World Panorama (UPSC) Part-III

The treaty was drawn, drafted and negotiated by the Eighteen Nation Committee on Disarmament, an UN-sponsored organisation based in Switzerland.

On August 6th and 9th,1945, the twin Japanese cities of Hiroshima and Nagasaki were bombed by the United States with a powerful and terrible weapon – The Atom Bomb. The act brought about the end of World War 2, but with a terrible price. Total casualties amounted between 129,000 to 226,000 between the two cities, with countless other injured and suffering from radiation sickness.

The after-effects of the bombings were a serious cause of concern among world powers, along with potential misuse of the weapon. This concern led to calls for a safeguard to ensure a Nuclear Arms Control was in place. Thus it was in 1961, a UN resolution called for a treaty to prevent an arms race for nuclear weapons. This treaty would go on to become the Non- Proliferation Treaty.

• The World Bank has released the Global Economic Prospects (GEP) report 2025.
o It is a flagship biannual publication of the World Bank Group that examines trends and projections in the global economy. It emphasizes emerging markets and developing economies.
Major Highlights
• Global Economy: It is projected to expand by 2.7% in both 2025 and 2026, the same pace as in 2024.
• Emerging Market and Developing Economies (EMDEs) have undergone significant transformation since 2000, now contributing about 45% of global GDP, compared to 25% at the start of the century.
o India, China, and Brazil, the three largest EMDEs, have collectively driven approximately 60% of annual global growth since the start of the century.
• Trade Restrictions: New global trade restrictions in 2024 were five times the 2010-19 average.
o As a result, overall economic growth dropped-from 5.9% in the 2000s to 3.5% in the 2020s.
• Challenges and Recommendations:
o Rising trade tensions could reduce global growth. Persistent inflation could delay expected cuts in interest rates.
o With the right policies, these economies can even transform some challenges into significant opportunities.
o All countries, meanwhile, should work together to strengthen global trade governance, with the support of multilateral institutions.

• The ‘European Stability Mechanism’ (ESM), is a rescue fund which was set up by the European Union in 2012 to provide loans to financially distressed eurozone countries. ESM acts as a “lender of last resort” for euro-area countries when they are unable to refinance their government debt in financial markets at sustainable rates. The assistance is granted, under strict conditionality, if needed to safeguard the financial stability of the entire euro area and of each euro area country.

• ESM provides loans only to ESM Members, all of which are by definition in the euro area. EU countries that do not use the euro as their currency may request assistance from the EU’s Balance of Payments facility.

• ESM raises funds for its financial assistance through the sale of bonds and bills to investors. Taxpayers’ money is never used for lending to beneficiary countries.

• The ESM will provide a backstop to the Single Resolution Fund, and will play a stronger role in crisis prevention and future economic adjustment programmes.

Green box: It includes subsidies which do not cause any trade distortion or cause very minimal distortions. They are not product specific subsidies. These are direct income support to farmers who are distressed due to crop loss or any such other calamity. Therefore, they are allowed by the WTO. Examples include, research funding, environment protection etc.

Amber box: These are the subsidies that distort international trade by promoting excessive production. As a result, the products become cheaper than their counterparts from other countries. Examples include, input subsidies such as subsidies on seeds, fertilisers, Minimum Support Price (MSP) etc. WTO limits this subsidy by capping it at 5% of their total agriculture production for developed countries & 10% for developing countries.

Blue box: These are basically amber box subsidies but they tend to limit production. Currently only few countries like Norway, Iceland use these kinds of subsidies. There is no cap by the WTO on these kinds of subsidies.

(ii) First statement is right and Second statement initial part is also correct- they're rupee denominated and 'debt' type of instrument. We've to check whether public sector firms also use it. answer is yes. Hence both are correct.