After the war there was a general consensus that the world needed multilateral institutions which could promote economic growth and stability, and which could prevent the slide into protectionism, which had marred the 1930s.

At a meeting held at Bretton Woods in New Hampshire, the finance ministers of the wartime allies agreed to set up two organisations to facilitate co-operation in the post-war era.

Both of them are still with us, being the International Monetary Fund and the International Bank for Reconstruction and Development, usually referred to as the World Bank.

The IMF’s aim is to promote international monetary co-operation, exchange rate stability, and orderly exchange arrangements;

• to promote growth and employment;
• and to provide temporary financial assistance to countries to help ease balance of payments adjustment.

In addition to offering financial assistance it undertakes regular surveillance of the economic policies of members and offers technical assistance, especially to poorer countries.

In many circles, especially in developing countries it has often been a controversial organisation, seen as imposing painful structural adjustment programmes on nations which are already struggling with widespread poverty. Financial assistance is usually only granted in exchange for agreement on a clear programme of action to be taken by the recipient government.

It is not only developing countries which have found themselves in need of help from the IMF. For many people, the nadir of the UK’s post-war economic decline was reached in 1976 when the Chancellor of the day, Dennis Healey, was forced to turn to the IMF for assistance to resolve a balance of payments crisis and a run on the pound. The price exacted by the IMF was swingeing cuts in public expenditure.

The IMF unveiled its biggest ever support package in August 2002, when it agreed to provide facilities to Brazil worth more than US$30 billion. The package was a response to another bout of jitters on the part of international investors about emerging markets. The IMF’s support was successful in restoring confidence in Brazil’s economic management and its ability to service its foreign debt commitments. The irony is that by restoring confidence, Brazil has not needed to draw on most of the available IMF credits.

The OECD, formed in 1960, is a club of industrialised nations which share the common values of open markets and democratic pluralism.

Members commit themselves to fostering growth and employment and the free movement of goods and capital. It is principally concerned with the exchange of information, the assessment of members’ economic policies, and spreading best practice to other parts of the world.

Since the collapse of communism, the OECD has actively supported economic and financial reforms in the transition countries.

The OECD currently has 30 members. Long-standing participants are the US, Canada, Japan, Australia and New Zealand, as well as all the EU-15 countries, Norway, Iceland, Switzerland and Turkey.

In recent years, membership has been extended to some of the more advanced developing and emerging countries, namely Poland, Hungary, the Czech Republic, Slovakia, South Korea and Mexico.

The OECD publishes annual economic assessments of all member countries, in which it makes public judgement on the wisdom, or otherwise, of their economic policies and management.

For EU members, the pressure applied by the OECD is nowadays rather gentler than that which can emanate from the formal monitoring and scrutiny procedures which were enshrined in the Treaty of Amsterdam in 1997.

The principal objective of the World Bank is to enhance economic development and alleviate poverty in poorer countries. It does this by lending money for specific projects, on which it also offers technical advice.

The Bank makes two types of loan. For the richer of the developing and emerging countries it makes finance available at near-market interest rates.

The money for these loans is obtained by issuing bonds on the international capital markets in the name of the World Bank. For the poorest countries loans are made available over very long terms which carry no interest charges.

The WTO was the final embodiment of a marathon round of international trade negotiations (the Uruguay Round), which dragged on for nine years. It finally reached a conclusion at Marrakech in 1995. The WTO succeeded the General Agreement on Tariffs and Trade (GATT) as the body in charge of overseeing the operation of the international trading system.

Multilateral trade is now regulated by a series of about 60 agreements. The core principle underlying the WTO, and before it the GATT, is non-discrimination, in other words that exporters should receive fair and consistent treatment in foreign markets with all members doing the same for imports.

The most significant accession of the past few years was that of China, which joined along with the Hong Kong and Macau Special Administrative Regions and Taiwan. The biggest economy not currently a member is the Russian Federation.

The WTO’s principal role is to conduct trade negotiations on a multilateral basis, to ensure that rules are adhered to and to provide mechanisms through which grievances can be heard and remedies imposed. The original GATT, signed in 1947, dealt only with trade in goods. With the creation of the WTO these agreements were supplemented by a series of new ones covering trade in services, including intellectual property.

The Uruguay round also saw substantial renegotiation of those parts of the GATT dealing with trade in agricultural products. As a result, the degree to which governments can protect their domestic farming interests through subsidies, especially on exports, is gradually being curtailed.

The latest round of trade liberalisation was launched at the WTO’s fourth Ministerial Conference, Held in Qatar in November 2001. But the so-called ‘Doha Round’ is now stalled, after a series of ministerial conferences, including one at Cancun in Mexico in 2003 and another in Hong Kong in 2006, failed to reach agreement.

It is becoming clear that the process of achieving further trade liberalisation is becoming more difficult. The mass demonstrations which have become a feature of all major international economic and political gatherings over the past few years, point to a growing dissatisfaction in some quarters about the established economic order.

The protesters represent a variety of disparate and often opposing causes, including environmental protection, alleviation of developing countries’ debt, curbing the economic power and cultural influence of global multinational corporations, getting a fairer deal for producers of agricultural products in developing countries, and protecting declining industries in advanced economies from the competitive inroads being made by lower-cost producers.

In a nutshell, the consensus for further liberalisation is being eroded, so that the onward march of free trade, which has been a feature of the global economy for the past half century, may be approaching its limit.

Since 1975, the leaders of the seven major industrialised nations (The US, Japan, Germany, France, the UK, Italy and Canada) have met on an annual basis.

The first meetings were inspired by the need to co-ordinate economic policy responses to the aftermath of the oil crisis of 1973. More recently, the meetings have been widened to what is usually referred to as the “G8” with the inclusion of Russia.

It was the UK’s turn to co-ordinate the activities of the ‘G8’ during 2005, culminating in the summit at Gleneagles in July.

The UK chose to highlight the issues of debt relief and climate change, with the Gleneagles summit finalising an agreement to cancel the international debts of many severely-indebted countries in sub-Saharan Africa.