International Economy - Current Affairs for November, 2017

International Economy Current Affairs for November, 2017

Month wise coverage of International Economy Current Affairs helps you improve your general knowledge and prepare for all competitive exams like IBPS, Bank PO, SBI PO, RRB, RBI, LIC, Specialist Officer, Clerk, SSC, UPSC, Railway etc. This section is updated daily with the most important events.

Preparing International Economy Current Affairs November, 2017

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▼ ADB announces increased funding to India   [11-29-17]

Multi-lateral funding agency Asian Development Bank (ADB) announced that it increase annual funding to India to up to $4 billion from existing $2.7 billion from next year to accelerate inclusive economic transformation. As part of ADB's Country Partnership Strategy 2018-22, the multi-lateral funding agency will provide loans up to $4 billion on annual basis including non-sovereign or private debt during 2018-22. Cumulatively, India which is the largest recipient of ADB will get about $20 billion over a period of 5 years.

▼ Swiss bank accounts now open for scrutiny!   [11-21-17]

Paving the way for India to get instant access to details on Indians with Swiss accounts, a key parliamentary panel in Switzerland has approved an automatic information exchange pact between the two countries. The Commission for Economic Affairs and Taxes of the Council of States-a key panel of the Swiss Parliament's Upper House-approved the proposed pact with India as also with 40 other countries, but suggested strengthening the provisions for individual legal claims. How It Works

  • The Commission for Economic Affairs and Taxes of the Council of States approved the proposed pact with India as also with 40 other countries, but suggested strengthening the provisions for individual legal claims.
  • It has asked the Swiss government to submit to Parliament an amendment "to strengthen concrete individual legal protection and to ensure that no exchange of information can take place for individual cases where a violation of essential legal claims is likely".
  • The pact will help provide a continuous access to details about alleged black money hoarders in once-all-secret Swiss banks.
  • The information that could be exchanged under this framework would include account number, name, address, date of birth, tax identification number, interest, dividend, receipts from insurance policies, credit balance in accounts and proceeds from sale of financial assets.
  • The exchange will work like this-If an Indian has a bank account in Switzerland, the bank concerned will disclose the financial account data to authorities there; the Swiss authority will forward the information to its peer in India who can then examine the person's details.

▼ India pledges USD 100m to India-UN Development Partnership Fund   [11-9-17]

India has pledged to contribute $100 million to the India-UN Development Partnership Fund to help the poorest nations achieve the world organisation's Sustainable Development Goals (SDGs) to reduce poverty and raise the quality of life. The multi-year contribution at the 2017 UN Pledging Conference for Development Activities was announced on 4th Nov, 2017. This contribution would be in addition to $10.582 million India is contributing to various other UN programmes, he said. A total of $398.98 million was pledged by about 20 countries during Monday's conference session. The Fund launched on June 8 is managed by the UN Office of South-South Cooperation (UNOSSC) and focuses on the least developed countries (LDCs) and Small Island Developing States (SIDS). The utilisation of India's contributions will be flexible and attuned to the needs of the receiving countries. The first project from the Fund is being executed in partnership with seven Pacific Island countries. The Fund has since then identified 15 more projects. Of the $5 million India contributed to the Fund this year, $2 million would be utilised for reconstruction in Dominica and Antigua and Barbuda, which took a big hit from hurricanes. The Fund project currently underway is an early warning system for extreme weather conditions for the Cook Islands, Kiribati, the Marshall Islands, Micronesia, Nauru, the Solomon Islands and Tonga. When the Fund was launched in June, it was yet another example of India's contributions to shaping a better world and its notable leadership and drive towards ensuring that no one is left behind, both in India and worldwide. Contributions From India to UN

  • The $100 million contribution pledged to the Fund and $10.582 million to other programmes are in addition to the annual dues of about $35 million mandated by the General Assembly as India's contributions towards the UN's regular budget, the peacekeeping operations and the tribunals.
  • The contributions totalling $10.582 million are for the UN Development Programme ($4.5 million), World Food Programme ($1.92 million), UN Relief and Works Agency for Palestinians ($1.25 million), UN Women ($1 million), Unicef ($862, 000), UN Population Fund ($500,000), UN HABITAT ($150,000), UN Environment Programme ($100,000), UN Office on Drugs and Crime ($100,000) and Voluntary Fund for Technical Cooperation ($200,000).
  • India will also be making contributions to the trust funds for victims of torture and modern slavery, and to the programme for UN Volunteers.

▼ Odisha Higher Education Programme for Excellence & Equity gets funds   [11-8-17]

A Financing Agreement for IBRD loan of US$ 119 million (equivalent) for the "Odisha Higher Education Programme for Excellence & Equity (OHEPEE) Project" was signed with the World Bank. The Objective of the project is to improve the quality of 'students' equitable access to selected institutions and enhance governance of the higher education system in Odisha. Project Component: Result Areas are: (I) Improved quality of and students' equitable access to selected institutions of higher education: Institutional Development Plan (IDP) Grants (performance – based Financing) (II) Enhanced governance of the higher education system: (i)Improvement of governance in colleges (ii)Improvement of financial and procurement management and accounting in all government and government-aided colleges.

▼ China enters "New Era", Yuan could be heading for Minsky moment   [11-6-17]

Addressing the recently held 19th congress of the communist party of China, president Xi declared that China had entered a 'New Era'. In political terms, the message is amply clear: more absolute power in his hands for a longer tenure. It is commonly agreed that China built trade and current account surpluses over successive decades by keeping the yuan artificially weak, which facilitated its emergence as a global manufacturing powerhouse. Between 2000-2014, Chinese authorities allowed the yuan to appreciate about 27% against the dollar, to encourage domestic consumption and offset persistent criticism of its exchange rate policy. Since 2014, however, sustained pressure of capital outflows from residents led to a 10% fall in the yuan, despite massive intervention by PBoC, which sold a total of $790 billion in 2015 and 2016. The moot point here is how much of forex reserves is in liquid form to help defend the yuan? Various estimates put it in the range of $1-2 trillion, Given the sharp fall in the ratio of forex reserves to broad money during the last five years (22% in 2012 to 13.3% in 2016), it is doubtful if the liquid forex reserves are sufficient to arrest the yuan's fall, if the residents trigger another bout of capital outflows. Despite capital controls anywhere, if the economic incentives are strong enough, residents will find a way to move money cross-border. In China, the temptation to do so is rising with its deepening debt problem and the current over-valuation of the yuan, which, as per the BIS, is about 20%. The overseas tourism outflow rose from 0.9% of GDP in 2012 to 2.2% in 2016. The logic of economics says that the yuan should depreciate in line with China's fundamentals, counterbalanced by the authorities' need for stability. The longer it is delayed, overshooting becomes a distinct possibility and a 'Minsky Moment' can happen. Paradoxically, massive forex reserves, meant to assure stability, may themselves lead to instability. If it happens, reverberations will be felt far and wide, including in India.

▼ Paradise Papers: ICIJ releases sequel to Panama Papers    [11-6-17]

After Panama Papers, a new set of data taken from another offshore law firm, Appleby, could expose the hidden wealth of individuals, including Indians, and show how corporations, hedge funds and others may have skirted taxes. Among the 180 countries represented in the data+ (being dubbed Paradise Papers), India ranks 19th in terms of the number of names. In all, there are 714 Indians in the tally, it reported. Interestingly, an Indian firm figures as Appleby's second-largest client globally, with at least 118 different offshore entities. The disclosure comes two days before the NDA government marks the first anniversary of the demonetization drive on November 8, which the Centre will observe as Anti-Black Money Day+. The leaked documents also show that US commerce secretary Wilbur Ross, the Trump administration's point man on trade and manufacturing policy, has a stake in a firm that does business with a gas producer partly owned by the son-in-law of Russian President Vladimir Putin. The latest revelations come out of an investigation led by the ICIJ , which was provided data collected in an alleged hack in 2016 of Appleby Global Group Services, a Bermuda firm providing legal services for hedge fund managers and corporations. The leak also revealed that millions of pounds from the private estate of Britain's Queen Elizabeth II have been invested in offshore tax haven funds. Around £10 million ($13 million, EUR11.3 million) of the Queen's private money was placed in funds held in the Cayman Islands and Bermuda, The investments, which were entirely legal, were made through the Duchy of Lancaster, which provides the monarch with an income and handles investments of her vast estate and remain current. Reporters working with the ICIJ, which was also behind the release of the Panama Papers, are reviewing the millions of pages of documents that reveal strategies used to hide assets and avoid taxes. Among the individuals and companies expected to be cited in the articles are Glencore Inc and Yuri Miltner, an early backer of Facebook.