BOT The balance of trade is the difference between the monetary value of exports and imports of output in an economy

over a certain period. It is the relationship between a nation's imports and exports. A positive balance is known as atrade surplus if it consists of exporting more than is imported; a negative balance is referred to as a trade deficit or, informally, a trade gap. Factors that can affect the balance of trade include:  The cost of production (land, labor, capital, taxes, incentives, etc.) in the exporting economy vis-vis those in the importing economy;       The cost and availability of raw materials, intermediate goods and other inputs; Exchange rate movements; Multilateral, bilateral and unilateral taxes or restrictions on trade; Non-tariff barriers such as environmental, health or safety standards; The availability of adequate foreign exchange with which to pay for imports; and Prices of goods manufactured at home (influenced by the responsiveness of supply)

Organisation for Economic Co-operation and Development (OECD)

The mission of the Organization for Economic Co-operation and Development (OECD) is to promote policies that will improve the economic and social well-being of people around the world.

Cooperation Council for the Arab States of the Gulf

The Cooperation Council for the Arab States of the Gulf , also known as the Gulf Cooperation Council , is a political and economic union of the Arab states constituting the Arabian Peninsula, namelyBahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates. On May 10, 2011, a request by Jordan to join the GCC was formally being considered and Morocco was invited to join the council. Created on May 25, 1981, the original Council comprised the 630-million-acre (2,500,000 km2) Persian Gulf states of the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. The unified economic agreement between the countries of the Gulf Cooperation Council was signed on November 11, 1981 in Abu Dhabi. These countries are often referred to as The GCC States.

Objectives
 formulating similar regulations in various fields such as economy, finance, trade, customs, tourism, legislation, and administration;  fostering scientific and technical progress in industry, mining, agriculture, water and animal resources;  establishing scientific research centers;

    

setting up joint ventures; unified military presence (Peninsula Shield Force) encouraging cooperation of the private sector; strengthening ties between their peoples; and establishing a common currency by 2010;

Special Economic Zone

A Special Economic Zone (SEZ) is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. "Nationwide" laws may be suspended inside a special economic zone. The category 'SEZ' covers a broad range of more specific zone types, including Free Trade Zones(FTZ), Export Processing Zones (EPZ), Free Zones (FZ), Industrial parks or Industrial Estates (IE),Free Ports, Urban Enterprise Zones and others. Usually the goal of a structure is to increase foreign direct investment by foreign investors, typically aninternational business or a multinational corporation (MNC).

SEZs in India
In India, SEZs are the special zones created by the Government and run by Government-Private or solely Private ownership, to provide special provisions to develop industrial growth in that particular area. The government of India launched its first SEZ in 1965, in Kandla, Gujarat. The incentives and facilities offered to the units in SEZs for attracting investments into the SEZs, including foreign investment include:  Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units  100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years.  Exemption from minimum alternate tax under section 115JB of the Income Tax Act.(In the Union Budget 2010-11, there is no more exemption on SEZ developers and SEZ units.)  External Commercial Borrowing by SEZ units up to US $ 12500 billion in a year without any maturity restriction through recognized banking channels.     Exemption from Central Sales Tax. Exemption from Service Tax. Single window clearance for Central and State level approvals. Exemption from State sales tax and other levies as extended by the respective State Governments

FREE TRADE ZONE.

A free trade zone (FTZ) or export processing zone (EPZ) is an area of a country where some normal trade barriers such as tariffs and quotas are eliminated and bureaucratic requirements are lowered in hopes of attracting new business and foreign investments.[1] It is a region where a group of countries has agreed to reduce or eliminate trade barriers.[2] Free trade zones can be defined as labor intensive manufacturing centers that involve the import of raw materials or components and the export of factory products. The world's first Free Trade Zone was established in Shannon, Co. Clare, Ireland Shannon Free Zone.[3] This was an attempt by the Irish Government to promote employment within a rural area, make use of a small regional airport and generate revenue for the Irish economy. It was hugely successful, and is still in operation today. Most FTZs are located in developing countries: Brazil, Indonesia, El Salvador, China, the Philippines,

Malaysia, Bangladesh, Pakistan, Mexico, Costa Rica, Honduras, Guatemala, Kenya, and Madagascar have
EPZ programs. In 1997, 93 countries had set up export processing zones (EPZs) employing 22.5 million people, and five years later, in 2003, EPZs in 116 countries employed 43 million people.
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Country risk: Country risk refers to the risk of investing in a country, dependent on changes in the

business environment that may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes, or stability factors such as mass riots, civil war and other potential events contribute to companies' operational risks. This term is also sometimes referred to as political risk, however country risk is a more general term, which generally only refers to risks affecting all companies operating within a particular country. Political risk analysis providers and credit rating agencies use different methodologies to assess and rate countries' comparative risk exposure. Credit rating agencies tend to use quantitative econometric models and focus on financial analysis, whereas political risk providers tend to use qualitative methods, focusing on political analysis. However, there is no consensus on methodology in assessing credit and political risks. Currency risk or exchange rate risk is a

form of financial risk that arises from the potential change in the exchange rate of one currency in relation to another. Investors or businesses face an exchange rate risk when they have assets or operations across national borders or if they have loans or borrowings in a foreign currency. What Does Currency Risk Mean? A form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged

Types of currency risk

There are two basic types of currency risk:   Transaction risk is the risk that an exchange rate will change unfavourably over time. Translation risk is an accounting concept. It is proportional to the amount of assets held in foreign currencies. Changes in the exchange rate over time will render a report inaccurate, and so assets are usually balanced by borrowings in that currency.

A currency risk exists regardless of whether investors invest domestically or abroad. If they invest in the home country, and the home currency devalues, investors have lost money. All stock market investments are subject to a currency risk, regardless of the nationality of the investor or the investment, and whether they are in the same or different currency. Some people argue that the only way to avoid currency risk is to invest in commodities (such as gold) which hold value independently of the monetary system.