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  • Forum for India Pacific Islands Cooperation (FIPIC)

    pacific

    Central Idea: The third summit of Forum for India Pacific Islands Cooperation (FIPIC) was recently held at Port Moresby in Papua New Guinea. It was attended by PM Modi.

    What is FIPIC?

    • The FIPIC is an intergovernmental forum that facilitates cooperation and dialogue between India and the Pacific island countries (PIC).
    • It was established by India in 2014 as a platform to enhance engagement and strengthen ties with the countries of the Pacific region.
    • FIPIC serves as a mechanism for mutual collaboration, addressing shared challenges, and promoting development cooperation between India and its Pacific island partners.

    Members of FIPIC:

    • FIPIC consists of 14 member-countries.
    • They are- Fiji, Cook Islands, Kiribati, Marshall Islands, Micronesia, Nauru, Niue, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.

    History of FIPIC

    • The establishment of FIPIC reflects India’s commitment to deepening its engagement with the Pacific island nations.
    • The inaugural FIPIC summit was held in November 2014 in Suva, Fiji, where India and the Pacific island countries came together to discuss bilateral and multilateral cooperation.
    • The summit marked a significant milestone in India’s efforts to strengthen relations with the Pacific island states and promote inclusive development in the region.

    Key highlights of the Summit

    (1) Imbibing perception change

    • During the FIPIC-3 summit held in Port Moresby, PM Modi emphasized the importance of recognizing the small island nations of the Pacific Ocean as “large ocean states.”
    • PM reiterated India’s commitment to supporting the development goals of the Pacific island states.

    (2) Advancing development goals

    • India expressed unwavering dedication to supporting Pacific island states in various ways.
    • Acknowledged challenges such as climate change, natural calamities, and disruptions in food and fuel supply chains.
    • India has been a reliable supplier of essential items, including vaccines, medicines, wheat, and sugar.

    (3) Voices to lead Global South

    • Prime Minister James Marape of Papua New Guinea urged India to serve as an advocate for the Global South.
    • Requested India’s representation in key global forums like the G-7 and G-20.

    Why does India need PIC?

    • Geopolitical Significance: Strengthening ties in Indo-Pacific to bolster regional influence, promote stability, and shape regional dynamics.
    • Maritime Trade Routes: Securing access to vital sea-lanes, ensuring smooth trade flow, and protecting maritime interests.
    • Resources: Expanding access to valuable resources such as minerals, hydrocarbons, and fisheries for economic growth and energy security.
    • Economic Opportunities: Exploring untapped markets, attracting investments, and fostering trade partnerships for mutual economic benefits.
    • Climate Change and Disaster Management: Collaborating on climate resilience strategies, sharing expertise in disaster management, and supporting sustainable development.
    • Diplomatic Relations: Establishing strategic alliances, enhancing multilateral cooperation, and strengthening India’s presence in the Pacific region.
    • Indian Diaspora: Supporting and engaging with the Indian diaspora, promoting cultural ties, and leveraging their contributions for bilateral cooperation and understanding.

    Conclusion

    • The FIPIC-3 summit provided a platform for India and Pacific island nations to deepen cooperation and address shared challenges.
    • India’s commitment to supporting development goals and its role as a reliable supplier underscores its dedication to the Pacific island states.
    • India’s active engagement in global forums and advocacy for the Global South aims to amplify voices and advance interests.
    • The summit signifies a strengthened partnership, fostering mutual growth and shared progress.

     

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  • Rasht-Astara Railway Link

    rasht

    Russia and his Iran has signed a deal to finance and build the 162 km Rasht-Astara Iranian railway, the main connection in the emerging North-South Transport Corridor.

    Rasht-Astara Railway Link

    • The Rash Astra Railway is a 162-kilometer railway connecting Rasht (Iran) and Astara (Azerbaijan) on the border.
    • It is part of the International North-South Transport Corridor (INSTC) and will significantly diversify global traffic flows.
    • The railway will facilitate connections between Russian ports on the Baltic Sea and Iranian ports in the Indian Ocean and the Gulf.

    About INSTC

    • The INSTC is a 7,200-kilometer Multi-Mode Transit System connecting India, Iran, Azerbaijan, Russia, Central Asia, and Europe.
    • It promotes transportation cooperation among member states and includes ship, rail, and road routes.
    • Membership has expanded to include additional countries, and observer states and Baltic countries have expressed interest in joining.

    Significance of INSTC for India

    • Central Asia trade: India has invested in the Chabahar Port in Iran, which serves as a doorway for trade with Central Asian countries.
    • Extended connection: INSTC offers potential connections to the Baltic, Nordic, and Arctic regions.
    • Bypassing Pakistan: INSTC provides an alternate route for India to connect with Central Asia, bypassing obstacles in Pakistan.
    • Fastest freight: It reduces transit time by 40% and freight costs by 30% compared to the Suez Canal route.
    • Alternative to Suez: Russia claims the project could ultimately rival the Suez Canal in terms of trade flows.

    Challenges of INSTC

    • Challenges include limited financial support from major international institutions due to US sanctions on Iran.
    • Harmonization of tariffs and customs, increased private sector involvement, and improved informational connectivity are necessary for success.

    Conclusion

    • More financing, cooperation, political will, and strategic planning are required to realize the full benefits of INSTC.
    • Addressing demand deficits and enhancing informational connectivity are crucial.
    • Collaboration and the establishment of industrial parks and special economic zones can contribute to the corridor’s development and commercial value.

     

    Key terminologies

    Multi-Mode Transit System: A system that integrates multiple modes of transportation, such as ship, rail, and road, for efficient movement of goods.

    Joint Comprehensive Plan of Action (JCPOA): An agreement reached in 2015 between Iran and world powers regarding Iran’s nuclear program.

    Suez Canal: A major global trade route connecting the Mediterranean Sea to the Red Sea.

    Chabahar Port: A port in Iran’s Sistan-Balochistan province, providing India with access to Central Asian countries.

    Baltic Countries: Countries located in the Baltic region of Northern Europe, including Latvia and Estonia.

     

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  • WHO’s advisory on Non-Sugar Sweeteners

    sweet

    Central Idea: The World Health Organization (WHO) issued new guidelines advising against the use of non-sugar sweeteners (NSS) as a healthy alternative to sugar.

    What are Non-Sugar Sweeteners?

    • NSS are low or no-calorie alternatives to sugar, including aspartame, saccharin, stevia, and others.
    • They are marketed for weight loss and controlling blood glucose in individuals with diabetes.

    WHO’s Finding

    • The WHO analyzed 283 studies on NSS intake in adults and children.
    • Higher intake of NSS was associated with a 76% increase in obesity risk and a 0.14 kg/m2 increase in BMI.
    • No evidence of long-term benefits on reducing body fat was found, and long-term use of NSS may increase the risk of Type 2 diabetes, cardiovascular diseases, chronic kidney disease, and cancer.
    • WHO suggests that NSS should not be used for weight control or reducing the risk of diet-related non-communicable diseases.

    Concerns and Recommendations

    • India has a high obesity rate and a significant number of people with pre-diabetes.
    • Lifestyle-related Type 2 diabetes is increasing among young individuals.
    • WHO recommends focusing on a balanced diet and minimally processed, unsweetened foods and beverages.

    What lies ahead?

    • WHO’s conditional guideline requires further discussions among policymakers before adoption as national policy.
    • Efforts should be made to educate youngsters about taste preferences and healthy eating habits.
    • Doctors can now provide more confident guidance to patients regarding NSS consumption.

     

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  • RBI to pull out ₹2000 notes from active circulation

    2000

    Central Idea

    • The Reserve Bank of India (RBI) has decided to withdraw ₹2000 denomination banknotes from circulation as part of its “Clean Note Policy.”
    • The withdrawal is similar to a previous withdrawal of notes in 2013-2014 (and not the demonetization).

    Legal Tender Status of ₹2,000 Banknotes

    • ₹2000 banknotes will continue to maintain their legal tender status.
    • People can use ₹2000 banknotes for transactions and accept them as payment.
    • However, the RBI encourages depositing or exchanging the notes by September 30, 2023.

    About the ₹2000 Notes

    • The ₹2000 denomination banknote was introduced in November 2016 under Section 24(1) of RBI Act, 1934.
    • It primarily aimed to meet the currency requirement of the economy in an expeditious manner after withdrawal of the legal tender status of all ₹500 and ₹1000 banknotes in circulation at that time.

    Reasons for withdrawal

    • Demonetization purpose served: Printing of ₹2000 notes was stopped in 2018-19 as other denominations became available in adequate quantities.
    • Clean Note Policy: This aims to provide good-quality currency notes with enhanced security features and withdraw soiled notes from circulation.
    • Ending timespan: Majority of the ₹2000 notes were issued prior to March 2017 and have reached their estimated lifespan of 4-5 years.
    • Disappeared from circulation: This denomination is not commonly used for transactions, and there is sufficient stock of banknotes in other denominations to meet public requirements.

    Withdrawal process

    • People can deposit ₹2,000 notes into their bank accounts or exchange them for banknotes of other denominations at any bank branch.
    • The usual deposit process without restrictions and subject to applicable statutory provisions applies.
    • Banks have been directed to provide deposit and exchange facilities for ₹2,000 notes until September 30, 2023.
    • The facility for exchange up to ₹20,000 at a time will be available at banks and RBI’s Regional Offices from May 23, 2023.
    • Banks are instructed to stop issuing ₹2,000 notes immediately.

    Impact and financial analysis

    • Deposit accretion of banks may improve in the short term, similar to the demonetization period.
    • Improved deposit rates may reduce pressure on interest rate hikes and lead to moderation in short-term interest rates.

    Clean Note Policy

    Previously, banknotes issued before 2005 were withdrawn due to fewer security features.

    Notes issued before 2005 are still legal tender but no longer in circulation to maintain consistency with international practices.

    Key issues

    • Individuals can seek multiple exchanges in packets of ₹20,000, but this may attract attention from enforcement agencies and the Income-tax Department.
    • Large sums of money in ₹2,000 notes may be difficult to exchange.
    • It is likely to witness chaos and long queues in bank branches.

    FAQs: Exchanging and depositing ₹2,000 Banknotes

    • Individuals should approach bank branches for depositing or exchanging ₹2,000 banknotes.
    • Deposit and exchange facilities will be available at banks until September 30, 2023.
    • Exchange facilities will also be available at 19 RBI Regional Offices.
    • There is a limit of ₹20,000 for each exchange transaction.
    • Account holders can exchange up to ₹4,000 per day through business correspondents.
    • Deposits into bank accounts have no restrictions, but compliance with KYC norms and other regulatory requirements is necessary.
    • From May 23, 2023, people can approach bank branches or RBI Regional Offices to exchange their ₹2,000 notes.

     

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  • India-EU discuss ways to resolve Carbon Border Tax

    Central Idea

    Why such move?

    • The EU is India’s second-largest trading partner and export market.
    • India has expressed confidence that the intention behind CBAM was not to create a trade barrier but to promote sustainability.
    • CBAM has potential impact on India’s Steel and Aluminum sectors.

    Carbon Border Adjustment Mechanism (CBAM)

    Proposed by European Union (EU)
    Purpose To reduce carbon emissions from imported goods and prevent competitive disadvantage against countries with weaker environmental regulations
    Objectives Reduce carbon emissions from imported goods

    Promote a level playing field between the EU and its trading partners

    Protect EU companies that have invested in green technologies

     

    How does CBAM work?

    Coverage Applies to imported goods that are carbon-intensive
    Integration Covered by the EU’s Emissions Trading System (ETS), which currently covers industries like power generation, steel, and cement
    Implementation CBAM taxes would be imposed on the carbon content of imported goods at the border, and the tax rates would be based on the carbon price in the EU ETS
    Exemptions Possible exemptions for countries that have implemented comparable carbon pricing systems
    Revenue Use Revenue generated from CBAM taxes could be used to fund the EU’s climate objectives, such as financing climate-friendly investments and supporting developing countries’ climate efforts

     

    Who will be affected by CBAM?

    Details
    Countries Non-EU countries, including India, that export carbon-intensive goods to the EU
    Items Initially covers iron and steel, cement, aluminium, fertilisers, and electric energy production
    Expansion The scope of the CBAM may expand to other sectors in the future

    Advantages offered

    • Encourages non-EU countries to adopt more stringent environmental regulations, reducing global carbon emissions.
    • Prevents carbon leakage by discouraging companies from relocating to countries with weaker environmental regulations.
    • Generates revenue that could be used to support EU climate policies.

    Challenges with CBAM

    • Difficulty in accurately measuring the carbon emissions of imported goods, especially for countries without comprehensive carbon accounting systems.
    • Potential for trade tensions with the EU’s trading partners, especially if other countries implement retaliatory measures.

    Ways to ease impact of CBAM

    To minimize the impact of CBAM, India can consider several actions:

    • Set up a carbon trading mechanism: To reflect the level of development and adjust the carbon tax paid domestically when paying CBT to the EU.
    • Re-designate taxes on essential products: Make these as carbon taxes, which could help lower the net impact of CBT.
    • Create a cadre of energy auditors: To ensure fair assessment of carbon emissions for products and help the industry calculate carbon intensity and adopt cleaner technologies.
    • Start an industry awareness program: To educate sectors affected by CBT and create a dedicated group involving government, industry associations, and researchers.
    • Devise a WTO-compatible retaliation mechanism: To counter CBT, considering that developing countries exporting to developed nations will also suffer from it.
    • Sign new Free Trade Agreements (FTAs): After resolving the CBT issue, as high CBT would undermine the benefits of zero import duties.
    • Expose the perceived hypocrisy: Utilize global platforms to expose offshoring pollution of developed countries and proposing to tax imports, while not addressing their own consumption patterns.

    Conclusion

    • The CBAM is a proposed policy by the EU to reduce carbon emissions from imported goods and to promote a level playing field between the EU and its trading partners.
    • Although the CBAM has its challenges, it has the potential to incentivize non-EU countries to adopt more stringent environmental regulations and reduce global carbon emissions.

     

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  • RBI to join Greenwashing TechSprint

    Central Idea: The RBI has announced its participation in the Global Financial Innovation Network’s (GFIN) Greenwashing TechSprint.

    What is Greenwashing?

    • Greenwashing is a term used to describe the practice of making exaggerated, misleading, or unsubstantiated claims about the environmental, social, and governance (ESG) credentials of a product, service, or company.
    • It is a deceptive marketing strategy that aims to portray an organization as environmentally friendly or socially responsible, even when its actions or practices do not align with these claims.
    • It creates the perception that a company is taking steps towards sustainability or social responsibility, but in reality, it may be engaging in practices that are harmful to the environment or society.

    There are various forms of greenwashing that companies may employ to deceive consumers or investors. These include:

    1. Vague or ambiguous claims: Companies may use general statements or buzzwords without providing specific details or evidence to support their environmental or social claims. For example, stating that a product is “eco-friendly” without explaining the specific environmental benefits or certifications.
    2. Irrelevant or misleading labels: Companies may use misleading labels or certifications that give the impression of sustainability or social responsibility but lack meaningful standards or independent verification. This can confuse consumers who rely on such labels to make informed choices.
    3. Hidden trade-offs: Greenwashing can involve emphasizing one positive aspect of a product or company’s operations while ignoring or downplaying other negative impacts. For instance, a company may highlight its use of renewable energy while disregarding other harmful environmental practices.
    4. Lack of transparency: Companies may fail to provide transparent information about their sustainability practices or refuse to disclose relevant data. This lack of transparency makes it difficult for consumers to verify the accuracy of the company’s claims.
    5. Inconsistent messaging: Some companies may adopt green initiatives or promote sustainable products as a public relations exercise, without making substantial changes to their overall operations. This inconsistency between their messaging and actual practices is a form of greenwashing.

    Implications of greenwashing

    • It undermines consumer trust, as people may make purchasing decisions based on misleading information.
    • It also hampers the credibility of genuinely sustainable businesses by creating scepticism in the market.
    • Moreover, it can divert attention and resources away from genuinely sustainable companies and initiatives.

    Back2Basics: Global Financial Innovation Network (GFIN)

    • GFIN was officially launched in January 2019.
    • It was inspired by the successful collaboration between 11 financial regulators during a cross-border pilot project known as the “Global Sandbox” in 2018.
    • The pilot project demonstrated the benefits of regulatory cooperation and information sharing in fostering responsible innovation in the financial sector.
    • GFIN consists of financial regulators and related organizations from around the world.
    • The network includes regulatory authorities, central banks, and supervisory bodies.

     

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  • Indian Ocean Conference (IOC)

    indian

    Central Idea: The sixth edition of the International Indian Ocean Conference is scheduled to take place in Dhaka, the capital city of Bangladesh, starting from May 12. (Note: This should not be confused with Indian Ocean Commission.)

    Indian Ocean Conference (IOC), 2023

    • The IOC has been held annually since 2016 and has become a key platform for regional countries to discuss regional affairs.
    • It focuses on fostering regional cooperation for Security and Growth for All in the Region (SAGAR), bringing together critical states and maritime partners in the region.

    Theme:

    • The theme of this year’s conference is “Peace, Prosperity, and Partnership for a Resilient Future,” focusing on the post-Covid situation and the ongoing Russia-Ukraine war.

    Participants:

    • The conference primarily targets coastal countries of the Indian Ocean but has expanded its scope to discuss important and relevant issues in the changing global context.
    • Dignitaries attending the conference include the President of Mauritius, Vice President of Maldives, and the Indian External Affairs Minister S Jaishankar.
    • Foreign Ministers from Bhutan, Nepal, Bahrain, and Singapore, along with ministerial representatives from Seychelles, Sri Lanka, and Madagascar, will also participate.
    • Around 150 foreign guests, including representatives from D8, SAARC, and BIMSTEC, are expected to attend.

    Organizers:

    • The conference is being organized by the India Foundation in collaboration with the Bangladesh Ministry of Foreign Affairs.

    Significance of the Indian Ocean Conference (IOC)

    • The conference aims to strengthen partnerships with Indian Ocean countries, enhance regional political engagement, and facilitate decision-making in crisis situations.
    • It provides an opportunity for participating countries to discuss ongoing global events and make informed decisions for future actions.

     

     

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  • Covid is no longer an Emergency: what changes?

    Central Idea: The World Health Organisation (WHO) has declared an end to the global emergency status for COVID-19. It had in 2020 declared the disease as Public Health Emergency of International Concern (PHEIC).

    Practical effects of WHO declaration

    • The classification of COVID-19 as a global emergency is meant to warn political authorities of an extraordinary event that could constitute a health threat to other countries and requires a coordinated response to contain it.
    • For the average person, the decision to end the global emergency classification will have no practical effect.
    • WHO’s emergency declarations are typically used as an international SOS for countries who need help or to spur countries to introduce special measures to combat disease or release extra funds.

    What is PHEIC?

    Definition: Under the International Health Regulations (IHR), a public health emergency is defined as “an extraordinary event which is determined, as provided in these Regulations: to constitute a public health risk to other States through the international spread of disease; and to potentially require a coordinated international response”.

    Emergencies declared so far

    • WHO has previously declared global emergencies for outbreaks of swine flu, Zika, Ebola, polio, and monkeypox.
    • Polio was declared nearly nine years ago, and its emergency status has persisted even as officials work to wipe out the disease from a shrinking number of countries.
    • MPOX was declared a global emergency last July but technically remains a global emergency.

    What criteria does the WHO follow to declare PHEIC?

    • PHEIC is declared in the event of some “serious public health events” that may endanger international public health.
    • The responsibility of declaring an event as an emergency lies with the Director-General of the WHO and requires the convening of a committee of members.

    Implications of a PHEIC being declared

    • There are some implications of declaring a PHEIC for the host country, which in the case of the coronavirus is China.
    • Declaring a PHEIC may lead to restrictions on travel and trade.
    • However, several countries have already issued advisories to their citizens to avoid travelling to China, while others are airlifting their citizens from it.

    Is COVID-19 still a pandemic?

    • Yes, COVID-19 is still a pandemic, as the virus is here to stay and thousands of people continue to die every week.
    • WHO chief Tedros warned that the risk remains of new variants emerging that cause new surges in cases and deaths.
    • Countries need to transition from emergency mode to managing COVID-19 alongside other infectious diseases.

    When will the COVID-19 pandemic end?

    • It is unclear when the COVID-19 pandemic will end, as the virus is still a public health threat and its continued evolution could cause future problems.
    • Pandemics only truly end when the next pandemic begins.
    • COVID-19 will continue to spread among people for a very long time but at a much lower level of threat that does not require extraordinary measures taken to try to curb the virus’ spread.

     

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  • What is the Washington Declaration?

    washington

    Central Idea: The context is the recent visit of the South Korean President to the US to commemorate the 70th anniversary of US-South Korea bilateral relations. During the visit, the two countries signed the “Washington Declaration” as a nuclear deterrence strategy against North Korea’s regional aggression.

    Washington Declaration: Key Terms

    • Nuke deployment by US: According to the declaration, an American nuclear ballistic submarine would be deployed in the Korean peninsula.
    • Intel mechanism: A nuclear consultative group would be formed to formulate principles of joint response tactics, and South Korea would receive Intel from the US regarding nuclear advancements.
    • Joint training: The US will strengthen South Korea’s nuclear deterrence capabilities through joint military training programs and an annual intergovernmental simulation.
    • Deterrence creation: The declaration reaffirmed the Non-Proliferation Treaty implying that South Korea would not venture into the creation of its own independent nuclear capabilities and would instead focus on deterrence measures through an alliance-based approach.

    Implications of the treaty

    • Big power politics: While the existence of the agreement is based on the security needs of South Korea, the policy reflects big power politics where the interests of the larger power (US) takes precedence.
    • US proprietorship over the nukes: The US is the only ‘sole authority’ to use the nuclear arsenal of the US in the event of a nuclear confrontation.
    • Maintaining stability: The assurance that the US and its nuclear weapons would protect its allies by being responsible for maintaining stability in the region aligns with the larger goal of non-proliferation.

    US Stance on South Korea’s Nuclear Capabilities

    • Fouled the SK nuclear program: South Korea’s nuclear development programme supported by former president Park Chung Hee was hindered due to US pressure.
    • Strategic arms reduction: The US withdrew one hundred nuclear weapons from South Korea in the 1990s as part of their “Strategic Arms Reduction Treaty” to make North Korea unarm itself.
    • Renewed interest after North Korea’s Rise: The Nuclear Posture Review 2022 reflects a shift in the US narrative where it is now concerned about the progressing nuclear capacities of North Korea.

    Regional and domestic responses

    • China: It said it undermines the nuclear non-proliferation regime and the strategic interests of other countries.
    • North Korea: Kim Jong-Un’s sister warned that the declaration would only result in making peace and security of North-East Asia and the world be exposed to more serious danger.

    Conclusion

    • Overall, the Declaration is an important step in the direction of creating a more overt and close coordination among the US allies in the Indo-Pacific.
    • It seeks to deal with not only North Korea but also moves of China and Russia.

    Back2Basics: Non-Proliferation Treaty (NPT)

    The NPT is an international treaty signed in 1968 that aims to prevent the spread of nuclear weapons and to promote the peaceful use of nuclear energy.

    Key facts about the NPT include:

    • Members: There are currently 191 parties to the treaty, including the five recognized nuclear-weapon states (the US, Russia, China, France, and the UK).
    • Three main pillars: Non-proliferation, Disarmament and Peaceful use of nuclear energy.
    • Non-nuclear-weapon states: They are parties to the treaty agree not to acquire nuclear weapons and to accept International Atomic Energy Agency (IAEA) safeguards on their nuclear activities.
    • Nuclear-weapon states: They are the parties to the treaty agree not to transfer nuclear weapons or technology to non-nuclear-weapon states.
    • 5 year review: The treaty is reviewed every five years at a conference of parties, with the most recent review conference taking place in 2015.
    • Criticisms: NPT has been criticized for not doing enough to promote disarmament, and for perpetuating a system of haves and have-nots in which certain states have nuclear weapons while others do not. However, proponents argue that the treaty has helped to prevent the spread of nuclear weapons and to promote peaceful use of nuclear energy.

     

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  • EU’s Artificial Intelligence (AI) Act

    eu ai

    Central idea: The European Parliament has recently reached a preliminary deal on a new draft of the European Union’s Artificial Intelligence Act, after two years of drafting and negotiations.

    Regulating AI

    • The need for regulation of AI technologies has been highlighted worldwide.
    • EU lawmakers have urged world leaders to hold a summit to brainstorm ways to control the development of advanced AI systems.

    EU’s Artificial Intelligence Act

    • The aim of the AI Act is to bring transparency, trust, and accountability to AI technologies and to mitigate risks to the safety, health, fundamental rights, and democratic values of the EU.
    • The legislation seeks to address ethical questions and implementation challenges in various sectors, from healthcare and education to finance and energy.
    • It seeks to strike a balance between promoting the uptake of AI while mitigating or preventing harms associated with certain uses of the technology.
    • It aims to strengthen Europe’s position as a global hub of excellence in AI from the lab to the market and ensure that AI in Europe respects the 27-country bloc’s values and rules.
    • The Act delegates the process of standardization or creation of precise technical requirements for AI technologies to the EU’s expert standard-setting bodies in specific sectors.

    Details of the Act

    • Defining AI: AI is broadly defined as “software that is developed with one or more of the techniques that can, for a given set of human-defined objectives, generate outputs such as content, predictions, recommendations, or decisions influencing the environments they interact with.”
    • Four risk-category: The Act outlines four risk categories:
    1. Unacceptable: The use of technologies in the unacceptable risk category is prohibited with little exception, including real-time facial and biometric identification systems in public spaces, China-like systems of social scoring, subliminal techniques to distort behavior, and technologies that exploit vulnerabilities of certain populations.
    2. High: The focus is on AI in the high-risk category, prescribing pre-and post-market requirements for developers and users of such systems and establishing an EU-wide database of high-risk AI systems. The requirements for conformity assessments for high-risk AI systems must be met before they can make it to the market.
    3. Limited and minimal: AI systems in the limited and minimal risk category can be used with a few requirements like transparency obligations.

    Recent proposal on General Purpose AI

    • Recent updates to EU rules to regulate generative AI, including language model-based chatbots like OpenAI’s ChatGPT, are discussed.
    • Lawmakers are debating whether all forms of general-purpose AI will be designated high-risk.
    • Companies deploying generative AI tools are required to disclose any copyrighted material used to develop their systems.

    Reaction from the AI Industry

    • Some industry players have welcomed the legislation, while others have expressed concerns about the potential impact on innovation and competitiveness.
    • Companies are worried about transparency requirements, fearing that they may have to divulge trade secrets.
    • Lawmakers and consumer groups have criticized the legislation for not fully addressing the risks associated with AI systems.

    Global governance of AI

    • The US currently lacks comprehensive AI regulation and has taken a hands-off approach.
    • The Biden administration released a Blueprint for an AI Bill of Rights (AIBoR) that outlines the harms of AI and five principles for mitigating them.
    • China has come out with some of the world’s first nationally binding regulations targeting specific types of algorithms and AI.
    • China enacted a law to regulate recommendation algorithms, with a focus on how they disseminate information.
    • While India is still stuck with the Personal Data Protection Bill.

     

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