. UNICEF reported in the late 1980's that the structural adjustment programs of the World Bank were responsible for the "reduced health, nutritional and educational levels for tens of millions of children in Asia, Latin America, and Africa".[16]

[edit] 1989–present

From 1989, World Bank policy changed in response to criticism from many groups. Environmental groups and NGOs were incorporated in the lending of the bank in order to mitigate the effects of the past that prompted such harsh criticism.[17]

Traditionally, and due to tacit agreement between the United States and Europe, the U.S. has always chosen the President of the World Bank. In 2012, for the first time, there are two candidates nominated for the presidency of the World Bank who are not from the United States.

On 23 March 2012, U.S. President Barack Obama announced that the United States would nominate Jim Yong Kim as the next President of the Bank.[18]

The World Bank headquarters in Washington, DC

[edit] Criteria

Many achievements have brought the Millennium Development Goals (MDGs) targets for 2015 within reach in some cases. For the goals to be realized, six criteria must be met: stronger and more inclusive growth in Africa and fragile states, more effort in health and education, integration of the development and environment agendas, more and better aid, movement on trade negotiations, and stronger and more focused support from multilateral institutions like the World Bank.

1. Eradicate Extreme Poverty and Hunger: From 1990 through 2004, the proportion of people living in extreme poverty fell from almost a third to less than a fifth. Although results vary widely within regions and countries, the trend indicates that the world as a whole can meet the goal of halving the percentage of people living in poverty. Africa's poverty, however, is expected to rise, and most of the 36 countries where 90% of the world's undernourished children live are in Africa. Less than a quarter of countries are on track for achieving the goal of halving under-nutrition.

2. Achieve Universal Primary Education: The number of children in school in developing countries increased from 80% in 1991 to 88% in 2005. Still, about 72 million children of primary school age, 57% of them girls, were not being educated as of 2005.

3. Promote Gender Equality: The tide is turning slowly for women in the labor market, yet far more women than men- worldwide more than 60% – are contributing but unpaid family workers. The World Bank Group Gender Action Plan was created to advance women's economic empowerment and promote shared growth.

4. Reduce Child Mortality: There is some what improvement in survival rates globally; accelerated improvements are needed most urgently in South Asia and Sub-Saharan Africa. An estimated 10 million-plus children under five died in 2005; most of their deaths were from preventable causes.

5. Improve Maternal Health: Almost all of the half million women who die during pregnancy or childbirth every year live in Sub-Saharan Africa and Asia. There are numerous causes of maternal death that require a variety of health care interventions to be made widely accessible.

6. Combat HIV/AIDS, Malaria, and Other Diseases: Annual numbers of new HIV infections and AIDS deaths have fallen, but the number of people living with HIV continues to grow. In the eight worst-hit southern African countries, prevalence is above 15 percent. Treatment has increased globally, but still meets only 30 percent of needs (with wide variations across countries). AIDS remains the leading cause of death in Sub-Saharan Africa (1.6 million deaths in 2007). There are 300 to 500 million cases of malaria each year, leading to more than 1 million deaths. Nearly all the cases and more than 95 percent of the deaths occur in Sub-Saharan Africa.

7. Ensure Environmental Sustainability: Deforestation remains a critical problem, particularly in regions of biological diversity, which continues to decline. Greenhouse gas emissions are increasing faster than energy technology advancement.

8. Develop a Global Partnership for Development: Donor countries have renewed their commitment. Donors have to fulfill their pledges to match the current rate of core program development. Emphasis is being placed on the Bank Group's collaboration with multilateral and local partners to quicken progress toward the MDGs' realization.

[edit] Leadership

The President of the Bank, currently Jim Yong Kim, is responsible for chairing the meetings of the Boards of Directors and for overall management of the Bank. Traditionally, the Bank President has always been a US citizen nominated by the United States, the largest shareholder in the bank. The nominee is subject to confirmation by the Board of Executive Directors, to serve for a five-year, renewable term. While most World Bank presidents have had banking experience, some have not.[19][20]

The vice presidents of the Bank are its principal managers, in charge of regions, sectors, networks and functions. There two Executive Vice Presidents, three Senior Vice Presidents, and 24 Vice Presidents.[21]

The Boards of Directors consist of the World Bank Group President and 25 Executive Directors. The President is the presiding officer, and ordinarily has no vote except a deciding vote in case of an equal division. The Executive Directors as individuals cannot exercise any power nor commit or represent the Bank unless specifically authorized by the Boards to do so. With the term beginning 1 November 2010, the number of Executive Directors increased by one, to 25.[22]

[edit] List of Presidents

Name Dates Nationality Background

Eugene Meyer1946–1946

 United States

Newspaper publisher

John J. McCloy

1947–1949

 United States

Lawyer and US Assistant Secretary of War

Eugene R. Black, Sr.

1949–1963

 United States

Bank executive with Chase and executive director with the World Bank

George Woods1963–1968

 United States

Bank executive with First Boston Corporation

Robert McNamara

1968–1981

 United States

US Defense Secretary, business executive with Ford Motor Company

Alden W. Clausen

1981–1986

 United States

Lawyer, bank executive with Bank of America

Barber Conable1986–1991

 United States

New York State Senator and US Congressman

Lewis T. Preston

1991–1995

 United States

Bank executive with J.P. Morgan

Sir James Wolfensohn

1995–2005

 United States

 Australia[note 1]

Corporate lawyer and banker

Paul Wolfowitz2005–2007

 United States

Various cabinet and government positions; US Ambassador to Indonesia, US Deputy Secretary of Defense

Robert Zoellick2007–2012

 United States

Bank executive with Goldman Sachs, Deputy Secretary of State and US Trade Representative

Jim Yong Kim2012–present

 United States

Korean-American physician and anthropologist, co-founder of Partners in Health and 17th President of Dartmouth College.[23] Elected on 16 April 2012.

José Antonio Ocampo, Ngozi Okonjo-Iweala, and Jim Yong Kim were candidates for the 2012 election. It was announced on 16 April 2012, that Jim Yong Kim will succeed Robert Zoellick as president, continuing the chain of successive World Bank president nominees from the United States. His nomination has been strongly opposed by the Nigerian Finance Minister Ngozi Okonjo-Iweala.[24]

[edit] List of chief economists

Main article: World Bank Chief Economist

Justin Yifu Lin

Hollis B. Chenery (1972–1982) Anne Osborn Krueger (1982–1986) Stanley Fischer (1988–1990) Lawrence Summers (1991–1993) Michael Bruno (1993–1996) Joseph E. Stiglitz (1997–2000) Nicholas Stern (2000–2003) François Bourguignon (2003–2007) Justin Yifu Lin (June 2008– )

[edit] Members

Main article: List of World Bank members

The International Bank for Reconstruction and Development (IBRD) has 187 member countries, while the International Development Association (IDA) has 171 members.[25] Each member state of IBRD should be also a member of the International Monetary Fund (IMF) and only members of IBRD are allowed to join other institutions within the Bank (such as IDA).[26]

[edit] Voting power

In 2010, voting powers at the World Bank were revised to increase the voice of developing countries, notably China. The countries with most voting power are now the United States (15.85%), Japan (6.84%), China (4.42%), Germany (4.00%), the United Kingdom (3.75%), France (3.75%), India (2.91%), Russia (2.77%), Saudi Arabia (2.77%) and Italy (2.64%). Under the changes, known as 'Voice Reform – Phase 2', countries other than China that saw significant gains included South Korea, Turkey, Mexico, Singapore, Greece, Brazil, India, and Spain. Most developed countries' voting power was reduced, along with a few poor countries such as Nigeria. The voting powers of the United States, Russia and Saudi Arabia were unchanged.[27][28]

The changes were brought about with the goal of making voting more universal in regards to standards, rule-based with objective indicators, and transparent among other things. Now, developing countries have an increased voice in the "Pool Model," backed especially by Europe. Additionally, voting power is based on economic size in addition to International Development Association contributions.[29]

[edit] Poverty reduction strategies

For the poorest developing countries in the world, the bank's assistance plans are based on poverty reduction strategies; by combining a cross-section of local groups with an extensive analysis of the country's financial and economic situation the World Bank develops a strategy pertaining uniquely to the country in question. The government then identifies the country's priorities and targets for the reduction of poverty, and the World Bank aligns its aid efforts correspondingly.

Forty-five countries pledged US$25.1 billion in "aid for the world's poorest countries", aid that goes to the World Bank International Development Association (IDA) which distributes the loans to eighty poorer countries. While wealthier nations sometimes fund their own aid projects, including those for diseases, and although IDA is the recipient of criticism, Robert B. Zoellick, the president of the World Bank, said when the loans were announced on 15 December 2007, that IDA money "is the core funding that the poorest developing countries rely on".[30]

[edit] Clean Technology Fund management

The World Bank has been assigned temporary management responsibility of the Clean Technology Fund (CTF), focused on making renewable energy cost-competitive with coal-fired power as quickly as possible, but this may not continue after UN's Copenhagen climate change conference in December, 2009, because of the Bank's continued investment in coal-fired power plants.[31]

[edit] Training wings

[edit] World Bank Institute

The World Bank Institute (WBI) creates learning opportunities for countries, World Bank staff and clients, and people committed to poverty reduction and sustainable development. WBI's work program includes training, policy consultations, and the creation and support of knowledge networks related to international economic and social development.

[edit] Global Development Learning Network

The Global Development Learning Network (GDLN) is a partnership of over 120 learning centers (GDLN Affiliates) in nearly 80 countries around the world. GDLN Affiliates collaborate in holding events that connect people across countries and regions for learning and dialogue on development issues.

GDLN clients are typically NGOs, government, private sector and development agencies who find that they work better together on subregional, regional or global development issues using the facilities and tools offered by GDLN Affiliates. Clients also benefit from the ability of Affiliates to help them choose and apply these tools effectively, and to tap development practitioners and experts worldwide. GDLN Affiliates facilitate around 1000 videoconference-

based activities a year on behalf of their clients, reaching some 90,000 people worldwide. Most of these activities bring together participants in two or more countries over a series of sessions. A majority of GDLN activities are organized by small government agencies and NGOs.

[edit] GDLN Asia Pacific

The GDLN in the East Asia and Pacific region has experienced rapid growth and Distance Learning Centers now operate, or are planned in 20 countries: Australia, Mongolia, Cambodia, China, Indonesia, Singapore, Philippines, Sri Lanka, Japan, Papua New Guinea, South Korea, Thailand, Laos, Timor Leste, Fiji, Afghanistan, Bangladesh, India, Nepal and New Zealand. With over 180 Distance Learning Centers, it is the largest development learning network in the Asia and Pacific region. The Secretariat Office of GDLN Asia Pacific is located in the Center of Academic Resources of Chulalongkorn University, Bangkok, Thailand.

GDLN Asia Pacific was launched at the GDLN’s East Asia and Pacific regional meeting held in Bangkok from 22 to 24 May 2006. Its vision is to become “the premier network exchanging ideas, experience and know-how across the Asia Pacific Region”. GDLN Asia Pacific is a separate entity to The World Bank. It has endorsed its own Charter and Business Plan and, in accordance with the Charter, a GDLN Asia Pacific Governing Committee has been appointed.

The committee comprises China (2), Australia (1), Thailand (1), The World Bank (1) and finally, a nominee of the Government of Japan (1). The organization is currently hosted by Chulalongkorn University in Bangkok, Thailand, founding member of the GDLN Asia Pacific.

The Governing Committee has determined that the most appropriate legal status for the GDLN AP in Thailand is a “Foundation”. The World Bank is currently engaging a solicitor in Thailand to process all documentation in order to obtain this legal status.

GDLN Asia Pacific is built on the principle of shared resources among partners engaged in a common task, and this is visible in the organizational structures that exist, as the network evolves. Physical space for its headquarters is provided by the host of the GDLN Centre in Thailand – Chulalongkorn University; Technical expertise and some infrastructure is provided by the Tokyo Development Learning Centre (TDLC); Fiduciary services are provided by Australian National University (ANU) Until the GDLN Asia Pacific is established as a legal entity tin Thailand, ANU, has offered to assist the governing committee, by providing a means of managing the inflow and outflow of funds and of reporting on them. This admittedly results in some complexity in contracting arrangements, which need to be worked out on a case by case basis and depends to some extent on the legal requirements of the countries involved.

[edit] Country assistance strategies

As a guideline to the World Bank's operations in any particular country, a Country Assistance Strategy is produced, in cooperation with the local government and any interested stakeholders and may rely on analytical work performed by the Bank or other parties.

[edit] Clean Air Initiative

Clean Air Initiative (CAI)[32] is a World Bank initiative to advance innovative ways to improve air quality in cities through partnerships in selected regions of the world by sharing knowledge and experiences. It includes electric vehicles.

[edit] United Nations Development Business

Based on an agreement between the United Nations and the World Bank in 1981, Development Business became the official source for World Bank Procurement Notices, Contract Awards, and Project Approvals.[33] In 1998, the agreement was re-negotiated, and included in this agreement was a joint venture to create an electronic version of the publication via the World Wide Web. Today, Development Business is the primary publication for all major multilateral development banks, United Nations agencies, and several national governments, many of whom have made the publication of their tenders and contracts in Development Business a mandatory requirement.[34] Currently, the subscription to "online version only" is not free, but costs US$ 550.[35]

The World Bank or the World Bank Group is also a sitting observer in the United Nations Development Group.[36]

[edit] Criticisms

The World Bank has long been criticized by non-governmental organizations, such as the indigenous rights group Survival International, and academics, including its former Chief Economist Joseph Stiglitz who is equally critical of the International Monetary Fund, the US Treasury Department, US and other developed country trade negotiators.[37] Critics argue that the so-called free market reform policies which the Bank advocates are often harmful to economic development if implemented badly, too quickly ("shock therapy"), in the wrong sequence or in weak, uncompetitive economies.[37][38]

One of the strongest criticisms of the World Bank has been the way in which it is governed. While the World Bank represents 186 countries, it is run by a small number of economically powerful countries. These countries (which also provide most of the institution's funding) choose the leadership and senior management of the World Bank, and so their interests dominate the bank.[39]

In the 1990s, the World Bank and the IMF forged the Washington Consensus, policies which included deregulation and liberalization of markets, privatization and the downscaling of government. Though the Washington Consensus was conceived as a policy that would best promote development, it was criticized for ignoring equity, employment and how reforms like privatization were carried out. Joseph Stiglitz argued that the Washington Consensus placed too much emphasis on the growth of GDP, and not enough on the permanence of growth or on whether growth contributed to better living standards.[40]

Some analysis shows that the World Bank has increased poverty and been detrimental to the environment, public health and cultural diversity.[41]

Criticism of the World Bank often takes the form of protesting as seen in recent events such as the World Bank Oslo 2002 Protests,[42] the October Rebellion,[43] and the Battle of Seattle.[44] Such demonstrations have occurred all over the world, even amongst the Brazilian Kayapo people.[45]

Another source of criticism has been the tradition of having an American head the bank, implemented because the United States provides the majority of World Bank funding. "When economists from the World Bank visit poor countries to dispense cash and advice," observed The Economist, as yet another American, Jim Yong Kim, was lined up in 2012, "they routinely tell governments to reject cronyism and fill each important job with the best candidate available. It is good advice. The World Bank should take it."[46] Jim Yong Kim was duly named as president anyway.[47]

[edit] Structural adjustment

The effect of structural adjustment policies on poor countries has been one of the most significant criticisms of the World Bank. The 1979 energy crisis plunged many countries into economic crises.[48] The World Bank responded with structural adjustment loans which distributed aid to struggling countries while enforcing policy changes in order to reduce inflation and fiscal imbalance. Some of these policies included encouraging production, investment and labour-intensive manufacturing, changing real exchange rates and altering the distribution of government resources.[49] Structural adjustment policies were most effective in countries with an institutional framework that allowed these policies to be implemented easily.[50] For some countries, particularly in Sub-Saharan Africa, economic growth regressed and inflation worsened.[51] The alleviation of poverty was not a goal of structural adjustment loans, and the circumstances of the poor often worsened, due to a reduction in social spending and an increase in the price of food, as subsidies were lifted.[52]

By the late 1980s, international organizations began to admit that structural adjustment policies were worsening life for the world's poor. The World Bank changed structural adjustment loans, allowing for social spending to be maintained, and encouraging a slower change to policies such as transfer of subsidies and price rises.[53] In 1999, the World Bank and the IMF introduced the Poverty Reduction Strategy Paper approach to replace structural adjustment loans.[54] The Poverty Reduction Strategy Paper approach has been interpreted as an extension of structural adjustment policies as it continues to reinforce and legitimize global inequities.[55] Neither approach has addressed the inherent flaws within the global economy that contribute to economic and social inequities within developing countries.[56] By reinforcing the relationship between lending and client states, many believe that the World Bank has usurped indebted countries' power to determine their own economic policy.[57]

[edit] Sovereign immunity

Despite claiming goals of "good governance and anti-corruption″[58] the World Bank requires sovereign immunity from countries it deals with.[59][60][61][62][63] Sovereign immunity waives a holder from all legal liability for their actions. It is proposed that this immunity from responsibility is a "shield which [The World Bank] wants resort to, for escaping accountability and security by the people."[59] As the United States has veto power, it can prevent the World Bank from taking action against its interests.[59]

International Monetary Fund From Wikipedia, the free encyclopediaJump to: navigation, search "IMF" redirects here. For other uses, see IMF (disambiguation).

International Monetary Fund

Official logo for the IMF

Formation

Adopted: July 22, 1944 (67 years ago)Entered into force: December 27, 1945 (66 years ago)

TypeInternational Economic Organization

HeadquartersWashington, D.C.United States

Membership185 nations (founding); 188 nations (to date)

Official languages English, French, and SpanishManaging Director Christine LagardeMain organ Board of GovernorsWebsite www.imf.org

The International Monetary Fund (IMF) is an international organization that was created on July 22, 1944 at the Bretton Woods Conference and came into existence on December 27, 1945 when 29 countries signed the Articles of Agreement[1]. It originally had 45 members. The IMF's stated goal was to stabilize exchange rates and assist the reconstruction of the world’s

international payment system post World War II. Countries contribute money to a pool through a quota system from which countries with payment imbalances can borrow funds on a temporary basis. Through this activity and others such as surveillance of its members' economies and policies, the IMF works to improve the economies of its member countries.[2] The IMF describes itself as “an organization of 188 countries (as of April 2012), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.” The organization's stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.[3] Its headquarters are in Washington, D.C.

Contents

 [hide] 

1 History 2 Member countries

o 2.1 Qualifications o 2.2 Benefits

3 Leadership o 3.1 Board of Governors o 3.2 Executive Board o 3.3 Managing Director

4 Voting power o 4.1 Effects of the quota system

4.1.1 Developing countries 4.1.2 United States influence 4.1.3 Overcoming borrower/creditor divide

5 Functions o 5.1 Surveillance of the global economy o 5.2 Conditionality of loans

5.2.1 Benefits 5.2.2 Criticisms

o 5.3 Reform 6 Use 7 IMF and globalization 8 Criticism

o 8.1 Support of military dictatorships o 8.2 Impact on access to food o 8.3 Impact on public health o 8.4 Impact on environment o 8.5 Criticism from free-market advocates

9 In the media 10 See also 11 Notes and references

12 Further reading 13 External links

[edit] History

IMF "Headquarters 1" in Washington, D.C.

The International Monetary Fund was originally created as part of the Bretton Woods system exchange agreement in 1944.[4] During the Great Depression, countries sharply raised barriers to foreign trade in an attempt to improve their failing economies. This led to the devaluation of national currencies and a decline in world trade.[5] This breakdown in international monetary cooperation created a need for oversight. The representatives of 45 governments met in the Mount Washington Hotel in the area of Bretton Woods, New Hampshire in the United States, and agreed on a framework for international economic cooperation to establish post-World War II. The participating countries were concerned with the rebuilding of Europe and the global economic system after the war.[6]

There were two views on the role the IMF should assume as a global economic institution at the Bretton Woods Conference. British economist John Maynard Keynes imagined that the IMF would be a cooperative fund upon which member states could draw to maintain economic activity and employment through periodic crises. This view suggested an IMF that helped governments and to act as the US government had during the New Deal in response to World War II. American delegate Harry Dexter White foresaw an IMF that functioned more like a bank, making sure that borrowing states could repay their debts on time.[7] Most of White’s plan was incorporated into the final acts adopted at Bretton Woods.

The IMF was formally organized on December 27, 1945, when the first 29 countries signed its Articles of Agreement. The International Monetary Fund was one of the key organizations of the international economic system; its design allowed the system to balance the rebuilding of international capitalism with the maximization of national economic sovereignty and human welfare, also known as embedded liberalism.[8]

In 1947, France became the first country to borrow from the IMF.[9] The IMF’s influence in the global economy steadily increased as it accumulated more members. The number of IMF

member countries has more than quadrupled from the 44 states involved in its establishment, reflecting in particular the attainment of political independence by many African countries and more recently the 1991 dissolution of the Soviet Union because most countries in the Soviet Sphere of influence did not join the IMF.[10]

The Bretton Woods system prevailed until 1971, when the U.S. government suspended the convertibility of the dollar (and dollar reserves held by other governments) into gold. This is known as the Nixon Shock. [11] As of January 2012, the largest borrowers from the fund in order are Greece, Portugal, Ireland, Romania and Ukraine.[12]

[edit] Member countries

  IMF member states  IMF member states not accepting the obligations of Article VIII, Sections 2, 3, and 4[13]

The members of the IMF are 187 members of the UN and the Republic of Kosovo [a] .[14][15] All members of the IMF are also International Bank for Reconstruction and Development (IBRD) members and vice versa.[citation needed]

Former members are Cuba (which left in 1964)[16] and the Republic of China, which was ejected from the UN in 1980 after losing the support of then U.S. President Jimmy Carter and was replaced by the People's Republic of China.[17]

Apart from Cuba, the other states that do not belong to the IMF are North Korea, Andorra, Monaco, Liechtenstein, Nauru, Cook Islands, Niue, Vatican City, and the states with limited recognition (other than Kosovo).

[edit] Qualifications

Any country may apply to be a part of the IMF. Post-IMF formation, in the early postwar period, rules for IMF membership were left relatively loose. Members needed to make periodic membership payments towards their quota, to refrain from currency restrictions unless granted IMF permission, to abide by the Code of Conduct in the IMF Articles of Agreement, and to provide national economic information. However, stricter rules were imposed on governments that applied to the IMF for funding.[18]

The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates secured at rates that could be adjusted only to correct a "fundamental disequilibrium" in the balance of payments, and only with the IMF's agreement.[19]

[edit] Benefits

Member countries of the IMF have access to information on the economic policies of all member countries, the opportunity to influence other members’ economic policies, technical assistance in banking, fiscal affairs, and exchange matters, financial support in times of payment difficulties, and increased opportunities for trade and investment[20]

[edit] Leadership

[edit] Board of Governors

The Board of Governors consists of one governor and one alternate governor for each member country. Each member country appoints its two governors. The Board normally meets once a year and is responsible for electing or appointing executive directors to the Executive Board. While the Board of Governors is officially responsible for approving quota increases, special drawing right allocations, the admittance of new members, compulsory withdrawal of members, and amendments to the Articles of Agreement and By-Laws, in practice it has delegated most of its powers to the IMF's Executive Board. [21]

The Board of Governors is advised by the International Monetary and Financial Committee and the Development Committee. The International Monetary and Financial Committee has 24 members and monitors developments in global liquidity and the transfer of resources to developing countries.[22] The Development Committee has 25 members and advises on critical development issues and on financial resources required to promote economic development in developing countries. They also advise on trade and global environmental issues.[23]

[edit] Executive Board

24 Executive Directors make up Executive Board. The Executive Directors represent all 188 member-countries. Countries with large economies have their own Executive Directo, but most countries are grouped in constituencies representing four or more countries.[24]

Following the 2008 Amendment on Voice and Participation, eight countries each appoint an Executive Director: the United States, Japan, Germany, France, the United Kingdom, China, the Russian Federation, and Saudi Arabia.[25] The remaining 16 Directors represent constituencies consisting of 4 to 22 countries. The Executive Director representing the largest constituency of 22 countries accounts for 1.55% of the vote.

[edit] Managing Director

The IMF is led by a Managing Director, who is head of the staff and serves as Chairman of the Executive Board. The Managing Director is assisted by a First Deputy Managing Director and three other Deputy Managing Directors.[26]Historically the IMF’s managing director has been European and the president of the World Bank has been from the United States. However, this standard is increasingly being questioned and competition for these two posts may soon open up to include other qualified candidates from any part of the world.[27][28] In 2011 the world's largest developing countries, the BRIC nations, issued a statement declaring that the tradition of appointing a European as managing director undermined the legitimacy of the IMF and called for the appointment to be merit-based.[28][29]The head of the IMF's European department is António Borges of Portugal, former deputy governor of the Bank of Portugal. He was elected in October 2010.[30]

Dates Name NationalityMay 6, 1946 – May 5, 1951 Camille Gutt  BelgiumAugust 3, 1951 – October 3, 1956 Ivar Rooth  SwedenNovember 21, 1956 – May 5, 1963 Per Jacobsson  SwedenSeptember 1, 1963 – August 31, 1973 Pierre-Paul Schweitzer  FranceSeptember 1, 1973 – June 16, 1978 Johannes Witteveen  NetherlandsJune 17, 1978 – January 15, 1987 Jacques de Larosière  FranceJanuary 16, 1987 – February 14, 2000 Michel Camdessus  FranceMay 1, 2000 – March 4, 2004 Horst Köhler  GermanyJune 7, 2004 – October 31, 2007 Rodrigo Rato  SpainNovember 1, 2007 – May 18, 2011 Dominique Strauss-Kahn  FranceJuly 5, 2011 – Christine Lagarde  France

On June 28, 2011, Christine Lagarde was named Managing Director of the IMF, replacing Dominique Strauss-Kahn.

Previous Managing Director Dominique Strauss-Kahn was arrested in connection with charges of sexually assaulting a New York room attendant. Strauss-Kahn subsequently resigned his position on May 18.[31] On June 28, 2011 Christine Lagarde was confirmed as Managing Director of the IMF for a five-year term starting on July 5, 2011.[32][33]

[edit] Voting power

Voting power in the IMF is based on a quota system. Each member has a number of “basic votes" (each member's number of basic votes equals 5.502% of the total votes),[34] plus one additional vote for each Special Drawing Right (SDR) of 100,000 of a member country’s quota.[35] The Special Drawing Right is the unit of account of the IMF and represents a claim to currency. It is based on a basket of key international currencies. The basic votes generate a slight bias in favor of small countries, but the additional votes determined by SDR outweigh this bias.[36]

[edit] Effects of the quota system

The IMF’s quota system was created to raise funds for loans.[37] Each IMF member country is assigned a quota, or contribution, that reflects the country’s relative size in the global economy. Each member’s quota also determines its relative voting power. Thus, financial contributions from member governments are linked to voting power in the organization.[38]This system follows the logic of a shareholder-controlled organization: wealthy countries have more say in the making and revision of rules.[39] Since decision making at the IMF reflects each member’s relative economic position in the world, wealthier countries that provide more money to the fund have more influence in the IMF than poorer members that contribute less.[40]

[edit] Developing countries

Quotas are normally reviewed every five years and can be increased when deemed necessary by the Board of Governors. Currently, reforming the representation of developing countries within the IMF has been suggested. [41] These countries’ economies represent a large portion of the global economic system but this is not reflected in the IMF's decision making process through the nature of the quota system. Joseph Stiglitz argues "There is a need to provide more effective voice and representation for developing countries, which now represent a much larger portion of world economic activity since 1944, when the IMF was created." [42] In 2008, a number of quota reforms were passed including shifting 6% of quota shares to dynamic emerging markets and developing countries[43].

[edit] United States influence

International relations theorists such as R.W Cox, A.D Morton, S. Gill, R.Gardner and J.G Ruggie have noted the hegemonic role of the US government in the IMF.[44] [45] [46]. Their criticism is on the quota system itself: countries have more of an influence on policy if their quota is larger. The IMF provides an incentive for nations to fulfill their quota because that directly determines their voting power.[47]. The United States is currently (April 2012) the IMF’s largest shareholder and has the largest bloc of votes--16.75% of the total vote. Thus, one side of the argument is that the United States uses the IMF institution for the construction and maintenance of its hegemony.[48]. A second criticism is that the United States’ transition to neoliberalism and global capitalism also lead a change in the identity and functions of international institutions like the IMF. Because of the high involvement and voting power of the United States, the global economic ideology could effectively be transformed to match the US's.

This is consistent with the IMF’s function change during the 1970s after the Nixon Shock ending the Bretton Woods system. Another criticism is that allies of the United States are able to receive bigger loans with fewer conditions[49].

[edit] Overcoming borrower/creditor divide

The IMF’s membership is divided along income lines: certain countries provide the financial resources while others use these resources. Both developed country “creditors” and developing country “borrowers” are members of the IMF. The developed countries provide the financial resources but rarely enter into IMF loan agreements; they are the creditors. Conversely, the developing countries use the lending services but contribute little to the pool of money available to lend because their quotas are smaller; they are the borrowers. Thus, tension is created around governance issues because these two groups, creditors and borrowers, have fundamentally different interests in terms of the conditions of these loans.[50]. The criticism is that the system of voting power distribution through a quota system institutionalizes borrower subordination and creditor dominance. The resulting division of the Fund's membership into borrowers and non-borrowers has increased the controversy around conditionality because the borrowering members are interested in making loan access easier while the creditor members want to maintain reassurance the loans will be repaid[51].

[edit] Functions

The IMF works to foster global growth and economic stability. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty [52] . The rationale for this is that private international capital markets function imperfectly and many countries have limited access to financial markets. Such market imperfections, together with balance of payments financing, provide the justiciation for official financing, without which many countires could only correct large external payment imbalances through measures with adverse affects on both national and international economic prosperity[53]. The IMF can provide other sources of financing to countries in need that would not be available in the absence of an economic stabilization program supported by the Fund.

Upon initial IMF formation, its two primary functions were: to oversee the fixed exchange rate arrangements between countries[54], thus helping national governments manage their exchange rates and allowing these governments to prioritize economic growth [55] , and to provide short-term capital to aid balance-of-payments [56]. This assistance was meant to prevent the spread of international economic crises. The Fund was also intended to help mend the pieces of the international economy post the Great Depression and World War II [57] .

The IMF’s role was fundamentally altered after the floating exchange rates post 1971. It shifted to examining the economic policies of countries with IMF loan agreements to determine if a shortage of capital was due to economic fluctuations or economic policy. The IMF also researched what types of government policy would ensure economic recovery[58]. The new challenge is to promote and implement policy that reduces the frequency of crises among the emerging market countries, especially the middle-income countries that are open to massive

capital outflows[59]. Rather than maintaining a position of oversight of only exchange rates, their function became one of “surveillance” of the overall macroeconomic performance of its member countries. Their role became a lot more active because the IMF now manages economic policy instead of just exchange rates.

In addition, the IMF negotiates conditions on lending and loans under their policy of conditionality [60] , which was established in the 1950s[61]. Low-income countries can borrow on concessional terms, which means there is a period of time with no interest rates, through the Extended Credit Facility (ECF), the Standby Credit Facility (SCF) and the Rapid Credit Facility (RCF). Nonconcessional loans, which include interest rates, are provided mainly through Stand-By Arrangements (SBA), the Flexible Credit Line (FCL), the Precautionary and Liquidity Line (PLL), and the Extended Fund Facility. The IMF provides emergency assistance via the newly-introduced Rapid Financing Instrument (RFI) to all its members facing urgent balance of payments needs[62].

[edit] Surveillance of the global economy

The IMF is mandated to oversee the international monetary and financial system[63] and monitor the economic and financial policies of its 188 member countries. This activity is known as surveillance and facilitates international cooperation[64] . Since the demise of the Bretton Woods system of fixed exchange rates in the early 1970s, surveillance has evolved largely by way of changes in procedures rather than through the adoption of new obligations[65] . The responsibilities of the Fund changed from those of guardian to those of overseer of members’ policies.

The Fund typically analyzes the appropriateness of each member country’s economic and financial policies for achieving orderly economic growth, and assesses the consequences of these policies for other countries and for the global economy [66] .

IMF Data Dissemination Systems participants:   IMF member using SDDS  IMF member using GDDS  IMF member, not using any of the DDSystems  non-IMF entity using SDDS

  non-IMF entity using GDDS  no interaction with the IMF

In 1995 the International Monetary Fund began work on data dissemination standards with the view of guiding IMF member countries to disseminate their economic and financial data to the public. The International Monetary and Financial Committee (IMFC) endorsed the guidelines for the dissemination standards and they were split into two tiers: The General Data Dissemination System (GDDS) and the Special Data Dissemination Standard (SDDS).

The International Monetary Fund executive board approved the SDDS and GDDS in 1996 and 1997 respectively, and subsequent amendments were published in a revised Guide to the General Data Dissemination System. The system is aimed primarily at statisticians and aims to improve many aspects of statistical systems in a country. It is also part of the World Bank Millennium Development Goals and Poverty Reduction Strategic Papers.

The primary objective of the GDDS is to encourage IMF member countries to build a framework to improve data quality and increase statistical capacity building. Upon building a framework, a country can evaluate statistical needs, set priorities in improving the timeliness, transparency, reliability and accessibility of financial and economic data. Some countries initially used the GDDS, but later upgraded to SDDS.

Some entities that are not themselves IMF members also contribute statistical data to the systems:

 Palestinian National Authority – GDDS  Hong Kong – SDDS  Macau - GDDS[67]

 European Union institutions: o the European Central Bank for the Eurozone – SDDSo Eurostat for the whole EU – SDDS, thus providing data from  Cyprus (not

using any DDSystem on its own) and  Malta (using only GDDS on its own)

[edit] Conditionality of loans

IMF conditionality is a set of policies or “conditions” that the IMF requires in exchange for financial resources[68]. The IMF does not require collateral from countries for loans but rather requires the government seeking assistance to correct its macroeconomic imbalances in the form of policy reform. If the conditions are not met, the funds are withheld[69]. Conditionality is perhaps the most controversial aspect of IMF policies[70] . The concept of conditionality was introduced in an Executive Board decision in 1952 and later incorporated in the Articles of Agreement.

Conditionality is associated with economic theory as well as an enforcement mechanism for repayment. Stemming primarily from the work of Jacques Polak in the Fund’s research department, the theoretical underpinning of conditionality was the “monetary approach to the balance of payments."[71]

[edit] Benefits

These loan conditions ensure that the borrowing country will be able to repay the Fund and that the country won’t attempt to solve their balance of payment problems in a way that would negatively impact the international economy [72] [73] . The incentive problem of moral hazard, which is the actions of economic agents maximizing their own utility to the detriment of others when they do not bear the full consequences of their actions, is mitigated through conditions rather than providing collateral; countries in need of IMF loans do not generally possess internationally valuable collateral anyway[74]. Conditionality also reassures the IMF that the funds lent to them will be used for the purposes defined by the Articles of Agreement and provides safeguards that country will be able to rectify its macroeconomic and structural imbalances[75]. In the judgment of the Fund, the adoption by the member of certain corrective measures or policies will allow it to repay the Fund, thereby ensuring that the same resources will be available to support other members[76].

Some critics assume that Fund lending imposes a burden on creditor countries. However, countries receive market-related interest rates on most of their quota subscription, plus any of their own-currency subscriptions that are loaned out by the Fund, plus all of the reserve assets that they provide the Fund. Also, as of 2005 borrowing countries have had a very good track record of repaying credit extended under the Fund's regular lending facilities with the full interest over the duration of the borrowing [77].

[edit] Criticisms

The IMF has the obstacle of being unfamiliar with local economic conditions, cultures, and environments in the countries they are requiring policy reform[78]. The Fund knows very little about what public spending on programs like public health and education actually means, especially in African countries; they have no feel for the impact that their proposed national budget will have on people. The economic advice the IMF gives might not always take into consideration the difference between what spending means on paper and how its felt by citizens[79]. For example, Jeffrey Sach's work shows that "the Fund’s usual prescription is 'budgetary belt tightening to countries who are much too poor to own belts'[80]." The IMF’s role as a generalist institution specializing in macroeconomic issues needs reform. Conditionality has also been criticized because a country can pledge collateral of “acceptable assets” in order to obtain waivers on certain conditions[81]. However, that assumes that all countries have the capability and choice to provide acceptable collateral.

One view is that conditionality undermines domestic political institutions [82] . The recipient governments are sacrificing policy autonomy in exchange for funds, which can lead to public resentment of the local leadership for accepting and enforcing the IMF conditions. Political instability can result from more leadership turnover as political leaders are replaced in electoral backlashes.[83]. IMF conditions are often criticized for their bias against economic growth and reduce government services, thus increasing unemployment[84] . Another criticism is that IMF programs are only designed to address poor governance, excessive government spending, excessive government intervention in markets, and too much state ownership[85]. This assumes that this narrow range of issues represents the only possible problems; everything is standardized

and differing contexts are ignored[86]. A country may also be compelled to accept conditions it would not normally accept had they not been in a financial crisis in need of assistance[87].

It is claimed that conditionalities retard social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries.[88] The IMF sometimes advocates “austerity programmes,” cutting public spending and increasing taxes even when the economy is weak, in order to bring budgets closer to a balance, thus reducing budget deficits. Countries are often advised to lower their corporate tax rate. In Globalization and Its Discontents, Joseph E. Stiglitz, former chief economist and senior vice president at the World Bank, criticizes these policies.[89] He argues that by converting to a more monetarist approach, the purpose of the fund is no longer valid, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF “was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community.”[90]

[edit] Reform

The IMF is only one of many international organizations and it is a generalist institution for macroeconomic issues only; its core areas of concern in developing countries are very narrow. One proposed reform is a movement towards close partnership with other specialist agencies in order to better productivity. The IMF has little to no communication with other international organizations such as UN specialist agencies like UNICEF, the Food and Agriculture Organization (FAO), and the United Nations Development Program (UNDP)[91]. Jeffrey Sachs argues in The End of Poverty: “international institutions like the International Monetary Fund (IMF) and the World Bank have the brightest economists and the lead in advising poor countries on how to break out of poverty, but the problem is development economics”[92]. Development economics needs the reform, not the IMF. He also notes that IMF loan conditions need to be partnered with other reforms such as trade reform in developed nations, debt cancellation, and increased financial assistance for investments in basic infrastructure in order to be effective[93]. IMF loan conditions cannot stand alone and produce change; they need to be partnered with other reforms.

[edit] Use

A recent study reveals that the average overall use of IMF credit per decade increased, in real terms, by 21% between the 1970s and 1980s, and increased again by just over 22% percent from the 1980s to the 1991–2005 period. Another study has suggested that since 1950 the continent of Africa alone has received $300 billion from the IMF, the World Bank and affiliate institutions[94]

A study done by Bumba Mukherjee found that developing democratic countries benefit more from IMF programs than developing autocratic countries because policy-making, and the process of deciding where loaned money is used, is more transparent within a democracy[95]. One study done by Randall Stone found that although earlier studies found little impact of IMF programs on balance of payments, more recent studies using more sophisticated methods and larger samples “usually found IMF programs improved the balance of payments.”[96]

[edit] IMF and globalization

Globalization encompasses three institutions: global financial markets and transnational companies, national governments linked to each other in economic and military alliances led by the US, and rising “global governments” such as World Trade Organization (WTO), IMF, and World Bank [97]. Charles Derber argues in his book People Before Profit, "These interacting institutions create a new global power system where sovereignty is globalized, taking power and constitutional authority away from nations and giving it to global markets and international bodies."[98]

The establishment of globalized economic institutions has been both a symptom of and a stimulus for globalization. The development of the World Bank, the IMF. regional development banks such as the European Bank for Reconstruction and Development (EBRD), and, more recently, multilateral trade institutions such as the WTO indicates the trend away from the dominance of the state as the exclusive unit of analysis in international affairs. Globalization has thus been transformative in terms of a reconceptualizing of state sovereignty. [99] .

Following U.S. President Bill Clinton's administration’s aggressive financial deregulation campaign in the 1990s, globalization leaders overturned long-standing restrictions by governments that limited foreign ownership of their banks, deregulated currency exchange, and eliminated restrictions on how quickly money could be withdrawn by foreign investors[100]

[edit] Criticism

See also: Neocolonialism allegations against the IMF

Overseas Development Institute (ODI) research undertaken in 1980 pointed to five main criticisms of the IMF. Firstly, developed countries were seen to have a more dominant role and control over less developed countries (LDCs) primarily due to the Western bias towards a capitalist form of the world economy with professional staff being Western trained and believing in the efficacy of market-oriented policies.

Secondly, the Fund worked on the incorrect assumption that all payments disequilibria were caused domestically. The Group of 24 (G-24), on behalf of LDC members, and the United Nations Conference on Trade and Development (UNCTAD) complained that the Fund did not distinguish sufficiently between disequilibria with predominantly external as opposed to internal causes. This criticism was voiced in the aftermath of the 1973 oil crisis. Then LDCs found themselves with payments deficits due to adverse changes in their terms of trade, with the Fund prescribing stabilisation programmes similar to those suggested for deficits caused by government over-spending. Faced with long-term, externally-generated disequilibria, the Group of 24 argued that LDCs should be allowed more time to adjust their economies and that the policies needed to achieve such adjustment are different from demand-management programmes devised primarily with internally generated disequilibria in mind.

The third criticism was that the effects of Fund policies were anti-developmental. The deflationary effects of IMF programmes quickly led to losses of output and employment in economies where incomes were low and unemployment was high. Moreover, it was sometimes claimed that the burden of the deflationary effects was borne disproportionately by the poor.

Fourthly is the accusation that harsh policy conditions were self-defeating where a vicious circle developed when members refused loans due to harsh conditionality, making their economy worse and eventually taking loans as a drastic medicine.

Lastly is the point that the Fund's policies lack a clear economic rationale. Its policy foundations were theoretical and unclear due to differing opinions and departmental rivalries whilst dealing with countries with widely varying economic circumstances.

ODI conclusions were that the Fund’s very nature of promoting market-oriented economic approach attracted unavoidable criticism, as LDC governments were likely to object when in a tight corner. Yet, on the other hand, the Fund could provide a ‘scapegoat service’ where governments could take loans as a last resort, whilst blaming international bankers for any economic downfall. The ODI conceded that the fund was to some extent insensitive to political aspirations of LDCs, while its policy conditions were inflexible.[101]

Argentina, which had been considered by the IMF to be a model country in its compliance to policy proposals by the Bretton Woods institutions, experienced a catastrophic economic crisis in 2001,[102] which some believe to have been caused by IMF-induced budget restrictions—which undercut the government’s ability to sustain national infrastructure even in crucial areas such as health, education, and security—and privatization of strategically vital national resources.[103] Others attribute the crisis to Argentina’s misdesigned fiscal federalism, which caused subnational spending to increase rapidly.[104] The crisis added to widespread hatred of this institution in Argentina and other South American countries, with many blaming the IMF for the region’s economic problems.[105] The current—as of early 2006—trend toward moderate left-wing governments in the region and a growing concern with the development of a regional economic policy largely independent of big business pressures has been ascribed to this crisis.

In an interview, the former Romanian Prime Minister Călin Popescu-Tăriceanu claimed that "Since 2005, IMF is constantly making mistakes when it appreciates the country's economic performances."[106]

The delay in the IMF’s response to any crisis, and the fact that it tends to only respond to them rather than prevent them, has led many economists to argue for reform. In 2006 an IMF reform agenda called the Medium Term Strategy was widely endorsed by the institution’s member countries. The agenda includes changes in IMF governance to enhance the role of developing countries in the institution’s decision-making process and steps to deepen the effectiveness of its core mandate, which is known as economic surveillance or helping member countries adopt macroeconomic policies that will sustain global growth and reduce poverty. On June 15, 2007, the executive board of the IMF adopted the 2007 Decision on Bilateral Surveillance, a landmark measure that replaced a 30-year-old decision of the Fund’s member countries on how the IMF should analyze economic outcomes at the country level.

[edit] Support of military dictatorships

The role of the Bretton Woods institutions has been controversial since the late Cold War period, due to claims that the IMF policy makers supported military dictatorships friendly to American and European corporations and other anti-communist regimes. Critics also claim that the IMF is generally apathetic or hostile to their views of human rights, and labor rights. The controversy has helped spark the Anti-globalization movement.

Arguments in favor of the IMF say that economic stability is a precursor to democracy; however, critics highlight various examples in which democratized countries fell after receiving IMF loans.[107]

[edit] Impact on access to food

A number of civil society organizations[108] have criticized the IMF’s policies for their impact on people’s access to food, particularly in developing countries. In October 2008, former U.S. president Bill Clinton presented a speech to the United Nations World Food Day, which criticized the World Bank and IMF for their policies on food and agriculture:

We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was president. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture.—Former U.S. president Bill Clinton, Speech at United Nations World Food Day, October 16, 2008[109]

[edit] Impact on public health

In 2008 a study by analysts from Cambridge and Yale universities published on the open-access Public Library of Science concluded that strict conditions on the international loans by the IMF resulted in thousands of deaths in Eastern Europe by tuberculosis as public health care had to be weakened. In the 21 countries to which the IMF had given loans, tuberculosis deaths rose by 16.6%.[110]

In 2009, a book by Rick Rowden titled The Deadly Ideas of Neoliberalism: How the IMF has Undermined Public Health and the Fight Against AIDS, claimed that the IMF’s monetarist approach towards prioritizing price stability (low inflation) and fiscal restraint (low budget deficits) was unnecessarily restrictive and has prevented developing countries from being able to scale up long-term public investment as a percent of GDP in the underlying public health infrastructure. The book claimed the consequences have been chronically underfunded public health systems, leading to dilapidated health infrastructure, inadequate numbers of health personnel, and demoralizing working conditions that have fueled the “push factors” driving the brain drain of nurses migrating from poor countries to rich ones, all of which has undermined public health systems and the fight against HIV/AIDS in developing countries.[111]

[edit] Impact on environment

IMF policies have been repeatedly criticized for making it difficult for indebted countries to avoid ecosystem-damaging projects that generate cash flow, in particular oil, coal, and forest-destroying lumber and agriculture projects. Ecuador for example had to defy IMF advice repeatedly in order to pursue the protection of its rain forests, though paradoxically this need was cited in IMF argument to support that country. The IMF acknowledged this paradox in a March 2010 staff position report [112] which proposed the IMF Green Fund, a mechanism to issue special drawing rights directly to pay for climate harm prevention and potentially other ecological protection as pursued generally by other environmental finance.

While the response to these moves was generally positive[113] possibly because ecological protection and energy and infrastructure transformation are more politically neutral than pressures to change social policy. Some experts voiced concern that the IMF was not representative, and that the IMF proposals to generate only US$200 billion a year by 2020 with the SDRs as seed funds, did not go far enough to undo the general incentive to pursue destructive projects inherent in the world commodity trading and banking systems—criticisms often leveled at the World Trade Organization and large global banking institutions.

In the context of the May 2010 European banking crisis, some observers also noted that Spain and California, two troubled economies within Europe and the United States respectively, and also Germany, the primary and politically most fragile supporter of a euro currency bailout would benefit from IMF recognition of their leadership in green technology, and directly from Green Fund–generated demand for their exports, which might also improve their credit standing with international bankers.[citation needed]

[edit] Criticism from free-market advocates

Typically the IMF and its supporters advocate a monetarist approach. As such, adherents of supply-side economics generally find themselves in open disagreement with the IMF.[who?] The IMF frequently advocates currency devaluation, criticized by proponents of supply-side economics as inflationary.

Currency devaluation is recommended by the IMF to the governments of poor nations with struggling economies. Some economists claim these IMF policies are destructive to economic prosperity.[114]

At the request of the Islamic Development Bank (IDB), the K4D Program delivered a training course for IDB staff on the knowledge economy approachand its relevance to IDB member countries. The course consisted of two half-day video conference sessions (March 21 and 28, 2006) and a three-day face-to-face workshop in Jeddah, Saudi Arabia (May 15-17, 2006), and was attended by about 40 staff members from various departments of the IDB. The K4D Program has also delivered a separate introductory session on the

Knowledge Economy to IDB operational staff and a KE Awareness Session at the IDB Annual Meetings.  This page provides a brief overview of the event and the key presentations.

 The course introduced the knowledge economy approach as an integrative and coherent set of development strategies that tends to increase long-term economic productivity. Its

importance has been steadily growing in the current extremely competitive era of globalization. The KE approach is not only about information technology or other high-technology industries per se, but about the capability to combine together elements from the various KE pillars so that the use of knowledge spurs economic activity and productivity. In this light, the KE approach is relevant to any economy at any stage of development, even to low-income countries. An interesting example of the tourism industry in Mauritania was presented.  In the desert of Mauritania tourists are being guided by English speaking university graduates, previously unemployed, using the traditional knowledge of nomads.  Even in the desert, the tourists are able to remain cyber connected as the hotels are equipped with first rate Internet services and hardware, thanks to an exemplary telecom policy.  Hence, it was seen that the implicit application of the KE approach in low-income Mauritania has led to the decrease in skilled unemployment and growth of the tourist industry. The course also included detailed discussions regarding the KE pillars. In terms of education, the emphasis was on the importance of problem solving skills rather than rote learning, and move from a centralized education systems to systems with more school autonomy and accountability of schools’ and teachers’ performance. The session on innovation highlighted the key principles for successful innovation policies. Lastly, the ICT session underscored that ICT are but tools, and that economic benefits can be reaped only if the right policies and incentives are in place. The IDB staff were also introduced to the Knowledge Assessment Methodology, and had actual hands-on practice using the KAM to benchmark the KE performance of selected IDB countries.  The current version of the KAM includes 37 out of the 57 IDB member countries.  At the end of the three-day training workshop, the participants presented in teams their own KE assessment of a self-selected IDB member country.  The course spent a substantial amount of time focusing on country case studies of knowledge economy strategies. Finland and South Korea were highlighted as exemplary economies that have made the transition to advanced knowledge economies, while China and India were presented as countries in the midst of the KE transformation. The performance of Malaysia, Egypt, Turkey and Senegal were discussed as examples of IDB countries at various levels of KE development. In addition, education reform projects in Jordan and Tunisia and ICT projects in Morocco, Tunisia and Saudi Arabia were shown as examples of how the World Bank provides assistance to countries undertaking knowledge economy strategies. K4D team members Jean-Eric Aubert, Kurt Larsen (task team leader), Douglas Zhihua Zeng, and Derek Chen, together with other World Bank colleagues Bruno Lanvin (Telecoms and Infrastructure Policy Division), Omer Karasapan (MENA Region), and Jamal Al-Kibbi (MENA Region), contributed to the delivery of the course.

Islamic Development Bank

TypeDevelopment organization providing technical assistance and funding to the Islamic world.Brief Overview

In line with its overall objectives of fostering economic development and social progress, the Bank finances productive projects and programs in both public and private sectors in member countries. It invests in economic and social infrastructure projects, provides technical assistance to member countries and assists in the promotion of foreign trade, especially capital goods. The Bank also assists Muslim communities in nonmember countries and undertakes shari’ah-based research studies in Islamic economics and banking through special funds established for this purpose.

IDB finances development projects in member countries through a number of shari’ah-compatible modes such as Loan, Leasing, Installment Sale, Equity Participation, Lines of Financing, etc. Besides, its trade financing schemes, such as Import Trade Financing Operations (ITFO), Longer Term Trade Financing Scheme (LTTFS), Islamic Banks’ Portfolio (IBP), etc., promote trade among member countries.

Contact Information

website: http://www.isdb.org/address:Islamic Development BankP.O. Box. 5925Jeddah 21432Kingdom of Saudi Arabiatelephone: (+9662) 6361400fax: (+9662) 6366871e-mail: IDB.ARCHIVE@MAIL.OICISNET.ORG

MEMBER COUNTRIES:Afghanistan, Albania, Algeria, Azerbaijan, Bahrain, Bangladesh, Benin, Brunei, Burkina Faso, Cameroon, Chad, Comoros, Djibouti, Egypt, Gabon, Gambia, Guinea, Guinea Bissau, Indonesia, Iran, Iraq, Jordan, Kazakhstan, Kuwait, Kyrgyz, Lebanon, Maldives, Mali, Mauritania, Morocco, Mozambique, Niger, Oman, Pakistan, Palestine, Qatar, Saudi Arabia, Senegal, Sierra Leone, Somalia, Sudan, Suriname, Syrian, Tajikistan, Togo, Tunisia, Turkey, Turkmenistan, Uganda, United Arab Emirates, Yemen

South Asian Association for Regional Cooperation From Wikipedia, the free encyclopediaJump to: navigation, search

South Asian Association for Regional Cooperation (SAARC)

List[show]

  Member-States  Observers States

Headquarters Kathmandu, NepalOfficial languages English

Demonym South Asian

Membership

8 Members [show]

9 Observers [show]

Government Organization -  Chairman Mohammed Waheed Hassan Manik -  Secretary General Ahmed Saleem

Establishment December 8, 1985Area

 -  Total5,130,746 km2 (7th 1 )1,980,992 sq mi Population

 -  2009 estimate 1,600,000,000 (1st 1 )

 -  Density304.9/km2 789.7/sq mi

GDP (PPP) 2009 estimate -  Total US$ 4,382,700 million (3rd 1 ) -  Per capita US$ 2,779 

Currency See footnote 2Time zone (UTC+4½ to +6)

Websitewww.saarc-sec.org

1If considered as a single entity.

2

A unified currency has been proposed.Present currencies (ISO 4217 codes bracketed):Afghan afghani (AFG) • Bangladeshi taka (BDT) •Bhutanese ngultrum (BTN) • Indian rupee (INR) •Maldivian rufiyaa (MVR) • Nepalese rupee (NPR) •Pakistani rupee (PKR) • Sri Lankan rupee (LKR)

The South Asian Association for Regional Cooperation (SAARC) is an organisation of South Asian nations, founded in December 1985 by Ziaur Rahman and dedicated to economic, technological, social, and cultural development emphasising collective self-reliance. Its seven founding members are Sri Lanka, Bhutan, India, Maldives, Nepal, Pakistan, and Bangladesh. Afghanistan joined the organization in 2005. Meetings of heads of state are usually scheduled annually; meetings of foreign secretaries, twice annually. It is headquartered in Kathmandu, Nepal.

The 16 stated areas of cooperation are agriculture and rural, biotechnology, culture, energy, environment, economy and trade, finance, funding mechanism, human resource development, poverty alleviation, people to people contact, security aspects, social development, science and technology, communications, and tourism.

Contents

 [hide] 

1 History 2 Objectives 3 Principles

o 3.1 Secretariat o 3.2 Regional Centres o 3.3 Political issues o 3.4 South Asian Free Trade Area

4 SAARC Youth Award 5 Membership

o 5.1 Current members o 5.2 Observers o 5.3 Others

6 Secretaries-General of SAARC 7 See also 8 References 9 External links

[edit] History

The concept of SAARC was first adopted by Bangladesh during 1977, under the administration of President Ziaur Rahman. In the late 1970s, SAARC nations agreed upon the creation of a trade bloc consisting of South Asian countries. The idea of regional cooperation in South Asia

was again mooted in May 1980. The foreign secretaries of the seven countries met for the first time in Colombo in April 1981. The Committee of the Whole, which met in Colombo in August 1985, identified five broad areas for regional cooperation. New areas of cooperation were added in the following years.[1]

[edit] Objectives

The objectives of the Association as defined in the Charter are:[2]

to promote the welfare of the people of South Asia and to improve their quality of life; to accelerate economic growth, social progress and cultural development in the region

and to provide all individuals the opportunity to live in dignity and to realize their full potential;

to promote and strengthen selective self-reliance among the countries of South Asia; to contribute to mutual trust, understanding and appreciation of one another's problems; to promote active collaboration and mutual assistance in the economic, social, cultural,

technical and scientific fields; to strengthen cooperation with other developing countries; to strengthen cooperation among themselves in international forums on matters of

common interest; and to cooperate with international and regional organisations with similar aims and purposes.

[edit] Principles

The principles are:

Respect for sovereignty, territorial integrity, political equality and independence of all members states

Non-interference in the internal matters is one of its objectives

Cooperation for mutual benefit All decisions to be taken unanimously and need a quorum of all eight members All bilateral issues to be kept aside and only multilateral(involving many countries)

issues to be discussed without being prejudiced by bilateral issues

Afghanistan was added to the regional grouping on 13 November 2005,[3] With the addition of Afghanistan, the total number of member states were raised to eight (8). In April 2006, the United States of America and South Korea made formal requests to be granted observer status. The European Union has also indicated interest in being given observer status, and made a formal request for the same to the SAARC Council of Ministers meeting in July 2006.[4][5] On 2 August 2006 the foreign ministers of the SAARC countries agreed in principle to grant observer status to the US, South Korea and the European Union.[5] On 4 March 2008, Iran requested observer status.[6] Followed shortly by the entrance of Mauritius.

[edit] Secretariat

The SAARC Secretariat was established in Kathmandu on 16 January 1987 and was inaugurated by Late King Birendra Bir Bikram Shah of Nepal.

It is headed by a Secretary General appointed by the Council of Ministers from Member Countries in alphabetical order for a three-year term. He is assisted by the Professional and the General Services Staff, and also an appropriate number of functional units called Divisions assigned to Directors on deputation from Member States.[7] The Secretariat coordinates and monitors implementation of activities, prepares for and services meetings, and serves as a channel of communication between the Association and its Member States as well as other regional organizations.[7]

The Memorandum of Understanding on the establishment of the Secretariat[7] which was signed by Foreign Ministers of member countries on 17 November 1986 at Bangalore, India contains various clauses concerning the role, structure and administration of the SAARC Secretariat as well as the powers of the Secretary-General.

In several recent meetings the heads of state or government of member states of SAARC have taken some important decisions and bold initiatives to strengthen the organisation and to widen and deepen regional co-operation.

The SAARC Secretariat and Member States observe 8 December as the SAARC Charter Day1.

[edit] Regional Centres

The SAARC Secretariat has established various regional centres in member states. The 13th being SAARC Arbitration Council established at Islamabad in 2010. Each regional centre is managed by a governing board. The GB has representatives of each of the member state and SAARC Secretariat.

[edit] Political issues

SAARC has intentionally laid more stress on "core issues" mentioned above rather than more divisive political issues like the Kashmir dispute and the Sri Lankan civil war. However, political dialogue is often conducted on the margins of SAARC meetings. SAARC has also refrained from interfering in the internal matters of its member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism.

[edit] South Asian Free Trade Area

Over the years, the SAARC members have expressed their unwillingness on signing a free trade agreement. Though India has several trade pacts with Maldives, Nepal, Bhutan and Sri Lanka, similar trade agreements with Pakistan and Bangladesh have been stalled due to political and economic concerns on both sides. In 1993, SAARC countries signed an agreement to gradually lower tariffs within the region, in Dhaka. Eleven years later, at the 12th SAARC Summit at Islamabad, SAARC countries devised the South Asia Free Trade Agreement which created a

framework for the establishment of a free trade area covering 1.6 billion people. This agreement went into force on January 1, 2006. Under this agreement, SAARC members will bring their duties down to 20 per cent by 2009.

[edit] SAARC Youth Award

The SAARC Youth Award is awarded to outstanding individuals from the SAARC region. The award is notable due to the recognition it gives to the Award winner in the SAARC region. The award is based on specific themes which apply to each year. The award recognises and promotes the commitment and talent of the youth who give back to the world at large through various initiatives such as Inventions, Protection of the Environment and Disaster relief. The recipients who receive this award are ones who have dedicated their lives to their individual causes to improve situations in their own countries as well as paving a path for the SAARC region to follow. The Committee for the SAARC Youth Award selects the best candidate based on his/her merits and their decision is final.

Previous Winners:

1997: Outstanding Social Service in Community Welfare - Mr. Md. Sukur Salek (Bangladesh)

1998: New Inventions and Discoveries - Dr. Najmul Hasnain Shah (Pakistan) 2001: Creative Photography: South Asian Diversity - Mr. Mushfiqul Alam (Bangladesh) 2002: Outstanding contribution to protect the Environment - Dr. Masil Khan (Pakistan) 2003: Invention in the Field of Traditional Medicine - Mr. Hassan Sher (Pakistan) 2004: Outstanding contribution to raising awareness for TB and/or HIV/AIDS - Mr. Ajij

Prasad Poudyal (Nepal) 2006: Promotion of Tourism in South Asia - Mr. Syed Zafar Abbas Naqvi (Pakistan) 2008: Protecting the Environment in South Asia - Ms. Uswatta Liyanage Deepani

Jayantha (Sri Lanka) 2009: Outstanding contribution to humanitarian works in the aftermath of Natural

Disasters - Dr. Ravikant Singh (India) 2010: Outstanding contribution for the Protection of Environment and mitigation of

Climate Change - Ms. Anoka Primrose Abeyrathne (Sri Lanka)