India and World & IR from The Hindu and other sources

[Dr. Yatri Thor]

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New highways to economic growth

While economic diplomacy in India has been going on for two decades, Narendra Modi’s test is to ensure that the number of States that reach out to the outside world increases, and that sub-regional linkages within South Asia get strengthened through political will. He spoke about the possibility of having representatives of State governments in other countries for promotion of trade and commercial relations, a practice followed by many countries, including the United States. A number of U.S. states have trade offices located in different parts of the world. Seventeen states have trade offices in China. In addition to this, sister city programmes have been used effectively by the U.S. ever since the programme was introduced in the 1950s.

State governments reaching out to the outside world began in the 1990s, post-liberalisation of the economy, when Chief Minister of Andhra Pradesh, N. Chandrababu Naidu reached out to the U.S., and was able to attract investments from IT giants like Microsoft which began investing in Hyderabad. The Karnataka Chief Minister, S.M. Krishna, also made an effort to woo foreign investors. The efforts by Mr. Naidu and Mr. Krishna helped in promoting Hyderabad and Bangalore as investment destinations. While Hyderabad was on the itinerary of U.S. Presidents Bill Clinton and George W. Bush, Bangalore was on the schedule of former Chinese Premier Li Peng, in 2001.

Mr. Modi will view the participation of border States like those on the west (Punjab, Rajasthan and Gujarat) vis-à-vis Pakistan, and those bordering Myanmar in the northeast. There is a strong possibility that in the case of countries like Bangladesh and Pakistan, security issues will overshadow matters pertaining to trade and peopleto- people contact.

[Dr. Yatri Thor]

Relations between Australia and India crossed an important milestone with last week’s signing of the Agreement on the Peaceful Uses of Nuclear Energy. Following the lead of the United States, Australia was one of the countries that strongly opposed the 1998 Pokhran nuclear tests, joining Western nations in imposing sanctions against India. But even after U.S.- India relations underwent a sea change, culminating in the signing of a civilian nuclear deal in 2005, Australian opposition to India’s nuclear programme continued.

With 40 per cent of the world’s uranium reserves, Australia is pivotal to India’s nuclear energy road map. It was only in 2011 that then Prime Minister Julia Gillard was able to overturn her Labor party’s long-standing opposition on uranium sales to India, paving the way for the signing of the agreement during Prime Minister Tony Abbott’s visit. The demand for uranium fell after the Fukushima disaster, and the push for sale to India came in large measure from the Australian mining industry.

Mr. Modi’s visit to Australia for the G-20 summit and bilateral meetings will be the first by an Indian Prime Minister in 28 years. But as Australia and India prepare to open a new chapter in their bilateral ties, neither can afford to overlook the crucial economic relationship both have with China, and in India’s case, a border dispute that still awaits resolution.

[Dr. Yatri Thor]

A significant outing in Nepal - India pledged to bolster Nepal’s energy security by agreeing to establish a two-phase products pipeline, which will eventually carry petroleum products from Raxaul in Bihar to Kathmandu. More significantly, discussions have been held to link Nepal with a gas pipeline from India. If that happens, it would lock India and Nepal into a genuine strategic embrace, opening up the possibility of Nepal benefiting from gas that India might in the future procure from a variety of overseas destinations, including Iran and Turkmenistan. India’s energy pledge to Nepal follows a decision to build a pipeline channelling diesel and kerosene to Pakistan from its refinery in Bhatinda. Besides, India is planning to send gas, transported from Dahej in Gujarat to Jalandhar, before it is sent on to Pakistan. Nepal would be one of the beneficiaries if the project fructifies; it could also be connected with the futuristic Iran-Pakistan-India (IPI) and Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline networks.

Narendra Modi’s Nepal trip seemed to be personal, political and geopolitical, all rolled into one.

[Dr. Yatri Thor]

A new template for India-Nepal ties - India has been ready to receive Nepalese proposals to revise the antiquated 1950 Treaty of Peace and Friendship — unequal principally because of the one-way privileges it accords to Nepalese nationals living and working in India. Other tasks include resumption of the Boundary Working Group, signing of the finalised strip maps, and signature or ratification of a host of treaties and letters of exchange ranging from extradition and mutual legal assistance to transit, railways and communications. India believes the future cooperation agenda can be energised in two broad ways: first, by introducing changes that improve the lives of people, and second, by altering its strategic setting by focussing on the big infrastructure sector issues of energy, ecology and connectivity that have not been addressed so far. About a fifth of Nepal’s 28 million resident population lives and works in India. The open border is a “safety-valve” for Nepal. Without compromising India’s security, the challenge is to turn it into a bridge, not a barrier. The big idea on the table is for Nepal to simply tap power from the enormous body of waters Nepal can become, by far, the richest country of the subcontinent, on condition that it harnesses this resource. There is recognition in Nepal today that this can transform the social and fiscal dynamics of Nepal by its employment, energy and revenue generation potential. - investment of $2 million/ MW, the foreign direct investment (FDI). If half of Nepal’s hydro potential was to be harnessed, annual revenues could top $40 billion, over $100 million a day. Other big ideas include Indian partnership in cooperative watershed and environment management for the protection of the Himalayan ecosystem, including soil conservation, re-forestation, and more rational land use for horticulture and bio-agriculture. For its transformation, Nepal needs energy, connectivity, a new Constitution that is durable, inclusive and democratic, and a political disposition that unfetters its economy and supports the entrepreneurial talent of its people.

Prime Minister Narendra Modi’s visit to Kathmandu in early August. Ms. Swaraj travelled to the Nepalese capital to reignite after a gap of 23 years, the Indo-Nepal Joint Commission, the appropriate forum for taking stock of the entire gamut of India-Nepal relations. She also engaged with all important segments of the political spectrum, including UCPN-Maoist chief and Leader of the Opposition Pushpa Kamal Dahal, apart from President Ram Baran Yadav and Prime Minister Sushil Koirala. Mr. Modi’s visit follows a renewed thrust imparted by the new government to the South Asian Association for Regional Cooperation (SAARC). The timing of Mr. Modi’s visit demands a recalibration, including the exploration of an imaginative India-Nepal-China trilateral partnership, in areas such as hydropower, with India as a possible end-user. Nepal could also become a candidate to benefit from the recently formed BRICS bank, opening the prospects of convergence between SAARC and BRICS.- the Nepal government would sign the much-delayed project development agreement (PDA) for the 900MW Upper Karnali hydropower project with the Indian multinational, GMR, during Prime Minister Narendra Modi’s visit.

[Dr. Yatri Thor]

India at WTO


For a WTO stand with PDS in hand

India should continue with its stand at the WTO to demand a permanent solution to the issue of public stockholding for food security before the protocol on trade facilitation is signed. It should also resist efforts to dismantle the Public Distribution System. India argued that the adoption of the protocol on trade facilitation should be postponed till a permanent solution to public stockholding for food security had been worked out. Despite intense pressure from the developed countries, including the United States, India stuck to its stand even as the deadline for adopting the protocol on TF passed on July 31.

Even though the developing countries have generally backed measures to enhance food security, support for India’s stand was not easy to come by this time round. Only Cuba, Bolivia and Venezuela stood with India at the WTO. Later the U.N. International Fund for Agricultural Development came out in support of India’s position.

India faces serious problems of hunger and under-nutrition. According to National Sample Survey data, average calorie and protein intake have been steadily declining over the past few decades. - Given this enormous burden of hunger and under-nutrition, it is only natural that India places a high priority on food security. A key mechanism to address the problem of hunger and under-nutrition has been the Public Distribution System (PDS). It involves the procurement of food grains from farmers, transporting and storing them in warehouses and then distributing them to consumers. In recent years, the price paid to farmers — known as minimum support price (MSP) — has been higher than open market prices. Also, the price at which the food grains are distributed to consumers — known as the issue price — has been lower than the market price. - Hence, PDS involves providing a subsidy to both farmers and consumers. The subsidy to farmers, estimated to be about 20 per cent of the overall food subsidy, provides income support to poor agricultural families. The subsidy to consumers, by providing staple food grains at affordable prices, is necessary to increase consumption of poor families and address the widespread problem of hunger and under-nutrition.

According to Article 6 of the Agriculture Agreement, providing minimum support prices for agricultural products is considered distorting and is subject to limits. The subsidy arising from “minimal supports” cannot exceed 10 per cent of the value of agricultural production for developing countries. - actual prices have increased several-fold since 1986-88. India has argued that the reference price used in the calculation should be moved forward on a rolling basis. - A major and genuine fear of WTO members is that India will dump its huge stock of food grains on the world market, crashing food prices. -- First, the coverage, reach and effectiveness of the existing PDS have improved over time. Second, there is significant variation in the performance of the PDS across States. While some States like Himachal Pradesh, Kerala and Tamil Nadu have consistently performed well, others like Chhattisgarh and Uttarakhand have improved significantly. Thus, arguments for dismantling the PDS are wrong-headed.

[Dr. Yatri Thor]

India at WTO

India is receiving a lot of flak for its stance at the meeting of the World Trade Organisation’s (WTO) General Council in Geneva with epithets such as “deal-breaker” being hurled at it. The country is being accused of sabotaging the first real agreement forged by the trade body in 19 years on trade facilitation with its rigid stance on the issue of food subsidy.

An agreement on trade facilitation (TFA), which is aimed at easing customs rules and simplifying procedures, was reached at the 9th Ministerial Round in Bali in December last year after the developed world agreed to find a permanent solution to the contentious issue of stockpiling of food grains by the developing countries by 2017.The Bali Declaration also provided for a “peace clause” whereby countries such as India could continue with their food subsidy programmes until then.

India, which supports the TFA, has questioned the current limit of “trade distorting” subsidy which is 10 per cent of the value of food grains output in a year with the base year for prices set at 1986-88. Its position is that the limit does not account for inflation and currency depreciation and the base year needs to be reset to a later period. This is a fair argument as it concerns the critical issue of food security for a country that is home to a quarter of the world’s hungry.India has signalled that it is willing to return to the table and has suggested a permanent “peace clause” until a final understanding on subsidy is reached. Extending the TFA deadline by another six months will not cause harm, especially if it leads to a final agreement on all issues.

[Dr. Yatri Thor]

India has formally signed a free trade agreement for services and investments with ASEAN. Philippines, now the only ASEAN country yet to sign the pact, is also expected to do so soon. All ASEAN members — Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam — are expected to get the agreement ratified by their Parliaments after which it will be formally adopted during the next India–ASEAN summit later this year. The services agreement will open up opportunities of movement of both manpower and investments. The pact will allow India to leverage its competitive edge in the areas of finance, education, health, IT, telecommunications and transport. This will be especially helpful for balancing India’s deficit with ASEAN countries in trade of goods. The India–ASEAN Agreement on trade in goods was operationalised in 2010.

[Dr. Yatri Thor]

Al-Qaeda’s move to create a South Asian wing should be viewed in the context of its patchy subcontinental record. Up to 80 Indians have reportedly joined jihadists in Syria and Iraq, but the figure is only slightly larger than that for tiny countries like Belgium, smaller than that for faraway Australia, and pales in comparison with the massive recruitment from countries like Britain and France. Over 6,000 Indian Muslims did apply for visas to Iraq but these were Indian Shias who wanted to fight against Sunni jihadists.

The “Pakistanization” of the group because of the U.S. drone strikes in Pakistan, which leapt upward between 2008 and 2010, though declining thereafter, decimated al-Qaeda’s largely Arab leadership and elevated Pakistanis into senior positions. -- it’s also being eclipsed by one of its own splinters, the Islamic State (IS). IS was kicked out of al-Qaeda in February after it defied Zawahiri’s orders and tried to take over the Syrian rebellion. - for now, al-Qaeda looks sluggish, stale, and irrelevant.

Differences understood to be ideological and tactical acquire real urgency in the jihadi world when one group is perceived to be more successful in its strategy and propaganda. And here success is measured in terms of military victory, which ISIS has recently achieved whereas al-Qaeda has not.

[Dr. Yatri Thor]

Strategic networking in the Indo-Pacific

India’s ‘look-east’ policy is maturing, with diplomatic and political linkages built up with Asian forums providing the Modi government a foundation to establish overlapping non-formal networks based on strategic convergences. Outreach with Japan and Australia are the building blocks.

Recently Prime Minister Narendra Modi’s diplomatic outreach covered two established democracies of the Asia-Pacific, Japan and Australia. The outcomes reflect the geostrategic shift from the Euro-Atlantic to the Indo-Pacific and together, the two engagements provide interesting insights into Mr. Modi’s foreign policy agenda and diplomatic style. The personal chemistry between Japanese Prime Minister Shinzo¯ Abe and Mr. Modi was evident during Mr. Modi’s Japan visit. They come from very different socio-economic backgrounds but their shared sense of “nationalism” and “destiny” has drawn them to discover strategic convergences in their respective world views. Both believe in the “Asian century” and are convinced that Japan as a “normal state” and an economically resurgent India can, together, be a force of stability and prosperity in the region. This sentiment can nurture a potential defence relationship, which for the first time finds prominent mention in the Tokyo Declaration. But negotiators were unable to bridge differences on the civil nuclear cooperation agreement that has been on the table now for over two years. The Treaty on the Non-Proliferation of Nuclear Weapons (NPT), which India cannot be a party to, remains an article of blind faith for Japan. Therefore, it was a breakthrough in 2011 when Japan agreed to open negotiations with us on civil nuclear cooperation. Yet, there is a long way to go, as three issues remain divisive. Japan wants India to accept inspections over and above what India has agreed to with the International Atomic Energy Agency (IAEA), under “national flagging,” which India finds unacceptable. India seeks to retain the right to reprocess spent fuel while providing assurances that this will only be under safeguards and for peaceful purposes, whereas Japan would like India to accept restrictions on its basic right to reprocess. India cannot accept more obligations than those negotiated in 2008 with the U.S., which provided for the Nuclear Suppliers Group (NSG) waiver.

Coincidentally, the highlight of Australian Prime Minister Tony Abbott’s visit to India was also the signing of the Civil Nuclear Cooperation Agreement, under negotiation since 2011. Mr. Abbott’s statements about India — calling it “a model international citizen,” “a country that threatens no one and is a friend to many” and “the world’s emerging democratic superpower” — marks a change in Australian perceptions. Australia supported the NSG waiver for India in 2008.

[Don Quixote]

Sri Lankan fishers' crisis.

Sri Lankan fishers have one more woe beyond the trawlers from Tamilnadu, in the form of a EU ban on seafood exports from Sri Lanka from Jan 2015. This will have a severe impact on the Lankan economy as about 20% of the population is dependent on fishing and 70% of Lankan seafood exports are destined to EU. The EU argues that Sri Lanka has failed to cooperate in eliminating illegal, unreported and unregulated (IUU) fishing, because vessels under Lankan flags were found fishing in Exclusive Economic Zones of other countries.


The question that begs asking is which European country? The British Indian Ocean Territory of Diego Garcia (US Military base on Brit island) provides Britain a large EEZ in the middle of Indian Ocean because UNCLOS provides for 200 nautical miles territorial extension into water. Thus, while the Brits only gain financially fromt eh fishing operations in Indian Ocean, without engaging any local populace, they are badly hurting the small fishers of southern Lanka, while their northern brethren are already impacted by Indian trawlers. From the Lankan perspective, the irony is not missed as EU has obiously not taken any such action against India for its fisherman fishing in Lankan waters. To add to the woes of the small fishers, the Lankan government's collobaration with larger fishing companies from South East asia with powerful trawlers are eating into the limited fish sources and exmployment opportunities of the fishermen.The encroachment by Indian trawlers; the Sri Lankan companies’ joint ventures with East Asian vessels; and the EU ban have a common impact. They cripple small-scale fishers who are powerless in the face of decisions taken at the level of states and international forums.

Src: www.thehindu.com/opinion/op-ed/no-country-for-small-fishers/article6561568.ece 

[Dr. Yatri Thor]

India-USA

President Obama right at the end to accompany Mr. Modi to the Martin Luther King Memorial came as a poignant signal that the U.S. genuinely wants to move ahead with India’s newly elected leader. Secondly, U.S. business, clearly disaffected by the difficulties they face in doing business with India, have also signalled its desire to renew investments. The fact that the two countries issued a vision document, the two leaders penned a joint op-ed, and then came out with a comprehensive 3,500-word Joint Statement, speaks volumes for the breadth of discussions between them in a short period.

On issues where the countries agree, such as defence and energy, they show only incremental progress, without any big announcements. On issues where the countries differ, like the nuclear deal, trade and WTO, they seem to have deferred negotiations, indicating that no progress was made in resolving them. - to dismantle terror groups including al-Qaeda, Lashkar-e Taiba, Jaish-e- Mohammad, the D-Company, and the Haqqanis. The statements seem most opaque when it comes to spelling out a shared worldview for India and the U.S.: while referring obliquely to China’s aggression in the South China Sea, ‘global crises’ like the situations in Iraq and Syria, and cooperation in Afghanistan, and a confounding, long reference to North Korea (DPRK), they list no action or step that the two countries hope to take together. And while both sides made it clear ahead of the talks that the U.S. would request, and India would discuss, the possibility of joining the anti-ISIS coalition, there is silence on where those discussions led.

[Don Quixote]

On ISIS:


Al-Baghdadi, a small time preacher in Iraq’s Diyala province who was a minor member of Iraq’s armed forces and then the insurgency against the Americans, is now a major figure in the Arab world. This role could have been taken by the phoenix that arose in the squares of the Arab capitals in 2011. That was a social force that did not soak its rhetoric in blood and in hatred of minorities. It was, however, defeated at the hands of the perfidy of the Gulf Arabs and their Western allies.

More: www.thehindu.com/opinion/op-ed/continent-of-the-islamic-state/article6605368.ece

[Lisbeth Salander]

India-ASEAN

• India’s agreements with Asean offer less market access and cover fewer issues than Asean’s agreements with other countries in the region.An inherently defensive approach to trade negotiation makes the concluded agreements counterproductive. India refrained from yielding as much market access as was demanded in the goods trade negotiations. The impression stuck and Asean was less generous when it came to services.
  
• India’s trade negotiations with Southeast Asia never took into account structural realities. Pushing manufactured exports into Asean markets requires Indian producers to be able to import cheap inputs from the region. But protective demands from domestic producers did not let that happen. As a result, exports have hardly flourished through the Asean FTA. 
• The services FTA with Asean has been concluded but is yet to come into force. India’s biggest thrust in all service sector negotiations is to get deeper market access for its professionals. The problem is that while bilateral trade agreements might formalise reciprocal access, actual movement of professionals is much more difficult to achieve. Several roadblocks impede such movement. The most important among these is mutual recognition of qualifications.
  
• Mutual recognition agreements (MRAs) are essential for skilled people to be able to migrate. Recognition needs to be agreed on by the certifying agencies from different countries. But negotiating MRAs between different agencies is difficult because of protectionist pressures. Allowing technical professionals from foreign countries to practise on home turf is an onerous challenge.

-- IE

[Don Quixote]

On Oil Pricing and the role of Saudis' insecurity

Oil prices in the international markets have fallen to 4 year lows at below $80 a barrel. The price drop has been triggered by multiple factors including:

1. Shale Oil boom in the US
   
2. Slow recovery of world economy from the depression.
3. Saudis maintaining high oil production to beat Iran, Russia, economically and make its crude more attractive than shale oil.

The Saudis feel inherently threatened by a resurgent Iran which was able to sign a $7bn deal with the West, letting it continue to enrich Uranium (upto 5%) for power generation and medical purposes, in return for allowing inspections of its facilities, neutralizing its weapon grade plutonium, etc. Further, with growing menace of ISIS, the western priorities are changing with regard to Syria (Russian Ally) which can be seen as an ally to fight ISIS. Both Russia and Iran earn a large part of their exports from crude, keeping whose price low can help Saudis keep their influence intact.

Src: www.bbc.com/news/world-middle-east-30289546

[Deleted]

Dec 4, 2014 23:29:13 GMT 5.5 Don Quixote said:

On Oil Pricing and the role of Saudis' insecurity

Oil prices in the international markets have fallen to 4 year lows at below $80 a barrel. The price drop has been triggered by multiple factors including:

1. Shale Oil boom in the US
   
2. Slow recovery of world economy from the depression.
3. Saudis maintaining high oil production to beat Iran, Russia, economically and make its crude more attractive than shale oil.

The Saudis feel inherently threatened by a resurgent Iran which was able to sign a $7bn deal with the West, letting it continue to enrich Uranium (upto 5%) for power generation and medical purposes, in return for allowing inspections of its facilities, neutralizing its weapon grade plutonium, etc. Further, with growing menace of ISIS, the western priorities are changing with regard to Syria (Russian Ally) which can be seen as an ally to fight ISIS. Both Russia and Iran earn a large part of their exports from crude, keeping whose price low can help Saudis keep their influence intact.

Src: www.bbc.com/news/world-middle-east-30289546

related questions:

1. Geopolitical shifts indicated by falling oil prices in the global markets are important to notice. Comment
2. Comment on the impact of the emergence of shale gas as a factor in international politics.

[Don Quixote]

There's no separate thread for GS I / World History currently, hence adding it here:

Well written note on Japanese Imperialism: qr.ae/qo1cY