International Institutions

The International Bank for Reconstruction and Development (IBRD) is a key arm of the World Bank Group, originally created for post-war reconstruction and now focused on development in middle-income nations.

Statement I: Correct The IBRD provides loans and guarantees to middle-income and creditworthy low-income countries.

Statement II: Incorrect The IBRD does not work single-handedly; it collaborates with other arms of the World Bank Group like IDA, IFC, etc.

Statement III: Correct It was established in 1944 to help Europe rebuild after World War II.

* Statement 1: Correct. India is indeed a member of the International Grains Council (IGC).

* Statement 2: Incorrect. Membership in the IGC is not a prerequisite for engaging in the rice and wheat trade. Countries that are not members can still export and import these grains. The IGC primarily serves as a forum for intergovernmental cooperation and policy discussion on grain trade.

The World Trade Organization (WTO) has an agreement called the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

TRIPS requires member countries to protect Geographical Indications (GIs). GIs identify a product as originating from a specific geographical location where its qualities or reputation are essentially due to that origin.

India enacted the Geographical Indications of Goods (Registration and Protection) Act, 1999 to comply with its obligations under the TRIPS agreement of the WTO.

The 'Global Financial Stability Report' is prepared by the International Monetary Fund (IMF).

The Global Financial Stability Report is a semiannual report published by the IMF that assesses the stability of the global financial system and emerging market financing. It highlights potential risks and vulnerabilities in the financial system and provides policy recommendations to promote financial stability.

The SDR is an international reserve asset created by the International Monetary Fund (IMF) and not a single currency. Its value is based on a basket of five major world currencies

- US Dollar (USD) - Euro (EUR) - Japanese Yen (JPY) - British Pound Sterling (GBP) - Chinese Renminbi (RMB) (added in 2016)

The IMF reviews the composition of the SDR basket every five years to ensure it reflects the relative importance of currencies in the global trading and financial system. The inclusion of the RMB in 2016 signified the growing importance of the Chinese economy in the world.

It is published by the World Bank.

Ease of Doing Business Index: This index was a global ranking that assessed the regulatory environment for business startups and operations in different economies. It measured regulations in areas like starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, trading across borders, enforcing contracts, and resolving insolvency.

Note: The World Bank discontinued the Ease of Doing Business Index in 2021 due to concerns about data irregularities in some past reports.

The World Bank publishes the Global Economic Prospects (GEP) report twice a year, typically in January and June. This flagship publication examines global economic developments and prospects, with a specific focus on emerging market and developing economies (EMDEs). It provides detailed analysis of key development issues and includes growth forecasts at the global and regional levels.

The World Economic Outlook (WEO) is a flagship report published by the International Monetary Fund (IMF) twice a year, typically in April and October. It provides a comprehensive analysis of global economic developments, short-term and medium-term growth projections, and examines pressing policy issues. Other key reports published by the IMF include the Global Financial Stability Report and the Fiscal Monitor.

The Global Infrastructure Facility (GIF) is a partnership between governments, multilateral development banks, private sector investors, and financiers.

The GIF provides comprehensive project support by utilizing the combined expertise of its technical and advisory partners, including commercial banks and institutional investors. This ensures that well-structured and bankable infrastructure projects are brought to market sustainably, meeting the needs of governments and service users.

The GIF partnership is overseen by a Governing Council that supervises strategic programming and funds management, as well as the development of operational policies and procedures. Additionally, the Governing Council holds the GIF's management accountable for delivering on objectives and principles. The Governing Council is composed of representatives of funding and technical partners, as well as representatives of emerging markets and developing economies. It is co-chaired by the World Bank Group and a Funding Partner.

The World Bank's Ease of Doing Business Index measured business regulations through 10 specific sub-indices: (1) Starting a business, (2) Dealing with construction permits, (3) Getting electricity, (4) Registering property, (5) Getting credit, (6) Protecting minority investors, (7) Paying taxes, (8) Trading across borders, (9) Enforcing contracts, and (10) Resolving insolvency. While maintenance of law and order is a fundamental requirement for economic stability, it was not one of the quantitative indicators used by the World Bank for this index. Options B, C, and D are all official sub-indices used in the ranking methodology.

Statement 1 is correct: The Trade-Related Investment Measures (TRIMS) agreement under the World Trade Organization (WTO) prohibits quantitative restrictions on imports by foreign investors. This means that countries cannot impose conditions like mandatory local sourcing or trade-balancing requirements that distort free trade.

Statement 2 is incorrect: TRIMS only applies to trade in goods, not services. The regulation of trade in services falls under the General Agreement on Trade in Services (GATS), not TRIMS.

Statement 3 is correct: TRIMS is not directly concerned with the regulation of foreign investments. Instead, it focuses on investment measures that affect trade in goods, ensuring that they do not create barriers to international trade.

Hence, option C is the correct answer.

In the context of the International Monetary Fund (IMF), "Gold Tranche" (also referred to as "Reserve Tranche") refers to a specific portion of a member country's quota that can be accessed under specific conditions. Here's a breakdown

International Monetary Fund (IMF): An international organization that works to promote global financial stability and economic cooperation.

Quota: The amount of financial resources a member country is obligated to contribute to the IMF. This contribution is based on the country's economic size and importance in the global trade system.

Reserve Tranche: The first 25% of a member country's quota that can be accessed without needing IMF approval or paying any interest or service charges. It's essentially a readily available credit line.

Hence, option D is the correct answer.

Statement 1 is Incorrect: According to India's Foreign Direct Investment (FDI) policy, 100% FDI is permitted in the 'marketplace model' of e-commerce, but FDI is strictly prohibited in the 'inventory-based model'. This means foreign-owned e-commerce firms can only provide an IT platform to act as a facilitator between buyers and sellers; they cannot exercise ownership or control over the inventory and are not allowed to sell their own goods on the platform.

Statement 2 is Correct: The government has implemented regulations to prevent foreign e-commerce entities from exercising indirect control over inventory. Under Press Note 2 (2018), a vendor is deemed to be controlled by the marketplace entity if more than 25% of its purchases are from the marketplace entity or its group companies. This effectively limits the degree to which these platforms can own or control big sellers, ensuring they remain neutral marketplaces.

Both Rapid Financing Instrument (RFI) and Rapid Credit Facility (RCF) are lending facilities offered by the International Monetary Fund (IMF) to member countries facing urgent balance of payments needs.

Rapid Financing Instrument (RFI): This is available to all IMF member countries.

Rapid Credit Facility (RCF): This is a concessional lending facility specifically for low-income countries (LICs) that are members of the Poverty Reduction and Growth Trust (PRGT).