Business & Economy Current Affairs 2017

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Helmut Kohl, father of German reunification Passes Away

Former German Chancellor Helmut Kohl, who is hailed as the father of German unification has passed away. He was responsible for unifying Germany after the 1989 fall of the Berlin Wall despite facing stiff resistance from Margaret Thatcher and Mikhail Gorbachev.

East and West Germany were separated post World War II. After Soviet Union relinquished control of Eastern Europe, Helmunt Kohl worked towards unifying East and West Germany by giving constant assurances to the Western leaders that a united Germany posed no threat.

Helmunt Kohl was the longest serving post-war chancellor of Germany since 1945. He served as chancellor for 16 years from 1982 to 1998.

Initially Helmunt Kohl served as the chancellor of West Germany in 1982 and later became the chancellor of Germany after reunification in 1990.

He was also the driving force behind the introduction of the euro currency in the Germany at a time when Germans were sceptical  to give up their cherished deutschemark.

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RBI: India’s Current Account Deficit narrowed in 2016-17

According to Reserve Bank of India (RBI), India’s current account deficit (CAD) narrowed during 2016-17 fiscal owing to a contraction in the country’s trade deficit. The CAD for the last fiscal narrowed down to 0.7% of the GDP from that of 1.1% in 2015-16 due to contraction in the trade deficit. Country’s trade deficit narrowed down to $112.4 billion in 2016-17 from $130.1 billion in 2015-16.

Further, the net FDI (Foreign Direct Investment) inflows in 2016-17 also got narrowed to $35.6 billion from $36 billion during 2015-16.

Current Account Deficit

The current account is the net difference between inflows and outflows of foreign currencies. Current Account transactions increase or decrease national income. It includes all transactions of export and import of goods and services, investment income, and unilateral transfers. It consists of two major items (a) merchandise exports (credit to home country) and imports (debit to home country) (b) invisible exports (sale of services) and imports (purchase of services). If the sum of all these transactions is negative then it is called as current account deficit (CAD)

AIIB Approves $150 million for India Infrastructure Fund

China-led Asian Infrastructure Investment Bank (AIIB) has approved $150 million equity investment loan to the India Infrastructure Fund. This loan will be the bank’s first equity investment to fund private projects.

Salient Highlights

The $150 million investment would go the India Infrastructure Fund. The Infrastructure Fund aims to invest in mid-cap infrastructure companies in India.

AIIB in total has approved two loans and one equity investment totalling $324 million to support infrastructure projects in India, Georgia and Tajikistan. In the case of Georgia and Tajikistan, the loans were approved to support transport and power projects.

The initiative is expected to benefit local infrastructure development as it will enhance private capital inflows from global long-term investors, such as public pension funds, endowments and insurance companies.

AIIB

AIIB is a multilateral development bank backed by China and is seen as a rival to the World Bank and Asian Development Bank (ADB). The bank started to function in January 2016. The bank was established to fund various infrastructure projects including energy, transportation, urban construction and logistics as well as education and healthcare in Asia-Pacific region.

The AIIB was officially established with 57 founding members. But as of May 2017, the bank has 52 members. It has an authorised capital of USD 100 billion. The bank is headquartered in Beijing.

Voting Share: China is the largest shareholder with 26.06% voting shares. India is the second largest shareholder with 7.5% voting shares followed by Russia 5.93% and Germany with 4.5%.

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