OFID , the role of OPEC in the modern economy

The mission of OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The mission of OPEC is to coordinate and unify the petroleum policies of its Member Countries and ensure the stabilization of oil markets in order to secure an efficient, economic and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital for those investing in the petroleum industry.

Member Countries

The Organization of the Petroleum Exporting Countries (OPEC) was founded by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization. These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007). From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership effective January 2009. Currently, the Organization has a total of 12 Member Countries.The OPEC Statute distinguishes between the Founder Members and Full Members - those countries whose applications for membership have been accepted by the Conference. The Statute stipulates that “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.” The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.

Secreteriat

The OPEC Secretariat is the executive organ of the Organization of the Petroleum Exporting Countries (OPEC). Located in Vienna, it also functions as the Headquarters of the Organization.It is responsible for the implementation of all resolutions passed by the Conference and carries out all decisions made by the Board of Governors. It also conducts research, the findings of which constitute key inputs in decision-making. The Secretariat consists of the Secretary General, who is the Organization’s Chief Executive Officer, as well as such staff as may be required for the Organization’s operations. It further consists of the Office of the Secretary General, the Legal Office, the Research Division and the Support Services Division. The Research Division comprises Data Services, Petroleum Studies and Energy Studies departments. The Support Services Division includes Public Relations & Information, Finance & Human Resources and Administration & IT Services departments. The Secretariat was originally established in 1961 in Geneva, Switzerland. In April 1965, the 8th (Extraordinary) OPEC Conference approved a Host Agreement with the Government of Austria, effectively moving the Organization’s headquarters to the city of Vienna on September 1, 1965.

OFID , the role of OPEC in the modern economy

When Member Countries do meet, the impact is felt beyond the confines of the Organization’s MCs and for decades too. Such meetings have the tendency to affect lives in a positive way. This could be said to be the effect their first meeting in 1975 has had on the world’s poor countries through the OPEC Fund for International Development, (OFID). Established as a multilateral development finance institution to promote cooperation between Member States of OPEC and other developing countries, OFID was conceived at the Summit of the Sovereigns and Heads of State of the OPEC Member Countries (MCs) held in Algier in 1975. OFID was established in January 1976, as a collective financial facility to consolidate the assistance extended by its Member Countries namely Algeria, Gabon, Indonesia, Islamic Republic of Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. OFID’s resources are additional to those already made available by OPEC MCs through a number of bilateral and multilateral channels. The resources of OFID consist mainly of voluntary contributions by OPEC MCs and income derived from OFID’s investments and loans (interest and service charges). In addition, OFID channeled $972m to two international institutions: it has channeled OPEC Members’ contributions to the initial capital and first replenishment of IFAD’s (international fund of agricultural development) resources and made irrevocable transfers in the name of seven OPEC Members to the Trust Fund of the IMF(international monetary fund). OFID’s total approved commitments (including grants and contributions to other institutions) as at the end of March 2010 stood at $11,926m.

Easy to see that OFID plays a very important role in the global economy, supporting developing countries, thanks to OFID , stabilizing oil prices, which has a beneficial effect on the economy as a whole. Now the significance of OPEC increases rapidly as countries realize the usefulness and benefits of the organization

Date: 2015-12-11; view: 882