DNYANSAGAR INSTITUTE OF MANAGEMENT AND RESEARCH

MBA-I / SEM-II/ GEOPOLITICS & WORLD ECONOMIC SYSTEMS (208) (2021-22)

COMPREHENSIVE CONCURRENT EVALUATION

Faculty Name: Prof. Nilofar A Sayyad

Subject: GEOPOLITICS & WORLD ECONOMIC SYSTEMS Subject Code: 208

Sr. No. Parameter / Component Marks Date of Exam/Submission

1 Written Home Assignment 50 2nd June 2022
2 Caselet 50 20th June 2022

Written Home Assignment

Instructions:

1. The last date of Submission is 2nd June 2022.The assignment won’t be accepted after the
date.
2. Assignment should be hand written and in your own words; copied assignments from peers
or other open sources will not be considered for assessment.
3. The content should cover all the points & justify the marks for assessment.
4. Incomplete assignments will not be accepted.
5. Student name, specialization, assignment questions must be clearly mentioned.

Q.1) Define Global Economy. Describe the components of Global Economy and types of
capitalism.

Q.2) Describe the effects of Globalisation on Indian Economy.

Q.3) Explain the functions of GATT and WTO.

Q.4) Discuss the impact of trade wars in liberalized economy in current day scenario through
relevant examples.

Q.5) Explain International Trade Insurance, patents, copyright, trademarks, IPR.

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Q.6) Write a detailed note on International Financial System and reform of international monetary
affairs.

Q.7) Explain the concept Globalisation and its impact on India.

Q.8) What is the impact of reverse globalization?

Q. 9) Explain SAARC, ASEAN and NAFTA.

Q. 10) Explain trade war with examples.

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Caselet 1- The world after World War II was based on the concept of multilateralism in various
political and economic fields. Embodiment in the growing role of international organizations.

On the economic level, the establishment of the World Trade Organization sealed the triangle of
international organizations that dominate the world economy (the International Monetary Fund and
the World Bank).

However, with the increase in protectionist tendencies, trade tensions, and the tendency towards
concluding bilateral and regional agreements, fears have emerged that multilateralism will enter a
crisis that threatens its survival.

Que- What do you think of that?

Caselet 2 -Trade wars can lead to a decline in revenues in the state budget if the country
developed exports and obtained high income from the state budget. In this situation, trade wars can
lead to a public finance crisis if the state budget has a high budget deficit and public finances are
burdened with high public debt. In this situation there is a systemic risk of increasing indebtedness
and loss of liquidity in the state finances. This type of situation can lead to an economic crisis.

Que- In what situations can trade wars lead some of the smaller national economies to an
economic crisis?

Caselet 3 - The shock to the global economy from COVID-19 has been both faster and more
severe than the 2008 global financial crisis (GFC) and even the Great Depression.

In those two previous episodes, stock markets collapsed by 50% or more, credit markets froze up,
massive bankruptcies followed, unemployment rates soared above 10%, and GDP contracted at an
annualized rate of 10% or more. But all of this took around three years to play out. In the current
crisis, similarly dire macroeconomic and financial outcomes have materialized in three weeks.

Que- What is the expected impact of COVID-19 on the world economy in the next 3 months?

Caselet 4- India’s economic growth for the financial year 2016 has been estimated at 7.6 per cent
as compared with the revised estimate of 7.2 per cent in the previous year, aided largely by growth
in the manufacturing sector. If the new projection materializes, India will be the fastest growing
major economy in the world, overtaking China. The latest projection is a shade better than the

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finance ministry’s earlier estimate of seven to 7.5 per cent. However, the GDP growth for the third
quarter of this financial year slowed to a four-quarter low at 7.3 per cent. In the second quarter, it
had grown by 7.7 per cent. Growth in gross fixed capital formation, a proxy for investment, fell
significantly in the third quarter, compared to the second, because of lacklustre private
investments. According to data, growth figures were revised sharply upwards for the second
quarter from 7.4 per cent; and from seven per cent to 7.6 per cent for the first quarter. 9 To meet
the revised figure of 7.6 per cent growth in the entire current year, the GDP has to increase by 7.8
per cent in the last quarter. Economic Affairs Secretary Shaktikanta Das attributed the estimated
higher growth to reforms initiated by the government. However, very few economists and market
experts were ready to take the official data at face value, which they said was at odds with weak
exports, railway freight, cement production, investment and flat order books that pointed to
weakness in the economy. “All our qualitative and quantitative data checks suggest that GDP
growth decisively decelerated in FY16 as compared to FY15, whilst the GDP data is suggesting
that growth accelerated in FY16,” said Ritika Mankar Mukherjee, economist, Ambit Capital. In
nominal terms, however, GDP would grow just 8.6 per cent in the current financial year, which
would make the fiscal consolidation exercise of the government a tad challenging. At Rs 135.67
lakh crore GDP, fiscal deficit at 3.9 per cent means Rs 5.29 lakh crore. This is over 26,000 crore
less than Rs 5.55 lakh crore estimated at the time of the Budget. The Budget had assumed the
nominal GDP growth at 11.5 per cent. The Centre’s fiscal deficit already stood at Rs 4.88 lakh
crore till December of the current financial year. The government will have to restrict it within Rs
41,000 crore (Rs 5.29 lakh crore minus Rs 4.88 lakh crore) in the January-March period. For the
next financial year, the government will have to just narrow the gap between the expenditure and
the revenue, by over Rs 13,000 crore to retain the target of 3.5 per cent of GDP on the assumption
that, in nominal terms, it would also grow the same 8.6 per cent in 2016-17. This should not have
been a problem for the government, caught in a dilemma of sticking to the fiscal consolidation
road map or deferring it by a year more. However, the government will have to bear the extra
burden of Rs 1.1 lakh crore to implement One Rank One Pension for retired Army personnel and
the Seventh Pay Commission recommendations. If the government sticks to the plan, the Reserve
Bank of India will find it easier to cut the policy rate to spur economic growth. Chief Economic
Adviser Arvind Subramanian said agriculture has to be a focus for policy action. Answer the
following questions:

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1. Elaborate your views on growth of India and its related factors.

2. Do a SWOT analysis of the present economic situation of India

3. Suggest suitable solutions to achieve the prospective growth

Caselet 5- As IMF Managing Director Kristalina Georgieva noted ahead of the April 2021
IMF/World Bank Spring Meetings: “The global economy is on firmer footing as millions of people
benefit from vaccines. But while the recovery is underway, too many countries are falling behind
and economic inequality is worsening. Strong policy action is needed to give everyone a fair
shot—a shot in the arm to end the pandemic everywhere, and a shot at a better future for
vulnerable people and countries.” (Speech). In this trying time, the IMF continues to support
countries on the path to recovery by providing policy advice, financial support, capacity
development, and debt relief for the poorest.

The April 2021 World Economic Outlook projects a stronger recovery for the global economy in
2021 and 2022 compared to the forecast in last October, with growth projected to be 6 percent in
2021 and 4.4 percent in 2022. Nonetheless, the outlook presents daunting challenges related to
divergences in the speed of recovery both across and within countries and the potential for
persistent economic damage from the crisis.

Cumulative per capita income losses over 2020–22, compared to pre-pandemic projections, are
equivalent to 20 percent of 2019 per capita GDP in emerging markets and developing economies
(excluding China), while in advanced economies the losses are expected to be relatively smaller, at
11 percent. This has reversed gains in poverty reduction, with an additional 95 million people
expected to have entered the ranks of the extreme poor in 2020, and 80 million more
undernourished than before. The divergent recovery paths are likely to create significantly wider
gaps in living standards between developing countries and others, compared to pre-pandemic
expectations. The adverse impact on low-income people will be particularly acute, imperiling the
significant progress made in reducing extreme poverty in the world since the 1990s.

The April 2021 Global Financial Stability Report shows that financial stability risks are in check
so far, but action is needed to address financial vulnerabilities exposed by the crisis. The measures

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may have unintended consequences on stretched valuations and rising financial vulnerabilities.
Given large external financing needs, many emerging markets face challenges, especially if a
persistent rise in US rates brings about a

reprising of risk and tighter financial conditions. The corporate sector in many countries is
emerging from the pandemic over indebted, with notable differences depending on firm size and
sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh
on the risk appetite of banks. Therefore, ongoing support remains necessary, but there is a pressing
need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial
conditions.

Supporting emerging market and developing countries is an urgent priority. They are already more
economically vulnerable than the advanced economies—and now particularly hard hit by a lack of
medical supplies, a sudden stop of the world economy, difficulties in accessing global capital
markets and, for some, a sharp drop in commodity prices and a reduction in tourism.

As highlighted also in the External Sector Report published in August 2020, trade barriers will not
be effective in reducing external imbalances and countries should avoid tariff and nontariff
barriers, especially on medical equipment and supplies.

Que- What is the impact of coronavirus on the global economy?

Prof. Nilofar Sayyad www.dimr.edu.in