International Economy - Current Affairs for December, 2017

The U.S. Federal Communications Commission voted along party lines on December 14 to repeal landmark 2015 rules aimed at ensuring a free and open internet, setting up a court fight over a move that could recast the digital landscape. The approval of FCC Chairman Ajit Pai's proposal marks a victory for internet service providers like AT&T, Comcast and Verizon Communications and hands them power over what content consumers can access. Democrats, Hollywood and companies like Google parent Alphabet and Facebook had urged Mr. Pai, a Republican appointed by U.S. President Donald Trump, to keep the Obama-era rules barring service providers from blocking, slowing access to or charging more for certain content. Consumer advocates and trade groups representing content providers have planned a legal challenge aimed at preserving those rules. Mr. Pai has argued that the 2015 rules were heavy handed and stifled competition and innovation among service providers. The FCC voted 3-2 to repeal the rules. Consumers are unlikely to see immediate changes resulting from the rule change, but smaller startups worry the lack of restrictions could drive up costs or lead to their content being blocked. FCC: Know More

• The Federal Communications Commission is an independent agency of the United States government created by statute to regulate interstate communications by radio, television, wire, satellite, and cable.
• Chairperson: Ajit Pai(2017)
• Director: Ajit Pai (2017)
• Headquarters: Washington, D.C.
• Founded: June 19, 1934
• Jurisdiction: Federal government of the United States
• Tag: US, Net Neutrality, Facebook

China started trial operations of world's biggest automated container terminal at Yangshan Deep Water Port in Shanghai, the country's commercial hub. The terminal is located at south of Donghai Bridge, phase 4 of Yangshan Port and covers 2.23 million square metres and has a 2,350-metre shoreline. The automated management system is also used at port to maintain safety and efficiency. Key Facts

• The project uses automated handling equipment designed and manufactured in China. The machinery used in loading and unloading, including bridge crane, automated guided vehicle (AGV) and rail-mounted gantry crane, are all made in China by Shanghai Zhenhua Heavy Industries Company.
• Initially, automated terminal will have capacity to handle 4 million TEUs (twenty-foot equivalent units) and later it will be expanded to 6.3 million TEUs at later stage.
• The automated terminal not only increases the port's handling efficiency, but also reduces carbon emissions by up to 10%.

NEW YORK: A federal regulator gave the go ahead on Dec 8, 2017 to the CME Group to start trading bitcoin futures later this month, the first time the digital currency will be traded on a Wall Street exchange and subject to federal oversight. The CME Group, which owns the Chicago Mercantile Exchange, will start trading bitcoin futures December 18. The Commodities Futures Trading Commission, the primary regulator for exchanges like the CME, gave approval for the exchange to create bitcoin futures after six weeks of discussions. The CME Group is using a process known as "self-certification'', which is when an exchange pledges that the new instruments will not break any federal securities laws. The price of bitcoin futures will be based on the price the digital currency is going for on four major bitcoin exchanges- Bitstamp, GDAX, itBit and Kraken. Due to its volatility, bitcoin futures will be subject higher margin levels and intraday price limits, the CME said. The move will subject some of the bitcoin market to federal regulation for the first time. It will also open up bitcoin trading to a larger group of investors and traders, who have been reluctant to purchase the virtual currency on the private exchanges. Bitcoin has gained more mainstream attention lately as its price has soared on the private exchanges. It was trading Friday at around $10,500, after being worth roughly $1,000 at the beginning of the year.

The UAE on Dec 5, 2017announced it has formed a new economic and partnership group with Saudi Arabia, separate from the Gulf Cooperation Council (GCC), a move that could undermine the council amid a diplomatic crisis with Qatar. The new "joint cooperation committee" was approved by the UAE's ruler and President, Sheikh Khalifa bin Zayed Al Nayhan. Saudi Arabia did not immediately comment on the new partnership. It wasn't immediately clear how the development could affect the six-member GCC meeting, which is expected to focus on the Qatar issue. Half of the GCC members are boycotting Doha. The Emirati Ministry said the new "committee is assigned to cooperate and coordinate between the UAE and Saudi Arabia in all military, political, economic, trade and cultural fields, as well as others, in the interest of the two countries." The UAE and Saudi Arabia have cultivated even-closer ties in recent years. Emirati troops are deeply involved in the Saudi-led war in Yemen. Abu Dhabi's powerful Crown Prince, Mohammad bin Zayed al-Nayhan, also is believed to have a closer relationship with Saudi Arabia's young Crown Prince Mohammed bin Salman. The Emirati announcement did not say whether any other Gulf Arab countries would be invited to join the new group. GCC: Know More

• The Cooperation Council for the Arab States of the Gulf or Gulf Cooperation Council (GCC), is a regional intergovernmental political and economic union consisting of all Arab states of the Persian Gulf, except for Iraq.
• Its member states are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.
• The Charter of the Gulf Cooperation Council was signed on 25 May 1981, formally eslishing the institution.
• All current member states are monarchies, including three constitutional monarchies (Qatar, Kuwait, and Bahrain), two absolute monarchies (Saudi Arabia and Oman), and one federal monarchy (the United Arab Emirates, which is composed of seven member states, each of which is an absolute monarchy with its own emir).
• There have been discussions regarding the future membership of Jordan, Morocco, and Yemen.

Venezuela has launched its own cryptocurrency called Petro to circumvent US-led financial sanctions. It will be backed by the country's vast natural resource reserves. In this regard, Venezuelan President Nicolas Maduro has approved the creation of BlockchainBase observatory to oversee development and rollout of new cryptocurrency. Petro: Know More

• The cryptocurrency (in Spanish, criptomoneda) could help Venezuela evade international sanctions.
• Venezuela will create a petromoneda cryptocurrency to advance the matter of monetary sovereignty as it will help defeat the financial blockade and move toward new forms of international financing for the economic and social development of the country.
• The petro will be backed by strategic reserves of oil, gold, gas and diamonds - tangible support that the government hopes will help it fight both sanctions and Venezuela's high inflation rate
• Questions remain about how the new cryptocurrency will be rolled out and whether it might be linked to established digital currencies such as bitcoin or Ethereum.
• Economist Jean Paul Leidenz warned via Twitter that the system could merely reinforce hyperinflation - which could then disproportionately harm Venezuelans who use only the bolivar currency

• A cryptocurrency is a digital or virtual currency that uses cryptography for security.
• A cryptocurrency is difficult to counterfeit because of this security feature.
• A defining feature of a cryptocurrency, and arguably its most endearing allure, is its organic nature; it is not issued by any central authority, rendering it theoretically immune to government interference or manipulation.

The first phase of the Chabahar port on the Gulf of Oman was inaugurated today by Iranian President Hassan Rouhani, opening a new strategic route connecting Iran, India and Afghanistan bypassing Pakistan, and reflecting growing convergence of interests among the three countries. The port in the Sistan-Balochistan province on the energy-rich nation's southern coast is easily accessible from India's western coast and is increasingly seen as a counter to Pakistan's Gwadar Port, which is being developed with Chinese investment and is located at distance of around 80 kms from Chabahar.