Development of Money

Development of money

Main article: History of money

The first instances of money were objects with intrinsic value. This is called commodity money and includes any commonly-available commodity that has intrinsic value; historical examples include pigs, rare seashells, whale's teeth, and (often) cattle. In medieval Iraq, bread was used as an early form of money. In Mexico under Montezuma cocoa beans were money. [1]

Roman denarius

Currency was introduced as a standardised money to facilitate a wider exchange of goods and services. This first stage of currency, where metals were used to represent stored value, and symbols to represent commodities, formed the basis of trade in the Fertile Crescent for over 1500 years.

Numismatists have examples of coins from the earliest large-scale societies, although these were initially unmarked lumps of precious metal.^[3]

Ancient Sparta minted coins from iron to discourage its citizens from engaging in foreign trade.

The system of commodity money in many instances evolved into a system of representative money. In this system, the material that constitutes the money itself had very little intrinsic value, but nonetheless such money achieves significant market value through scarcity or controlled supply.

Current trends

Current trends

[edit] Doha rounds

Main article: Doha round

The Doha round of World Trade Organization negotiations aims to lower barriers to trade around the world, with a focus on making trade fairer for developing countries. Talks have been hung over a divide between the rich, developed countries, and the major developing countries (represented by the G20). Agricultural subsidies are the most significant issue upon which agreement has been hardest to negotiate. By contrast, there was much agreement on trade facilitation and capacity building.

The Doha round began in Doha, Qatar, and negotiations have subsequently continued in: Cancún, Mexico; Geneva, Switzerland; and Paris, France and Hong Kong.

[edit] China

Beginning around 1978, the government of the People's Republic of China (PRC) began an experiment in economic reform. Previously the Communist nation had employed the Soviet-style centrally planned economy, with limited results. They would now utilise a more market-oriented economy, particularly in the so-called Special Economic Zones located in the Guangdong, Fujian, and Hainan.

This reform has been spectacularly successful. By 2004, the GDP of the nation has quadrupled since 2008 and foreign trade exceeded USD 1 trillion. As of 2005, China had become the 3rd largest exporter behind Germany and the United States. This occurred in spite of the backlash from the shootings following Tiananmen Square protests of 1989. In 2007, China's two-way trade totaled US$2,173.8 billion, and was $262.2 billion in surplus. Foreign exchange reserves, the largest in the world, topped $1.8 trillion in mid-2008.

In 1991 the PRC joined the Asia-Pacific Economic Cooperation group, a trade-promotion forum. More recently, in 2001 they also joined the World Trade Organization. See also: Economy of the People's Republic of China

International Trade

International trade

Main article: International trade

International Trade Series v • d • e

International trade

History of international trade

Political views

Fair trade

Trade justice

Free trade

Protectionism

Economic integration

Preferential trading area

Free trade area

Customs union

Common market

Economic and monetary union

Other

Trade pact

Trade bloc

Trade creation

Trade diversion

International trade is the exchange of goods and services across national borders. In most countries, it represents a significant part of GDP. While international trade has been present throughout much of history (see Silk Road, Amber Road), its economic, social, and political importance have increased in recent centuries, mainly because of Industrialisation, advanced transportation, globalisation, multinational corporations, and outsourcing. In fact, it is probably the increasing prevalence of international trade that is usually meant by the term "globalisation".

Empirical evidence for the success of trade can be seen in the contrast between countries such as South Korea, which adopted a policy of export-oriented industrialisation, and India, which historically had a more closed policy (although it has begun to open its economy, as of 2005). South Korea has done much better by economic criteria than India over the past fifty years, though its success also has to do with effective state institutions.

Trade sanctions against a specific country are sometimes imposed, in order to punish that country for some action. An embargo, a severe form of externally imposed isolation, is a blockade of all trade by one country on another. For example, the United States has had an embargo against Cuba for over 40 years.

Although there are usually few trade restrictions within countries, international trade is usually regulated by governmental quotas and restrictions, and often taxed by tariffs. Tariffs are usually on imports, but sometimes countries may impose export tariffs or subsidies. All of these are called trade barriers. If a government removes all trade barriers, a condition of free trade exists. A government that implements a protectionist policy establishes trade barriers.

The fair trade movement, also known as the trade justice movement, promotes the use of labour, environmental and social standards for the production of commodities, particularly those exported from the Third and Second Worlds to the First World. Such ideas have also sparked a debate on whether trade itself should be codified as a human right.^[4]

Standards may be voluntarily adhered to by importing firms, or enforced by governments through a combination of employment and commercial law. Proposed and practiced fair trade policies vary widely, ranging from the commonly adhered to prohibition of goods made using slave labour to minimum price support schemes such as those for coffee in the 1980s. Non-governmental organizations also play a role in promoting fair trade standards by serving as independent monitors of compliance with fairtrade labelling requirements.

Organization of trade

Organization of trade

Patterns of organizing and administering trade include:

• State control - trade centrally controlled by government planning.
• Laws regulating Trade and establishing a framework such as trade law, tariffs, support for intellectual property, opposition to dumping.
• Guild control - trade controlled by private business associations holding either de facto or government-granted power to exclude new entrants.
• In contemporary times, the language has evolved to business and professional organizations, often controlled by academia. For example in many states, a person may not practice the professions of engineering, law, law enforcement, medicine, and teaching unless they have a college degree and, in some cases, a license.
• Free enterprise - trade without significant central controls; market participants engage in trade based on their own individual assessments of risk and reward, and may enter or exit a given market relatively unimpeded.
• Infrastructure in support of trade, such as banking, stock market,
• Technology in support of trade such as electronic commerce, vending machines.

[edit] International organizations

• European Common Market
• G8
• General Agreement on Tariffs and Trade (GATT), World Trade Organization (WTO)
• International Monetary Fund (IMF)
• OPEC = Organization of the Petroleum Exporting Countries

[edit] Free trade areas

• Free trade organizations or free trade areas
• European Free Trade Association
• Free Trade Area of the Americas (FTAA)
• [[North American Free Trade

Top News of the Day

[[News No 1.]]As part of its probe on scam-tainted Satyam, RBI today collected particulars of transactions that various banks including The bank, in a statement, had said that it did not have any fund-based exposure to Satyam Computer Services other than a marginal exposure of about Rs 3-crore on account of a forward contract.
Satyam is also maintaining a deposit with ICICI Bank in a current account. The balance in this account is not material, ICICI bank said. We have submitted the details of our business deals with Satyam to the Reserve bank. In the wake of these developments (in Satyam), banks are bound to be extra cautious while lending to such corporates, SBIs Chief Financial Officer Ashok Mukand told.When asked, Citibank declined to comment if the company was its client and whether the bank had given details to RBI.
We are unable to comment due to client confidentiality, a spokesperson of the bank said.
SBI is undertood to have extended loans to the Hyderabad-based company, but the officials declined to divulge the details of its exposure to Satyam.
Leading public-sector lender, Bank of Baroda, has also submitted the details of its insignificant exposure to Satyam to the apex bank, its CMD, M D Mallya said.
We do not have any fund-based exposure to this company (Satyam), Mallya said. However, the lender has some current account deposits of Satyam.
Leading private-sector lender, ICICI Bank, is also believed to have provided the details to the RBI about its dealings with Satyam. [[News No 2.]]CARE has assigned ‘CARE A+’ rating to the proposed Rs 100 crore non convertible debentures issue of Bharati Shipyard Ltd, which is to say the NCDs offer adequate safety for timely servicing and carry low credit risk.
Further, CARE has reaffirmed the ‘CARE A+’ rating assigned to the long-term bank facilities of Bharati Shipyard. Also, CARE has reaffirmed the ‘PR1+’ rating to its short-term bank facilities. The short-term and long-term bank facilities aggregate Rs.3,031 crore, revised from Rs.3,116 crore.
The ratings derive strength from professionally qualified and experienced promoters as well as management, in-house vessel design capabilities of Bharati Shipyard, comfortable gearing level, stable profitability margins, strong order-book position demonstrating visibility in revenue and higher proportion of repeat orders in the order book.
However, the rating is constrained by project risk associated with the expansion projects, high working-capital requirement in the wake of increasing order book and competition from global players in the event of slowdown in the ship building activity.
The inherent cyclicality in the ship building sector, execution of huge order book within the timeframe in view of the possible delay in receipt of equipment for shipbuilding and the government decisions regarding continuation of subsidies are the key rating sensitivities.
Bharati Shipyard is engaged in design and construction of various types of sea-going vessels. Over the years, it has upgraded from manufacturing inland cargo barges and deep-sea trawlers to build tugs, sophisticated offshore support vessels and drilling rigs. BSL has its facilities located at Dabhol (Maharashtra), Ghodbunder (Thane), Ratnagiri (an EOU), Goa (an EOU) and Kolkatta.
The Dabhol and Mangalore yards are under implementation. Since 1987, the company built and delivered over 50 vessels, with 39 vessels being delivered in last nine years.
As on August 31, 2008, Bharati Shipyard had an order-book position of 54 vessels under construction, valued approximately at Rs.5,023 crore, to be executed over the next four years. The export orders constitute 70% of the total order size. [[News No 3.]]Bharat Forge, the countrys largest forgings company, has reviewed its earlier decision to issue non convertible debentures due to bad equity markets.
The Rs 400-crore debenture issue, with detachable warrants, was scheduled to be issued on a rights basis and would have funded Bharat Forges growth plans.
The decision to review the issue was taken at a board meeting on Friday, Bharat Forge said in a statement to the BSE.
Shares of Bharat Forge were up 0.3% to Rs 91.50 on the BSE in intra day trading.
Last month, the auto component maker had approved a proposal to raise Rs 250 crore through issue of debentures on a private placement basis to Life Insurance Corporation of India. [[News No 4.]]The board meeting of Rolta India will be held on 19 January 2009 to take record on the unaudited financial results for the quarter ended 31 December 2008 (Q2) of the financial year 2008-009. [[News No 5.]]KLG Systel has announced that the Power System Solution (PSS) division of the company has been awarded repeat order aggregating Rs 30.60 crore from Uttar Haryana Bijli Vitran Nigam (UHBVN) for EPC project.The company made this announcement during the trading hours today, 10 January 2009.#### Vijaya Bank has announced a reduction in its Benchmark Prime Lending Rate (BPLR) from 13.25 per cent to 12.75 per cent with effect from January 12, 2009.
While deciding on the BPLR, the Banks Asset Liability Management Committee also reviewed the interest rates offered on deposits of various maturities in the light of continued downward trends in benchmark rates, a release said.
Accordingly, interest rates on the Banks retail deposit schemes across various slabs have also been revised downwards in the range of 25 to 75 basis points.
"Our objective is to contribute progressively to a revival in the real economy. I expect the reduction in the BPLR to enable pick-up in credit, especially from the productive sectors as also the public at large," said Vijaya Bank CMD Albert Tauro in the release.

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