International Economy - Current Affairs for September, 2016

The Central Bank of Iran is allowing local financial institutions to issue credit cards for the first time in the Islamic Republic.

• The full introduction of the cards could take some time as local banks will need to get used to the credit card system, according to the head of Iran’s central bank Valiollah Seif.
• The step aims at improving public spending
• Number of credit cards issued will depend on applications received
• The cards will be offered with three set credit limits topping off at $15,000.
• Cards will be able to be used for purchasing goods and services over the counter and online.
• Accounts unpaid within a month will be subject to an 18 percent annual interest rate charge.
• Before this, only debt and prepaid cards were available
• According to Turkish payments processor Iyzico, the country has 231 million active cards operating through the Shetab debit card system.
• I ran’s financial institutions are trying to adjust after decades of sanctions against the country were lifted at the beginning of the year.

China and Vietnam on 13th Sept 2016 agreed to manage their territorial differences over disputes in the South China sea and safeguard stability.

• Talks were held between Vietnamese Prime Minister Nguyen Xuan Phuc and his Chinese premier Li Keqiang in Beijing.
• Phuc's visit to China is the first by a top Vietnamese leader after the tribunal verdict on 12 July 2016.
• The Chinese Prime Minister is known as Premier.
• Besides, the two leaders also saw the signing of agreements on economy and trade, production capacity, infrastructure and education.
• China is now persuading Malaysia and Brunei to settle disputes bilaterally without approaching global arbitration
• China earlier rejected the Hague tribunal’s ruling which concluded that China does not have legal basis to claim historic rights over a majority of the sea
• China did not have the right to resources within its nine dash line which extends hundreds of miles to the south and east of its island province of Hainan and covers 90 percent of the disputed waters
• Ruling said China has no evidence to suggest control over SCS or its resources

World Bank has recently released a Logistics Performance Index report entitled Connecting to Complete 2016

• The Logistics Performance Index Report is published by World Bank every 2 years
• India has been ranked 35 among 160 countries to rank of 54 in 2014
• In terms of six components of the LPI that is Customs, Infrastructure, International Shipments, Logistics Quality and Competence, Tracking and Tracing and Timeliness, India has ranked between 32 to 42 range.
• LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in performance on trade logistics and what they can do to improve performance
• LPI is based on worldwide survey of stakeholders on the ground providing federal on logistics friendliness of the countries they operate and those which they trade
• Improvement in India’s rank in Logistics Performance Index adequately establishes steady performance in competitiveness in manufacturing and trade that also acts as a growth driver of the Make in India programme.