Chapter 11: INTERNATIONAL BODIES

IMF structure:

1.      Managing director

a.       5 yr term and by convention a European citizen and HQ in Washington.

2.      Executive board

a.       Daily work and 24 members with 5 positions reserved for UK, USA, France, Japan and Germany.

3.      Board of Governors

a.       All nations are represented by finance ministers or central bank governors

b.      Annual meeting

Functions:  

      A.   Help countries overcome BOP crisis

2.      B.   Surveillance of global, national and regional economy

3.      C.   Technical assistance, advisory role.

Special drawing right [S.D.R] also known as paper gold. Up to 1970 1 S.D.R = $1 = 0.88 gram of gold. But now it’s a basket of 5 currencies [euro, yen, dollar, renminbi and pound] with weight assigned to them based on their importance in international trade. S.D.R can be converted to member currency. Renminbi was added in 2016.

IMF quota:

The size of quota of a country depends on its openness to world trade, size of economy and G.D.P. The emerging economies have negligible quota. Hence there is a need to change the quota assigned to them. However the change needs 70% quota votes which isn’t going to happen. Thus I.M.F reforms have been slow.

Multilateral Development Banks

Due to the slow pace of reforms in agencies like IMF, World bank and Asian development bank new multilateral finance agencies are emerging in developing countries like New Development Bank [B.R.I.C.S bank] and Asian Infrastructure Investment Bank.

 
    KV kamath has become the first president of the N.D.B.

World trade organization

WTO structure:

1.      Ministerial council

a.       Appoints Director General

b.      Meets every 2 years and 160 members are present

c.       Signs trade agreements

2.      General council

a.       Day to day working

b.      HQ at Geneva

c.       Bodies: Trade Policy Review and Dispute Settlement

3.      Director General and Secretariat

a.       Term 4 years and can be reappointed

WTO functions:

      1.      Lower tariff and non tariff barriers to trade

      2.      Ensure less developed countries get benefit of world trade

      3.      Make agreements to ensure above points

      4.      Dispute settlement if agreement are violated

      5.      Cooperation with others to ensure sustainable development and environment protection.

Miscellaneous

Tariff barriers are import duties and export subsidies. Non tariff barriers are delay in customs clearance, quota for imports, subsidies, public procurement norms and quality controls.

Quality control Norms:

1.      A.  Technical barriers to trade

2.      B.   Sanitary and Phytosanitary measures [SPS].

SPS agreement means countries can ban imports to protect local plants, animals and human lives. QC norms should be scientific and developing countries should be given time to comply.

Q.In the context of which of the following do you sometimes find the terms `amber box, blue box and green box’ in the news? (UPSC CSAT 2016)

• WTO affairs




• SAARC affairs




• UNFCCC affairs




• India-EU negotiations on FTA

Ans . A

Q.Recently, which one of the following currencies has been proposed to be added to the basket of IMF’s SDR? (UPSC CSAT 2016)

• Ruble




• Rand




• Indian Rupee




• Renminbi

Ans . D

Q.With reference to `IFC Masala Bonds’, sometimes seen in the news, which of the statements given below is/are correct?
1. The International Finance Corporation, which offers these bonds, is an arm of the World Bank.
2. They are the rupee-denominated bonds and are a source of debt financing for the public and private sector.
Select the correct answer using the code given below. (UPSC CSAT 2016)

• 1 only




• 2 only




• Both 1 and 2




• Neither 1 nor 2

Ans . C

Q.Consider the following statements :
1. New Development Bank has been set up by APEC.
2. The headquarters of New Development Bank is in Shanghai.
Which of the statements given above is/are correct? (UPSC CSAT 2016)

• 1 only




• 2 only




• Both 1 and 2




• Neither 1 nor 2

Ans . B

1. New Development Bank has been set up by BRICS

Q.What is/are the purpose/purposes of Government’s ‘Sovereign Gold Bond Scheme’ and ‘Gold Monetization Scheme’?
1. To bring the idle gold lying with Indian households into the economy
2. To promote FDI in the gold and jewellery sector
3. To reduce India’s dependence on gold imports
Select the correct answer using the code given below. (UPSC CSAT 2016)

• 1 only




• 2 and 3 only




• 1 and 3 only




• 1, 2 and 3

Ans . C

1. FDI is not the purpose

Q.‘Global Financial Stability Report’ is prepared by the (UPSC CSAT 2016)

• European Central Bank




• International Monetary Fund




• International Bank for Reconstruction and Development




• Organization for Economic Cooperation and Development

Ans . B

Q.With reference to the International Monetary and Financial Committee (IMFC), consider the following statements :
1. IMFC discusses matters of concern affecting the global economy, and advises the International Monetary Fund (IMF) on the direction of its work.
2. The World Bank participates as observer in IMFC’s meetings.
Which of the statements given above is/are correct? (UPSC CSAT 2016)

• 1 only




• 2 only




• Both 1 and 2




• Neither 1 nor 2

Ans . C

Q.Which of the following best describes the term ‘import cover’, sometimes seen in the news? (UPSC CSAT 2016)

• It is the ratio of value of imports to the Gross Domestic Product of a country




• It is the total value of imports of a country in a year




• It is the ratio between the value of exports and that of imports between two countries




• It is the number of months of imports that could be paid for by a country’s international reserves

Ans . D

Q.Amnesty International is (UPSC CSAT 2015)

• an agency of the United Nations to help refugees of civil wars




• a global Human Rights Movement




• a non-governmental voluntary organization to help very poor people




• an inter-governmental agency to cater to medical emergencies in war-ravaged regions

Ans . B

1. Amnesty International is a global movement of more than 7 million people who take injustice personally. We are campaigning for a world where human rights are enjoyed by all.

Q.India is a member of which of the following?
1. Asia-Pacific economic corporation.
2. Association of South-East Asian Nations.
3. East Asia Summit
Select the correct answer using the code given below. (UPSC CSAT 2015)

• 1 and 2 only




• 3 only




• 1, 2, and 3




• India is a member of none of them

Ans . B

1. India is a member of East Asia Summit. India is a member of ASEAN+6, SCO, MTCR but not ASEAN.

Q.In the Mekong-Ganga Cooperation, an initiative of six countries, which of the following is/are not a participant/ participants?
1. Bangladesh
2. Cambodia
3. China
4. Myanmar
5. Thailand
Select the correct answer using the code given below. (UPSC CSAT 2015)

• 1 only




• 2, 3 and 4




• 1 and 3




• 1, 2 and 5

Ans . C

1. The Mekong–Ganga Cooperation (MGC) was established on November 10, 2000 at Vientiane at the First MGC Ministerial Meeting. It comprises six member countries, namely India, Thailand, Myanmar, Cambodia, Laos and Vietnam. They emphasised four areas of cooperation, which are tourism, culture, education, and transportation linkage in order to be solid foundation for future trade and investment cooperation in the region.

Q. ‘Basel III Accord’ or simply ‘Basel III’, often seen in the news, seeks to(UPSC CSAT 2015)

• develop national strategies for the conservation and sustainable use of biological diversity




• improve banking sector’s ability to deal with financial and economic stress and improve risk management




• reduce the greenhouse gas emissions but places a heavier burden on developed countries




• transfer technology from developed Countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals

Ans . B

1. Basel III (or the Third Basel Accord) is a global, voluntary regulatory framework on bank capital adequacy, stress testing and market liquidity risk.

Q.With reference to ‘Indian Ocean Rim Association for Regional Cooperation (IOR-ARC)’, Consider the following statements:
1. It was established very recently in response to incidents of piracy and accidents of oil spills
2. It is an alliance meant for maritime security only
Which of the following statements given above is/are correct? (UPSC CSAT 2015)

• 1 only




• 2 only




• Both 1 and 2




• Neither 1 nor 2

Ans . D

1. The organization was first established as Indian Ocean Rim Initiative in Mauritius on March 1995 and formally launched on 6–7 March 1997. It is an international organization consisting of coastal states bordering the Indian Ocean.

2. Priority areas are to promote the sustained growth and balanced development of the region and of the Member States, and to create common ground for regional economic co-operation

Q.With reference to ‘Forest Carbon Partnership Facility’, which of the following statements is/are correct?
1. it is global partnership of governments, businesses, civil society and indigenous peoples
2. it provides financial aid to universities, individual scientists and institutions involved in scientific forestry research to develop eco-friendly and climate adaptation technologies for sustainable forest management
3. It assists the countries in their ‘REDD+ (Reducing Emission from Deforestation and Forest Degradation+)’ efforts by providing them with financial and technical assistance.
Select the correct answer using the code given below (UPSC CSAT 2015)

• 1 only




• 2 and 3 only




• 1 and 3 only




• 1, 2 and 3

Ans . C

1. The facility has been formed under REDD+. This is implemented at country level, not al universities or individual levels.

Q. The 'Fortaleza Declaration' recently in the news, is related to the affairs of:(UPSC CSAT 2015)

• ASEAN




• BRICS




• OECD




• WTO

Ans . B

Q.Which one of the following issues the “Global Economic Prospects” report periodically? (UPSC CSAT 2015)

• The Asian Development Bank




• The European Bank for Reconstruction and Development




• The US Federal Reserve Bank




• The World Bank

Ans . D