International Economy - Current Affairs for November, 2015

Russia’s president Vladimir Putin has signed a decree imposing punitive economic sanctions against Turkey on 28th November 2015 following Turkey’s shooting down a Russian warplane. Decree says charter flights from Russia to Turkey have been banned and unspecified Turkish imports will be outlawed while Turkish firms and nations would face curbs in their economic activities.

Rajasthan and Southern Australia on 20th November 2015 signed a landmark Sister-State agreement for boosting trade and investment opportunities, signed by South Australia Trade and Investment Trade Minister Martin Hamilton-Smith and Rajasthan CM Vasundhara Raje in Rajasthan. This agreement focuses on a sister state relationship between the two nations based on two way exchange in fields of research, technical capabilities and policies.

Asian Development Bank and Japan have announced a 5 year, USD 16 billion partnership which is inclusive of investment fund for supporting sustainable infrastructure development in the region. The first step will be establishment of a trust fund by March 2016 with capitalisation of USD 1.5 billion from JICA/Japan International Cooperation Agency. In a combination with the own capital of ADB and commercial co-financers, funds should provide funding of USD 6 billion. Close to USD 10 billion has been set aside for promoting public infrastructure provided by ADB and JICA in co-financing sovereign borrowers over a period of 5 years.

This is under the scheme where RBI offers the facility of varying sizes not exceeding USD 2 billion in total. The decision was taken by the Union Cabinet which will provide a two year extension with amendments to the framework on 'Currency Swap Arrangement' for SAARC member countries up to November 14, 2017, and extension thereafter, if necessary, by Finance Minister.

India origin Microsoft chief Satya Nadella will co chair the World Economic Forum annual meet in January which will be attended by close to 100 business leaders including the Ambani brothers. The WEF meeting will be held at Davos, Switzerland from January 20-23 next year. More than 2500 business leaders will attend this meet the theme of which would be 'Mastering the Fourth Industrial Revolution’. Other co-chairs for the 2016 WEF meet are GM CEO Mary Barra, Hitachi chairman and CEO Hiroaki Nakanishi, Credit Suisse CEO Tidjane Thiam, ITUC secretary general Sharan Burrow and Al Bawsala founder and chair Amira Yahyaoui.

China’s top legislature on 4th November 2015 ratified the Asian Infrastructure Investment Bank (AIIB) agreement, that will set out legal framework for the $100 billion-bank in which India and 56 other countries are founder members. This is a step closer to the international bank’s establishment and it could rival WB, IMF and ADB according to some reports. It has authorised capital of $100 billion and subscribed capital of $50 billion. China, India and Russia are the three largest shareholders.