💥Join UPSC 2027,2028 Mentorship (July Batch) + XFactor Notes & Microthemes PDF
Talk to Mentor

Civilsdaily

Login

GS Paper: GS2

  • Pakistan’s Economic Crisis and the IMF Challenge

    Pakistan’s foreign exchange reserves have been depleting during the last one year and is heading towards a default risk as Sri Lanka did.

    Pakistani economy is said to have been crippling since the discontinuance of US ‘military’ aid which it had used

    What is the news?

    • The Pakistani rupee has been on free fall; from 150 in April 2021 to 213 against the dollar on 21 June, an all-time low.
    • This would mean high oil and electricity prices, to outrage the people who are already to the streets due to ousted PM Imran Khan.
    • The government-International Monetary Fund (IMF) talks have remained complicated.

    Options available for Pakistan

    • Pakistan is under deep Balance of Payment (BoP) crisis (as was India in 1991).
    • Pakistan has exhausted all credit options as SL did.
    • Even the China Pakistan Economic Corridor (CPEC) is at standstill.
    • Even the Saudi’s and so called ‘caliphate’ of Turkey has not come to Pakistan’s rescue.

    Only option left: IMF bail out

    • The immediate future of Pakistan’s economy would depend on IMF resuming its support.
    • Despite an intense discussion between the two, there has not been a consensus until now.

    What is IMF bail-out?

    • Bailout is a general term for extending financial support to a company or a country facing a potential bankruptcy threat.
    • When a country asks the IMF for a loan, the country is facing a major economic crisis.
    • In particular, it does not have enough foreign currency (‘dollars’) to pay for imports and the repayments on its loans. In short, the country cannot pay its international bills. So, it need a bailout.
    • The IMF will give the country an aid, which is ‘cash’ in the sense that it does not have to be spent on a particular project. This money can be used to pay its bills.
    • But, the IMF will impose certain conditions. The basic condition is to spend less – both domestically and internationally.
    • This belt-tightening is not easy – people lose jobs, prices rise, etc. And, one has to repay the loan.
    • These conditions are necessary to ensure that the money is being spent where it is supposed to.

    Pakistan and IMF: A track record

    • Pakistan’s relationship with the IMF has remained complicated. It sees conditions laid as a breach of sovereignty.
    • Though Islamabad has been negotiating with the IMF repeatedly, there has been an economic nationalism, mostly jingoistic, against approaching the IMF in recent years.
    • Imran Khan, the former PM made statements and fuelled the sentiments against the IMF.
    • After becoming the PM in 2018, he preferred approaching friendly countries (China and Saudi Arabia) and avoiding the IMF.
    • The new government is now back to the IMF; it expects the IMF to release the payments, expand the support programme, and give a longer rope to repay.

    Conditions laid out by IMF for recent bail-out

    • The IMF is willing to support Pakistan but has some conditions regarding macroeconomic reforms.
    • It wants Pakistan to be transparent about its debt situation, including what Islamabad owes to China, as a part of the CPEC.
    • Terror-financing in Pakistan is the most favored type of investment!
    • The IMF may agree to support after a few more promises by the government.
    • But the relief may be less than what Pakistan would hope for.

    A vicious cycle

    • Since its inception, Pakistan has spent more years inside an IMF programme than outside of it.
    • Every leader took the money, imposed massive hardships on the population through austerity and demand suppression and then reneges on its commitment through a patchy implementation.
    • Radical fanaticism and anti-India sentiments are successful tools of public appeasement.

    Will Pakistan pursue macroeconomic reforms?

    • In Pakistan, budgets have remained populist.
    • The economic governance declined due to corruption, lack of financial institutions’ independence, and the export decline.
    • The subsidies in the energy sector — fuel, oil and electricity — remain high to appease the public.
    • With the present coalition government facing elections, they are less likely to take any further bold decisions.

    Will “friendly countries” support Pakistan without preconditions?

    • Saudi Arabia and China have been supporting Pakistan. MBS has already pulled his hands.
    • Riyadh’s support is not unconditional.
    • It can ask Pakistan “to return the money at any time if the two countries have divergent views regarding their relationship or ties with a third country, or some other issue.”
    • China has been another significant source for Pakistan. Islamabad has been regularly seeking loans from China within and outside the CPEC projects.
    • However, since the attack on Chinese citizens by Baloch Fighters, China appears to have been disgusted with Pakistan.
    • CPEC is also at a standstill.

    FATF clearance is no panacea

    • During the latest Financial Action Task Force (FATF) meeting, there was an understanding that Pakistan has met its requirement.
    • The FATF has agreed to explore the possibilities of removing Pakistan from the grey list.
    • However, even when Pakistan was on the grey list, the IMF had been holding talks with Islamabad.
    • The big two — China and Saudi Arabia — were not constrained by Pakistan’s listing in the FATF.
    • So, the relaxation is less likely to open gates for big investments.

    Will Pakistan go the Sri Lankan way?

    • The situation was similar in Sri Lanka — the falling value of rupee, declining foreign exchange reserves, differences with the IMF, and rising fuel prices.
    • All of them led to public protests in Sri Lanka against the government.
    • The economic and energy crises in Pakistan have not snowballed into a political storm as it had happened in Sri Lanka.
    • The dope of “threats to Religion” works effectively there.

    Conclusion

    • The experiment of Pakistan (as a separate nation) has failed on various fronts.
    • To conclude, Pakistan’s economic and energy situation is serious and demands bold decisions.
    • The situation will worsen in the short term before it gets better, but this has been Pakistan’s history in the last 75 years.
    • With a relief from the IMF, after a protracted negotiation, a few band-aids, and the US intervention, Islamabad may muddle through this time as well, until the next crisis.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Group wants new order on MGNREGA workers revoked

    Certain groups has asked to discontinue manual attendance for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) work sites with more than 20 workers and use a mobile phone-based application.

    What is MGNREGA?

    • The MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act of 2005.
    • This is labour law and social security measure that aims to guarantee the ‘Right to Work’.
    • The act was first proposed in 1991 by P.V. Narasimha Rao.

    Features of the scheme

    • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
    • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
    • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
    • Thus, employment under MGNREGA is a legal entitlement.

    What is so unique about it?

    • MGNREGA is unique in not only ensuring at least 100 days of employment to the willing unskilled workers, but also in ensuring an enforceable commitment on the implementing machinery i.e., the State Governments, and providing a bargaining power to the labourers.
    • The failure of provision for employment within 15 days of the receipt of job application from a prospective household will result in the payment of unemployment allowance to the job seekers.
    • Any Indian citizen above the age of 18 years who resides in rural India can apply for the NREGA scheme. The applicant should have volunteered to do unskilled work.
    • Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid.
    • Thus, employment under MGNREGA is a legal entitlement.

    Answer this PYQ in the comment box:

    Q.Among the following who are eligible to benefit from the “Mahatma Gandhi national rural employment guarantee act”?

    (a) Adult members of only the scheduled caste and scheduled tribe households.

    (b) Adult members of below poverty line (BPL) households.

    (c) Adult members of households of all backward communities.

    (d) Adult members of any household.

     

     

    [wpdiscuz-feedback id=”vp15cpmv62″ question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Places in news: Snake Island

    Ukraine has said it has caused “significant losses” to the Russian military in airstrikes on Zmiinyi Island, also known as Snake Island, in the Black Sea.

    Snake Island

    • Zmiinyi Island, also known as Snake or Serpent Island, is a small piece of rock less than 700 metres from end to end, that has been described as being “X-shaped”.
    • It is located 35 km from the coast in the Black Sea, to the east of the mouth of the Danube and roughly southwest of the port city of Odessa.
    • The island, which has been known since ancient times and is marked on the map by the tiny village of Bile that is located on it, belongs to Ukraine.

    Why does Russia seek to control the Black Sea?

    • Domination of the Black Sea region is a geostrategic imperative for Moscow.
    • The famed water body is bound by Ukraine to the north and northwest, Russia and Georgia to the east, Turkey to the south, and Bulgaria and Romania to the west.
    • It links to the Sea of Marmara through the Bosporus and then to the Aegean through the Dardanelles.
    • It has traditionally been Russia’s warm water gateway to Europe.
    • For Russia, the Black Sea is both a stepping stone to the Mediterranean as well as a strategic buffer between NATO and itself.
    • Cutting Ukrainian access to the Black Sea will reduce it to a landlocked country and deal a crippling blow to its trade logistics.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • BRICS

    Context

    China is hosting the 14th BRICS summit in virtual mode. The focus of the summit will be centred on the conflict and the association’s future.

    About BRICS

    • BRICS is an acronym for the grouping of the world’s leading emerging economies, namely Brazil, Russia, India, China and South Africa.
    • The BRICS Leaders’ Summit is convened annually.
    • It does not exist in form of an organization, but it is an annual summit between the supreme leaders of five nations.
    • The grouping was formalized during the first meeting of BRIC Foreign Ministers on the margins of the UNGA in New York in September 2006.
    • The first BRIC Summit took place in 2009 in the Russian Federation and focused on issues such as reform of the global financial architecture.
    • South Africa was invited to join BRIC in December 2010, after which the group adopted the acronym BRICS.
    • South Africa subsequently attended the Third BRICS Summit in Sanya, China, in March 2011.
    • The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.

    Significance of BRICS

    • Economically, militarily, technologically, socially and culturally, BRICS nations represent a powerful bloc.
    • 40 per cent of the world’s population: They have an estimated combined population of 3.23 billion people, which is over 40 per cent of the world’s population.
    • 25 per cent of global GDP: They account for over more than a quarter of the world’s land area over three continents, and for more than 25 per cent of the global GDP.
    • Two fastest growing large economies: The grouping comprises two of the fastest-growing nations, India and China.
    •  It has proved its mettle to an extent by establishing the BRICS New Development Bank (NDB) and the Contingency Reserve Arrangement (CRA).

    How the Ukraine crisis creates challenges for the BRICS

    • The leaders of BRICS countries — Brazil, Russia, India, China and South Africa — will navigate the crucial dilemma of evolving a common stance on the Russian-Ukraine conflict.
    • The primary agenda of BRICS was rebalancing an international system dominated by the West.
    • However, the Ukraine crisis could act as a distraction from that primary agenda.
    • The geopolitical considerations of its members can come in the way of attaining the grouping’s original goal.
    • Target of economic warfare: Some of the BRICS members could be potential targets of the kind of economic warfare deployed by the West against Russia.
    •  The West has so far not expected the BRICS countries to stringently adhere to its sanctions against Russia.
    • But it will be naïve to expect that they will persist with this attitude.

    Way forward

    1] Create institutional arrangement

    • Challenging the economic might of the West in the near future might be close to impossible.
    • Despite the group comprising China, India and Russia, intra-BRICS trade accounts for less than 20 per cent of global trade.
    • BRICS is far from having its own payment mechanisms, international messaging systems or cards.
    • The Ukraine crisis should drive home the need to create institutional arrangements that can cushion against similar financial turbulence in the future.

    2] Recalibrate structure and expand

    • BRICS requires a recalibration of its structure and agenda.
    • Creating financial mechanisms and technological institutions could turn BRICS into a G20 for developing nations.
    • It’s time to revisit the idea of expanding the grouping by inviting new members.
    • This could also impart new vigour to the BRICS’s developmental goals.

    3] Economic cooperation between India and China

    • Economic cooperation between India and China is vital for the success of any future BRICS endeavour.
    • The border conflict has created a mistrust of China in India.
    • In the current situation, New Delhi is unlikely to take an anti-West stance.
    • India, unlike China, is neither a UN Security Council member nor does it have major sticking points with the West.
    • At the same time, India is not a part of the Western camp.
    • That does open up the possibility of New Delhi taking a more proactive position in BRICS.
    • The two powers need to come together for the sake of global governance reform.

    Conclusion

    The Ukraine crisis could be an occasion for the leaders of BRICS nations to commit themselves to the original goal of the bloc. It’s an opportunity they shouldn’t let go of.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Anti-defection Law

    The unfolding political crisis in Maharashtra has thrown the spotlight on the anti-defection law, and the roles of the Deputy Speaker and the Governor.

    What is the news?

    • Some legislators have aligned themselves with the party’s rebel leader and are camping in Guwahati.
    • The party has warned its MLAs that their absence from the meeting would lead to the presumption they wanted to leave the political party.
    • And this would therefore lead to action against them under the anti-defection law.

    What is the Anti-Defection Law?

    • The anti-defection law provides for the disqualification of MLAs who, after being elected on the ticket of a political party, “voluntarily give up their party membership”.
    • The Supreme Court has interpreted the term broadly and ruled an MLA’s conduct can indicate whether they have left their party.
    • The law is also applicable to independent MLAs.
    • But the anti-defection law does not apply if the number of MLAs who leave a political party constitute two-thirds of the party’s strength in the legislature.
    • These MLAs can merge with another party or become a separate group in the legislature.

    How does the two-thirds rule work in the current situation in Maharashtra?

    • Reports indicate that 30 MLAs are with rebel leader.
    • Taking this number at face value means it does not reach the two-thirds (37) mark of the 55 MLAs the party has in the Maharashtra Assembly.
    • Therefore, the protection under the anti-defection law would not be available to the rebel group.

    What adds more to this high-stage political drama?

    • It is the Assembly Speaker who decides whether an MLA has left a party or a group that constitutes two-thirds of a party.
    • The position of the Speaker of the Maharashtra Assembly is, however, currently vacant.
    • Article 180(1) of the Constitution states that the Deputy Speaker performs the Speaker’s duties when the office is vacant.
    • Since then, the Deputy Speaker has been acting as the Speaker.

    How would a decision be taken whether the anti-defection law applies in this case?

    Under the current circumstances, two ways would lead to adjudication under the law.

    (1) Approaching the acting Speaker to file defection petition

    • First, any MLA of the Assembly can petition that certain MLAs have defected from their political party.
    • Such a petition has to be accompanied by documentary evidence.
    • The Deputy Speaker would then forward the petition to the MLAs against whom their colleagues are making the charge of defection.
    • The MLAs would have seven days or such time that the Deputy Speaker decides is sufficient to enable them to put across their side of the story.

    (2) Proving of two-third majority

    • Rebel leader and MLAs supporting too can write to the Deputy Speaker with evidence claiming that they represent two-thirds of the strength and claim protection under the anti-defection law.
    • In either case, Speakers will decide the matter after hearing all parties, which could take time.

    How much time does it usually take? Why delay occurs?

    • In recent years, one of the fastest decisions in a defection proceeding was delivered by Rajya Sabha Chairman Venkaiah Naidu.
    • However in state legislatures, defection petitions have taken much longer.
    • For example, in 2020, the Supreme Court used its extraordinary power to remove a Manipur minister from his position.
    • But whether the Speaker decides quickly or takes time, the Speaker is usually challenged in court, which further delays the decision.
    • Both Venkaiah Naidu and the Supreme Court have recommended that Speakers decide on defection cases in three months.

    What is the Governor’s role?

    (1) Declaration of Presidents Rule (NA)

    • The Governor has a crucial role when there is political instability in a state.
    • Before 1994, Governors were quick to dismiss a state government, charging that it did not have a majority in the state legislature and recommending the imposition of the President’s rule in the state.
    • But the Supreme Court ended this practice with its judgment in the S R Bommai case in 1994.

     (2) Holding Assembly

    • In this landmark case, the court ruled that the place for deciding whether a government has lost its majority was in the legislature.
    • Hence, Maharashtra Governor can ask Chief Minister to convene the Assembly and prove his majority on the floor of the House.

     (3) Governors Discretion

    • The CM can recommend to the Governor to dissolve the legislature before the end of its five-year term and call for elections under Article 174(2)(b).
    • Here, the Governor’s discretion comes into play.
    • The Governor may choose not to dissolve the legislature.
    • This is when if he or she believes that the recommendation is coming from a council of ministers who do not enjoy the confidence of the state legislature.

    Note: In 2020, the Supreme Court, in Shivraj Singh Chouhan & Ors versus Speaker, MP Legislative Assembly & Ors, upheld the powers of the Speaker to call for a floor test if there is a prima facie view that the government has lost its majority.

    (4) Floor test

    • Under Article 175(2), the Governor can summon the House and call for a floor test to prove whether the government has the numbers.
    • In a detailed judgment, the Court also explained the scope of the power of the Governor and the law revolving around floor tests.
    • When the House is in session, it is the Speaker who can call for a floor test.
    • But when the Assembly is not in session, the Governor’s residuary powers under Article 163 allow him to call for a floor test.

    Conclusion

    • The spectacle of rival political parties whisking away their MLAs to safe destinations does little credit to the state of our democratic politics.
    • It is an unfortunate reflection on the confidence which political parties hold in their own constituents and a reflection of what happens in the real world of politics.
    • Political bargaining, or horse-trading, as we noticed, is now an oft repeated usage in legal precedents.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • PM to attend G-7 summit in Germany

    PM Modi will fly to the Germany as a special invitee to the meeting of G-7 countries.

    Group of 7

    • The G-7 or ‘Group of Seven’ includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.
    • It is an intergovernmental organisation that was formed in 1975 by the top economies of the time as an informal forum to discuss pressing world issues.
    • Initially, it was formed as an effort by the US and its allies to discuss economic issues.
    • The G-7 forum now discusses several challenges such as oil prices and many pressing issues such as financial crises, terrorism, arms control, and drug trafficking.
    • It does not have a formal constitution or a fixed headquarters. The decisions taken by leaders during annual summits are non-binding.
    • Canada joined the group in 1976, and the European Union began attending in 1977.

    Evolution of the G-7

    • When it started in 1975—with six members, Canada joining a year later—it represented about 70% of the world economy.
    • And it was a cosy club for tackling issues such as the response to oil shocks.
    • Now it accounts for about 40% of global GDP.
    • Since the global financial crisis of 2007-09 it has sometimes been overshadowed by the broader G20.
    • The G-7 became the G-8 in 1997 when Russia was invited to join.

    Why was Russia expelled?

    • The G-7 was known as the ‘G-8’ for several years after the original seven were joined by Russia in 1997.
    • The Group returned to being called G-7 after Russia was expelled as a member in 2014 following the latter’s annexation of the Crimea region of Ukraine.
    • Since his election in 2016, President Trump has suggested on several occasions that Russia be added again, given what he described as Moscow’s global strategic importance.

    Why in news now?

    • New Delhi is preparing for more pressure from the G-7 countries.
    • These countries (Canada, France, Germany, Italy, Japan, the UK, the US and the EU) have unitedly imposed sanctions on Russia since it invaded Ukraine.
    • They want India to cooperate in restricting its purchase of Russian oil, not circumvent the sanctions by using a rupee-rouble mechanism.
    • It also wants India to lift the ban on the export of wheat.

    Relevance of G7 for India

    • India will get more voice, more influence and more power by entering the G7.
    • After UN Security Council (UNSC), this is the most influential grouping.
    • If the group is expanded it will collectively address certain humongous issues in the global order.
    • Diplomatically, a seat at the high table could help New Delhi further its security and foreign policy interests, especially at the nuclear club and UNSC reforms.
    • It will further protect its interests in the Indian Ocean.

    Challenges for India’s entry

    • The decision to expand the grouping cannot be taken by the US alone.
    • There needs to be a consensus.
    • However, a special invitation to India is no mean achievement.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Judicial Reforms in India

    Context

    Following are the reforms needed in the various aspects of the higher judiciary

    Removing the disparity between retirement ages of HC and SC judges

    • High Court judges now retire at 62 and Supreme Court judges at 65.
    • It is high time that we did away with the disparity between the retirement ages of High Court and Supreme Court judges.
    • There is no good reason for this difference.
    • Intense pressure and competition: The obvious negative fallout of a differential retirement age simply is intense pressure and competition to make it to the top court and thus get three more years.
    • If this is done away with, several judges of mettle would prefer to be Chief Justices and senior judges in the High Courts exercising wide power of influence rather than being a junior judge on a Bench of the Supreme Court.
    • There is good work to be done in the High Courts, and we need good men there.

    Create a cadre of public service for retired judges

    • SeveralSupreme Court judges focus on arbitrations after retirement.
    • A minority of judges devote themselves to public service; sadly, this is a very small minority.
    • Another lot are appointed to various constitutional posts and tribunals and commissions.
    • It would be worthwhile reform to create a cadre of public service for retired judges and from this pool make appointments to the constitutional and statutory posts and special assignments.
    • Such judges should receive the full pay and the facilities of a judge of the Supreme Court for life.
    • We should have a culture of public service for senior judges, and those who do not fit in such culture should not be a part of senior ranks.

    Reform in the process of appointment of Chief Justice of India

    • No constitutional basis: It is generally assumed that the seniormost judge of the Supreme Court should be the Chief Justice of India.
    • The Constitution mandates no such thing.
    • Article 124 merely states that the President will appoint every judge of the Supreme Court, and this includes the Chief Justice, and each of these judges shall hold office until they attain the age of 65 years.
    • The requirement about appointing the seniormost judge to be the CJI was devised in the Second Judges case (1993) and the consequent Memorandum of Procedure which is an usurpation of the President’s power.
    • There is no good reason why any one particular person should have a vested interest in the top job, and we are better served by eliminating such expectation.
    • Let all serve equally under the constitutional throne for the entire length of their tenure.

    But who then shall be the CJI?

    • As per the Constitution the judges of the High Court, senior advocates and distinguished jurists are eligible for the appointment as the judge of the Supreme Court.
    • Chief Justice of HC: When a serving CJI retires, his successor should be the best reputed Chief Justice of a High Court who has proved himself worthy both in judicial office as well as administrative leadership and has those qualities of heart and head which mark a good leader.
    • The same process is followed in the appointment of the Chief Justice of the United States Supreme Court.
    • Security of tenure: The appointee should have a clear three-year term.
    • He should not function as the primus super pares — calling the shots and having their unfettered way.
    • He should instead function in a true collegiate manner, especially in regard to the roster of allotment of cases, especially the sensitive ones, and appointments to the Supreme Court and High Courts and other important matters of judicial and administrative importance.

    Conclusion

    Though there are several issues that need reforms in the higher judiciary, the above reforms can serve as the precursor to the other reforms to come.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • India and Australia

    Context

    India and Australia, which share common values and interests, must work together with resolve to shape the economic and strategic environment so that it continues to support collective security and prosperity.

    India-Australia ties: A background

    • The ties are a Comprehensive Strategic Partnership full of practical, tangible actions that strengthen ties and benefit the region.
    • India and Australia are a small group of countries to hold annual leaders’ summits and biennial 2+2 talks involving foreign and defence ministers.
    • The defence forces of both the countries are undertaking more complex activities together, such as in Exercise Malabar with the US and Japan.
    • We coordinate closely on maritime domain awareness.
    • This year both countries deployed P-8 surveillance aircraft to each other’s territories for joint patrols.
    • Australia has also committed to a package of partnership initiatives in our update to the India Economic Strategy.
    • Cooperation on climate and sustainability: India and Australia have great potential to cooperate on climate and sustainability.

    Why India matters to Australia

    • Securing supply chain: India’s economy, manufacturing capabilities and talent ensure it will play a key role in securing supply chains and restarting post-pandemic growth.
    • Balance of power: Its military has the capacity and capability to respond to natural disasters, help stabilise an uncertain region and contribute to an effective balance of power.
    • Technological and scientific capabilities: Its technological and scientific capabilities are gateways to a cleaner and more sustainable world.
    •  Commitment to democracy: Most of all, India’s people have the optimism, the commitment to democracy, the drive and the goodwill to make our region safer, freer and better.

    Vision for open, inclusive and resilient Indo-Pacific region

    • As the bilateral relationship deepens, both the countries must begin to work more together with others in the region.
    • Responding to humanitarian crises and natural disasters: There is enormous potential in the Indian and Pacific oceans, where we each have vital interests in combating climate change, illegal fishing and people smuggling and responding to humanitarian crises and natural disasters.
    •  Australia has a vision for an open, inclusive and resilient Indo-Pacific region.
    • It is a vision for a region that is more integrated rather than divided, where trade and investment flow freely based on agreed rules and treaty commitments, where disputes are resolved through dialogue in accordance with international law, and where a strategic culture that respects the rights of all states, big and small, prevails.
    • It is a vision that Australia share with partners like ASEAN, and partners like India.
    • Whether through joint activities with like-minded countries, or the support of regional and multilateral architecture, Australia is ensuring the region has options and balance.

    Conclusion

    India and Australia’s interests don’t just align, they are inextricably entwined. Expect this relationship to grow and prosper, our cooperation to deepen.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • Places in news: Strait of Hormuz

    A US Navy warship fired a warning flare to wave off an Iranian speedboat coming straight at it during a tense encounter in the strategic Strait of Hormuz.

    Why in news?

    • The Strait of Hormuz, a narrow waterway in the Middle East marks the most sensitive transportation choke point for global oil supplies.

    Strait of Hormuz

    • The Strait of Hormuz is a narrow channel, approximately 30 miles wide at the narrowest point, between the Omani Musandam Peninsula and Iran.
    • It connects the Persian Gulf to the Gulf of Oman.
    • The Strait is deep and relatively free of maritime hazards.
    • Its depth is greatest near the Musandam Peninsula and tapers as you move north toward the Iranian shore.

    Why is it important?

    • Oil tankers carrying crude from ports on the Persian Gulf must pass through the strait.
    • Around 21 million barrels of oil a day flowed through it in 2018, equivalent to roughly a third of global seaborne oil trade and about 21% of global petroleum liquids consumption.

     

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)

  • In Sri Lankan crisis, a window of economic opportunity

    Context

    The commonality between Sri Lanka and the southern parts of India remains a less-emphasised yet significant aspect of India-Sri Lanka relations.

    Crisis in Sri Lanka and relief provided by India

    • The present economic crisis in Sri Lanka has pushed it closer to India for immediate relief.
    • India, as part of its ‘Neighbourhood First’ policy, has extended support to the people of Sri Lanka in the form of aid (close to $3.5 billion) to help secure Sri Lanka’s food, health and energy security by supplying it essential items such as food, medicines, fuel and kerosene.
    • The latest in the series was the signing of an agreement on June 10 between the Government of Sri Lanka and the Export-Import Bank of India for a $55-million short term Line of Credit to facilitate the procurement of urea for paddy crop in the ongoing ‘Yala’ season.
    • On its part, Tamil Nadu decided to provide aid of ₹123 crore, comprising 40,000 tonnes of rice, 137 types of life-saving drugs and 500 tonnes of milk powder.

    Sri Lanka-India sub-regional context

    • During his second term as Prime Minister, Mr. Wickremesinghe while delivering a lecture in Chennai, in August 2003, called for the development of the south India-Sri Lanka sub-region as a single market.
    • Such a market would provide more opportunities for the economic growth of both countries.
    • In 2016 he highlighted the fact that the five Indian southern States, with a total population of 250 million, had a combined gross state domestic product of nearly $450 billion; with the addition of Sri Lanka’s $80 billion GDP, the sub-region would have a $500 billion economy, having an aggregate population of around 270 million.

    Challenges

    • Possibility of greater economic collaboration: Whether this bonhomie can lead to greater economic collaboration between Sri Lanka and south India, not necessarily Tamil Nadu alone, given the historical baggage, is anybody’s guess.
    • Baggage of history: Some sections of the Sinhalese still hold the view that India had been a threat to Sri Lanka and it can still be a threat to them.
    • The manner in which the Rajapaksa regime unilaterally scrapped in February 2021 a tripartite agreement signed in 2019 with India and Japan for the development of Colombo’s East Container Terminal was a reflection of the historical baggage.
    • This perception can be traced to history when Sri Lanka was invaded by rulers of south India who humbled the Sinhala kings.
    • In the aftermath of the 1983 anti-Tamil pogrom, the support provided by the Indian government to Tamil rebels only strengthened this perception.
    • Modest investment in Sri Lanka’s development: Despite India’s open willingness to take part in the development of Sri Lanka after the civil war, the scale of its involvement has been modest.
    • Incomplete projects due to lack of political will: After the cancellation of the tripartite agreement, India was later provided with projects such as the West Container Terminal, the Trincomalee oil tank farm and a couple of renewable projects, there were several proposals that envisaged India’s participation but did not see the light of day.
    • Another project, a collaboration between NTPC Limited and the Ceylon Electricity Board, was cancelled.
    • Other projects too such as the development of the Kankesanthurai harbour and the expansion of the Palaly airport in Jaffna, both envisaging Indian participation, would have become a reality had there been show of political will from the other side.
    • The project of building a sea bridge and tunnel, connecting Rameshwaram to Talaimannar, remains on paper.

    Way forward

    • Infrastructure development: Even now, there is enormous scope for collaboration between the two countries in the area of infrastructure development.
    • Cross-border energy trade: The economic crisis has revived talk of linking Sri Lanka’s electricity grid with that of India.
    • If this project takes off, the first point of interconnectivity on the Indian side will most likely be in Tamil Nadu.
    • India has cross-border energy trade with Bangladesh, Nepal, Bhutan and Myanmar.
    • Facilitating people-to-people interaction: The apprehension in the minds of sections of the Sinhalese majority about India being a threat can be dispelled only by facilitating greater people-to-people interaction, including pilgrimages by monks and other sections of Sri Lankan society to places of Buddhist importance not only in north India but also in the south (Andhra Pradesh).

    Conclusion

    Much more will have to be done but the opportunity created by the current circumstances should be utilised to bring Indian and Sri Lankan societies closer — a prerequisite to achieving an economic union between Sri Lanka and the southern States of India.

    UPSC 2023 countdown has begun! Get your personal guidance plan now! (Click here)