Part – B

Answer The Following Questions.

Question 21.
Write the meaning of Special Drawing rights?
Answer:
Special Drawing Rights (SDRs):

  1. The Fund has succeeded in establishing a scheme of Special Drawing Rights (SDRs) which is otherwise called ‘Paper Gold’.
  2. They are a form of international reserves created by the IMF in 1969 to solve the problem of international liquidity.
  3. They are allocated to the IMF members in proportion to their Fund quotas.
  4. SDRs are used as a means of payment by Fund members to meet balance of payments deficits and their total reserve position with the Fund.
  5. Thus SDRs act both as an international unit of account and a means of payment.
  6. All transactions by the Fund in the form of loans and their repayments, its liquid reserves, its capital, etc., are expressed in the SDR.


Question 22.
Mention any two objectives of ASEAN?
Answer:

  1. To accelerate the economic growth, social progress and cultural development in the region;
  2. To promote regional peace and stability and adherence to the principles of the United Nations Charter.

Question 23.
Point out any two ways in which IBRD lends to member countries?
Answer:
The Bank advances loans to members in two ways

  1. Loans out of its own fund,
  2. Loans out of borrowed capital.


Question 24.
Define Common Market?
Answer:
Common market is established through trade pacts. A group formed by countries within a geographical area to promote duty free trade and free movement of labour and capital amongits members, e.g. European Common Market (ECM).

Question 25.
What is Free trade area?
Answer:

  1. A free trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA).
  2. Such agreements involve cooperation between at least two countries to reduce trade barriers, e.g. SAFTA, EFTA.

Question 26.
When and where was SAARC Secretariat established?
Answer:
South Asian Association For Regional Co – Operation (SAARC):
1. The South Asian Association for Regional Co – operation (SAARC) is an organisation of South Asian nations, which was established on 8 December 1985 for the promotion of economic and social progress, cultural development within the South Asia region and also for friendship and co – operation with other developing countries.

2. The SAARC Group (SAARC) comprises of Bangaladesh, Bhutan, India, The Maldives, Nepal, Pakistan and Sri Lanka.

3. In April 2007, Afghanistan became its eighth member.


Question 27.
Specify any two affiliates of World Bank Group?
Answer:

Part – C
Answer The Following Questions.

Question 28.
Mention the various forms of economic integration?
Answer:
An economic union is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production and a common external trade policy, (e.g. European Economic Union)
EU > CM > CU > FTA
EU – Economic Union >
CM – Common – Market >
CU – Customs Union >
FTA – Free Trade Area
The regional economic integration among the trade blocks such as SAARC (South Asian nations), ASEAN (South East Asia) and BRICS and their achievements.


Question 29.
What are trade blocks?
Answer:
1. Trade blocks cover different kinds of arrangements between or among countries for mutual benefit. Economic integration takes the form of Free Trade Area, Customs Union, Common Market and Economic Union.

2. A free trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such agreements involve cooperation between at least two countries to reduce trade barriers, e.g. SAFTA, EFTA.

3. A customs union is defined as a type of trade block which is composed of a free trade area with no tariff among members and (zero tariffs among members) with a common external tariff, e.g. BENELUX (Belgium, Netherland and Luxumbuarg).

4. Common market is established through trade pacts. A group formed by countries within a geographical area to promote duty free trade and free movement of labour and capital among its members, e.g. European Common Market (ECM).

5. An economic union is composed of a common market with a customs union. The participant countries have both common policies on product regulation, freedom of movement of goods, services and the factors of production and a common external trade policy. (e.g. European Economic Union).


Question 30.
Mention any three lending programmes of IMF?
Answer:
(I) Establishment of monetary reserve fund:

  1. The Fund has played a major role in achieving the sizeable stock of the national currencies of different countries.
  2. To meet the foreign exchange requirements of the member nations, IMF uses its stock to help the member nations to meet foreign exchange requirements.

(II) Monetary discipline and cooperation:

  1. The IMF has shown keen interest in maintaining monetary discipline and cooperation among the member countries.
  2. To achieve this objective, it has provided assistance only to those countries which make sincere efforts to solve their problems.

(III) Special interest in the problems of UDCs:

  1. The notable success of the Fund is the maintenance of special interest in the acute problems of developing countries.
  2. The Fund has provided financial assistance to solve the balance of payment problem of UDCs.
  3. However, many UDCs continue to be UDCs, while the developed countries have achieved substantial growth.


Question 31.
What is Multilateral Agreement?
Answer:
1. Multilateral trade agreement:
It is a multi national legal or trade agreements between countries. It is an agreement between more than two countries but not many.

2. The various agreements implemented by the WTO such as TRIPS, TRIMS, GATS, AoA, MFA have been discussed.

Question 32.
Write the agenda of BRICS Summit, 2018?
Answer:

  1. South Africa hosted the 10th BRICS summit in July 2018.
  2. The agenda for BRICS summit 2018 includes Inclusive growth, Trade issues, Global governance, Shared Prosperity, International peace and security.

Question 33.
State briefly the functions of SAARC?
Answer:
Functions of SAARC:
The main functions of SAARC are as follows.

  1. Maintenance of the co operation in the region
  2. Prevention of common problems associated with the member nations.
  3. Ensuring strong relationship among the member nations.
  4. Removal of the poverty through various packages of programmes.
  5. Prevention of terrorism in the region.


Question 34.
List out the achievements of ASEAN?
Answer:
The ASEAN Declaration states the aims and purposes of the Association as:

  1. To accelerate the economic growth, social progress and cultural development in the region;
  2. To promote regional peace and stability and adherence to the principles of the United Nations Charter;
  3. To promote cooperation among the members of ASEAN through the exchange of knowledge and experience in the field of public sector auditing.
  4. To provide a conducive environment and facilities for research, training, and education among the members
  5. To serve as a centre of information and as an ASEAN link with other international organizations.

Part – D
Answer The Following Questions.

Question 35.
Explain the objectives of IMF?
Answer:
Objectives Of IMF:

  1. To promote international monetary cooperation among the member nations.
  2. To facilitate faster and balanced growth of international trade.
  3. To ensure exchange rate stability by curbing competitive exchange depreciations.
  4. To eliminate or reduce exchange controls imposed by member nations.
  5. To establish multilateral trade and payment system in respect of current transactions instead of bilateral trade agreements.
  6. To promote the flow of capital from developed to developing nations.
  7. To solve the problem of international liquidity.


Question 36.
Bring out the functions of World Bank?
Answer:
Functions of IBRD (or) World Bank:
The World Bank performs the major role of providing loans for development works to member countries, especially to underdeveloped countries. The World Bank provides long¬term loans for various development projects. Article 1 of the Agreement states the functions performed by the world bank as follows.

(I) Investment for productive purposes:
The World Bank performs the function of assisting in the reconstruction and development of territories of member nations through facility of investment for productive purposes. It also encourages the development of productive facilities and resources in less developed countries.

(II) Balanced growth of international trade:
Promoting the long range balanced growth of trade at international level and the maintaining equilibrium in BOPs of member nations by encouraging international investment.

(III) Provision of loans and guarantees:
Arranging the loans or providing guarantees on loans by various other channels so as to execute important projects.

(IV) Promotion of foreign private investment:
The promotion of private foreign investment by means of guarantees on loans and other investment made by private investors. The Bank supplements private investment by providing finance for productive purpose out of its own resources or from borrowed funds.

(V) Technical services:
The World Bank facilitates different kinds of technical services to the member countries through Staff College and experts.


Question 37.
Discuss the role of WTO in India’s socio economic development?
Answer:
WTO and India:
India is the founding member of the WTO. India favours multilateral trade approach. It enjoys MFN status and allows the same status to all other trading partners. India benefited
from WTO on following grounds:

  1. By reducing tariff rates on raw materials, components and capital goods, it was able to import more for meeting her developmental requirements. India’s imports go on increasing.
  2. India gets market access in several countries without any bilateral trade agreements.
  3. Advanced technology has been obtained at cheaper cost.
  4. India is in a better position to get quick redressal from the trade disputes.
  5. The Indian exporters benefited from wider market information.


Question 38.
Write a note on?
(a) SAARC
(b) BRICS.
Answer:
(a) South Asian Association For Regional Co – Operation (SAARC):

  • The South Asian Association for Regional Co – operation (SAARC) is an organisation of South Asian nations, which was established on 8 December 1985 for the promotion of economic and social progress, cultural development within the South Asia region and also for friendship and co-operation with other developing countries.
  • The SAARC Group (SAARC) comprises of Bangaladesh, Bhutan, India, The Maldives, Nepal, Pakistan and Sri Lanka.
  • In April 2007, Afghanistan became its eighth member.
  • The basic aim of the organisation is to accelerate the process of economic and social development of member states through joint action in the agreed areas of cooperation.
  • The SAARC Secretariat was established in Kathmandu (Nepal) on 16th January 1987.
  • The first SAARC summit was held at Dhaka in the year 1985.
  • SAARC meets once in two years. Recently, the 20th SAARC summit was hosted by Srilanka in 2018.

(b) BRICS:

  • BRICS is the acronym for an association of five major emerging national economies: Brazil, Russia, India, China and South Africa.
  • Since 2009, the BRICS nations have met annually at formal summits.
  • South Africa hosted the 10th BRICS summit in July 2018.
  • The agenda for BRICS summit 2018 includes Inclusive growth, Trade issues, Global governance, Shared Prosperity, International peace and security.
  • It’s headquarters is at Shanghai, China.
  • The New Development Bank (NDB) formerly referred to as the BRICS Development Bank was established by BRICS States.
  • The first BRICS summit was held at Moscow and South Africa hosted the Tenth Conference at Johanesberg in July 2018.
  • India had an opportunity of hosting fourth and Eighth summits in 2009 and 2016 respectively.
  • The BRICS countries make up 21 percent of global GDP. They have increased their share of global GDP threefold in the past 15 years.
  • The BRICS are home to 43 percent of the world’s population.
  • The BRICS countries have combined foreign reserves of an estimated $ 4.4 trillion