bric economy

7/28/2019 bric economy

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Short Notes

IMF & World Bank:

The International Monetary Fund (IMF) is an intergovernmental organization that promotes

international economic cooperation, focusing in particular on policies that have an impact on theexchange rate and the balance of payments. The organization's stated objectives are to promote

international economic cooperation, international trade, employment, and exchange rate stability,

including by making resources available to member countries to meet balance of

payments needs. Its headquarters are in Washington, D.C. The IMFs relatively large influence in

world affairs and development has drawn heavy criticism from some sources.

The IMF was conceived on July 22, 1944 originally with 45 members and came into existence on

December 27, 1945 when 29 countries signed the agreement, with a goal to stabilize exchange

rates and assist the reconstruction of the worlds international payment system. Countries

contributed to a pool which could be borrowed from, on a temporary basis, by countries with

payment imbalances. The IMF was vital when it was first created because it helped the worldstabilize the economic system. The IMF works to improve the economies of its member

countries. The IMF describes itself as an organization of 187 countries (as of July 2010), working to

foster global monetary cooperation, secure financial stability, facilitate international trade,

promote high employment and sustainable economic growth, and reduce poverty.

The World Bank is an international financial institution that provides loans to developing

countries for capital programmes.

The World Bank's official goal is the reduction ofpoverty. By law, all of its decisions must be

guided by a commitment to promote foreign investment, international trade and facilitate

capital investment. The World Bank comprises only two institutions: the International Bank for

Reconstruction and Development (IBRD) and the International Development Association (IDA),

The World Bank is one of five institutions created at the Bretton Woods Conference in 1944. The

International Monetary Fund, a related institution, is the second. Delegates from many countries

attended the Bretton Woods Conference. The most powerful countries in attendance were the

United States and United Kingdom, which dominated negotiations.

Although both are based in Washington, D.C., the World Bank is, by custom, headed by an

American, while the IMF is led by a European.
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BRICS:

BRICS is an international political organisation of leading emerging economies, arising out of the

inclusion ofSouth Africa into the BRIC group in 2010. As of 2011, its five members

are Brazil, Russia, India, China and South Africa.[2]

With the possible exception of Russia, the BRICS

members are all developing or newly industrialisedcountries, but they are distinguished by theirlarge economies and significant influence on regional and global affairs. As of 2011, the five BRICS

countries represent roughly one-third of the world's total population, with a combined

nominal GDP of US$13.6 trillion, and an estimated US$4 trillion in combined foreign reserves.

History

The foreign ministers of the four BRIC countries met in New York Cityin September 2006, beginning

a series of high-level meetings. A full-scale diplomatic meeting was held in Yekaterinburg, Russia,

on May 16, 2008.

First summit

The BRIC countries met in Yekaterinburg for their first official summiton 16 June 2009, with Luiz

Incio Lula da Silva, Dmitry Medvedev, Manmohan Singh, and Hu Jintao, the respective leaders of

Brazil, Russia, India and China, all attending.[7]The summit's focus was on means of improvingthe global economic situation and reforming financial institutions, and discussed how the four

countries could better co-operate in the future.[6][7]

There was furthermore discussion on ways

thatdeveloping countries, such as the BRIC members, could become more involved in global affairs.

In the aftermath of the Yekaterinburg summit, the BRIC nations announced the need for a

new global reserve currency, which would have to be 'diversified, stable and predictable'.

Although the statement that was released did not directly criticise the perceived 'dominance' of

the US dollar - something which Russia had attacked in the past - it still led to a fall in the value of

the dollar against other major currencies.

Entry of South Africa

In 2010, South Africa began efforts to join the BRIC grouping, and the process for its formal

admission began in August of that year. South Africa officially became a member nation on

December 24, 2010, after being formally invited by China and the other BRIC countries to join the

group.[10]

The group was renamed BRICS - with the "S" standing for South Africa - to reflect the

group's expanded membership. In April 2011, South African President Jacob Zuma attended

the 2011 BRICS summit in Sanya, China, as a full member.

The BRICS Forum, an independent international organisation encouraging commercial, political and

cultural cooperation between the BRICS nations, was formed in 2011.
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Balance of payments:

Balance of payments (BOP) accounts are an accounting record of all monetary transactions

between a country and the rest of the world. These transactions include payments for thecountry's exports and imports ofgoods, services, financial capital, and financial transfers. The BOP

accounts summarize international transactions for a specific period, usually a year, and are

prepared in a single currency, typically the domestic currency for the country concerned. Sourcesof funds for a nation, such as exports or the receipts of loans and investments, are recorded as

positive or surplus items. Uses of funds, such as for imports or to invest in foreign countries, are

recorded as negative or deficit items.

When all components of the BOP accounts are included they must sum to zero with no overall

surplus or deficit. For example, if a country is importing more than it exports, its trade balance will

be in deficit, but the shortfall will have to be counter-balanced in other ways such as by funds

earned from its foreign investments, by running down central bank reserves or by receiving loans

from other countries.

While the overall BOP accounts will always balance when all types of payments are included,

imbalances are possible on individual elements of the BOP, such as the current account, the capital

account excluding the central bank's reserve account, or the sum of the two. Imbalances in the

latter sum can result in surplus countries accumulating wealth, while deficit nations become

increasingly indebted. The term "balance of payments" often refers to this sum: a country's

balance of payments is said to be in surplus (equivalently, the balance of payments is positive) by a

certain amount if sources of funds (such as export goods sold and bonds sold) exceed uses of funds

(such as paying for imported goods and paying for foreign bonds purchased) by that amount. There

is said to be a balance of payments deficit (the balance of payments is said to be negative) if theformer are less than the latter.

Intellectual Property Rights:

Intellectual property (IP) is a term referring to a number of distinct types of creations of the mind

for which a set ofexclusive rights are recognizedand the corresponding fields oflaw.[1]

Under

intellectual property law, owners are granted certain exclusive rights to a variety o fintangible

assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases,

symbols, and designs. Common types of intellectual property rights includecopyrights, trademarks, patents, industrial design rights and trade secrets in some jurisdictions.

Although many of the legal principles governing intellectual property have evolved over centuries,

it was not until the 19th century that the term intellectual propertybegan to be used, and not until

the late 20th century that it became commonplace in the majority of the world.
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What is a Multilateral Agreement?

With the increased influence globalization, the actions of one nation bear on other nations more

than ever. Multilateral agreements have become an increasingly important means for nations to

resolve important issues in a way that establishes common ground and resolves actual and

potential points of difference. Multilateral agreements frequently require complex negotiations

necessary to resolve the differences between the various parties and bring them into agreement.

Multilateral Agreements DefinedA multilateral agreement is defined as a binding agreement between three or more parties

concerning the terms of a specific circumstance. Multilateral agreements can occur between three

individuals or agencies; however, the most common use of the term refers to multilateral

agreements between several countries. Multilateral agreements are often the result of a

recognition of common ground between the various parties involved concerning the issue at hand.

Multilateral Agreements to Deter Military Escalation

Multilateral agreements are often negotiated to deter the escalation of international tensions by

mapping out the terms of an accord between the various parties involved. One example is the

Antarctic Treaty, which came into force in 1961. The Antarctic Treaty specified an agreementamong several nations, including the United States and the former Soviet Union, to prohibit all

military activity and nuclear testing, as well as to promote scientific cooperation, on the Antarctic

continent during the height of the Cold War.

Multilateral Agreements for Economic Purposes

An ongoing example of a multilateral agreement that promotes the economic interests of the

member parties is the European Union. The terms of the European Union have allowed for the

development of a single currency (the Euro) within what is called the Euro zone, to replace the

multiple currencies of the member countries. Another feature of the European Union is a commonEU passport for citizens of member nations, allowing for free movement across borders within the

Union for work and visiting.

Multilateral Agreements for Environmental Purposes

The Kyoto Protocol is an example of a multilateral agreement designed to promote the

environmental interests of the parties in agreement. The basis for the Kyoto Protocol is the

attempt to mitigate the effects of climate change by regulating such aspects as carbon dioxide

emissions levels. One of the major challenges of a multilateral agreement is ensuring that its terms

are followed and/or enforced. In the case of the Kyoto Protocol, most of the world's industrializednations have signed and ratified the agreement. However, despite having signed the agreement in

1998, the United States had not ratified it as of June 2009, with former President George W. Bush

citing adverse effects to the American economy and criticizing that controls would not be equally

strict for developing nations like China.


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Multilateral Agreements for Humanitarian Purposes

Another purpose for multilateral agreements is to promote humanitarian standards. One example

of a multilateral, multinational agreement for humanitarian purposes is the United Nations

Millennium Declaration, which was drawn up in September 2000. The declaration states a general

agreement among the countries signing it to uphold human dignity and equality and especially to

guard the welfare of children.

Multilateral vs Bilateral Agreements

Multilateral agreements differ from bilateral agreements in that bilateral agreements occur

between two parties only. In relationship to international affairs, bilateral agreements often take

place between economic trading partners that depend on each other for much or all of the

exchange of certain goods and/or services. Bilateral agreements and multilateral agreements can

sometimes come into conflict with one another, especially when the terms of a multilateral

agreement modify or nullify the terms of a longstanding bilateral agreement.

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