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Subject: International Relations

  • India’s CPC designation by the USCIRF

    In its 2022 Annual report, the United States Commission on International Religious Freedom (USCIRF) has recommended that India be designated a ‘Country of Particular Concern’ (CPC).

    What is the USCIRF and how is it constituted?

    • The USCIRF is an independent, bipartisan body created by the International Religious Freedom Act, 1998 (IRFA) of the US.
    • It has a mandate to monitor religious freedom violations globally and make policy recommendations to the President, the Secretary of State, and the Congress.
    • It is a congressionally created entity and not an NGO or advocacy organisation.
    • It is led by nine part-time commissioners appointed by the President and the leadership of both political parties in the House and the Senate.

    Why in news now?

    • USCIRF wants India to be designated under the CPC category of governments performing most poorly on religious freedom criteria.
    • It has called for “targeted sanctions” on individuals and entities responsible for severe violations of religious freedom by freezing those individuals’ or entities’ assets and/or barring their entry” into the US.

    What does a ‘Country of Particular Concern’ (CPC) designation mean?

    • IRFA requires the USCIRF to annually identify countries that merit a CPC designation.
    • As per IRFA, CPCs are countries whose governments either engage in or tolerate “particularly severe violations” of religious freedom.
    • Such freedoms are defined as systematic, ongoing, egregious violations of the internationally recognized right to freedom of religion.
    • The other designation, for less serious violations, is Special Watch List (SWL)

    Which other countries have been designated as CPCs?

    • For 2022, based on religious freedom conditions in 2021, a total of 15 countries have been recommended for the CPC designation.
    • They include India, Pakistan, Burma, China, Eritrea, Iran, North Korea, Russia, Saudi Arabia, Tajikistan, Afghanistan, Nigeria, Syria and Vietnam.
    • Countries recommended for a SWL designation include Algeria, Cuba, Nicaragua, Azerbaijan, Central African Republic, Egypt, Indonesia, Iraq, Kazakhstan, Malaysia, Turkey, and Uzbekistan.

    Why does USCIRF want India to be designated as a CPC?

    • The USCIRF, in its annual report, states that in 2021, religious freedom conditions in India significantly worsened.
    • It has noted that the Indian government escalated its promotion and enforcement of policies —including those promoting a Hindu-nationalist agenda.
    • This negatively affects Muslims, Christians, Sikhs, Dalits, and other religious minorities.
    • It highlighted the use of the Unlawful Activities Prevention Act (UAPA) against those documenting religious persecution and violence.
    • It also criticised the spate of fresh anti-conversion legislations, noting that “national, State and local governments demonised and attacked the conversion of Hindus to Christianity or Islam.”

    Are USCIRF recommendations binding on the US government?

    • No, they are not. The USCIRF typically recommends more countries for a CPC label than the State Department will designate.
    • This happens because the USCIRF is concerned solely with the state of religious freedom when it makes a recommendation.
    • However, the US State Department also takes into account other diplomatic, bilateral and strategic concerns before making a decision on a CPC designation.

    Is this the first time India is being designated as a CPC by the USCIRF? What has been India’s reaction?

    • This is the third year in a row that India has received a CPC recommendation.
    • India has in the past pushed back against the grading, questioning the locus standi of USCIRF.
    • In 2020, External Affairs Minister S. Jaishankar called the Commission an “Organisation of Particular Concern.”
    • US needs to introspect itself on the HR violations by the state authorities on the basis of racism, ethnocentrism and religion (particularly Sikhs).

    What is the likely impact of the USCIRF’s recommendation?

    • The US State Department hasn’t acted on such recommendations so far.
    • But India may come under greater pressure this time, given its divergence from the American position on the Ukraine war and refusal to endorse US-backed resolutions against Russia at the UN.
    • Hence the USCIRF is another force of Anti-India lobby in the US to bully other nations by countering an accusation with another.

     

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  • Countries will have to ‘justify’ Veto Votes at UN

    The 193 members of the United Nations General Assembly adopted by consensus a resolution requiring the five permanent members of the Security Council to justify their use of the veto.

    Why such move?

    • The push for reform was driven by Russia’s invasion of Ukraine.
    • The measure is intended to make veto-holders United States, China, Russia, France and Britain “pay a higher political price” when they use the veto to strike down a Security Council resolution.
    • For years Russia (and the US) has used its veto power to block UNSC resolutions — which, unlike General Assembly resolutions, are enforceable under international law.

    What is the Veto Power at the UN?

    • The UN Security Council veto power is the power of the five permanent members of the UN Security Council to veto any “substantive” resolution.
    • They also happen to be the nuclear-weapon states (NWS) under the terms of the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).
    • However, a permanent member’s abstention or absence does not prevent a draft resolution from being adopted.
    • This veto power does not apply to “procedural” votes, as determined by the permanent members themselves.
    • A permanent member can also block the selection of a Secretary-General, although a formal veto is unnecessary since the vote is taken behind closed doors.

    Issues with Veto Power

    • The veto power is controversial. Supporters regard it as a promoter of international stability, a check against military interventions, and a critical safeguard against US domination.
    • Critics say that the veto is the most undemocratic element of the UN, as well as the main cause of inaction on war crimes and crimes against humanity.
    • It effectively prevents UN action against the permanent members and their allies.

    Back2Basics: United Nations Security Council

    • The UNSC is one of the six principal organs of the United Nations and is charged with the maintenance of international peace and security.
    • Its powers include the establishment of peacekeeping operations, the establishment of international sanctions, and the authorization of military action through Security Council resolutions.
    • It is the only UN body with the authority to issue binding resolutions to member states.
    • The Security Council consists of fifteen members. Russia, the United Kingdom, France, China, and the United States—serve as the body’s five permanent members.
    • These permanent members can veto any substantive Security Council resolution, including those on the admission of new member states or candidates for Secretary-General.
    • The Security Council also has 10 non-permanent members, elected on a regional basis to serve two-year terms. The body’s presidency rotates monthly among its members.

    Also read

    Explained: India at United Nations Security Council

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  • The goal of an energy-secure South Asia

    Context

    Given that a 0.46% increase in energy consumption leads to a 1% increase in GDP per capita, electrification not only helps in improving lifestyle but also adds to the aggregate economy by improving the nation’s GDP.

    Widening electricity coverage in South Asian nations

    • The electricity policies of South Asian countries aim at providing electricity to every household.
    • The issues these policies address include generation, transmission, distribution, rural electrification, research and development, environmental issues, energy conservation and human resource training.
    • Bangladesh has achieved 100% electrification recently while Bhutan, the Maldives, and Sri Lanka accomplished this in 2019.
    • For India and Afghanistan, the figures are 94.4% and 97.7%, respectively, while for Pakistan it is 73.91%.
    • Bhutan has the cheapest electricity price in South Asia (U.S.$0.036 per kilowatt hour, or kWh) while India has the highest (U.S.$0.08 per kWh.) 
    • South Asia is reinforcing its transmission and distribution frameworks to cater to growing energy demand not only through the expansion of power grids but also by boosting green energy such as solar power or hydroelectricity.

    Adapting to renewable

    • Geographical differences between these countries call for a different approach depending on resources.
    •  India leads South Asia in adapting to renewable power, with its annual demand for power increasing by 6%.
    • India’s pledge to move 40% of total energy produced to renewable energy is also a big step.
    • Prime Minister Narendra Modi in his ‘net-zero by 2070’ pledge at COP26 in Glasgow asserted India’s target to increase the capacity of renewable energy from 450GW to 500GW by 2030.
    • The region is moving towards green growth and energy as India hosts the International Solar Alliance.
    • South Asia has vast renewable energy resources — hydropower, solar, wind, geothermal and biomass — which can be harnessed for domestic use as well as regional power trade.

    Steps toward SDGs

    • Solar power-driven electrification in rural Bangladesh is a huge step towards Sustainable Development Goal 7.
    • Access to electricity improves infrastructure i.e., SDG 9 (which is “build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation”).
    • Energy access helps online education through affordable Internet (SDG 4, or “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”), more people are employed (SDG 1: “no poverty”), and are able to access tech-based health solutions (SDG 3, or “ensure healthy lives and promote well-being for all at all ages”).

    Regional energy trade

    • The South Asian Association for Regional Cooperation (SAARC) prepared the regional energy cooperation framework in 2014, but its implementation is questionable.
    • Energy trade agreements: There are a number of bilateral and multilateral energy trade agreements such as the India-Nepal petroleum pipeline deal, the India-Bhutan hydroelectric joint venture, the Myanmar-Bangladesh-India gas pipeline, the Bangladesh-Bhutan-India-Nepal (BBIN) sub-regional framework for energy cooperation, and the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline, rumoured to be extended to Bangladesh.
    • Challenges: ‘South Asia’s regional geopolitics is determined by the conflation of identity, politics, and international borders.
    • The current participation in cross-border projects has been restricted to respective tasks, among Bhutan and India or Nepal and India.
    • It is only now that power-sharing projects among the three nations, Nepal, India, and Bangladesh, have been deemed conceivable.

    Way forward

    • Energy framework: Going forward, resilient energy frameworks are what are needed such as better building-design practices, climate-proof infrastructure, a flexible monitory framework, and an integrated resource plan that supports renewable energy innovation.
    • Public-Private Partnership: Government alone cannot be the provider of reliable and secure energy frameworks, and private sector investment is crucial.

    Conclusion

    While universal coverage can catalyse the region’s economic growth, energy trade must be linked to peace building.

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  • India, Europe and the Russian complication

    Context

    The re-election of Emmanuel Macron as the president of France on Sunday has sent a sigh of relief across Europe and North America. Delhi too is pleased with the return of Macron, who laid a strong foundation for India’s strategic partnership with France.

    Why France election matters to the regional and domestic order in Europe

    • Unlike the Soviet Union, which sought to shape European politics though left-wing parties, Russia today influences European politics through right-wing parties.
    • Victory for Marine Le Pen, Macron’s opponent, would have dramatically complicated the geopolitics of Europe.
    • Le Pen, like so many other right-wing leaders in Europe, has close ties to Vladimir Putin.
    • Le Pen’s victory would have not only altered France’s international trajectory, but also shaken the EU to its political core.

    Three factors shaping the transformation of India’s ties with Europe

    • Russia’s threat to the regional and domestic order in Europe is among multiple factors shaping Delhi’s intensifying engagement with Brussels.
    • Three major external factors are facilitating the transformation of India’s ties with Europe.

    1] Russian Question

    • For India, a normal relationship between Russia and the West would have been ideal.
    • But Russia’s confrontation with the West comes during India’s rapidly expanding economic and political ties to Europe and America.
    • Delhi might be sentimental about India’s historic Russian connection but it is not going to sacrifice its growing ties to the West on that altar.
    • Russia’s declining economic weight and growing international isolation begins to simplify India’s choices.
    • During the last few weeks, Delhi has insisted that its silence is not an endorsement of Russian aggression.
    • India’s position has continued to evolve.
    • Delhi’s repeated emphasis on respecting the territorial integrity of states is a repudiation of Russia’s unacceptable aggression.
    • Meanwhile, geographic proximity and economic complementarity have tied Europe even more deeply to Russia.
    • The EU’s annual trade with Russia at around $260 billion is massive in comparison to India’s $10 billion.
    • Putin’s reckless invasion of Ukraine has compelled Europe to embark on a costly effort to disconnect from Russia.
    • The war in Ukraine has certainly presented a major near-term problem that needs to be managed by Delhi and Brussels.

    2] China Question

    •  Moscow has been deepening ties with Beijing for more than two decades triggering many anxieties in Delhi.
    •  In February, Putin travelled to Beijing to announce a partnership “without limits”.
    • India has no option but to manage the consequences of the Russian decision.
    • In the last two decades, China has emerged as a great power and now presents a generational challenge for Indian policymakers.
    • That challenge has been made harder by Putin’s alliance with Xi Jinping.
    • As Delhi strives to retain a reasonable relationship with Moscow, Europe emerges as an important partner in letting India cope with the China challenge.
    •  Thanks to the growing problems of doing business with Xi’s China, Beijing’s geopolitical alliance with Moscow, and the rapid deterioration of Sino-US relations, Brussels is ready to invest serious political capital in building purposeful strategic ties with India.

    3] American Question

    • Until recently it appeared that Europe’s calls for “strategic autonomy” from the US were in sync with India’s own worldview.
    • But the Ukraine crisis has underlined the US’s centrality in securing Europe against Russia.
    • In Asia, Chinese assertiveness has brought back the US as a critical factor in shaping peace and security.
    • Washington wants a strong Europe taking greater responsibility for its own security; it would like Delhi to play a larger role in Asia and become a credible provider of regional security.
    • Above all, America wants India and Europe to build stronger ties with each other.

    Conclusion

    For the first time since independence, India’s interests are now aligning with those of Europe. Together, Delhi and Brussels can help reshape Eurasia as well as the Indo-Pacific.

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  • EU member states agrees on Digital Services Act (DSA)

    The European Parliament and European Union (EU) Member States announced that they had reached a political agreement on the Digital Services Act (DSA).

    What is DSA?

    • DSA is a landmark legislation to force big Internet companies to act against disinformation and illegal and harmful content, and to “provide better protection for Internet users and their fundamental rights”.
    • The Act, which is yet to become law, was proposed by the EU Commission (anti-trust) in December 2020.
    • As defined by the EU Commission, the DSA is “a set of common rules on intermediaries’ obligations and accountability across the single market”.
    • It seeks to ensure higher protection to all EU users, irrespective of their country.
    • The proposed Act will work in conjunction with the EU’s Digital Markets Act (DMA), which was approved last month.

    Whom will the DSA apply?

    • Intermediaries: The DSA will tightly regulate the way intermediaries, especially large platforms such as Google, Facebook, and YouTube, function when it comes to moderating user content.
    • Abusive or illegal content: Instead of letting platforms decide how to deal with abusive or illegal content, the DSA will lay down specific rules and obligations for these companies to follow.
    • Ambit platforms: The legislation brings in its ambit platforms that provide Internet access, domain name registrars, hosting services such as cloud computing and web-hosting services.
    • Very large platforms: But more importantly, very large online platforms (VLOPs) and very large online search engines (VLOSEs) will face “more stringent requirements.”
    • 45 million monthly users-base: Any service with more than 45 million monthly active users in the EU will fall into this category. Those with under 45 million monthly active users in the EU will be exempt from certain new obligations.

    Key features

    A wide range of proposals seeks to ensure that the negative social impact arising from many of the practices followed by the Internet giants is minimised or removed:

    1. Faster removal of illicit content: Online platforms and intermediaries such as Facebook, Google, YouTube, etc will have to add “new procedures for faster removal” of content deemed illegal or harmful. This can vary according to the laws of each EU Member State.
    2. Introduction of Trusted Flaggers: Users will be able to challenge these takedowns as well. Platforms will need to have a clear mechanism to help users flag content that is illegal. Platforms will have to cooperate with “trusted flaggers”.
    3. Imposition of duty of care: Marketplaces such as Amazon will have to “impose a duty of care” on sellers who are using their platform to sell products online. They will have to “collect and display information on the products and services sold in order to ensure that consumers are properly informed.”
    4. Annual audit of big platforms: The DSA adds an obligation for very large digital platforms and services to analyse systemic risks they create and to carry out risk reduction analysis. This audit for platforms like Google and Facebook will need to take place every year.
    5. Promoting independent research: The Act proposes to allow independent vetted researchers to have access to public data from these platforms to carry out studies to understand these risks better.
    6. Ban ‘Dark Patterns’ or “misleading interfaces: The DSA proposes to ban ‘Dark Patterns’ or “misleading interfaces” that are designed to trick users into doing something that they would not agree to otherwise.
    7. Transparency of Algorithms: It also proposes “transparency measures for online platforms on a variety of issues, including on the algorithms used for recommending content or products to users”.
    8. Easy cancellation of subscription: Finally, it says that cancelling a subscription should be as easy as subscribing.
    9. Protection of minors: The law proposes stronger protection for minors, and aims to ban targeted advertising for them based on their personal data.
    10. Crisis mechanism clause: This clause will make it “possible to analyse the impact of the activities of these platforms” on the crisis, and the Commission will decide the appropriate steps to be taken to ensure the fundamental rights of users are not violated.
    11. Others: Companies will have to look at the risk of “dissemination of illegal content”, “adverse effects on fundamental rights”, “manipulation of services having an impact on democratic processes and public security”, “adverse effects on gender-based violence, and on minors and serious consequences for the physical or mental health of users.”

    Bar over Social Media

    • It has been clarified that the platforms and other intermediaries will not be liable for the unlawful behaviour of users.
    • So, they still have ‘safe harbour’ in some sense.
    • However, if the platforms are “aware of illegal acts and fail to remove them, they will be liable for this user behaviour.
    • Small platforms, which remove any illegal content they detect, will not be liable.

    Are there any such rules in India?

    • India last year brought the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
    • These rules make the social media intermediary and its executives liable if the company fails to carry out due diligence.
    • Rule 4 (a) states that significant social media intermediaries — such as Facebook or Google — must appoint a chief compliance officer (CCO), who could be booked if a tweet or post that violates local laws is not removed within the stipulated period.
    • India’s Rules also introduce the need to publish a monthly compliance report.
    • They include a clause on the need to trace the originator of a message — this provision has been challenged by WhatsApp in the Delhi High Court.

     

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  • Places in news: Kuril Islands

    Japan has recently described the Kuril Islands (which Japan calls the Northern Territories and Russia as the South Kurils) as being under Russia’s “illegal occupation”.

    Note the Islands of Japan in North to South Direction:  Hokkaido, Honshu , Shikoku, and Kyushu

    What are the Kuril Islands/ Northern Territories?

    • These are a set of four islands situated between the Sea of Okhotsk and the Pacific Ocean near the north of Japan’s northernmost prefecture, Hokkaido.
    • Both Moscow and Tokyo claim sovereignty over them though the islands have been under Russian control since the end of World War II.
    • The Soviet Union had seized the islands at the end of World War II and by 1949 had expelled its Japanese residents.
    • Tokyo claims that the disputed islands have been part of Japan since the early 19th century.

    Why in news?

    • This is the first time in about two decades that Japan has used this phrase to describe the dispute over the Kuril Islands.
    • Japan had been using softer language since 2003, saying that the dispute over the islands was the greatest concern in Russia-Japan bilateral ties.

    What lies behind the dispute?

    • Japan’s sovereignty over the islands is confirmed by several treaties since 1855.
    • Russia, on the other hand, claims the Yalta Agreement (1945) and the Potsdam Declaration (1945) as proof of its sovereignty.
    • It argues that the San Francisco Treaty of 1951 is legal evidence that Japan had acknowledged Russian sovereignty over the islands.
    • Under Article 2 of the treaty, Japan had “renounced all right, title and claim to the Kuril Islands.”
    • However, Japan argues that the San Francisco Treaty cannot be used here as the Soviet Union never signed the peace treaty.

    Continuing the WW2

    • In fact, Japan and Russia are technically still at war because they have not signed a peace treaty after World War II.
    • In 1956, during Japanese PM Ichiro Hatoyama’s visit to the Soviet Union, it was suggested that two of the four islands would be returned to Japan once a peace treaty was signed.
    • However, persisting differences prevented the signing of a peace treaty though the two countries signed the Japan-Soviet Joint Declaration, which restored diplomatic relations between the two nations.
    • The Soviet Union later hardened its position, even refusing to recognise that a territorial dispute existed with Japan.
    • It was only in 1991 during Mikhail Gorbachev’s visit to Japan that the USSR recognised that the islands were the subject of a territorial dispute.

    Have there been attempts at resolution?

    • Since 1991, there have been many attempts to resolve the dispute and sign a peace treaty.
    • The most recent attempt was under PM Shinzo Abe when joint economic development of the disputed islands was explored.
    • In fact, both countries had agreed to have bilateral negotiations based on the 1956 Japan-Soviet Joint Declaration.
    • Russia was even willing to give back two islands, the Shikotan Island and the Habomai islets, to Japan after the conclusion of a peace treaty as per the 1956 declaration.
    • Japan’s attempt to improve ties with Russia was driven by its need to diversify energy sources and Russia by its need to diversify its basket of buyers and bring in foreign investments.
    • But nationalist sentiments on both sides prevented resolution of the dispute.

    Implications for Japan

    • Soon after the Russian invasion of Ukraine, Japan made its unhappiness with Russia clear.
    • Japan has been among the most steadfast of Western allies in denouncing Russian aggression and punishing it with sanctions.
    • Japan has probably been spurred by its fears of a Russia-China alliance as Japan itself has territorial disputes and an uneasy history with China.
    • Secondly, Japan might have felt that this is a good opportunity to further isolate Russia and paint it as a “habitual offender” of international law.
    • Finally, Tokyo might have been prompted to take this position as it feels that the invasion of Ukraine proves that getting back the Kuril Islands is a lost cause.

     

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  • Finding workable solutions to India-Sri Lanka fisheries issue

    Context

    After a gap of 15 months, the India-Sri Lanka Joint Working Group (JWG) on fisheries held its much-awaited deliberations (in virtual format) on March 25.

    Background of the issue

    • As sections of fishermen from the Palk Bay bordering districts of Tamil Nadu continue to transgress the International Maritime Boundary Line (IMBL), cases of many of them getting arrested and their boats being impounded by the Sri Lankan authorities continue.
    • Apart from poaching in the territorial waters of Sri Lanka, the use of mechanised bottom trawlers is another issue that has become a bone of contention between the fishermen of the two countries; the dispute is not just between the two states.
    • Use of mechanised bottom trawlers: This method of fishing, which was once promoted by the authorities in India, is now seen as being extremely adverse to the marine ecology, and has been acknowledged so by India.
    • The actions of the Tamil Nadu fishermen adversely affect their counterparts in the Northern Province.
    • Reason for transgression: The fishermen of Tamil Nadu experience a genuine problem — the lack of fishing areas consequent to the demarcation of the IMBL in June 1974.
    • If they confine themselves to Indian waters, they find the area available for fishing full of rocks and coral reefs besides being shallow.
    • Under the Tamil Nadu Marine Fishing Regulation Act 1983, mechanised fishing boats can fish only beyond 3 NM from the coast.
    • This explains the trend of the fishermen having to cross the IMBL frequently.

    Way forward

    • Transition to deep-sea fishing: While Indian fishermen can present a road map for their transition to deep sea fishing or alternative methods of fishing, the Sri Lankan side has to take a pragmatic view that the transition cannot happen abruptly.
    • In the meantime, India will have to modify its scheme on deep-sea fishing to accommodate the concerns of its fishermen, especially those from Ramanathapuram district, so that they take to deep-sea fishing without any reservation.
    • Alternative livelihood measures: There is a compelling need for the Central and State governments to implement in Tamil Nadu the Pradhan Mantri Matsya Sampada Yojana in a proactive manner.
    • The scheme, which was flagged off two years ago, covers alternative livelihood measures too including seaweed cultivation, open sea cage cultivation, and sea/ocean ranching.
    • During Mr. Jaishankar’s visit, India had signed a memorandum of understanding with Sri Lanka for the development of fisheries harbours.
    • This can be modified to include a scheme for deep-sea fishing to the fishermen of the North.
    • Joint research on fisheries: . It is a welcome development that the JWG has agreed to have joint research on fisheries, which should be commissioned at the earliest.
    • Institutional mechanism: Simultaneously, the two countries should explore the possibility of establishing a permanent multi-stakeholder institutional mechanism to regulate fishing activity in the region.
    • Using common thread of culture, language and religion: The people of the two countries in general and fisherfolk in particular have common threads of language, culture and religion, all of which can be used purposefully to resolve any dispute.

    Conclusion

    What everyone needs to remember is that the fisheries dispute is not an insurmountable problem. A number of options are available to make the Palk Bay not only free of troubles but also a model for collaborative endeavours in fishing.

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  • India can be the fulcrum of the new global order

    Context

    As Mahatma Gandhi’s nation, India must be a committed and relentless apostle of peace and non-violence, both at home and in the world.

    How the Russia-Ukraine conflict is reshaping the world order

    • Ever since the fall of the Berlin Wall in 1989, a paradigm of free societies, frictionless borders and open economies evolved to be the governing order in many nations.
    • This catalysed freer movement of people, goods, services and capital across the world.
    • India too has benefited enormously from being an active participant in this interconnected world, with a tripling of trade (as share of GDP) in the last three decades and providing vast numbers of jobs.
    • Such tight inter-dependence among nations will lead to fewer conflicts and promote peace, was the established wisdom.
    • The Russia-Ukraine conflict has dismantled this wisdom.
    • Mutually beneficial to mutually harmful: If inter-connectedness and trade among nations were mutually beneficial, then it follows that its disruption and blockade will be mutually harmful.
    • Global Village was built on the foundation of advanced transportation networks, cemented with the U.S. dollar as the reserve currency and fenced by integrated payment systems.
    • Any disruption to this delicate balance runs the risk of plunging the ‘Global Village’ into disequilibrium and derailing the lives of all.

    Trade opportunity for India

    • Trade with other nations should and will always be an integral cornerstone of India’s economic future.
    • A reversal towards isolationism and protectionism will be foolhardy and calamitous for India.
    • As the western bloc of nations looks to reduce dependence on the Russia-China bloc of nations, it presents newer avenues for India to expand trade.
    • It presents a tremendous opportunity for India to become a large producing nation for the world and a global economic powerhouse.
    • However, to capitalise on these opportunities, India needs free access to these markets, an accepted and established global currency to trade in and seamless trade settlements.

    Suggestions for India

    1] Bilateral currency agreements are unsustainable

    • The American dollar has emerged as the global trade currency, bestowing an ‘exorbitant privilege’ on the dollar.
    • But a forced and hurried dismantling of this order and replacing it with rushed bilateral local currency arrangements can prove to be more detrimental for the global economy in the longer run.
    • We had an Indian rupee-Russian rouble agreement in the late 1970s and 1980s, when we mutually agreed on exchange rates for trading purposes.
    • Now, with India’s robust external sector, a flourishing trading relationship with many nations and tremendous potential to expand trade, such bilateral arrangements are unsustainable, unwieldy, and perilous.

    2] Avoid discounted commodity purchases from Russia

    • In the long run, India stands to gain more from unfettered access to the western bloc markets for Indian exports under the established trading order than from discounted commodities purchased under new bilateral currency arrangements that seek to create a new and parallel global trade structure.
    • It entails a prolonged departure from the established order of dollar-based trade settlement or jeopardises established trading relationships with western bloc markets, it can have longer term implications for India’s export potential.

    3] Non-disruptive geo-economic policy

    • India needs not just a non-aligned doctrine for the looming new world order but also a non-disruptive geo-economic policy that seeks to maintain the current global economic equilibrium.
    •  By the dint of its sheer size and scale, India can be both a large producer and a consumer.
    • To best utilise this opportunity, India needs not just cordial relationships with nations on either side of the new divide but also a stable and established global economic environment.

    4] Social harmony is a must

    • Just as it is in India’s best interests to balance the current geo-economic equilibrium, it is also imperative for India to maintain its domestic social equilibrium.
    • Social harmony is the edifice of economic prosperity.
    • Fanning mutual distrust, hate and anger among citizens, causing social disharmony is a shameful slide to perdition.

    Conclusion

    The reshaping and realignment of the world order will be a unique opportunity for India to reassess its foreign policy, economic policy and geo-political strategy and don the mantle of global leadership.

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  • What is the Five Eyes (FYEY) Alliance?

    The annual Raisina Dialogue in Delhi held this year by National Security Adviser Ajit Doval will host intelligence agency chiefs of several countries.

    What is the conference about?

    • The conference is modelled on the lines of the annual Munich Security Conference and Singapore’s Shangri-La dialogue.
    • It is expected to bring together heads and deputy heads of the top intelligence and security organisations from more than 20 — mostly Western countries and their allies.
    • Intelligence chiefs and deputies from Australia, Germany, Israel, Singapore, Japan and New Zealand are among those expected to attend the conference.
    • The meet is held on the sidelines of the “Five eyes alliance” of the U.S., U.K., Canada, New Zealand and Australia, who coordinate on terrorism and security issues.

    What is the Five Eyes Alliance?

    • The Five Eyes (FVEY) is an intelligence alliance comprising Australia, Canada, New Zealand, the United Kingdom, and the United States.
    • These countries are parties to the multilateral UKUSA Agreement, a treaty for joint cooperation in signals intelligence.
    • The origins of the FVEY can be traced to informal secret meetings during World War II between British and American code-breakers.
    • It was started before the US formally entered the war, followed by the Allies’ 1941 Atlantic Charter that established their vision of the post-war world.

    Back2Basics: Munich Security Conference

    • The Munich Security Conference is an annual conference on international security policy that has been held in Munich, Bavaria, Germany since 1963.
    • It brings together heads of state, diplomats and business leaders from the world’s leading democracies for three days of meetings and presentations.
    • It is the world’s largest gathering of its kind.
    • Over the past four decades the MSC has become the most important independent forum for the exchange of views by international security policy decision-makers.

     

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  • India extends duration of $400 mn Currency Swap to SL

    India has extended the duration of a $400 million currency swap facility with Sri Lanka which it had concluded with the island nation in January this year.

    What are Currency Swaps?

    • A currency swap, also known as a cross-currency swap, is an off-balance sheet transaction in which two parties exchange principal and interest in different currencies.
    • Currency swaps are used to obtain foreign currency loans at a better interest rate than could be got by borrowing directly in a foreign market.

    Practice question for mains:

    Q. What are Currency Swaps? Discuss the efficacy of Currency Swap Agreements for enhancing bilateral cooperation in Indian context.

    How does it work?

    • In a swap arrangement, RBI would provide dollars to a Lankan central bank, which, at the same time, provides the equivalent funds in its currency to the RBI, based on the market exchange rate at the time of the transaction.
    • The parties agree to swap back these quantities of their two currencies at a specified date in the future, which could be the next day or even three months later, using the same exchange rate as in the first transaction.
    • These swap operations carry no exchange rate or other market risks, as transaction terms are set in advance.

    Why does one need dollars?

    • FPIs investors look for safer investments but the current global uncertainty over COVID outbreak has led to a shortfall everywhere in the global markets.
    • This has pulled down foreign exchange reserves of many small and developing countries.
    • This means that the government and the RBI cannot lower their guard on the management of the economy and the external account.

    Benefits of currency swap

    • The absence of an exchange rate risk is the major benefit of such a facility.
    • This facility provides the flexibility to use these reserves at any time in order to maintain an appropriate level of balance of payments or short-term liquidity.
    • Swaps agreements between governments also have supplementary objectives like the promotion of bilateral trade, maintaining the value of foreign exchange reserves with the central bank and ensuring financial stability (protecting the health of the banking system).

     

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