Aspirants Times Magazine Vol8 (NOV 2009) Www.Upscportal.Com


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Aspirants Times Magazine Vol8 (NOV 2009) Www.Upscportal.Com

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Aspirants Times Magazine Vol8 (NOV 2009) Www.Upscportal.Com

  1. 1. Copyright © 2009 | WWW.UPSCPORTAL.COM 1
  2. 2. “ Thank you for your overwhelming support and love for UPSCPORTAL.COM and Aspirants Times Digital Magazine. We are working hard to bring you the best possible... ” Founder, UPSCPORTAL.COM Copyright © 2009 | WWW.UPSCPORTAL.COM 2
  3. 3. Aspirants Times Hello! to new UPSC Aspirants of 2010...... UPSC Civil Services Main exams are now over. Many of you VOL : 08 have done very well and will be happy that you are going to November 2009 crack the biggest challenge of the earth. But many of you are not sure of the future and few of them are hopeless. Dear friend! We would like to say that worry is not solution of any problem. Honorary Editor: Those must work hard, who are going to appear at personality Mr. Ram Kumar Pandey test; and those, who are sure that they are not going to qualify for interview, must acknowledged their week points and pre- Honorary Editorial Advisor: pare for next main examination and at the same time they must Mr. Sant Prasad Gupta also insure themselves to qualify for mains (written). We also have something to say about those who have finished Executive Editor: Dr. Divya all attempts to appear in the Civil Services examination. They must seriously think about other career option and overcome from the pain. They must not think that their efforts (time, Senior Sub Editor: money and knowledge) were thrown into dustbin. They must Mr. Avadhesh Kumar Pandey visualise the fact that if they want, they can utilise their assets in other fields. So prepare for new area and new life. Honorary Advisors: 1) Dr. Nageshwar Nath Mishra 2) Dr. Sachchidanand And now we want to say Hello! to new UPSC Aspirants of 2010 … "UPSCPORTAL.COM" is always here to help you, and we will provide you all sufficient materials for the next preliminary Computer staff: test. We will also provide some exclusive materials for alterna- Manish Malhotra tive careers in near future. Disclaimer: In this eighth volume of "Aspirant Times", you will find articles Editor and Publisher are not on 'Nobel Prize 2009: Indo American Won the Most Eminent responsible for any views, Prize', ' ASEAN Summit', ' G-20 Pittsburgh Summit' and data, figures etc. Expressed in 'Global Financial Stability Report'. Some very important news the articles by the author(s). Maps are notational. has been covered under the Hot Topics column. They are: 'Microsoft Windows 7: Historic Launch of New Operating Sys- tem', 'Indo- U.S. Agreement on IPR: Sixth Ministerial Level Published By: Meeting of the Trade Policy Forum', and 'RBI Monetary Policy: www.UPSCPORTAL.COM M2- 1st Floor, Jaina House, SLR Increase is Just a Beginning to Withdraw Liquidity'. YES, Mukherjee Nagar We are fully aware about our responsibilities to provide you day- New Delhi- 110009 to-day facts, so CURRENT AFFAIRS, SPORTS & AWARDS are 011 - 45151781 included under regular columns. With this We conclude, and hoping that all of you think seriously to face the future…………. WWW.UPSCPORTAL.COM Ram Kumar Pandey and UPSCPORTAL.COM Team Copyright © 2009 | WWW.UPSCPORTAL.COM 3
  4. 4. INDEX Editorial » You Can Utilise Your Time And Knowledge .….....................................................03 SECTION - 1: Articles » Nobel Prize 2009 .................................................................................................05 » G-20 Pittsburgh Summit .......................................................................................11 » Fifteenth ASEAN Summit ...............................................................................................18 » Global Financial Stability Report .....................................................................................24 » ..................................................................29 SECTION - 2: Hot Topics » Microsoft Windows 7 ............................................................................................42 » Indo- U.S. Agreement on IPR ...............................................................................48 » RBI Monetary Policy .............................................................................................53 SECTION - 3: Current Affairs » Current Relevant Facts..........................................................................................57 SECTION -4: » Sports ...................................................................................................................73 SECTION -5: » Awards..................................................................................................................76 Copyright © 2009 | WWW.UPSCPORTAL.COM 4
  5. 5. Section -1 (Article : Nobel Prize 2009) Nobel Prize 2009 Indo American Won the Most Eminent Prize By: Ram Kumar Pandey Indian-American used X-ray crystallography, the same method used Venkatraman by the discoverers of DNA to map the thousands Ramakrishnan has of microscopic atoms that make up a ribosome. won Nobel Prize in The Nobel committee described ribosomal protein chemistry, the Nobel synthesis as one of life’s core processes. An anti- Foundation an- biotic based on Ramakrishnan’s model will save nounced in Oct 2009. lives and decrease suffering. He shares it with Tho- mas Steitz, an American, and Ada Yonath, an Is- The Nobel Prize raeli. The Norwegian Nobel Committee said US President Barack Obama won the award for his The Nobel Prize is a Sweden-based international extraordinary efforts to strengthen international monetary prize. The award was established by the diplomacy and cooperation between peoples and 1895 will and estate of Swedish chemist and in- for his work on nuclear non-proliferation. US trio ventor Alfred Nobel. It was first awarded in Phys- Elizabeth Blackburn, Carol W Greider and Jack ics, Chemistry, Physiology or Medicine, Litera- W Szostak won the Nobel Medicine Prize for dis- ture, and Peace in 1901. An associated prize, The covering an enzyme which helps chromosomes Sveriges Riksbank Prize in Economic Sciences in in cells stay eternally young. Herta Mueller, a Ro- Memory of Alfred Nobel, was instituted by manian-born writer who produced tales of the dis- Sweden's central bank in 1968 and first awarded enfranchised and fought for free speech, has won in 1969. The Nobel Prizes in the specific disci- the 2009 Nobel prize for literature. She made her plines (Physics, Chemistry, Physiology or Medi- debut in 1982 with a collection of short stories. cine, and Literature) and the Prize in Economics, Charles Kao, Willard Boyle and George Smith which is commonly identified with them, are shared the 2009 Nobel Prize for physics for work widely regarded as the most prestigious award one in fibre-optics and in semiconductors. Elinor can receive in those fields. The Nobel Peace Prize Ostrom and Oliver Williamson of the United conveys social prestige and is often politically con- States won the 2009 Nobel Economics Prize for troversial. their work on the organisation of cooperation in economic governance. Ostrom is the first woman Alfred Nobel to win the Economics Prize, which has been awarded since 1969. Alfred Bernhard Nobel was born October 21, 1833 in Stockholm Sweden. Nobel, who invented dy- Well known as ‘Venky’ in India’s scientific circles, namite, endowed a $9 million fund in his will. Ramakrishnan, has been a visiting lecturer at the The interest on this endowment was to be used as Indian Institute of Science (IISc) Bangalore, for awards for people whose work most benefited many years. He was born and schooled at humanity. He wanted the profit from his inven- Chidambaram, Tamil Nadu and graduated from tion to be used to reward human ingenuity. First M.S. University in Vadodara, Gujarat, before mov- awarded in 1901, the Nobel Prize is still the most ing to the United States for his Ph.D. from Ohio honored in the world. University. He is the seventh person of Indian origin to win the Nobel. In 1842 Nobel's family moved to St. Petersburg, The three scientists won the prize for their re- Russia where he obtained his education. He trav- search into ribosomes, which are protein-produc- eled widely as a young man, becoming fluent in ing structures found in all cells. Ramakrishnan five languages. Nobel was interested in literature Copyright © 2009 | WWW.UPSCPORTAL.COM 5
  6. 6. Section -1 (Article : Nobel Prize 2009) and wrote novels, poetry and plays in his spare Although Nobel's will established the prizes, his time. In the 1860s he began experiments with ni- plan was incomplete and, due to various other troglycerin in his father's factory. He tried many hurdles, it took five years before the Nobel Foun- ways to stabilize this highly volatile material. dation could be established and the first prizes Nobel discovered that a mix of nitroglycerin and awarded on 10 December 1901. As of December a fine porous powder called kieselguhr was most 31, 2007, the assets controlled by the Nobel Foun- effective. He named this mixture dynamite, and dation amounted to 3.628 billion Swedish kronor received a patent in 1867. He set up factories (approx. $560 million US Dollars) around the world to manufacture dynamite and other explosives. Construction and mining com- Selection Process panies, and the military ordered large quantities of this relatively safe explosive. Sales of dynamite The Prize nomination and selection process is long brought Nobel great wealth. His other chemical and rigorous. This is a key reason why the Prizes research provided valuable information on the have grown in importance over the years to be- development of artificial rubber, leather, silk and come the most important prizes in their field. precious stones. The Nobel laureates are selected by their respec- The Nobel Prize Awarders tive Nobel Committees. For the Prizes in Physics, Chemistry and Economics, a committee consists In his last will and testament, Alfred Nobel spe- of five members elected by The Royal Swedish cifically designated the institutions responsible for Academy of Sciences; for the Prize in Literature, the prizes he wished to be established: The Royal a committee of four to five members of the Swed- Swedish Academy of Sciences for the Nobel Prize ish Academy; for the Prize in Physiology or Medi- in Physics and Chemistry, Karolinska Institute for cine, the committee consists of five members se- the Nobel Prize in Physiology or Medicine, the lected by The Nobel Assembly, which consists of Swedish Academy for the Nobel Prize in Litera- 50 members elected by Karolinska Institute; for ture, and a Committee of five persons to be elected the Peace Prize, the Norwegian Nobel Commit- by the Norwegian Parliament (Storting) for the tee consists of five members elected by the Nor- Nobel Peace Prize. In 1968, the Sveriges Riksbank wegian Storting (the Norwegian parliament). In established the Sveriges Riksbank Prize in Eco- its first stage, several thousand people are asked nomics in Memory of Alfred Nobel. The Royal to nominate candidates. These names are scruti- Swedish Academy of Sciences was given the task nized and discussed by experts in their specific to select the Economics Prize Laureates starting disciplines until only the winners remain. This in 1969. slow and thorough process is arguably what gives the prize its importance. Despite this, there have Alfred Nobel's will been questionable awards and questionable omis- sions over the prize's century-long history. Forms, Five Nobel Prizes were instituted by the final will which amount to a personal and exclusive invita- of Alfred Nobel, a Swedish chemist and industri- tion, are sent to about three thousand selected alist, who was the inventor of the high explosive individuals to invite them to submit nominations. dynamite. Though Nobel wrote several wills dur- ing his lifetime, the last was written a little over a For the peace prize, inquiries are sent to such year before he died, and signed at the Swedish- people as governments of states, members of in- Norwegian Club in Paris on 27 November 1895. ternational courts, professors and rectors at uni- Nobel bequeathed 94% of his total assets, 31 mil- versity level, former Peace Prize laureates, cur- lion Swedish kronor, to establish and endow the rent or former members of the Norwegian Nobel five Nobel Prizes. (As of 2008 that equates to 186 Committee, among others. The Norwegian Nobel million US dollars.) Committee then bases its assessment on nomina- tions sent in before 3 February. The submission Copyright © 2009 | WWW.UPSCPORTAL.COM 6
  7. 7. Section -1 (Article : Nobel Prize 2009) deadline for nominations for Physics, Chemistry, discoveries that had withstood the test of time, Physiology or Medicine, Literature and Econom- but which occurred well before the one-year time ics is 31 January. Self-nominations and nomina- frame specified in Nobel's will. tions of deceased people are disqualified. The interval between the accomplishment of the The names of the nominees are never publicly an- achievement being recognized and the awarding nounced, and neither are they told that they have of the Nobel Prize for it varies from discipline to been considered for the Prize. Nomination records discipline. The prizes in Literature are typically are sealed for 50 years. In practice, some nomi- awarded to recognize a cumulative lifetime body nees do become known. It is also common for of work rather than a single achievement. In this publicists to make such a claim, founded or not. case the notion of "lag" does not directly apply. The prizes in Peace can also be awarded for a life- After the deadline has passed, the nominations are time body of work. However, they can also be screened by committee, and a list is produced of awarded for specific events. In this case, they are approximately 200 preliminary candidates. This awarded within a few years of the event. For in- list is forwarded to selected experts in the relevant stance, Kofi Annan was awarded the 2001 Peace field. They remove all but approximately 15 Prize just four years after becoming the Secretary- names. The committee submits a report with rec- General of the United Nations. On the other hand, ommendations to the appropriate institution. The 2008 winner Martti Ahtisaari won it "for his im- Assembly for the Physiology or Medicine Prize, portant efforts, on several continents and over for example, has 50 members. The institution more than three decades, to resolve international members then select prize winners by vote. conflicts." The selection process varies slightly between the Awards in the scientific disciplines of physics, different disciplines. The Literature Prize is rarely chemistry, and medicine require that the signifi- awarded to more than one person per year, cance of achievements being recognized is "tested whereas other Prizes now often involve collabo- by time." In practice it means that the lag between rators of two or three. the discovery and the award is typically on the order of 20 years and can be even longer. For ex- While posthumous nominations are not permit- ample, Subrahmanyan Chandrasekhar shared the ted, awards can occur if the individual died in the 1983 Nobel Prize in Physics for his work on stel- months between the nomination and the decision lar structure and evolution from the 1930s. Not of the prize committee. The scenario has occurred all scientists live long enough for their work to be twice: the 1931 Literature Prize of Erik Axel recognized. Some important scientific discoveries Karlfeldt, and the 1961 Peace Prize to UN Secre- are never considered for a Prize if the discoverers tary General Dag Hammarskjöld. As of 1974, lau- have died by the time the impact of their work is reates must be alive at the time of the October realized. announcement. There has been one laureate— Facts About Noble William Vickrey (1996, Economics)—who died after the prize was announced but before it could Since the establishment of the Nobel Prize, four be presented. people have received two Nobel Prizes: Nobel's will provides for prizes to be awarded in recognition for discoveries made during the pre- Maria Sklodowska-Curie: in Physics 1903, for the ceding year, and for the first years of the awards, discovery of radioactivity; and in Chemistry 1911, the discoveries recognized were recent. However, for the isolation of pure radium some awards were made for discoveries that were later discredited. Taking the discrediting of a rec- Linus Pauling: in Chemistry 1954, for his research ognized discovery as an embarrassment, the into the nature of the chemical bond and its ap- awards committees began to recognize scientific Copyright © 2009 | WWW.UPSCPORTAL.COM 7
  8. 8. Section -1 (Article : Nobel Prize 2009) plication to the elucidation of the structure of com- plex substances; and Peace 1962, for nuclear test- ban treaty activism; he is the only person to have » J. J. Thomson, awarded the Nobel prize for won two unshared Nobel Prizes. Physics in 1906, was the father of George Paget Thomson who was awarded the Nobel prize for John Bardeen: in Physics 1956, for the invention Physics in 1937. of the transistor; and Physics 1972, for the theory of superconductivity. » William Henry Bragg shared the Nobel prize in Physics in 1915 with his son, William Lawrence Frederick Sanger: in Chemistry 1958, for struc- Bragg. ture of the insulin molecule; and in Chemistry 1980, for virus nucleotide sequencing. » Niels Bohr won the Nobel prize in Physics in As a group, the International Committee of the 1922, and his son Aage Bohr won the Nobel prize Red Cross (ICRC) has received the Nobel Peace in Physics in 1975. Prize three times: in 1917, 1944, and 1963. The first two prizes were specifically in recognition of the group's work during the world wars, and the » Manne Siegbahn, who won the Nobel prize in third was awarded at the year of its 100-Year Physics in 1924, was the father of Kai Siegbahn Anniversary. who shared the Nobel prize in Physics in 1981. The United Nations High Commissioner for Refu- » Hans von Euler-Chelpin shared the Nobel prize gees (UNHCR) has won the Peace Prize twice: in in Chemistry in 1929 with Arthur Harden. His 1954 and 1981. son, Ulf von Euler, was awarded the Nobel prize in Physiology or Medicine in 1970. A number of families have included multiple laureates. » C.V. Raman who won the Nobel prize in Phys- » The Curie family claim the most Nobel ics in 1930, was the uncle of Subrahmanyan Chandrasekhar who won the Nobel prize in Phys- Prizes, with five: ics in 1983. » Maria Sklodowska-Curie, Physics 1903 and Chemistry 1911 » Arthur Kornberg shared with Severo Ochoa » Her husband Pierre Curie, Physics 1903 the 1959 Nobel prize in Physiology or Medicine » Their daughter Irène Joliot-Curie, Chemistry for their discovery of the mechanisms in the bio- 1935 logical synthesis of ribonucleic acid and deoxyri- bonucleic acid. Kornberg's son Roger won the 2006 » Their son-in-law Frederic Joliot-Curie, Chem- Nobel prize in Chemistry for his studies of the istry 1935 molecular basis of eukaryotic transcription. » In addition, Henry Labouisse, the husband of the Curies' second daughter Ève, was the director » Jan Tinbergen, who won the Nobel Prize for of UNICEF when it won the Nobel Peace Prize in Economics in 1969, was the brother of Nikolaas 1965. Tinbergen who shared the 1973 Nobel Prize in Physiology or Medicine with Konrad Lorenz and » Gunnar Myrdal (Economics, 1974) and wife Karl von Frisch. Alva Myrdal (Peace, 1982) Copyright © 2009 | WWW.UPSCPORTAL.COM 8
  9. 9. Section -1 (Article : Nobel Prize 2009) Noble 2009 Winners Nobel Peace Prize: US President Barack Obama for extraordinary efforts to strengthen interna- tional diplomacy and cooperation between peoples and for his work on nuclear non-proliferation. Physiology or Medicine: US trio Elizabeth Blackburn, Carol W Greider and Jack W Szostak won the Nobel Medicine Prize for discovering an enzyme which helps chromosomes in cells stay eternally young. Literature: Herta Mueller, a Romanian-born writer who produced tales of the disenfranchised and fought for free speech, has won the 2009 Nobel prize for literature. She made her debut in 1982 with a collection of short stories. Physics: Charles Kao, Willard Boyle and George Smith shared the 2009 Nobel Prize for physics for work in fibre-optics and in semiconductors. Chemistry: Indian-American Venkatraman Ramakrishnan has won Nobel Prize in chemistry. He shares it with Thomas Steitz, an American, and Ada Yonath, an Israeli. Economic Sciences: Elinor Ostrom and Oliver Williamson of the United States won the 2009 Nobel Economics Prize for their work on the organisation of cooperation in economic gover- nance. Copyright © 2009 | WWW.UPSCPORTAL.COM 9
  10. 10. Copyright © 2009 | WWW.UPSCPORTAL.COM 10
  11. 11. Section -1 (Article : G-20 Pittsburgh Summit) G-20 Pittsburgh Summit Concluded with Tough Message for the Finance Community By: Sant Prasad Gupta The G-20 Summit was held at Pittsburgh, USA rum for economic policy, it was announced dur- on September 24-25, 2009. The G-20 leaders’ state- ing the Summit. “Dramatic changes in the world ment from Pittsburgh has a tough message for the economy have not always been reflected in the finance community. global architecture for They have to raise far economic cooperation. more capital, say bye- This all started to bye to bonuses that soar change today,” the even if medium term White House said of the profits of the institu- makeover, “The G-20 tions they worked for leaders reached a his- do not, and face tough toric agreement to put regulation, starting the G-20 at the centre with full compliance of their efforts to work with the enhanced together to build a du- Basel II Capital Frame- rable recovery while work by 2011, includ- avoiding the financial ing a limit on borrow- fragilities that led to the ing. crisis.” The G-20 has large ambitions on energy security For India, this means a regular, perhaps annual or and climate change and its Pittsburgh twice-yearly pow-wows beyond the bi-laterals communiqué binds members to phase out subsi- and clubby tri-laterals (IBSA—India, Brazil, South dies on fossil fuels over the medium term. It also Africa) and quadri-laterals (BRIC—Brazil, Russia, recognises that the poor might need subsidies to India, China) that it was fostering. consume at least a minimal amount of energy and calls for cash transfers to target beneficiaries, while Collectively, the G-20 economies account for 85% abandoning the policy of subsidising fuels in gen- of global gross national product, 80% of world eral. This would bring pressure on India to aban- trade, and two-thirds of world population. don its present policy of subsidising kerosene and cooking gas and even diesel and petrol when their The new G20 will not have a permanent secre- prices rise above what the government thinks is tariat, and its chairmanship will be rotated annu- above the level of political tolerance. ally, with South Korea running the body next year and France in 2011 A final agreement on a re- Studies have shown that 40% of subsidised kero- vamped representation structure will be com- sene gets diverted for adulteration of diesel. This pleted in negotiations at the International Mon- not only foils the goal of offering subsidy on the etary Fund (IMF), set to conclude by January 2011. fuel but also reduces engine life across our trans- Under the proposal, the G-20 leaders will annu- port fleets and adds to pollution and diesel con- ally outline objectives for growth and then ask sumption through reduced fuel efficiency. the IMF to carry out a form of assessment or peer review to ensure member states are following the The Group of 20 (G-20), which includes develop- plan’s objectives ing nations like India, Brazil, and South Africa, will replace the Group of 7 (G-7), the mostly-west- Prime Minister Manmohan Singh returned from ern club of rich industrial nations, as a global fo- the G-20 Summit at Pittsburgh with some major Copyright © 2009 | WWW.UPSCPORTAL.COM 11
  12. 12. Section -1 (Article : G-20 Pittsburgh Summit) gains at hand that are making the rich nations now G 20 committed to act together to raise capital look at the developing world in a new light. It standards, to implement strong international com- was evident from the final communiqué issued by pensation standards aimed at ending practices that the G-20 leaders at the end of the summit that it lead to excessive risk-taking, to improve the over- reflected a lot of what Manmohan Singh had been the-counter derivatives market and to create more pointing out prior to the summit. powerful tools to hold large global firms to ac- count for the risks they take. Standards for large In some of the other aspects of global financial global financial firms should be commensurate structure, too, India’s stand was reflected in equal with the cost of their failure. For all these reforms, measure notably greater voting rights for devel- G 20 have set for ourselves strict and precise time- oping countries in the International Monetary tables. Fund (IMF). In fact, the developing countries, mainly India, China and Brazil, also managed to To reform the global architecture to meet the secure what was rather unthinkable even a de- needs of the 21st century. After this crisis, criti- cade ago a peer review of the economic policy cal players need to be at the table and fully framework of rich countries. vested in institutions to allow to cooperate to lay the foundation for strong, sustainable and G-20 Leaders Statement balanced growth. To launch a framework that lays out the poli- G 20 established the Financial Stability Board cies and the way we act together to generate (FSB) to include major emerging economies and strong, sustainable and balanced global growth. welcome its efforts to coordinate and monitor G 20 need a durable recovery that creates the progress in strengthening financial regulation. good jobs their people need. G 20 are committed to a shift in International G 20 need to shift from public to private sources Monetary Fund (IMF) quota share to dynamic of demand, establish a pattern of growth across emerging markets and developing countries of at countries that is more sustainable and balanced, least 5% from over-represented countries to un- and reduce development imbalances. G 20 pledge der-represented countries using the current quota to avoid destabilizing booms and busts in asset and formula as the basis to work from. Today G 20 credit prices and adopt macroeconomic policies, have delivered on their promise to contribute over consistent with price stability, that promote ad- $500 billion to a renewed and expanded IMF New equate and balanced global demand. G 20 will also Arrangements to Borrow (NAB). make decisive progress on structural reforms that foster private demand and strengthen long-run G 20 stressed the importance of adopting a dy- growth potential. namic formula at the World Bank which prima- rily reflects countries’ evolving economic weight G 20 Framework for Strong, Sustainable and Bal- and the World Bank’s development mission, and anced Growth is a compact that commits us to that generates an increase of at least 3% of voting work together to assess how our policies fit to- power for developing and transition countries, to gether, to evaluate whether they are collectively the benefit of under-represented countries. consistent with more sustainable and balanced growth, and to act as necessary to meet their com- While recognizing that over-represented countries mon objectives. will make a contribution, it will be important to protect the voting power of the smallest poor To make sure regulatory system for banks and countries. G 20 called on the World Bank to play other financial firms reins in the excesses that a leading role in responding to problems whose led to the crisis. Where reckless behavior and a nature requires globally coordinated action, such lack of responsibility led to crisis, G 20 will not as climate change and food security, and agreed allow a return to banking as usual. Copyright © 2009 | WWW.UPSCPORTAL.COM 12
  13. 13. Section -1 (Article : G-20 Pittsburgh Summit) that the World Bank and the regional develop- A Framework for Strong, Sustainable, and Bal- ment banks should have sufficient resources to anced Growth address these challenges and fulfill their mandates. G 20 has launched a Framework for Strong, Sus- To take new steps to increase access to food, tainable, and Balanced Growth. To put in place fuel and finance among the world’s poorest this framework, G 20 committed to develop a pro- while clamping down on illicit outflows. Steps cess whereby they set out their objectives, put to reduce the development gap can be a potent forward policies to achieve these objectives, and driver of global growth. together assess their progress. G 20 will ask the IMF to help them with its analysis of how their Over four billion people remain undereducated, respective national or regional policy frameworks ill-equipped with capital and technology, and in- fit together. sufficiently integrated into the global economy. G 20 need to work together to make the policy G 20 called on their Finance Ministers and Cen- and institutional changes needed to accelerate the tral Bank Governors to launch the new Frame- convergence of living standards and productivity work by November by initiating a cooperative in developing and emerging economies to the lev- process of mutual assessment of their policy frame- els of the advanced economies. To start, G 20 call works and the implications of those frameworks on the World Bank to develop a new trust fund to for the pattern and sustainability of global growth. support the new Food Security Initiative for low- G 20 believe that regular consultations, strength- income countries announced last summer. G 20 ened cooperation on macroeconomic policies, the will increase, on a voluntary basis, funding for exchange of experiences on structural policies, and programs to bring clean affordable energy to the ongoing assessment will promote the adoption of poorest, such as the Scaling Up Renewable En- sound policies and secure a healthy global ergy Program. economy. To phase out and rationalize over the medium term G 20 compact is that: inefficient fossil fuel subsidies while providing tar- » G-20 members will agree on shared policy ob- geted support for the poorest. Inefficient fossil fuel jectives. These objectives should be updated as subsidies encourage wasteful consumption, reduce conditions evolve. our energy security, impede investment in clean energy sources and undermine efforts to deal with the threat of climate change. » G-20 members will set out their medium-term policy frameworks and will work together to as- To maintain our openness and move toward sess the collective implications of their national greener, more sustainable growth. policy frameworks for the level and pattern of glo- bal growth and to identify potential risks to fi- G 20 will fight protectionism. G 20 are commit- nancial stability. ted to bringing the Doha Round to a successful conclusion in 2010. » G-20 Leaders will consider, based on the re- sults of the mutual assessment, and agree any ac- G 20 will spare no effort to reach agreement in tions to meet their common objectives. Copenhagen through the United Nations Frame- work Convention on Climate Change (UNFCCC) negotiations. Finally, G 20 agreed to meet in Canada in June 2010 and in Korea in November 2010. G 20 ex- pect to meet annually thereafter and will meet in France in 2011. Copyright © 2009 | WWW.UPSCPORTAL.COM 13
  14. 14. Section -1 (Article : G-20 Pittsburgh Summit) was institutionalized by the creation of the G-20 What is the G-20 in 1999. The Group of Twenty (G-20) Finance Ministers Membership and Central Bank Governors was established in 1999 to bring together systemically important in- The G-20 is made up of the finance ministers and dustrialized and developing economies to discuss central bank governors of 19 countries: key issues in the global economy. The inaugural Argentina, Australia, Brazil, Canada, China, meeting of the G-20 took place in Berlin, on De- France, Germany, India, Indonesia, Italy, Japan, cember 1516, 1999, hosted by German and Cana- Mexico, Russia, Saudi Arabia, South Africa, South dian finance ministers. Korea, Turkey, United Kingdom, United States of America Mandate The European Union, who is represented by the The G-20 is an informal forum that promotes open rotating Council presidency and the European and constructive discussion between industrial and Central Bank, is the 20th member of the G-20. To emerging-market countries on key issues related ensure global economic fora and institutions work to global economic stability. By contributing to together, the Managing Director of the Interna- the strengthening of the international financial tional Monetary Fund (IMF) and the President of architecture and providing opportunities for dia- the World Bank, plus the chairs of the Interna- logue on national policies, international co-opera- tional Monetary and Financial Committee and De- tion, and international financial institutions, the velopment Committee of the IMF and World G-20 helps to support growth and development Bank, also participate in G-20 meetings on an ex- across the globe. officio basis. The G-20 thus brings together im- portant industrial and emerging-market countries Origins from all regions of the world. Together, member countries represent around 90 per cent of global The G-20 was created as a response both to the gross national product, 80 per cent of world trade financial crises of the late 1990s and to a growing (including EU intra-trade) as well as two-thirds recognition that key emerging-market countries of the world's population. The G-20's economic were not adequately included in the core of glo- weight and broad membership gives it a high de- bal economic discussion and governance. Prior to gree of legitimacy and influence over the man- the G-20 creation, similar groupings to promote agement of the global economy and financial sys- dialogue and analysis had been established at the tem. initiative of the G-7. The G-22 met at Washing- ton D.C. in April and October 1998. Its aim was Achievements to involve non-G-7 countries in the resolution of global aspects of the financial crisis then affecting The G-20 has progressed a range of issues since emerging-market countries. Two subsequent 1999, including agreement about policies for meetings comprising a larger group of participants growth, reducing abuse of the financial system, (G-33) held in March and April 1999 discussed dealing with financial crises and combating ter- reforms of the global economy and the interna- rorist financing. The G-20 also aims to foster the tional financial system. The proposals made by the adoption of internationally recognized standards G-22 and the G-33 to reduce the world economy's through the example set by its members in areas susceptibility to crises showed the potential ben- such as the transparency of fiscal policy and com- efits of a regular international consultative forum bating money laundering and the financing of ter- embracing the emerging-market countries. Such rorism. In 2004, G-20 countries committed to new a regular dialogue with a constant set of partners higher standards of transparency and exchange of Copyright © 2009 | WWW.UPSCPORTAL.COM 14
  15. 15. Section -1 (Article : G-20 Pittsburgh Summit) information on tax matters. This aims to combat n 2004 Germany abuses of the financial system and illicit activities n 2005 China including tax evasion. The G-20 also plays a significant role in matters concerned with the re- n 2006 Australia form of the international financial architecture. n 2007 South Africa n 2007 Brazil The G-20 has also aimed to develop a common view among members on issues related to further Meetings and activities development of the global economic and finan- cial system and held an extraordinary meeting in It is normal practice for the G-20 finance minis- the margins of the 2008 IMF and World Bank ters and central bank governors to meet once a annual meetings in recognition of the current eco- year. The last meeting of ministers and governors nomic situation. At this meeting, in accordance was held in São Paulo, Brazil on 8-9 November with the G-20s core mission to promote open and 2008. The ministers' and governors' meeting is constructive exchanges between advanced and usually preceded by two deputies' meetings and emerging-market countries on key issues related extensive technical work. This technical work to global economic stability and growth, the Min- takes the form of workshops, reports and case stud- isters and Governors discussed the present finan- ies on specific subjects, that aim to provide minis- cial market crisis and its implications for the world ters and governors with contemporary analysis and economy. They stressed their resolve to work to- insights, to better inform their consideration of gether to overcome the financial turmoil and to policy challenges and options. deepen cooperation to improve the regulation, su- pervision and the overall functioning of the worlds Towards the end of 2008 Leaders of the G-20 financial markets. Countries meet in Washington. This meeting re- mitted follow up work to Finance Ministers. In Chair addition to their November meeting in order to take forward this work in advance of the Leaders Unlike international institutions such as the Or- summit in London on 2nd April Finance Minis- ganization for Economic Co-operation and Devel- ters and Central Bank Governors will also meet in opment (OECD), IMF or World Bank, the G-20 March 2009. A deputies meeting will be held in (like the G-7) has no permanent staff of its own. February 2009 to prepare for the Ministers meet- The G-20 chair rotates between members, and is ing. selected from a different regional grouping of countries each year. In 2009 the G-20 chair is Interaction with Other International the United Kingdom, and in 2010 it will be South Korea. The chair is part of a revolving three-mem- Organizations ber management Troika of past, present and fu- The G-20 cooperates closely with various other ture chairs. The incumbent chair establishes a tem- major international organizations and fora, as the porary secretariat for the duration of its term, potential to develop common positions on com- which coordinates the group's work and organizes plex issues among G-20 members can add politi- its meetings. The role of the Troika is to ensure cal momentum to decision-making in other bod- continuity in the G-20's work and management ies. The participation of the President of the World across host years. Bank, the Managing Director of the IMF and the chairs of the International Monetary and Finan- Former G-20 Chairs: cial Committee and the Development Committee n 1999-2001 Canada in the G-20 meetings ensures that the G-20 pro- n 2002 India cess is well integrated with the activities of the n 2003 Mexico Bretton Woods Institutions. The G-20 also works Copyright © 2009 | WWW.UPSCPORTAL.COM 15
  16. 16. Section -1 (Article : G-20 Pittsburgh Summit) with, and encourages, other international groups and organizations, such as the Financial Stability Forum, in progressing international and domestic economic policy reforms. In addition, experts from private- sector institutions and non-government organisations are invited to G-20 meetings on an ad hoc basis in order to exploit synergies in analyzing selected topics and avoid overlap. External Communication The country currently chairing the G-20 posts details of the group's meetings and work program on a dedicated website. Although participation in the meetings is reserved for members, the public is informed about what was discussed and agreed immediately after the meeting of ministers and governors has ended. After each meeting of ministers and governors, the G-20 publishes a communiqué which records the agreements reached and measures outlined. Material on the forward work program is also made public. G-20 Working Groups The November 15th Washington Summit, on the international response to the global financial and economic crisis, tasked G-20 Finance Ministers to take forward work in the following five areas: n Strengthening transparency and accountability n Enhancing sound regulation n Promoting integrity in financial markets n Reinforcing international cooperation n Reforming the International Financial Institutions As Chair of the G-20 in 2009 the UK, working closely with Brazil and Korea 2008 and 2010 Chairs respec- tively, has established four working groups to advance this work for the next Leaders Summit on 2 April in London. Each working group is co-chaired by two senior officials from the G-20, one from a developed and one from an emerging market economy. Each G-20 country is represented on each working group. Experts from relevant international financial institutions, standard setting bodies, non G-20 countries, business and academia have also been invited by co-chairs to input into the work of the groups. Copyright © 2009 | WWW.UPSCPORTAL.COM 16
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  18. 18. Section -1 (Article : Fifteenth ASEAN Summit ) Fifteenth ASEAN Summit New Vision for a Wider Asian Free Trade Zone By: Dr. Sachchidanand Fifteenth ASEAN Summit has held in Cha-Am Tokyo toward a more Asia-centered Japanese for- Hua Hin, Thailand on 23-25 October 2009. After eign policy. a year of uncertain economic prospects, a sense of cautious optimism appeared to have returned to Japan places the U.S.-Japan alliance at the foun- Asia’s leaders as they returned to the business of dation of its diplomacy,” Yukio Hatoyama, the increasing trade within the region, lowering tar- Japanese prime minister, told the leaders at the iffs and discussing summit meeting. plans for a wider There are several Asian free trade zone. proposals for a fu- ture East Asian free The Thai prime min- trade zone the Japa- ister, Abhisit nese version is Vejjajiva, said a major called the East concern raised by Asian Community leaders was finding but all remain vague new avenues for eco- and nascent con- nomic growth that are cepts that leaders not dependent on the say are a long way markets of the United from reality. The States and Europe. He said that the old growth proposals are often compared to a European Union- model where, simply put, we have still to rely on style single market, but analysts say a pan-Asian consumption in the West for goods and services economic bloc would be unlikely to have E.U.- produced here, we feel will no longer serve us. style open borders, free movement of labor and common security policies. A statement issued after the final meetings said the leaders were encouraged that the global China did not publicly offer its vision of an East economy had shown signs of recovery but urged Asian community, but a communiqué issued after governments to remain vigilant. a meeting of what is known as Asean plus three the leaders of Asean, China, Japan and South Ko- Leaders discussed many other issues, ranging from rea said those 13 countries would form the main climate change and the formation of a human vehicle towards the long-term goal of building an rights commission in Southeast Asia. But there East Asian Community. That would seem to ex- were also reminders of the tensions accompany- clude a role for the United States. ing Asia’s economic rise, especially jockeying by Japan and China for the top leadership role in the Asean leaders signed an agreement for China to region. set up an Asean-China center in Beijing, financed by China. Asean leaders said they “commended” The Japanese and Chinese governments have com- and supported China’s efforts to expand the use of peting proposals to finance infrastructure projects its currency, the yuan, instead of the dollar in some in Southeast Asia, and the two nations appeared regional trade transactions. And the leaders said to disagree at the meeting about the future of an they “welcomed” China’s initiatives to build roads East Asian free trade zone. The Japanese delega- in south-central Myanmar and western Cambo- tion stressed the importance of the involvement dia and its financing of a bridge over the Mekong of the United States, perhaps in part to appease River between Laos and the Thai town of Chiang concerns in Washington over possible shifts in Copyright © 2009 | WWW.UPSCPORTAL.COM 18
  19. 19. Section -1 (Article : Fifteenth ASEAN Summit ) Khong, a project delayed in part by the economic ment and response and pandemic diseases. crisis. China told Asean leaders that they were eligible for a $15 billion Southeast Asian infra- The region's increasing clout in global affairs is structure loan program sponsored by the Chinese increasingly recognised. In this regard, the con- government. tinued participation of the ASEAN Chair and the Secretary-General of ASEAN in future G-20 Sum- The leaders said they were well on track for the mits in order to ensure close coordination between Asean free-trade area by January, 2010. The agree- its regional approaches and the global approach ment, long in the making, eliminates tariffs for 87 was strongly supported by ASEAN Dialogue Part- percent of imports within Asean countries. Asean’s ners. The ASEAN Chair and the Secretary-Gen- 10 member countries are Brunei, Cambodia, Laos, eral of ASEAN had attended the previous two G- Indonesia, Malaysia, Myanmar, the Philippines, 20 Summits in London and Pittsburgh. Singapore, Thailand and Vietnam. Thailand will end its Chairmanship at the end of Summits closed with a resounding the year, with Viet Nam as the incoming Chair chorus for 2010. The 15th ASEAN Summit and Re- ASEAN Plus Three Summit lated Summits closed with a re- sounding chorus that the region was Apart from reviewing the progress of cooperation well on course towards its commu- to date, the 12th ASEAN Plus Three Summit nity-building efforts. In a well-re- largely focused on deepening regional cooperation ceived move, ASEAN's Dialogue and on reviving growth. Partners extended further support for regional in- tegration and its aim of establishing an ASEAN On the financial sector, the Summit discussed the Community by 2015. implementation of the Chiang Mai Initiative Multilateralisation (CMIM) and reiterated their The Secretary-General of ASEAN Dr Surin call for the CMIM, with a total fund value of USD Pitsuwan said that the ASEAN Community is well 120 billion, to be operational by the end of the on course and our Dialogue Partners are fully com- year. mitted to help us in our drive towards its comple- tion. The Dialogue Partners had pledged their sup- The Asian Bond Markets Initiative, a mechanism port and are convinced of the centrality and the for the financing of development projects, and the continued viability of ASEAN. proposal for an East Asian Free Trade Area (FTA), were also on the table. Much of the discussions had focused on the ben- efits of enhancing intra-regional connectivity as The 12th ASEAN Plus Three Summit issued the it would contribute towards promoting ASEAN Cha-am Hua Hin Statement on ASEAN Plus Three centrality and help build the ASEAN Community. Cooperation on Food Security and Bio-Energy De- This is in line with the theme of the Summits: velopment. The statement aims to enhance food 'Enhancing Connectivity, Empowering Peoples'. production capabilities and promote the harmonisation of safety and bio-energy produc- The Leaders underscored the need for closer co- tion standards. The statement also encompasses operation both within ASEAN and also with its the establishment of the ASEAN Plus Three Emer- Dialogue Partners to address critical issues such gency Rice Reserve mechanism. as the impact and recovery from the global finan- cial crisis, climate change and food and energy The 12th ASEAN Plus Three Summit further dis- security. They also urged for greater coordination cussed youth exchange, especially in terms of in meeting challenges related to disaster manage- Copyright © 2009 | WWW.UPSCPORTAL.COM 19
  20. 20. Section -1 (Article : Fifteenth ASEAN Summit ) cross-cultural education, climate change and Asean and India (signed in 2003). health-related issues. India signs Free Trade Agreement with Promotion and Protection of the Rights ASEAN members of Women and Children India signed a Freed Trade Agreement (FTA) with Just shortly after the establishment of the ASEAN the ASEAN members. It could be possible after Intergovernmental Commission on Human Rights the final obstacle on the Free Trade Agreement (AICHR), another mechanism on the rights of between India and ASEAN members was re- women and children, the ASEAN Commission on moved, as the last country; Vietnam also signed the Rights of Women and Children, will be set up on the agreement. in 2010. This and other regional mechanisms shall be part This agreement is aimed to help fighting the situ- and parcel of the ASEAN human rights regime ation like global crunch, as there will be mini- under the single umbrella of the AICHR," H.E. mum duties on goods amongst their trading in Abhisit Vejjajiva, Prime Minister of Thailand, said ASEAN countries. The trade size between India in his remarks. and ASEAN countries is huge and its size is around 48 billion dollars. This Free Trade will come into The terms of reference of the ASEAN Commis- force from July 2010. sion on the Rights of Women and Children has recently been approved by the ASEAN Ministe- India-ASEAN round table rial Meeting on Social Welfare and Development. Each Member State is to appoint one representa- Prime Minister Manmohan Singh suggested the tive on women's rights and one on children's rights establishment of an India-ASEAN round table to by next year. provide policy inputs to the governments on fu- ture areas of cooperation. Addressing the seventh ASEAN-India business council India-ASEAN Summit he said the round table should comprise think tanks, policy makers, schol- The Association of Southeast Asian Nations ars, journalists and business representatives to (ASEAN) said an ASEAN-India business council bridge the knowledge gap. would be set up to strengthen business networks and opportunities. It also said it would step up ef- He also sought intensified negotiations on an open forts for concluding Free Trade Agreement nego- skies policy and further simplification of the visa tiations in services and investment sectors with regime to encourage business and tourist travel India. This comes following the signing of the between India and ASEAN countries. He also pro- India-ASEAN Free Trade Agreement in August posed greater exchanges of youths and MPs. 2009. Manmohan Singh said India was ready to share The ASEAN said that FTA agreement is expected Satellite data with the 10-member Association of to create a free trade area comprising about 1.7 Southeast Asian Nations (ASEAN) to manage natu- billion people with a combined GDP of approxi- ral disasters and to launch small satellites, scien- mately 2.75 trillion dollar as of 2008. tific instruments and payloads for experiments in remote sensing. The ASEAN said it had instructed its officials to exert maximum effort towards concluding nego- tiations in services and investment to complete the mandate in the Framework Agreement on Comprehensive Economic Cooperation between Copyright © 2009 | WWW.UPSCPORTAL.COM 20
  21. 21. Section -1 (Article : Fifteenth ASEAN Summit ) measures to encourage bilateral trade and invest- Five key initiatives for boosting India- ment, with the hope that bilateral annual trade ASEAN ties would reach 60 billion dollars by 2010. Emphasizing India’s engagement with the ASEAN All About ASEAN countries as a key element of his country’s vision of an Asian economic community that is based on The Association of Southeast Asian Nations, or an open and inclusive architecture, visiting Indian ASEAN, was established on 8 August 1967 in Prime Minister, Dr. Manmohan Singh said New Bangkok with the signing of the ASEAN declara- Delhi wishes to partner ASEAN in realizing this tion (Bangkok Declaration) by the Founding Fa- vision for mutual benefit, mutual prosperity and thers of ASEAN, namely, Indonesia, Malaysia, the mutual respect. Addressing the Seventh India- Philippines, Singapore, and Thailand. ASEAN Summit Dr. Singh described the ASEAN region as being synonymous with dynamic eco- Brunei Darussalam then joined on 8 January 1984, nomic growth. Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999, Lauding the conclusion of the India-ASEAN making up what is today the ten Member States Trade-in-Goods Agreement in August 2009 as a of ASEAN. major first step 'in our objective of creating an The ASEAN declaration states that the aims and India-ASEAN Regional Trade and Investment purposes of the Association are: (1) to accelerate Area,” Singh said the journey towards it was not economic growth, social progress and cultural de- easy, and having succeeded in overcoming sev- velopment in the region and (2) to promote re- eral difficulties, it gave hope for the future. He gional peace and stability through abiding respect also welcomed the healthy growth of India- for justice and the rule of law in the relationship ASEAN trade despite the recent global economic among countries in the region and adherence to downturn. He said that the volume of trade stood the principles of the United Nations Charter. at 48 billion US dollars in 2008. ASEAN Community He also said that India attached high importance to the early conclusion of negotiations on the In 2003, at the 9th ASEAN Summit, the ASEAN Trade-in-Services and Investment Agreement. Leaders resolved that an ASEAN Community be established by 2020. However, in 2007, during the China- India resolve differences on 12th ASEAN Summit, they decided to accelerate border issues the establishment by 2015. Chinese Prime Minister Wen Jiabao and his In- The ASEAN Community is comprised of three pil- dian counterpart Manmohan Singh agreed to lars, namely the ASEAN Political-Security Com- gradually narrow differences on border issues be- munity, ASEAN Economic Community and tween the two countries. The leaders who met on ASEAN Socio-Cultural Community. Each pillar the sidelines of the ongoing ASEAN-related sum- has its own Blueprint, and, together with the Ini- mits also resolved to try to ensure peace and sta- tiative for ASEAN Integration (IAI) Strategic bility in the border area, as it would be conducive Framework and IAI Work Plan Phase II (2009- to resolving the border issues and furthering bi- 2015), they form the Roadmap for an ASEAN lateral cooperation. Community 2009-2015. The two leaders discussed issues of common con- cern during their meeting on the sidelines of the ASEAN Summit. The two sides also agreed to take Copyright © 2009 | WWW.UPSCPORTAL.COM 21
  22. 22. Section -1 (Article : Fifteenth ASEAN Summit ) ASEAN Political Security Community (APSC) Aims to ensure that the peoples and Member States of ASEAN live in peace with one another and with the world at large in a just, democratic and harmonious environment. ASEAN Economic Community (AEC) Aims to transform ASEAN into a stable, prosperous, and highly competitive region with equitable eco- nomic development, and reduced poverty and socio-economic disparities. ASEAN Socio-Cultural Community (ASCC) Aims to contribute to realising an ASEAN Community that is people-oriented and socially responsible with a view to achieving enduring solidarity and unity among the peoples and Member States of ASEAN. It seeks to forge a common identity and build a caring and sharing society which is inclusive and where the well-being, livelihood, and welfare of the peoples are enhanced. ASEAN Charter The ASEAN Charter serves as a firm foundation in achieving the ASEAN Community by providing legal status and institutional framework for ASEAN. It also codifies ASEAN norms, rules and values; sets clear targets for ASEAN; and presents accountability and compliance. The ASEAN Charter entered into force on 15 December 2008. A gathering of the ASEAN Foreign Minis- ters was held at the ASEAN Secretariat in Jakarta to mark this very historic occasion for ASEAN. Fundamental principles The Treaty of Amity and Cooperation in Southeast Asia (TAC) of 1976 also contains the following fundamental principles which ASEAN Member States abide by in their relations with one another: n Mutual respect for the independence, sovereignty, equality, territorial integrity, and national identity of all nations; n The right of every State to lead its national existence free from external interference, subversion or coercion; n Non-interference in the internal affairs of one another; n Settlement of differences or disputes by peaceful manner; n Renunciation of the threat or use of force; and n Effective cooperation among themselves. Copyright © 2009 | WWW.UPSCPORTAL.COM 22
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  24. 24. Section -1 (Article : Global Financial Stability Report ) Global Financial Stability Report Financial Stability has Improved, but Risks Remain Elevated By: Avadhesh Kumar Pandey International Monetary Fund (IMF) has intro- duced it’s new report on Global financial stability Tail Risks in Emerging Markets have in Oct 2009.According to report, Global financial Declined stability has improved following unprecedented policy actions and signs of economic recovery. Still, Asia and Latin America have benefited most from overall risks remain elevated and the risk of re- the stabilization of core markets and a recovery in versal remains significant. IMF estimate of global portfolio inflows. However, refinancing and de- losses arising from the crisis for 2007-10 now fault risks in the corporate sector remain relatively stands at roughly $3.4 trillion (around $600 bil- high, with corporates facing a foreign-currency lion lower than the last GFSR), largely due to ris- debt refinancing burden of $400 billion in the next ing securities values. two years. The situation is most acute in emerg- ing Securities writedowns by financials have begun Europe, where corporate revenues are declining to taper, but credit deterioration will continue to sharply as a result of the recession and several large lead to higher loan losses over the next few years. defaults have already occurred, but is also a con- Bank writedowns on holdings of loans and secu- cern for smaller, leveraged corporations in Asia rities realized between mid-2007 and mid-2009 and Latin America. Countries heavily dependent have amounted to $1.3 trillion. We estimate that on external financing and cross-border funding are $1.5 trillion of actual and potential writedowns most vulnerable. through end-2010 has yet to be recognized. While the capital positions and outlook for banks have Transfer of Risk from the Private Sector improved significantly since the last GFSR, earn- ings are not expected to fully offset forthcoming to Public Balance Sheets writedowns. Banks have enough capital to sur- vive, but they remain under deleveraging pres- The transfer of risk from the private sector to pub- sure. With steady-state earnings likely to be lower lic balance sheets raises concerns that longer-term in the post-crisis environment, stronger action is interest rates may face upward pressure unless gov- needed to bolster bank capital and earnings ca- ernments credibly commit to medium-term fiscal pacity to support lending. sustainability and anchor expectations. While net sovereign issuance is expected to decline in 2010– 12 relative to the projections for 2009, it is likely Private Sector Credit Growth to remain well above the 2002–07 average, as fis- cal deficits remain high (Figure 4). Historical panel Private sector credit growth has continued to con- data analysis indicates that a persistent 1 percent- tract across the major economies as weak activity age and household deleveraging restrain private sec- point increase in the fiscal deficit relative to GDP tor credit demand and the financing capacity of leads to a 10 to 60 basis point increase in longterm both the bank and nonbank sectors remains lim- interest rates. ited (Figure 3). However, total borrowing needs are not decelerating as rapidly, due to burgeoning public sector deficits. The likely result is con- strained credit availability. Continued support by central banks may be required to help alleviate this constraint. Copyright © 2009 | WWW.UPSCPORTAL.COM 24
  25. 25. Section -1 (Article : Global Financial Stability Report ) While Systemic Risks have Declined, Most are represented by other member states on the Policy Challenges are Significant a 24-member Executive Board but all member countries belong to the IMF's Board of Governors. Policymakers need to (i) ensure sufficient credit growth to support the nascent economic recov- Current Scenario ery; (ii) devise appropriate exit strategies; (iii) manage risks associated with sovereign balance The IMF's influence in the global economy steadily sheet pressures; and (iv) maintain a balance be- increased as it accumulated more members. The tween regulation and market forces in reducing number of IMF member countries has more than future systemic risks. Moving toward the medium- quadrupled from the 44 states involved in its es- term, policymakers should seek to restore market tablishment, reflecting in particular the attain- discipline, address risks posed by systemic insti- ment of political independence by many develop- tutions, institute a macroprudential policy ap- ing countries and more recently the collapse of proach, and strengthen the oversight of cross-bor- the Soviet bloc. The expansion of the IMF's mem- der financial institutions. bership, together with the changes in the world economy, have required the IMF to adapt in a The International Monetary Fund variety of ways to continue serving its purposes effectively. The International Monetary Fund (IMF) is an in- ternational organization that oversees the global In 2008, faced with a shortfall in revenue, the In- financial system by following the macroeconomic ternational Monetary Fund's executive board policies of its member countries, in particular those agreed to sell part of the IMF's gold reserves. On with an impact on exchange rates and the balance April 27, 2008, IMF Managing Director Domin- of payments. It is an organization formed with a ique Strauss-Kahn welcomed the board's decision stated objective of stabilizing international ex- April 7, 2008 to propose a new framework for the change rates and facilitating development. It also fund, designed to close a projected $400 million offers highly leveraged loans mainly to poorer budget deficit over the next few years. The bud- countries. Its headquarters are located in Wash- get proposal includes sharp spending cuts of $100 ington, D.C., United States. The current chief million until 2011 that will include up to 380 staff economist is Olivier Blanchard. dismissals. The International Monetary Fund was created in At the 2009 G-20 London summit, it was decided July 1944, originally with 45 members, with a goal that the IMF would require additional financial to stabilize exchange rates and assist the recon- resources to meet prospective needs of its mem- struction of the world's international payment ber countries during the ongoing global crisis. As system. Countries contributed to a pool which part of that decision, the G-20 leaders pledged to could be borrowed from, on a temporary basis, by increase the IMF's supplemental cash tenfold to countries with payment imbalances. $500 billion, and to allocate to member countries another $250 billion via Special Drawing Rights. The IMF describes itself as "an organization of 186 countries (Kosovo being the 186th, as of June 29, Data Dissemination Systems 2009), working to foster global monetary coop- eration, secure financial stability, facilitate inter- In 1995, the International Monetary Fund began national trade, promote high employment and work on data dissemination standards with the sustainable economic growth, and reduce pov- view of guiding IMF member countries to dissemi- erty". With the exception of Taiwan (expelled in nate their economic and financial data to the pub- 1980), North Korea, Cuba (left in 1964), Andorra, lic. The International Monetary and Financial Monaco, Liechtenstein, Tuvalu and Nauru, all UN Committee (IMFC) endorsed the guidelines for the member states participate directly in the IMF. dissemination standards and they were split into Copyright © 2009 | WWW.UPSCPORTAL.COM 25
  26. 26. Section -1 (Article : Global Financial Stability Report ) two tiers: The General Data Dissemination Sys- IMF's Articles of Agreement and to fulfil the ob- tem (GDDS) and the Special Data Dissemination ligations of IMF membership. Similarly, any mem- Standard (SDDS). ber country can withdraw from the Fund, al- though that is rare. For example, in April 2007, The International Monetary Fund executive board the president of Ecuador, Rafael Correa announced approved the SDDS and GDDS in 1996 and 1997 the expulsion of the World Bank representative respectively and subsequent amendments were in the country. A few days later, at the end of published in a revised “Guide to the General Data April, Venezuelan president Hugo Chavez an- Dissemination System”. The system is aimed pri- nounced that the country would withdraw from marily at statisticians and aims to improve many the IMF and the World Bank. Chavez dubbed both aspects of statistical systems in a country. It is also organisations as “the tools of the empire” that part of the World Bank Millennium Development “serve the interests of the North”. As of June 2009, Goals and Poverty Reduction Strategic Papers. both countries remain as members of both organisations. Venezuela was forced to back down The IMF established a system and standard to because a withdrawal would have triggered de- guide members in the dissemination to the public fault clauses in the country's sovereign bonds. of their economic and financial data. Currently there are two such systems: General Data Dissemi- A member's quota in the IMF determines the nation System (GDDS) and its superset Special amount of its subscription, its voting weight, its Data Dissemination System (SDDS), for those access to IMF financing, and its allocation of Spe- member countries having or seeking access to in- cial Drawing Rights (SDRs). The United States has ternational capital markets. The primary objec- exclusive veto power. A member state cannot tive of the GDDS is to encourage IMF member unilaterally increase its quota—increases must be countries to build a framework to improve data approved by the Executive Board and are linked quality and increase statistical capacity building. to formulas that include many variables such as This will involve the preparation of metadata de- the size of a country in the world economy. For scribing current statistical collection practices and example, in 2001, China was prevented from in- setting improvement plans. Upon building a creasing its quota as high as it wished, ensuring it framework, a country can evaluate statistical remained at the level of the smallest G7 economy needs, set priorities in improving the timeliness, (Canada). In September 2005, the IMF's member transparency, reliability and accessibility of finan- countries agreed to the first round of ad hoc quota cial and economic data. Some countries initially increases for four countries, including China. On used the GDDS, but lately upgraded to SDDS. March 28, 2008, the IMF's Executive Board ended a period of extensive discussion and negotiation Membership Qualifications over a major package of reforms to enhance the institution's governance that would shift quota and Any country may apply for membership to the voting shares from advanced to emerging markets IMF. The application will be considered first by and developing countries. The Fund's Board of the IMF's Executive Board. After its consideration, Governors must vote on these reforms by April the Executive Board will submit a report to the 28, 2008. Board of Governors of the IMF with recommen- dations in the form of a "Membership Resolution." IMF About India These recommendations cover the amount of quota in the IMF, the form of payment of the sub- The International Monetary Fund said on Oct 29, scription, and other customary terms and condi- 2009 that pick up in inflationary expectations sug- tions of membership. After the Board of Gover- gest that demand pressures are already pushing nors has adopted the "Membership Resolution," up inflation in India. "A pick up in core inflation the applicant state needs to take the legal steps and inflation expectations suggests that demand required under its own law to enable it to sign the pressures are already playing a role in pushing up Copyright © 2009 | WWW.UPSCPORTAL.COM 26
  27. 27. Section -1 (Article : Global Financial Stability Report ) inflation in India," IMF's Regional Outlook for Asia ery is robust and self-sustaining and ensuring that and Pacific released today said. IMF said in some the accommodative policies do not ignite infla- sectors recovery is advancing so rapidly that out- tion pressures. put gaps are reducing and pressures are emerging. "In India, for example industrial production is re- India and the IMF covering rapidly, and core inflation and inflation expectations are rising," it said. India's industrial India and the IMF have had a friendly relation- growth has recovered to a 22-month high of 10.4% ship, which has been beneficial for both. The IMF in August compared with 1.7% a year ago. The has provided India with loans over the years and multilateral funding agency also said it saw up- this has helped the country to grow. The IMF has side to its forecasts on India's growth in 2009 and also praised India for it has been able to maintain 2010 as signs of recovery are broadening. In In- average growth rate of its economy. India and the dia, there are upside risks to growth projections IMF has a positive relationship. The IMF has pro- for both this year and the next as signs of recov- vided financial assistance to India, which has ery are broadening and adverse impact of the helped in boosting the country's economy. The monsoon is likely to be smaller than anticipated. IMF praised the country for it was able to avoid the Asian Financial Crisis in 1999 and was also IMF had earlier this month projected the Indian able to maintain the average rate of growth of its economy to grow 5.4% in 2009 and 6.4% in 2010. economy. The southwest monsoon, the lifeline of India's ag- riculture, was 23% below normal this year, the International Monetary Fund said that the rea- worst in 37 years. The poor rains are likely to bring sons behind the economy growth of India are that down rice output, India's main summer crop, by the RBI has been able to control inflation and has 10-15 million tonne. The normalisation of finan- also handled its monetary policies very skillfully. cial market conditions is expected to support re- The IMF has suggested that India can become a bound of private investment in India and sustain financial super power by bringing in more reforms demand even as fiscal stimulus wanes. in its economic policies that will increase its growth rate to 8%. The relationship between the Asian Outlook IMF and India has grown strong over the years. In fact, the country has turned into a creditor to IMF projected the Asian economy to grow 2.8% the IMF and has stopped taking loans from it. In- and 5.8% in 2009 and 2010, respectively, mainly dia and IMF must continue to boost their rela- driven by China and India. Emerging Asia is ex- tionship this way, as it will prove to be advanta- pected to grow 5.1% and 7.0% in 2009 and 2010. geous for both. However, if China and India are excluded, the growth in emerging Asia will come down to (- )0.8% in 2009 and 3.8% in 2010. The report said Asia has rebounded from the depth of the global financial crisis. "The 'green shoots' recovery ap- pears more firmly rooted in Asia than in other regions. Not only are they more prevalent, but they have also appeared earlier, and have pro- gressed further," the report said. The global con- ditions are expected to continue to improve in 2010 with western economies progressing from stabilisation to recovery. But the recovery is ex- pected to be sluggish one. The report said the main concern for Asian policy makers is to find the bal- ance between supporting growth until the recov- Copyright © 2009 | WWW.UPSCPORTAL.COM 27
  28. 28. Aspirants Times Previous Issues VOL.1 VOL.2 VOL.3 VOL.4 Copyright © 2009 | WWW.UPSCPORTAL.COM 28
  29. 29. Section -1 (Article : Hindi Article) By: Dr. Divya » » » » » » Copyright © 2009 | WWW.UPSCPORTAL.COM 29
  30. 30. Section -1 (Article : Hindi Article) ºÉƇ´ÉvÉÉxÉ (73´ÉÉÆ) ºÉÆ„ÉÉävÉxÉ +‡vɇxɪɨÉ, 1992 Eä {Éɇ®iÉ VÉxÉiÉÉ E É |ɇiɇxɇvÉi´É E ® ®½ä ½é* +ɇJÉ®E É® {ÉÆSÉɪÉiÉÒ ½ÉäxÉä ºÉä nä„É Eä ºÉÆPÉÒªÉ ±ÉÉäE iÉÉƇjÉE f ÉÆSÉä ¨Éå BE xÉB ® ÉVÉ E Éä ºÉÆ´ÉèvÉɇxÉE +‡vÉE É® |ÉÉ{iÉ ½Éä ½Éä MɪÉÉ VÉ¤É ªÉÖMÉ E É ºÉÚjÉ{ÉÉiÉ ½Ö+É +Éè® {ÉÆSÉɪÉiÉÒ ® ÉVÉ ºÉƺlÉÉ+ÉäÆ 1992 ¨ÉäÆ ºÉƺÉn Eä nÉäxÉÉäÆ ºÉnxÉÉäÆ xÉä ºÉƇ´ÉvÉÉxÉ ( 73´ÉÉÆ E Éä ºÉÆ´ÉèvÉɇxÉE nVÉÉÇ |ÉÉ{iÉ ½Ö+É * <ºÉ +‡vɇxÉªÉ¨É E Ò ºÉÆ„ÉÉävÉxÉ) ‡´ÉvÉäªÉE E Éä {ÉÉºÉ E ® ‡nªÉÉ* 24 +|Éè±É, ‡xɨxɇ±É‡JÉiÉ ¨ÉÖJªÉ ‡´É„Éä¹ÉiÉÉBÆ ½é - OÉÉ¨É ºÉ¦ÉÉ BE 1993 ºÉä ºÉƇ´ÉvÉÉxÉ (73´ÉÉÆ ºÉÆ„ÉÉävÉxÉ) +‡vɇxɪɨÉ, 1992 BäºÉÉ ‡xÉE ÉªÉ ½ÉäMÉÉ, ‡VɺɨÉå OÉÉ¨É ºiÉ® {É® {ÉÆSÉɪÉiÉ |ɦÉÉ´ÉÒ ½Éä MɪÉÉ* 73´Éä ºÉƇ´ÉvÉÉxÉ ºÉÆ„ÉÉävÉxÉ xÉä MÉÉÄ´É, IÉäjÉ ¨Éå ¨ÉiÉnÉiÉÉ+ÉäÆ Eä ° {É ¨Éå {ÉÆVÉÒEÞ iÉ ºÉ¦ÉÒ ´ªÉ‡H ¤±ÉÉìE iÉlÉÉ ‡WɱÉÉ ºiÉ® {É® {ÉÆSÉɪÉiÉäÆ ¨ÉÖ½èªÉÉ E ® É<Ç* „Éɇ¨É±É ½ÉåMÉä * OÉÉ¨É ºÉ¦ÉÉ ® ÉVªÉ ‡´ÉvÉÉxɨÉhb±É uÉ® É |ÉiªÉäE {ÉÉÄSÉ ºÉÉ±É ¤ÉÉn <ºÉEä SÉÖxÉÉ´É +‡xÉ´ÉɪÉÇ ½è* ‡xÉvÉÉLJ® iÉ „ɇH ªÉÉå E É |ɪÉÉäMÉ iÉlÉÉ E ɪÉÉç E Éä ºÉ¨{ÉzÉ ¨É‡½±ÉÉ+ÉäÆ Eä ‡±ÉB E ¨É ºÉä E ¨É BE ‡iɽÉ<Ç ºÉÒ] äÆ E ® äMÉÒ; 20 ±ÉÉJÉ ºÉä +‡vÉE VÉxɺÉÆJªÉÉ ´ÉɱÉä ºÉ¦ÉÒ +É® ‡IÉiÉ E ® nÒ MÉ<ÆÇ* EÖ U ® ÉVªÉÉäÆ ¨ÉäÆ ºÉ¨ÉÉVÉ Eä ® ÉVªÉÉå Eä ‡±ÉB {ÉÆSÉɪÉiÉÒ ® ÉVÉ E Ò ‡jÉ-ºiÉ® ÒªÉ |ÉhÉɱÉÒ; E ¨ÉWÉÉä® ´ÉMÉÉÆç VÉèºÉä +xÉÖºÉÚ‡SÉiÉ VÉɇiÉ, +xÉÖºÉÚ‡SÉiÉ VÉxÉVÉɇiÉ |ÉiªÉäE 5 ´É¹ÉÇ ¨Éå {ÉÆSÉɪÉiÉÉå Eä ‡xɪɇ¨ÉiÉ SÉÖxÉÉ´É; +xÉÖºÉÚ‡SÉiÉ iÉlÉÉ +xªÉ ‡{ÉU cä ´ÉMÉÉç E Éä =xÉE Ò +ɤÉÉnÒ Eä +xÉÖ{ÉÉiÉ VÉɇiÉ, +xÉÖºÉÚ‡SÉiÉ VÉxÉVÉɇiɪÉÉå Eä ‡±ÉB +É® IÉhÉ +Éè® ¨ÉäÆ |ɇiɇxɇvÉi´É |ÉnÉxÉ ‡E ªÉÉ MɪÉÉ ½è* ® ÉVªÉ ‡xÉ´ÉÉÇSÉxÉ ¨É‡½±ÉÉ+ÉäÆ Eä ‡±ÉB (33 |ɇiÉ„ÉiÉ) +É® IÉhÉ; {ÉÆSÉɪÉiÉÒ +ɪÉÉäMÉ iÉlÉÉ ‡´ÉkÉÉ +ɪÉÉäMÉ E Ò ºlÉÉ{ÉxÉÉ +‡xÉ´ÉɪÉÇ E ® ®ÉVÉ ºÉƺlÉÉ+ÉäÆ E Ò ‡´ÉkÉÒªÉ „ɇH ªÉÉå Eä ºÉƤÉÆvÉ ¨Éå ‡ºÉ¡ ɇ®„Éå nÒ MÉ<Ç* ‡WɱÉÉ ªÉÉäVÉxÉÉ ºÉ‡¨É‡iɪÉÉäÆ Eä MÉ` xÉ Eä ‡±ÉB E ® xÉä Eä ‡±ÉB ‡´ÉkÉ +ɪÉÉäMÉ E Ò ºlÉÉ{ÉxÉÉ;{ÉÚ® ä ‡VɱÉä Eä 74´ÉÆä ºÉƇ´ÉvÉÉxÉ ºÉÆ„ÉÉävÉxÉ Eä Wɇ®B +xÉÖSU än 243VÉäbbÒ ‡±ÉB ‡´ÉE ÉºÉ ªÉÉäVÉxÉÉ ¨ÉºÉÉènÉ ¤ÉxÉÉxÉä Eä ‡±ÉB ‡VɱÉÉ E Éä ºÉƇ´ÉvÉÉxÉ ¨ÉäÆ VÉÉäcÉ MɪÉÉ* 73´ÉäÆ ºÉƇ´ÉvÉÉxÉ ºÉÆ„ÉÉävÉxÉ +ɪÉÉäVÉxÉÉ ºÉ‡¨É‡iÉ E É MÉ` xÉ; ªÉ½ +‡vɇxÉªÉ¨É ºÉƇ´ÉvÉÉxÉ 23 ® ÉVªÉÉäÆ iÉlÉÉ 5 Eä Æp „ÉɇºÉiÉ |Énä„ÉÉäÆ ¨ÉäÆ |ɦÉÉ´ÉÒ ½è* ¨Éå +xÉÖSU än 243 (VÉÒ) uÉ® É BE xɪÉÒ 11´ÉÓ ºÉÚSÉÒ +ÉVÉ +‡vÉE iÉ® ® ÉVªÉÉäÆ iÉlÉÉ Eä Æp „ÉɇºÉiÉ |Énä„ÉÉäÆ ¨ÉäÆ VÉÉäciÉÉ ½è, ‡VɺɨÉå 29 ‡´É¹ÉªÉ ½è * {ÉÆSÉɪÉiÉÒ SÉÖxÉÉ´ÉÉäÆ Eä iÉÒxÉ nÉè® ½ÉäiÉä ½é +Éè® {ÉÆSÉɪÉiÉÉäÆ Eä iÉÒxÉ ºiÉ® ÉäÆ ¨ÉäÆ 28 ±ÉÉJÉ ºÉä ¦ÉÒ VªÉÉnÉ ‡xÉ´ÉÉLJSÉiÉ Bä‡iɽ ɇºÉE {ɽ ±É |ɇiɇxɇvÉ ½é* ¨ÉäÆ OÉɨÉÒhÉ IÉäjÉÉäÆ ¨ÉäÆ BE JÉɨÉÉä„É G ÉƇiÉ ‡nJÉÉ<Ç nÒ ½è CªÉÉäƇE ¨É‡½±ÉÉ+ÉäÆ E Éä ®ÉVɇxɇiÉE |ɇiɇvÉi´É ={ɱɤvÉ ½è +Éè® ºÉÒ¨ÉÉÆiÉ ºÉ¨ÉÚ½ÉäÆ E É ºÉ„ɇH E ®hÉ ‡E ªÉÉ ¸ÉÒ ¤É±É´ÉÆiÉ ® ÉªÉ ¨Éä½iÉÉ E Ò +vªÉIÉiÉÉ ´ÉɱÉä €