UPSC Quiz – 2024 : IASbaba’s Daily Current Affairs Quiz 10th June 2024

·       Prices for goods or services that don’t appear to be coming down anytime soon are considered sticky.

·       Causes: Rising wages and prices for consumer goods and services are typically the main factors behind inflation stickiness.

·       Prices for medical services, education, and housing are some of the most important factors that can contribute to sticky inflation.

·       It erodes the purchasing power of consumers and puts pressure on housing affordability.

·       To address sticky inflation, central banks usually raise interest rates.

·       However, raising rates too fast can cause the economy to fall into a recession, while not raising them enough will allow prices to continue increasing.

·       It consists of two accounts — current and capital account.

·       Current account deals mainly with import and export of goods and services

·       Capital account deals with cross-border movement of capital by way of investments and loans.

·       Current account convertibility refers to the freedom to convert your rupees into other internationally accepted currencies and vice versa without any restrictions whenever you make payments.

Capital Account Convertibility

·       Similarly, capital account convertibility means the freedom to conduct investment transactions without any constraints.

·       Typically, it means no restrictions on the amount of rupees you can convert into foreign currency to enable you, an Indian resident, to acquire any foreign asset.

·       Similarly, there should be no restraints on any NRIs bringing in any amount of dollars or dirhams to acquire an asset in India.

·       Currently India has partial capital account convertibility.

·       Developing countries are usually cautious in opening up their capital account because inflows and outflows of the foreign and domestic capital are prone to volatility. This can lead to excessive appreciation/depreciation of their currency and impact the monetary and financial stability.

·       It is an alliance of India, South Korea, Japan, the US, and the European Union to put joint efforts into building a resilient supply chain in the biopharmaceutical sector.

·       The participants emphasised the importance of a reliable and sustainable supply chain and agreed to coordinate the respective countries’ biopolicies, regulations, and research and development support measures.

·       They acknowledged that the production of essential raw materials and ingredients is concentrated in a few countries and agreed to work together to build a detailed pharmaceutical supply chain map.

·       The alliance was launched in response to the drug supply shortages experienced during the Covid-19 pandemic.

·       The alliance was inaugurated in San Diego during the Bio International Convention 2024.

·       The Bio International Convention is the premier event for the biotechnology industry, bringing together over 20,000 leaders from around the world.

·       It represents the entire biotech ecosystem, from public pharmaceutical companies and biotech startups to academia, non-profits, and government agencies.

·       A zombie company is a corporate entity with very limited cash flows, only sufficient to pay the interest on the debt borrowed but not the principal amount of the loan.

·       The revenue generated by the business operations only covers the fixed routine and operating costs (wages, rent, interest payments on debt, for example).

·       These companies, often referred to as the “living dead” or “zombie stocks,” have no excess capital to invest in growth, innovation, or significant improvements.

·       They are highly dependent on banks for financing.

·       They are typically subject to higher borrowing costs and may be one just event—market disruption or a poor quarter performance—away from insolvency or a bailout.

·       They are “uncompetitive survivors” and contribute to lower productivity in the global economy.

·       These companies can pose a risk to the broader economy by tying up resources that could be more effectively used by healthier, more innovative firms.

·       The Port of Mongla is located in the Bagerhat District of Bangladesh. It lies 62 km north of the Bay of Bengal coastline.

·       It is situated at the confluence of the Pasur River and the Mongla River.

·       The Port is surrounded and protected by the Sundarban mangrove forest.

·       Mongla is the second largest seaport in Bangladesh after Chittagong.

Significance for India:

·       Provides strategic access to India’s northeastern states (e.g., Assam, Tripura, Meghalaya).

·       Reduces distance and transportation costs for goods to and from these regions.

·       India Ports Global Limited (IPGL) has expressed interest in operating Mongla Port, which would be its third international port operation after Chabahar in Iran and Sittwe in Myanmar.

·       Expansion project: India and Bangladesh signed a MoU on the use of Chattogram and Mongla ports in 2015.

·       The MoU envisages the transit of goods from Mongla port to the northeastern states of India through waterways, roads and railways.