Prepare Prelims 2017-Day-24-Indian Economy

International Organisations:

Group of Seven

  • The Group of 7 (G7) is a group consisting of Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. The European Union is also represented within the G7.
  • These countries are the seven major advanced economies as reported by the International Monetary Fund: the G7 countries represent more than 64% of the net global wealth ($263 trillion).
  • A very high net national wealth and a very high Human Development Index are the main requirements to be a member of this group. The G7 countries also represent 46% of the global GDP evaluated at market exchange rates and 32% of the global purchasing power parity GDP.
  • The 42nd G7 summit was held in Japan in May 2016. Other recent G7 meetings include that of May 2013 in Aylesbury, United Kingdom with an emergency meeting in The Hague, Netherlands on March 24, 2014.

Function:

  • The organization was founded to facilitate shared macroeconomic initiatives by its members in response to the collapse of the exchange rate 1971, during the time of the Nixon Shock, the 1970s energy crisis and the ensuing recession.
  • Its goal was fine tuning of short term economic policies among participant countries to monitor developments in the world economy and assess economic policies.

BRICS:

  • BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa. Originally the first four were grouped as “BRIC” (or “the BRICs”), before the induction of South Africa in 2010.
  • The BRICS members are all leading developing or newly industrialized countries, but they are distinguished by their large, sometimes fast-growing economies and significant influence on regional affairs; all five are G-20 members.
  • Since 2009, the BRICS nations have met annually at formal summits. China will host the 9th BRICS summit in Xiamen on September 3rd, 4th and 5th, 2017.
  • The term does not include countries such as South Korea, Mexico and Turkey for which other acronyms and group associations were later created.
  • As of 2015, the five BRICS countries represent over 3.6 billion people, or half of the world population; all five members are in the top 25 of the world by population, and four are in the top 10.
  • The five nations have a combined nominal GDP of US$16.6 trillion, equivalent to approximately 22% of the gross world product, combined GDP (PPP) of around US$37 trillion and an estimated US$4 trillion in combined foreign reserves.
  • Overall the BRICS are forecasted to expand 4.6% in 2016, from an estimated growth of 3.9% in 2015. The World bank expects BRICS growth to pick up to 5.3% in 2017.
  • The BRICS have received both praise and criticism from numerous commentators.
  • Bilateral relations among BRICS nations have mainly been conducted on the basis of non-interference, equality, and mutual benefit.

New Development Bank

  • The New Development Bank (NDB), formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states (Brazil, Russia, India, China and South Africa).
  • According to the Agreement on the NDB, “the Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments.”
  • Moreover, the NDB “shall cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank.”[1]
  • The initial authorized capital of the bank is $100 bln divided into 1 mln shares having a par value of $100,000 each.
  • The initial subscribed capital of the NDB is $50 bln divided into paid-in shares ($10 bln) and callable shares ($40 bln).
  • The initial subscribed capital of the bank was equally distributed among the founding members.
  • The Agreement on the NDB specifies that the voting power of each member will be equal to the number of its subscribed shares in the capital stock of the bank.
  • The bank is headquartered in Shanghai, China.
  • The first regional office of the NDB will be opened in Johannesburg, South Africa.

South Asian Association for Regional Cooperation:

  • The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of nations in South Asia.
  • Its member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka. SAARC comprises 3% of the world’s area, 21% of the world’s population and 3.8% (US$ 2.9 trillion)[3] of the global economy, as of 2015.
  • SAARC was founded in Dhaka on 8th December,1985.
  • Its secretariat is based in Kathmandu, Nepal.
  • The organization promotes development of economic and regional integration.
  • It launched the South Asian Free Trade Area in 2006. SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

South Asian Free Trade Area:

  • SAFTA was envisaged primarily as the first step towards the transition to a South Asian Free Trade Area (SAFTA) leading subsequently towards a Customs Union, Common Market and the Economic Union.
  • In 1995, the Sixteenth session of the Council of Ministers (New Delhi, 18–19 December 1995) agreed on the need to strive for the realisation of SAFTA and to this end an Inter-Governmental Expert Group (IGEG) was set up in 1996 to identify the necessary steps for progressing to a free trade area.
  • The Tenth SAARC Summit (Colombo, 29–31 July 1998) decided to set up a Committee of Experts (COE) to draft a comprehensive treaty framework for creating a free trade area within the region, taking into consideration the asymmetries in development within the region and bearing in mind the need to fix realistic and achievable targets.
  • The SAFTA Agreement was signed on 6 January 2004 during Twelfth SAARC Summit held in Islamabad, Pakistan. The Agreement entered into force on 1 January 2006, and the Trade Liberalisation Programme commenced from 1 July 2006.

Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation:

  • The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation involving a group of countries in South Asia and South East Asia.
  • These are: Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal.
  • Bimstec Headquarters is situated in Dhaka, Bangladesh and opened by Bangladeshi Prime Minister Sheikh Hasina (13 September 2014)
  • The main objective of BIMSTEC is technological and economic co-operation among south Asian and south east Asian countries along the coast of the bay of Bengal.
  • Commerce, investment, technology, tourism, human resource development, agriculture, fisheries, transport and communication, textiles, leather etc. have been included in it .

Cooperation with Asian Development Bank (ADB)

  • The ADB has become BIMSTEC’s development partner since 2005, to undertake a study which is designed to help promote and improve transport infrastructure and logistic among the BIMSTEC countries.
  • So far, Asian Development Bank has already finished the project so called BIMSTEC Transport Infrastructure and Logistic Study (BTILS).

Asia Cooperation Dialogue

  • The Asia Cooperation Dialogue (ACD) is an inter-governmental organization created on 18 June 2002 to promote Asian cooperation at a continental level and to help integrate separate regional organizations such as ASEAN, SAARC, the Gulf Cooperation Council, and the Eurasian Economic Union.
  • It is the main objective of the former Thai Prime Minister to form the Asia Co-operation Dialogue or the forerunner to the Asian Union.
  • The ACD’s main members states are India, Kuwait, Bahrain, Sri Lanka, Turkey, Indonesia, Thailand, Uzbekistan, China and Japan, the so-called Major Ten ACD Nations.

Gulf Cooperation Council

  • a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf, except for Iraq.
  • Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
  • All current member states are monarchies, including three constitutional monarchies (Qatar, Kuwait, and Bahrain), two absolute monarchies (Saudi Arabia and Oman), and one federal monarchy (the United Arab Emirates, composed of seven member states, each with its own emir).
  • There have been discussions regarding the future membership of Jordan, Morocco, and Yemen.

the stated objectives are:

  • Formulating similar regulations in various fields such as religion, finance, trade, customs, tourism, legislation, and administration
  • Fostering scientific and technical progress in industry, mining, agriculture, water and animal resources
  • Establishing scientific research centers
  • Setting up joint ventures
  • Unified military (Peninsula Shield Force)
  • Encouraging cooperation of the private sector
  • Strengthening ties between their people
  • Establishing a common currency

South Asia Subregional Economic Cooperation:

  • The South Asia Subregional Economic Cooperation (SASEC) Program, set up in 2001, brings together Bangladesh, Bhutan, India, Maldives, Myanmar, Nepal and Sri Lanka in a project-based partnership to promote regional prosperity by improving cross-border connectivity, boosting trade among member countries, and strengthening regional economic cooperation.
  • The Manila, Philippines-based Asian Development Bank (ADB) serves as the Secretariat for the SASEC member countries.

Association of Southeast Asian Nations

  • a regional organisation comprising ten Southeast Asian states which promotes intergovernmental cooperation and facilitates economic integration amongst its members. Since its formation on 8 August 1967 by Indonesia, Malaysia, the Philippines, Singapore, and Thailand, the organisation’s membership has expanded to include Brunei, Cambodia, Laos, Myanmar (Burma), and Vietnam.
  • Its principal aims include accelerating economic growth, social progress, and sociocultural evolution among its members, alongside the protection of regional stability and the provision of a mechanism for member countries to resolve differences peacefully.
  • ASEAN shares land borders with India, China, Bangladesh, East Timor, and Papua New Guinea, and maritime borders with India, China, Palau, and Australia. Both East Timor and Papua New Guinea are backed by certain ASEAN members for their membership in the organisation.

As set out in the ASEAN Declaration, the aims and purposes of ASEAN are:

  • To accelerate economic growth, social progress, and cultural development in the region.
  • To promote regional peace and stability.
  • To promote collaboration and mutual assistance on matters of common interest.
  • To provide assistance to each other in the form of training and research facilities.
  • To collaborate for the better utilisation of agriculture and industry to raise the living standards of the people.
  • To promote Southeast Asian studies.
  • To maintain close, beneficial co-operation with existing international organisations with similar aims and purposes.

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