Last year marked the 70th anniversary of the Bretton Woods Conference that established new rules and institutions governing international financial relations. The post war period also saw the emergence of the European Union, as well as important European institutions such as the European Investment Bank, the EU's policy-based lending bank.
Recently, these rules and the governance systems of International Financial Institutions (IFIs) have been revisited in light of the new economic landscape. Most significantly, the emerging economies such as the BRICS have reclaimed a larger weight in the IFIs’ decision-making process, becoming actors themselves in the field of development financing, both bilaterally and multilaterally. For example, 2014 saw the creation of the BRICS' New Development Bank and the formation of the Asian Infrastructure Investment Bank, which are branded as alternatives to other IFIs.
All this has an obvious link with the role IFIs play in shaping international relations. From a governance point of view, IFIs must take into account the foreign policies of their diverse set of stakeholders. For example, some IFIs recently helped finance Ukraine's new government to face a major economic crisis as the country fights against pro-Russian separatists in the East.
YPFP Brussels’ Economic Diplomacy series aims to explore how economic and business tools are increasingly being used by countries to support and achieve their national, regional and even international interests. It looks at how non-state actors – companies, NGOs etc – are becoming major players in the foreign policy sphere as practitioners of economic statecraft. Whether through foreign trade agreements, sanctions, the attraction of investment, or provision of aid, economic diplomacy has become a barometer of rewards and punishments, success and failure. As such, this type of diplomacy is key to the future of global foreign policy.
Ben Knapen, EIB Permanent Representative in Brussels
Andrea Engel, Brussels Representative of the International Finance Corporation, World Bank Group
Freddy Van den Spiegel, Professor of Finance at VUB and expert on Contemporary China
Rond Point Robert Schuman 6
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