- India and Mauritius sign CECP Agreement
- India signs agreements with AIIB and World Bank
INDIA AND MAURITIUS SIGN CECP AGREEMENT
India and Mauritius signed the India-Mauritius Comprehensive Economic Cooperation and Partnership Agreement (CECPA) in Port Louis.
GS-II: International Relations
Dimensions of the Article:
- India–Mauritius relations
- About the CECPA Between India and Mauritius
- India–Mauritius relations date back to 1730, diplomatic relations were established in 1948, before Mauritius became independent state.
- The cultural affinities and long historical ties between the two nations have contributed to strong and cordial relations between the two nations.
- More than 68% of the Mauritian population are of Indian origin, most commonly known as Indo-Mauritians.
- India and Mauritius co-operate in combating piracy, which has emerged as a major threat in the Indian Ocean region and Mauritius supports India’s stance against terrorism.
- From the 1820s, Indian workers started coming into Mauritius to work on sugar plantations.
- In the 1830s, when slavery was abolished by the British Parliament, large numbers of Indian workers began to be brought into Mauritius as indentured labourers.
- Novermber 2nd is observed as ‘Aapravasi Day’ to mark the ship named ‘Atlas’ docking in Mauritius in1834 carrying the first batch of Indian indentured labourers.
About the CECPA Between India and Mauritius
- CECPA provides for an institutional mechanism to encourage and improve trade between the two countries.
- The CECPA between India and Mauritius covers various export items for India, including food stuff and beverages, agricultural products, textiles etc., and Mauritius will benefit from preferential market access into India for its products, including frozen fish, speciality sugar, alcoholic drinks, etc.
- As regards trade in services, Indian service providers will have access to service sectors, such as professional services, computer related services, research & development etc.
- Both sides have also agreed to negotiate an Automatic Trigger Safeguard Mechanism (ATSM) for a limited number of highly sensitive products within two years of the Signing of the Agreement.
- This CECPA with Mauritius is the first trade Agreement signed by India with a country in Africa
- The Agreement is a limited agreement, which will cover Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Financial services, Customs Procedures and Cooperation in other Areas.
INDIA SIGNS AGREEMENTS WITH AIIB AND WORLD BANK
- The Government of India and the Asian Infrastructure Investment Bank (AIIB) signed a loan agreement for more than $300 million for Assam Intra-State Transmission System Enhancement Project to improve reliability, capacity and security of the power transmission network in the State of Assam.
- The Government of India, Government of Nagaland and the World Bank today signed a $68 million project to enhance the governance of schools across Nagaland as well as to improve teaching practices and learning environments in select schools.
GS-III: Indian Economy, GS-II: International Relations
Dimensions of the Article:
- About Asian Infrastructure Investment Bank (AIIB)
- Membership of AIIB
- Financial Capital of AIIB
- World Bank (WB)
- World Bank Group
- Introduction to the 5 organizations of World Bank Group
- About the Projects in Assam and Nagaland of the AIIB and WB agreements
About Asian Infrastructure Investment Bank (AIIB)
- The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. The purpose of the multilateral development bank is to provide finance to infrastructure projects in the Asia-Pacific region.
- It is headquartered in Beijing and commenced operations in 2016.
- By investing in sustainable infrastructure and other productive sectors today, it aims to connect people, services and markets that over time will impact the lives of billions and build a better future.
Membership of AIIB
- Membership in the AIIB is open to all members of the World Bank or the Asian Development Bank and is divided into regional and non-regional members.
- Regional members are those located within areas classified as Asia and Oceania by the United Nations.
- The China-led Asian Infrastructure Investment Bank (AIIB) has officially approved 57 nations as prospective founding members, with Sweden, Israel, South Africa, Azerbaijan, Iceland, Portugal and Poland the latest to be included.
- Countries accepted as AIIB founding members include China, India, Malaysia, Indonesia, Singapore, Saudi Arabia, Brunei, Myanmar, the Philippines, Pakistan, Britain, Australia, Brazil, France, Germany and Spain.
- Founding members have priority over nations that sign up later because they will have the right to set the rules for the bank.
- As of May, 2020, the bank currently has 78 members as well as 24 prospective members from around the world.
Financial Capital of AIIB
- The AIIB’s initial total capital is USD 100 billion divided into 1 million shares of 100 000 dollars each, with 20% paid-in and 80% callable.
- Paid-Up Share Capital: It is the amount of money that has already been paid by investors in exchange for shares of stock.
- Called-Up Share Capital: Some companies may issue shares to investors with the understanding they will be paid at a later date.
- This allows for more flexible investment terms and may entice investors to contribute more share capital than if they had to provide funds up front.
- China is the largest contributor to the Bank, contributing USD 50 billion, half of the initial subscribed capital.
- India is the second-largest shareholder, contributing USD 8.4 billion.
- Voting Rights:
- China is the largest shareholder with 26.61 % voting shares in the bank followed by India (7.6%), Russia (6.01%) and Germany (4.2 %).
- The regional members hold 75% of the total voting power in the Bank.
World Bank (WB)
- The World Bank (WB) is an international organization which provides facilities related to “finance, advice and research to developing nations” in order to bolster their economic development.
- It provides loans and grants to the governments of poorer countries for the purpose of pursuing capital projects.
- It comprises two institutions: The International Bank for Reconstruction and Development (IBRD), and the International Development Association (IDA).
- The World Bank is a component of the World Bank Group.
World Bank Group
The World Bank Group is an extended family of five international organizations, and the parent organization of the World Bank, the collective name given to the first two listed organizations, the IBRD and the IDA:
- International Bank for Reconstruction and Development (IBRD)
- International Development Association (IDA)
- International Finance Corporation (IFC)
- Multilateral Investment Guarantee Agency (MIGA)
- International Centre for Settlement of Investment Disputes (ICSID)
- With 189 member countries, the World Bank Group is a unique global partnership: five institutions working for sustainable solutions that reduce poverty and build shared prosperity in developing countries.
- The Bank Group works with country governments, the private sector, civil society organizations, regional development banks, think tanks, and other international institutions on issues ranging from climate change, conflict, and food security to education, agriculture, finance, and trade.
Introduction to the 5 organizations of World Bank Group
I – The International Bank for Reconstruction and Development
The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.
II – The International Development Association
The International Development Association (IDA) provides interest-free loans — called credits — and grants to governments of the poorest countries. It is called the soft loan window of the World Bank. Together, IBRD and IDA make up the World Bank.
III – The International Finance Corporation
The International Finance Corporation (IFC) is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments.
IV – The Multilateral Investment Guarantee Agency
The Multilateral Investment Guarantee Agency (MIGA) was created in 1988 to promote foreign direct investment into developing countries to support economic growth, reduce poverty, and improve people’s lives. MIGA fulfils this mandate by offering political risk insurance (guarantees) to investors and lenders.
V – The International Centre for Settlement of Investment Disputes
The International Centre for Settlement of Investment Disputes (ICSID) provides international facilities for conciliation and arbitration of investment disputes.
About the Projects in Assam and Nagaland of the AIIB and WB agreements
The project aims to strengthen Assam’s electricity transmission system by:
- constructing 10 transmission substations and laying transmission lines with the associated infrastructure;
- upgrading 15 existing substations, transmission lines and existing ground wire to optical power ground wire; and
- providing technical assistance to support project implementation.
The programme would strengthen the existing intrastate transmission network of Assam by augmenting it with newer networks to achieve affordable, secure, efficient and reliable 24×7 power.
- This would, in turn, bring Assam closer to ensuring long-term sustainability of its electricity supply.
- The “Nagaland: Enhancing Classroom Teaching and Resources Project” will improve classroom instruction; create opportunities for the professional development of teachers; and build technology systems to provide students and teachers with more access to blended and online learning as well as allow better monitoring of policies and programs. Such an integrated approach will complement conventional delivery models and help mitigate the challenges posed by COVID-19. About 150,000 students and 20,000 teachers in the government education system in Nagaland will benefit from the statewide reforms in schools.
- As part of that strategy, approximately 15 out of Nagaland’s 44 higher secondary schools will be developed into school complexes that operationalize the envisioned learning environment during the project period.