Discover ItDiscover ItAn excellent blog about Indian Current Affairs as a subject of study for those appearing for competitive examinations in India like the Civil Services Exams. The content is like notes prepared from daily newspapers and is updated on daily basis. 
Articles
Fannie Mae and Freddie Mac
2008-07-17 09:54:00 Why should the world be concerned about these US housing mortgage companies? health? It was on 13th July that we noted first about them. Look at it here. Their full names are Federal National Mortgage Association (Fannie Mae ) and the Federal Home Loan Mortgage Corporation (Freddie Mac). One can?t help but feel a sense of dj vu when reading about them again and again. The figures being reported about their liabilities keep going up. The two institutions are now reported to have bought or guaranteed almost half the $12 trillion housing mortgages. As government-sponsored entities, their debt had been regarded as almost as good as gilts and hence is held by many central banks worldwide. Amazingly, it now transpires that their direct and guaranteed liabilities were almost 65 times their regulatory capital at the end of the first quarter. The US government is trying to rescue the mortgage giants whose shares came under acute selling pressure last week on fears that th... More About: Freddie Mac
Fannie Mae and Freddie Mac
2008-07-17 09:54:00 Why should the world be concerned about these US housing mortgage companies? health? It was on 13th July that we noted first about them. Look at it here. Their full names are Federal National Mortgage Association (Fannie Mae ) and the Federal Home Loan Mortgage Corporation (Freddie Mac). One can?t help but feel a sense of dj vu when reading about them again and again. The figures being reported about their liabilities keep going up. The two institutions are now reported to have bought or guaranteed almost half the $12 trillion housing mortgages. As government-sponsored entities, their debt had been regarded as almost as good as gilts and hence is held by many central banks worldwide. Amazingly, it now transpires that their direct and guaranteed liabilities were almost 65 times their regulatory capital at the end of the first quarter. The US government is trying to rescue the mortgage giants whose shares came under acute selling pressure last week on fears that th... More About: Freddie Mac
Why is the RBI concerned about the frenetic activity in the OIS market now?
2008-07-15 06:09:00 OIS stands for Overnight Index Swap. To get a grip over the concept read this noting we made sometime back.India's OIS market is unregulated. These deals, which do not cause any flow of funds into or outside the country, are not reported, unlike foreign institutional trading activity in stock or bond markets.Offshore hedge funds operating through multinational banks in India have stepped up action in India?s OIS market in recent months. These players are convinced that rates will rise, even as the economy is showing signs of slowing down.Concerned that this surge in hedge fund activity in OIS is boosting volatility in interest rates, the RBI is making inquiries with multinational banks about exposures of such funds in this market. More About: Market
Why is the RBI concerned about the frenetic activity in the OIS market now?
2008-07-15 06:09:00 OIS stands for Overnight Index Swap. To get a grip over the concept read this noting we made sometime back.India's OIS market is unregulated. These deals, which do not cause any flow of funds into or outside the country, are not reported, unlike foreign institutional trading activity in stock or bond markets.Offshore hedge funds operating through multinational banks in India have stepped up action in India?s OIS market in recent months. These players are convinced that rates will rise, even as the economy is showing signs of slowing down.Concerned that this surge in hedge fund activity in OIS is boosting volatility in interest rates, the RBI is making inquiries with multinational banks about exposures of such funds in this market. More About: Market
The country?s education market potential
2008-07-14 05:46:00 With double digit economic growth demanding a sustained supply of knowledge workers, India has emerged as one of the world?s largest consumer of education services with a target population of more than 445 million (between age group of 5-24 years), which is expected to increase to approximately 486 million by 2025, far exceeding the combined target population in China (354 million) and the US (91 million) in the same year. With public and private spending on education services in India aggregating approximately $100 billion per annum, and private spending on education having grown at a CAGR of 10.38% since 1994 at constant prices (double the 5.11% CAGR for total private consumption spending during the same period at constant prices), the Indian education sector is on its way to become the next ?flavour? of the season for private equity (PE) investors.While government spending on education remains comparable to other developing nations (approximately 4% of GDP), structural inefficien... More About: Education , Country , Market
The country?s education market potential
2008-07-14 05:46:00 With double digit economic growth demanding a sustained supply of knowledge workers, India has emerged as one of the world?s largest consumer of education services with a target population of more than 445 million (between age group of 5-24 years), which is expected to increase to approximately 486 million by 2025, far exceeding the combined target population in China (354 million) and the US (91 million) in the same year. With public and private spending on education services in India aggregating approximately $100 billion per annum, and private spending on education having grown at a CAGR of 10.38% since 1994 at constant prices (double the 5.11% CAGR for total private consumption spending during the same period at constant prices), the Indian education sector is on its way to become the next ?flavour? of the season for private equity (PE) investors.While government spending on education remains comparable to other developing nations (approximately 4% of GDP), structural inefficien... More About: Education , Country , Market
ECB vs. FII limits
2008-07-14 05:41:00 Which is better? Raising the ECB limits for Indian corporates? Or raising the limits for FIIs to invest in Indian bonds?The finance ministry and RBI jointly fix an annual limit for debt raising by Indian corporates abroad. Progressively, the cap has been raised and during the last fiscal, local firms are reckoned to have raised over $20 billion.Over a month ago, the combined ceiling for investment by foreign portfolio investors in local corporate bonds and government securities was enhanced to $8 billion from $2.5 billion. Of this, the allocation for investment in corporate bonds stands at $3 billion.The finance ministry has made out a case for a major revision in the policy on foreign borrowings to allow an investment of over $15 billion by foreign portfolio investors (FIIs) in rupee-denominated bonds issued by Indian corporates. The ministry?s argument is that allowing higher investment by foreign portfolio investors in local corporate bonds would make better economic sense ra... More About: Limits
ECB vs. FII limits
2008-07-14 05:41:00 Which is better? Raising the ECB limits for Indian corporates? Or raising the limits for FIIs to invest in Indian bonds?The finance ministry and RBI jointly fix an annual limit for debt raising by Indian corporates abroad. Progressively, the cap has been raised and during the last fiscal, local firms are reckoned to have raised over $20 billion.Over a month ago, the combined ceiling for investment by foreign portfolio investors in local corporate bonds and government securities was enhanced to $8 billion from $2.5 billion. Of this, the allocation for investment in corporate bonds stands at $3 billion.The finance ministry has made out a case for a major revision in the policy on foreign borrowings to allow an investment of over $15 billion by foreign portfolio investors (FIIs) in rupee-denominated bonds issued by Indian corporates. The ministry?s argument is that allowing higher investment by foreign portfolio investors in local corporate bonds would make better economic sense ra... More About: Limits
Latest jargon on the global stock markets
2008-07-14 05:39:00 Heard of things like 'dark pools' 'smart routers' and 'algorithmic trading'?Dark pools, to put it simply, are essentially trading platforms and exchanges that match block institutional orders, bypassing the main exchanges completely in off-market deals, and don?t publish stock quotes. The geeky jargon in the circuit is primarily because it?s been made possible by increasingly sophisticated technology like algorithmic trading tools. They guarantee absolute anonymity and secrecy to buy-side traders worried about revealing their strategies, accesses available liquidity outside the exchanges, and is only reported to the light side post-trade. It is, of course, all intensely regulated and painstakingly legal ? dark pools have taken off in Europe only after the introduction of MiFID, which discourages internalisation of trades, and regulation NMS in the US. A consortium of major banks, including Citigroup, Goldman Sachs, Deutsche Bank, Merrill Lynch, UBS, Morgan Stanley and Credit ... More About: Markets , Global , Stock , Stock markets
Latest jargon on the global stock markets
2008-07-14 05:39:00 Heard of things like 'dark pools' 'smart routers' and 'algorithmic trading'?Dark pools, to put it simply, are essentially trading platforms and exchanges that match block institutional orders, bypassing the main exchanges completely in off-market deals, and don?t publish stock quotes. The geeky jargon in the circuit is primarily because it?s been made possible by increasingly sophisticated technology like algorithmic trading tools. They guarantee absolute anonymity and secrecy to buy-side traders worried about revealing their strategies, accesses available liquidity outside the exchanges, and is only reported to the light side post-trade. It is, of course, all intensely regulated and painstakingly legal ? dark pools have taken off in Europe only after the introduction of MiFID, which discourages internalisation of trades, and regulation NMS in the US. A consortium of major banks, including Citigroup, Goldman Sachs, Deutsche Bank, Merrill Lynch, UBS, Morgan Stanley and Credit ... More About: Markets , Global , Stock
Gist of the developments related to the Indo-US nuclear deal
2008-07-13 05:13:00 DECODING THE NUKE JARGON Nuclear Deal : A nuclear deal, announced in July, 2005 and finalised in March, 2006, would allow the United States to sell nuclear material to India and it may end India?s nuclear isolation. India is self-sufficient in thorium but possesses a meagre 1% of the global uranium reserves. The deal will help India obtaining a steady supply of uranium required for running the present nuclear programme. 123 agreement: Section 123 of the United States Atomic Energy Act of 1954, titled ?Cooperation With Other Nations?, establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation. Such an agreement is called a 123 Agreement. Hyde Act: Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 is the legal framework for a bilateral pact between the United States and India under which the US will provide access to civil nuclear technology and access to nuclear fuel in exchange for Interna... More About: Indo , Related
Gist of the developments related to the Indo-US nuclear deal
2008-07-13 05:13:00 DECODING THE NUKE JARGON Nuclear Deal : A nuclear deal, announced in July, 2005 and finalised in March, 2006, would allow the United States to sell nuclear material to India and it may end India?s nuclear isolation. India is self-sufficient in thorium but possesses a meagre 1% of the global uranium reserves. The deal will help India obtaining a steady supply of uranium required for running the present nuclear programme. 123 agreement: Section 123 of the United States Atomic Energy Act of 1954, titled ?Cooperation With Other Nations?, establishes an agreement for cooperation as a prerequisite for nuclear deals between the US and any other nation. Such an agreement is called a 123 Agreement. Hyde Act: Henry J Hyde United States-India Peaceful Atomic Energy Cooperation Act of 2006 is the legal framework for a bilateral pact between the United States and India under which the US will provide access to civil nuclear technology and access to nuclear fuel in exchange for Interna... More About: Indo , Related
Shoutbox queries answered
2008-06-14 14:36:00 13 Jun 08, 19:11kranthi: sir, I don't understand whats the meaning of "revised growth" ---in 1st point, today blog ! can you explain me please?can we compare earlier growth with revised growth....I mean do they have same base?CSO (Central Statistical Organization) gets revised figures frequently. Not all the figures needed for compiling the inflation or economic growth figures are available by the time it releases the figures the first time. Even when it does have, the department supplying the figures keep revising them as and when they get latest data. Therefore, as and when the new figures keep coming in, it revises the compiled figures to reflect this reality. That is how/why there occurs a revision in these figures.13 Jun 08, 16:19zephyr: and all this while I thought Capital Account Deficit needs to be reduced... please exaplain sir...Capital account deficit means more capital is flowing into the country. That's is usually a good thing. But then a country should be conc... More About: Shoutbox
Shoutbox queries answered
2008-06-14 14:36:00 13 Jun 08, 19:11kranthi: sir, I don't understand whats the meaning of "revised growth" ---in 1st point, today blog ! can you explain me please?can we compare earlier growth with revised growth....I mean do they have same base?CSO (Central Statistical Organization) gets revised figures frequently. Not all the figures needed for compiling the inflation or economic growth figures are available by the time it releases the figures the first time. Even when it does have, the department supplying the figures keep revising them as and when they get latest data. Therefore, as and when the new figures keep coming in, it revises the compiled figures to reflect this reality. That is how/why there occurs a revision in these figures.13 Jun 08, 16:19zephyr: and all this while I thought Capital Account Deficit needs to be reduced... please exaplain sir...Capital account deficit means more capital is flowing into the country. That's is usually a good thing. But then a country should be conc...
What broad lessons can India draw from the subprime crisis?
2008-06-09 06:30:00 o In a very well written piece, the Chairman of the CFSR (Committee on Financial Sector Reforms) of the Planning Commission, Dr. Raghuram Rajan writes about the lessons that our country can learn from the subprime debacle and also offers solutions. o Perhaps the most important lesson is that a narrow focus on rules can lead regulators to miss the bigger picture, and can encourage regulatory arbitrage, to the detriment of the system. Regulators were overly fixated on seeing that rules on capital norms were being met, without seeing the larger picture ? that many banks were going to the riskiest structures consistent with the rules. To achieve this, a statutory body, the Financial Sector Oversight Agency (FSOA) composed of key regulators, which will replace the current informal High-Level Coordination Committee (HLCC) is recommended to be set up. The FSOA will conduct a principles-based supervisory dialogue with top management of key financial conglomerates, look out for ... More About: India , Lessons , Subprime , Crisis , Draw
What broad lessons can India draw from the subprime crisis?
2008-06-09 06:30:00 o In a very well written piece, the Chairman of the CFSR (Committee on Financial Sector Reforms) of the Planning Commission, Dr. Raghuram Rajan writes about the lessons that our country can learn from the subprime debacle and also offers solutions. o Perhaps the most important lesson is that a narrow focus on rules can lead regulators to miss the bigger picture, and can encourage regulatory arbitrage, to the detriment of the system. Regulators were overly fixated on seeing that rules on capital norms were being met, without seeing the larger picture ? that many banks were going to the riskiest structures consistent with the rules. To achieve this, a statutory body, the Financial Sector Oversight Agency (FSOA) composed of key regulators, which will replace the current informal High-Level Coordination Committee (HLCC) is recommended to be set up. The FSOA will conduct a principles-based supervisory dialogue with top management of key financial conglomerates, look out for ... More About: India , Lessons , Subprime , Crisis , Draw
India?s position on bio-piracy and TRIPS in WTO talks
2008-06-09 06:28:00 INDIA has insisted that the issue of amending the trade-related intellectual property rights agreement (TRIPS) to check bio-piracy should be made part of the upcoming ?horizontal process? in which senior officials and trade ministers from key countries would meet to agree on the modality texts for liberalising trade in agriculture, industrial goods and other issues.But wait a minute. What is this ?horizontal process??'Horizontal process' is the term given to a process of prior negotiations at Senior Official level in the WTO talks. Prior talks on trade issues at the senior official level, even before the Ministerial level talks commence, is believed to help the Ministerial meets to quickly close the gaps that exist in their positions and give commitments for the trade agreements. This was done at the behest of the Director General Pascal Lamy in April 2008 in the context of agriculture and NAMA (... More About: India , Piracy , Position
India?s position on bio-piracy and TRIPS in WTO talks
2008-06-09 06:28:00 INDIA has insisted that the issue of amending the trade-related intellectual property rights agreement (TRIPS) to check bio-piracy should be made part of the upcoming ?horizontal process? in which senior officials and trade ministers from key countries would meet to agree on the modality texts for liberalising trade in agriculture, industrial goods and other issues.But wait a minute. What is this ?horizontal process??'Horizontal process' is the term given to a process of prior negotiations at Senior Official level in the WTO talks. Prior talks on trade issues at the senior official level, even before the Ministerial level talks commence, is believed to help the Ministerial meets to quickly close the gaps that exist in their positions and give commitments for the trade agreements. This was done at the behest of the Director General Pascal Lamy in April 2008 in the context of agriculture and NAMA (... More About: India , Piracy
On the spectacular growth of the insurance sector in India
2008-06-07 05:29:00 If you are asked to say something about the benefits of opening up of the insurance sector in India , what could your answer be?Insurance penetration has increased from a niggardly 2.32 % at the time the sector was opened up to private sector participation in 2000 to more than 5% in 2007. The first year premium collections in life insurance, a measure of new business secured, has gone up from Rs 9,700 crore in 2000-01 to Rs 75,600 crore in 2006-07. Industrial houses which have forayed into this sunrise sector have seen spectacular growth and have overtaken the valuations of their parent companies. For example Bajaj Auto?s seven-year-old insurance business has overtaken its 60-year-old parent company in market value. Bajaj Auto is not an exception. Multinational companies that were smart enough to see the potential in the sunrise sector, despite the low 26% ceiling for foreign direct investment, have be... More About: Growth , Spectacular
A look at how IPL makes money
2008-06-03 06:12:00 A lowdown on the IPL business modelThe business model is relatively straightforward. The revenues for the IPL and the franchisees come from three streams: media rights, sponsorships under the central or local pool, and gate receipts. The central pool includes sponsorships for the entire league, to be distributed between the IPL and the franchisees. The local pool comprises sponsorships each team manages to attract, of which the franchisee/team keeps the entire amount. The franchisees? expenses include team franchising instalments, player and personnel, marketing, stadium expenses, and promotion, event management and administration. The auction of the eight teams generated $724 million. Franchisees own the teams in perpetuity, but make the payments in instalments over the next 10 years. In addition, each team spends $4-6 million per year on players and team personnel. Players signed three-year contract... More About: Money
Answers to shoutbox discussions - Apr 2008
2008-04-07 11:05:00 I found some of the discussions requiring quite lengthy responses. Hence I am reproducing below the discussions and my responses to them:6 Apr 08, 23:04neha: sir could u plz explain underwriting ..i m new to ur blogs. and also what is mandatory IPO unerwriting. i looked in wikipedia but could'nt get it. thanks.ramkyc: I would say keep reading the blogs and do keep following the links given therein. Almost everyday I am giving links to some external sites which give us a deeper understanding of some important concept or the other. However...Whenever any company comes out with an IPO (Initial Public Offering) of its shares, it may choose to have an underwriter. This person/entity is one which gaurantees the company that its public offer would be fully subscribed and that in the event that it remains unsubscribed, the latter would subscribe for the entire portion remaining unsubscribed by the public. This is a kind of insurance that the underwriter gives to the company. For thi... More About: Answers , Shoutbox , 2008
On farm loan waiver package
2008-03-03 18:18:00 We all have seen the details of the farm loan waiver package announced by the Finance Minister in his budget speech on 29th February. Some more details are: There are four crore small and marginal farmers who are unable to repay their crop loans to the banks. It will be financed out of the fisc through a combination of cash and bonds. The fisc is expected find the resources from its overflowing tax receipts and disinvestment proceeds. The last major write-off was in 1990. Why is a waiver bad or why it misses the point? A complete waiver vitiates the lending climate and does damage to farm and loan discipline. It penalizes borrowers who have honoured their loan commitments and creates a moral hazard since farmer-borrowers are likely to assume future dues will also be written off. Small farmers face two main challenges: meeting their input needs and dealing with the weather risks to their crops. Addressing these challenges is not on the radar of the govern... More About: Loan , Farm , Package
Budget Related Questions answered
2008-03-02 11:05:00 Hi friends,I received an email asking me to clarify certain things about the recent budget statement and figures. I am doing my best to answer the queries. The para having an * before it is the query and the para that follows it without an * is my answer. Here I go:This is with reference to blog post (dt. 01.03.2008). Here you have posted a table depicting various aggregates of Budget 2008.I had the following queries -* Point 3 talks about non - tax revenue to the central govt. Could you provide me with an indicative break up of this figure.If you are looking for actual figures, I recommend that you look at Annual Financial Statement on Receipts. It is just a four page document.But to give an idea what comprises non-tax revenue, it includes thinks like fiscal services (coinage and mint services), interest and dividend income or profits made by government. * Similarly, Point 6 is about other capital receipts, so it refers to 'grants' which the central govt. receives or it is po... More About: Questions , Related
Hagiography
2008-02-15 17:27:00 It is the body of literature describing the lives and veneration of the Christian saints. The literature of hagiography embraces acts of the martyrs (i.e., accounts of their trials and deaths); biographies of saintly monks, bishops, princes, or virgins; and accounts of miracles connected with saints' tombs, relics, icons, or statues. Hagiographies have been written from the 2nd century AD to instruct and edify readers and glorify the saints. In the Middle Ages it was customary to read aloud at divine office and in the monastic refectory (dining hall) biographies of the principal saints on their feast days. Besides biographies of single saints, other works of hagiography told the stories of a class of saints, such as Eusebius of Caesarea's account of the martyrs of Palestine (4th century AD) and Pope Gregory I the Great's Dialogues, a collection of stories about Saint Benedict and other 6th-century Latin monks. Perhaps the most important hagiographic collection is the Legenda ...
Replies to shoutbox discussions
2008-02-07 16:20:00 @Suresh: Agree with your assessment. But a real national leader is one who could muster his faculties to articulate a cause that is felt strongly about by the larger masses and mobilize them to it. Had you and I lived in pre-independence era, could we have mobilized people the way a Gandhi or Nehru mobilized? That's the stuff leaders are made of. At present, yes we are woefully short of them. Instead what we are witnessing is regional and sectarian leaders articulating narrow and petty considerations for the perceived wants of a few, often to the chagrin and detriment of the needs of the majority. Suresh: out 7 Feb 08, 19:15 Suresh: looking at issues that are important for the country, unlike previous generation(Nehruian era), where all the leaders had faced Imperialism since its a national issue they gained popularity through 7 Feb 08, 19:13 Suresh: I wonder who is going to have a national leader appeal in the next elections, present day no one commands such re... More About: Shoutbox
Basics about primary and secondary stock markets
2008-02-01 15:22:00 Quite a few of you have asked me at one time or the other to define or explain about stock markets. More specifically primary and secondary markets. You can’t get a better explanation than the one that appeared in today’s article ‘Not so primary a market’ in the ET. For the impatient amongst you, the following excerpt would be just enough: For sustained economic growth, it is essential to have a stock market that mobilises and allocates capital efficiently. To place the capital market in perspective, it would be useful to distinguish between the “new issues market” and “stock exchange”. The “new issues market” allocates long-term funds to corporates in an economy without constraining the investment horizon of the investors. The “stock exchange” facilitates buyers and sellers to transact in securities issued in the “new issues market”. Hence, the economic significance of the stock market stems from its role as an allocator of resources. As a resul... More About: Markets , Stock , Primary , Basics , Stock markets
Are regional trade agreements the right strategy?
2008-01-31 15:17:00 This is one question you can expect to be asked either in Mains or in an interview. You can’t get a better answer for this question than from today’s op-ed by Prashant Goyal. Take a look at it here. But Some excerpts worth our noting follow. Today 50% of world trade is under 200 RTAs and for countries like Mexico and Singapore almost 85% and 63% respectively of their global trade is under RTAs. In contrast, only around 30% of India’s global trade is under RTAs. Today when our exports are around 14% of GDP and the trade-GDP ratio is almost 33%, our economy cannot afford this trade diversion. The effects of such diversion would be traumatic if India’s competitors were to conclude RTAs with India’s major trading partners. The WTO negotiations are meandering. Even if the Doha round gets concluded, trade liberalisation is unlikely to be as ambitious as under RTAs owing to the divergent views and positions of 151 nations. RTA negotiations, in contrast, are faster... More About: Strategy , Regional , Trade
RBI’s quarterly review of the monetary policy
2008-01-31 04:07:00 The RBI Governor has kept the key rates unchanged in the recent review of the monetary policy. The key rates here include: Bank rate, CRR, Repo rate and Reverse repo rate. (Refer to the glossary or search our blogs for the definitions of these rates.) Bank rate: 6% Repo rate: 7.75% Reverse repo rate: 6% CRR: 7.5% This has not gone down well with the expectations of the market, because everybody was expecting that RBI would reduce the rates in response to the US Federal reserve’s steep cut of the funds rate (the rate at which banks borrow/lend to each other). The Fed rate cut is seen as having sharpened the interest rate differentials between India and the US, leading to splendid arbitrate opportunity. This is expected to accentuate funds inflows into the country, leading to further rupee appreciation, subsequent sterilisation and the attendant fiscal costs. But the RBI has stood its ground and the logic appears to be that there is no need for India to respond t... More About: Monetary Policy , Review , Policy
Floating vs. Fixed exchange rate system
2008-01-17 17:38:00 Floating currency implies that the government of the currency concerned will not interfere with the exchange rate. But this never happens in reality. The question of floating vs. fixed can be better understood by us if we know some basics about what is known as the macroeconomic trilemma (or the impossible trinity). What this says is that at the most general level, policymakers in open economies are confronted with three typically desirable, yet contradictory, objectives:1. to stabilize the exchange rate;2. to enjoy free international capital mobility, and3. to engage in a monetary policy oriented toward domestic goals.Because only two out of the three objectives can be mutually consistent, policymakers must decide which one to give up. This is the trilemma.So even a country that country professes that it has a floating exchange rate system does intervene often in the forex markets to obtain a 'desired' level of exchange rate. That is how countries end up having only a managed... More About: System , Exchange , Floating , Rate , Fixed
For a different world view
More articles from this author:2008-01-15 18:02:00 Remember James Wolfensohn? Yes, I am referring to the former Word Bank President. A piece written by him is printed in today’s ET. I strongly recommend reading it once. Do so here. He suggests in his article that the notion of a divide between the rich developed north and the poor developing south has become obsolete in the context of globalization. The dynamic process of globalization has heralded the emergence of four inter-connected tiers of countries in the world. The first tier comprises of the affluent countries – notably the US, EU, Australia and Japan. These countries which have relatively smaller populations and have contributed significantly for the world GDP in the last 50 years are now increasingly seeing a challenge from the second tier countries. The second tier comprises of the emerging economies which account for roughly 50% of the world’s population. Though these had smaller growth rates in the region of 3.5%, they have learned how to integr... More About: World , View , Diff 1, 2, 3, 4, 5 |
|
 |
|
 |
