📰 India should be pro-active: ASEAN
The bloc sees New Delhi as key to Indo-Pacific region’s peace and prosperity, says MEA
•All leaders at the just concluded ASEAN-India Commemorative Summit had urged India to play a proactive role in the Asia-Pacific region, the Ministry of External Affairs (MEA) said here on Friday.
•In an official statement at the conclusion of two days of diplomatic engagements that included the Summit and the celebrations of the Republic Day where the ten ASEAN leaders were Guests of Honour, Secretary in charge of eastern affairs in the MEA Preeti Saran said, “All the leaders have appreciated India’s role and the bilateral relationship that we enjoy with each one of them and that India has such a positive role in the Indo-Pacific region. They feel that India is a very important component of peace, stability and prosperity of the Indo-Pacific region.”
•The official statement complements Prime Minister Narendra Modi’s comments that the Indo-Pacific region will be “indispensable” India’s future. In an op-ed article, published on Friday in leading newspapers across ASEAN countries, including the The Straits Times (Singapore), Bangkok Post (Thailand) and Manila Bulletin (Philippines), Mr Modi said, “Indians have always looked East to see the nurturing sunrise and the light of opportunities. Now, as before, the East, or the Indo-Pacific region, will be indispensable to India's future and our common destiny.”
Growing presence
•The comments from the Prime Minister and the MEA officials are significant as they come just months after India joined the quadrilateral grouping of Australia, Japan and the U.S. for maintaining freedom of navigation in the Asia-Pacific region.
•Ms. Saran, however, declined to elaborate on whether talks on India’s role in the quadrilateral were discussed during the plenary session of the summit. The proposed enlarged Indian engagement in the region is to ensure freedom of navigation in the region’s oceans, MEA officials said, indicating growing concerns over China’s continued build up in the South China Sea.
•During the summit, India announced 1,000 PhD fellowships in the IITs for students from the ASEAN countries.
•New Delhi also announced a dedicated training course in highway engineering, setting up of a virtual network of universities, and pilot projects to set up digital infrastructure at the ASEAN-India Commemorative Summit. Further, an ASEAN-India Startup festival will be held later this year.
•The participating countries also agreed to celebrate 2019 as the year of tourism for ASEAN nations, said Ms Saran.
•Apart from countering ‘traditional and non-traditional’ threats to freedom of navigation, India plans to work closely with Malaysia and Indonesia on handling radicalisation. A conference on de-radicalisation will be held soon, said the official.
•“In specific discussions, that our Prime Minister had with the prime ministers of Malaysia and Indonesia, soft and hard aspects of countering terrorism through strict actions and enabling laws (were discussed),” said Ms Saran.
•The India-ASEAN bonhomie will be followed by further diplomacy on Sunday when Delhi will host Cambodian leader Hun Sen for a bilateral vist.
📰 ASEAN rising — on India-Southeast Asia cooperation
India and Southeast Asia need to move beyond summitry to deeper integration
•As leaders of the 10 countries of the Association of Southeast Asian Nations gathered in New Delhi this week, India’s ties with ASEAN got a dose of both symbolism and substance. The ASEAN-India Commemorative Summit, followed by their attendance at the Republic Day parade as joint chief guests, underlined the new consensus on the need for Southeast Asia and India to boost cooperation. First, as the demand for goods in Western economies comes down, the region needs to look deeper within to grow markets and increase trade. Second, continuing tensions between the “great powers” — between the U.S. and Russia, or the U.S. and China — are forcing the unaligned countries of ASEAN and India to forge a common understanding. China’s moves in particular, both its naval forays in the Indo-Pacific and its Belt and Road Initiative connectivity project, have the potential to change equations in the region. Third, as Singapore’s Prime Minister and the Chairman of ASEAN, Lee Hsien Loong, reminded the world in an editorial, and Prime Minister Narendra Modi said in his speech at the summit, India’s cultural and trade ties with Southeast Asia go back 2,000 years — and with Southeast Asia having come out of the overhang of Cold War divisions, India and ASEAN have a unique opportunity to reap the potential of their geographic proximity. The Delhi Declaration they signed articulated their urgent concerns as ASEAN and India called for measures to deepen security, economic and socio-cultural cooperation, and connectivity. These include joint mechanisms for maritime transport, trade and a “code of conduct” for the South China Sea.
•But it must not be forgotten that when ASEAN-India leaders last gathered together in New Delhi in 2012 to mark the 20th anniversary of the dialogue partnership, they had made a similar commitment to trade and maritime security, and several promises are yet to be realised. With trade with ASEAN at $76 billion, India ranks lower than not just the U.S. and China, but also South Korea, Japan and Australia. The Regional Comprehensive Economic Partnership negotiations launched in 2012 have been held up, largely because of Indian concerns over unfettered access to Chinese goods and ASEAN resistance to movement of Indian services and labour. The other big unfulfilled promise is on connectivity, between ASEAN countries and India, as well as India’s connectivity through its Northeast to Myanmar and beyond. Work on the extension of the India-Myanmar-Thailand Trilateral Highway, the Kaladan multimodal highway, and Tamu-Kalay rail link to Myanmar has lagged behind deadlines. Border trade posts and infrastructure in the Northeast need much improvement to attract investment in the region. India and the ASEAN countries have much to gain from each other — but heavy-lifting is required to integrate India into the ASEAN equation. Else, shared history and culture and political leaderships in sync may only yield rousing summitry.
📰 Natural partners in the Asian century
There is a need for a fresh perspective in India’s China policy
•As we complete two decades of the 21st century, a paradigm change in the global power structure is taking shape. Technology and size are causing this change. The physical size of a nation did not matter during the 19th and most of the 20th centuries. Britain, Germany, France and Japan leveraged their Industrial Revolution advantage on technology for armaments to become world powers despite their relatively small size. Europe thus became the global centre till the late 1950s. Now, potential power is shifting to the two large nations of the Asian mainland, China and India, which are nuclear weapons states and with fast-growing economies. Together they represent 60% of the Asian mainland.
Continental shift
•Asia already accounts for almost half of the world’s population, half of the world’s container traffic, one-third of its bulk cargo and 40% of the world’s off-shore oil reserves. It is home to several fast-growing new economies with GDP growth rates above 7% per year, i.e. a doubling of the GDP every 10 years.
•Asian defence spending ($439 billion) is also much more than Europe’s ($386 billion). In a few years half of the world’s naval fleet and combat aircraft with extended range missiles, supported by highly sophisticated communications networks, will soon be seen roaming in the Indo-Pacific region.
•Also, since the late 1990s, China and India have been rapidly emerging as influential power hubs. Being two of the three most post populous and largest GDP nations, India and China, both culturally akin, are socially structured on family values and associated social attitudes.
•Potentially both are poised to fill the role of global powers. To achieve that potential, both require hardware, software and the clear mindset for exercising this power. As of now, China is ahead of India in reaching that level. We are concerned here with the question whether India can reach it.
•India’s China policy thus needs a re-structuring based on a fresh perspective that is relevant for the 21st century. This is because the global power matrix has undergone a paradigm change, from an exclusively Atlantic shores-based concerns to emerging Indo-Pacific ocean strategic issues. Thus India-Chinarelations matter as never before.
•The diminishing influence of Western powers in the region, and as of now the acknowledged rising power of China are the new global reality. In terms of hardware capability and mindset, India is at present only a regional power. Because of its present mindset, it is obsessed with the problem of Pakistan-trained terrorists entering Indian territory rather than asserting higher priority on global issues, and thus it is complicit in international attempts to hyphenate the two regional-minded nations, India with Pakistan.
•This is the Indian myopia, because India has the capacity and the opportunity to rise as a ‘responsible and influential global power’. As a collateral effect, this will easily fix Pakistan and its terrorist propensity.
Looking beyond Pakistan
•Since 1971, Pakistan has already broken into two, and there are still fissiparous internal pressures. India therefore needs a new mindset: to look beyond Pakistan. Moreover, it depends on whether India’s intellectual outlook matures enough to find acceptable accommodation with China for a partnership in Asian peace.
•The U.S. has become a much friendlier nation for India, especially because the Soviet Union unravelled, and India’s economy is growing fast to become an open, competitive market economy, the third largest in PPP terms. But the U.S. also is hesitant to put boots on the ground to fight terrorist establishments. Hence India can help the U.S. fill that growing void in return for the sophisticated military hardware that it lacks.
•The world already is dazzled by India’s prowess in information technology, the capability to produce pharmaceuticals at low cost, and the high quality of its trained manpower capable of innovation. But India does not exert this soft power advantage on the world scene commensurate with this potential or its size in Asia.
•We are still on the international stage in a “petitioner” mode on vital national and international security issues — an unfortunate hangover from Nehru’s diplomacy of the 1950s. Unless we take ourselves seriously, stop craving foreign certificates and acquire commensurate military hardware by reaching spaces vacated by the U.S., others will not acknowledge our global status and comply accordingly.
A strategic bond
•My prescription is thus short: the key for India today is to bond strategically with China. But this requires dealing bilaterally on huge pending issues. After my recent visit to China, I believe there is an unfortunate trust deficit that requires frank, hard-nosed bilateral discussion at a high political level and not between bureaucrats. China recognises India’s potential and respects the same.
•There is sufficient common ground to cement the relationship. The question for us is: do we want to be strategic partners with China and accept sincerely the concomitant commitments, and trust China to do the same? The answer lies in our relations with the U.S., and China’s relations with Pakistan.
•For that to happen, India has to completely reorient its strategic mindset. A change in strategic conceptualisation is needed, that is, from the colonial hangover of junior partnership for the sake of crumbs from the materialistic “Westward Ho” syndrome, to an Eastward ethos, concomitantly from the present land-focussed thinking to Ocean-centric articulation.
•The Indian Ocean has now emerged as the epicentre of global power play in the 21st century. Gone are the outdated phrases like Asia-Pacific. Let us articulate and embrace the new concept of Indo-Pacific alliances that accommodates Chinese perspectives on a reciprocity basis. Hence we need to recognise this centrality and primacy of the Indian Ocean in India’s global economic and military activism: the Indian Ocean is the epicentre of global power play in the 21st century. With Indonesian partnership, India can monitor the Malacca Strait through which over 80% of the freight traffic of China and East Asia passes.
•My recent meetings with influential Chinese leaders and scholars convinces me more than ever before that China recognises India’s potential to match Chinese reach and strategic goals.
•Simplified, China would be more flexible in dealing with India if it is convinced of India’s equidistance with the U.S. on China-U.S. disputes involving distant places such as Taiwan and South China Sea islands. Of course, we will require that China respond with similar nonchalance on Pakistan-India disputes.
•As an important part of its diplomacy, India has thus to develop deeper cultural and civilisational linkages with China and the rest of Asia. India has to realise that it can’t just be a spectator, or a mere visible participant, or even a ‘pole’ in the so-called multi-polar world. China has conceptualised and implemented the centrality of befriending all of India’s neighbours and has brought them on board in its Belt and Road Initiative (BRI).
•In the Chinese Communist Party Congress in the early 2000s, Hu Jintao, then President of China, had got adopted the goal of developing a “Harmonious Society”, of blending spiritual Confucianist and Taoist values with aspirations for material progress. This is similar to the Hindu values of placing on a pedestal intellect and sacrifice (gyana and tyaga). Since then China has proceeded systematically to bring countries of Asia under its influence with imaginative proposals such as the BRI and the China-Pakistan Economic Corridor. India has been reduced to merely reacting to such proposals without any of her own to canvass as an alternative.
New paradigm
•India, therefore, has to strive imaginatively to become a stakeholder in this new global power paradigm: to give up its reticence and passive diplomacy and learn to exercise power without being seen as a bully by our neighbours.
•Under Prime Minister Narendra Modi we have at least conveyed to the world that we have arrived and are interested in carving out India’s due place.
•To some extent, China too has made that clear already by writing into CPEC and BRI documents, since India objected, that the proposed road through Pakistan-occupied Kashmir would be subject to the “final solution” of the so-called Jammu and Kashmir issue.
•In brief then, India is now poised to form a global triangle with the U.S. and China, and therefore the government must seize the opportunity, which requires a serious effort at reconciliation with China in a give-and-take mode without sacrificing our national interest.
📰 Trump must walk the talk: Karzai
Ex-Afghan President hopes U.S. will help stop Pakistani support to terror forces
•Former Afghanistan President Hamid Karzai called upon U.S. President Donald Trump to “walk the talk” on curbing Pakistan’s support of extremist forces. Mr. Trump, in a tweet at the beginning of the year, had chastised Pakistan for giving “safe haven to terrorists we hunt in Afghanistan”.
•“We do support Trump on his statement about Pakistan. We hope they will walk the talk ... We hope we will see action on that front,” Mr. Karzai said at the Jaipur Literature Festival during a free-wheeling conversation with author William Dalrymple about his student life in India, his presidential years as well as the charges of corruption against those close to him.
•Afghanistan, he said, was far from secure, with extremist forces yet to be defeated, and the Taliban making further inroads. Peace, the former President said, will not come unless Pakistan agrees to the peace, and unless the U.S. and Pakistan work together to secure it.
Washington blamed
•Criticising the U.S. for promoting the rise of extremism in Afghanistan in its bid to defeat the Soviet Union, Mr. Karzai said, “Whether deliberate or a mistake, I hope they will correct it soon.” He also said the impression that he was anti-America was incorrect, but he was certainly opposed to the fact that the U.S. had been ignoring the sanctuary being given to terrorists outside of Afghanistan. He also hoped that Afghanistan’s strong relationship with India would continue.
•On matters of corruption as well as widespread opium production in Afghanistan, Mr Karzai blamed “foreign countries”. Afghanistan is as corrupt as any other country, he said, but the main blame for it must go to U.S. contractors.
•Mr Karzai spoke with affection of his student years in Shimla, and his love for Indian films, songs, writers and poets.
📰 India, ASEAN target swift deal on RCEP
Commit to use India’s $1-billion line of credit to enhance connectivity as per master plan for 2025
•With an aim to further trade ties, India and ASEAN on Friday agreed to target a swift conclusion to the comprehensive and mutually beneficial Regional Comprehensive Economic Partnership (RCEP) in 2018.
•Both sides also reaffirmed their commitment to enhance physical and digital connectivity in line with the Master Plan on ASEAN Connectivity 2025 and the ASEAN ICT Masterplan (AIM) 2020 by availing the $1-billion line of credit announced by India.
Highway project
•India and ASEAN will also work towards encouraging early completion of the India-Myanmar-Thailand Trilateral Highway Project and extend this trilateral highway to Cambodia, Lao PDR and Vietnam, according to the Delhi Declaration of the ASEAN-India Commemorative Summit.
•The summit was held here to mark the 25th anniversary of Association of Southeast Asian Nations (ASEAN)-India Dialogue Relations.
•It also emphasised the need to deepen cooperation in the area of aviation under the ASEAN-India Aviation Cooperation Framework adopted at the 14th ASEAN Transport Ministers’ Meeting in Manila, on November 6, 2008, including through the convening of air services consultations by the ASEAN-India Working Group on Regional Air Services Arrangements and the establishment of air transport cooperation on technical, economic and regulatory matters between ASEAN and India. It was agreed to establish closer ASEAN-India air links to promote tourism, trade, and enhance greater connectivity between 10-nation grouping ASEAN and India.
•Both sides will work to “further strengthen ASEAN-India economic relations, including through the full utilisation and effective implementation of the ASEAN-India Free Trade Area, and intensify efforts in 2018 toward the swift conclusion of a modern, comprehensive, high quality, and mutually beneficial Regional Comprehensive Economic Partnership (RCEP),” it said.
•There were also agreements on cooperation for conservation and sustainable use of marine resources in the Indian and Pacific Oceans and address threats to these resources including illegal, unreported and unregulated fishing, loss of coastal ecosystems and the adverse impacts of pollution, ocean acidification, marine debris.
Maritime cooperation
•It also emphasised the need to promote maritime transport cooperation between ASEAN and India, and encourage potential private sector participation in the development of seaports, maritime logistics network and maritime services in order to create greater efficient linkages and encourage ASEAN and India to continue discussions on these priority areas.
•According to the declaration, promotion of stable and sustainable growth for Micro, Small and Medium Enterprises (MSMEs), including through technology transfer, as well as enhancing capacity building, technical assistance, access to innovation and opportunities to integrate into the global and regional value chains were agreed upon.
•India and ASEAN countries will continue to collaborate in peaceful exploitation of outer space, through the implementation of the ASEAN-India Space Cooperation Programme, including launching of satellites, for sustainable exploitation of ground, sea, atmospheric and digital resources for equitable development of the region, it said.
•“We also look forward to the establishment of the ASEAN-India Trade and Investment Centre,” the declaration said.
📰 The ASEAN embrace
India can act as a vital bridge between South and East Asia
•Prime Minister Narendra Modi used India’s Republic Day to host heads of state/government of the 10 members of the Association of Southeast Asian Nations (ASEAN). As India’s ‘Look East Policy’, matures into an ‘Act East Policy’, a strong relationship with ASEAN is no longer a policy option; rather it is an economic and strategic necessity.
Economy, trade, investment
•While India-ASEAN trade value stood at $76.53 billion in 2014-15, China-ASEAN trade value reached $452.2 billion in 2016, almost six times than that of India. Similarly, Indian investments continue to remain marginal in the ASEAN region — it was around $224 million in 2015-2016 while Chinese investment over the same period totalled over $3 billion. However, Indian investments in ASEAN are likely to grow as there has been increased liberalisation and deregulation regarding outward foreign investments. The Tata Group already has a strong presence in Myanmar and is investing in the IT and agricultural sectors, which will create capacity and generate employment.
•Infrastructure is a key area where there is much potential. The India-Myanmar-Thailand Trilateral Highway and the Kaladan Multimodal Transit Transport Project will significantly boost connectivity between India-Myanmar leading up to the rest of Southeast Asia. Enhanced connectivity between the two countries will not only serve India but also neighbouring Bangladesh. A railway or highway such as Bangkok-Yangon-Delhi has to pass through Bangladesh, making the country an intermediate beneficiary. India, which is vying to become a regional leader in South Asia, can score major points with its South Asian neighbours by connecting them to East Asia.
Strategic issues and security
•Uncertain regional geopolitics coupled with the rise of economies in the region will require Asian governments to adapt to a newer political environment, economic realities, and a different regulatory ecosystem. Businesses and governments will have to confront disruptions to traditional employment structures and loss of jobs caused by digital technologies and the impending Fourth Industrial Revolution. The region’s multifaceted challenges require dynamic and forward-looking policymaking. To reiterate Mr. Modi’s point, engagement with ASEAN is not only confined to trade and is becoming increasingly multi-dimensional.
•India-ASEAN strategic cooperation gets trickier given China’s territorial claim on the resource-rich South China Sea. The tug of war between China and India to dominate the Indian Ocean has given rise to maritime rivalry. When it comes to the South China Sea, it is in India’s interest to have freedom of navigation, unfettered access to common waters and respect for international maritime law. India and the Singapore Navy conducted SIMBEX-17, a week-long bilateral military exercise in the South China Sea in 2017. Given the prevailing regional power imbalance created by a declining U.S. and an assertive China, India and ASEAN are well poised to become strategic partners in ensuring regional peace and stability. Battling non-traditional risks such as terrorism, human trafficking, cybercrime and piracy also provide opportunities for greater cooperation.
Socio-cultural ties
•The presence of the Indian diaspora in almost all ASEAN nations has also helped strengthen ties. Almost 1.6 million Indians call Malaysia their second home. The Indian film industry has a huge fan base in Malaysia and Singapore. For example, of the editions of the International Indian Film Academy Awards held so far, a few have been held in ASEAN countries. Southeast Asia is even overtaking Europe as a filming location for Indian films.
•With an assertive China driving the Belt and Road Initiative and U.S. disengagement in the region, India has to navigate carefully especially when many nations, including those in ASEAN, are looking for options that promote economic interests and protect territorial sovereignty. At such a critical juncture in East and South Asian geopolitics, the significance of ASEAN from an Indian perspective can hardly be overemphasised. As Singapore’s elder-statesman, Lee Kuan Yew, argued many years ago, India must be “part of the Southeast Asia’s balance of forces” and “a counterweight to China” in the Indian Ocean.
•The “Act East” policy needs to be acted upon with a sense of purpose and priority before India can become a reliable and strategic partner of ASEAN.
📰 ‘Doklam blown out of proportion’
•India’s Ambassador to China Gautam Bambawale has called for a new phase of dialogue between the countries to foster a stronger post-Doklam “partnership.” In an interview to the Global Times , ahead of the Republic Day, he said the stand-off last year should be viewed in a historical perspective. “When you do so, it is just one event in a much longer-term history. I believe you are blowing it out of proportion,” he said. “The people of India and China and our leaders are experienced enough and wise enough to overcome such momentary hurdles in our relationship,” he said. Without making a specific reference to the Doklam standoff, which India says was rooted in China’s attempt to build a road in a disputed India-China-Bhutan border tri-junction area, Mr. Bambawale said: “Also, in the India-China border areas, especially at some sensitive points, it is important not to change the status quo.”
📰 Govt. relaxes Atal pension plan norms
Payment banks can offer the product
•The Centre would now allow small finance banks and payment banks to offer the Atal Pension Yojana (APY), which is expected to significantly increase the coverage of the scheme.
•“To strengthen the existing channels of APY distribution, it is felt that these new payments banks and small finance banks will provide a boost to the outreach of subscribers under APY,” the Ministry of Finance said in a statement.
Pensioned society
•“Participation in APY not only builds a pensioned society but also adds sustainable fee income to banks by way of attractive incentive for mobilising APY at the rate of ₹120-150 for each account.”
•So far, 11 payment banks and 10 small finance banks have received licences from the Reserve Bank of India to start banking operations in India.
•“In order to familiarise these small finance banks and payment banks with APY, the Pension Fund Regulatory and Development Authority (PFRDA) conducted an orientation meeting on January 15, 2018 in New Delhi,” the statement added.
•“All small finance banks and payment banks have positively responded to the initiative undertaken by PFRDA and have committed towards the greater cause of building a pensioned India.”
•As of January 23, 2018, there were more than 84 lakh subscribers registered under the APY with an asset base of more than ₹3,194 crore, the government said.
📰 Bad loans shrink from record peak
Regulator’s clean-up drive, tighter rules helping; overdue loans ease in Sept.
•India’s stock of soured bank loans shrank slightly in the quarter to September last year, the first pullback since a drive to clean up record levels of bad debt began in 2015 and signalling that tighter rules and a new bankruptcy code may be starting to show results.
•Stressed loans — which include non-performing as well as restructured or rolled-over loans — eased 0.4% from three months earlier to ₹9.46 trillion ($148.3 billion) at the end of September, according to unpublished central bank data reviewed by Reuters.
•The last data seen by Reuters showed soured loans hit a record ₹9.5 trillion as of end-June last year, accounting for 12.6% of total loans. The new data shows that the ratio declined to 12.2% in the period to end-September.
•That would be the first decline in soured assets since at least 2015, according to quarterly data collected by Reuters.
•On an annual basis, stressed assets have risen steadily since the year to March 2006.
•Banks have seen their soured loans nearly double in the past four years as a prolonged economic slowdown took its toll on the ability of companies to repay debt. Profligate lending and poor due diligence have also been blamed for the surge.
Asset quality review
•In late 2015, the Reserve Bank of India (RBI) began a major asset quality review amid allegations that banks were hiding the extent of the bad debts on their books.
•The central bank last year ordered banks to push some 40 of the country’s biggest corporate defaulters into bankruptcy proceedings through greater powers given to it as part of the government’s banking sector reforms programme. The government has also announced a $33 billion recapitalisation of the state-run banks that account for the bulk for the soured loans.
•“The view is that the stressed assets ratio will not go up sharply from current levels. We expect asset-quality parameters to stabilise in due course before moving lower,” said Jobin Jacob, an associate director at Fitch Ratings.
•“The capital that has come in is a big positive and will bolster state banks’ ability to absorb losses that are likely to ensue from non-performing loan resolution”, Mr. Jacob said, adding the rating agency would be watching the asset quality closely.
•The government on Wednesday announced the first tranche of the capital injection programme, pledging to inject nearly $14 billion into 20 state banks by March.
•Stressed loans at the country’s 21 state-run banks were ₹8.25 trillion at end-September, or 16.2% of their total loans, according to the data received through a right-to-information request.
•Private sector banks had 4.65% of their total loans classified as stressed amounting to ₹1.06 trillion as of September 30. Bad loans at foreign banks’ Indian operations amounted to ₹148.52 billion, or 4.2% of their total loans.
•Loans that had been overdue for between 60 days and 90 days, and are at the highest risk of default, also eased to ₹1.53 trillion rupees as of end-September, from ₹1.63 trillion rupees at end-June, the data showed.
📰 The oil risk — on the rise in international prices
India needs to expedite steps that can help minimise the impact of higher oil prices
•As international oil prices head higher, India will have to brace itself for the economic risks of expensive energy. Brent crude oil futures were trading at about $70 a barrel on Friday, marking a four-year high and a price increase of close to 6% since the start of the year. The rise in international prices has been particularly sharp given that oil had been selling at below $45 in June. This is a rally of about 55% in a matter of just months. Oil price dynamics have often been explained by changes in the supply outlook influenced by the decisions of major oil producers. Oil trading at $70 should offer some respite to traditional oil producers like the OPEC members, which have suffered the onslaught of U.S. shale producers. According to the IMF, last year, for instance, Saudi Arabia would break even on its budget with oil at $70. The recent spurt in oil prices, however, seems to be more the result of a weakening of the U.S. dollar than anything else. The dollar has been gradually weakening against major global currencies since the beginning of last year. But the trend was given a new push following comments by U.S. Treasury Secretary Steven Mnuchin in favour of a weak-dollar policy. At Davos this week, Mr. Mnuchin noted that a weaker dollar would be good for American trade. However, given that the U.S. is right in the middle of a monetary tightening cycle, it is unlikely that the dollar will continue to boost oil prices, unless the Federal Reserve slows the projected pace of interest rate increases.
•Consumers in India are already beginning to feel the pinch as petrol and diesel prices have hit multi-year highs. The retail selling price of both petrol and diesel in Delhi, for instance, has risen by close to ₹3 a litre since the beginning of 2018. The rise in domestic fuel prices is on expected lines given the policy of dynamic daily pricing of petrol and diesel adopted by the Centre. But as rising oil prices put pressure on domestic consumers, the government will have to desist from resorting to subsidies to ease the pain. It should work towards rationalising taxes on petrol and diesel to bring down retail prices. This will help consumers without imposing an undue burden on the oil marketing companies. An even bigger risk posed by higher oil prices is to the government’s fiscal management. With the fiscal windfall from low oil prices likely to end for now, the government should think for the long term and make crucial tweaks to its hydrocarbon exploration and licensing policy to expedite oil discovery and production. Simultaneously, it must take a leaf from China’s book and actively support Indian energy firms’ bids for overseas oilfields. Self-reliance is ultimately the best hedge.
📰 Armed forces set to be reduced in northeast
State police to get more responsibility
•The Home Ministry will conduct a “security audit” in the Northeast and chalk out a plan to reduce the number of Central armed police force personnel deployed there.
•In a recent meeting chaired by Home Minister Rajnath Singh, it was decided that certain “tweaking” was required as far as the deployment of the Central forces was concerned. A senior government official said the imposition of the Armed Forces (Special Powers) Act was discussed in the meeting held on January 16 but “no considered view” was taken.
•An official said insurgency related incidents in the Northeast had come down to 308 in 2017, the lowest since 1997.
•“Since the incidents have come down by 85%, it was felt that the number of boots on the ground should be reduced too. More responsibility would be given to the State police,” said a senior government official.
•Another official said there was no final decision to repeal AFSPA as of now but the Jeevan Reddy Committee report that recommended it was discussed from time to time. The Central government appointed a five member committee headed by Justice B.P. Jeevan Reddy in November 2004 to review AFSPA.
Report submitted
•The committee submitted its report in 2005.
•It said that besides repealing the Act, recommended that the Unlawful Activities (Prevention) Act, 1967 should be modified to clearly specify the powers of the armed forces and the Central forces.
📰 Fossil shows modern humans left Africa earlier than thought
Jawbone found in Misliya Cave on the western slopes of Mount Carmel in Israel
•Scientists have announced the discovery of a fossilised human jawbone in a collapsed cave in Israel that they said is between 1,77,000 and 1,94,000 years old.
•If confirmed, the find may rewrite the early migration story of our species, pushing back by about 50,000 years the time that Homo sapiens first ventured out of Africa.
•Previous discoveries in Israel had convinced some anthropologists that modern humans began leaving Africa between 90,000 and 120,000 years ago. But the recently dated jawbone is unravelling that narrative.
•“This would be the earliest modern human anyone has found outside of Africa, ever,” said John Hawks, a palaeoanthropologist from the University of Wisconsin, Madison, who was not involved in the study.
•The upper jawbone — which includes seven intact teeth and one broken incisor, and was described in a paper in the journal Science — provides fossil evidence that lends support to genetic studies that have suggested modern humans moved from Africa far earlier than had been suspected.
•“What I was surprised by was how well this new discovery fits into the new picture that’s emerging of the evolution of Homo sapiens ,” said Julia Galway-Witham, a research assistant at the Natural History Museum in London who wrote an accompanying perspective article.
•Mr. Hawks and other researchers advised caution in interpreting the discovery. Although this ancient person may have shared some anatomical characteristics with present-day people, this “modern human” would have probably looked much different from anyone living in the world today.
•“Early modern humans in many respects were not so modern,” said Jean-Jacques Hublin, director of the department of human evolution at the Max Planck Institute for Evolutionary Anthropology in Germany.
•Mr. Hublin said that by concluding the jawbone came from a “modern human”, the authors were simply saying that the ancient person was morphologically more closely related to us than to Neanderthals. That does not mean that this person contributed to the DNA of anyone living today, he added. It is possible that the jawbone belonged to a previously unknown population of Homo sapiensthat departed Africa and then died off.
•The upper jawbone, or maxilla, was found by a team led by Israel Hershkovitz, a palaeoanthropologist at Tel Aviv University and lead author of the new paper, while excavating the Misliya Cave on the western slopes of Mount Carmel in Israel.
•The team had long known that ancient people lived in the Misliya Cave, which is a rock shelter with an overhanging ceiling carved into a limestone cliff. By dating burned flint flakes found at the site, archaeologists had determined that it was occupied 2,50,000 to 1,60,000 years ago, during an era known as the Early Middle Palaeolithic.
Base camp
•Evidence, including bedding, showed that the people who lived there used it as a base camp.
•The jaw bone was studied at a palaeontology lab run by Gerhard W. Weber, a palaeoanthropologist at the University of Vienna. There scientists were able to assess whether the bone belonged to a modern human or a Neanderthal, thought to have also occupied the region during that time period.
•Using high resolution micro-CT scanning, Mr. Weber created a 3D replica of the upper left maxilla that allowed him to investigate its surface and, virtually, to remove enamel from the teeth.
•He then performed a morphological and metric test that compared the Misliya fossil with about 30 other specimens, including fossils of Neanderthals, Homo erectus , more recent Homo sapiens , and other hominins who lived in the Middle Pleistocene in Asia, Africa Europe and North America.
•“The shape of the second molar, the two premolars and the whole maxilla are very modern,” said Mr. Weber. Next, the archaeologists determined the jawbone’s age by performing three dating techniques in Australia, France and Israel.
•“The dating had to be rock solid,” said Rolf M. Quam, an anthropologist at Binghamton University in New York and an author of the paper. The team dated the tooth dentin and enamel, the sediment stuck to the upper jaw, and tools found near the fossil.
•“I don’t know how much more we could do with this little bone,” said Mr. Quam. “I think we’ve squeezed blood from a turnip here.”
•Together, the techniques put the jawbone at between 177,000 and 194,000 years old, in line with what was already known about the period during which the cave was inhabited.
•“This thing is as old as we thought it was, and it was probably the earliest Homo sapien out of Africa ever found,” said Quam. “It’s not very often you can make a superlative statement, but in this case we can.”
