An Editorial on ACES Bill,2009 : From Economic Times

During her recent visit, the US secretary of state Hillary Clinton forcefully urged India to contribute to carbon-emission reductions to combatglobal warming. India’s environment minister Jairam Ramesh responded with equal force stating that emission caps would not cut ice in India. Widespread criticisms of this response in the western press notwithstanding, Ramesh is on a strong wicket when refusing to accept mitigation obligations.

The push secretary Clinton has made for emission reductions by India partially reflects a switch in the US policy towards climate change under President Obama. The Congress, which has also come to be dominated by the Democratic Party following the November 2008 elections, reinforces this switch. Specifically, the House of Representatives recently passed the American Clean Energy and Security (ACES) Bill of 2009, which provides for a “cap and trade” program that would place an annual cap on the overall carbon emissions in the US.

The cap would progressively tighten to 80% of 2005 emissions in 2020, 58% in 2030 and 17% in 2050. Each year, the government would issue tradable permits matching the amount of the carbon cap. Companies would be required to acquire permits for every tonne of carbon they emit either from the government or the marketplace. To become law, Senate must also pass the ACES Bill.

While “cap and trade” programs have existed in Europe as a part of the Kyoto Protocol, an international treaty negotiated under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC), the proposed US program differs from them in one key respect: beginning in 2020, it requires the US President to impose tariffs on selected carbon-intensive goods from countries that do not introduce caps on carbon emissions. It specifically targets India and China by requiring the US Trade Representative to annually certify that these countries are adopting emission standards at least as vigorous as those prevailing in the US.

According to legal opinion, the import tariff is likely to violate some key World Trade Organisation (WTO) provisions. Even President Obama who has actively sought the passage of the ACES Bill has expressed disappointment with the insertion of the import duty provision. Nevertheless, if the Bill does become law, India will have to eventually challenge any carbon tariffs the US imposes on it in the WTO dispute settlement body and be willing to retaliate in a WTO-consistent manner.

But a more immediate and perhaps bigger battle on climate change looms in Copenhagen in December. According to the UNFCCC, which came into force in 1994 and is currently subscribed to by 192 countries, developed countries must periodically negotiate mitigation commitments to avoid “dangerous anthropogenic interference” with the climate system. The convention explicitly exempts developing countries from similar mitigation commitments. Consistent with this provision, the Kyoto Protocol, ratified in 2005, requires only developed countries to mitigate.

The US, which had refused to ratify the Kyoto Protocol but is now keen on a post-Kyoto climate change treaty, insists, however, that China and India undertake binding mitigation commitments. It reasons that these countries are among the world’s four largest emitters in absolute terms.

But beyond this size-based argument, there is little else on which the US case can be pegged, especially against India. Given India has the second largest population in the world with the US being a very distant third, it is hardly surprising that India is among the top four emitters in absolute terms. But in per-capita terms, it ranks a low 137th. Forty percent of the households in the country are even without an electricity connection. And there are 300 million people living in abject poverty. If India were to agree to even cap its emissions at current levels, let alone mitigate, its growth process will be crippled. And with it, the country would lose any hope of bringing electricity to all households or of eliminating poverty.

Therefore, from the viewpoint of its own citizenry, India has every reason to refuse mitigation commitments for some decades to come. It also has a good moral case. Rich countries have been responsible for more than 70% of the emissions between 1850 and 2000. India’s contribution to emissions during these same years was a paltry 2%. Even setting aside this history, Canada, US, Europe, Eurasia and Japan together account for more than 50% of the current emissions and India only 4.4%. If environment were to be viewed as a common resource, which it is, almost any principle of moral philosophy would say that developed countries must bring their emissions down very substantially before they demand similar reductions from the poor countries. The fact that they have emitted a lot in the past and they continue to do so today ought to give them rights to less, not more, future emissions than the poor countries.

The exemption to the developing countries from mitigation commitments unless they choose to voluntarily undertake them is also enshrined in the UNFCCC to which developed countries are signatory. In its preamble, the convention explicitly recognises that “the largest share of historical and current global emissions of greenhouse gases has originated in developed countries, that per capita emissions in developing countries are still relatively low and that the share of global emissions originating in developing countries will grow to meet their social and development needs.” The UNFCCC requires mitigation commitments only from developed countries.

The US knows that it is on thin ice when it insists on mitigation commitments from India in the near future. The principal reason it targets India is that it is ill-at-ease targeting China alone. It can be scarcely unaware that mitigation by India from its current low emission levels would do little to alleviate global warming problem.

At Copenhagen, India should clearly indicate to the US that it would not sign an unjust and inequitable treaty permitting trade sanctions against other countries; that it would challenge any attempt at enforcing such sanctions against non-signatories in the WTO dispute settlement body; and that if necessary it would exercise its right to retaliate in WTO-legal fashion.

source: economic times

Tutorial : National Rural Employment Gaurantee Act (NREGA)

The following is a fantastic article on NREGA by GKToday.in. The article wasnt changed.Here is the link for Original article.

What is NREGA?

1. NREGA is designed as a safety net to reduce migration by rural poor households in the lean period through A hundred days of guaranteed unskilled manual labour provided when demanded at minimum wage on works focused on water conservation, land development & drought proofing.
2. Notification of the National Rural Employment Guarantee Act came in September 2005. It was launched on February 2, 2006.
3. NREGA is the flagship programme of the UPA Government that directly touches lives of the poor and promotes inclusive growth.
4. The Act aims at enhancing livelihood security of households in rural areas of the country by providing at least one hundred days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
5. The ongoing programmes of Sampoorn Grameen Rozgar Yojna & National Food for Work Programme were subsumed within this programme in the 200 of the most backward districts of the country, in which it was introduced in phase -1 .
6. In phase-2 it was introduced in 130 additional districts.
7. The scheme was extended to 274 rural districts from April 1, 2008 in phase-3.
8. NREGA is the first ever law internationally, that guarantees wage employment at an unprecedented scale.
9. Dr. Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project.

What are Objectives of NREGA?

1. Augmenting wage employment.
2. Strengthening natural resource management through works that address causes of chronic poverty like drought, deforestation and soil erosion and so encourage sustainable development.
3. Strengthening grassroots processes of democracy
4. Infusing transparency and accountability in governance.
5. Strengthening decentralization and deepening processes of democracy by giving a pivotal role to the Panchayati Raj Institutions in planning, monitoring and implementation.

What are the Unique Features of NREGA?

1. Time bound employment guarantee and wage payment within 15 days
2. Incentive-disincentive structure to the State Governments for providing employment as 90 per cent of the cost for employment provided is borne by the Centre or payment of unemployment allowance at their own cost and emphasis on labour intensive works prohibiting the use of contractors and machinery.
3. The Act mandates a 33 percent participation for women.

How NREGA is Implemented? The following image shows the key processes in the implementation of NREGA.

1. Cost sharing : Central Government 3/4th , State Government 1/4th
2. Adult members of rural households submit their name, age and address with photo to the Gram Panchayat.
3. The Gram panchayat registers households after making enquiry and issues a job card. The job card contains the details of adult member enrolled and his /her photo.
4. Registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to panchayat or to Programme Officer.
5. The panchayat/programme officer will accept the valid application and issue dated receipt of application, letter providing work will be sent to the applicant and also displayed at panchayat office.
6. The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.
7. If employment under the scheme is not provided within fifteen days of receipt of the application daily unemployment allowance will be paid to the applicant.

NREGA & Union Budget 2009-10:

1. During 2008-09, NREGA provided employment opportunities for more than 4.47 crore households as against 3.39 crore households covered in 2007-08.
2. Govt. is committed to providing a real wage of Rs.100 a day as an entitlement under the NREGA.
3. To increase the productivity of assets and resources under NREGA, convergence with other schemes relating to agriculture, forests, water resources, land resources and rural roads is being initiated. In the first stage, a total of 115 pilot districts have been selected for such convergence.
4. Govt of India has proposed an allocation of Rs.39,100 crore for the year 2009-10 for NREGA which marks an increase of 144% over 2008-09 Budget Estimates.

How Monitoring & Evaluation is Done in NREGA?

1. The Ministry has set up a comprehensive monitoring system. For effective monitoring of the projects 100% verfication of the works at the Block level, 10% at the District level and 2% at the State level inspections need to be ensured.
2. In order to optimize the multiplier effects of NREGA, the Ministry has set up a Task Force to look at the possibility of convergence of programmes like National Horticulture Mission, Rashtriya Krishi vikas Yojana, Bharat Nirman, Watershed Development with NREGA.
3. These convergence efforts will add value to NREGA, works and aid in creating durable efforts and also enable planned and coordinated public investments in rural areas.
   

Critical Issues of NREGA, how they are addressed?

1. Issues Related to Job Cards: To ensure that rural families likely to seek unskilled manual labour are identified & verify against reasonably reliable local data base so that nondomiciled contractor’s workers are not used on NREGA works . What is done for this problem? Job card verification is done on the spot against an existing data base and Reducing the time lag between application and issue of job cards to eliminate the possibility of rentseeking, and creating greater transparency etc. Besides ensuring that Job Cards are issued prior to employment demand and work allocation rather than being issued on work sites which could subvert the aims of NREGA
2. Issues related to Applications: To ascertain choices and perceptions of households regarding lean season employment to ensure exercise of the right to employment within the time specified of fifteen days to ensure that works are started where and when there is demand for labour, not demand for works the process of issuing a dated acknowledgement for the application for employment needs to be scrupulously observed. In its absence, the guarantee cannot be exercised in its true spirit
3. Issues Related to Selection of Works: Selection of works by gram sabha in villages and display after approval of shelf of projects, to ensure public choice, transparency and accountability and prevent material intensive, contractor based works and concocted works records
4. Issues related to Execution of Works: At least half the works should be run by gram panchayats . Maintenance of muster roll by executing agency -numbered muster rolls which only show job card holders must be found at each work-to prevent contractor led works
5. Issues related to measurement of work done: Regular measurement of work done according to a schedule of rural rates sensitive Supervision of Works by qualified technical personnel on time. Reading out muster rolls on work site during regular measurement -to prevent bogus records and payment of wages below prescribed levels
6. Issues related to Payments: Payment of wages through banks and post offices -to close avenues for use of contractors, short payment and corruption
7. Audit : Provision of adequate quality of work site facilities for women and men labourers Creation and maintenance of durable assets Adequate audit and evaluation mechanisms Widespread institution of social audit and use of findings

Some Points:

1. Rozgar Jagrookta Puruskar award has been introduced to recognize outstanding Contributions by Civil society Organizations at State, District, Block and Gram Panchayat levels to generate awareness about provisions and entitlements and ensuring compliance with implementing processes.
2. The government has engaged professional institutions like IIMs, IITs and agricultural universities to assess the implementation of NREGA across the country.

Criticism of NREGA :

Here are some points raised regarding the implementation and success of NREGA in various news papers and magazines:

1. In last 3 years on average only 50% of the households that registered under the scheme actually got employment. (times of India)
2. There is a wide variation of performance across states. In terms of the percentage of registered households provided work, Maharashtra has averaged an abysmal 13% over the three years while Rajasthan at the other end of the spectrum has averaged 73%. (Times of India)
3. The rural poverty line, which is now in the region of Rs 400 per capita per day, means that an average household that is below the poverty line (BPL) will have an income of something in the range of Rs 24,000 per annum or less, assuming a five-member household. In other words, if a BPL family were to get the full promised benefit of NREGA they could earn the equivalent of more than 40% of their annual income from this one scheme alone. That should be enough to see why NREGA should not be seen as just another of the plethora of poverty alleviation schemes that India has had since Independence. (Times of India)
4. If this scheme is implemented the right way, there will be no need for MP and MLAs funds. Look at the figures: At Rs 2 crore per 543 MP, the allocation comes to Rs 1086 crore (most times this remains underutilized). In his budget, finance minister Pranab Mukherjee has increased the NREGA allocation by 144% and it's now Rs 39,100 crore. (Times of India)
5. NREGA: ship without rudder? (The Hindu)
6. The Planning Commission has sought the Reserve Bank of India’s intervention in streamlining the mechanism of paying wages under the NREGA. In a letter to the central bank, the Commission said that the RBI should give directions to banks to ensure that payments to the beneficiaries of the NREGA are made only through banks or post-offices. The Commission has pointed out that disbursing funds under the NREGA, which has an annual allocation of Rs30,000 crore, needs to be strengthened to ensure that no leakages happen as the canvas of the programme is bound to expand in the near future. (Live Mint)
7. Despite the political and economic importance NREGA has generated, there are lack of studies on the working of public employment programmes. (Live Mint)

First BRIC Summit by R K Pandey of upscportal.com

First BRIC Summit

Developing World Rendered New Power

By R.K.Pandey (upscportal.com)

Brazil, Russia, India and China ended the first BRIC summit at Yekaterinburg in Russia by calling for an increased role in global financial institutions by emerging economies and developing nations. At the conclusion of the first BRIC summit on June16,2009 BRIC countries issued a joint statement calling for increased economic reform. The four nations, representing emerging economic powers, demanded that developing economies have a greater voice and representation in international financial institutions, and their heads and senior leadership should be appointed through an open, transparent and merit-based selection process. BRIC countries said that they also believe there is a strong need for a stable, predictable and more diversified international monetary system, it showed a warning against the global domination of the US dollar as the world’s standard reserve currency.

Russian President Dmitry Medvedev had voiced similar sentiments before the summit, saying the current reserve policies have not managed to perform their functions. Chief economic aide, Arkady Dvorkovich, suggested that the International Monetary Fund (IMF) should revise the basket of currencies used to value its financial products to include the Russian ruble and Chinese Yuan. At the moment the currencies included are the dollar, euro, yen and sterling.

The range of topics on the agenda and the line-up of presidents attending showed the growing economic and political power of the world's emerging nations, including India and China, and their desire to forge new levers of influence. Host president Dmitry Medvedev of Russia hailed the Urals city of Yekaterinburg as the epicenter of world politics.

BRICs New Affirmation
The so-called BRIC nations of Brazil, Russia, India and China called for reform of international financial institutions, sweeping changes to the United Nations to give a bigger role to Brazil and India and a stable and predictable currency system. Iran's president, re-elected in a disputed vote, fired a salvo at the United States, the leaders of India and Pakistan had their first one-to-one meeting since the Mumbai attacks and the four top emerging market economies held their first summit.

A common thread running through the Shanghai Cooperation Organisation (SCO) summit and a separate meeting between Brazil, Russia, India, and China (BRIC) was discussion of a new world order less dependent on the United States. President of Russia told that existing reserve currencies, including the U.S. dollar, had not performed their function and said it was time for change and countries should use their national currencies more for trade. The BRIC summit ended with a statement by Medvedev and a communique which demanded more power for developing nations. It did not mention two key Moscow initiatives a smaller role for the U.S. dollar and a supranational reserve currency.

The Kremlin's top economic aide, Arkady Dvorkovich, said the International Monetary Fund (IMF) should expand the basket of its Special Drawing Right (an international reserve asset) to including the Chinese yuan, the Russian rouble and gold. The dollar fell 0.9 percent against a basket of major currencies on world markets after Medvedev's comments. Since the four BRIC nations represent around 40 percent of the world's population and 15 percent of its GDP. Russia and China lead the SCO, a security and economic co-operation forum which also includes four Central Asian states, plus Iran, Mongolia, India and Pakistan as observers. It can be say that such a type of coordination will allow developing nations to better explain their positions to each other and work out a novel path to resolving international financial problems and the reform of international financial relations.

Underlining its growing economic influence abroad, Chinese President Hu Jintao offered Central Asian states $10 billion of credit support to help counter the global economic slump, though he did not mention the proposals for diluting dollar dominance. In another ignore to the West, the SCO leaders welcomed Iranian President Mahmoud Ahmadinejad, making his first foreign trip to attend the summit since his disputed re-election. Ahmadinejad arrived a day late in Yekaterinburg after mass protests against his disputed victory in Tehran but the SCO presidents had congratulated Ahmadinejad on his victory.

On the sidelines, Indian Prime Minister Manmohan Singh met Pakistani leader Asif Ali Zardari for the first time since the Mumbai attacks and asked him to ensure that Islamist militants could not operate from Pakistani territory. His tough words offered little hope for a breakthrough in relations between the two nuclear-armed Asian powers.

Campaigning for Economic Modification
Those divisive issues are mainly political in nature which is why most observers correctly predicted that the BRIC summit would focus predominantly on economic issues. Combined, the BRIC countries currently have a 15-percent share of the world economy and a 42-percent share of global currency reserves. Their increased economic power was underscored when Brazil and Russia joined China in announcing they would shift some $70 billion (50 billion euros) of reserves into multicurrency bonds issued by the International Monetary Fund. The move was interpreted by some as an attempt to topple the dollar in part because the Russian president said at the time that his proposal to create a new world currency could be discussed at the summit.

But fiscal experts said that BRIC will tread carefully where the dollar is concerned, as triggering a dollar crisis would be akin to shooting themselves in the foot. The BRIC’s are putting the US on notice that there has to be a cutback on spending and that they need to get their house in order any attack on the dollar will hurt them. But they want to make sure this kind of mess doesn't happen again. Clearly though, BRIC is using its new influence to put pressure on the IMF to reshape its voting structure to better reflect the shift in economic power. Brazil, for example, is the world's 10th largest economy, but has just 1.38 percent of the IMF board's votes, compared to 2.09 percent for Belgium, an economy one-third the size.

Joint Statement of the BRIC Countries’ Leaders
Leaders of the Federative Republic of Brazil, the Russian Federation, the Republic of India and the People’s Republic of China, have discussed the current situation in global economy and other pressing issues of global development, and also prospects for further strengthening collaboration within the BRIC.

BRIC have arrived at the following conclusions:
» BRIC stressed the central role played by the G20 Summits in dealing with the financial crisis. They have fostered cooperation, policy coordination and political dialogue regarding international economic and financial matters.

» BRIC called upon all states and relevant international bodies to act vigorously to implement the decisions adopted at the G20 Summit in London on April 2, 2009. BRIC shall cooperate closely among them and with other partners to ensure further progress of collective action at the next G20 Summit to be held in Pittsburgh in September 2009. BRIC countries are committed to advance the reform of international financial institutions, so as to reflect changes in the global economy. The emerging and developing economies must have greater voice and representation in international financial institutions, whose heads and executives should be appointed through an open, transparent, and merit-based selection process. BRIC also believe that there is a strong need for a stable, predictable and more diversified international monetary system.

» BRIC countries are convinced that a reformed financial and economic architecture should be based, inter alia, on the following principles:

• Democratic and transparent decision-making and implementation process at the international financial organisations;
• Solid legal basis;
• Compatibility of activities of effective national regulatory institutions and international standard-setting bodies;
• Strengthening of risk management and supervisory practices.

» BRIC countries recognise the important role played by international trade and foreign direct investments in the world economic recovery. BRIC countries call upon all parties to work together to improve the international trade and investment environment. They urge the international community to keep the multilateral trading system stable, curb trade protectionism, and push for comprehensive and balanced results of the WTO’s Doha Development Agenda.

» The poorest countries have been hit hardest by the financial crisis. The international community needs to step up efforts to provide liquid financial resources for these countries. The international community should also strive to minimise the impact of the crisis on development and ensure the achievement of the Millennium Development Goals. Developed countries should fulfil their commitment of 0.7% of Gross National Income for the Official Development Assistance and make further efforts in increasing assistance, debt relief, market access and technology transfer for developing countries.

» The implementation of the concept of sustainable development, comprising, inter alia, the Rio Declaration, Agenda for the 21st Century and multilateral environmental agreements, should be a major vector in the change of paradigm of economic development.

» BRIC countries stand for strengthening coordination and cooperation among states in the energy field, including amongst energy producers and consumers and transit states, in an effort to decrease uncertainty and ensure stability and sustainability. They support diversification of energy resources and supply, including renewable energy, security of energy transit routes and creation of new energy investments and infrastructure.

» BRIC countries support international cooperation in the field of energy efficiency. They stand ready for a constructive dialogue on how to deal with climate change based on the principle of common but differentiated responsibility, given the need to combine measures to protect the climate with steps to fulfill our socio-economic development tasks.

» BRIC countries reaffirmed to enhance cooperation among our countries in socially vital areas and to strengthen the efforts for the provision of international humanitarian assistance and for the reduction of natural disaster risks. They take note of the statement on global food security issued today as a major contribution of the BRIC countries to the multilateral efforts to set up the sustainable conditions for this goal.

» BRIC countries reaffirmed to advance cooperation among our countries in science and education with the aim, inter alia, to engage in fundamental research and development of advanced technologies.

» BRIC countries underlined their support for a more democratic and just multi-polar world order based on the rule of international law, equality, mutual respect, cooperation, coordinated action and collective decision-making of all states. BRIC countries reiterate their support for political and diplomatic efforts to peacefully resolve disputes in international relations.

» BRIC countries strongly condemn terrorism in all its forms and manifestations and reiterate that there can be no justification for any act of terrorism anywhere or for whatever reasons. They note that the draft Comprehensive Convention against International Terrorism is currently under the consideration of the UN General Assembly and call for its urgent adoption.

» BRIC countries expressed their strong commitment to multilateral diplomacy with the United Nations playing the central role in dealing with global challenges and threats. In this respect, They reaffirmed the need for a comprehensive reform of the UN with a view to making it more efficient so that it can deal with today’s global challenges more effectively. They reiterated the importance that attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the United Nations.

» BRIC countries have agreed upon steps to promote dialogue and cooperation among our countries in an incremental, proactive, pragmatic, open and transparent way. The dialogue and cooperation of the BRIC countries is conducive not only to serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity.

» Russia, India and China welcomed the invitation of Brazil to the next BRIC summit where it will host in 2010.

Cooperation Within BRIC
BRIC is a loose group of countries including Brazil, Russia, India and China, the largest economic growth and political influence centres among emerging economies. These countries have a substantial integration potential in their respective regions. The global problems of international terrorism and multinational crime, environmental degradation and climate change, plus food and energy security cannot be effectively solved without the involvement of the BRIC countries. BRIC partnership is becoming increasingly important amid the global economic and financial downturn, when the four countries should coordinate their efforts with the international community to weather the crisis on global financial markets and reform the world financial system.

Political dialogue within the BRIC format began in New York in September 2006, when their foreign ministers conferred during the 61st UN General Assembly. Since then, the BRIC foreign ministers have met four times, including at a full-scale meeting in Yekaterinburg on May 16, 2008. The joint statement adopted as a result of the latter meeting formulated common approaches to crucial issues on the international agenda.

Ties between the BRIC foreign ministers were completed by the meetings between their finance ministers in Sao Paulo, Brazil, on November 7, 2008 and in London on March 13, 2009. The finance ministers adopted joint statements on their meetings, which reflected common views of global economic problems, including the reasons for and ways to weather the global financial crisis.

At the initiative of Russia, the four leaders had a short meeting on July 9, 2008, during the G8 summit in Japan, to agree on drafting a full-scale BRIC summit. Official contacts in the BRIC format have been buttressed by interaction between the respective regional authorities and public organisations.

Russia would like the cooperation between the BRIC countries to become a major factor of multilateral diplomacy and to make a substantial contribution to promoting the nascent multipolarity and development of collective leadership by the world’s leading countries. By some predictions, the four nations, Brazil, Russia, India and China, a group referred to as the BRIC group, will surpass the current leading economies by the middle of this century, a tectonic shift that by this reckoning will eventually nudge the United States and Western Europe away from the center of world productivity and power.

Russia’s president, Dmitri A. Medvedev, said the main point of the meeting was to show that the BRIC should create conditions for a more just world order. The four countries produce about 15 percent of the world’s gross domestic product and hold about 40 percent of the gold and hard currency reserves, but they are not a unified bloc and do not do enough business among themselves to justify a trade alliance. Russia and Brazil export natural resources, China exports manufactured goods and India bases its growth primarily on domestic demand. As such, India is not as concerned with the status of the dollar and is by no means as intent on scoring ideological points against the United States as is Russia.

The acronym BRIC was coined by a Goldman Sachs economist in 2001 to describe the four countries that were expected to surpass today’s largest economies by 2050, owing to their faster growth rate. A communiqué issued after the meeting highlighted the common goals of a greater voice in international financial institutions and a more diversified global monetary system. They agreed to meet again in 2010, in Brazil. The gathering was the second of back-to-back summit meetings sponsored by Russia in this city in the Ural Mountains on the divide between Europe and Asia.

The Shanghai Cooperation Organization, a regional security alliance intended loosely as a counterweight to NATO, met in an expanded format with many Eurasian nations holding observer status. It even included a brief appearance by the president of Iran, Mahmoud Ahmadinejad, whose disputed re-election last week has touched off street demonstrations in Tehran. In a sign of regional economic integration, China’s president, Hu Jintao, pledged $10 billion in aid to Central Asian nations in the group, which consists of China, Russia and four former Soviet states: Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Mr. Hu and Mr. Medvedev then met separately with India’s prime minister, Manmohan Singh, and the Brazilian president, Luiz Inácio Lula da Silva.

Mr. Medvedev encouraged China, the world’s largest holder of dollar reserves, and other nations to put their money in some other currency or financial mechanism. He also urged members of the Shanghai Cooperation Organization to use their national currencies in conducting bilateral trade.

There can be no successful currency system, and particularly a global system, if the financial instruments that are used are denominated in only one currency, Mr. Medvedev said. A top economic policy aide to Mr. Medvedev, Arkady Dvorkovich, said Russia would like to diversify its currency reserves away from dollars by buying bonds from Brazil, China and India, but only if they bought Russian rubles as a reserve. The dollar fell slightly against the euro and other currencies on Tuesday, though some traders quoted by Bloomberg News cited a more workaday cause: good results on new American housing starts were encouraging investors to move out of Treasury bonds and into equities.

The Path To 2050
The BRIC dissertation (defended in the paper Dreaming with BRICs: The Path to 2050) recognizes that Brazil, Russia, India and China have changed their political systems to embrace global capitalism. Goldman Sachs predicts China and India, respectively, to be the dominant global suppliers of manufactured goods and services while Brazil and Russia would become similarly dominant as suppliers of raw materials. Cooperation is thus hypothesized to be a logical next step among the BRICs because Brazil and Russia together form the logical commodity suppliers to India and China. Thus, the BRICs have the potential to form a powerful economic bloc to the exclusion of the modern-day states currently of "Group of Eight" status.

Brazil is dominant in soy and iron ore while Russia has enormous supplies of oil and natural gas. Goldman Sachs' thesis thus documents how commodities, work, technology, and companies have diffused outward from the United States across the world. Following the end of the Cold War or even before, the governments comprising BRIC all initiated economic or political reforms to allow their countries to enter the world economy. In order to compete, these countries have simultaneously stressed education, foreign investment, domestic consumption, and domestic entrepreneurship.

According to the study, India has the potential to grow the fastest among the four BRIC countries over the next 30 to 50 years. A major reason for this is that the decline in working age population will happen later for India and Brazil than for Russia and China.

Analysis
The Economist published an annual table of social and economic national statistics in its Pocket World in Figures. Extrapolating the global rankings from their 2008 Edition for the BRIC countries and economies in relation to various categories provides an interesting touchstone in relation to the economic underpinnings of the BRIC thesis. It also illustrates how, despite their divergent economic bases, the economic indicators are remarkably similar in global rankings between the different economies. It also suggests that whilst economic arguments can be made for linking Mexico into the BRIC thesis, the case for including South Africa looks considerably weaker.

A Goldman Sachs paper published later in December 2005 explained why Mexico wasn't included in the original BRICs. According to the paper, among the other countries they looked at, only Mexico and perhaps Korea have the potential to rival the BRICs, but they are economies that they decided to exclude initially because they looked at them as already more developed. According to that paper, Mexico becomes the fifth-largest economy by 2050, ahead of Russia.

A criticism is that the BRIC projections are based on the assumptions that resources are limitless and endlessly available when needed. In reality, many important resources currently necessary to sustain economic growth, such as oil, natural gas, coal, other fossil fuels, and uranium might soon experience a peak in production before enough renewable energy can be developed and commercialized, which might result in slower economic growth than anticipated, thus throwing off the projections and their dates.

The economic emergence of the BRICs will have unpredictable consequences for the global environment. Indeed, proponents of a set carrying capacity for the Earth may argue that, given current technology, there is a finite limit to how much the BRICs can develop before exceeding the ability of the global economy to supply.

Academics and experts have suggested that China is in a league of its own compared to the other BRIC countries. BRIC are the one with the big reserves. They are the biggest potential market. They are the U.S. partner in the G2 (imagine the coverage a G2 meeting gets vs. a G8 meeting) and the E2 (no climate deal without them) and so on. Deutsche Bank Research said in a report that economically, financially and politically, China overshadows and will continue to overshadow the other BRICs. It added that China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Moreover, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined.

Another criticism is the understatement of GDP growth in China over the next 45 years; which predicts growth falling far below normal development. This contradicts the rapid economic growth that has already taken place in the country and the experience of countries like South Korea catching up with western GDP per capita, which China has been growing faster than in a similar period of development. There are many uncertainties and assumptions in the BRIC thesis that could mean that any or all of these four countries will not live up to their promise. The preeminence of China and India as major manufacturing countries with unrealised potential has been widely recognised, but some commentators state that China's and Russia's disregard for human rights and democracy could be a problem in the future, as is the possibility of conflict over Taiwan in the case of China.

Likewise, the population of Russia is steadily declining and aging, and Brazil's and China's populations will begin to decline in several decades, and with their demographic windows closing in several decades as well. This may have implications for those countries' future, for there might be a decrease in the overall labor force and a negative change in the proportion of workers to retirees.

Brazil's economic potential has been anticipated for decades, but it had until recently consistently failed to achieve investor expectations. Only in recent years has the country established a framework of political, economic, and social policies that allowed it to resume consistent growth. The result has been solid and paced economic development that rival its early 70's miracle years, as reflected in its expanding capital markets, lowest unemployment rates in decades, and consistent international trade surpluses - that led to the accumulation of reserves and liquidation of foreign debt (earning the country a coveted investment grade by the S&P and Fitch Ratings in 2008). How long such positive factors will stay in place remains to be seen.

Finally, India's relations with one of its neighbors, Pakistan, have always been frosty. In 1998, there was a nuclear standoff between Pakistan and India. Border conflicts with Pakistan, mostly over the longheld dispute over Kashmir, has further aggravated any economic ties. The BRIC countries have enormous populations of extremely impoverished people. This impedes progress by limiting government finances, increasing social unrest, and limiting potential domestic economic demand. Factors such as international conflict, civil unrest, unwise political policy, outbreaks of disease and terrorism are all factors that are difficult to predict and that could have an effect on the destiny of any country.

Other critics suggest that BRIC is nothing more than a neat acronym for the four largest emerging market economies, but in economic and political terms nothing else (apart from the fact that they are all big emerging markets) links the four. Two are manufacturing based economies and big importers (China and India), but two are huge exporters of natural resources (Brazil and Russia). Two have growing populations (Brazil and India), and two have shrinking populations (China and Russia). The Economist, in its special report on Brazil, expressed the following view: In some ways Brazil is the steadiest of the BRICs. Unlike China and Russia it is a full-blooded democracy; unlike India it has no serious disputes with its neighbors. It is the only BRIC without a nuclear bomb. The Heritage Foundation's Economic Freedom Index, which measures factors such as protection of property rights and free trade ranks Brazil (moderately free) above the other BRICs (mostly unfree).

In a not-so-subtle dig critical of the term as nothing more than a shorthand for emerging markets generally, critics have suggested a correlating term, CEMENT (Countries in Emerging Markets Excluded by New Terminology). Whilst they accept there has been spectacular growth of the BRIC economies, these gains have largely been the result of the strength of emerging markets generally, and that strength comes through having BRICs and CEMENT.

The National Rural Employment Guarantee Act

The National Rural Employment Guarantee Act (NREGA, also known as National Rural Employment Guarantee Scheme, NREGS) is Indian legislation enacted on August 25, 2005. The NREGA provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living below poverty line in rural India. It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated work force must be women.

Political background

The act was brought about by the UPA coalition government under the pressure from left parties. The promise of this project was one of the major factors that gained UPA victory in the Indian general election, 2004.

Dr. Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project.

The plan

Central Government shall meet the cost towards the payment of wage, 3/4 of material cost and certain percentage of administrative cost. State Government shall meet the cost towards unemployed allowance, 1/4 of material cost and administrative cost of State council.

Adult members of rural households submit their name, age and address with photo to the Gram Panchayat. The Gram panchayat registers households after making enquiry and issues a job card. The job card contains the details of adult member enrolled and his /her photo. Registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to panchayat or to Programme Officer.

The panchayat/programme officer will accept the valid application and issue dated receipt of application, letter providing work will be sent to the applicant and also displayed at panchayat office. The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.

If employment under the scheme is not provided within fifteen days of receipt of the application daily unemployment allowance will be paid to the applicant.

The scheme starting from February 2, 2006 in 200 districts (out of a total of 593 in the country) will cover all districts in five years. The government announced the addition of another 130 districts in the financial year 2007-8. (See External Links below for a full list of districts covered by the NREGA.)

2006-2007

For financial year 2006-2007 budgetary support for NREGA is Rs 11300 crores.

The Congress-led UPA government decided to further extend this scheme across the country at the beginning of the financial year 2008-09, the year the government faces a new general elections. Though the government has already planned to extend the scheme, country's supreme audit institution, the Comptroller and Auditor General (CAG) of India, in its performance audit of the implementation of NREGA found out "significant deficiencies" and had even advised the government to plug these shortcomings before extending the scheme further

2008

In April 2008 NREGA expanded to cover the entire India.

IT implementation

NREGA is the first programme having been implemented with full IT support. TATA Consultancy Services, India's largest IT/ITES sector company has designed the software solution for the state of Andhra Pradesh. NIC, a government of India undertaking, developed solution has been implemented in other areas.