IMF

During the Great Depression of the 1930s, countries attempted to shore up their failing economies by sharply raising barriers to foreign trade, devaluing their currencies to compete against each other for export markets, and curtailing their citizens' freedom to hold foreign exchange. These attempts proved to be self-defeating. World trade declined sharply,and employment and living standards plummeted in many countries.This breakdown in international monetary cooperation led the IMF's founders to plan an institution charged with overseeing the international monetary system—the system of exchange rates and international payments that enables countries and their citizens to buy goods and services from each other. The new global entity would ensure exchange rate stability and encourage its member countries to eliminate exchange restrictions that hindered trade.

 The Bretton Woods agreement

The IMF was conceived in July 1944, when representatives of 45 countries meeting in the town of Bretton Woods, New Hampshire, in the northeastern United States, agreed on a framework for international economic cooperation, to be established after the Second World War.  They believed that such a framework was necessary to avoid a repetition of the disastrous economic policies that had contributed to the Great Depression.

The IMF came into formal existence in December 1945, when its first 29 member countries signed its Articles of Agreement. It began operations on March 1, 1947. Later that year, France became the first country to borrow from the IMF.

The IMF's membership began to expand in the late 1950s and during the 1960s as many African countries became independent and applied for membership. But the Cold War limited the Fund's membership, with most countries in the Soviet sphere of influence not joining.

Par value system

The countries that joined the IMF between 1945 and 1971 agreed to keep their exchange rates (the value of their currencies in terms of the U.S. dollar and, in the case of the United States, the value of the dollar in terms of gold) pegged at rates that could be adjusted only to correct a "fundamental disequilibrium" in the balance of payments, and only with the IMF's agreement. This par value system—also known as the Bretton Woods system—prevailed until 1971, when the U.S. government suspended the convertibility of the dollar (and dollar reserves held by other governments) into gold.

By the early 1960s, the U.S. dollar's fixed value against gold, under the Bretton Woods system of fixed exchange rates, was seen as overvalued. A sizable increase in domestic spending on President Lyndon Johnson's Great Society programs and a rise in military spending caused by the Vietnam War gradually worsened the overvaluation of the dollar.

End of Bretton Woods system

The system dissolved between 1968 and 1973. In August 1971, U.S. President Richard Nixon announced the "temporary" suspension of the dollar's convertibility into gold. While the dollar had struggled throughout most of the 1960s within the parity established at Bretton Woods, this crisis marked the breakdown of the system. An attempt to revive the fixed exchange rates failed, and by March 1973 the major currencies began to float against each other.

Since the collapse of the Bretton Woods system, IMF members have been free to choose any form of exchange arrangement they wish (except pegging their currency to gold): allowing the currency to float freely, pegging it to another currency or a basket of currencies, adopting the currency of another country, participating in a currency bloc, or forming part of a monetary union.

Oil shocks

Many feared that the collapse of the Bretton Woods system would bring the period of rapid growth to an end. In fact, the transition to floating exchange rates was relatively smooth, and it was certainly timely: flexible exchange rates made it easier for economies to adjust to more expensive oil, when the price suddenly started going up in October 1973. Floating rates have facilitated adjustments to external shocks ever since.

The IMF responded to the challenges created by the oil price shocks of the 1970s by adapting its lending instruments. To help oil importers deal with anticipated current account deficits and inflation in the face of higher oil prices, it set up the first of two oil facilities.

Helping poor countries

From the mid-1970s, the IMF sought to respond to the balance of payments difficulties confronting many of the world's poorest countries by providing concessional financing through what was known as the Trust Fund. In March 1986, the IMF created a new concessional loan program called the Structural Adjustment Facility. The SAF was succeeded by the Enhanced Structural Adjustment Facility in December 1987.

The oil shocks of the 1970s, which forced many oil-importing countries to borrow from commercial banks, and the interest rate increases in industrial countries trying to control inflation led to an international debt crisis.

During the 1970s, Western commercial banks lent billions of "recycled" petrodollars, getting deposits from oil exporters and lending those resources to oil-importing and developing countries, usually at variable, or floating, interest rates. So when interest rates began to soar in 1979, the floating rates on developing countries' loans also shot up. Higher interest payments are estimated to have cost the non-oil-producing developing countries at least $22 billion during 1978–81. At the same time, the price of commodities from developing countries slumped because of the recession brought about by monetary policies. Many times, the response by developing countries to those shocks included expansionary fiscal policies and overvalued exchange rates, sustained by further massive borrowings.

When a crisis broke out in Mexico in 1982, the IMF coordinated the global response, even engaging the commercial banks. It realized that nobody would benefit if country after country failed to repay its debts.

The IMF's initiatives calmed the initial panic and defused its explosive potential. But a long road of painful reform in the debtor countries, and additional cooperative global measures, would be necessary to eliminate the problem.

The fall of the Berlin wall in 1989 and the dissolution of the Soviet Union in 1991 enabled the IMF to become a (nearly) universal institution. In three years, membership increased from 152 countries to 172, the most rapid increase since the influx of African members in the 1960s.

In order to fulfill its new responsibilities, the IMF's staff expanded by nearly 30 percent in six years. The Executive Board increased from 22 seats to 24 to accommodate Directors from Russia and Switzerland, and some existing Directors saw their constituencies expand by several countries.

The IMF played a central role in helping the countries of the former Soviet bloc transition from central planning to market-driven economies. This kind of economic transformation had never before been attempted, and sometimes the process was less than smooth. For most of the 1990s, these countries worked closely with the IMF, benefiting from its policy advice, technical assistance, and financial support.

By the end of the decade, most economies in transition had successfully graduated to market economy status after several years of intense reforms, with many joining the European Union in 2004.

Asian Financial Crisis

In 1997, a wave of financial crises swept over East Asia, from Thailand to Indonesia to Korea and beyond. Almost every affected country asked the IMF for both financial assistance and for help in reforming economic policies. Conflicts arose on how best to cope with the crisis, and the IMF came under criticism that was more intense and widespread than at any other time in its history.

From this experience, the IMF drew several lessons that would alter its responses to future events. First, it realized that it would have to pay much more attention to weaknesses in countries’ banking sectors and to the effects of those weaknesses on macroeconomic stability. In 1999, the IMF—together with the World Bank—launched the Financial Sector Assessment Program and began conducting national assessments on a voluntary basis. Second, the Fund realized that the institutional prerequisites for successful liberalization of international capital flows were more daunting than it had previously thought. Along with the economics profession generally, the IMF dampened its enthusiasm for capital account liberalization. Third, the severity of the contraction in economic activity that accompanied the Asian crisis necessitated a re-evaluation of how fiscal policy should be adjusted when a crisis was precipitated by a sudden stop in financial inflows.

Debt relief for poor countries

During the 1990s, the IMF worked closely with the World Bank to alleviate the debt burdens of poor countries. The Initiative for Heavily Indebted Poor Countries was launched in 1996, with the aim of ensuring that no poor country faces a debt burden it cannot manage. In 2005, to help accelerate progress toward the United NationsMillennium Development Goals (MDGs), the HIPC Initiative was supplemented by theMultilateral Debt Relief Initiative (MDRI).

The IMF has been on the front lines of lending to countries to help boost the global economy as it suffers from a deep crisis not seen since the Great Depression.

For most of the first decade of the 21st century, international capital flows fueled a global expansion that enabled many countries to repay money they had borrowed from the IMF and other official creditors and to accumulate foreign exchange reserves.

The global economic crisis that began with the collapse of mortgage lending in the United States in 2007, and spread around the world in 2008 was preceded by large imbalances in global capital flows.

Global capital flows fluctuated between 2 and 6 percent of world GDP during 1980-95, but since then they have risen to 15 percent of GDP. In 2006, they totaled $7.2 trillion—more than a tripling since 1995. The most rapid increase has been experienced by advanced economies, but emerging markets and developing countries have also become more financially integrated.

The founders of the Bretton Woods system had taken it for granted that private capital flows would never again resume the prominent role they had in the nineteenth and early twentieth centuries, and the IMF had traditionally lent to members facing current account difficulties.

The latest global crisis uncovered fragility in the advanced financial markets that soon led to the worst global downturn since the Great Depression. Suddenly, the IMF was inundated with requests for stand-by arrangements and other forms of financial and policy support.

The international community recognized that the IMF’s financial resources were as important as ever and were likely to be stretched thin before the crisis was over. With broad support from creditor countries, the Fund’s lending capacity was tripled to around $750 billion. To use those funds effectively, the IMF overhauled its lending policies, including by creating a flexible credit line for countries with strong economic fundamentals and a track record of successful policy implementation. Other reforms, including ones tailored to help low-income countries, enabled the IMF to disburse very large sums quickly, based on the needs of borrowing countries and not tightly constrained by quotas, as in the past.

For more on the ideas that have shaped the IMF from its inception until the late 1990s, take a look at James Boughton's "The IMF and the Force of History: Ten Events and Ten Ideas that Have Shaped the Institution."

The IMF works to foster global growth and economic stability. It provides policy advice and financing to members in economic difficulties and also works with developing nations to help them achieve macroeconomic stability and reduce poverty.

The IMF, also known as the “Fund,” was conceived at a United Nations conference convened in Bretton Woods, New Hampshire, United States, in July 1944. The 44 governments represented at that conference sought to build a framework for economic cooperation that would avoid a repetition of the vicious circle of competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF’s responsibilities: The IMF's primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with one other. This system is essential for promoting sustainable economic growth, increasing living standards, and reducing poverty. The Fund’s mandatehas recently been clarified and updated to cover the full range of macroeconomic and financial sector issues that bear on global stability.

§     Membership: 188 countries §     Headquarters: Washington, D.C. §     Executive Board: 24 Directors representing countries or groups of countries §     Staff: Approximately 2,475 from 156 countries §     Total quotas: US$360 billion (as of 8/9/12) §     Additional pledged or committed resources: US$1 trillion §     Loans committed (as of 8/9/12): US$243 billion, of which US$186 billion have not                              been drawn §     Biggest borrowers (amount agreed as of 8/9/12): Greece, Portugal, Ireland §     Biggest precautionary loans (amount agreed as of 8/9/12): Mexico, Poland,                         Colombia §     Surveillance consultations: Consultations concluded for 128 countries in FY2011 and                              for 117 countries in FY2012 §     Technical assistance: Field delivery in FY2011—198.2 person years §     Transparency: In 2011, about 90 percent of Article IV and program-related staff                          reports and policy papers were published §     Original aims: Article I of the Articles of Agreement sets out the IMF’s main goals: §  promoting international monetary cooperation; §  facilitating the expansion and balanced growth of international trade; §  promoting exchange stability; §  assisting in the establishment of a multilateral system of payments; and §  making resources available (with adequate safeguards) to members experiencing balance of payments difficulties

Surveillance: To maintain stability and prevent crises in the international monetary system, the IMF reviews country policies, as well as national, regional, and global economic and financial developments through a formal system known as surveillance. Under the surveillance framework, the IMF provides advice to its 188 member countries, encouraging policies that foster economic stability, reduce vulnerability to economic and financial crises, and raise living standards. It provides regular assessment of global prospects in its World Economic Outlook, financial markets in its Global Financial Stability Report, and public finance developments in its Fiscal Monitor, and publishes a series of regional economic outlooks. The Fund’s Executive Board has been considering a range of options to enhance multilateral, financial, and bilateral surveillance, including to better integrate the three; improve our understanding of spillovers and the assessment of emerging and potential risks; and strengthen the traction of IMF policy advice.

The key findings and policy advice from the various multilateral products are pulled together in Consolidated Multilateral Surveillance Reports. The Executive Board of the IMF recently adopted a new Decision on Bilateral and Multilateral Surveillance, also known as the Integrated Surveillance Decision. The decision provides guidance to the Fund and member countries on their roles and responsibilities in surveillance and will take effect on January 18, 2013. More broadly, in response to the Triennial Surveillance Review completed in October 2011, efforts are underway to better integrate multilateral, financial, and bilateral surveillance, including through: additional work on interconnections and spillovers; greater use of in-depth risk assessments; renewed emphasis on external stability—a pilot External Sector Report was published in July; and strengthening the traction of IMF policy advice.

Financial assistance: IMF financing provides member countries the breathing room they need to correct balance of payments problems. A policy program supported by IMF financing is designed by the national authorities in close cooperation with the IMF, and continued financial support is conditioned on effective implementation of this program. In an early response to the recent global economic crisis, the IMF strengthened its lending capacity and approved amajor overhaul of the mechanisms for providing financial support in April 2009, with further reforms adopted in August 2010 and December 2011.

In the most recent reforms, IMF lending instruments were improved further to provide flexible crisis prevention tools to a broad range of members with sound fundamentals, policies, and institutional policy frameworks. In low-income countries, the IMF doubled loan access limits and is boosting its lending to the world’s poorer countries, with interest rates set at zero through end-2012.

SDRs: The IMF issues an international reserve asset known as Special Drawing Rights (SDRs) that can supplement the official reserves of member countries. Two allocations in August and September 2009 increased the outstanding stock of SDRs almost ten-fold to total about SDR 204 billion (US$312 billion). Members can also voluntarily exchange SDRs for currencies among themselves. In a recent paper, IMF staff explores options to enhance the role of the SDR to promote stability of the international monetary system.

Technical assistance: The IMF provides technical assistance and training to help member countries strengthen their capacity to design and implement effective policies. Technical assistance is offered in several areas, including tax policy and administration, expenditure management, monetary and exchange rate policies, banking and financial system supervision and regulation, legislative frameworks, and statistics.

Resources: The IMF’s resources are provided by its member countries, primarily through payment of quotas, which broadly reflect each country’s economic size. At the April 2009 G-20 Summit, world leaders pledged to support a tripling of the IMF's lending resources from about US$250 billion to US$750 billion. To deliver on this pledge, the then current and new participants in the New Arrangements to Borrow (NAB) agreed to expand the NAB to about US$570 billion, which became effective on March 11, 2011 following completion of the ratification process by NAB participants. When concluding the 14th General Review of Quotas in December 2010, Governors agreed to double the IMF’s quota resources to approximately US$730 billion and a major realignment of quota shares among members. When the quota increase becomes effective, there will be a corresponding rollback in NAB resources. In mid-2012, member countries announced additional pledges to increase the IMF’s resources to $456 billion to help strengthen global economic and financial stability.

Historically, the annual expenses of running the Fund have been met mainly by interest receipts on outstanding loans, but the membership recently agreed to adopt a new income model based on a range of revenue sources better suited to the diverse activities of the Fund.

Governance and organization: The IMF is accountable to the governments of its member countries. At the top of its organizational structure is the Board of Governors, which consists of one Governor and one Alternate Governor from each member country. The Board of Governors meets once each year at theIMF-World Bank Annual Meetings. Twenty-four of the Governors sit on the International Monetary and Financial Committee (IMFC) and normally meet twice each year.

The day-to-day work of the IMF is overseen by its 24-member Executive Board, which represents the entire membership; this work is guided by the IMFC and supported by the IMF staff. In a package of reforms approved by the Governorsin December 2010, the Articles of Agreement will be amended so as to facilitate a move to a more representative, all-elected Executive Board. The Managing Director is the head of the IMF staff and Chairman of the Executive Board, and is assisted by four Deputy Managing Directors.

ग्लोबल वार्मिंग

 ग्लोबल वार्मिंग

 ग्लोबल वार्मिंग धरती के वातावरण के तापमान में लगातार हो रही बढ़ोतरी है। हमारी धरती प्राकृतिक तौर पर सूर्य की किरणों से उष्मा प्राप्त करती है। ये किरणें वायुमंडल ( एटमास्पिफयर) से गुजरती हुईं धरती की सतह से टकराती हैं और फिर वहीं से परावर्तित ( रिफलेक्शन) होकर पुन: लौट जाती हैं। धरती का वायुमंडल कई गैसों से मिलकर बना है जिनमें कुछ ग्रीनहाउस गैसें भी शामिल हैं। इनमें से अधिकांश धरती के ऊपर एक प्रकार से एक प्राकृतिक आवरण बना लेती हैं। यह आवरण लौटती किरणों के एक हिस्से को रोक लेता है और इस प्रकार धरती के वातावरण को गर्म बनाए रखता है। गौरतलब है कि मनुष्यों, प्राणियों और पौधों के जीवित रहने के लिए कम से कम 16 डिग्री सेल्शियस तापमान आवश्यक होता है। वैज्ञानिकों का मानना है कि ग्रीनहाउस गैसों में बढ़ोतरी होने पर यह आवरण और भी सघन या मोटा होता जाता है। ऐसे में यह आवरण सूर्य की अधिक किरणों को रोकने लगता है और फिर यहीं से शुरू हो जाते हैं ग्लोबल वार्मिंग के दुष्प्रभाव।

ग्लोबल वार्मिंग की वजह

ग्लोबल वार्मिंग के लिए सबसे ज्यादा जिम्मेदार तो मनुष्य और उसकी गतिविधियां (एक्टिविटीज ) ही हैं। अपने आप को इस धरती का सबसे बुध्दिमान प्राणी समझने वाला मनुष्य अनजाने में या जानबूझकर अपने ही रहवास ( हैबिटेट,रहने का स्थान) को खत्म करने पर तुला हुआ है। मनुष्य जनित ( मानव निर्मित) इन गतिविधियों से कार्बन डायआक्साइड, मिथेन, नाइट्रोजन आक्साइड इत्यादि ग्रीनहाउस गैसों की मात्रा में बढ़ोतरी हो रही है जिससे इन गैसों का आवरण्ा सघन होता जा रहा है। यही आवरण सूर्य की परावर्तित किरणों को रोक रहा है जिससे धरती के तापमान में वृध्दि हो रही है। वाहनों, हवाई जहाजों, बिजली बनाने वाले संयंत्रों ( प्लांटस), उद्योगों इत्यादि से अंधाधुंध होने वाले गैसीय उत्सर्जन ( गैसों का एमिशन, धुआं निकलना ) की वजह से कार्बन डायआक्साइड में बढ़ोतरी हो रही है। जंगलों का बड़ी संख्या में हो रहा विनाश इसकी दूसरी वजह है। जंगल कार्बन डायआक्साइड की मात्रा को प्राकृतिक रूप से नियंत्रित करते हैं, लेकिन इनकी बेतहाशा कटाई से यह प्राकृतिक नियंत्रक (नेचुरल कंटरोल ) भी हमारे हाथ से छूटता जा रहा है।

इसकी एक अन्य वजह सीएफसी है जो रेफ्रीजरेटर्स, अग्निशामक ( आग बुझाने वाला यंत्र) यंत्रों इत्यादि में इस्तेमाल की जाती है। यह धरती के ऊपर बने एक प्राकृतिक आवरण ओजोन परत को नष्ट करने का काम करती है। ओजोन परत सूर्य से निकलने वाली घातक पराबैंगनी ( अल्ट्रावायलेट ) किरणों को धरती पर आने से रोकती है। वैज्ञानिकों का कहना है कि इस ओजोन परत में एक बड़ा छिद्र ( होल) हो चुका है जिससे पराबैंगनी किरणें (अल्टा वायलेट रेज ) सीधे धरती पर पहुंच रही हैं और इस तरह से उसे लगातार गर्म बना रही हैं। यह बढ़ते तापमान का ही नतीजा है कि धु्रवों (पोलर्स ) पर सदियों से जमी बर्फ भी पिघलने लगी है। विकसित या हो अविकसित देश, हर जगह बिजली की जरूरत बढ़ती जा रही है। बिजली के उत्पादन ( प्रोडक्शन) के लिए जीवाष्म ईंधन ( फासिल फयूल) का इस्तेमाल बड़ी मात्रा में करना पड़ता है। जीवाष्म ईंधन के जलने पर कार्बन डायआक्साइड पैदा होती है जो ग्रीनहाउस गैसों के प्रभाव को बढ़ा देती है। इसका नतीजा ग्लोबल वार्मिंग के रूप में सामने आता है।

ग्लोबल वार्मिंग के प्रभाव :

पिछले दस सालों में धरती के औसत तापमान में 0.3 से 0.6 डिग्री सेल्शियस की बढ़ोतरी हुई है। आशंका यही जताई जा रही है कि आने वाले समय में ग्लोबल वार्मिंग में और बढ़ोतरी ही होगी।

समुद्र सतह में बढ़ोतरी : ग्लोबल वार्मिंग से धरती का तापमान बढ़ेगा जिससे ग्लैशियरों पर जमा बर्फ पिघलने लगेगी। कई स्थानों पर तो यह प्रक्रिया शुरू भी हो चुकी है। ग्लैशियरों की बर्फ के पिघलने से समुद्रों में पानी की मात्रा बढ़ जाएगी जिससे साल-दर-साल उनकी सतह में भी बढ़ोतरी होती जाएगी। समुद्रों की सतह बढ़ने से प्राकृतिक तटों का कटाव शुरू हो जाएगा जिससे एक बड़ा हिस्सा डूब जाएगा। इस प्रकार तटीय ( कोस्टल) इलाकों में रहने वाले अधिकांश ( बहुत बडा हिस्सा, मोस्ट आफ देम) लोग बेघर हो जाएंगे।

मानव स्वास्थ्य पर असर : जलवायु परिवर्तन का सबसे ज्यादा असर मनुष्य पर ही पड़ेगा और कई लोगों को अपनी जान से हाथ धोना पडेग़ा। गर्मी बढ़ने से मलेरिया, डेंगू और यलो फीवर ( एक प्रकार की बीमारी है जिसका नाम ही यलो फीवर है) जैसे संक्रामक रोग ( एक से दूसरे को होने वाला रोग) बढ़ेंगे। वह समय भी जल्दी ही आ सकता है जब हममें से अधिकाशं को पीने के लिए स्वच्छ जल, खाने के लिए ताजा भोजन और श्वास ( नाक से ली जाने वाली सांस की प्रोसेस) लेने के लिए शुध्द हवा भी नसीब नहीं हो।

पशु-पक्षियों व वनस्पतियों पर असर : ग्लोबल वार्मिंग का पशु-पक्षियों और वनस्पतियों पर भी गहरा असर पड़ेगा। माना जा रहा है कि गर्मी बढ़ने के साथ ही पशु-पक्षी और वनस्पतियां धीरे-धीरे उत्तरी और पहाड़ी इलाकों की ओर प्रस्थान ( रवाना होना) करेंगे, लेकिन इस प्रक्रिया में कुछ अपना अस्तित्व ही खो देंगे।

शहरों पर असर : इसमें कोई शक नहीं है कि गर्मी बढ़ने से ठंड भगाने के लिए इस्तेमाल में लाई जाने वाली ऊर्जा की खपत (कंजम्शन, उपयोग ) में कमी होगी, लेकिन इसकी पूर्ति एयर कंडिशनिंग में हो जाएगी। घरों को ठंडा करने के लिए भारी मात्रा में बिजली का इस्तेमाल करना होगा। बिजली का उपयोग बढ़ेगा तो उससे भी ग्लोबल वार्मिंग में इजाफा ही होगा।

ग्लोबल वार्मिंग से कैसे बचें

ग्लोबल वार्मिंग के प्रति दुनियाभर में चिंता बढ़ रही है। इसका अंदाजा इसी बात से लगाया जा सकता है कि इस साल का नोबेल शांति पुरस्कार पर्यावरण संरक्षण के क्षेत्र में कार्य करने वाली संयुक्त राष्ट्र की संस्था इंटरगवर्नमेंटल पैनल ऑन क्लाइमेंट चेंज (आईपीसीसी) और पर्यावरणवादी अमेरिका के पूर्व उपराष्ट्रपति अल गोर को दिया गया है। लेकिन सवाल यह है कि क्या पर्यावरण संरक्षण के क्षेत्र में काम करने वालों को नोबेल पुरस्कार देने भर से ही ग्लोबल वार्मिंग की समस्या से निपटा जा सकता है? बिल्कुल नहीं। इसके लिए हमें कई प्रयास करने होंगे  

1- सभी देश क्योटो संधि का पालन करें। इसके तहत 2012 तक हानिकारक गैसों के उत्सर्जन ( एमिशन, धुएं ) को कम करना होगा।

2- यह जिम्मेदारी केवल सरकार की नहीं है। हम सभी भी पेटोल, डीजल और बिजली का उपयोग कम करके हानिकारक गैसों को कम कर सकते हैं।

3- जंगलों की कटाई को रोकना होगा। हम सभी अधिक से अधिक पेड लगाएं। इससे भी ग्लोबल वार्मिंग के असर को कम किया जा सकता है।

4- टेक्नीकल डेवलपमेंट से भी इससे निपटा जा सकता है। हम ऐसे रेफ्रीजरेटर्स बनाएं जिनमें सीएफसी का इस्तेमाल न होता हो और ऐसे वाहन बनाएं जिनसे कम से कम धुआं निकलता हो।

वैज्ञानिकों और पर्यावरणवादियों का कहना है कि ग्लोबल वार्मिंग में कमी के लिए मुख्य रुप से सीएफसी गैसों का ऊत्सर्जन कम रोकना होगा और इसके लिए फ्रिज़, एयर कंडीशनर और दूसरे कूलिंग मशीनों का इस्तेमाल कम करना होगा या ऐसी मशीनों का उपयोग करना होगा जिनसे सीएफसी गैसें कम निकलती हैं. औद्योगिक इकाइयों की चिमनियों से निकले वाला धुँआ हानिकारक हैं और इनसे निकलने वाला कार्बन डाई ऑक्साइड गर्मी बढ़ाता है. इन इकाइयों में प्रदूषण रोकने के उपाय करने होंगे.वाहनों में से निकलने वाले धुँए का प्रभाव कम करने के लिए पर्यावरण मानकों का सख़्ती से पालन करना होगा. उद्योगों और ख़ासकर रासायनिक इकाइयों से निकलने वाले कचरे को फिर से उपयोग में लाने लायक बनाने की कोशिश करनी होगी.

OPEC

The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding Members were later joined by nine other Members: Qatar (1961); Indonesia (1962) – suspended its membership from January 2009; Libya (1962); United Arab Emirates (1967); Algeria (1969); Nigeria (1971); Ecuador (1973) – suspended its membership from December 1992-October 2007; Angola (2007) and Gabon (1975–1994). OPEC had its headquarters in Geneva, Switzerland, in the first five years of its existence. This was moved to Vienna, Austria, on September 1, 1965.

OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.

 1960

OPEC’s formation by five oil-producing developing countries in Baghdad in September 1960 occurred at a time of transition in the international economic and political landscape, with extensive decolonisation and the birth of many new independent states in the developing world. The international oil market was dominated by the “Seven Sisters” multinational companies and was largely separate from that of the former Soviet Union (FSU) and other centrally planned economies (CPEs). OPEC developed its collective vision, set up its objectives and established its Secretariat, first in Geneva and then, in 1965, in Vienna. It adopted a ‘Declaratory Statement of Petroleum Policy in Member Countries’ in 1968, which emphasised the inalienable right of all countries to exercise permanent sovereignty over their natural resources in the interest of their national development. Membership grew to ten by 1969.

 1970

OPEC rose to international prominence during this decade, as its Member Countries took control of their domestic petroleum industries and acquired a major say in the pricing of crude oil on world markets. On two occasions, oil prices rose steeply in a volatile market, triggered by the Arab oil embargo in 1973 and the outbreak of the Iranian Revolution in 1979. OPEC broadened its mandate with the first Summit of Heads of State and Government in Algiers in 1975, which addressed the plight of the poorer nations and called for a new era of cooperation in international relations, in the interests of world economic development and stability. This led to the establishment of the OPEC Fund for International Development in 1976. Member Countries embarked on ambitious socio-economic development schemes. Membership grew to 13 by 1975.

1980

After reaching record levels early in the decade, prices began to weaken, before crashing in 1986, responding to a big oil glut and consumer shift away from this hydrocarbon. OPEC’s share of the smaller oil market fell heavily and its total petroleum revenue dropped below a third of earlier peaks, causing severe economic hardship for many Member Countries. Prices rallied in the final part of the decade, but to around half the levels of the early part, and OPEC’s share of newly growing world output began to recover. This was supported by OPEC introducing a group production ceiling divided among Member Countries and a Reference Basket for pricing, as well as significant progress with OPEC/non-OPEC dialogue and cooperation, seen as essential for market stability and reasonable prices. Environmental issues emerged on the international energy agenda.

1990

Prices moved less dramatically than in the 1970s and 1980s, and timely OPEC action reduced the market impact of Middle East hostilities in 1990–91. But excessive volatility and general price weakness dominated the decade, and the South-East Asian economic downturn and mild Northern Hemisphere winter of 1998–99 saw prices back at 1986 levels. However, a solid recovery followed in a more integrated oil market, which was adjusting to the post-Soviet world, greater regionalism, globalisation, the communications revolution and other high-tech trends. Breakthroughs in producer-consumer dialogue matched continued advances in OPEC/non-OPEC relations. As the United Nations-sponsored climate change negotiations gathered momentum, after the Earth Summit of 1992, OPEC sought fairness, balance and realism in the treatment of oil supply. One country left OPEC, while another suspended its Membership.

2000

An innovative OPEC oil price band mechanism helped strengthen and stabilise crude prices in the early years of the decade. But a combination of market forces, speculation and other factors transformed the situation in 2004, pushing up prices and increasing volatility in a well-supplied crude market. Oil was used increasingly as an asset class. Prices soared to record levels in mid-2008, before collapsing in the emerging global financial turmoil and economic recession. OPEC became prominent in supporting the oil sector, as part of global efforts to address the economic crisis. OPEC’s second and third summits in Caracas and Riyadh in 2000 and 2007 established stable energy markets, sustainable development and the environment as three guiding themes, and it adopted a comprehensive long-term strategy in 2005. One country joined OPEC, another reactivated its Membership and a third suspended it.

The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. They were to become the Founder Members of the Organization.

These countries were later joined by Qatar (1961), Indonesia (1962), Libya (1962), the United Arab Emirates (1967), Algeria (1969), Nigeria (1971), Ecuador (1973), Gabon (1975) and Angola (2007).

From December 1992 until October 2007, Ecuador suspended its membership. Gabon terminated its membership in 1995. Indonesia suspended its membership effective January 2009.

Currently, the Organization has a total of 12 Member Countries.

The OPEC Statute distinguishes between the Founder Members and Full Members - those countries whose applications for membership have been accepted by the Conference.

The Statute stipulates that “any country with a substantial net export of crude petroleum, which has fundamentally similar interests to those of Member Countries, may become a Full Member of the Organization, if accepted by a majority of three-fourths of Full Members, including the concurring votes of all Founder Members.”

The Statute further provides for Associate Members which are those countries that do not qualify for full membership, but are nevertheless admitted under such special conditions as may be prescribed by the Conference.

The OPEC Secretariat is the executive organ of the Organization of the Petroleum Exporting Countries (OPEC). Located in Vienna, it also functions as the Headquarters of the Organization, in accordance with the provisions of the OPEC Statute.

It is responsible for the implementation of all resolutions passed by the Conference and carries out all decisions made by the Board of Governors. It also conducts research, the findings of which constitute key inputs in decision-making.

The Secretariat consists of the Secretary General, who is the Organization’s Chief Executive Officer, as well as such staff as may be required for the Organization’s operations. It further consists of the Office of the Secretary General, the Legal Office, the Research Division and the Support Services Division.

The Research Division comprises Data Services, Petroleum Studies and Energy Studies departments. The Support Services Division includes Public Relations & Information, Finance & Human Resources and Administration & IT Services departments.

The Secretariat was originally established in 1961 in Geneva, Switzerland. In April 1965, the 8th (Extraordinary) OPEC Conference approved a Host Agreement with the Government of Austria, effectively moving the Organization’s headquarters to the city of Vienna on September 1, 1965.

Economics vocabulary X, Y and Z

X-efficiency

Producing output at the minimum possible cost. This is not enough to ensure the best sort of economic efficiency, which maximizes society's total consumer plus producer surplus, because the quantity of output produced may not be ideal. For instance, a monopoly can be an x-efficient producer, but in order to maximize its profit it may produce a different quantity of output than there would be in a surplus-maximizing market with perfect competition.

Yield

The annual income from a security, expressed as a percentage of the current market price of the security. The yield on a share is its dividend divided by its price. A bond yield is also known as its interest rate: the annual coupon divided by the market price.

Yield curve

Shorthand for comparisons of the interest rate on government bonds of different maturity. If investors think it is riskier to buy a bond with 15 years until it matures than a bond with five years of life, they will demand a higher interest rate (yield) on the longer-dated bond. If so, the yield curve will slope upwards from left (the shorter maturities) to right. It is normal for the yield curve to be positive (upward sloping, left to right) simply because investors normally demand compensation for the added risk of holding longer-term securities. Historically, a downward-sloping (or inverted) yield curve has been an indicator of recession on the horizon, or, at least, that investors expect the central bank to cut short-term interest rates in the near future. A flat yield curve means that investors are indifferent to maturity risk, but this is unusual. When the yield curve as a whole moves higher, it means that investors are more worried that inflation will rise for the foreseeable future and therefore that higher interest rates will be needed. When the whole curve moves lower, it means that investors have a rosier inflationary outlook.

Even if the direction (up or down) of a yield curve is unchanged, useful information can be gleaned from changes in the spreads between yields on bonds of different maturities and on different sorts of bonds with the same maturity (such as government bonds versus corporate bonds, or thinly traded bonds versus highly liquid bonds).

Yield gap

A way of comparing the performance of bonds and shares. The gap is defined as the average yield on equities minus the average yield on bonds. Because shares are usually riskier investments than bonds, you might expect them to have a higher yield. In practice, the yield gap is often negative, with bonds yielding more than equities. This is not because investors regard equities as safer than bonds (see equity risk premium). Rather, it is that they expect most of the benefit from buying shares to come from an increase in their price (capital appreciation) rather than from dividend payments. Bond investors usually expect more of their gains to come from coupon payments. They also worry that inflation will erode the real value of future coupons, making them value current payments more highly than those due in years to come. Moreover, the usefulness of the dividend yield as a guide to the performance of shares has declined since the early 1990s, as increasingly companies have chosen to return cash to shareholders by buying back their own shares rather than paying out bigger dividends.

Zero-sum game

When the gains made by winners in an economic transaction equal the losses suffered by the losers. It is identified as a special case in game theory. Most economic transactions are in some sense positive-sum games. But in popular discussion of economic issues, there are often examples of a mistaken zero-sum mentality, such as “profit comes at the expense of wages”, “higher productivity means fewer jobs”, and “imports mean fewer jobs here”.

सूनामी

समुद्री तूफ़ान - को जापानी भाषा में सूनामी  अथवा बोलते हैं, जिसकी उत्पत्ति दो शब्द-सू (हार्बर) और नामी (वेब) से हुई है, जिसका आशय जापान में ‘बन्दरगाह की लहरें’ से है। सुनामी लहरों की श्रृंखला से मिलकर बनी एक प्राकृतिक घटना है जो तब उत्‍पन्‍न होती हैं जब समुद्र या झील में जल की व्‍यापक मात्रा तेजी से विस्‍थापित होती है। सुनामी विशाल पनडुब्बी या तटीय भूकंप, पानी के नीचे भूस्‍खलन जो भूकम्‍प या ज्‍वालामुखीय गतिविधि के कारण भी हो सकता है, बड़ी तटीय चट्टान या झील के किनारे के भूस्‍खलन, या समुद्र की तलहटी के नीचे या इसके समीप ज्‍वालामुखीय उदगार आदि के द्वारा भी उत्‍पन्‍न हो सकती हैं। दरअसल ये बहुत लम्बी - यानी सैकड़ों किलोमीटर चौड़ाई वाली लहरें होती हैं, यानी कि लहरों के निचले हिस्सों के बीच का फ़ासला सैकड़ों किलोमीटर का होता है। पर जब ये तट के पास आती हैं, तो लहरों का निचला हिस्सा ज़मीन को छूने लगता है,- इनकी गति कम हो जाती है, और ऊँचाई बढ़ जाती है। ऐसी स्थिति में जब ये तट से टक्कर मारती हैं तो तबाही होती है। गति 420 किलोमीटर प्रति घण्टा तक, और ऊँचाई 10 से 18 मीटर तक। यानी खारे पानी की चलती दीवार। अक्सर समुद्री भूकम्पों की वजह से ये तूफ़ान पैदा होते हैं। प्रशान्त महासागर में बहुत आम हैं, पर बंगाल की खाड़ी, हिन्द महासागर व अरब सागर में नहीं। इसीलिए शायद भारतीय भाषाओं में इनके लिए विशिष्ट नाम नहीं है।

सुनामी के तीन प्रकार

सुनामी तीन प्रकार की होती हैं। आप किस प्रकार की सुनामी का सामना करेंगे, यह सुनामी उत्‍पन्‍न होने वाले स्‍थान से आप की दूरी पर निर्भर करता है।

दूरस्‍थ सुनामी दूर लम्‍बे रास्‍ते में उत्‍पन्‍न होती है, जैसे कि चिली में प्रशांत के उस पार से। ऐसी अवस्था में हमारे पास न्‍यूजीलैंड के लिए चेतावनी का तीन घंटे से अधिक समय होगा।

क्षेत्रीय सुनामी अपने गंतव्‍य से दूर एक से तीन घंटे की यात्रा समय के बीच उत्‍पन्‍न होती हैं। न्‍यूजीलैंड के उत्तर करमाडे‍क गर्त में पानी के नीचे ज्‍वालामुखी उदगार क्षेत्रीय सुनामी उत्‍पन्‍न कर सकता है।

स्थानीय सुनामी न्यूजीलैंड के बहुत ही करीब उत्पन्न होती हैं। इस प्रकार की सुनामी बहुत खतरनाक है क्‍योंकि हमारे पास चेतावनी के केवल कुछ मिनट ही हो सकते हैं।

कारण:

सूनामी लहरों के पीछे वैसे तो कई कारण होते हैं लेकिन सबसे ज्यादा असरदार कारण है भूकंप. इसके अलावा ज़मीन धंसने, ज्वालामुखी फटने, किसी तरह का विस्फोट होने और कभी-कभी उल्कापात के असर से भी सूनामी लहरें उठती हैं।

भूकंप

जब कभी भीषण भूकंप की वजह से समुद्र की ऊपरी परत अचानक खिसक कर आगे बढ़ जाती है तो समुद्र अपनी समांतर स्थिति में ऊपर की तरफ बढ़ने लगता है। जो लहरें उस वक़्त बनती हैं वो सूनामी लहरें होती हैं. इसका एक उदाहरण ये हो सकता है कि धरती की ऊपरी परत फ़ुटबॉल की परतों की तरह आपस में जुड़ी हुई है या कहें कि एक अंडे की तरह से है जिसमें दरारें हों।पहले सूनामी को समुद्र में उठने वाले ज्वार के रूप में भी लिया जाता रहा है लेकिन ऐसा नहीं है. दरअसल समुद्र में लहरे चाँद सूरज और ग्रहों के गुरुत्वाकर्षण के प्रभाव से उठती हैं लेकिन सूनामी लहरें इन आम लहरों से अलग होती हैं।

जैसे अंडे का खोल सख़्त होता है लेकिन उसके भीतर का पदार्थ लिजलिजा और गीला होता है। भूकंप के असर से ये दरारें चौड़ी होकर अंदर के पदार्थ में इतनी हलचल पैदा करती हैं कि वो तेज़ी से ऊपर की तरफ का रूख़ कर लेता है। धरती की परतें भी जब किसी भी असर से चौड़ी होती हैं तो वो खिसकती हैं जिसके कारण महाद्वीप बनते हैं. तो इस तरह ये सूनामी लहरें बनती हैं। लेकिन ये भी ज़रूरी नहीं कि हर भूकंप से सूनामी लहरें बने. इसके लिए भूकंप का केंद्र समुद्र के अंदर या उसके आसपास होना ज़रूरी है।

जब ये सूनामी लहरें किसी भी महाद्वीप की उस परत के उथले पानी तक पहुँचती हैं जहाँ से वो दूसरे महाद्वीप से जुड़ा है और जो कि एक दरार के रूप में देखा जा सकता है। वहाँ सूनामी लहर की तेज़ी कम हो जाती है. वो इसलिए क्यों कि उस जगह दूसरा महाद्वीप भी जुड़ रहा है और वहां धरती की जुड़ी हुई परत की वजह से दरार जैसी जो जगह होती है वो पानी को अपने अंदर रास्ता देती है। लेकिन उसके बाद भीतर के पानी के साथ मिल कर जब सूनामी किनारे की तरफ़ बढ़ती है तो उसमे इतनी तेज़ी होती है कि वो 30 मीटर तक ऊपर उठ सकती है और उसके रास्ते में चाहे पेड़, जंगल या इमारतें कुछ भी आएँ- सबका सफ़ाया कर देती है।

सूनामी लहरें समुद्री तट पर भीषण तरीके से हमला करती हैं और जान-माल का बुरी तरह नुक़सान कर सकती है। इनकी भविष्यवाणी करना मुश्किल है । जिस तरह वैज्ञानिक भूकंप के बारे में भविष्य वाणी नहीं कर सकते वैसे ही सूनामी के बारे में भी अंदाज़ा नहीं लगा सकते। लेकिन सूनामी के अब तक के रिकॉर्ड को देखकर और महाद्वीपों की स्थिति को देखकर वैज्ञानिक कुछ अंदाज़ा लगा सकते हैं। धरती की जो प्लेट्स या परतें जहाँ-जहाँ मिलती है वहाँ के आसपास के समुद्र में सूनामी का ख़तरा ज़्यादा होता है।

सुनामी चेतावनी

सम्‍भावित सुनामी के बारे में चेतावनी संदेश और संकेत अनेक स्रोतों से आ सकते हैं - प्राकृतिक, आधिकारिक या गैरआधिकारिक।

प्राकृतिक चेतावनी

स्थानीय स्रोत आधारित सुनामी के लिए, जो मिनटों में पहुंच सकती है, आधिकरिक चेतावनी के लिए समय नहीं होगा। ऐसे में प्राकृतिक चेतावनी के संकेतों को पहचानना और जल्‍दी से कार्य करना महत्‍वपूर्ण है।

आधिकारिक चेतावनी

आधिकारिक चेतावनियां केवल दूर की और क्षेत्रीय स्रोत आधारित सुनामी के लिए ही संभव हैं। सरकारी चेतावनियां नागरिक प्रतिरक्षा एवं आपदा प्रबंधन मंत्रालय द्वारा राष्‍ट्रीय मीडिया, स्‍थानीय प्राधिकारियों एवं अन्‍य प्रमुख जिम्‍मेदार एजेंसियों को प्रसारित की जाती हैं। आपकी स्थानीय काउंसिल स्‍थानीय मीडिया, साइरन और संभवत: अन्‍य स्‍थानीय व्‍यवस्‍थाओं के द्वारा भी चेतावनियों को जारी कर सकती है।

गैरआधिकारिक या अनौपचारिक चेतावनी

आप दोस्तों, अन्‍य सामान्‍य जनों, अंतर्राष्‍ट्रीय मीडिया और इंटरनेट से चेतावनियों को प्राप्‍त कर सकते हैं। चेतावनी को तभी सत्‍यापित करें यदि आप बहुत जल्‍दी से ऐसा कर सकें। यदि आधिकारिक चेतावनी मिल सके, तो अनौपचारिक चेता‍वनियों के बजाय उस पर ज्‍यादा भरोसा करें।

2004 में सुनामी आने के बाद भारत ने इसके ख़तरे को कम करने के उपाय पर काम शुरू किया। सुनामी की चेतावनी जारी करने के लिए 'इंण्डियन ओसियन सुनामी वार्निंग मिशिगेशन सिस्टम' (आई.ओ.टी.डब्ल्यू.एस.) विकसित हुआ। भारत, ऑस्ट्रेलिया, इंडोनेशिया समेत 18 देश इस बात पर सहमत हुए कि, वे आपस में सुनामी जैसी किसी भी आपदा की भविष्यवाणी संबंधी सूचना एक दूसरे के साथ साझा करेंगे। आई.ओ.टी.डब्ल्यू.एस भूकंप और ज्वालामुखी का पता लगाता है, जो सुनामी का कारण बन सकता है। समुद्री तल के भीतर होने वाले कंपन पर नज़र रखता है। यह मुख्यत: दो तरह से काम करता है। पहला समुद्र में बन रहे दबाव को रिकॉर्ड करता है, दूसरा लहरों को मापता है। उसके आधार पर सुनामी का कितना ख़तरा है इसका आकलन किया जाता है। इन सारे डाटा को इकठ्टा कर वह गृह मंत्रालय को जारी करेगा। 2004 से एक अंतरिम एजेंसी जैपनीज मेटेरियोलॉजिकल एजेंसी के नेतृत्व में काम कर रही थी, लेकिन आई.ओ.टी.डब्ल्यू.एस उच्च तकनीक पर आधारित सिस्टम है, जो खुद इस तरह की सूचनाएँ इकठ्टा करने में सक्षम है। आई.ओ.टी.डब्ल्यू.एस सुनामी की भविष्यवाणी समुद्री लहरों की ऊँचाई को नाप कर करता है।

Economic vocabulary start from 'W'

Wage drift

The difference between basic pay and total earnings. Wage drift consists of things such as overtime payments, bonuses, profit share and performance-related pay. It usually increases during periods of strong growth and declines during an economic downturn.

Wages

The price of labour. In theory, wages ought to change so that the supply and demand in the labour market are always in equilibrium. In practice, wages are often sticky, especially in a downward direction: when demand for labour falls, wages does not fall. In this situation, the fall in demand results in higher involuntary unemployment. Trade unions may use collective bargaining to keep wages above the market-clearing rate. Furthermore, many governments impose a minimum wage that employers must pay.

Firms may choose to pay above the equilibrium wage to increase the productivity of workers. Such so-called efficiency wages may make workers less likely to join another firm, so cutting the employer's hiring and training costs. They may encourage workers to do a better job. They may also attract a higher quality of worker than wages at the market-clearing rate; better workers may have a higher reservation wage (the lowest wage for which they are willing to work) than the market-clearing equilibrium.

In recent years, employers have tried to reduce wage stickiness by increasing the proportion of pay that is linked to the performance of their firm. Thus if falling demand reduces the employer's profit the pay of its employees falls automatically, so it does not have to lay off as many workers as it otherwise would. Performance-related wages can also reduce agency costs by giving hired hands a stronger incentive to do a good job.

Wealth effect

As people get wealthier, they consume more. This wealth effect has important consequences for monetary policy. When there is an interest rate increase, future income from assets such as equities must be discounted at a higher rate than before. As a result their owners feel poorer and spend less. A cut in interest rates has the opposite effect. Economists disagree on the wealth elasticity of consumption: how much consumer spending would rise if wealth increased by, say, 1%. Different consumers may have different wealth elasticity. If most of the increase in wealth goes to poorer people this may have a different wealth effect than if most of it went to people who are already wealthy. The source of the wealth increase may also matter. If share prices rise or interest rates fall, consumers may be slow to spend out of their increased wealth if they think the increase may be temporary. However, if they think a sharp rise in share prices is permanent and the stock market then tumbles, the result may be that consumption falls by enough to cause a recession. The wealth effect of rising house prices is particularly uncertain.

Wealth tax

In most countries, the majority of wealth is concentrated in a fairly small number of hands. This makes a wealth tax appealing to politicians, as it should allow substantial amounts of revenue to be raised from comparatively few people, allowing the tax burden on the majority of the population to be kept down. It also appeals because it promotes meritocracy by making it harder to be born with a silver spoon in your mouth. A wealth tax reduces the disparities in wealth rather than income that are the biggest determinant of how the scales are weighted for succeeding generations. What could be better than a tax that produces lots of money for the government and strikes most voters as being extremely fair?

Alas, as critics point out, wealth taxes may cause inefficiency by discouraging wealth-creating economic activities. Moreover, the revenue collected may prove disappointing. The wealthiest people are often the most skilled at tax avoidance, not least because they can afford good tax accountants. Despite the enormous concentration of wealth in a small part of the population, on average across the OECD wealth taxes account for less than 2% of total tax revenue.

A wealth tax can achieve horizontal equity and vertical equity (so that people of similar means pay the same and those with more pay more) in ways that income tax cannot. For instance, neither a poor person nor a rich person with no income would pay income tax, and only the rich person would pay the wealth tax.

Wealth taxes come in two main forms. Capital transfer taxes are levied when wealth changes hands, either at death (inheritance tax) or through donation (gift tax). Annual wealth taxes are levied each year as a fraction of the taxpayer's net worth. Some people regard capital gains tax as a wealth tax, but, strictly speaking, it is a tax on the income earned on capital, rather than a wealth tax on the capital itself.

Weightless economy

At the start of the 21st century, the total output of the American economy weighed roughly the same as it did 100 years earlier. Yet the value of that output, in real terms, was 20 times greater. Output is increasingly weightless, produced from intellectual capital rather than physical materials. Production has shifted from steel, heavy copper wire and vacuum tubes to microprocessors, fine fiber-optic cables and transistors. Services have increased their share of GDP. This weightless or dematerialized economy, most economists agree, is not just lighter but also more efficient.

Welfare

Americans use welfare as shorthand for government handouts to the poor. Economists use it to describe the well being of an individual or society, as in 'are tax cuts welfare-enhancing?'. This is economist-speak for 'will tax cuts improve the overall well being of the country?'

Welfare economics

Economics with a heart. The study of how different forms of economic activity and different methods of allocating scarce resources affect the well being of different individuals or countries. Welfare economics focuses on questions about equity as well as efficiency.

Welfare to work

Active labour market policies, in which government handouts to the unemployed come with strings attached, designed to get the recipient off welfare and back to work as quickly as possible.

Windfall gains

Income you do not expect, such as winning a lottery prize. Economists have long argued about whether people are likely to save such windfalls or spend them. According to the permanent income hypothesis, favoured by most economists, people save the lion's share of windfall gains. But real life often contradicts this; ask any lottery winner.

Windfall profit

A controversial concept, often used by politicians to justify imposing a tax on profit that in theory is earned unexpectedly, through circumstances beyond the control of the company concerned, and is thus deemed undeserved and ripe for the taking by the tax authorities. As the profits were neither expected nor a result of the efforts of the firm, taxing them should not harm the firm's incentives to maximise future profits. The problem comes when greedy politicians start claiming that profits are windfalls when in fact they are deserved and expected. Then taxing them sends a signal to firms that they should not try too hard to make profits, as if they do too well they will not get to keep the profits anyway. If this became widely believed, effort would probably decline and economic growth would be slower.

Winner-takes-all markets

No time for losers. In certain jobs, the market pays individuals not according to their absolute performance but according to their performance relative to others. The income of window cleaners depends upon how many windows they clean, but investment bankers' pay may depend upon their performance ranking. Slightly more talented window cleaners will make only a small difference to the transparency of their customers' windows, but in the markets for selling bonds that slight edge can mean everything. Rewards at the top are therefore disproportionately high, and rewards below the top are disproportionately low. People in these professions are often willing to work for very little just to have the chance to compete for the top job and the jackpot that comes with it.

This sort of economics has long been prevalent in celebrity-dominated businesses such as entertainment and sport. But this reward structure is spreading to more and more occupations, including journalism, the law, medicine and corporate management. Globalization has expanded the market for skills, increasing the opportunities for the rich to become even richer.

In a normal market, sumptuous superstar incomes would attract competition from more applicants to do the jobs that pay them. This would then bring salaries down to less exotic levels. In a winner-takes-all market, this does not happen. An investment bank wants the best analysts and dealers; second best will not do. It can also afford to pay. Some economists believe that because of more liberalised markets there will be growing inequality in most professions and the emergence of a winner-takes-all society.

Withholding tax

A tax that is collected at source, before the taxpayer has seen the income or capital to which the tax applies. In other words, that part of the income or capital due in tax is withheld from the taxpayer, who therefore cannot easily avoid paying the tax. Withholding taxes are frequently imposed on interest and dividends.

World Bank

An institution created with the IMF at Bretton woods in 1944 and opened in 1946. The world bank has three main branches: the international bank for reconstruction and development (IBRD), the international development agency (IDA) and the international finance corporation (IFC). Collectively, it aims to promote economic development in the world's poorer countries through advice and long-term lending, averaging $30 ­billion a year, spread around 100 countries.

Critics of the World Bank say that it often worsens the problems facing developing countries. Its advice has often been guided by economic fashion, which led it to support a centrally planned brand of development economics in the 1960s and 1970s, before switching to privatisation and structural adjustment in the 1980s and then to promoting democracy and economic transparency, and attacking crony capitalism, in the late 1990s. Until recently, it has generally supported big, ­high-profile projects rather than more economically useful smaller schemes. It has often failed to ensure that its loans have been spent on the intended project. Its willingness to pump money into struggling countries creates a potential moral hazard, in which politicians may have little incentive to govern well because they believe that, if they do a bad job, the world bank will come to the rescue. The increase in private-sector lending to and investment in emerging markets has led to growing discussion of whether the world bank is any longer needed.

World Trade Organisation

Bête noire of anti-globalization protesters. The World Trade Organisation is the governing body of international trade, setting and enforcing the rules of trade and punishing offenders. Established during the Uruguay round of talks under the general agreement on tariffs and trade (GATT), it opened for business in 1995 with a membership of 132 countries (rising to 146 by 2003). Countries used to break GATT rules with impunity. They seem to be finding it harder to do so under the WTO. Even so, protestors complain that it does not promote fair trade but does promote the interest of rich countries over poorer one. Supporters of free trade, including the economist, reckon that all countries are better off as part of a well-regulated international trading system, and that the WTO is the most likely source of the good regulation that is needed.