Shinzo Abe Current Affairs - 2019
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A Letter of Intent (LoI) was exchanged between Ahmedabad and Japanese city of Kobe for a sister city partnership. The LoI was exchanged in presence of Indian Prime Minister Narendra Modi, who visited Kobe to address a large Indian diaspora event.
Authorities from Japanese city of Kobe exchanged Letter of Intent (LoI) with their counterparts in Ahmedabad for Ahmedabad-Kobe Sister City Partnership.
This development will further pave the way for an enhanced economic relationship as well as a cultural exchange between two vibrant cities as well as between India and Japan.
In November 2016, PM Narendra Modi and his Japanese counterpart Shinzo Abe inked a sister-state relationship Memorandum of Understanding for Gujarat and Hyogo prefecture, a Japanese prefecture in Kansai region of Japan’s main island, Honshu. Kobe is capital city of Hyogo. During his visit, Modi had also visited a bullet train plant in Kobe.
MoU then signed was sought to promote mutual cooperation between Gujarat and Hyogo in fields of academics, cultural cooperation, business, environmental protection and disaster management.
What is a sister city?
The sister cities or twin towns concept is a legal and social agreement between towns, cities, oblasts, counties, provinces, prefectures, states, regions between two different countries to promote cultural as well as commercial ties.
This plan was conceived after World War II ended so as to promote peaceful coexistence and to encourage trade and tourism.
In diplomacy, the concept of sister cities is seen as a way for enhancing strategic ties between two nations, both cultural and economic.
India has signed sister city agreements with: China, Australia, United States, South Korea (RoK), Russia, Canada, Germany, Belarus, Mauritius, Hungary, Jordan, Bangladesh, Lithuania and Portugal.
In India there is no such part where Japan’s projects or investments have not left its mark in similar manner, talent and manpower of India are also contributing towards strengthening Japan. This partnership has risen from a time when both countries collaborated in building cars and are collaborating in building a bullet train.
India is also planning to run its 1st bullet train between Mumbai and Ahmedabad with the help of Japan. The first stretch of ambitious project is expected to be completed by 2022.
The Union Cabinet has approved India’s Currency Swap Agreement with Japan. The $75-billion bilateral currency swap arrangement is a milestone in mutual economic cooperation and special strategic and global partnership between two countries.
Currency Swap Agreements
A Currency swap agreement is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped.
How Currency Swap Agreement can benefit India?
The currency swap agreement can be beneficial to India in the following ways:
- The currency swap facilities make it easier for India to pay for its imports. This aids in addressing the challenge of depreciation.
- Since the Currency swap agreement involves trading in local currencies. Countries pay for imports and exports through their own currencies rather than involving a third country currency. This does away with the charges involved in multiple currency exchanges.
- The currency swap makes it easier to improve liquidity conditions.
- Currency swap agreements help in saving for a rainy day when the economy is not looking in good shape.
- The swap agreements also contribute towards stabilising the country’s balance of payments (BoP) position.
- The agreement aids in improving the confidence in the Indian market.
- Together with ensuring that the agreed amount of capital is available to India, it also brings down the cost of capital for Indian entities while accessing the foreign capital market.
The Currency Swap Agreement was concluded between Prime Minister Narendra Modi and Japan’s Prime Minister Shinzo Abe during the summit level meeting at Yamanashi, Japan.