The Global Economy
Since the beginning of the nineties the world economy has been dominated by globalisation. The international flows of trade and investments, the exchange and sharing of knowledge and the pace of information transfer have increased to an extent unprecedented to date. The acceleration of communication and the rapid increase in cross-border transactions are the most prominent features of globalisation. Another characteristic is that global trade in goods and services and the volume of direct investments abroad have risen more markedly than production and output.
International finance and business institutions are gaining in importance in this increasingly interrelated economic environment. They not only facilitate cooperation and coordination among individual states but also deal with the wider range of challenges globalisation entails.
Without doubt the most important role in this context is played by the International Monetary Fund and the World Bank Group, which are based in Washington and both belong to the Bretton Woods Institutions.
In the field of development aid, regional development banks such as the Inter-American Development Bank, the Asian Development Bank and the African Development Bank play an essential role. In this context the European Bank for Reconstruction and Development holds a special position. Founded only in 1991 after the collapse of Communism in Europe with the aim of supporting the process of transformation in the Central and Eastern European countries, the EBRD is the only development bank equipped with a political mandate and makes its support dependent on the progress of democratisation. Within the European Union the European Investment Bank (EIB) has been given the task of ensuring well-balanced development and strengthening development cooperation between the Union and third countries.
For in-depth information (in German) on the international financial institutions, please refer to the homepage of the Austrian Ministry of Finance.
The World Trade Organisation has now developed into the most important international economic institution. It has become the forum for negotiations on further liberalisation of the world market, and endeavours via its dispute settlement mechanism to contribute to resolving international trade disputes.
The Organisation for Economic Co-operation and Development deals with social and economic issues both at the global level and in terms of multi-lateral cooperation.
For some time already the European Union has been perceived as a uniform economic block and has developed into a major player on the global economic stage. Its strength is mainly founded on the fact that the EU Member States speak with one voice in their contacts with other economic powers. In this connection the European Commission, which represents the EU vis-à-vis third countries in many economic matters, plays an essential role.