International Economy - Current Affairs for January,2017

Month and Year:   
▼ Nepal launches 10 year plan to cut vegetable imports from India   [01-24-17]

Landlocked country Nepal has launched a 10 year plan to cut reliance on vegetable imports from India.

Though the western part of this nation has seen a rise in commercial vegetable farming, vegetable imports from India have continued to rise.

Region imports vegetables worth INR 55 billion each year from India.

Potatoes worth INR 370 million were annually imported. Green vegetable imports is pegged at INR 180 million.

Birgunj and Gadda Chauki are the two most important Indian trading outposts with Nepal.

Vegetable is cultivated in the following areas : Belauri, Krishnapur, Jhalari, Mahendranagar and Mahakali.

Production barely meets local demand.

The aim is to propose modern farm techniques to boost productivity, and making the country self-reliant in food.

Government has targeted making the country self-sufficient in maize and fish by the next three years.

Self reliance is sought in fruits like bananas, papaya and litchi by four years.

Towards its end, the project envisages becoming self-sufficient in fruits like kiwi, apple and orange.

Nepal Government: Know More

  • Government: Federal parliamentary republic
  • President: Bidhya Devi Bhandari
  • Vice President: Nanda Kishor Pun
  • Prime Minister: Pushpa Kamal Dahal
  • Speaker of House: Onsari Gharti Magar
  • Chief Justice: Sushila Karki
  • Legislature: Parliament

▼ Morroco bans the burqa   [01-16-17]

Morocco’s ban on the sale and production of burqa has sharply divided people in the N. African nation.

Award winning French-Moroccan novelist Leila Slimani said the burqa is not an item of clothing but an instrument of oppression.

Lawmaker and former minister Nouzha Skalli has said it will combat religious extremism.

Measure appeared to be motivated by security concerns, as criminals have repeatedly used this garment to perpetrate their crimes.”

Most women in Morocco, whose King Mohammed VI favours a moderate version of Islam, prefer the hijab headscarf that does not cover the face.

The niqab, which leaves the area around the eyes uncovered, is also worn in Salafist circles and in more conservative regions in the north.

Morocco: Know More

  • Morocco is officially known as the Kingdom of Morocco/The Western Kingdom
  • Location: Maghreb region of North Africa.
  • Geographically, Morocco is characterized by a rugged mountainous interior and large portions of desert.
  • It is the only African country to have both an Atlantic and a Mediterranean coastline.
  • Morocco has a population of over 33.8 million and an area of 446,550 km2 (172,410 sq mi).
  • Capital: Rabat
  • Largest city is Casablanca.
  • Other major cities include Marrakesh, Tangier, Tetouan.

▼ Australian government to tax online transactions   [01-13-17]

Australian government has announced plans to tax all digital transactions, part of what treasurer Scott Morrison calls a “Tax Strike” on the growing digital economy.

The government is currently unable to tax Australia's USD 7.37 billion annual online transactions.

As Australia moves towards a modern cashless economy, the aim is to also ensure tax systems remain modern.

Google and Netflix taxes have also been imposed to ensure MNCs and online services were paying tax properly.

Government is aiming at proper taxation for all digital sales in Australia to ensure everyone is paying their fair share of tax.

▼ China launches first freight train to London   [01-5-17]

The PRC or People's Republic of China launched its first freight train to London (UK) with the aim to improve trade ties and strengthen connectivity with Britain and Western Europe.

The train departed from Yiwu West Railway station in eastern Zhejiang province of China. It will travel for 18 days over 12,000 km before reaching London.

The train will also pass through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France, before reaching London.

It is carrying goods produced in Yiwu. London is the 15th city in European region added to China-Europe freight train services.

Success of the train will give impetus to China's One Belt and One Road Initiative, an infrastructure and trade network connecting Asia with Africa and EU along ancient trade routes.

One Belt and One Road Initiative: Know More

  • Also known as the Silk Road Economic Belt
  • Called the Belt and Road, One Belt, One Road (OBOR) or Belt and Road Initiative
  • It is a 21st Century Maritime Silk Road.
  • The initiative is a development strategy and framework put in place by Chinese leader XI Jingping
  • It focuses on connectivity and cooperation between China and Eurasia.
  • Comprises two components namely Silk Road Economic Belt (land based) and Maritime Silk Road (ocean going).
  • It was unveiled in Sept and Oct 2013 (SREB and MSR respectively).

▼ Consortium of Chinese companies purchases 40 percent of Pakistan's only stock exchange   [01-4-17]

A consortium of Chinese companies have purchased 40 percent of Pakistan's only stock exchange in Karachi.

This is the price Pakistan is paying in return for Chinese investments in CPEC.

CPEC is expected to cost USD 46 billion.

Karachi based Pakistan stock exchange agreed to sell the stakes for USD 85 million.

The consortium comprises three China bourses:

  • Shanghai based China Financial Futures Exchange
  • Shanghai Stock Exchange
  • Shenzhen Stock Exchange
The above 3 have taken 30 percent of the shares.

Another two companies, Pak-China Investment Company Limited and Habib Bank Limited have picked 5 percent each.

This is the first time Chinese companies have acquired a share of a foreign stock exchange.

Another Chinese consortium has been trying to acquire the Chicago stock exchange, but is facing resistance from US senators.

China is now trying to connect Shanghai stock exchange with London.

It has recently connected this stock exchange with Hong Kong and Shenzhen.

China Securities Regulatory Commission supports this acquisition.

Shanghai stock exchange said this would improve Pak-China ties and implement the Belt and Road Initiative and CPEC both.

PSX expected the investment will bring experience, technological assistance and new products.

Market will also be internationalised.

PSX: Know More
  • Formed: Jan 2016
  • Formed by merger of Lahore, Karachi and Islamabad stock exchanges.
  • Included in emerging market index of Morgan Stanley Capital International in June 2016.
  • Market reforms have accelerated with Chinese investments.
  • This is making PSX appealing to global investors

Chronology of events
The Government has imposed an anti-dumping duty on imports of jute and its products from Nepal and Bangladesh for five years period to protect the domestic industry.
Forex reserves up by $625.5 mn to $360.296 bn Foreign exchange reserves rose by USD 625.5 million to USD 360.296 billion in the week to December 30, helped by an increase in foreign currency assets, the Reserve Bank said on Jan 9th.
The United States is set to issue a commemorative $100 gold coin that depicts Lady Liberty - a national symbol generally portrayed as a white woman as an African American for the first time.
State General Reserve Fund of Oman (SGRF), a Sovereign Wealth Fund of Oman and State Bank of India (SBI) have signed pact to infuse $150 million and $50 million respectively in second Oman India Joint Investment Fund (OIJIF).