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Subject: International Relations

  • 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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  • Maldives bans ‘India Out’ Campaign

    Maldivian President Ibrahim Mohamed Solih issued a decree banning the ‘India Out’ campaign, now led by former President Abdulla Yameen, terming it a “threat to national security”.

    The India-Out Campaign

    • Maldivian protesters recently demanded the Solih administration to ‘stop selling national assets to foreigners’, implying India.
    • ‘India Out’ campaign in Maldives had started sometime last year as on-ground protests in the Maldives and later widely spread across social media platforms under the same hashtag.
    • It is not related to people-to-people conflict (Indian diaspora) but is discontent on close relationship between Maldivian government & India.

    Causes for the anti-India sentiments

    • Political instability: The anti-India sentiment is nearly a decade old and can be traced back to when Abdulla Yameen Abdul Gayoom became president in 2013. He used anti-India sentiments for his political mobilization and started tilting China.
    • Controversy over helicopter gift: Two Dhruv Advanced Light Helicopters (ALF) that were given by India to the Maldives for ocean search-and-rescue operations. Opposition tried to portray this as military presence in the country.
    • Confidential agreements: Most agreements being signed between the Ibrahim Solih government and India are backdoor and has not been publicly discussed in the Maldives Parliament.
    • Alleged interference in domestic politics: India being a big neighbour, there are unsubstantiated perceptions & allegations on Indian Diplomats stationed in Maldives interfering in Domestic affairs.

    Restoration of ties

    • Ibrahim Mohamed Solih who became President in 2018 has restored Maldives close ties with India.

    India-Maldives Relations: A backgrounder

    • India and Maldives are neighbors sharing a maritime border.
    • Both nations established diplomatic relations after the independence of Maldives from British rule in 1966.
    • India was one of the first nations to recognize Maldives’ independence.
    • Since then, India and Maldives have developed close strategic, military, economic and cultural relations.
    • Maldivians generally regard Indians and India as a friend and trusted neighbor in the field economic, social and political.

    Major irritants in ties

    • Political Instability: India’s major concern has been the impact of political instability in the neighborhood on its security and development.
    • Increasing radicalization: In the past decade or so, the number of Maldivians drawn towards terrorist groups like the Islamic State (IS) and Pakistan-based jihadist groups has been increasing.
    • Inclination towards terror: Radicalism in the island nation has increased the possibility of Pakistan-based terror groups using remote Maldivian islands as a launch pad for terror attacks against India and Indian interests.
    • Chinese affinity: China’s strategic footprint in India’s neighborhood has increased. The Maldives has emerged as an important ‘pearl’ in China’s “String of Pearls” construct in South Asia.

    Recent gestures by India

    [1] 2014 Malé drinking-water crisis

    • In the wake of a drinking water crisis in Malé in December 2014, following collapse of the island’s only water treatment plant, Maldives urged India for immediate help.
    • India came to rescue by sending its heavy lift transporters like C-17 Globemaster III, Il-76 carrying bottled water.

    [2] 2020 Covid-19 crisis

    • During the COVID-19 crisis of 2020, India extended help to Maldives in the form of financial, material and logistical support.
    • Also, the IAF airlifted 6.2 tonnes of essential medicines and hospital consumables to Maldives, as part of ‘Operation Sanjeevani’.

    [3] Greater Male Connectivity Project

    • India has recently announced the signing of a $500-million infrastructure project for the construction of the Greater Malé Connectivity Project (GMCP).
    • This infrastructure project, the largest-ever by India in the Maldives, involves the construction of a 6.74-km-long bridge and causeway link.

    Why is Maldives significant for India?

    • Increasing maritime cooperation: As maritime economic activity in the Indian Ocean has risen dramatically in recent decades, the geopolitical competition too in the Indian Ocean has intensified.
    • Toll Gate in Indian Ocean: It is situated at the hub of commercial sea-lanes running through the Indian Ocean. More than 97% of India’s international trade by volume and 75% by value passes through the region.
    • Naval cooperation: Maldives is an important partner in India’s role as the net security provider in the Indian Ocean Region.
    • Important SAARC member: Besides, Maldives is a member of the South Asian Association for Regional Cooperation (SAARC) and the South Asia Subregional Economic Cooperation (SASEC).
    • People To People Contact: There is a significant population of Maldivian students in India. They are aided by a liberal visa-free regime extended by India. There is also medical tourism.
    • Major destination for Tourists: Tourism is the mainstay of the Maldivian economy. The country is now a major tourist destination for some Indians and a job destination for others.

    Conclusion

    • There is a significant Indian diaspora in the Maldives. Innumerable Indians work across the hospitality, education, and health-care sectors of the Maldives economy.
    • India must use its Diaspora more extensively for strengthening its relations.

     

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  • India’s role in a disordered world

    Context

    Western nations want to throw Russia out of the G-20. China has opposed them. India will be chair of the G-20 from December 1, 2022. The world is greatly disordered. What should India stand for?

    Challenges to the global order

    • The war in Ukraine in February 2022 has put the final nail in the coffin of the boundary-less global economy that seemed to be emerging with the fall of the Berlin Wall and the collapse of the Soviet Union in 1991.
    • Vaccines were hoarded by rich countries in the COVID-19 pandemic: poor countries starved.
    • The World Trade Organization (WTO) was already in a bad state before the novel coronavirus pandemic, with rich and poor countries unable to agree on equitable rules, when COVID-19 froze global supply chains.
    • Institutions of global governance have failed to unite the world.

    Global order and governance challenge

    • In the aftermath of the Second World war, new institutions for global governance were established — the United Nations and the General Agreement on Tariffs and Trade (GATT), and the World Bank and the International Monetary Fund (IMF) to provide finance to build the economies of all countries to eliminate poverty.
    • However, the victors retained their veto power within the United Nations Security Council to determine when force can be used to keep the world in order, and to prevent the proliferation of nuclear power.
    • The UN General Assembly meets every year — now 193 nations strong.
    • It passes many resolutions to address global problems — hunger, poverty, women’s rights, terrorism, climate change, etc.
    • However, “might is right”: members of the Security Council retain their right to deny the democratic will of the Assembly when it does not suit them.
    • Global governance is not democratic.

    G-7 and G-20

    • The United States, the United Kingdom, France, Italy, Japan, West Germany and Canada formed the G7 in 1976. ‘so that the noncommunist powers could come together to discuss economic concerns, which at the time included inflation and recession following the Organization of the Petroleum Exporting Countries (OPEC) oil embargo’.
    • The European Union was invited to attend in 1977.
    • Russia joined in 1998 — and ‘its inclusion was meant as a signal of cooperation between East and West after the collapse of the Soviet Union in 1991’.
    • However, Russia was removed from G-8 in 2014 when it invaded the Crimea. China was never a member.
    • After the Asian financial crisis, the G20 was formed in 1999 with the aim of discussing policies in order to achieve international financial stability.
    • Russia and China are members.
    • Now western nations want to throw Russia out of the G-20. China has opposed them.
    • India will be chair of the G-20 from December 2022.
    • Meanwhile, India is being hectored by officials from the U.S. and the U.K. to support their sanctions on Russia.
    • India has so far refused to be cowed down.

    Backlash against globalisation

    • The belief that unfettered flows of finance and trade across national borders will lift people in all poor countries out of poverty and make the world flatter in terms of inequality has failed.
    •  Strong leaders who put the interests of their own countries first are gaining power through elections — in Turkey, Hungary, Poland, Russia, and even India.
    • Free market capitalism is not ideologically compatible with a genuine democracy.
    • Capitalist institutions are governed by the fundamental principle of ‘property rights’.
    • Whereas, genuine democracies are founded on the principle of equal human rights.
    • The rules of governance of capitalist and democratic institutions have always been in tension within societies.
    • Capitalist institutions want to be unfettered by democratic regulations to make it easier to do business.
    • Democratic institutions want to rein in the competitive animal spirits of capitalism to create a more compassionate capitalism.

    Conclusion

    To prevent violence, it is essential that global governance becomes genuinely democratic. Countries must not attack each other. But they must be given the freedom to evolve their own democracies and economies and not be dictated to by others.

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  • India-UK relations: A new shine to old ties

    Context

    As Prime Minister Narendra Modi hosts British premier Boris Johnson this week in India, the moment is ripe to turn the expansive new possibilities — in trade, investment, high technology, defence, and regional cooperation— into concrete outcomes.

    Background of the India-UK ties and  paradoxes

    • Legacies of colonialism: The bitter legacies of colonialism had made it impossible for the two sides to pursue a sensible relationship in the past.
    • India’s post-colonial engagement with Britain has been riddled with multiple paradoxes.
    • 1] India’s post-post colonial resentment and UK’s claim for special role: Delhi’s lingering post-colonial resentments and London’s unacceptable claim for a special role in the Subcontinent generated unending friction.
    • The consequences of Partition and the Cold War made it harder for Delhi and London to construct a sustainable partnership.
    • The important role played by the US: It was the US that first recognised India’s rapidly-growing relative weight in the international system.
    • At the turn of the millennium, Washington unveiled a policy of assisting India’s rise.
    • This was based on a bipartisan American consensus that a stronger India will serve US interests in Asia and the world.
    • Over the last two decades, it has led to a quick transformation of US relations with India.
    • 2] Washington is setting the pace for Delhi’s relationship with London:  At the dawn of Independence, India saw London as the natural interlocutor with an unfamiliar Washington.
    • Today it is Washington that is setting the pace for Delhi’s relationship with London.
    •  3] China’s role in shaping India’s relations with the West: For Washington, the strategic commitment to assist India’s rise was rooted in the recognition of the dangers of a China-dominated Asia.
    • London in the last two decades was moving in the other direction — a full embrace of Beijing.
    • Once the American deep state decided to confront Chinese power in the late 2010s, London had to extricate itself from the Chinese Communist Party’s powerful spell.
    • As the US unveiled a new Asian strategy, Britain followed with its own “Indo-Pacific tilt” that helped secure the region against China’s muscular policies.
    • 4] Historic tilt towards Pakistan: Unlike the US and France, which are committed to an “India first” strategy in South Asia, Britain remains torn between its new enthusiasm for India and the inertia of its historic tilt towards Pakistan.
    • But India is confident that Pakistan’s relative decline in the region is bound to make it a less weighty factor in India’s bilateral relations with Britain.
    • The question of Pakistan brings us to the fourth paradox—the domestic dynamics of Britain that have tended to sour ties with India.
    • Delhi has figured out that the interconnected politics of India and Britain — shaped by the large South Asian diaspora of nearly four million — can be cut both ways.
    • 5] Making best of historic ties:  If the Tories are romantic about the Raj, nationalists in India bristle at the British imperial connection.
    • Yet, together they are constructing a new relationship between India and Britain.

    Better outlook for bilateral ties

    • As the two sides make a determined effort to transcend the paradoxes, the regional and international circumstances provide a new basis for mutually beneficial engagement.
    • Over the last couple of years, Delhi and London have begun a promising and pragmatic engagement devoid of sentiment and resentment.
    • Having walked out of Europe, Britain needs all the partners it can find and a rising India is naturally among the top political and economic priorities.
    • Delhi meanwhile has become supremely self-assured in dealing with London.
    • With the Indian economy set to become larger than Britain’s in the next couple of years, Delhi is no longer defensive about engaging Britain.
    • Even more important, Delhi recognises the value of a deep strategic partnership with London.

    Conclusion

    The UK has a significant international military presence and wide-ranging political influence. Realists in Delhi are trying to leverage these British strengths for India’s strategic benefit.

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  • What is the UK-Rwanda Asylum Plan?

    The United Kingdom has signed a deal with Rwanda to send some asylum seekers to the East African nation — a move that PM Boris Johnson said will “save countless lives” from human trafficking.

    Immigrants crisis in UK

    • Since 2018, there has been a marked rise in the number of refugees and asylum seekers that undertake dangerous crossings between Calais in France and Dover in England.
    • Most such migrants and asylum seekers hail from war-torn countries like Sudan, Afghanistan, and Yemen, or developing countries like Iran and Iraq.
    • The Britain that has adopted a hardline stance on illegal immigration, these crossings constitute an immigration crisis.
    • The Nationality and Borders Bill, 2021, which is still under consideration in the UK, allows the British government to strip anyone’s citizenship without notice under “exceptional circumstances”.
    • The Rwanda deal is the operationalization of one objective in the Bill which is to deter illegal entry into the United Kingdom.

    What is the Rwanda Deal?

    • The UK and Rwanda Migration and Economic Development Partnership or the Rwanda Deal is a Memorandum of Understanding (MoU) signed between the two governments.
    • Under this deal, Rwanda will commit to taking in asylum seekers who arrive in the UK on or after January 1, 2022, using illegally facilitated and unlawful cross border migration.
    • Rwanda will function as the holding centre where asylum applicants will wait while the Rwandan government makes decisions about their asylum and resettlement petitions in Rwanda.
    • Rwanda will, on its part, accommodate anyone who is not a minor and does not have a criminal record.

    Rationale of the deal

    • The deal aims to combat “people smugglers”, who often charge exorbitant prices from vulnerable migrants to put them on unseaworthy boats from France to England that often lead to mass drownings.
    • The UK contends that this solution to the migrant issue is humane and meant to target the gangs that run these illegal crossings.

    What will the scheme cost the UK?

    • The UK will pay Rwanda £120 million as part of an “economic transformation and integration fund” and will also bear the operational costs along with an, as yet undetermined, amount for each migrant.
    • Currently, the UK pays £4.7 million per day to accommodate approximately 25,000 asylum seekers.
    • At the end of 2021, this amounted to £430 million annually with a projected increase of £100 million in 2022.
    • The Rwanda Deal is predicted to reduce these costs by outsourcing the hosting of such migrants to a third country.

    Will the Rwanda Deal solve the problem of illegal immigration?

    • This deal will be implemented in a matter of weeks unless it is challenged and stayed by British courts.
    • While Boris Johnson’s government is undoubtedly bracing for such legal challenges, it remains unclear if the Rwanda Deal will solve the problem of unlawful crossings.
    • Evidence from similar experiences indicates that such policies do not fully combat “people smuggling”.

    Criticisms of the deal

    • Several activists, refugee and human rights organizations have strongly opposed the new scheme.
    • There are dangers of transferring refugees and asylum seekers to third countries without sufficient safeguards.
    • The refugees are traded like commodities and transferred abroad for processing.
    • Such arrangements simply shift asylum responsibilities, evade international obligations, and are contrary to the letter and spirit of the Refugee Convention.
    • Rwanda also has a known track record of extrajudicial killings, suspicious deaths in custody, unlawful or arbitrary detention, torture, and abusive prosecutions, particularly targeting critics and dissidents.

    Do any other countries send asylum seekers overseas?

    • Yes, several other countries — including Australia, Israel and Denmark — have been sending asylum seekers overseas.
    • Australia has been making full use of offshore detention centres since 2001.
    • Israel, too, chose to deal with a growing influx of asylum seekers and illegal immigrants from places like Sudan and Eritrea by striking deals with third countries.
    • Those rejected for asylum were given the choice of returning to their home country or accepting $3,500 and a plane ticket to one of the third countries.
    • They faced the threat of arrest if they chose to remain in Israel.

     

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  • A fatal friendship with Beijing

    Context

    China’s intervention has proved disastrous for the economies of Myanmar, Sri Lanka and Pakistan.

    China-Myanmar relations and its implications

    • Myanmar, China’s closest neighbour with a long history of cross border trade, was the first country to voluntarily turn towards Beijing, from 1988, when the State Law and Order Restoration Council (SLORC) took over the reins of government.
    • World sanctions followed, but Beijing reassured the generals of its continued support and in 1989, signed a treaty of trade and cooperation that made China the sole supporter of the illegitimate military government.
    • The strong western sanctions after 2007, made China virtually its sole trading partner.
    • The link with China became essential for the regime’s survival but did little to increase economic prosperity.
    • Wood alone accounts for about 70 per cent of Myanmar’s exports to China.
    • It’s clear that China is stripping bare Myanmar’s centuries-old teak forests.

    Implications for Pakistan

    • In 2012,  Pakistan signed on to the China Pakistan Economic Corridor.
    • New Delhi and Washington imagined wrongly that the CPEC would lead to a major People’s Liberation Army-Navy (PLAN) expansion into the Indian Ocean through Gwadar, which even now is a largely disused port.
    •  As a conservative IMF estimate put it, Islamabad’s poor management of the economy and reckless borrowing has put its immediate financial needs (2022) at $51 billion.
    • Projects chosen are unviable like the Gwadar port and the Lahore Metro and attracted huge public criticism. The CPEC was put on hold and rebooted.
    • The IMF warned Islamabad of the CPEC repayment boosting the current account deficit, forcing Pakistan to cut Chinese interest payments for 10 years.
    • The CPEC has been a humbling experience for China and an economic disaster for Pakistan.

    Implications for Sri Lanka

    • Against all economic surveys and advice, the Hambantota port was built, it floundered and Sri Lanka transferred the land as equity to China for 99 years.
    • From 2012 to 2016, China accounted for 30 per cent of all FDI to Sri Lanka, becoming the top source of foreign investment
    • Today China is funding 50 projects in the country, involving more than $1 billion, including the Colombo Port and the Lakvijaya thermal power plant.
    • Today, the Sri Lankan economy is in complete meltdown, with China holding the largest amount of Sri Lankan debt.
    • Private banks have run out of funds to finance imports. Its main sources of revenue, tourism and remittances, have dried up, and the government is in a crisis.

    Conclusion

    The recourse to availing Chinese money by Myanmar, Pakistan and Sri Lanka has led to a feeling of hubris among the leaders, inducing them to take bad economic decisions in the perception that Beijing is footing the bills.

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  • The war’s many victims

    Context

    Beyond Ukraine’s borders, far beyond the media spotlight, the war has launched a silent assault on the developing world. This crisis could throw up to 1.7 billion people — over one-fifth of humanity — into poverty, destitution and hunger on a scale not seen in decades.

    Impact of the war on the developing world

    • Ukraine and the Russian Federation provide 30 per cent of the world’s wheat and barley, one-fifth of its maize, and over half of its sunflower oil.
    • Together, their grain feeds the poorest and most vulnerable people, providing more than one-third of the wheat imported by 45 African and least-developed countries.
    • At the same time, Russia is the world’s top natural gas exporter, and second-largest oil exporter.
    • But the war is preventing farmers from tending their crops while closing ports, ending grain exports, disrupting supply chains and sending prices skyrocketing.
    • The World Food Programme has warned that it faces the impossible choice of taking from the hungry to feed the starving.
    • It urgently needs $8 billion to support its operations in Yemen, Chad and Niger.
    • But while much of the world has stepped up in solidarity with the people of Ukraine, there is no sign of the same support for the 1.7 billion other potential victims of this war.

    The Global Crisis Response Group on Food, Energy and Finance

    • The group aims to develop coordinated solutions to these interlinked crises, with governments, international financial institutions and other key partners.
    • 1] On food, the group is urging all countries to keep markets open, resist hoarding and unjustified and unnecessary export restrictions, and make reserves available to countries at the highest risk of hunger and famine.
    • 2] On energy, the use of strategic stockpiles and additional reserves could help to ease this energy crisis in the short term.
    • But the only medium- and long-term solution is to accelerate the deployment of renewable energy.
    • 3] And on finance, the G20 and international financial institutions must go into emergency mode.
    • They must find ways to increase liquidity and fiscal space, so that governments in developing countries can invest in the poorest and most vulnerable, and in the Sustainable Development Goals.
    •  Social protection, including cash transfers, will be essential to support desperate families through this crisis.
    • But many developing countries with large external debts do not have the liquidity to provide these safety nets.

    Conclusion

    The only lasting solution to the war in Ukraine and its assault on the poorest and most vulnerable people in the world is peace.

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