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  • Foreign Policy Watch: India-SCO

    India, Pakistan avoid blaming each other at SCO meeting

    Explained | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Why in the News?

    External Affairs Minister S. Jaishankar informally interacted with Pakistan’s Prime Minister Shehbaz Sharif and Foreign Minister Ishaq Dar during the SCO summit’s concluding lunch in Islamabad.

    About SCO:

    • The SCO was established in 2001 to promote regional cooperation in security, economic development, and cultural exchange among its member states, which include China, India, Russia, Pakistan, and several Central Asian countries.
    • The organization represents around 40% of the global population, making it one of the largest regional groups. Its influence spans economic, political, and security dimensions.
    • The SCO focuses on combating terrorism, separatism, and extremism (the “three evils”), enhancing regional security, and fostering economic collaboration among member states.
    • The SCO holds annual summits, rotating between member countries, to discuss various topics ranging from economic cooperation to regional security challenges.

    What were the major insights during SCO 2024 summit?

    • Diplomatic Engagement: The informal interaction between India’s External Affairs Minister and Pakistan’s leadership marked a notable shift in diplomatic engagement, highlighting a more constructive tone compared to previous meetings.
    • Avoidance of Contentious Issues: Both India and Pakistan’s leaders refrained from discussing sensitive topics such as Kashmir, indicating a focus on cooperation rather than conflict during this summit.
    • Collective Responsibility: The Indian foreign minister emphasized the need for an “honest conversation” about trust and cooperation in the SCO region, highlighting the importance of addressing concerns over terrorism and separatism in fostering trade and connectivity.
    • Positive Outcomes: The summit resulted in the signing of eight documents, including proposals for economic dialogue, cooperation in the creative economy, and strategies for addressing challenges in areas like green development and digital economy.
    • Future Cooperation: The joint statement from the summit emphasized optimizing the region’s potential in various sectors such as trade, innovation, and climate change, indicating a commitment to collaborative economic growth.

    Challenges for India: 

    • India-Pakistan Relations: Pakistan’s membership complicates India’s position within the SCO. The rivalry between India and Pakistan can hinder India’s ability to assert its interests effectively, especially since China and Russia are influential players in the organization.
    • Balancing Relations: India’s participation in the SCO necessitates a delicate balancing act between its traditional ties with Russia and its growing partnerships with Western nations. This is particularly challenging given the SCO’s often anti-Western posture.

    Way forward: 

    • Strengthen Regional Cooperation: India should prioritize common interests within the SCO, such as counter-terrorism, economic development, and connectivity, while using diplomatic channels to reduce tensions with Pakistan and maintain constructive dialogue.
    • Strategic Balancing: India can pursue a balanced approach by aligning its SCO engagements with its broader foreign policy goals, leveraging partnerships with Russia and Central Asia while carefully managing its ties with Western nations.

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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    Spotlighting the work of the Economics Nobel winners

    Explained | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Why in the News?

    • This year’s Nobel Prize in Economics, officially known as the Sveriges Riksbank Prize in Economic Sciences, was awarded to Daron Acemoglu, Simon Johnson, and James Robinson (AJR).  
    • AJR have highlighted the importance of institutions in development, but critics argue that this approach tends to favour Western liberal models over other institutional frameworks.

    Why Do Some Nations Succeed While Others Fail?

    • Role of Institutions: The economic success or failure of nations can often be traced back to the nature of their institutions. 
      • Inclusive institutions encourage economic activity by providing secure property rights, legal frameworks, and political systems that incentivize growth. 
      • In contrast, extractive institutions concentrate wealth and power in the hands of a few, leading to economic stagnation and social inequality.
    • Historical Path Dependence: Countries that experienced inclusive economic institutions early in their development tend to be more prosperous, while those with a history of extractive institutions face significant barriers to growth. Historical events shape the trajectory of institutional development and influence current outcomes.

    What Is the Impact of Historical Institutions on Current Economic Outcomes?

    • Colonial Legacy: Institutions established during colonialism, especially extractive ones, have long-lasting impacts. Areas with landlord-based land tenure systems or direct colonial rule have struggled with lower agricultural productivity, fewer social services, and weaker infrastructure.
    • Natural Experiment Evidence: AJR’s research used historical data, such as differences in settler mortality, to show that regions colonized by Europeans with high mortality rates ended up with extractive institutions that still negatively affect growth today.
    • Long-Term Development Patterns: The effects of historical institutions persist, shaping economic development, social structures, and governance even after countries gain independence or transition to new political systems.

    Why do critics argue that this approach tends to favour Western liberal models over other institutional frameworks?

    • Historical Bias: Critics argue that AJR’s approach overlooks the diverse paths of development, favoring Western institutions while underestimating non-Western experiences and historical complexities.
    • Western Norms as Universal: The framework tends to present Western liberal institutions as ideal models, disregarding how other systems might effectively function in different cultural and socio-political contexts.

    Why Are Inclusive Institutions Not More Widely Adopted?

    • Conflict of Interests: Powerful groups with control over resources have incentives to maintain extractive institutions to protect their wealth and power, resisting changes that would lead to a fairer distribution of economic benefits.
    • Collective Action Challenges: Reforming extractive institutions requires solving collective action problems where diverse groups must agree on new rules that may threaten the established elite’s interests.
    • Path Dependency: Historical conditions can create institutional inertia, making it challenging to shift from extractive to inclusive frameworks due to deep-rooted social, political, and economic norms.

    Way forward: 

    • Strengthen Inclusive Institutions: Focus on legal and policy reforms that secure property rights, ensure fair governance, and promote transparent decision-making, encouraging broad-based economic participation and growth.
    • Empower Marginalized Groups: Implement policies that reduce power concentration by supporting grassroots movements, enhancing education access, and providing economic opportunities to disadvantaged communities to overcome historical inequalities.

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  • Industrial Sector Updates – Industrial Policy, Ease of Doing Business, etc.

    HAL becomes 14th Maharatna Company in India

    Prelims Only | Economics | Mains Paper 3: Effects Of Liberalization On The Economy, Changes In Industrial Policy and their effects on Industrial Growth

    Why in the News?

    The Centre has upgraded the status of PSU Hindustan Aeronautics Ltd (HAL) as Maharatna Company (from earlier Navratna Status).

    About Hindustan Aeronautics Limited (HAL): Key Facts

    • HAL was founded in 1940 in Bangalore as Hindustan Aircraft Limited, merging with Aeronautics India Limited in 1964 to become HAL.
    • It is a state-owned company under the Ministry of Defence.
    • Headquarters are in Bengaluru, Karnataka.
    • Operates 20 production and R&D centers across India, including Bangalore, Nashik, Koraput, and Lucknow.
    • Focuses on design, development, manufacture, and maintenance of aircraft, helicopters, engines, avionics, and aerospace equipment.
    • Produces fighter aircraft like Tejas LCA, Sukhoi Su-30MKI, Jaguar, and Hawk.
      • Manufactures helicopters including Dhruv ALH, Rudra, Cheetah, Chetak, and LCH.
    • Collaborates with Boeing, Airbus, Rosoboronexport, and Safran on aircraft production and tech transfer.
    • Listed on BSE and NSE in 2018, allowing public investment.
    • Expanded exports, supplying aircraft and helicopter parts to countries like Vietnam, Mauritius, and Ecuador.
      • Recent projects include AMCA, IMRH, and Tejas Mk2, boosting India’s indigenous defense capabilities.

    About Maharatna Companies 

    Details
    What is it? • Recognition granted to select Public Sector Undertakings (PSUs) in India.
    • Provides greater financial and operational autonomy compared to Navratna and Miniratna PSUs.
    Eligibility • Annual Turnover: Over ₹25,000 crore in the last three years.
    • Net Worth: More than ₹15,000 crore over the last three years.
    • Net Profit: Minimum of ₹5,000 crore for three consecutive years.
    • Must have significant global operations or international presence.
    Autonomy • Can invest up to ₹5,000 crore or 15% of their net worth in a single project without government approval.
    • Authorized to make equity investments for strategic resources or collaborations in India and abroad.
    Purpose • Aims to foster more flexibility in operations and encourage expansion, especially in international markets.
    • Helps companies to become global players.
    Examples • Indian Oil Corporation (IOC)
    • Bharat Petroleum Corporation Limited (BPCL)
    • Steel Authority of India Limited (SAIL)
    • Oil and Natural Gas Corporation (ONGC)
    Significance • Enhances the ability of PSUs to compete globally.
    • Allows quicker decision-making and reduces bureaucratic hurdles.
    • Promotes growth and competitiveness in the international arena.

    Benefits of Maharatna Status for HAL

    • HAL can now invest up to ₹5,000 crore (from earlier ₹1000 cr) or 15% of its net worth (whichever is applicable) in a single project without needing government approval.
    • As a Maharatna company, HAL has the freedom to engage in mergers, acquisitions, and strategic investments, both domestically and internationally.

    PYQ:

    [2011] Why is the Government of India disinvesting its equity in the Central Public Sector Enterprises (CPSEs)?

    1. The Government intends to use the revenue earned from the disinvestment mainly to pay back the external debt.

    2. The Government no longer intends to retain the management control of the CPSEs.

    Which of the statements given above is/ are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

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  • Festivals, Dances, Theatre, Literature, Art in News

    [pib] International Abhidhamma Divas

    Prelims Only | History | Mains Paper 1: Arts & Culture

    Why in the News?

    PM has participated in the celebration of International Abhidhamma Divas and recognition of Pali as a classical language.

    What is Abhidhamma?

    • Abhidhamma means “Higher Teaching” or “Special Teaching” in Pali, one of the three main divisions of the Tripitaka (Abhidhamma Pitaka) of Theravada Buddhism.
    • It offers a systematic and analytical exploration of mind and matter, delving deeper into Buddhist philosophy than the Sutta Pitaka.
    • The Abhidhamma explores mental states, consciousness, and psychological processes, providing a framework for understanding reality.
    • It is known for its technical and specialized vocabulary in Pali, such as:
      • Chitta (consciousness)
      • Chetasika (mental factors)
      • Rupa (materiality)
      • Nibbana (final liberation).
    • Abhidhamma Pitaka contains seven treatises, with Pannhana being one of the most notable for its analysis of causal relationships.
    • Traditionally, Buddha is believed to have taught the Abhidhamma to the gods in the Tavatimsa heaven, later sharing the teachings with his disciple Sariputta.

    About International Abhidhamma Divas

    • It is celebrated Ashwin Purnima (Full Moon), to commemorate Buddha’s descent from Tavatimsa-devaloka (a celestial realm) to Sankassiya (Sankisa Basantapur, UP).
      • It actually marks the conclusion of a 3-month rain retreat, known as Varsavasa or Vasa, during which monks remain in a single location for meditation and prayer.
    • The celebration involves Dhamma discourses, academic sessions, and exhibitions that connect ancient wisdom with modern spiritual practices.
    • Vigyan Bhavan, New Delhi, hosts the event, organized by the Ministry of Culture in collaboration with the International Buddhist Confederation (IBC).

    Teachings of Abhidhamma

    • The Abhidhamma provides a detailed framework for understanding the mind, matter, and existence.
    • It addresses complex concepts like birth, death, and mental phenomena in a precise and abstract manner.
    • Abhidhamma is known for its analytical approach:
      • It categorizes mental states and emotions.
      • It explains causal relationships that determine mental and material phenomena.
    • The teachings cover topics like:
      • Moral and mental states
      • Aggregates (components of existence)
      • Causal links
      • Path to enlightenment.

    Historical Background and Significance

    • Abhidhamma Divas commemorates the day when Lord Buddha returned to earth after teaching the Abhidhamma in the Tavatimsa realm.
    • The descent is marked by the Ashokan Elephant Pillar at Sankassiya, highlighting its historical significance.
    • The celebration coincides with the end of the Rainy Retreat (Vassa), a period of monastic seclusion, and the Pavarana festival, a time of mutual reflection among monks.

    Classical Status to Pali Language

    • In 2024, the event holds special significance due to the recognition of Pali as a Classical Language by the Indian government.
    • Pali is the ancient language in which much of Buddhist canonical literature is written, including the Tipitaka.
    • Recognized as a Classical Language by the Government of India in 2024, alongside Marathi, Prakrit, Assamese, and Bengali.
    • Pali’s significance lies in its role as the medium for delivering Buddha’s teachings, especially the Sutta Pitaka, Vinaya Pitaka, and Abhidhamma Pitaka.
    • The Tipitaka is composed of:
      • Vinaya Pitaka: Ethical rules for monks and nuns.
      • Sutta Pitaka: Discourses and teachings of Buddha.
      • Abhidhamma Pitaka: Detailed analysis of mental and physical phenomena.
    • Pali has a rich tradition of commentaries such as Atthasalini and Sammohavinodani, which aid in understanding Abhidhamma concepts.

     

    PYQ:

    [2020] With reference to the religious history of India, consider the following statements:

    1. Sthaviravadins belong to Mahayana Buddhism.
    2. Lokottaravadin sect was an offshoot of Mahasanghika sect of Buddhism.
    3. The deification of Buddha by Mahasanghikas fostered the Mahayana Buddhism.

    Which of the statements given above is/are correct?

    (a) 1 and 2 only
    (b) 2 and 3 only
    (c) 3 only
    (d) 1, 2 and 3

    [2016] With reference to the religious history of India, consider the following statements:

    1. The concept of Bodhisattva is central to Hinayana sect of Buddhism.
    2. Bodhisattva is a compassionate one on his way to Enlightenment.
    3. Bodhisattva delays achieving his own salvation to help all sentient beings on their path to it.

    Which of the statements given above is/are correct?

    (a) 1 only
    (b) 2 and 3 only
    (c) 2 only
    (d) 1, 2 and 3

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  • Wildlife Conservation Efforts

    Karakoram Wildlife Sanctuary 

    Prelims Only | Enviro & Biodiversity | Mains Paper 3: Conservation, Environmental Pollution & Degradation, Eia

    Karakoram Wildlife Sanctuary 

    Why in the News?

    • The National Board for Wildlife (NBWL) has approved 5 crucial roads, including 4 that pass through the Karakoram Wildlife Sanctuary near the Line of Actual Control (LAC).
      • These include a route to Daulat Beg Oldie (DBO), India’s northernmost military outpost in Ladakh, which also houses the country’s highest airstrip.

    About Karakoram Wildlife Sanctuary:

    Details
    Location Ladakh, India, situated in the eastern part of the Karakoram Range.
    Area 5,000 sq km (approximately), making it one of the largest high-altitude protected areas in India.
    Altitude Range Ranges from about 4,200m to over 7,500m at the peak of Saltoro Kangri.
    Climate
    • Characterized by a cold desert climate, with harsh winters, low temperatures, and limited vegetation.
    • The region experiences snowfall during winter and temperatures can drop below -20°C (-4°F).
    • Summer temperatures are also low, typically ranging between 5°C to 20°C (41°F to 68°F).
    Biodiversity Home to species like the snow leopard, Tibetan antelope (chiru), Tibetan wild ass (kiang), ibex, and blue sheep (Bharal). The sanctuary also supports migratory bird species during certain times of the year.
    Flora Sparse vegetation, with cold desert flora, including hardy grasses, shrubs, and medicinal plants.
    Rivers Shyok and Nubra Rivers flow through the Ladakh region, providing crucial water sources for the sanctuary.
    Significance Part of the larger trans-Himalayan ecosystem, offering a habitat for some of the rarest and most endangered species in the world.
    Conservation Challenges Harsh climatic conditions, limited accessibility, and poaching threats to species like the chiru, whose undercoat is highly prized.
    Tourism and Access Restricted due to its proximity to the international border with China. Special permits are required for researchers and travelers.

     

    PYQ:

    [2020] Which one of the following protected areas is well-known for the conservation of a sub-species of the Indian swamp deer (Barasingha) that thrives well on hard ground and is exclusively graminivorous?

    (a) Kanha National Park

    (b) Manas National Park

    (c) Mudumalai Wildlife Sanctuary

    (d) Tal Chhapar Wildlife Sanctuary

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  • Foreign Policy Watch: India-Canada

    Canada accuses Indian diplomats?

    Explained | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Why in the News?

    India-Canada relations have reached a historic low after Justin Trudeau’s government accused Indian officials of being involved in “activities that pose a significant threat to public safety,” claims that New Delhi has strongly rejected as “preposterous.”

    What specific allegations has Canada made against Indian diplomats?

    • Violent Extremism: Canadian authorities claim that agents of the Government of India have been involved in violent extremist activities affecting both countries.
    • Involvement in Criminal Activity: The Royal Canadian Mounted Police (RCMP) have accused Indian diplomats and consular officials of being linked to homicides, acts of violence, and the use of organized crime to create a sense of insecurity among the South Asian community in Canada.
    • Foreign Interference: Investigations suggest Indian officials leveraged their positions to collect information on certain individuals or groups in Canada, either directly or through proxies. This intelligence was allegedly shared with the Research and Analysis Wing (RAW) in India.
    • Threats and Coercion: The allegations include coercion tactics where individuals in Canada were reportedly threatened regarding their immigration status or faced risks to their family members in India.
    • Connections with Organized Crime: There are claims that Indian intelligence conveyed information to criminal networks in India, allegedly linked to gangster Lawrence Bishnoi, who is in custody in India. These networks are suspected of intimidating or targeting Canadians of South Asian descent.
    • Involvement in Assassinations: The controversy began with the assassination of Khalistani activist Hardeep Singh Nijjar in Surrey, and was further linked to the killing of Sukhdool Singh Gill in Winnipeg. Both incidents allegedly have ties to Indian government directives.

    How has India responded to Canada’s accusations?

    • Denial of Allegations: India has categorically dismissed the allegations as “absurd” and “preposterous.” Indian authorities have rejected claims of any involvement in criminal activities in Canada or targeting the Sikh community.
    • Accusations of Canadian Tolerance for Extremism: New Delhi has countered by accusing Canada of allowing anti-India elements and Khalistani separatist groups to operate freely, impacting India’s sovereignty and security.
    • Denial of Diplomatic Cooperation: Reports suggest that while India initially agreed to cooperate with the Canadian investigation, it later denied visas to RCMP officials who intended to share evidence with Indian counterparts.

    What actions have both countries taken in retaliation?

    • Expulsion of Diplomats: Following Canada’s expulsion of an Indian diplomat, India retaliated by expelling a senior Canadian diplomat, escalating the diplomatic dispute.
    • Visa Suspension: In response to the diplomatic tensions, India suspended visa services for Canadian citizens, citing security concerns for Indian diplomatic personnel in Canada.
    • Reduced Diplomatic Presence: The crisis has resulted in both nations significantly scaling back their diplomatic staff, affecting consular services and visa issuance.
    • Diplomatic Disengagement: India’s foreign minister has hinted at limiting diplomatic interactions with Canada, reflecting the deterioration in bilateral ties.

    What are the potential implications of this diplomatic crisis for both sides?

    • Bilateral Relations: The row represents a historic low in India-Canada relations. Both nations may experience prolonged diplomatic disengagement, adversely affecting cooperation in trade, education, and defence.
    • Economic Impacts: Canada is a significant partner for Indian students and the Punjabi diaspora, which could face disruptions in visa issuance, immigration processes, and consular services.
    • Geopolitical Ramifications: The dispute may strain India’s relations with Western allies, including the United States, which has strong ties with both India and Canada.
    • Division in Diaspora Communities: The Sikh community in Canada could be further divided, with escalating tensions around pro-Khalistan activities. Allegations against Indian officials may also increase anti-India sentiments among diaspora groups.

    Way forward: 

    • Diplomatic Engagement and De-escalation: Both countries should prioritize diplomatic channels to de-escalate tensions, perhaps through neutral intermediaries or international platforms, ensuring that the crisis does not further damage long-term relations, trade, and people-to-people ties.
    • Focused Cooperation on Extremism and Criminal Activity: A joint task force or collaborative investigation involving both nations could be set up to address concerns about violent extremism and criminal activity, fostering transparency and trust, while respecting sovereignty and legal frameworks.

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  • Agricultural Sector and Marketing Reforms – eNAM, Model APMC Act, Eco Survey Reco, etc.

    ‘Yield’ can’t be the sole indicator for agriculture

    Explained | Agriculture | Mains Paper 3: Agriculture and related issues

    Why in the News?

    Government must embrace a new approach where the success of agriculture is defined by its capacity to nourish people, support livelihoods, and safeguard our planet for future generations.

    What are the limitations of using yield as the sole indicator of agricultural success?

    • Nutritional Quality Neglect as per ICAR (Indian Council for Agricultural Research): Focusing on yield has led to a decline in the nutritional profile of crops. High-yielding varieties often have lower micronutrient densities, as seen in reduced zinc and iron levels in rice and wheat.
    • Increased Input Costs: Higher yield does not always correlate with increased farmer income. The cost of achieving additional yield may be high, especially as the response to fertilizers has declined significantly since the 1970s.
    • Biodiversity Loss: The emphasis on a few high-yielding varieties leads to the loss of diverse, local crop varieties. For example, India has lost around 104,000 rice varieties since the Green Revolution.
    • Environmental Impact: Intensive farming to maximize yield can degrade soil health, reduce water availability, and harm the ecosystem, making agriculture less sustainable.
    • Reduced Resilience: The prioritization of yield over other factors makes crops less resilient to extreme weather events such as floods, droughts, and heatwaves.

    How do other indicators complement yield in assessing agricultural sustainability?

    • Nutritional Output Per Hectare: This indicator measures not just the quantity but the quality of the food produced, addressing nutritional security.
    • Soil Health Metrics: Including soil biological activity and soil organic carbon in evaluations helps ensure long-term soil fertility and productivity.
    • Water-Use Efficiency: Metrics like water-use efficiency track the amount of water required to produce crops, promoting conservation.
    • Farm Biodiversity: Assessing crop diversity at the farm and regional levels (Landscape Diversity Score) improves resilience to pests, diseases, and climate variability.
    • Economic Resilience Metrics: Indicators such as income diversification (through intercropping, livestock rearing, etc.) can help measure farmers’ economic stability.
    • Environmental Impact Measures: Tracking parameters like carbon footprint and ecosystem services evaluates the broader impact of agricultural practices.

    What practices can farmers adopt to improve sustainability beyond just increasing yield? (Way forward)

    • Intercropping: Growing multiple crops together (e.g., sugarcane with vegetables) can provide year-round income and enhance soil health.
    • Agroecological Approaches: Practices such as crop rotation, organic farming, and reduced pesticide use help maintain biodiversity and soil fertility.
    • Water Management Techniques: Using methods like drip irrigation and AI-powered tools for optimal irrigation ensures better water use.
    • Integrated Pest Management (IPM): Combining biological, mechanical, and chemical control methods reduces reliance on harmful pesticides.
    • Conservation Agriculture: Techniques such as no-till farming and mulching help improve soil structure and retain moisture.
    • Adopting Climate-Resilient Varieties: Growing drought-tolerant or flood-resistant crop varieties helps mitigate the impacts of climate change.

    Mains PYQ:

    Q Discuss the various economic and socio-cultural forces that are driving increasing feminization of agriculture in India. (UPSC IAS/2014)

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  • Economic Indicators and Various Reports On It- GDP, FD, EODB, WIR etc

    A Nobel prize for explaining why nations fail or succeed

    Explained | International Relations | Mains Paper 2: Important International Institutions

    Why in the News?

    U.S. economists Daron Acemoglu, Simon Johnson, and James A. Robinson won the 2024 Economics Nobel for their research on how the formation of institutions influences a nation’s prosperity and economic success.

    What are the key factors that explain why some nations are rich while others are poor?

    • Quality of Institutions: According to the 2024 Nobel laureates, the primary determinant of economic success is the quality of a country’s institutions. Inclusive institutions, which ensure secure property rights, political freedoms, and economic opportunities, tend to promote growth.
    • Rule of Law and Property Rights: When laws protect private property and are enforced impartially, individuals are incentivized to invest and engage in economic activities. Weak or corrupt legal systems can deter investments and slow growth.
    • Political Stability and Governance: Countries with stable, democratic governance structures often provide a conducive environment for economic activities. In contrast, political instability and authoritarianism can hinder development.
    • Geography and Natural Resources: Some scholars argue that geographic factors, such as access to trade routes and natural resource endowment, play a role in shaping a nation’s wealth. However, resource-rich nations can still struggle if their institutions are weak (resource curse).
    • Human Capital and Education: Nations that invest in education and healthcare build a skilled and productive workforce, which can drive long-term economic growth.
    • Technological and Industrial Development: The ability to adopt and innovate technologies is crucial for economic advancement, which historically facilitated the “Great Divergence” during the Industrial Revolution.

    How do historical contexts and colonial legacies impact current economic outcomes?

    • Colonial Institution Setup: Colonizers often set up institutions based on their motivations and local conditions. In places with harsh climates or high disease rates, extractive institutions were established to exploit resources quickly.
    • Impact of Extractive Institutions: In countries where extractive institutions were set up, economic policies often focused on resource extraction and wealth concentration, which led to long-term stagnation. For instance, regions in Africa and South Asia that experienced extractive colonial policies face lasting developmental challenges.
    • Path Dependence: Colonial institutions created trajectories that persisted even after independence. Post-colonial governments often inherited the same extractive structures, leading to continued corruption, inequality, and weak rule of law.
    • Unequal Development: Colonialism exacerbated regional disparities by favouring some areas (urban centres, resource-rich regions) over others, affecting infrastructure development and economic integration.

    What criticisms exist regarding the theories proposed by the Nobel laureates?

    • Oversimplification of Institutional Role: Critics argue that attributing economic success primarily to institutions might ignore other important factors, such as culture, geography, and international trade dynamics, which also significantly shape economic outcomes.
    • Neglect of Global Power Structures: Some scholars believe that focusing on domestic institutions alone overlooks the influence of global economic structures and the power imbalances that exist between countries, which can perpetuate inequality.
    • Limited Consideration of Economic Policies: Critics point out that macroeconomic policies, market dynamics, and state-led development strategies also play a crucial role in determining economic trajectories, beyond institutional quality alone.
    • Debate Over Inclusiveness of “Inclusive Institutions”: Some argue that even countries with ostensibly inclusive institutions (e.g., Western democracies) can exhibit extractive practices, such as unequal wealth distribution, labor exploitation, and environmental degradation.

    Way forward: 

    • Strengthen Institutions with Reforms: Focus on reforming political and economic institutions to promote inclusiveness, transparency, and rule of law, ensuring secure property rights and equal opportunities for all citizens.
    • Address Global Inequities and Support Development: International efforts should aim to reduce global economic disparities by promoting fair trade, debt relief, and development aid.

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  • The Crisis In The Middle East

    Places in news: Jordan Valley

    World Mapping | International Relations | Mains Paper 2: India & Its Neighborhood – Relations

    Jordan Valley

    Why in the News?

    Extremist groups held drone strikes on Israeli territory in the Jordan Valley (which forms Jordan’s border with Israel and the West Bank).

    About Jordan Valley:

    Details
    Geography • Part of the Great Rift Valley, extending from the Sea of Galilee to the Dead Sea.
    • Forms a natural border between Jordan, Israel, and the West Bank.
    • Low-lying, with parts below sea level, especially near the Dead Sea.
    Climate • Semi-arid to arid, with hot summers and mild winters.
    • Limited rainfall, necessitating irrigation for agriculture.
    Significance • An essential agricultural region, growing citrus, dates, and vegetables.
    • The Jordan River is a vital water source for agriculture and drinking water.
    • Ecological corridor for migratory birds.
    History • Rich in biblical and historical significance, including Jesus’ baptism in the Jordan River.
    • Archaeological sites from ancient civilizations like the Canaanites and Romans.
    Geopolitical Aspects • Critical in the Israeli-Palestinian conflict, with strategic importance for security and border control.
    • Vital for Palestinian economic development and a future state.
    • Shared water resources create tensions between Israel, Jordan, and Syria.
    Economic Activities • Agriculture is the mainstay of the economy.
    • Tourism is also significant due to religious and historical sites.
    Environmental Concerns • Water scarcity and the shrinking Dead Sea due to river diversion are major issues.
    • Pollution and overuse of the Jordan River affect water quality and ecosystem health.

     

    PYQ:

    [2015] Which one of the following countries of South-West Asia does not open out to the Mediterranean Sea?

    (a) Syria

    (b) Jordan

    (c) Lebanon

    (d) Israel

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  • Trade Sector Updates – Falling Exports, TIES, MEIS, Foreign Trade Policy, etc.

    UAE to review India’s concerns on surge in Silver, Platinum Alloy imports

    Prelims Only | International Relations | Mains Paper 2: Bilateral, Regional and Global Groupings and agreements involving India

    Why in the News?

    India has raised concerns over the increase in imports of silver products, platinum alloy, and dry dates from the UAE under the Free Trade Agreement (FTA).

    Issues Raised by India:

    • The Global Trade Research Initiative (GTRI) has called for an urgent review of the India-UAE CEPA, citing concerns that the agreement allows unlimited imports of gold, silver, platinum, and diamonds with zero tariffs.
    • GTRI claims that many of these imports do not meet Rules of Origin requirements and thus should not qualify for concessions.
      • India’s gold and silver imports from the UAE increased by 210% to $10.7 billion in 2023-24.
      • India allows customs duty concessions of 7% on silver and 1% on 160 metric tonnes of gold under the agreement.
    • India also requested that the Indian Jewellery Exposition Centre in Dubai be classified as a Designated Zone to allow domestic jewellery manufacturers to benefit from concessional duties, including those not registered under UAE’s domestic regulations.
    • India also requested the UAE to grant recognition to the i-CAS (India Conformity Assessment Scheme) Halal scheme to simplify the certification process and boost exports of animal products.
    • The UAE expressed its willingness to review this request after consulting internal stakeholders, including federal tax authorities.

    India-UAE Trade Relations:

    Details
    Volume • The UAE is India’s 3rd largest trading partner with $83.65 billion in bilateral trade in 2023-24.
    • Trade between India and UAE grew from $180 million in the 1970s to $85 billion in 2022-23.
    Comprehensive Economic Partnership Agreement (CEPA) • Signed in February 2022, making India the first country to sign such an agreement with the UAE.
    • CEPA has slashed tariffs on 80% of goods and offers zero duty access to 90% of Indian exports to the UAE.
    Non-Oil Trade Target • The target of reaching $100 billion in non-oil trade by 2030 is seen as achievable given current growth trends.
    Investment from UAE • UAE’s investments in India are around $20-21 billion, with $15.5 billion as Foreign Direct Investment (FDI).
    • The Abu Dhabi Investment Authority (ADIA) has invested in projects like the NIIF Master Fund and renewable energy initiatives.
    India’s Exports to UAE • UAE is India’s 2nd largest export destination after the US, with exports worth $31.61 billion in 2022-23.
    • Key exports include petroleum products, gems, food items, textiles, and engineering goods.
    India’s Imports from UAE • UAE is a critical partner for India’s energy security.
    • India imports petroleum, gems, minerals, and chemicals from UAE.
    • UAE is India’s 4th largest crude oil supplier and 2nd largest for LNG and LPG.

     

    PYQ:

    [2022] How will I2U2 (India, Israel, UAE and USA) grouping transform India’s position in global politics? 

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