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Subject: International Stories of Key Importance

  • The legal challenges in recognising the Taliban

    Context

    The Taliban’s takeover of Afghanistan has triggered a new debate in international law on the issue of recognising an entity that claims to be the new government of a state.

    Legal challenge of recognising a government

    • Questions of recognition do not arise when the change of government within a state occurs when political power is transferred through legal means.
    • However, things are different when the change of government happens through extra-legal methods like ousting the sitting government using unconstitutional means.
    • China and Russia, two of the five permanent United Nations Security Council members, have seemingly shown readiness to recognise a Taliban-led government.
    • Whereas countries like Canada have opposed it.
    • Recognition of governments under international law is vital for several reasons.
    • Recognition of government Vs. Recognition of State: Malcolm Shaw, the international lawyer, writes, “a change in government, however, accomplished, does not affect the identity of the State itself.”
    • Thus, in the current debate, the issue is not about the recognition of Afghanistan, whose legal personality remains intact it’s about the recognition of government.

    Two doctrines in Internation laws for recognising a government

    1) Effectiveness

    • According to this principle, to recognise a government means to determine whether it effectively controls the state it claims to govern.
    • Under this doctrine, it is immaterial how the new government occupied office.
    • Since there is hardly any doubt that the Taliban now effectively controls Afghanistan, as per this test, it would be recognised as Afghanistan’s government for international law and thus, international relations.

    2) Democratic legitimacy

    •  According to this doctrine, recognition of a government also depends on whether it is the legitimate representative of the people it claims to govern.
    • The end of the Cold War, the subsequent spread of democracy in the world, and the growing demand for universal respect for human rights gave an impetus to this doctrine in the last three decades.
    • This doctrine has led many countries to bestow de jure recognition (legal recognition) on governments in exile in place of governments exercising effective control.
    • Two recent examples include recognition by some states of Yemen’s government in exile since 2015.
    • Second, the Nicolás Maduro government in Venezuela is not recognised by several countries due to the alleged lack of democratic legitimacy.
    • The Taliban regime, despite exercising effective control over Afghanistan, lacks democratic legitimacy.
    • Thus, it would fail to be recognised as the legitimate representative of Afghanistan if the doctrine of democratic legitimacy is applied.
    • Nevertheless, there is no binding legal obligation on countries to withhold recognition citing democratic legitimacy.
    • Thus, if Russia and China were to formally recognise the Taliban regime due to its effective control of Afghanistan, it would be consistent with international law.

    Way forward for India

    • India will have to find a way to engage with the Taliban given India’s huge investments in Afghanistan and stakes in the South Asian region.
    • India should adopt a clear policy that it will deal with the Taliban simply because it is the de facto government, not because it is a legitimate one.
    • This principle should be followed for bilateral relations and also for multilateral dealings such as within the South Asian Association for Regional Cooperation.

    Consider the question “What are the doctrines in international law in recognising the government of State? What should be India’s course of action in dealing with the Taliban in Afghanistan?” 

    Conclusion

    Given the Taliban’s brutal past, India is within its right to withhold de jure recognition of the Taliban regime. However, India has to devise a policy to deal with the Taliban as a de facto government.

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  • India must bet on patience in Afghanistan

    Context

    Notwithstanding the current triumphalism in Pakistan at “overthrowing” the US-backed order in Kabul and “pushing” India out of Afghanistan, India can afford to step back and signal that it can wait.

    Uncertainties about the future

    Two interconnected political negotiations unfolding are likely to determine Afghanistan’s immediate future.

    1) Setting up political order

    • One is focused on building a new political order within Afghanistan.
    • More than a week after President Ghani fled Kabul, there is no government, let alone an inclusive and internationally acceptable one, in sight.
    • Before Pakistan can get the Taliban to share power with other groups, it has to facilitate an acceptable accommodation between different factions of the Taliban.
    • Then there is the problem of including the non-Taliban formations in the new government.

    2) Gaining international recognition

    • The international community has set some broad conditions for the recognition of the Taliban-led government.
    • Besides an inclusive government at home, the world wants to see respect for human rights, especially women’s rights, ending support for international terrorism, and stopping opium production.
    • Pakistan will hope to get some of its traditional friends like China and Turkey or new partners like Russia to break the current international consensus.
    • Pakistan and the Taliban, however, know Chinese and Russian support is welcome but not enough.
    • They need an understanding of the US and its allies to gain political legitimacy as well as sustained international economic assistance.
    • The West, too, needs the Taliban to facilitate the evacuation of its citizens from Kabul and, sooner rather than later, deliver humanitarian assistance.

    How India differs from Pakistan in its approach towards Afghanistan?

    • India has never been in strategic competition with Pakistan in Afghanistan. India’s lack of direct geographic access to Afghanistan has ensured that.
    • Both their strategies have roots in the 19th-century policies of the Raj.
    • Forward policy: The Pakistan Army’s quest for strategic depth in Afghanistan harks back to the “forward policy” school that sought to actively control the territories beyond the Indus.
    • The forward policy seeks political dominance over Afghanistan in the name of a “friendly government” in Kabul.
    • Masterly inactivity: India, in contrast, stayed with a rival school in the Raj that called for “masterly inactivity” — a prudent approach to the badlands beyond the Indus.
    • India’s strategy seeks to strengthen Kabul’s autonomy vis-à-vis Rawalpindi and facilitate Afghanistan’s economic modernisation.
    • The Afghan values that India supports — nationalism, sovereignty, and autonomy — will endure in Kabul, irrespective of the nature of the regime.

    Consider the question “What are the implications of the return of Taliban in Afghanistan for India? What should be India’s approach in dealing with the Taliban controlled Afghanistan?” 

    Conclusion

    Strategic patience coupled with political empathy for Afghan people, and an active engagement will continue to keep India relevant in Kabul’s internal and external evolution.

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  • The fall of Kabul, the future of regional geopolitics

    Context

    The fall of Kabul in the wake of the American withdrawal from Afghanistan will prove to be a defining moment for the region and the future shape of its geopolitics.

    Implications of the US withdrawal for India

    1) Increase in threat from China

    • The manner in which the United States withdrew from Afghanist created the regional power vacuum in the Eurasian heartland.
    • An axis of regional powers such as China, Pakistan, Iran, Russia, and the Taliban, have already started filling this power vacuum.
    • Advantageous for China: The post-American power vacuum in the region will be primarily advantageous to China and its grand strategic plans for the region.
    • BRI expansion: Beijing will further strengthen its efforts to bring every country in the region, except India, on the Chinese Belt and Road Initiative bandwagon, thereby altering the geopolitical and geoeconomic foundations of the region
    • The much-feared Chinese encirclement of India will become ever more pronounced.
    • Even in trade, given the sorry state of the post-COVID-19 Indian economy, India needs trade with China more than the other way round.
    • Unless India can find ways of ensuring a rapprochement with China, it must expect Beijing to challenge India on occasion, and be prepared for it.

    2) Terror and extremism

    • The U.S. presence in Afghanistan, international pressure on the Taliban, and Financial Action Task Force worries in Pakistan had a relatively moderating effect on the region’s terror ecosystem.
    • There is little appetite for a regional approach to curbing terrorism from a Taliban-led Afghanistan.
    • This enables the Taliban to engage in a selective treatment towards terror outfits present there or they have relations with.
    • It is unlikely that the Taliban will proactively export terror to other countries unless of course for tactical purposes, for instance, Pakistan against India.
    • The real worry, however, is the inspiration that disgruntled elements in the region will draw from the Taliban’s victory against the world’s sole superpower.

    3) Impact on India’s regional interests and outreach to Central Asia

    • The return of the Taliban to Kabul has effectively laid India’s ‘mission Central Asia’ to rest.
    • India’s diplomatic and civilian presence as well as its civilian investments will now be at the mercy of the Taliban, and to some extent Pakistan.
    • Had India cultivated deeper relations with the Taliban, Indian interests would have been more secure in a post-American Afghanistan.

    4) Impact on India’s foreign policy choices

    • Shift to Indo-Pacific: Given the little physical access India has to its north-western landmass, its focus is bound to shift more to the Indo-Pacific even though a maritime grand strategy may not necessarily be an answer to its continental challenges.
    • Improving relations with neighbours: India might also seek to cultivate more friendly relations with its neighbours.
    • India has already indicated that it would not challenge the junta on the coup and its widespread human rights violations.
    • The last thing India needs now is an angry neighbour rushing to China.
    • Stability in relations with Pakistan: The developments in Afghanistan could nudge India to seek stability, if not peace, with Pakistan.
    • Both sides might refrain from indulging in competitive risk-taking unless something dramatic happens which is always a possibility between the two rivals.
    • That said, stability between India and Pakistan depends a great deal on how politics in Kashmir plays out, and whether India is able to pacify the aggrieved sections in the Valley.

    Consider the question “What would be the fallout of the Taliban’s return in Afghanistan for India? What steps India needs to take to mitigate the impact on its interests?”

    Conclusion

    The lesson for India in the wake of these developments is clear: It will have to fight its own battles. So it must make enemies wisely, choose friends carefully, rekindle flickering friendships, and make peace while it can.

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  • Places in news: Panjshir Valley

    The Taliban has sent hundreds of its fighters to the Panjshir Valley, one of the few parts of Afghanistan not yet controlled by the group.

    Panjshir Valley

    • Located 150 km north of Kabul, the Valley is near the Hindu Kush Mountain range.
    • It’s divided by the Panjshir river and ringed by the Panjshir mountains in the north and the Kuhestan mountains in the south.
    • The mountain tops are covered by snow throughout the year.
    • This difficult terrain makes the Valley a nightmare for invaders.

    Why is it significant?

    • The Valley has repeatedly played a decisive role in Afghanistan’s military history, as its geographical position almost completely closes it off from the rest of the country.
    • The only access point to the region is through a narrow passage created by the Panjshir River, which can be easily defended militarily.
    • Famed for its natural defenses, the region tucked into the Hindu Kush mountains never fell to the Taliban during the civil war of the 1990s, nor was it conquered by the Soviets a decade earlier.
    • Panjshir Valley was among the safest regions in the country during the time of the NATO-backed government from 2001 to 2021.
    • The valley is also known for its emeralds, which were used in the past to finance the resistance movements against those in power.

    Answer this PYQ:

    Consider the following pairs

    Towns: Country in news        

    1. Aleppo: Syria
    2. Kirkuk: Yemen
    3. Mosul: Palestine
    4. Mazar-i-sharif: Afghanistan

    Which of the pairs given above are correctly matched? (CSP 2018)

    (a) 1 and 2

    (b) 1 and 4

    (c) 2 and 3

    (d) 3 and 4

     

    [wpdiscuz-feedback id=”y9iww5wevm” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

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  • Understanding the strategic flux and humanitarian crisis in Afghanistan

    Context

    The Afghan government and its defence forces have completely collapsed. The world over, television screens are full of images of the extraordinary takeover of Afghanistan by the Taliban.

    Background of the US intervention in Afghanistan

    • The original trigger for the US military intervention in Afghanistan was the 9/11 attacks.
    • The objective then was to eliminate the al Qaeda sanctuaries hosted by the Taliban.
    • That goal was quickly attained, as was another one — the elimination of Osama Bin Laden in Abbottabad, Pakistan, in 2011.
    • The US was thereafter stuck into a vortex in which its mission oscillated between counter-terrorism and counter-insurgency. 
    • The military presence in Afghanistan has been questioned by the US political firmament for a decade.

    Factors driving the US exit

    • China factor: The US now regards China as its principal strategic competitor.
    • China’s muscle-flexing in the East and South China Seas calls for a renewed effort by the US to protect its stakes.
    • The rise of China is the main geo-strategic threat for the US.
    • In 2001, the US had taken its eye off the ball in diverting its attention to the global war on terror.
    • Beginning with Afghanistan, it meandered through Iraq, Libya and Syria, with mixed results.
    • Taiwan: China’s recent ratcheting up of pressure on Taiwan has also sounded the alarm.

    Implications of Taliban’s return for region

    • The new regime in Kabul is likely to open the door to economic investments from China.
    • At the geopolitical level, the BRI may well receive a boost, given China’s interests in connectivity that could straddle the region, from Pakistan to Iran.
    • Pakistan has shown alacrity in welcoming the change of guard in Kabul.
    • The change in Afghanistan has security implications for India and the region at large.
    • A spill-over of any chaos and instability in Afghanistan beyond its borders could give terrorism a shot in the arm.
    • It could also singe Pakistan if it does not review its malevolent practices, which favour terror as an instrument of state policy.

    Way forward for India

    • India should prioritise the welfare of the Afghan people, whenever the opportunity presents itself.
    • Currently, about 2,500 Afghan students are enrolled in educational and vocational institutions across India.
    • They will no doubt wish to extend their scholarships.
    • As a close neighbour, India has keen stakes in ensuring a stable, secure and developed Afghanistan.
    • As the rotational President of the UN Security Council for August, India has an opportunity to engage important stakeholders on the way forward.
    • Beyond that too, India’s presence in the UN Security Council till the end of 2022 will provide a platform to explore options with greater flexibility.

    Conclusion

    The global community needs to underscore the continued participation of women in governance in Afghanistan and keep an eye on violations of human rights and international humanitarian law.

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  • For India, there will be no dearth of balancing opportunities in Afghanistan

    Context

    The rapid fall of Afghanistan after the withdrawal of the US sent shockwaves across the region.

    Cause of concern for India

    • The Taliban’s entry into Kabul, marks the beginning of a new phase in the relationship between Afghanistan and India.
    • Recent developments in South Asia certainly point to a recurring dynamic between Afghanistan and India.
    • The restoration of Taliban rule in Afghanistan with Pakistan’s support undoubtedly presents some very serious potential challenges for Indian security.
    • However, a measure of strategic patience could help India cope with the adverse developments in Afghanistan and find ways to secure its interests in the near future.
    • For India, a bigger question mark will be about the Taliban’s renewed support for international terrorism and Pakistan’s re-direction of jihadi groups that have allegedly fought with the Taliban towards India.

    Afghanistan from 1979 to 2001 and how it changed the subcontinent

    • At the end of 1979, the Soviet Union launched a massive military invasion to protect a communist regime in Kabul.
    • The US and Pakistan responded by unleashing a religious jihad that compelled Russia to withdraw by 1989.
    • Pakistan’s critical role in the Afghan war against Russia allowed Pakistan to secure the political cover for the country’s acquisition of nuclear weapons.
    • The Pakistan army turned the jihadi armies to gain control of Afghanistan and launched a proxy war against India, especially in the Punjab and Kashmir regions.
    • The turbulence of the 1990s saw deepening conflict between India and Pakistan.
    • Al Qaeda, hosted by the Taliban, launched terror attacks against the US on September 11, 2001.
    • Swift US retribution brought an end to Taliban rule and compelled Pakistan to reconsider its policies.
    • After 2001, there has also been a significant expansion of the India-US strategic partnership.
    • By the end of the decade, though, the Pakistan Army had swung back to its default positions — renewed support for the Taliban in Afghanistan.
    • Pakistan also teased an increasingly war-weary Washington into a negotiation with the Taliban for a peace settlement.

    Way forward for India

    • Patience: Like all radical groups, the Taliban will have trouble balancing its religious ideology with the imperatives of state interests.
    • India would want to carefully watch how this tension plays out.
    • Watch the relation between Pakistan and Taliban: Equally important is the nature of the relationship between the Taliban and Pakistan.
    • The Taliban is bound to seek a measure of autonomy from Pakistan, India will have to wait.
    • Prepare for cross-border terror: India must fully prepare for a renewal of cross-border terror, but there is a lot less global acceptance of terrorism today than in the permissive 1990s.
    • No major power would like to see Afghanistan re-emerge as a global sanctuary of terror.
    • The world has also imposed significant new constraints on Pakistan’s support for terror through mechanisms like the Financial Action Task Force.
    • Unlike in the 1990s, when Delhi simply absorbed the terror attacks, it now shows the political will to retaliate forcefully.
    • Regional geopolitical alignment: It is also important to note that the US and the West will continue to have a say in shaping the international attitudes towards the new regime.
    • The Taliban and Pakistan appear to be acutely conscious of this reality.

    Conclusion

    For a patient, open-minded and active India, there will be no dearth of balancing opportunities in Afghanistan.

  • India’s fate is tied to the rest of the world

    Context

    Ever since Independence, India’s fate has been closely tied to the rest of the world.

    How global interactions and how it shaped India

    • A large, newly independent, impoverished, and diverse country required active engagement with a variety of partners for its survival, security, and development.
    • But a constantly evolving international environment presented India not just with opportunities but numerous challenges.
    • Poorly demarketed borders: Its frontiers were initially poorly demarcated and poorly integrated.
    • Nuclear-armed neighbours: India came to have two nuclear-armed neighbors with which it competed for territory.
    • Relations with the US and Russia: India’s first leaders opted for flexible and friendly relations with both the U.S. and the Soviet Union and their respective allies.
    • The Indo-Soviet Treaty of Friendship and Cooperation and the Bangladesh war altered India’s relations with both superpowers and shifted the dynamics of the rivalry with Pakistan.
    • Role in global politics: India also played an activist role in the decolonizing world, extending diplomatic and (in some cases) security assistance to independence movements in Asia and Africa and sending military missions to Korea and the Congo.
    • Economic progress: There were also important economic strides made, including the Green Revolution, undertaken with considerable foreign technical and financial assistance.
    • Independent policy: India often found itself at odds with the great powers when it felt its greater interests were threatened, as on intervention in Bangladesh, nuclear non-proliferation, or trade.

    India after the Cold War

    • The 1991 Gulf war resulted in a balance of payments crisis and the liberalization of the economy.
    • India then adopted a range of reforms to liberalize the economy, but it faced more than just economic turmoil.
    • Yet, the period that followed witnessed some important developments under the prime ministership of P.V. Narasimha Rao:
    • The period saw the advent of the Look East Policy and relations with the Association of Southeast Asian Nations
    • It also saw the establishment of diplomatic ties with Israel.
    • The signing of a border peace and tranquility agreement with China took place in the same period
    • The period also witnessed initial military contracts with the U.S., and preparations for nuclear tests.
    • The Atal Bihari Vajpayee government built further upon these developments, conducting a series of tests in 1998, negotiating a return to normal relations with most major powers within two years.
    • Economic development: These years also witnessed a rapid growth of the Indian economy, fuelled by a boom in information and communication technology companies, the services sector, and a rising consumer market.
    • After 2004, the Manmohan Singh government worked extensively to resolve the outstanding question of India’s nuclear status.
    • By eliminating barriers to ‘dual use’ technologies and equipment, as well as a host of associated export controls, India had the opportunity to establish robust defense relations with the U.S. and its allies.
    • Coupled with an economic deceleration after 2011, India’s relations with the U.S. and Europe grew more contentious over the next three years.

    Relationship with China

    • The global financial crisis in 2008-09 presaged a slight change in approach, whereby India sought to partner with China and other rising powers on institutional reform, financial lending, climate change, and sovereignty.
    • Beginning in 2013,  China began to test India on the border and undermine Indian interests in South Asia and the Indian Ocean Region.
    • With further stand-offs at Doklam and Ladakh between 2017 and 2021, India opted to boycott China’s Belt and Road Initiative, raise barriers to Chinese investment.
    • In response, India began consulting more closely with other balancing powers in the Indo-Pacific.
    • Security relations and understandings with the U.S. and its allies (Japan, France, Australia) accelerated after 2014.
    • A greater emphasis on neighborhood connectivity was adopted.

    Way forward

    • As India enters its 75th year of independence, there are plenty of reasons for cautious optimism about its place in the world.
    • COVID-19 and growing international competition also underscore the difficulties that India will likely face as it attempts to transform into a prosperous middle-income country.
    • What is certain is that India will not have the luxury to turn inwards.

    Conclusion

    India’s objectives have been broadly consistent: development, regional security, a balance of power, and the shaping of international consensus to be more amenable to Indian interests. At the same time, India’s means and the international landscape have changed, as have domestic political factors.

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  • India set to take over as President of the UNSC

    India will take over the Presidency of the UN Security Council on August 1 and is set to host signature events in three major areas of maritime security, peacekeeping, and counterterrorism during the month.

    Key agendas on the table

    During its Presidency, India will be organizing high-level signature events in three major areas:

    • Maritime security
    • Peacekeeping and
    • Counterterrorism

    About 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 (P5).
    • 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.

    Issues with UNSC

    (1) Non-representative

    • UNSC in its current form is not representative of the developing world and global needs — with the primacy of policy being a political tool in hands of P5.
    • By 1992, India, Brazil, Germany, and Japan (referred as G4) had put up their claims and logic for demanding inclusion as permanent members.
    • India has been part of UN since its inception and has contributed maximum peacekeepers to UN so far, has a strong case.
    • Brazil is the largest country in Latin America (unrepresented continent) and fifth-largest in the world. Japan and Germany are one of the largest financial donors to UN.

    (2) Rivalry with G4

    • The pitch for reforms of G4 was lowered by their regional rivals like Italy, Pakistan, Mexico and Egypt.
    • They started formulation of another interest group, known to be “Uniting for Consensus” opposing G4 becoming permanent members with veto power.

    (3) Rigid framework

    • Reforms in the UNSC also require an amendment to the UN charter, in accordance with Article 108.
    • This highlights that any reform of the Security Council not only requires the support of at least two-thirds of UN member states but also all the permanent members.

    (4) Veto power

    • The stance of P5 members to expansion has been varying as per their national interest, like most P5 members agree to Indian inclusion, except China.
    • It becomes obvious that even if one member of P5 doesn’t agree to any reform, the UNSC cannot be reformed.
    • There have been many proposals since its inception from totally abolishing veto power to selectively using it for vital national security issues.

    (5) No consensus

    • It has been seen in past that the UNSC, in some of the major global security issues, could not arrive at a consensus and interventions that happened by countries mainly from P5 without UNSC resolution.
    • US entry in Iraq war or Warsaw Pact war in Afghanistan are few cases in point.
    • The UNSC has thus become an organization, which can pass strong resolutions against weak countries, weak resolutions against strong countries and no resolution against P5 countries.

    Suggested reforms

    • Expansion: Besides the existing P5 members, an expansion of UNSC from five to 10 permanent members, with the addition of G4 and South Africa. This will provide equitable regional representation besides balancing the developing and developed world to meet the aspirations of humanity.
    • Abolition of veto: The expansion of P5 without veto power makes very little impact on the problems, because of which the reforms are required. Ideally the veto power should be abolished.

    Will UNSC reforms ever happen?

    • Under the given charter, articles and structures, there is very little hope for UNSC reforms in near future.
    • The lack of reforms can push the credibility crisis of UN to a degree that it becomes unsustainable for it to function, or incidences of side-lining the UN increase manifold.
    • If the UNSC does not appoint new permanent members then its primacy may be challenged by some of the new emerging countries.
    • There is also a possibility that if UN doesn’t reform itself, it may lose relevance and alternate global and regional groupings may assume greater importance.
    • No P5 member is likely to compromise this power in its own national interest, which is generally prioritized before global interest, thus making the reformation process a mirage.

  • South China Sea Dispute

     

    Pentagon chief has said that Beijing’s expansive claims in the South China Sea have “no basis in international law”, taking aim at China’s growing assertiveness in the hotly contested waters.

    South China Sea Dispute

    • It is a dispute over territory and sovereignty over ocean areas, and the Paracels and the Spratlys – two island chains claimed in whole or in part by a number of countries.
    • China, Vietnam, the Philippines, Taiwan, Malaysia, and Brunei all have competing claims.
    • Alongside the fully-fledged islands, there are dozens of rocky outcrops, atolls, sandbanks, and reefs, such as the Scarborough Shoal.
    • China claims by far the largest portion of territory – an area defined by the “nine-dash line” which stretches hundreds of miles south and east from its most southerly province of Hainan.
    • Beijing says its right to the area goes back centuries to when the Paracel and Spratly island chains were regarded as integral parts of the Chinese nation, and in 1947 it issued a map detailing its claims.
    • It showed the two island groups falling entirely within its territory. Those claims are mirrored by Taiwan.

    Spat over Chinese claims

    • China has backed its expansive claims with island-building and naval patrols.
    • The US says it does not take sides in territorial disputes but has sent military ships and planes near disputed islands, calling them “freedom of navigation” operations to ensure access to key shipping and air routes.
    • Both sides have accused each other of “militarizing” the South China Sea.
    • There are fears that the area is becoming a flashpoint, with potentially serious global consequences.

  • OPEC Reaches Compromise With U.A.E. Over Oil Production

    Context

    The end to the UAE’s weeks-long impasse with Saudi Arabia and Russia, a non-OPEC state, was brought about by Sunday’s deal.

    What was the deal about?

    • United Arab Emirates (UAE), said to hold the world’s largest untapped crude reserves, had demanded an increase in its oil output quotas.
    • The end to the UAE’s weeks-long impasse with Saudi Arabia, one of the world’s biggest crude exporters, and Russia, a non-OPEC state, was brought about by Sunday’s deal.
    • Under its terms, the UAE’s demand for an increase in its oil output quotas, in recognition of its higher production capacity, has been conceded.
    • The baselines have also been raised for Saudi Arabia, Russia, Iraq, and Kuwait.
    • The bloc will now step up crude production by 400,000 barrels a day starting in August.
    • The output boost is in response to rising oil prices in the wake of the rebound in economic activity.
    • The cartel had cut oil production by 9.7 million barrels a day (mbd) as oil demand fell from 100 mbd to 91.1 mbd and prices plummeted from $70 in January 2020 to around $20 in April.

    Strain in Saudi Arabia-UAE relations

    • The UAE has played hardball during the bloc’s attempts to deal with the pandemic-induced price volatility.
    • Thus, while the internal rift has been resolved for now, the danger cannot be ruled out of an increasingly economically and politically assertive UAE flexing its muscle.
    • Bilateral relations between the traditional allies, Saudi Arabia and the UAE, have been especially strained since the UAE established diplomatic ties with Israel last year and withdrew troops from the Saudi-spearheaded war in Yemen the year before.
    • A more recent arena of tension is the tariffs Riyadh has imposed on imports from the six-nation Gulf Cooperation Council.
    • Saudi Arabia will now exclude from the GCC tariff agreement goods made by companies with a workforce of less than 25% of locals and industrial products with less than 40% of the added value after their transformation process.
    • Home to a predominantly migrant population, the move could hit the UAE especially hard.

    OPEC’s concerns

    • The OPEC, forecast in 2016 that a strict implementation of the Paris climate accord could see the demand for oil peak by 2030.
    • There is an eagerness to maximise the returns on their substantial hydrocarbon resources, amid growing speculation of a peak in oil demand within sight.
    • The International Energy Agency (IEA), which in 2016 forecast a continued rise in oil consumption until the 2040s, has more recently hinted at about a 5% rise or fall relative to the demand before the pandemic within a decade.
    • OPEC’s other concerns are the stabilization of world oil prices without jeopardizing national expenditure programs, and the diversification of economies in anticipation of the unfolding global energy transition.

    Conclusion

    The latest OPEC compromise echoes growing recognition of the delicate balance between competing domestic and global priorities.

    B2BASICS

    OPEC

    • The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental organization, created at the Baghdad Conference in 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela.
    • It aims to manage the supply of oil in an effort to set the price of oil in the world market, in order to avoid fluctuations that might affect the economies of both producing and purchasing countries.
    • It is headquartered in Vienna, Austria.
    • OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.
    • Gabon terminated its membership in January 1995. However, it rejoined the Organization in July 2016.
    • As of 2019, OPEC has a total of 14 Member Countries viz. Iran, Iraq, Kuwait, United Arab Emirates(UAE), Saudi Arabia, Algeria, Libya, Nigeria, Gabon, Equatorial Guinea, Republic of Congo, Angola, Ecuador, and Venezuela are members of OPEC.