DAILY CURRENT AFFAIRS (JULY 07, 2022)

THE INDIAN POLITY AND GOVERNANCE

1. WHY DOES RAJYA SABHA HAVE ‘NOMINATED’ MPS, AND WHO GETS NOMINATED?

THE CONTEXT:The government on nominated musician Ilaiyaraaja, track-and-field icon PT Usha, Telugu screenwriter V Vijayendra Prasad, and philanthropist and spiritual leader Veerendra Heggade to Rajya Sabha. The four new entrants to Rajya Sabha belong to four southern states, Tamil Nadu, Kerala, Andhra Pradesh, and Karnataka.

THE EXPLANATION:

Ilaiyaraaja, Usha, Prasad, and Heggade will serve until July 2028. The Upper House of Parliament now has nine nominated members — the other five being lawyer Mahesh Jethmalani, dancer Sonal Mansingh, politician Ram Shakal, author and columnist Rakesh Sinha, and former Chief Justice of India Ranjan Gogoi. Three nominated positions are currently vacant.

What does the Constitution say about nominated members?

• Article 80 of the Constitution (“Composition of the Council of States”) says “The Council of States shall consist of (a) twelve members to be nominated by the President in accordance with the provisions of clause (3); and (b) not more than two hundred and thirty-eight representatives of the States and of the Union territories.”
• Clause 3 of the article layer down the qualifications for the appointment: “The members to be nominated by the President…shall consist of persons having special knowledge or practical experience in respect of such matters as the following, namely:—
o Literature, science, art and social service.”
• Since Rajya Sabha was constituted in 1952, a total 142 individuals have been nominated as its members. The list includes scholars, jurists, educationists, historians, scientists, litterateurs, journalists, engineers, economists, administrators, artistes, sportspersons, social workers, and politicians, mostly with loyalty to the government of the day.
What is the role of nominated members?
• Nominated members of Rajya Sabha enjoy all the powers and privileges to which the elected MPs are entitled. They can take part in the proceedings of the House in the normal manner, even though there has been criticism that several nominated members have poor attendance and do not appear to show much interest in legislative work.
• In this context, cricketer Sachin Tendulkar, actor Rekha, and businesswoman Anu Aga have faced criticism in recent years.
• Nominated members are not allowed to vote in the election of the President.They do have the right to vote in the election of the Vice-President, however.
ADD TO YOUR KNOWLEDGE
Why are members nominated to the Rajya Sabha?
• Pitching for a provision in the Constitution to allow eminent persons to be nominated to the Council of States, N Gopalaswami Ayyangar, who was part of the Constitution Drafting Committee, said: “We also give an opportunity, perhaps, to seasoned people who may not be in the thickest of the political fray, but who might be willing to participate in the debate with an amount of learning and importance which we do not ordinarily associate with the House of the People (Lok Sabha).”
• The first list of 12 Presidential nominees perfectly represented this sentiment: Zakir Hussain, who later became the President of India; historians Kalidas Nag and Radha Kumud Mookerji; the eminent Hindi poet Maithilisharan Gupt; Gandhian author Kakasaheb Kalelkar; scientist Satyendranath Bose; social worker N R Malkani; danseuse Rukmini Devi Arundale; Gandhian scholar J M Kumarappa; jurist Alladi Krishnaswami; actor Prithviraj Kapoor; and medical scientist Major General S SSokhey.

2. EXPLAINED: A SHORT HISTORY OF THE DEMAND FOR ‘DRAVIDA NADU’, ITS EVOLUTION

THE CONTEXT:A recent controversial statement by the MP in Tamil Nadu triggered criticism for demanding “Dravida Nadu”.

THE EXPLANATION:

  • E V Ramasamy ‘Periyar’ (1879-1973) had started the Self Respect Movement to “redeem the identity and self-respect” of Tamils. He envisaged an independent Dravida homeland of Dravida Nadu, comprising Tamil, Malayalam, Telugu and Kannada speakers, and launched a political party, Dravidar Kazhagam (DK), to pursue this goal.
    C N Annadurai (1909-1969) was the last Chief Minister of Madras state, and the first Chief Minister of Tamil Nadu. He founded the Dravida Munnetra Kazhagam (DMK) after breaking with Periyar which ultimately chose to go slow on the demand for an independent Dravida Nadu and instead worked for greater autonomy for Tamil Nadu and better cooperation among the southern states.
    The demand for Dravida Nadu
    • The movement for a separate Dravida country has passed through several stages and meanings. The early 20th century agitations against the colonial government of Madras state (of which, along with Tamil Nadu, portions of modern-day Andhra Pradesh, Karnataka, and Kerala were part) often included expressions of regional aspirations.
    • The South Indian Liberal Federation, popularly known as Justice Party, which was founded in 1917 by Sir Pitti Theagaraya Chetty, Dr T M Nair, and Dr C Natesa Mudaliar, was the first to raise the flag of anti-Brahminism, and oppose the caste system that put Brahmins at the top of the social hierarchy.
    • At the time, the presence of Brahmins in the Madras government was disproportionately higher than their population in the state, and the Justice Party demanded opportunities for those lower in the caste hierarchy.
    • Periyar, the founder of the Self-Respect Movement (1925), was both anti-caste and anti-religion. He advocated major social reforms, including equality for women in society, and supporting birth control for women for their health and well-being. He also opposed the domination of Hindi and emphasised the distinct cultural identity of the Tamil nation.
    Legal Picture for such Statement:
    • To control such secessionist threats, through the 16th Amendment, the words “the sovereignty and integrity of India” were added to Article 19(2) of the Constitution. After this amendment, raising such secessionist threats became unconstitutional and illegal.
    • Article 19 of the Indian Constitution ensures freedom of speech and expression but to curb such secessionist threats, a restriction was added through the 16th amendment, as inserted in Article 19 (2), “Nothing…..shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred…..In the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence.”
    • The 16th amendment, also called the anti-secession bill, banned secessionist advocacy and was a clear warning to secessionists like Anna who had to suspend the demand for a separate country.
    • Also, as explained by the Supreme Court of India and many legal experts, calling for “freedom of a state/UT” verbally is not a crime until it is followed by violence and related action on the ground.
    The 16th amendment Act of 1963:
    The Sixteenth Amendment Act of 1963 has two provisions as follows:
    1. Empowered the state to impose further restrictions on the rights to freedom of speech and expression, to assemble peacefully and to form associations in the interests of sovereignty and integrity of India.
    2. Included sovereignty and integrity in the forms of oaths or affirmations to be subscribed by contestants to the legislatures, members of the legislatures, ministers, judges and CAG of India.

3. THE GLOBAL LIVEABILITY INDEX 2022

THE CONTEXT:The European Intelligence Unit (EUI) recently released the Global Liveability Index 2022. It ranked 173 cities on the basis of their liveability or living conditions, which was determined by five factors — stability, healthcare, culture and environment, education, and infrastructure.
THE EXPLANATION:

About the Economist Intelligence Unit(EIU)
The Economist Intelligence Unit (EIU) was created in 1946. It is the research and analysis division of The Economist Group and the world leader in global business intelligence.
• For the first time, included five Indian cities; Delhi, Mumbai, Chennai, Ahmedabad, and Bangalore.
• All five scored poorly, ranked between 140 and 146. Delhi was ranked the best at 140, followed by Mumbai at 141, Chennai and Ahmedabad at 142 and 143 respectively. Bangalore scored the least out of the five Indian cities, ranking 146th with a score of 54.4 out of 100. This came as a shocker after the silicon valley of India topped the ‘Ease of Living Index 2020’, which was released by the Ministry of Housing and Urban Affairs.
• The city received a score of 46.4, out of 100, in infrastructure. This score is the lowest among all Indian cities. Pakistan’s largest city Karachi was one of the five least livable cities in the world in the index, but it has still scored better than the IT capital of India in terms of infrastructure. The Silicon Valley of India scored equal to Lagos in Nigeria, the third-least livable city in the world, in terms of infrastructure.
• The infrastructure score is based on the quality of roads, public transportation system, international links, energy provision, telecommunications, water, and availability of good quality housing.
• When ranking, out of the five factors, the EUI attaches the highest weightage to stability and culture and environment, which account for 25% each. It is followed by healthcare and infrastructure with 20% each and education with 10%.
• The most livable city according to the index is Vienna. Western European cities along with a few Canadian cities dominate the top ten ranks. The Syrian capital, Damascus is the least livable city in the world.

THE ENVIRONMENT, ECOLOGY AND CLIMATE CHANGE

4. RESTORING BANNI GRASSLANDS, GUJARAT BATTLES INVASIVE TREE SPECIES

THE CONTEXT:Recently, Gujarat forest department said that they will restore 10,000 hectares of the Banni grasslands in the coming year, and every year in the coming decade.
THE EXPLANATION:
• The state plans on restoring at least 76,000 hectares of this 2,497 sq km grassland which is a high-biodiversity area — it has already restored 10,000 hectares over the past couple of years.
• The Banni grassland was also flagged by Prime Minister, in his keynote speech at the United Nations High Level Dialogue on Desertification, Land Degradation and Drought last year, as part of India’s endeavour to reach the target of restoring 26 million hectares of degraded land by 2030.
• The grasslands of Gujarat constitute about 4.33 per cent (8,490 sq km) of the total geographical area, distributed in eight districts and three different climatic regions — Kutch, Saurashtra and central Gujarat. A majority of grasslands in Gujarat (41 per cent) are found in the Kutch district. Banni grassland was declared a Protected Forest in 1955, under the Indian Forest Act, 1927.
Variety of Species
Besides having 40 species of grass and 99 species of flowering plants, Banni is also home to the Indian wolf, jackal, Indian fox, desert fox, desert cat, caracal, hyena, chinkara, Nilgai, wild boar, Indian hare, common monitor lizard — and the cheetah before it became extinct.Banni also has 273 bird species and in years of good rainfall, is home to thousands of migratory birds.
Invasive Alien Species
• On analysis of the data over last four decades, it was found that in the year 1989, the area was dominated with grasslands covering 54.57 per cent of the area followed by saline areas devoid of vegetation or sparsely distributed vegetation covering 27.30 per cent and Prosopis Juliflora, an alien invasive species, covering only 15.72 per cent of the area.
• The Land Use Land Cover (LULC) assessment of the grassland over a 10 years interval revealed that grassland areas over the period gradually reduced while in the same period Prosopis Juliflora dominant area increased encroached to more than 30 per cent.
• Therefore, within a gap of 20 years, the Prosopis Juliflora dominant areas doubled in Banni,” stated the project proposal of the Gujarat forest department.
• According to Environmentalists “The grasslands have native trees like Acacia nilotica, Salvadora persica and Capparis decidua which are protected under Section 26 in the Indian Forest Act, 1927. These have been destroyed to grow fodder.
• Banni has sensitive soil ecology where the sweet soil rests on salinity only 2 to 3 metres below the ground and any disturbance of the soil brings up salinity destroying the rich productivity of the land”.

VALUE ADDITION:
What is Invasive Alien species?
• Invasive alien species are plants, animals, pathogens and other organisms that are non-native to an ecosystem, and which may cause economic or environmental harm or adversely affect human health.
• In particular, they impact adversely upon biodiversity, including decline or elimination of native species – through competition, predation, or transmission of pathogens – and the disruption of local ecosystems and ecosystem functions.

THE ECONOMIC DEVELOPMENT

5. TO STEM RUPEE SLIDE, BOOST FOREX INFLOWS, RBI EASES FPI, NRI DEPOSIT NORMS

THE CONTEXT:The Reserve Bank of India (RBI) announced a series of measures, including relaxation in foreign investment in debt, external commercial borrowings, and Non-Resident Indian (NRI) deposits to prevent the slide in the rupee and shore up foreign exchange reserves.
THE EXPLANATION:
• With the rupee depreciating 4.1 per cent to 79.30 against the US dollar in the current financial year till, FPIs (foreign portfolio investors) pulling out Rs 2.32 lakh crore in six months, and $50 billion being shaved off forex reserves over the last nine months (2022), the measures are expected to further diversify and expand the sources of forex funding, mitigate volatility, and dampen global spillovers.
• The RBI said it has been closely and continuously monitoring the liquidity conditions in the forex market and has stepped in as needed in all segments to alleviate dollar tightness with the objective of ensuring orderly market functioning.
• While India’s foreign exchange reserves stood at US$ 593.3 billion on June 24, 2022, the new measures are expected to boost inflows as nearly a third of India’s external debt of $ 621 billion will be due for maturity in the coming months.
• In a significant move, RBI has allowed banks temporarily to raise fresh Foreign Currency Non-Resident Bank i.e., FCNR(B) and Non-Resident External (NRE) deposits without reference to the current regulations on interest rates, with effect from July 7. This relaxation too will be available till October 31, 2022.
• The RBI decided to increase the limit under the automatic route for external commercial borrowing (ECB) from $ 750 million or its equivalent per financial year to $ 1.5 billion. The all-in cost ceiling under the ECB framework is also being raised by 100 basis points, subject to the borrower being of investment grade rating.
• In another measure, the RBI has decided that category one banks can utiliseoverseas foreign currency borrowing (OFCBs) forlending in foreign currency to entities for a wider set of end-use purposes, subject to the negative list set out for external commercial borrowings (ECBs). The measure is expected to facilitate foreign currency borrowing by a larger set of borrowers who may find it difficult to directly access overseas markets.
VALUE ADDITION:
EXTERNAL COMMERCIAL BORROWING (ECB):
• It is a commercial loan raised by an eligible resident entity from recognised non-resident entities.
• These foreign sources could be:
1. Commercial bank loans
2. Buyers’ credit and suppliers’ credit
3. Securitised instruments such as Floating Rate Notes and Fixed Rate Bonds etc.
4. Credit from official export credit agencies and commercial borrowings from the private sector window of Multilateral Financial Institutions.
• Commercial borrowings account for the largest component of India’s external debt.

THE PRELIMS PERSPECTIVE

5. ONE WORD A DAY- TIHAN

THE CONTEXT:Union Minister of State (Independent Charge) Science & Technology inaugurated first-of-its-kind, state-of-the-art “Autonomous Navigation” facility to develop unmanned ground and aerial vehicles in the IIT Hyderabad campus- “Technology Innovation Hub on Autonomous Navigation” or TiHAN.
THE EXPLANATION:
It is seen as one of the steps toward India’s vision of ‘Atmanibhar Bharat’, ‘Skill India’ and ‘Digital India’.
What is TiHAN?
• Funded by the Union Ministry of Science & Technology at a budget of Rs 130 crore, the “Technology Innovation Hub on Autonomous Navigation” is a multidisciplinary initiative, which aims at making India a global player in the futuristic and next-generation “Smart Mobility” technology.
• The multi-departmental initiative includes researchers from electrical, computer science, mechanical and aerospace, civil, mathematics, and design at IIT-H. There is also collaboration and support from reputed institutions and industry.
• The focus will be on solving various challenges hindering the real-time adoption of unmanned autonomous vehicles for both terrestrial and aerial applications.
• It will facilitate research grounds to investigate the functioning of unmanned and connected vehicles in a controlled environment by replicating different situations.
• It should be noted that there is no such testbed facility in India to evaluate the autonomous navigation of vehicles.
• TiHAN aims to fill this gap by developing a fully functional and exemplary testbed facility dedicated to connected autonomous vehicles (CAVs).

THE PRELIMS PRACTICE QUESTIONS

QUESTION OF THE DAY

Q. Which of the following statements is incorrect with respect to TiHAN?
a) It is the state-of-the-art facility at IIT-Hyderabad.
b) It is funded by Ministry of Education in collaboration with reputed institutions and industry.
c) It is a body scanning mechanism developed by IIT Madras
d) It is term seen in news related to automation navigation.

ANSWER FOR 6TH JULY 2022

ANSWER: A
EXPLANATION:
Nairobi Flies:
• Usually flies do not bite, but if disturbed while sitting on anyone’s skin, they release a potent acidic substance that causes burns.
• This substance is called pederin, and can cause irritation if it comes in contact with the skin, leading to lesions or unusual marks or colouring on the skin. The skin begins to heal in a week or two, but some secondary infections can occur, especially if the victim scratches the irritated skin.




Today’s Important Articles for Geography (07-07-2022)

  1. The West must realise India’s climate policy choices are complex READ MORE
  2. Water Scarcity: EU Countries Forced to Restrict Drinking Water Access READ MORE



Today’s Important Articles for Pub Ad (07-07-2022)

  1. Across democracies, supreme courts’ legitimacy, autonomy are under question READ MORE
  2. Find common ground for police reforms READ MORE
  3. Who regulates online speech? READ MORE
  4. EDUCATORS TO DISCUSS NEP IMPLEMENTATION READ MORE
  5. Media at Crossroads READ MORE
  6. Reproductive Justice: Constitutional Issues Plaguing ART and Surrogacy Laws in India READ MORE



WSDP Bulletin (07-07-2022)

(Newspapers, PIB and other important sources)

Prelim and Main

  1. P T Usha and Ilaiyaraaja among four nominated to Rajya Sabha READ MORE
  2. Need MSP till markets get competitive, but should not be given through procurement: Niti Aayog member READ MORE
  3. Gotabaya turns to Putin for urgent fuel supplies for Sri Lanka READ MORE
  4. To stem Rupee slide, boost forex inflows, RBI eases FPI, NRI deposit norms READ MORE
  5. Explained: What are critical minerals, the centerpiece of a new India-Australia collaboration? READ MORE
  6. Explained: Why Twitter has moved court against govt’s content-blocking orders READ MORE
  7. Sub-categorisation of OBCs: Govt extends term again without panel asking for it READ MORE
  8. Global Liveability Index 2022: Here is why Bangalore was ranked ‘least liveable’ city in India READ MORE

Main Exam    

GS Paper- 1

  1. Unity and diversity: Our obsession with diversity misses the point READ MORE

GS Paper- 2

POLITY AND GOVERNANCE

  1. Across democracies, supreme courts’ legitimacy, autonomy are under question READ MORE
  2. Find common ground for police reforms READ MORE
  3. Who regulates online speech? READ MORE
  4. EDUCATORS TO DISCUSS NEP IMPLEMENTATION READ MORE
  5. Media at Crossroads READ MORE
  6. Reproductive Justice: Constitutional Issues Plaguing ART and Surrogacy Laws in India READ MORE

SOCIAL ISSUES

  1. The way to control tuberculosis READ MORE

INTERNATIONAL ISSUES

  1. Words from Bandung to relive in Bali and Delhi: With the Ukraine war shaping the future world order, it is time India brings a balanced outlook to its strategic policy READ MORE
  2. India-EU- global dynamics: Recent progress in the alliance opens up prospects of a customised partnership and mutual growth READ MORE

GS Paper- 3

ECONOMIC DEVELOPMENT

  1. Labour reforms will hurt employment READ MORE
  2. How to address the inflation challenge READ MORE
  3. Taking stock of five years of GST READ MORE

ENVIRONMENT AND ECOLOGY

  1. The West must realise India’s climate policy choices are complex READ MORE
  2. Water Scarcity: EU Countries Forced to Restrict Drinking Water Access READ MORE

DISASTER MANAGEMENT

  1. Ill-prepared for monsoon: Cities, states need to prioritise disaster management READ MORE

GS Paper- 4

ETHICS EXAMPLES AND CASE STUDY

  1. 5 ways in which we can experience constant contentment READ MORE
  2. SEEKING NEUTRALITY, AND DETACHMENT IN THE WORLD READ MORE

Questions for the MAIN exam

  1. ‘With the Ukraine war shaping the future world order, it is time India brings a balanced outlook to its strategic policy’. In light of the statement, discuss how India can balance different power blocs?
  2. Critically analyse the impacts of reverse migration, as seen during the recent pandemic, on Rural as well as Urban economies.

QUOTATIONS AND CAPTIONS

  • More than an end to war, we want an end to the beginnings of all wars.
  • With the Ukraine war shaping the future world order, it is time India brings a balanced outlook to its strategic policy.
  • Rather than tax on exports to EU as proposed in CBAM, India and EU can cooperate better by investing in cleaner and greener technologies in India and helping in cleaning up production in India. Such a partnership will ensure that both India and the EU have their agendas of economic growth and sustainability fulfilled, a win-win situation for both entities.
  • The primary responsibility of supreme courts is to serve as checks against executive over-reach, and make sure that the state maintains the crucial distinction between the rule of law and rule by law.
  • Across democracies worldwide, this masquerade of “rule by law” posing as “rule of law” has grown and needs to be consistently exposed. There is no room for complacency.
  • Labour laws’ deregulation has worsened labour productivity and incomes, thereby hurting economic growth.
  • As Twitter takes the Centre to court for its orders to remove tweets and disable user accounts, India must strike a balance between rights and restrictions.
  • At its apogee, print media had immense power to mould public opinion, champion worthy causes and shine an unforgiving light on corruption.

50 WORD TALK

  • Section 69A of Information Technology Act allows government to block digital content, but the power should be used only in the rarest cases, after careful consideration. Twitter’s entitled to move the courts if it believes the government’s issuing arbitrary take-down orders. Social media should be accountable — but so should government.
  • Indians aren’t generous tippers. So upmarket restaurants, hotels levy a service charge to pad salaries of lowly-paid waiters. Now, why should a government consumer authority protect well-heeled customers from service charge? What about the mysterious ‘convenience fee’ other businesses charge? Eating out is a choice. Regulating that business is anti-market.

Things to Remember:

  • For prelims-related news try to understand the context of the news and relate with its concepts so that it will be easier for you to answer (or eliminate) from given options.
  • Whenever any international place will be in news, you should do map work (marking those areas in maps and exploring other geographical locations nearby including mountains, rivers, etc. same applies to the national places.)
  • For economy-related news (banking, agriculture, etc.) you should focus on terms and how these are related to various economic aspects, for example, if inflation has been mentioned, try to relate with prevailing price rises, shortage of essential supplies, banking rates, etc.
  • For main exam-related topics, you should focus on the various dimensions of the given topic, the most important topics which occur frequently and are important from the mains point of view will be covered in ED.
  • Try to use the given content in your answer. Regular use of this content will bring more enrichment to your writing.



Day-239 | Daily MCQs | UPSC Prelims | HISTORY

[WpProQuiz 270]




TOPIC : INDO – PACIFIC ECONOMIC FRAMEWORK

THE CONTEXT:Indo-Pacific Economic Framework for Prosperity (IPEF) is an economic initiative launched by United States President Joe Biden on May 23, 2022. It marks the beginning of a new phase of economic cooperation and integration in the region juxtaposed against China’s ambitious Belt and Road Initiative (BRI) and Regional Comprehensive Economic Partnership (RCEP) led by it. This article explains the Indo-Pacific Economic Framework and its significance and challenges in detail.

WHAT IS THE IPEF?

  • The Indo-Pacific Economic Framework for Prosperity (IPEF) aims to reassert U.S. economic engagement and provide a U.S.-led alternative to China’s economic statecraft in the region.
  • The 12 countries other than the U.S. are India, Australia, Brunei, Indonesia, Japan, South Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, and Vietnam (Taiwan is not part of it).
  • Among 12, Seven are ASEAN Countries. In Myanmar, Laos and Cambodia have not joined the group.
  • It aims to strengthen economic partnerships among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness in the Indo-Pacific region.
  • They together account for 40% of the world’s GDP.
  • U.S. officials have emphasized that IPEF is not a free trade agreement but one that will offer flexibility.

The negotiations will be along four main pillars:

FEATURES OF THE INDO-PACIFIC ECONOMIC FRAMEWORK

  • The U.S. Trade Representative (USTR) will be spearheading the trade pillar, while the others (I.e., supply chain resilience, clean energy and decarbonization, and taxes and anti-corruption measures) will fall under the purview of the U.S. Department of Commerce.
  • On the trade front, the endeavour is to establish “high-standard, inclusive, free, and fair-trade commitments” to fuel economic activity and investments benefitting both workers and consumers. What stands out, however, is U.S.’s willingness to extend cooperation for enhancing the digital economy and trade.
  • Digital trade incorporates not just the purchase and sale of goods online but also data flows that enable the operation of global value chains and services, like smart manufacturing, platforms and applications. The idea here is to overcome downstream costs for businesses as well as upscale the ability to utilize data processing and analysis and enhance cybersecurity outside their geographies.
  • As for supply chain resilience, the framework aspires to secure access to key raw and processed materials, semiconductors, critical minerals and clean energy tech, particularly for crisis response measures and ensuring business continuity. U.S. Commerce Secretary Gina Raimondo, in a press briefing, explained how workers at auto-manufacturing plants in Michigan experienced massive furloughs when semiconductor packaging operations were closed in Malaysia because of a COVID outbreak.
  • In line with the Paris Agreement, the clean energy, decarbonization and infrastructure pillar would provide technical assistance and help mobilize finance, including concessional finance, to improve competitiveness and enhance connectivity by supporting countries in the development of sustainable and durable infrastructure for adopting renewable energy.
  • Renewable energy is cheaper than fossil fuels; however, its high start-up costs when compared to using existing infrastructure stave off its adoption by the mainstream. Public policy analysts at the Centre for Strategic and International Studies (CSIS) suggest that regional partners would like the U.S. to help close the gap through climate financing and expertise sharing.
  • Lastly, the pillar on tax and anti-corruption is aimed at promoting fair competition by enforcing the robust tax, anti-money laundering and anti-bribery regimes in line with existing multilateral obligations, standards and agreements to curb tax evasion and corruption in the region.

SIGNIFICANCE OF INDO-PACIFIC ECONOMIC FRAMEWORK (IPEF)

  • Indo-Pacific Economic Framework for Prosperity (IPEF) aims to strengthen economic partnerships among participating countries to enhance resilience, sustainability, inclusiveness, economic growth, fairness, and competitivenessin the Indo-Pacific region.
  • The IPEF was launched with a dozen initial partners who together represent 40% of the world GDP.
  • It is a declaration of a collective desire to make the Indo-Pacific region an engine of global economic growth.
  • China not being a member gives the group a distinct geopolitical flavour since all its members share worries about China’s muscular nationalism and expansionist ambitions.
  • India’s joining of IPEF is a strong statement of commitment to Indo-Pacific goals and to broadening regional economic cooperation, particularly after it walked out of the 15-nation RCEP.
  • The Indo-Pacific covers half the population of the world and more than 60% of the global GDP, and the nations who will join this framework in the future are signing up to work toward an economic vision that will deliver for all people.

WHAT IS THE IPEF, IF NOT A TRADE DEAL?

  • It is not a traditional trade pact and does not reduce tariffs or grant better access to the American market. Those features would have been a clear draw for many Asian nations, which are comparing how the new deal stacks up against other trade agreements such as the TPP’s successor, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the Regional Comprehensive Economic Partnership minted over the past few years.
  • IPEF is designed as a tool to strengthen U.S. economic cooperation with Asian partners and assist the U.S. in re-engagement with the region since the Trump Administration withdrew from Trans-Pacific Partnership (TPP) in 2017.
  • It provides for the participation of members in “pillars” that include setting standards on trade in digital goods and services, obtaining commitments to ease bottlenecks in critical supply chains and enabling the transition to clean energy.

CHALLENGES WITH IPEF

  • UNCERTAINTY · It is set to be based on a presidential executive order and could be discarded by the coming U.S. administrations as it is not a senate-ratified treaty.
  • QUESTIONABLE PROCESS. Unlike traditional FTAs, the IPEF does not subscribe to the single undertaking principle, where all items on the agenda are negotiated simultaneously, with countries expected to sign the final agreement in its entirety or withdraw.Rather, the IPEF employs an ‘à la carte’ approach in which countries would launch separate negotiations under the four pillars.
  • ·A country would be required to sign up for all components within a pillar, but participation in all pillars is optional. This indicates that negotiations on various pillars will be handled at variable speeds with different groups of countries.
  • · The outcome would be a matrix, with some countries making commitments in all areas and others making in only a few. Commitments might also vary, from sharing information to binding obligations.
  • NOT A FREE TRADE AGREEMENT. U.S. officials have made it clear that IPEF is not a Free Trade Agreement, nor will it discuss tariff reductions or increasing market access, raising questions about its utility.
  • The four pillars also lend themselves to some confusion, drawing into question whether there is enough common ground among the 13 countries (that are part of very different economic arrangements) to set standards together or be open to issues that vary for each country.
  • MORE UNILATERAL AND NOT CONSENSUS-BASED. Unlike traditional trade blocks where the agreements are the results of arduous negotiations by the members, the IPEF is driven primarily by the USA.
  • ISSUE OF TAXATION. Tax provisions are another element of the IPEF that could pose problems. There is a tendency to take taxation as a sovereign function and therefore not subject it to negotiation.
  • CREDIBILITY OF IPEF. Given that the U.S.’s previous initiatives (the Blue Dot Network and the Build Back Better World (B3W) Initiative) have made little headway in changing the region’s infrastructural needs, the IPEF faces a credibility challenge.

THE WAY FORWARD

  1. Robust institutionalization: It should be a senate-ratified treaty so that it could see a level of certainty by the member states before they could invest their diplomatic capital.
  2. Need for the uniform procedure: Consistent procedure is needed to make the process simpler and easier to reduce complexity.
  3. Provisions for market access and reduced tariff: The developing countries would largely stand to not gain much from the arrangement if it would not have provisions pertaining to market access and lower tariffs.
  4. Need of a permanent Secretariat: An organisation or secretariat needs to drive and oversee the arrangement which houses representatives from all the member states, in the absence of which, the arrangement would lose its relevance.
  5. Need to resolve taxation Issue: India should initiate an internal review of its tax administration, involving experts and the Department of Revenue to come up with suitable changes.This would add to India’s attractiveness as a trading partner and as a destination for investment, especially in new supply chains.
  6. Multilateral Arrangement: The unilateral character of the arrangement should be tweaked to give way to more plural and multilateral arrangement and a consensus-based approach should be followed.

THE CONCLUSION:Although IPEF was launched with the intention to counter China, it is still thin on details. The initiative needs more clarity and a concrete plan for economic engagement among its members. For its part, India has been focusing on bilateral free trade agreements instead of multilateral ones, as is evident from the recently concluded agreements with the UAE and Australia. Similar agreements with the U.K. and the E.U. are expected. IPEF needs to create the confidence that multilateral economic cooperation could also benefit India. For IPEF to succeed, it is important to assist India in reducing its economic dependence on China and set in motion supply chain diversification at the earliest.

VALUE ADDITION

REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP (RCEP)

  • · The initiative to establish RCEP was taken by the member-states of the Association of Southeast Asian Nations (ASEAN) in 2011.
  • · Membership: It consists of the 10 ASEAN members and Australia, China, Japan, South Korea and New Zealand.
  • · The China-backed group is expected to represent at least 30% of the global GDP and will emerge as the largest free trade agreement in the world.
  • · RCEP negotiations on a framework for investment “to cover the four pillars of promotion, protection, facilitation and liberalization”.
  • · Purpose:
  • 1. to make it easier for products and services of each of these countries to be available across this region.
  • 2. to boost commerce among the member countries spread across the Asia-Pacific region.
  • COMPREHENSIVE AND PROGRESSIVE AGREEMENT FOR TRANS-PACIFIC PARTNERSHIP (CPTPP)
  • ·   The CPTPP was signed by the 11 countries on March 8, 2018, in Santiago, Chile
  • The CPTPP entered into force on December 30, 2018, for:
  • 1.   Australia
  • 2.  Canada
  • 3.  Japan
  • 4.  Mexico
  • 5.  New Zealand
  • 6.  Singapore; and on January 14, 2019, for Vietnam
  • · The Agreement calls for a free trade area to be created as per requirements of Article XXIV of GATT and Article V of GATS.
  • ·  The agreement mandates the duty-free entry of commercial samples having almost negligible value and printed advertising material from the territory of a signatory party.
  • · CPTPP covers all sectors and aspects of trade virtually in order to eliminate or reduce barriers. It establishes clear rules that help create a consistent, transparent and fair environment to do business in CPTPP markets.
  • · It eliminates tariffs and reduces barriers for 98% of exports to CPTPP member countries.
  • · It also includes trade-related technical cooperation among CPTPP members, including with respect to small and medium-sized enterprises, regulatory coherence and economic development.

 

QUESTION FOR MAINS EXAMINATION

  1. Discuss the significance of recently launched Indo pacific economic framework for India?
  2. For India, Indo – Pacific Economic Framework offers a significant opportunity as it is neither part of the RCEP nor the CPTPP. Examine.