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GS Paper: GS2-19.Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

  • China-Myanmar New Passage

    The shipments on a newly-launched railway line under the China-Myanmar New Passage from the Myanmar border to the key commercial hub of Chengdu in western China have started.

    China-Myanmar New Passage

    • The passage provides China a new road-rail transportation channel to the Indian Ocean, were delivered last week, state media reported on Tuesday.
    • The transport corridor involves a sea-road-rail link.
    • It connects the logistics lines of Singapore, Myanmar, and China, and is currently the most convenient land and sea channel linking the Indian Ocean with southwest China.
    • Goods from Singapore reached Yangon Port, arriving by ship through the Andaman Sea of the northeastern Indian Ocean, and were then transported by road to Lincang on the Chinese side of the Myanmar-China border in Yunnan province.
    • The new railway line that runs from the border town of Lincang to Chengdu, a key trade hub in western China, completes the corridor.

    Why does India need to be watchful?

    • From the perspective of security, India’s border with Myanmar has historically presented serious security challenges.
    • Chinese troops had used the Myanmar route to threaten India’s North-eastern States prior to the 1962 war.
    • In the run-up to the India-China war of 1962, Chinese troops had commissioned local muleteers in Northern Myanmar to facilitate the movement of troops and war logistics to challenge India’s Northeast.

    Way forward

    • The work on infrastructure projects in India’s Northeastern States needs to be expedited to ensure speedy mobilization of India’s own troops to face different contingencies.
    • Monitoring of developments including deployment of space assets to ensure that India is not caught unaware would be desirable.
    • Most importantly, India on its part needs to substantially step up its own game in Myanmar and proactively engage Myanmar in the realm of the infrastructure upgrade.

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  • Close the vaccination gap, in global lockstep

    Why vaccination gap is cause of worry

    • By the end of May 2021, only 2.1% of Africans had received at least one dose of a COVID-19 vaccine.
    • A widely vaccinated world population is the only way to end the pandemic; otherwise, the multiplication of variants is likely to undermine the effectiveness of existing vaccines.
    • Vaccination is also a prerequisite for lifting the restrictions that are holding back our economies and freedoms.
    • If the vaccination gap persists, it risks reversing the trend in recent decades of declining poverty and global inequalities.
    • Such a negative dynamic would hold back economic activity and increase geopolitical tensions.
    • The cost of inaction would for sure be much higher for advanced economies than what we collectively would have to spend to help vaccinate the whole world.
    • The International Monetary Fund has proposed $50 billion plan in order to be able to vaccinate 40% of the world population in 2021 and 60% by mid-2022.

    Need to resist the vaccine nationalism

    • To achieve the goal set by IMF, we need closely coordinated multilateral action.
    • We must resist the threat posed by linking the provision of vaccines to political goals and vaccine nationalism.
    • The EU has been vaccinating its own population, while exporting large volumes of vaccines and contributing substantially to the vaccines roll-out in low-income countries.
    • The EU has also exported 240 million doses to 90 countries, which is about as much as used within the EU.
    • One-third of all COVAX doses delivered so far have been financed by the EU.
    • India’s Vaccine Maitri is another example of global solidarity.
    • However, this effort is still far from sufficient to prevent the vaccination gap from widening.

    Way forward

    • To fill widening vaccination gap, countries with the required knowledge and means should increase their production capacities, so that they can both vaccinate their own populations and export more vaccines.
    • All countries must avoid restrictive measures that affect vaccine supply chains.
    • We also need to facilitate the transfer of knowledge and technology, so that more countries can produce vaccines.
    • Voluntary licensing is the privileged way to ensure such transfer of technology and know-how.

    Conclusion

    The COVID-19 pandemic has reminded us that health is a global public good. Our common global COVID-19 vaccine action to close the vaccination gap must be the first step toward genuine global health cooperation, as foreseen by the Rome Declaration recently adopted at the Global Health Summit.

     

  • US investigation into India’s Digital Services Tax (DST)

    The US government has announced the further suspension of punitive tariffs for six months on India, Austria, Italy, Spain, Turkey, and the UK while it continues to resolve the DST investigation amid the ongoing multilateral negotiations at the OECD and the G20.

    Do you remember?

    GAFA tax—named after Google, Apple, Facebook, Amazon—is a proposed digital tax to be levied on large technology and internet companies.

    What are the Digital Services Taxes in India?

    • The NDA government had moved an amendment in the Finance Bill 2020-21 imposing a 2 percent digital service tax on trade and services by non-resident e-commerce operators with a turnover of over Rs 2 crore.
    • The new levy has expanded the ambit of the equalization levy for non-resident e-commerce operators involved in the supply of services, including the online sale of goods and provision of services.
    • E-commerce operators are obligated to pay the tax at the end of each quarter.
    • Estimates by the USTR indicate that the value of the DST payable by US-based company groups to India will be up to approximately $55 million per year.

    Also read:

    What are Digital Services Taxes?

    What is the story?

    • The US is focused on finding a multilateral solution to a range of key issues related to international taxation, including our concerns with digital services taxes.
    • It is trying to reaching a consensus on international tax issues through the OECD and G20 processes.

    Investigation regarding DST

    • The US has conducted a year-long investigation into digital services taxes imposed by countries, stating that they are against tech companies like Apple, Amazon, Google, and Facebook.
    • It had determined that the digital services taxes adopted by Austria, India, Italy, Spain, Turkey, and the UK has discriminated against US digital companies and were inconsistent with principles of international taxation, and burdened US companies.

    What’s the case against India?

    • In the case of India, the USTR’s proposed course of action includes additional tariffs of up to 25 percent ad valorem on an aggregate level of trade.
    • Around 26 categories of goods are in the preliminary list of products that would be subject to the additional tariffs.
    • This includes shrimps, basmati rice, cigarette paper, cultured pearls, semi-precious stones, silver powder and silver articles of jewelry, gold mixed link necklaces, and neck chains, and certain furniture of bentwood.

    Why does India need DST?

    • The agenda to reform international tax law so that digital companies are taxed where economic activities are carried is still a work in progress.
    • Due to this, countries are worried that they might cede their right to tax incomes. Therefore, many countries have either proposed or implemented a digital services tax.
    • The proliferation of digital service taxes (DSTs) is a symptom of the changing international economic order.
    • Countries such as India which provides large markets for digital corporations seek a greater right to tax incomes.
    • The taxation of the digitalized economy turned out to be a relatively contentious issue because there is a huge asymmetry in digital service providers and consumers.
  • Israel and Palestine could take a leaf out of India’s book

    The article suggest the Indian model for peaceful coexistence as a possible solution to Israel-Palestine conflict.

    Brief history of the conflict

    • Britain renounced its Mandate over Palestine in 1948.
    • This paved the way for the United Nations to divide Palestine between the Jews and Arabs, giving them about 55% and 45% of the land, respectively.
    • The Jews, meanwhile, had declared the establishment of the state of Israel for which they had been working for long.
    • The Palestinians, who lacked the resources to conceive of a state, failed to form a state of their own in the land allotted to them.
    • Instead, a coalition of Arab countries invaded the nascent state of Israel to nip it in the bud.
    • Israel defeated the Arab armies.
    • Israel also destroyed about 600 Palestinian villages and expelled about 80% of Arabs from its territory.
    • In 1967, in the Six-Day War, Israel captured not just more Palestinian land but also Egypt’s Sinai Peninsula and Syria’s Golan Heights.
    • During the Yom Kippur War of 1973, the Arabs came to realise that Israel is here to stay.

    Need for realisation on both the sides

    • The Arab states failed to impress the realisation of permanency of Israel upon their Palestinian brethren, a sizeable number of whom remain committed to seeking a solution through counter-violence. 
    • Vicious cycle of violence is not going to end unless there is realism on both sides.
    • The Hamas should know that Israel will not give up on holding on to land it has held for years.
    • Israel should understand that total subjugation, expulsion or even decimation of Palestinians will not make it any safer.
    • A solution based on the common humanity of all stakeholders, one that is not riven by racial and religious schisms, needs to be explored.

    Viability of Indian model

    • The Indian model of democracy and secularism, which accommodates religious, ethnic, linguistic and other diversities, could be a viable model for the peaceful coexistence of formerly antagonistic groups.
    •  India evolved a unique model of accommodating the victors and the vanquished, without ever resorting to the latter’s decimation.
    • A modus vivendi has to evolve on the basis of hard realities, the first of which is that neither the Jews nor the Palestinians are going to vanish.
    • If the two-state solution is nowhere in the offing, a single state after the Indian model, i.e., a secular, democratic and pluralistic state, may be the only feasible option.
    • The Palestinian refugees have a right to return.
    • That the altered demographics would impinge on the religio-racial character of Israel is not an argument which behoves a modern democratic state.
    • It is true that a nation state belongs to the group which constituted itself into a nation.
    • A nation is an imagined community.
    • As imagination expands, the foundations of the nation become deeper.

    Consider the question “In the absence of two-state solution to the Israel-Palestine conflict, what lessons India could offer to the two parties for peaceful coexistence?”

    Conclusion

    Israel might not offer the right model of conflict resolution for India, but India presents a model of peaceful coexistence for Israel.

  • UAE’s Golden Visa Scheme

    A Bollywood actor has recently received a golden visa from the UAE government.

    What is the Golden Visa?

    • The Golden Visa system essentially offers long-term residency (5 and 10 years) to people belonging to the following groups: investors, entrepreneurs, individuals with outstanding talents the likes of researchers, medical professionals and those within the scientific and knowledge fields, and remarkable students.
    • The main benefit of the visa will be security.
    • The UAE government has made it clear that they are committed to providing expatriates, investors and essentially everyone looking to make the UAE their home an extra reason to feel secure about their future.

    Who are eligible to apply?

    • For the 10-year visa, investors having no less than AED (Dirham) 10 million worth of public investment, either in the form of an investment fund or a company, can apply.
    • However, at least 60 per cent of the total investment must not be in the form of real estate and the invested amount must not be loaned, or in case of assets, investors must assume full ownership.
    • The investor must be able to retain the investment for a minimum of three years as well.
    • The long-term visa can also include the holder’s spouse and children, as well as one executive director and one advisor.
    • In addition to the aforementioned, foreign nationals who are looking to set up their business in the UAE may also apply for permanent residency (5 years) through the Golden Business Visa scheme.

    Perks for the talent

    • Besides entrepreneurs, individuals with specialized talent can also apply for the visa. They include doctors, researchers, scientists, investors and artists.
    • These individuals may be granted a 10-year visa following accreditations granted by their respective departments and fields and the visa will also be extended to their spouses and children.
    • Exceptional high school and university students are eligible for a 5-year residency visa in the UAE.
  • Places in news: Paracel Islands

    A United States warship sailed through the Paracel Islands in the disputed South China Sea.

    Paracel Islands

    • The Paracel Islands, also known as the Xisha Islands are a disputed archipelago in the South China Sea.
    • The archipelago includes about 130 small coral islands and reefs, most grouped into the northeast Amphitrite Group or the western Crescent Group.
    • They are distributed over a maritime area of around 15,000 square kilometers with a land area of approximately 7.75 square kilometers.
    • The archipelago includes Dragon Hole, the deepest underwater sinkhole in the world.
    • It is surrounded by productive fishing grounds and a seabed with potential, but as yet unexplored, oil and gas reserves.
  • Russia’s Nord Stream 2 Pipeline

    The US government has decided to waive sanctions on the company behind Russia’s Nord Stream 2 pipeline to Europe.

    Nord Stream 2 Pipeline

    • It is a system of offshore natural gas pipelines running under the Baltic Sea from Russia to Germany.
    • It includes two active pipelines running from Vyborg to Lubmin near Greifswald forming the original Nord Stream, and two further pipelines under construction running from Ust-Luga to Lubmin termed Nord Stream 2.
    • In Lubmin the lines connect to the OPAL line to Olbernhau on the Czech border and to the NEL line to Rehden near Bremen.
    • The first line Nord Stream-1 was laid and inaugurated in 2011 and the second line in 2012.
    • At 1,222 km in length, Nord Stream is the longest sub-sea pipeline in the world, surpassing the Langeled pipeline.

    US sanctions

    • Nord Stream projects have been opposed by the United States as well as by several Central and Eastern European countries because of concerns that the pipelines would increase Russia’s influence in the region.
    • The US resistance to Nord Stream 2 is also influenced by the country’s increased production of natural gas, which gives the US economic incentive to resist the Russian supply of gas to the EU, in favour of US shale gas.
  • The world cannot ignore the Palestinian question

    The article discusses the types of response the recent violence in the Israel-Palestine conflict would invoke across the world and also explains the perils of ignoring the conflict.

    Three types of responses

    • The deadly riots in Israel and the war in Gaza, is likely to evoke three kinds of responses: The indifferent, the imperial, the humanitarian.

    1) Moral indifference

    •  Instead of becoming the symbol of the unfinished tasks of decolonisation, and a human rights catastrophe, the Palestinian question is now mostly an occasion to vent cynicism.
    • The moral questions the oppression of Palestinians poses is avoided by claiming that in this conflict we can assigning rights and wrongs equally to both sides.
    • There is the spectacle of civilians on both sides living in terror.
    • There is the fanaticism of the right-wing in Israel and there is the fanaticism of Hamas and Fatah.
    • Blaming both sides also whitewashes the fact that there is a monumental injustice to the Palestinians at the heart of the problem.

    2) The imperial response

    • The events leading up to the recent clashes at the Al-Aqsa Mosque can be seen as part of a long pattern of pushing out Palestinians from territory Israel wants to claim.
    • American administration has not been able to significantly roll back this project of pushing the Palestinians out.
    • Palestine will once again be the site where the Biden administration’s liberal internationalism will face challenge.

    3) Humanitarian response

    • This third response is to dig beneath the politics and find bridges in shared humanity and suffering.
    • This is also the tack of the peace movements that use culture and a history of shared suffering to build bridges.
    •  They emphasise that dispossession and exile is something both communities share; they, of all the people, should be able to understand each other.
    •  Humanity and culture, even when deeply internalised, collapse quickly when subject to fear.
    • And they always fall short of acknowledging the core issue at stake: Political equality between two peoples.

    Geopolitical implications of conflict

    • The violence of Israel will beget more terrorist violence of Hamas and Fatah, with every world power from Russia to Iran influencing the chaos.
    • Israel needs to be reminded of the blowback of imperial politics: The ultimate consequence of trying to dominate a people is that you end up destroying the moral legitimacy of your own claims.
    • No amount of military capacity can compensate for the images of lynching, rioting, and provocations that we have seen this week.

    Conclusion

    We continually risk conflict if the Palestinian question is simply treated as an object of geo-political opportunism, not as a question of basic dignity and justice.

  • What does US departure from Afghanistan mean for South Asia?

    The article highlights the important role played by the US in the geopolitics of the region and the impact of the US retreat on the region foreign policy landscape.

    How the US shaped the regional politics of South Asia

    • Since it replaced Britain as the major external power in Greater Middle East half a century ago, America has been the pivot around which the regional politics has played out.
    • Many regional actors sought alliances with America to secure themselves against ambitious or troublesome neighbours.
    • Others sought to balance against America.
    • Israel’s security, ensuring oil supplies, competing with other powers, making regional peace, promoting democracy, and stamping out terrorism are no longer compelling factors demanding massive American military, political and diplomatic investments in the region.

    Region now has to learn to live with neighbours

    • As America steps back from the Middle East, most regional actors either need alternate patrons or reduced tensions with their neighbours.
    • Although China and Russia have regional ambitions, neither of them bring the kind of strategic heft America brought to bear on the Middle East all these decades.
    • Turkey has figured that its troubled economy can’t sustain the ambitious regional policies.
    •  After years of challenging Saudi leadership of the Islamic world, Erdogan is offering an olive branch to Riyadh.
    • After years of intense mutual hostility, Saudi Arabia and Iran are now exploring means to reduce bilateral tensions and moderate their proxy wars in the region.
    • Saudi Arabia is also trying to heal the rift within the Gulf by ending the earlier effort to isolate Qatar. 
    •  These changes come in the wake of the big moves last year by some Arab states — the UAE, Bahrain, Morocco and Sudan — to normalise ties with Israel.

    How India’s approach helped maintain ties in the region

    • India’s emphasis on good relations with all the regional actors without a reference to their conflicts has been vindicated by the turn of events.
    • Barring Turkey, which turned hostile to India under Erdogan, India has managed to expand its ties with most regional actors.
    • Hopefully, the new regional churn will encourage Turkey to take a fresh look at its relations with India.

    Effect on India-Pak relations

    • The regional reset in the Middle East has coincided with efforts by Delhi and Rawalpindi to cool their tensions.
    • The ceasefire on the Line of Control in Kashmir announced at the end of February appears to be holding.
    • The US withdrawal from Afghanistan poses major challenges to the Subcontinent.
    • India and Pakistan, for very different reasons, would have liked to see the US forces stay forever in Afghanistan.
    • For India, American military presence would have kept a check on extremist forces and created conducive conditions for an Indian role in Afghanistan.
    • For Pakistan, American military presence in Afghanistan keeps the US utterly dependent on Pakistan for geographic access and operational support.

    Challenge of terrorism

    • The prospect of trans-border links between the Taliban and other extremist forces in the region is a challenge that South Asian states will have to confront sooner than later.
    • Soaring levels of violence in Afghanistan and attack on the former president of Maldives, underlines South Asia’s enduring challenges with terrorism.
    • Unless the South Asian states collaborate on countering extremism and terrorism, every one of them will be weakened.

    Consider the question “How US troop withdrawal from Afghanistan will influence the regional geopolitics of the region?”

    Conclusion

    The region needs to focus on the peace and harmony in the region while resolving the bilateral issues through dialogue.

  • Israel-Palestine Clash

    Context

    On Monday, Israeli police stormed the Al-Aqsa mosque compound in East Jerusalem, leaving a reported 300 people injured. The stand-off came at the end of a week of tensions over the eviction of Palestinian residents from two neighbourhoods of East Jerusalem, Sheikh Jarrah and Silwan, to make way for Jewish settlers.

    Cause of the clashes

    • The Al-Aqsa is located on a plaza at Temple Mount, which is known in Islam as Haram-e-Sharif.
    • The Mount is also Judaism’s holiest site.
    • The most imposing structure on the compound is the Dome of the Rock, with its golden dome.
    • The Western Wall, also known as the Wailing Wall sacred to Jews, is one side of the retaining wall of the Al-Aqsa compound.
    • Soon after the 1967 Six-Day War ended, Israel gave back to Jordan the administration and management of the Al-Aqsa compound.
    • While non-Muslims have not been allowed to worship at Al-Aqsa, Jewish individuals and groups have made repeated attempts to gain entry to the Mount Temple plaza.
    • Since the late 1990s, around the time of the first intifada, such attempts began occurring with a regularity as Jewish settlers began claiming land in East Jerusalem and surrounding areas.
    • It has led to repeated clashes and tensions at Al-Aqsa.

    Rival claims over Jerusalem

    • Both Israel and Palestine have declared Jerusale their capital.
    • In July 1980, the Israeli Parliament passed the Jerusalem Law declaring it the country’s capital.
    • Palestinians declared Jerusalem the capital of the putative state of Palestine by a law passed by the Palestinian Authority in 2000.
    • The 1988 Palestinian Declaration of Independence also declared Jerusalem as the capital.
    • For the present, the Palestinian Authority has its headquarters in Ramallah.

    How the world is reacting

    • The Security Council held a meeting on the situation in Jerusalem, but did not make any statement immediately.
    • Last Friday, the US said it was “extremely concerned” .
    • The UAE, which recently recognised as Israel as a state and sealed a historic peace agreement to normalise relations with it, has “strongly condemned” the clashes and the planned evictions in Jerusalem over the past week.
    • Saudi Arabia said it “rejects Israel’s plans and measures to evict dozens of Palestinians from their homes in Jerusalem”.
    • Pakistan Prime Minister also condemned Israel for violation of international law.