South Asian Free Trade Area ( SAFTA ) : –
🔹 The spirit behind the idea of SAFTA is that all countries in this region allow free trade across the borders. The agreement was signed in 2004 and come into effect on 1st January 2006.
Significance of SAARC for India : –
🔸 Economic Integration : – India’s Look East Policy links South Asian economies with South – East Asia will bring further economic intergration and prosperity to India mainly in the Service sector.
🔸 Geostrategic Significance : – It can counter China through engaging Nepal , Bhutan , the Maldives and Sri Lanka in development process and economic cooperation.
🔸 Regional Stability : – SAARC can help in creation of mutual trust and peace within the region.
🔸 Global Leadership : – Role It offers India a platform to showcase its leadership in the region by taking up extra responsibilities.
Limitations of SAARC : –
🔹 SAARC is growing at a slow pace due to the political differences among its member states.
🔹 Conflicts between India and Pakistan led t bilateral issues like Kashmir issue.
🔹 India’s neighbours feared that India intends to dominate them by influencing at the political and societal level.
🔹 SAARC members in majority belong to developing or least developing countries which creates insufficiency of funds.
BRICS : –
🔹 The term BRICS refers to Brazil , Russia , India , China and South Africa respectively.
🔹 BRIC was founded in 2006 in Russia . BRIC turned into BRICS after the inclusion of South Africa in its first meeting in the year 2009.
Conference of BRICS : –
🔹 The 12th conference of BRICS was concluded in Russia in 2020. It was chaired by Russian President Vladimir Putin.
🔹 The 13th Conference of BRICS was held in India in June 2021 under the Chairmanship of India’s Prime Minister Shri Narendra Modi.
Objectives of BRICS : –
🔹 To co – operate and distribute mutual economic benefits among its members besides non – Interference in the Internal policies of each Nation and mutual equality.
🔹 To enhance and diversify trade and investment cooperation that support value addition among the BRICS countries.
🔹 To enhance market access opportunities and facilitate market interlinkages.
🔹 BRICS is emerging as a new and promising political – diplomatic entity with diverse objectives , far beyond the original objective of reforming global financial institutions.
Importance of BRICS for India : –
🔹 India can benefit from collective strength of BRICS by way of consultation and cooperation as well as topical global issues , such as international terrorism , climate change , food and energy security , reforms of global governance institutions etc.
🔹 India remains engaged with the other BRICS countries on its NSG membership.
🔹 The New Development Bank ( NDB ) will help India to raise and avail resources for their infrastructure and sustainable development projects.
🔶 Nations : – Russia, China, Israel, India, Japan and South Korea 🔶
Russia : –
- Russia became the successor of USSR in 1991.
- Russia’s GDP is currently eleventh in the world.
- Russia has reserves of minerals , natural resources and gases that make it a powerful country in the Global world.
- Russia is also the parmanent member of the United Nations Security council. called P – 5.
🔹 Russia emerged as the strong successor of USSR ( Union of Soviet Socialist Republic ) , after the dissolution of the Soviet Union in late 1980’s and the early 1990’s.
🔹 Russia is a nuclear state with a huge stock of sophisticated weapons . It is also a permament member of the UN Security Council , called P – 5.
🔹 Russia’s economy is a mixed and transitional economy of upper – middle income . Russia’s GDP is currently at eleventh position in the world .
China : –
🔹 After the inception of the Peole’s Republic of China in 1949 following the communist revolution under the leadership of Mao , its economy was based on the Soviet model.
🔹 China has been growing as an economic power since 1978. It is estimated to overtake US as the world’s largest economy by 2040. Factors like population , landmass , resources , regional location and political influence adds to its power along with a strong economy.
🔹 Trade barriers were eliminated only in Special Economic Zones ( SEZs ) where foreign investors could set up enterprises. China has become the most important destination for foreign direct investment ( FDI ) anywhere in the world.
🔹 China has large foreign exchange reserves that now allow it to make big investments in other countries . China is also a permanent member of the United Nations Security Council , called P – 5.
Steps taken by China that led to the rise of its economy : –
🔹 China ended its political and economic isolation with the establishment of relation with the United States in 1972.
🔹 Four modernization in the field of agriculture , industry , Science and Technology and military in 1973.
🔹 ‘ Open door policy ‘ to generate higher productivity by investments of capital and Technology from abroad and economic reforms in 1978.
🔹 The privatization of agriculture in 1982 who was followed by the privatization of industry in 1998.
🔹 Special Economic Zones where foreign investors could set up Enterprises.
New Economic Policy of China : –
🔹 Major policy decisions were taken in the 1970’s by the Chinese leadership. China ended its political and economic isolation with US in 1972.
🔹 Premier Zhou Enlai proposed Four modernisations i.e. agriculture , industry , science and technology and military in 1973. Later in 1978 , Deng Xiaoping announced the Open Door Policy and economic reforms in China.
🔹 Open door policy was to generate higher productivity by investments of capital and technology from abroad. Market economy was adopted and their economy was opened step by step.
🔹 Agriculture sector was privatised in 1982 followed by privatisation of industry in 1998. Trade barriers were eliminated in Special Economic Zones ( SEZ’s ) where enterprises were set by the foreign investors.
Impact of New Economic Policy : –
🔹 Privatisation of agriculture resulted in rise of agricultural production and rural incomes which helped the rural economy growth at a faster pace.
🔹 The new trading laws and creation of Special Economic Zones attracted foreign players and foreign trade.
🔹 China has become an important place for Foreign Direct Investment ( FDI ) in the world. Now , China has large foreign exchange reserves which allow it to make big investments in other countries.
🔹 China’s accession to the WTO in 2001 also helped its opening to the outside world.
Israel : –
🔹 Israel has also emerged as one of the most powerful nations in the 21st century in terms of science and technology , defence and intelligence.
🔹 Israel being a small Jewish – Zionist nation is placed in the contemporary global politics in general and the Arab – dominated West Asian politics in particular.
🔹 Israel’s economy is a well – developed free – market economy that is technologically advanced. After the United States , it has the world’s second – largest number of start – up enterprises.
🔹 Its top exports include cut diamonds , high – tech equipment , and pharmaceuticals . Crude oil , foodstuffs , raw materials , and military equipment are among the country’s main imports.
India : –
🔹 The 21 ” century India is being seen as an important emerging global power. The world is experiencing the power and rise of India in a multidimensional way. The economic , cultural , strategic position of the country with a population of more than 135 crores is very strong.
🔹 From an economic perspective , targeting the goal of a $ 5 trillion economy , a competitive huge market , an ancient inclusive culture with 200 million people of Indian Diaspora spreading across the globe impart distinct meaning and salience to India as a new centre of power in the 21 ” century.
🔹 From a strategic perspective , the military of India is self – sufficient with indigenous nuclear technology making it another nuclear power.
🔹 ” Make in India ‘ scheme in technology and science is another milestone of Indian economy. All these changesare making India an important centre of power in the present world.
Reason Why India view themselves as new centers of powers in global politics : –
- Large population of more than 135 crores.
- India has a fast developing economy.
- India has adopted free trade policy and privatisation.
- India has attained nuclear capability in the military sector.
- India is the world’s largest democracy.
Japan : –
🔹 Japan is a small country. Its area is 377,975 square kilometers and its population in 2021 estimate stood at 125,927,902. During the Second World War it had to suffer much devastation and a humiliating defeat. But today Japan is a leading economic power.
🔹 It is one of the most industrially advanced countries of the world and has made great advances in technology and science. Japan principal industries are automobiles ( Suzuki , Toyota , Honda , Mazda , and others ) , ceramics , shipbuilding and precision instruments.
- Japan became a member of the Organization for Economic Cooperation and Development (OECD) in 1964.
- The economy of Japan is the third largest economy in the world in 2017.
- Japan alone is included in the countries of Group – 7 (G – 7) among the countries of Asia.
- Japan ranks eleventh in the world in terms of population.
- Japan is the only country to have suffered the brunt of an atomic bomb.
- Japan contributes 10 percent to the United Nations budget.
- Japan is the second largest country in terms of contribution to the United Nations budget.
- Japan has a security alliance with the US since 1951.
- Although Japan’s military expenditure is only 1 % of its GDP.
Related Chapters
The Cold War Era ( Deleted )
The End of Bipolarity
US Hegemony in World Politics ( Deleted )
Contemporary Centres of Power
Contemporary South Asia
International Organisations
Security in the Contemporary World
Environment and Natural Resources
Globalisation