The HINDU Notes – 03rd November 2018 - VISION

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Saturday, November 03, 2018

The HINDU Notes – 03rd November 2018






📰 Iran oil: India likely to be exempted from U.S. sanctions

Can import oil, but at much lower levels, after curbs take effect, says Pompeo

•Eight countries will be given exemptions and “weeks longer to wind down” their trade with Iran, once U.S. sanctions against Iran kick in on November 5.

•This was clarified by Secretary of State Michael Pompeo on Friday during a conference call with some members of the press.

EU not on list

•Mr. Pompeo said the list of eight “jurisdictions” will be released on Monday, two of which have already reached zero levels of Iranian oil imports.

•He also clarified that the European Union — which consists of 28 countries including the UK — will not be one of the jurisdictions granted a temporary exemption.

•India — for whom Iran is the third largest source of oil after Iraq and Saudi Arabia — is expecting to be on the list as The Hindu recently reported.

•In terms of entities granted exemptions, there would be no exemption for Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global financial messaging service, Treasury Secretary, Steven Mnuchin who was also on the call, said.

•SWIFT — which does not hold money itself but transmits information on transactions — has a network that spans 200 countries and some 11,000 financial institutions as per data released by the company: if it is sanctioned, that will have a significant impact on organisations that use it. SWIFT has been told it will have to cut off from sanctioned entities as soon as technologically feasible or could face sanctions, Mr. Mnuchin said.

•The EU, which remains party to the Joint Comprehensive Plan of Action (JCPOA, the “Iran Deal”) has been frustrated by the U.S.’s withdrawal and has been searching for ways to work around the sanctions, including through the use of a Special Purpose Vehicle (SPV).

•The U.S. plans to bring any SPVs within its sanctions net as well. “…If there are transactions that go through there that have the intent of evading our sanctions, we will aggressively pursue our remedies,” Mr. Mnuchin said.

Curbs on condensates

•In terms of products, the U.S. will exempt food, agricultural products, medicines and medical devices. But there would be no exemptions for condensates — an ultralight oil which is a by-product of oil and natural gas production. Condensates are petroleum products but were not subject to Iran sanctions previously as they are not considered “crude oil”.

•Iran had exported some $1.5 billion worth of condensates in just three months of 2014 to get around sanctions, the New York Times had then reported.

•“This administration is treating condensate the same as crude,” Mr. Pompeo said on Friday.

•The Trump administration has enacted 19 rounds of sanctions, and sanctioned 168 entities,Mr. Mnuchin said, adding that a list of 700 names, of which more than 300 are newly sanctioned, will be released on Monday.

•The sanctions will penalise countries that do not end Iranian oil imports and foreign companies that do business with blacklisted Iranian firms.

📰 How not to choose among allies

A sanctions waiver from the U.S. may prove to be a rather hollow victory for India

•In May 2012, Hillary Clinton, then U.S. Secretary of State, visited Delhi on behalf of the Western countries negotiating the Joint Comprehensive Plan of Action (JCPOA), or the nuclear deal, with Iran, to convince India to cut its oil imports from Iran. In her book Hard Choices, she later recounted her tough battle with the Indian government, as she ran through the reasons India needed to help put pressure on Iran to return to the negotiating table for the six-party talks. Eventually, India agreed to cut its imports by only about 15%. But cumulative global pressure had the desired impact on Iran, where inflation had risen more than 40% and oil exports declined from 2.5 million barrels of crude each day to about 1 million. JCPOA negotiations that followed eventually led to a deal hailed by the United Nations, that had quarterbacked the talks all through.

Changed times

•As U.S. officials have led a series of delegations to New Delhi in the last few months, they have had a similar mission, but with a completely different backdrop. For starters, the sanctions that the U.S. now proposes trying to ensure India adheres to have been placed not in order to forge any deal, but because the Trump administration has walked out of the JCPOA. In this the U.S. has no support from any other country involved in the deal, and the UN has expressed grave misgivings about the decision. The U.S. has given no evidence that Iran in any way violated the terms of the JCPOA — in fact, the International Atomic Energy Agency’s June report concluded that Iran’s stockpile of uranium and heavy water as well as its implementation of additional protocols were “in compliance” with the agreement.

•Unlike in 2012, the U.S.’s EU allies are now working closely with arch rivals like Russia and China to put a “special payments mechanism”, primarily with a view to supporting trade to Tehran to ensure that the Iranian regime does not walk out of the nuclear deal as well.

•While the U.S. may succeed in squeezing Iran economically, it is increasingly isolated politically, as was evident at the most recent Financial Action Task Force meet in Paris where the U.S. proposed sanctions on Iran for terror funding. Even so, the U.S. has continued on its unilateral path, without a care for the very “rules-based international order” that it so often invokes.

•For India, the impact of the American sanctions plan would be manifold, regardless of the waiver. To begin with, there is the shock that sanctions would deal to the oil import bill, given that Iran is India’s third largest supplier. There are not only rising costs of oil to contend with, but also the added cost of having to recalibrate Indian fuel refineries that are used to process Iran’s special crude. The second impact would be on India’s investment in the Chabahar port, which would face both direct and indirect sanctions: as shippers, port suppliers and trading companies refuse to participate in the project. When India had opened the tenders for cranes for heavy lifting at Chabahar a few years ago, for example, it found no takers, and eventually was forced to award the contract to ZPMC in 2017. This problem will only get more acute as sanctions kick in, threatening India’s $500 million investment in the port and its $2 billion plan for a railway line to circumvent Pakistan and reach Afghanistan and Central Asian trade lines. Finally, there would be the impact on India’s regional security situation, which could see the Iranian-Arab divide deepen, Afghanistan’s choices dwindle and an angry Iran pitched closer into the China-Russia corner.

•Most worrying for India is that all of the above outcomes will follow regardless of whether the U.S. gives India a waiver for sanctions or not. While the ‘waiver’ list, which U.S. Secretary of State Mike Pompeo has hinted will be issued on Monday, would stave off penalties and allow India to continue some of its trade with Iran, it will not restore the pre-2018 situation. The U.S. has said that it is only issuing temporary waivers, and the waivers are strictly linked to the condition that countries receiving them keep cutting down their purchases from Iran. Along with the JCPOA-linked sanctions, India continues to face sanctions linked to the Countering America’s Adversaries Through Sanctions Act, which puts more strictures on dealings with Iran, Russia and North Korea. The waiver is therefore no magic wand to be wished for, as it only pushes the problems for India down the road.

Iran’s options

•Meanwhile, little thought has been given to Iran’s reaction if India keeps submitting to the U.S.’s sanctions regime against it. With trade levels receding, the Iranian regime may well lose interest in the Chabahar option, and focus on its main port of Bandar Abbas instead, derailing India’s grander plans for regional connectivity. There is also the worry that all of India’s sacrifices may come to naught, as Mr. Trump may well use the pressure placed on Iran to his own advantage, and possibly open talks with Tehran at a later date. Just months after the U.S. demanded that India close its mission in Pyongyang, Mr. Trump was planning a summit in Singapore with North Korean leader Kim Jong-un.

•Given the heavy costs and in the complete absence of any benefits, it is surprising that the Modi government has not been more vocal in its protest against the U.S.’s actions. In May this year, when asked, External Affairs Minister Sushma Swaraj had said very emphatically that India adheres only to “UN sanctions, not unilateral ones”. Yet, all the government’s moves have been to the contrary, as American delegations have been allowed to come to Delhi and issue dire warnings, of the kind Nikki Haley, the U.S.’s envoy to the UN, did. Meanwhile, Indian officials have made a beeline for Washington to discuss the reasons why India deserves a waiver, from both Iran and CAATSA sanctions. According to these officials, the U.S. has been apprised of India’s energy requirement compulsions, and of the cut of about 35-50% in its oil purchases from Iran. On the CAATSA front, the U.S. has also been assured of a significant reduction in Indian defence dependence on Russia, and that no weapons procured, like the recently purchased S-400 missile system, would be used against American interests.

•As a result, if the U.S. presses on with sanctions, it would be a marked failure of Indian diplomacy. And if the waiver does come through, as is indicated, it will be no victory, but signify an abject submission to the sanctions themselves. With no gains in the offing from a policy of ‘pragmatism’, India may have been better off sticking to principle instead.

📰 A judgment and its aftermath

Protests in Pakistan over Asia Bibi’s acquittal underline the urgent need to reassure religious minorities

•The reaction by extremist Islamist groups to the Pakistan Supreme Court’s decision to acquit a poor Christian woman, eight years after she was charged with blasphemy, highlights the country’s deeper problem.

•After years of religious rhetoric as an essential element of national politics and statecraft, Pakistan often finds itself at the mercy of hardline clerics and unscrupulous individuals seeking to exploit religion for political gain. The result is not only loss of individual liberty but also a state of permanent crisis.

Inherent weaknesses

•The Asia Bibi case has all the elements of Pakistan’s inherent weaknesses. First, the law allowed neighbours with a grudge to persecute Asia Noreen, usually referred to as Asia Bibi, and now, even belated judicial recognition of her innocence seems unacceptable to those rioting in the streets. They want to kill someone against whom the Supreme Court found no credible evidence and are threatening apex court judges as well senior military commanders while trying to force Pakistan to a halt.

•Ms. Bibi, an illiterate berry picker, was convicted of defiling the name of the Prophet Mohammed. She was accused by her Muslim neighbours who objected to her drinking water from the same glass as them because she was Christian. Under Pakistan’s blasphemy law, her alleged comment is punishable by death. In 2010, Ms. Bibi, at age 39, was sentenced to hang, but her final appeal remained pending until the Supreme Court decision on Wednesday.

•In intervening years, Ms. Bibi’s case became an international cause célèbre. Earlier this year, Rome’s Colosseum was lit in red in support of persecuted Christians, including her, and Pope Francis described Ms. Bibi, alongside a Nigerian woman who was captured by Boko Haram, as “martyrs”.

•The Pope’s attention to Ms. Bibi’s case paralleled efforts by the European Union’s Special Envoy for the promotion of the freedom of religion or belief to secure her release by making it a condition for continued European market access for Pakistani products. The Pakistani government was informed that the future of Generalised System/Scheme of Preferences (GSP) status to Pakistan, which allows Pakistan duty-free access to EU markets, would be directly linked to the peaceful resolution of the blasphemy case.

•The reason the Supreme Court heard Ms. Bibi’s appeal and acknowledged in its judgment what had been widely known — that witnesses against her had either retracted their testimony or contradicted each other — can be found in Pakistan’s severe financial woes. Ms. Bibi got relief she should have been entitled to as a right just because the Chief Justice wanted to help a weak new government struggling to manage the country’s external finances.

Zia’s legacy

•Pakistan’s blasphemy laws date back to the military dictatorship of General Zia-ul-Haq. A series of changes were introduced in the 1980s, making derogatory remarks against any Islamic personage a crime under Section 295 of Pakistan’s Penal Code and punishable by three years in prison; prescribing life imprisonment for “wilful desecration of the Quran”; and punishing blasphemy against Prophet Mohammed with “death, or imprisonment for life”.

•Ms. Bibi’s case illustrates how blasphemy laws are used to persecute the weakest of the weak among Pakistan’s religious minorities. As a poor Christian from a low caste, she was among the most vulnerable and susceptible to discrimination. And the legal system — which, in theory, should be designed to protect the innocent — failed her in every way until political expediency necessitated otherwise.

•Laws prohibiting blasphemy or harming religious feelings exist in many countries, although in some places they are rarely used even if they still exist on the statute books. But in Pakistan, which has one of the highest numbers of blasphemy cases in the world, the charge is used widely to settle grudges or property disputes.

•There is also political advantage to be gained by appealing to the religious sentiment of majority Muslims against Christians, Ahmadi Muslims, and members of other minority communities. The constant state of religious frenzy that Pakistan’s machinery of state maintains as a guarantee of Pakistani nationhood heightens vigilante violence against alleged blasphemers and their alleged protectors.

•As with her previous trials and appeals, large crowds gathered outside the court in Islamabad on Wednesday demanding that Ms. Bibi’s conviction be upheld, and the execution carried out. In messages sent to the media, Tehreek-e-Labbaik Pakistan asked soldiers to rebel against the Army Chief, saying that the acquittal presumably had the military’s backing.

•As Pakistan gets increasingly isolated internationally, the military may have sought Ms. Bibi’s acquittal and reported departure to safety abroad to relieve some pressure on Pakistan’s image around the world. She is reported to have left Pakistan and to have been reunited with her husband, daughters and grandchild.

•The Jamaat-e-Islami, which, like Tehreek-e-Labbaik, has a very strong street presence, has asked its members to come out in Islamabad to demand that the acquittal be reversed. Even the army’s overt protégé, Hafiz Saeed of the Lashkar-e-Taiba, has joined the call for protests over the Supreme Court judgment.

•Amidst reports of violence, the national media, especially television channels, have gone totally silent about Mr. Bibi’s release. They, too, are under threat from the baying mobs.

Imran Khan’s appeal

•To claim moral leadership, Pakistan Prime Minister Imran Khan attacked hardliners and appealed for calm in a televised address, taking a U-turn from his pre-election rhetoric that had projected him as a defender of the Prophet’s honour and a crusader against blasphemers.

•According to Mr. Khan, the hardliners were “inciting [people] for their own political gain” and were “doing no service to Islam”. But Ministers have also started negotiating with the extremist clerics, and it is only a matter of time before another U-turn is taken to fashion some compromise with the hardliners.

•The Supreme Court’s decision in the Asia Bibi case is a small step in the right direction but a long journey awaits Pakistan in reversing the cumulative injustice it has meted out to its religious minorities over the decades.

📰 Xi calls for ‘new era’ in ties with Pakistan

Report says Islamabad is expected to receive a $6 bn aid package from China during PM Imran’s visit

•Pakistan’s Prime Minister, Imran Khan has arrived in Beijing to rework “all-weather” ties with China, after reinforcing Islamabad’s bonds with Saudi Arabia, and keeping the door open for the re-entry of West-backed International Monetary Fund (IMF) into his country.

•He was received at the airport in the early hours on Friday by Chinese Minister for Transport Li Xiaopeng, Chinese Ambassador to Pakistan Yao Jing and Ambassador of Pakistan to China Masood Khalid. In the afternoon, Mr. Khan was welcomed by Chinese President Xi Jinping at the Great Hall of the People.

•Mr. Khan has arrived at a time when Pakistan’s economy is in doldrums, and could benefit from financial support from China — Islamabad’s longstanding ally.

•This was evident during Mr. Khan’s interaction with President Xi. “My party has only been in power for two months. Unfortunately we have inherited a very difficult economic situation,” Reuters quoted Mr. Khan as saying.

•“Countries go in cycles. They have their high points, they have their low points. Unfortunately, our country is going through a low point at the moment with two very big deficits, a fiscal deficit and a current account deficit. And so we, as I’ve said, have come to learn.”

•President Xi responded by stating that China-Pakistan “all weather” friendship should enter a “new era”. “I attach great importance to China-Pakistan relations and am willing to work together with the Prime Minister to strengthen the China-Pakistan all-weather strategic partnership and build a new era of China-Pakistan destiny,” Mr. Xi said.

Low reserves





•Talks between the two leaders commenced when Pakistan’s foreign exchange reserves have reached an alarming low of around $8 billion — barely sufficient to finance about two months of imports. Current account deficit in the financial year that ended in June was around $18 billion.

•Prior to Mr. Khan’s arrival in Beijing, Saudi Arabia had come to Pakistan’s aid with a $6 billion package. That included a $3 billion deposit for one year, to help Pakistan wriggle out of its immediate balance of payment crisis.

•Despite Riyadh’s emergency support, Pakistan is likely to approach China for financial backing to minimise its requirement for a loan from the IMF.

•“What we are hoping is that we do a bit of both, get a loan from the IMF and other loans from friendly governments,” Mr. Khan said during an investment conference in Riyadh last month.

•Pakistani media reports quoted Information Minister Fawad Chaudhry as saying that the Xi-Khan meeting was “very productive”, and signalled that Pakistan would secure a major economic package from China. Geo TV, quoting sources, reported that Pakistan is expected to receive $6 billion economic package from China during Mr. Khan’s visit.

•That includes a loan of $1.5 billion and a grant of $1.5 billion, along with an additional package of $3 billion for the China Pakistan Economic Corridor (CPEC).

•Analysts point out that China needs Pakistan’s full support to make the CPEC a success. China has billed the $62 billion project as the flagship undertaking of its Belt and Road Initiative (BRI).

📰 Russia to host Taliban dialogue

Invites a group of Afghan politicians to Moscow for negotiations with insurgents

•Russia has quietly invited a group of senior Afghan politicians to talks with the Taliban in Moscow, bypassing President Ashraf Ghani’s government in a move that has angered officials in Kabul who say it could muddle the U.S.-backed peace process.

•The invitations, extended over the past two months by Russian diplomats in Kabul, were confirmed to Reuters by six of the eight leaders, who include former Afghan President Hamid Karzai, or their aides, and by other leading politicians with ties to the Afghan government.

•Russia in August proposed holding multilateral peace talks in Moscow and invited 12 countries and the Taliban to attend a summit the following month.

•But the meeting was postponed after Mr. Ghani rejected the invitation on the grounds that talks with the Taliban should be led by the Afghan government. The U.S. had also declined to attend.

•Three senior Afghan officials said the government was unhappy that Moscow was pressing ahead with plans for talks.

Peace process

•“We requested Russia to cancel the summit because talking to the Taliban at multiple forums will further complicate the peace process backed by the U.S., but they rejected the request,” said a senior Afghan official who has been holding discussions with Russia.

•Russia's Foreign Ministry spokeswoman Maria Zakharova said on Thursday that she hoped to be able to announce details of the conference “in the coming days”.

📰 Lithuania takes a step forward with women on traffic symbols

Baltic state takes initiative to celebrate a century of their voting rights

•Lithuania’s capital Vilnius on Friday installed traffic lights featuring female symbols to celebrate the 100th anniversary of women getting the vote in the Baltic state.

•The right for women to vote was written into the Lithuanian Constitution on November 2, 1918, putting it among the first countries to grant women suffrage, ahead of France or the United States.

•President Dalia Grybauskaite, who chairs the Council of Women World Leaders, hailed the date as “a win for democracy that put the country (Lithuania) among the leaders of modern states”.

•City officials said the lights, along a busy downtown street right next to Vilnius’ largest business centre, also serve as a reminder that European countries need to keep pushing to close the gender gap.

•Vilnius University professor Dovile Jakniunaite said authorities must put more effort into tackling the gender pay gap and domestic violence against women.

‘More initiative’

•“This joyful date could encourage authorities to show more initiative in these areas,” she said.

•In Lithuania, women’s gross hourly earnings are on average 14.4% below those of men, compared to the EU average of 16.2%, according to official statistics.

•“Modern society does not exist without fully empowered women, yet globally all of us are still halfway on this journey,” Lithuanian Foreign Minister Linas Linkevicius tweeted.

📰 Modi announces incentives for MSMEs, including 59-minute sanction for loans up to ₹1 crore

In all, 12 decisions, which he termed “historic”, were announced to boost MSMEs.

•Prime Minister Narendra Modi on Friday announced 12 measures to boost the Micro, Small and Medium Enterprises (MSME) sector, including a portal that would enable them to get a loan in just 59 minutes and interest subvention of 2%.

•“In the time taken for you to reach your office, you can now get a loan,” he said. “We had run a pilot and I had set a target of 72,000 MSMEs. As of today, 72,680 have been on-boarded.”

‘Honesty a strength’

•The Prime Minister said firms registered on the Goods and Services Tax portal would be able to avail themselves of this facility on the portal itself. “When you file GST returns, you will be asked if you want a loan,” Mr. Modi said. “GST-registered firms will also get a 2% rebate on interest rates. Being a part of the GST and being an honest taxpayer will become your strength.”

•Mr. Modi said public sector companies had now been asked to compulsorily procure 25%, instead of 20%, of their total purchases from the MSMEs. He said that of the 25% procurement mandated from the MSMEs, 3% must now be reserved for women entrepreneurs.

•Also, Mr. Modi announced a 2% interest subvention for all GST-registered MSMEs on fresh or incremental loans.

•“These 12 decisions will mark a new chapter for the MSME sector,” Mr. Modi said.

•The Prime Minister recalled India’s strong traditions of small scale industries, including Ludhiana’s hosiery, and Varanasi’s sarees.

Access to credit, market

•“There are five key aspects for facilitating the MSME sector,” he said. “These include access to credit, access to market, technology upgradation, ease of doing business, and a sense of security for employees. As a Diwali gift for the sector, the 12 announcements will address each of these five categories.”

•According to Mr. Modi, all companies with a turnover of more than ₹500 crore must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS).

•“Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables,” he said. “This will resolve their problems of cash cycle.”

•More than 1.5 lakh suppliers, he said, had now registered on the government e-marketplace (GeM), out of which 40,000 are MSMEs, and that transactions worth more than ₹14,000 crore had been made so far through the GeM. He further announced that all central public sector undertakings must now compulsorily be a part of GeM.

•On technological upgradation, the Prime Minister said 20 tool hubs would be formed across the country, and 100 spokes in the form of tool rooms would be established.

📰 ‘NASA’s historic Dawn mission to asteroid belt comes to end’

•NASA’s pioneering Dawn spacecraft — which orbited the two largest objects in the asteroid belt — has run out of fuel, ending a historic 11-year mission that unravelled many mysteries of our solar system, the US space agency said.

•The USD 467 million Dawn mission, launched in 2007 to study the protoplanet Vesta and the dwarf planet Ceres, missed scheduled communications sessions with NASA’s Deep Space Network on October 31 and November 1, NASA said in a statement.

•After the flight team eliminated other possible causes for the missed communications, mission managers concluded that the spacecraft finally ran out of hydrazine, the fuel that enables the spacecraft to control its pointing.

•“Today, we celebrate the end of our Dawn mission — its incredible technical achievements, the vital science it gave us, and the entire team who enabled the spacecraft to make these discoveries,” said Thomas Zurbuchen, associate administrator of NASA’s Science Mission Directorate here.

•“The astounding images and data that Dawn collected from Vesta and Ceres are critical to understanding the history and evolution of our solar system,” Mr. Zurbuchen said.

•It was an expected end to the mission, although the spacecraft lasted two years longer than originally planned.

•On Tuesday, NASA announced that its exoplanet-hunting Kepler Space Telescope had run out of hydrazine fuel, and the craft would be commanded to cease operations.

•Dawn can no longer keep its antennae trained on Earth to communicate with mission control or turn its solar panels to the Sun to recharge, according to the US space agency.

•The spacecraft launched 11 years ago to visit the two largest objects in the main asteroid belt. Currently, it is in orbit around the dwarf planet Ceres, where it will remain for decades, NASA said.

•Dawn launched in 2007 on a journey that put about 6.9 billion kilometers on its odometer. Propelled by ion engines, the spacecraft achieved many firsts along the way.

•In 2011, when Dawn arrived at Vesta, the second largest world in the main asteroid belt, the spacecraft became the first to orbit a body in the region between Mars and Jupiter, NASA said.

•In 2015, when Dawn went into orbit around Ceres, a dwarf planet that is also the largest world in the asteroid belt, the mission became the first to visit a dwarf planet and go into orbit around two destinations beyond Earth, it said.

•“The demands we put on Dawn were tremendous, but it met the challenge every time. It’s hard to say goodbye to this amazing spaceship, but it’s time,” said Mission Director and Chief Engineer Marc Rayman at NASA’s Jet Propulsion Laboratory (JPL).

•The data Dawn beamed back to Earth from its four science experiments enabled scientists to compare two planet-like worlds that evolved very differently.

•Among its accomplishments, Dawn showed how important location was to the way objects in the early solar system formed and evolved, NASA said.

•Dawn also reinforced the idea that dwarf planets could have hosted oceans over a significant part of their history — and potentially still do.

•“In many ways, Dawn’s legacy is just beginning. Dawn’s data sets will be deeply mined by scientists working on how planets grow and differentiate, and when and where life could have formed in our solar system,” said Principal Investigator Carol Raymond at JPL.

•“Ceres and Vesta are important to the study of distant planetary systems, too, as they provide a glimpse of the conditions that may exist around young stars,” Ms. Raymond said.

•Because Ceres has conditions of interest to scientists who study chemistry that leads to the development of life, NASA follows strict planetary protection protocols for the disposal of the Dawn spacecraft, NASA said.

•Dawn will remain in orbit for at least 20 years, and engineers have more than 99% confidence the orbit will last for at least 50 years, it said.