SPEAKER: Global organisations-- World Trade Organisation, or WTO.

Need for formation of WTO. Failure of eighth round of GATT held in Uruguay at Punta del Este in 1986, known as Uruguay Round, gave birth to the new organisation and a legal entity called as World Trade Organisation, or WTO. Once again, India became the founder member of the World Trade Organisation, also.

Now let us see how the WTO is supporting foreign trade. Unlike the United Nations Organisation, or UNO, all members of the World Trade Organisation have equal voting and negotiating rights. It provides a framework for operations, implementation, and administration of multilateral trade agreements.

Objectives of WTO. Though the objectives of World Trade Organisation are similar to GATT, they have wider scope, and the powers to enforce its decisions. The objectives emphasize the creation of a global free trade environment among member countries. The World Trade Organisation enables members to enjoy higher income through growing output levels by sharing trade gains.

The objectives of WTO are-- first, to help to remove or reduce barriers to international trade agreement with the member countries; second, to achieve global economic development through optimum utilisation of world resources; third, to increase market share of developing countries through assistance in their development efforts; fourth, to follow a non-discriminatory policy for all member countries; fifth, to act as dispute settlement machinery, as and when disputes arise between member countries.

Functions of WTO. The WTO, being a legal entity, acts as an advisory as well as regulatory body. It performs several functions in order to control the international trading environment. They are-- first, to guide the member countries in multilateral trade; second, to handle dispute settlement with approval rules and procedures laid down by WTO; third, to scrutinize regularly the national trading policies of member countries; fourth, to implement multilateral trade agreements and legal instruments approved at the Uruguay Round; fifth, to participate in global policy making by seeking help from International Monetary Fund, or IMF, and World Bank, or IBRD, as and when necessary.

WTO provisions related to international trade are now similarly applicable to agriculture, which was brought within the fold of GATT in the Uruguay Round, 1986 to 1993, of multilateral trade negotiations, or MTNs.

The World Trade Organisation's Agreement on Agriculture, AOA. The World Trade Organisation's, or WTO, Agreement on Agriculture, or AOA, was put into practice in 1995 after the Uruguay Round of the General Agreement on Tariffs and Trade, or GATT. The WTO agreement focused on reducing trade barriers and was the first codification of global rules for agricultural trade. Developed-world agricultural subsidies remain the largest point of contention, along with the resulting competitive disadvantage faced by developing countries.

WTO and Indian agriculture. It was expected that WTO would create a free trade environment, but it was not 100% successful. Indian agricultural produce could be exported in much larger quantity because of two reasons-- first, reduced tariffs may reduce prices of farm products, and second, India has low labor cost advantage as compared to many developed countries.

There were two major obstacles in the creation of a free trade area-- first, high subsidies provided by EU, or European Union, and US to their farmers as domestic price support; and second, developed countries also gave direct export subsidies to their farmers. These two obstacles halted free trade environment implementation in a true sense.

Effect of WTO regime at a glance. India was exporting over three times of our agricultural imports during pre-WTO period. India's imports and exports both increased during post-WTO period over pre-WTO period. According to a study by Dr. S. K. Dhage during pre- and post-WTO period, India's imports grew faster than exports due to liberalisation under WTO. The gap between the value of imports and exports is narrowing after the WTO regime started functioning.

The exports of Indian agricultural produce could not grow at expected rates as developed countries were not ready to reduce their subsidies. They were not ready to proceed further in trade negotiations as well. In order to fetch the full advantage of the WTO, Indian farmers must be encouraged to reduce cost of production and increase exportable surplus. India must adopt dynamic policies for further improvement. This may be achieved through an alliance of developing nations which would pressure the developed world to reduce their subsidies.

Application of WTO provisions on agriculture involves many contentious issues and is an area of serious concern for developing countries which are primarily agrarian economies. Moreover, the world, despite growing interdependence and integration, is highly heterogeneous with regard to levels of development. This heterogeneity is very much noticeable when we compare the agricultural sector of developed and developing countries.

To summarize, India is constantly improving in the global trade environment. It has contributed as founder member of GATT, as well as WTO. Failure of GATT gave birth to WTO, as a legal entity, to develop and regulate global free trade environment. Implementation of the WTO regime was unable to bring about drastic changes in Indian agricultural sector, which is the backbone for the Indian economy, but it has surely given a helping hand to develop both Indian agricultural imports and exports in a quantitative manner.

NARRATOR: Our Earth is rich in natural resources, and some countries are blessed with an abundance of resources to call their own. Oil, copper, gold, natural gas, iron ore, potash. The list of valuable resources is long and covers a diverse array of substances.

But how to best manage those natural resources is something we all need to pay attention to. Whether it is the revenue from the sale of the resources, or the resource itself, we need to do a better job of managing.

Water remains the one natural resource we cannot live without. And water is tied not only to our health but also to industrial and agricultural production. In some regions, there is growing competition for limited water resources among agricultural, industrial, and ordinary household users. In some places, rivers and other bodies of water cross political borders and complicate the effective management of water systems.

In the case of oil, natural gas, and mineral extraction, the revenue generated by the sale of these products continues to be an important driver of economic growth and greater prosperity. If properly managed, the sale of these products can help fund infrastructure projects, sustain economic growth, and even help reduce poverty in developing countries. But the record is mixed.

When measured in terms of overall human development-- which is based on indicators of health, education, and living standards-- countries rich in natural resources rank lower than those with few natural resources. And prices for many natural resources tend to be volatile. For countries that sell natural resource products, this means the revenue they take in from sales can vary significantly from one year to the next. This makes it very difficult to save the profits and invest them.

Innovative economic approaches that help create the appropriate prices and markets for water are a first step toward solving global water problems. And for other natural resources, a sustainable investing tool that links investment and growth can help governments make decisions that avoid the pitfalls of investing resource revenues. Other options include saving a portion of profits in a rainy day fund and using budgetary tools to smooth revenue flows. By taking these first steps towards better management of our resources, we will all benefit in the years ahead.

JEAN FRANCOIS RISCHARD: The World Bank was created in 1944 before the World War II saga was over. It was created together with the Monetary Fund, the International Monetary Fund, and what was going to be later the WTO, the World Trade Organization. In the case of the bank, its main purpose was to borrow money on the markets-- in those days, Europe more than the US-- and to lend this money for the reconstruction of Europe and of Japan and so forth.

So it was a very bold design for the times. And it did that in the '50s. Mostly it was in the reconstruction business. It financed the reconstruction, for instance, of Toyota in Japan. Or the financing for the reconstruction of the French railway system came from there. Then, in the '60s, that reconstruction was over. It went into developing country business, Lending for hospitals, for highways, for ports, for agriculture in the developing world, starting most in Latin America and then going worldwide.

And it really became the World Bank that is known today under McNamara. When McNamara came from the US government to become a very famous president of the World Bank in the '70s. He made it grow to a much bigger place than it was originally. It originally had less than 1,000 people in Washington, and today it has 12,000 people, roughly. And he got the World Bank into social areas-- into education, into health, into nutrition, into what was called basic needs, integrated rural development, and so forth. And so it became the largest and most-- sort of broadest development institution in the world.

And that it is still today. Even though it's a very much changed world, there is still a lot of that work to be done. It still operates by borrowing money in the markets, usually in bonds; using the money for very long-term loans, which all have to do with some development purpose; and then when the loans get reimbursed by the clients, we repay the bondholders. That's the way the World Bank works.

For the very poor countries, it has a special kitty which is not based on borrowing money. It's based on donated money. It's called the International Development Association Window, or IDA Window. And that leads to very long-term loans without an interest rate, or on grand terms for very poor countries, under roughly $1,000 per person.

So it's an institution that's a sort of bank, in a way. There is a sort of financial function, financing function. But it's also full of people who have a lot of knowledge of what works and doesn't work in education, in road surfacing, in building latrines, in textbook publications for schools, in cataract operations-- you name it. So it's not just a money bank. It's a knowledge bank at the same time.

And lately it has become very active also in big global issues, like global warming, the ozone depletion, the pollution of the sea, and so forth. So it is still mainly in the poverty reduction business and the development business, but it's beginning to become a presence in the global issues business, as well.