📰 Qatar to quit OPEC in Jan. 2019, says its energy minister
“We don’t have great potential (in oil), we are very realistic,” Energy Minister Saad al-Kaabi, who described himself as “Mr. Gas”, told reporters here. “Our potential is gas.”
•Qatar will leave the Organization of the Petroleum Exporting Countries (OPEC) next month in order to focus on gas production, the Gulf state’s new Energy Minister Saad al-Kaabi announced on Monday.
•It has been a member of OPEC since 1961, and the decision to pull out after all these decades comes at a turbulent time in Gulf politics, with Doha under a boycott by former neighbouring allies, including Saudi Arabia for 18 months.
•“Qatar has decided to withdraw its membership from OPEC effective January 2019 and this decision was communicated to OPEC this morning,” he said at a press meet here.
Gas remains our top priority
•Qatar said gas production would remain its top priority. “We don’t have great potential (in oil), we are very realistic,” Energy Minister Saad al-Kaabi, who described himself as “Mr. Gas”, told reporters here. “Our potential is gas.”
•“I think it’s inefficient to focus on something that’s not your core business and something that’s not going to benefit you long-term,” he added.
‘A political decision’
•Some analysts saw Qatar’s withdrawal as a “political decision to oppose Saudi Arabia”, which alongside the U.S. and Russia is the biggest producer in OPEC.
•Saudi Arabia and allies have also imposed a blockade on Qatar.
•In September, Qatar announced its plans to boost gas production to 110 million tonnes a year by 2024. Its oil production is around 6,00,000 barrels a day, making it the world’s 17th largest producer of crude, according to WorldData.info. It also only holds around 2% of the world’s global oil reserves, according to the CIA World Factbook.
•Mr. Kaabi said that he would still attend OPEC’s Vienna meeting later this week, his “first and last” as Energy Minister. That meeting is expected to set a policy for 2019 and despite Qatar’s announcement, oil prices soared on Monday after Russia and Saudi Arabia renewed a pact to cap output. The pact was cheered by oil traders.
•Although Qatar’s move came out of the blue, analysts say it will have limited impact on the global market.
📰 Two Punjabs, one South Asia
India-Pakistan rapprochement and the South Asian future require subnational engagement, starting with Punjab
•For a flickering moment in the last week of November, it seemed as if Congress provocateur and Punjab Minister Navjot Singh Sidhu might set the geopolitical agenda, when he unabashedly spoke of the need for India and Pakistan to mend fences. He was in Lahore on the occasion of the start of work on the Kartarpur Corridor, meant to ease the travel of Sikh pilgrims to the resting place of Guru Nanak.
•Unfazed by ridicule on Indian television, the cricketer-turned-politician spoke of peace, trade and people-to-people contact, all of them lost causes of the ‘track two’ dialogues of past decades. His confidence seemed to emanate from being a Sikh and Punjabi reaching out to Pakistani Punjab, and in his wordy sermons one actually detected the formula for India-Pakistan cohabitation, which would also catalyse cooperation in the larger South Asian region.
Ultra-nationalist fog
•Peace in the Subcontinent presupposes amity between India and Pakistan, and more than 40 years of efforts at regionalism has been held hostage by hostility of the two, with the other countries watching askance.
•The abuse hurled by the state establishments of each side is a populist political tool that distracts the public from pressing matters of growth, equity, democracy and accountability. That the cost of maintaining massive militaries in each country drags down efforts at social justice is lost in the fog of ultra-nationalism.
•India, as the more stable democracy, should inculcate empathy for the neighbour, but the New Delhi commentariat tends not to recognise the difference between the Pakistani state and its people, the latter struggling against extremism, military supremacy and state-centralism all at one go.
•Indian media by and large is not bothered by the travails of Pakistanis, as right-wing trolls rule the airwaves and social media. Similar to how dissent is sought to be silenced with the ‘Urban Naxal’ tag, since long those seeking India-Pakistan amity and South Asian regionalism are rejected as romantic peaceniks lighting meaningless candles at Wagah-Atari.
•The trolling and abuse on all matters related to Pakistan can be expected to peak as India’s general election of 2019 draws near, which will only help Islamabad’s military-intelligence complex tighten its grip on the society. It is high time to try once again for a plan for South Asian regionalism.
Opportunity costs
•The potential of South Asia for sustained high growth has been blocked by the tightened national borders, with India playing its part by building barbed wire fences on the Pakistan and Bangladesh frontiers. In all of seven decades, the economic history of the Subcontinent has been forgotten, with the ultra-nationalist narrative having us believe that this separate living is how it has always been.
•Until Cyril Radcliffe drew the map of Partition, the economic synergy across the different parts of the Subcontinent was an unquestioned historical reality. There is no one to remember or remind that this reality of sealed borders was set only in 1947 for most parts of the Subcontinent, or that the door actually slammed shut only after the India-Pakistan war of 1965.
•As the historical ‘connectivity’ of the Subcontinent crumbled, it created massive dysfunction as economies of scale and production chains were disrupted. The opportunity costs have been incalculable in terms of infrastructure, production and commerce, and the loss in livelihoods would be heart-rending if only we cared to calculate.
•The present-day failure of South Asian academia is its unwillingness to theorise on the promise of economic growth and social justice that regionalism holds, through soft/open borders. Of the Indian intelligentsia, the failure is also in seeing economic geography through the New Delhi lens rather than those of the ‘peripheral’ regions, from Rajasthan to the Northeast.
•‘South Asia’ must be understood as a project for social justice, to be achieved through economic rationalisation, sub-regional interactions and reduced military budgets – and open borders such as exists between Nepal and India.
Counter-populism
•The goal of the future should be to learn to compartmentalise one’s perceptions of the ‘other’, that Pakistan is made up of its state and its people just as India too is made up of its state and its people. The mutual demonisation has to do with conflating the two, state apparatus and citizenry, as one.
•While the Pakistani state is rightfully critiqued for the way the military/intelligence calls the shots — from the Kargil misadventure to cross-border militancy, to even denying Punjab province the right to import energy from India — the self-perception of India as ‘good’ and Pakistan as ‘bad’ should have been abandoned long ago.
•In Pakistan, the space of the public intellectual is circumscribed by the jihadists, the army and the military intelligence. In India, a much freer country no doubt, there is the rise of pernicious ultra-populism that keeps public figures from speaking up.
•In the age of Narendra Modi, proposing South Asian solidarity is frowned upon to such an extent that academics and opinion makers, not to mention bureaucracy and even international funding agencies, all think it is better to keep aloof of the concept. Since 2016, the Prime Minister has been consistent in his refusal to attend the 19th SAARC Summit slated for Islamabad, which has rendered the regional organisation comatose. His vision of South Asian regionalism is where the neighbours dance to India’s tune.
•The fear that South Asia as a concept heralds some kind of supra-sovereignty is misplaced, for there is no plan afoot for supplanting of the nation-state and associated group privileges. No, the capitals are not being asked to relinquish their powers to a Subcontinental centre.
•Instead, a realistic formula for South Asian regionalism lies in allowing the federal units of the two largest countries — the provinces of Pakistan and the states of India — autonomy, which today exists only on paper. This is where the Punjab-Punjab formula comes in.
•Even as television sought to lampoon Mr. Sidhu, we saw what was required to push for peace in South Asia — chutzpah. The Yiddish word implies the gall or audacity of a showman, and the gift of repartee to challenge the harshest of televangelist anchors.
•It does seem that ultranationalist populism can only be cut by counter-populist hyperbole. Responding to the Pakistan Foreign Minister’s invitation to the Kartarpur Corridor ground-breaking, the Punjab Minister replied in a letter: “As our nations take this first step, the Kartarpur Spirit can make pilgrims of us all, venturing out on a journey that breaks the barriers of history and opens the borders of hearts and the mind, a journey that our people can walk together towards a future of shared peace and prosperity for India and Pakistan.”
•If you read the words and not the perception some have of the gentleman, the future of Punjab-Punjab, India-Pakistan and South Asia as a whole can be found in the paragraph.
Punjabiyat
•Nothing has been left untried in the effort to ease India-Pakistan tensions — Atal Bihari Vajpayee visiting Minar-e-Pakistan in Lahore; Mr. Modi flying in for Nawaz Sharif’s birthday; secret emissaries rushing hither and yon; and ‘track two’ and ‘track three’ events of every kind.
•Nothing has worked, and we are today in suspended animation between Mr. Modi’s India-centric vision of the region and the Pakistani military’s control of the geopolitical discourse in Islamabad. At such a time comes the possibility held out by the Kartarpur Corridor.
•Punjab province is by far the most powerful sub-national unit of Pakistan. The Indian Punjab may not be as powerful within India in relative terms, but it is no pushover either. The two Punjabs have one history, as the stepping stone for invaders, battlegrounds that go back millennia, the shared tragedy of Partition, and the shared culture and language of Punjabiyat.
•Given that South Asian regionalism can only come from a turn towards genuine federalism in India and Pakistan, Punjab Province and Punjab State are the places to start anew. It may just be Punjabiyat is the concept which will help bring India and Pakistan closer to peace, and make South Asia a safer and more prosperous place.
📰 Tariff truce: On U.S.-China trade war
U.S. and China must use the next 90 days to close the trade war in a way that benefits both
•The global trade war has come to a welcome pause. On the sidelines of the G20 meeting in Buenos Aires over the weekend, the U.S. and Chinese Presidents, Donald Trump and Xi Jinping, agreed to a 90-day truce. The two countries will try to find an amicable solution to the various problems plaguing bilateral trade relations, such as disputes over intellectual property rights and Chinese state support for domestic industries, through talks over the next three months. Meanwhile, the U.S. will refrain from raising the tariff on Chinese goods worth $200 billion from the current rate of 10% to 25% on January 1, 2019, as planned. In return, according to the White House, China will purchase agricultural and other goods from the U.S. in order to reduce the trade imbalance between the two countries. If talks fail, however, increased tariff rates are scheduled to come into force immediately. It is worth noting that Canada and Mexico arrived at a compromise trade agreement with the U.S. in October, replacing the decades-old North-American Free Trade Agreement (NAFTA). So these are signs that the global trade war that began earlier this year may be cooling down a little as 2018 draws to an end.
•What prompted the U.S. and China to arrive at an unexpected, albeit temporary, compromise is unclear. It will be important to see if any compromise between the two trade giants will include a complete rollback of the tariffs imposed on each other over the year. But the temporary trade truce should still offer some relief, as there have been apprehensions about the U.S.-China trade battle bringing global economic growth to a grinding halt. Signs of a significant slowdown in the Chinese economy and concerns over the negative impact of the trade war on American financial markets may have played a part in Mr. Trump and Mr. Xi agreeing to the truce — probably a sober recognition of the fact that there are no economic winners in any trade war. During the upcoming negotiations, the U.S. is likely to press hard on China’s protectionist policies aimed at favouring its domestic industries. But it is unlikely that China will yield to such pressure as that would require a seismic shift in the country’s growth policy, which till now has emphasised the state’s role in the economy. In fact, the Chinese government’s promise to increase imports from the U.S. is a clear giveaway of the fact that it still dominates the economy. Further, China itself is bound to draw attention to the U.S.’s own protectionist policies. A compromise that will allow both sides to claim final victory in the battle would be the best outcome.
📰 India remains the cornerstone of our foreign policy: Bhutan Foreign Minister
Bhutan's new Foreign Minister Tandi Dorji reiterates the country’s policy of not having full relations with any permanent member of the UN Security Council, including China
•Bhutan’s Prime Minister Lotay Tshering is expected to visit Delhi in late December, in the first high-level exchange between the Modi government and the newly elected government of the Druk Nyamrup Tshogpa (DNT) party that won a surprise victory last month. Ahead of the visit, Bhutan’s new Foreign Minister, Tandi Dorji, speaking over the telephone, said the change in government would not alter the Himalayan country’s foreign policy focus.
In the run-up to the election, the manifesto of your party, the DNT, had not focussed much on foreign policy issues. Many are hence curious about what your government’s foreign policy agenda is?
•The foreign policy of all parties in Bhutan follow the policies already established [by the monarchy], and I think whoever would have come to power would have the same policy in place. We will continue to build on that policy, with India as the cornerstone of our foreign policy. PM Dr. Lotay Tshering has said he would like to take India-Bhutan friendship to greater heights. His visit to India towards the end of the month will be his first call abroad, and we will hope to finalise India’s assistance for the 12th Five-Year Plan. The government hopes to establish its ties with the Government of India and would like to invite Prime Minister [Narendra] Modi for his long-awaited visit to Bhutan.
There have been some divergences from the past policies however. In the campaign, for example, one party (DPT) made “Bhutan’s sovereignty” its plank. Another concern was reducing Bhutan’s indebtedness to India. Will you discuss these issues with New Delhi?
•We are always grateful to India for its assistance, and it is only natural that as a land-locked country, we will continue to harness our needs from India. Yes, we are concerned about the issue of debt, but most of those debts are incurred from hydropower projects, which we believe will be paid back in time, once the projects are completed.
•On non-hydropower projects, we are doing some rethinking. Bhutan will graduate from an LDC (least developed country) to a middle-income country by 2023. So we will have to look for ways for our domestic revenues to meet our current budget at least.
•Those are serious issues for us, and we are very happy that India continues to assist us through this process.
But there have been serious differences over the rate of hydropower that India pays. How important will resolving this be?
•I don’t think this is a difficult issue. [Foreign Secretary] Mr. [Vijay] Gokhale had assured us that India will look at our requests very favourably. Eventually, what is good for Bhutan will also be good for India to a large extent, and we hope to discuss these issues during the PM’s visit.
•More than the hydropower rate that India pays, we are concerned about India’s revised policy on cross-border trade of electricity (CBTE) that will certainly impact Bhutan’s ability to sell power to India. We would like to see reforms in this policy.
India has been very keen on the passage of the BBIN (Bangladesh-Bhutan-India-Nepal) Motor Vehicles Agreement that was shelved by the Bhutanese Parliament. Will your government try to revive this, given the opposition from local Bhutanese transporters to freeing access for vehicular traffic?
•We are definitely looking at it, and we will reconsider the BBIN agreement.
•The arrangement has advantages and disadvantages, but we know that some of the outcomes will benefit Bhutan, and we will reconsider the agreement.
The former Prime Minister, who had to deal with the Doklam crisis, spoke of Bhutan being one of the smallest countries sandwiched between two Asian giants. How does your government hope to navigate ties with China?
•We have a very cordial relationship with China, but we do not have diplomatic relations with them.
•This is not because we don’t want them, but because it has always been our foreign policy not to build full relations with any of the permanent member of the UN Security Council, like China, U.S., etc. I don’t think that will change. We have people-to-people interactions and we cannot wish away China as our neighbour to our north.
How do you hope to strengthen people-to-people ties with India? In the past few years, we have seen more Bhutanese students making the shift to colleges in countries such as Thailand, Australia and Singapore, instead of India…
•There has always been a great interest from our students in India. I myself am a product of an Indian education: I went to St. Joseph’s school at North Point, Darjeeling, when I was four years old and then later studied at the Armed Forces Medical College in Pune.
•We would like to explore how more Indian universities can come to Bhutan and attract more students, because 70% of Bhutanese students would still prefer to study in India as it is more affordable and gives better value for them.
•The rest may be wealthier and able to send children abroad to study, but we hope to step up India-Bhutan exchanges for all.
📰 Services agree on Permanent Chair
Chiefs of Staff Committee to get full-time head to improve jointmanship: Lanba
•The three services are taking steps to improve ‘jointmanship’ and have agreed on the appointment of a Permanent Chairman of the Chiefs of Staff Committee, the Chief of the Naval Staff, Admiral Sunil Lanba, said on Monday.
•“The three services have finally agreed to a PCCoSC, what his roles and responsibilities will be,” Adm. Lanba said at a press conference ahead of Navy Day on December 4.
•“This proposal has been forwarded to the Defence Ministry and it is being examined there.”
•The PCCoSC is envisaged as a single-point military adviser to the government.
•Adm. Lanba, who is the current Chairman, CoSC, said there were no differences among the service chiefs, and that the three of them generally agreed on “all issues among ourselves including overruling our individual headquarters to take jointman issues, forward”.
•On the proposal for setting up theatre commands, he said there was need first for a higher defence organisation in New Delhi before creating them. “We need one operational commander to look after that theatre,” he said.
RNEL delay
•Asked about the long delay by Reliance Naval Engineering Ltd. (RNEL) in delivering Naval Offshore Patrol Vessels (NOPV), Adm. Lanba asserted that there was “no preferential treatment” for the company. While the contract had not been cancelled, the Navy was examining the issue to see what could be done.
•“RNEL is undergoing corporate debt restructuring. They are being taken to court by their banker IDBI,” he said, adding that RNEL’s bank guarantee had been encashed and that punitive action was being taken.
•In 2011, Pipavav Defence and Offshore Engineering was given a ₹2,500-crore order for five NOPVs but work never started as the shipyard got into debt and was subsequently taken over by Anil Ambani’s Reliance Defence. While the first NOPV was to have been delivered in early 2015, as per the original schedule, no deliveries have been made till date.
‘Only one front’
•On a possible two-front war, Adm. Lanba observed that for the Navy, “Indian Ocean is the only front”, adding that on that front the balance of power remained with the Indian Navy, China’s increasing presence notwithstanding. However, in the South China Sea, China had a similar advantage, he said.
•Stating that a total of three Carrier Battle Groups (CBG) would suffice for ensuring maritime security in the Indian Ocean region, the Naval chief made a strong pitch for a second Indigenous Aircraft Carrier (IAC).
•India’s first IAC is presently in its third and final phase of construction at Kochi and is expected to commence sea trials by mid-2020.
•A carrier’s substantial integral air power with rapid mobility would be a force multiplier giving India enhanced combat power to protect its maritime interests and sea lines of communication, Adm. Lanba said. “Case for a second IAC has received necessary impetus… spread over a period of 10 years, the expenditure would not only be feasible, but would also be ploughed back into our own economy.”
•China has significantly scaled up construction of aircraft carriers with the first indigenous carrier undergoing trials and a second one under construction. With threat from China, Japan has recently announced that its intent to deploy F-35 fighter jets on its helicopter carriers.
•The Navy envisages IAC-II having a displacement of 65,000 tonnes and featuring a Catapult Assisted Take Off But Arrested Recovery (CARTOBAR) for launching aircraft. “We will see the start of construction in three years,” Adm. Lanba added.
•The tempo of overseas deployment and exercises was at an all-time high this year, he added. “Indian Navy conducted 20 exercises with friendly foreign navies.”
📰 5.8-tonne GSAT-11 ready for launch
Part of ISRO’s new satellite fleet for high-speed Internet services
•A team of top officials and engineers of the Indian Space Research Organisation (IISRO), now stationed in the Guiana Space Centre, South America, is going over the last steps before it sees off the heaviest Indian communication satellite, GSAT-11, to its space orbit. The liftoff is slated for the wee hours of Wednesday, December 5, India time, but from half way across the globe.
•The 5,854-kg satellite, almost double the biggest one built or launched by ISRO to date, will ride up on European launch vehicle Ariane 5 ECA, numbered VA246, between 2.07 a.m. and 3.23 a.m. IST, according to the schedule of Arianespace, which is providing the launch services. It will be sunset at nearby Kourou in French Guiana, located 5 degrees North of the Equator, with a launch window between 5.37 p.m. and 6.53 p.m. local time.
•ISRO Chairman K. Sivan, besides the project director and scores of engineers, who have been taking care of the satellite for the last 30-odd days, are in Kourou for the big day, it is learnt.
•GSAT-11 is part of ISRO’s new family of high-throughput communication satellite (HTS) fleet that will drive the country's Internet broadband from space to untouched areas; the broadband domain is now ruled by underground fibre and covers partial and convenient locations.
High-speed data
•Already up in space are two HTSs — GSAT-29 (November 14) and GSAT-19 (June 2017) — while one more is due to join them in the near future. They are all to provide high-speed Internet data services at the rate of 100 Gbps (Gigabits per second) to Indian users. ISRO has earlier said this speed would be far better than what is available in the country now.
•The HTSs will also be the backbone of pan-India digital or easy Internet-based programmes and services — such as Digital India, BharathNet for rural e-governance, and commercial and public sector VSAT Net service providers.
•According to ISRO, GSAT-11’s multiple spot beam coverage — 32 in Ku band and eight in Ka bands — will deliver an improved service of 16 gbps over the Indian region and nearby islands. It said, “GSAT-11 will play a vital role in providing broadband services across the country. It will also provide a platform to demonstrate new generation applications.”
New date
•GSAT-11 was earlier planned for launch on May 26 this year. A few days before it, ISRO,brought it back from Kourou to the Bengaluru satellite centre for additional checks. The spacecraft was sent back in October for the rescheduled launch.
•Its co-passenger is South Korea’s GEO-KOMPSAT-2A, a meteorology satellite.
📰 Uneasy fields: on Kisan Mukti Morcha
In order to address farmers’ distress, the entire agricultural chain needs a reboot
•Last week, tens of thousands of farmers reached Delhi for a two-day Kisan Mukti Morcha and held the country’s attention. They sought a special 21-day Parliament session to discuss the crisis in India’s agrarian economy. Their key demands included an unqualified loan waiver to mitigate indebtedness levels in farm households and better remuneration for their produce instead of promises on paper of high minimum support prices. These broad demands sum up the precarious livelihood of a majority of farmers who work on small, fragmented land holdings. This is certainly not the first distress call from the farm sector to Parliament and policymakers; several such stirs have taken place across States over the past year alone. In March, when around 30,000 farmers and tribals from Maharashtra walked for days to Mumbai, they drew appreciation for their restrained conduct compared to the usually unruly protesters. And, they secured assurances from Chief Minister Devendra Fadnavis of tangible action on their demands over the next six months. Finding little movement on those promises, many of those who had marched to Mumbai joined the rally in Delhi, which was by far the biggest such gathering. Galvanised by the All India Kisan Sangharsh Coordination Committee, it reportedly had participation from 200-plus organisations, with farmers from 24 States.
•With rural distress palpable, elections for five State Assemblies under way, and the Lok Sabha election just about six months later, farmers’ issues are bound to further dominate politics. Official data released last Friday show that the agriculture sector clocked a growth of just 3.8% (on a gross value added basis) in the second quarter of this fiscal, compared to the 5.3% recorded in the preceding quarter. To put that in perspective, farm sector output was growing strongly in the first three quarters of 2016-17, before imploding in the aftermath of the demonetisation exercise. The latest number suggests that the semblance of recovery seen in the previous two quarters has dimmed too. The government has done an about-turn on its responses to a parliamentary panel that farmers were hit hard by the note ban, and sought to reassure farmers by reiterating its own initiatives for the sector. The Opposition, in turn, is using the farmers’ platform to take jibes at the BJP-led government at the Centre and in many States. Unfortunately, neither has focussed on the big picture strategy needed to reboot India’s hugely state-controlled farm sector. The Centre exhibits an aversion to inconvenient facts. And the Opposition’s attempts to tap into their angst with breezy promises of loan waivers (with both the Congress and the Telangana Rashtra Samithi promising them in State election pitches) that over-simplify the crisis. Farmers are not just vote banks, but also critical economic actors who aspire to live without handouts. Till that is clearly recognised, paying lip service to the humble farmer will continue to distort the discourse.
📰 Make planning fashionable again
The withdrawal of the Indian state from economic decision-making has had consequences on industry
•Economic planning is not considered fashionable today. Nevertheless, contemporary economic debates will have much to gain by revisiting the ideas on planning, championed in particular by Jawaharlal Nehru.
•As is well known, India under Nehru’s leadership inaugurated a strategy for industrialisation of the country in the early 1950s. This involved the setting up of public sector units (PSUs) in diverse areas of manufacturing; research institutions in cutting-edge technologies of the time such as space and atomic energy; and centres of higher learning, including the Indian Institutes of Technologies (IITs). All of these by a poor country, which was still struggling to find its feet amidst the multiple blows it had to endure during the early years after Independence.
Challenging the orthodoxy
•But that was not all. By consciously entering into sectors such as machine building and nuclear research, which needed capital and technology more critically than labour, India was also challenging a deeply held orthodoxy in economic theory. From the time of David Ricardo, a galaxy of economists had argued (and many still argue) that countries should develop industries based on their comparative advantage. According to this theory, a labour-surplus country like India should be limiting its industrial development ambitions to labour-intensive sectors, such as garments or leather. After all, the theory would ask, why should a country like India produce machines or pharmaceuticals domestically, when such products can easily be imported from advanced countries?
•During the colonial period, the British government in India had indeed been putting the theory of comparative advantage into practice — to the disadvantage of most Indians. In his book The Discovery of India, Nehru described how the colonial government systematically strangulated Indian entrepreneurship. Writing from his prison cell in Ahmednagar Fort in the early 1940s, Nehru argued that the fundamental requirements for a modern India included “a heavy engineering and machine-making industry, scientific research institutes, and electric power.”
•The programmes launched in India from the 1950s onwards to build indigenous capabilities in capital- and technology-intensive sectors, despite the general poverty of the country, became a model for other developing and Third World nations. The debates around Indian planning provided a fertile launching pad for the evolution of development economics as an important sub-discipline.
•It will only be reasonable to argue that the foundations for India’s diversified economic base had been laid during the planning years. The successes that India enjoys today in the information technology and knowledge-intensive sectors owe much to the research and educational institutions that were built during the early decades. At the same time, however, planning did very little to remove the hurdles to the growth of agriculture and small-scale industries. India’s record during the post-Independence period in implementing land reforms and ensuring primary education for all has been rather unimpressive. As a result, the benefits from state-led development have so far reached only a minority of Indians.
•India’s commitment towards development through planning had begun to diminish from the early 1990s itself — much before the Planning Commission was formally dismantled in 2014. After the introduction of economic reforms in 1991, public investment, especially on agriculture and industry, has been on a decline in the country. PSUs have begun to be valued only for the returns they bring as commercial entities. There has been little recognition of the important role that PSUs can play as creators of new technologies and knowledge, particularly in fields in which the private sector may have little interest or capabilities.
•The disregard for planning and the general withdrawal of the state from economic decision-making have had important consequences on Indian industry. India is today one of the largest markets in the world for a wide range of goods, whether passenger cars, mobile phones or food products. Despite the emergence of such a large domestic market, the record of Indian manufacturing in absorbing the large labour reserves in the country remains abysmal. The imports of machinery, transport equipment, electronic goods and all their components have been rising continuously in India from the 2000s onwards. This trend has not been reversed after the introduction of the ‘Make in India’ initiative.
Planning in a globalised world
•Planning is not incompatible with markets and globalisation. On the contrary, a developing country trying hard to stay afloat amidst the turbulence of a global economy requires more, and not less, guidance thorough industrial policies. The successes achieved by East Asian countries such as South Korea in manufacturing are, to a great extent, the result of strategic planning over several decades by their governments. China is gradually shifting its economic base from low-wage industries, and is now emerging as a global leader, even ahead of the U.S., in several new technologies, including artificial intelligence and renewable energy. These Chinese achievements owe much to the careful planning and investments made by its government, particularly in the area of science and technology.
•The employment challenge that India faces — close to 15 million waiting to be absorbed in the industrial and services sectors every year — is possibly bigger than that faced by any other country (except China) in the world. It cannot be resolved with the technologies that foreign companies bring into India, which tend to be labour saving. What India requires, on the other hand, are technological advances that create new economic opportunities and absorb — not displace — labour. Consider, for instance, breakthroughs in biotechnology that may find new commercial applications for our agricultural products, or electric vehicles and renewable energy solutions that depend less on imported material.
•India’s research institutions and our PSUs should engage in the creation and dissemination of such technologies. The country’s industrial policies should be able to enthuse young and educated entrepreneurs from rural areas to make use of these technologies to create new jobs. And, for all these, planning should be brought back to the centre of our economic discussions.
•Economic planning is not considered fashionable today. Nevertheless, contemporary economic debates will have much to gain by revisiting the ideas on planning, championed in particular by Jawaharlal Nehru.
•As is well known, India under Nehru’s leadership inaugurated a strategy for industrialisation of the country in the early 1950s. This involved the setting up of public sector units (PSUs) in diverse areas of manufacturing; research institutions in cutting-edge technologies of the time such as space and atomic energy; and centres of higher learning, including the Indian Institutes of Technologies (IITs). All of these by a poor country, which was still struggling to find its feet amidst the multiple blows it had to endure during the early years after Independence.
Challenging the orthodoxy
•But that was not all. By consciously entering into sectors such as machine building and nuclear research, which needed capital and technology more critically than labour, India was also challenging a deeply held orthodoxy in economic theory. From the time of David Ricardo, a galaxy of economists had argued (and many still argue) that countries should develop industries based on their comparative advantage. According to this theory, a labour-surplus country like India should be limiting its industrial development ambitions to labour-intensive sectors, such as garments or leather. After all, the theory would ask, why should a country like India produce machines or pharmaceuticals domestically, when such products can easily be imported from advanced countries?
•During the colonial period, the British government in India had indeed been putting the theory of comparative advantage into practice — to the disadvantage of most Indians. In his book The Discovery of India, Nehru described how the colonial government systematically strangulated Indian entrepreneurship. Writing from his prison cell in Ahmednagar Fort in the early 1940s, Nehru argued that the fundamental requirements for a modern India included “a heavy engineering and machine-making industry, scientific research institutes, and electric power.”
•The programmes launched in India from the 1950s onwards to build indigenous capabilities in capital- and technology-intensive sectors, despite the general poverty of the country, became a model for other developing and Third World nations. The debates around Indian planning provided a fertile launching pad for the evolution of development economics as an important sub-discipline.
•It will only be reasonable to argue that the foundations for India’s diversified economic base had been laid during the planning years. The successes that India enjoys today in the information technology and knowledge-intensive sectors owe much to the research and educational institutions that were built during the early decades. At the same time, however, planning did very little to remove the hurdles to the growth of agriculture and small-scale industries. India’s record during the post-Independence period in implementing land reforms and ensuring primary education for all has been rather unimpressive. As a result, the benefits from state-led development have so far reached only a minority of Indians.
•India’s commitment towards development through planning had begun to diminish from the early 1990s itself — much before the Planning Commission was formally dismantled in 2014. After the introduction of economic reforms in 1991, public investment, especially on agriculture and industry, has been on a decline in the country. PSUs have begun to be valued only for the returns they bring as commercial entities. There has been little recognition of the important role that PSUs can play as creators of new technologies and knowledge, particularly in fields in which the private sector may have little interest or capabilities.
•The disregard for planning and the general withdrawal of the state from economic decision-making have had important consequences on Indian industry. India is today one of the largest markets in the world for a wide range of goods, whether passenger cars, mobile phones or food products. Despite the emergence of such a large domestic market, the record of Indian manufacturing in absorbing the large labour reserves in the country remains abysmal. The imports of machinery, transport equipment, electronic goods and all their components have been rising continuously in India from the 2000s onwards. This trend has not been reversed after the introduction of the ‘Make in India’ initiative.
Planning in a globalised world
•Planning is not incompatible with markets and globalisation. On the contrary, a developing country trying hard to stay afloat amidst the turbulence of a global economy requires more, and not less, guidance thorough industrial policies. The successes achieved by East Asian countries such as South Korea in manufacturing are, to a great extent, the result of strategic planning over several decades by their governments. China is gradually shifting its economic base from low-wage industries, and is now emerging as a global leader, even ahead of the U.S., in several new technologies, including artificial intelligence and renewable energy. These Chinese achievements owe much to the careful planning and investments made by its government, particularly in the area of science and technology.
•The employment challenge that India faces — close to 15 million waiting to be absorbed in the industrial and services sectors every year — is possibly bigger than that faced by any other country (except China) in the world. It cannot be resolved with the technologies that foreign companies bring into India, which tend to be labour saving. What India requires, on the other hand, are technological advances that create new economic opportunities and absorb — not displace — labour. Consider, for instance, breakthroughs in biotechnology that may find new commercial applications for our agricultural products, or electric vehicles and renewable energy solutions that depend less on imported material.
•India’s research institutions and our PSUs should engage in the creation and dissemination of such technologies. The country’s industrial policies should be able to enthuse young and educated entrepreneurs from rural areas to make use of these technologies to create new jobs. And, for all these, planning should be brought back to the centre of our economic discussions.
📰 The boundaries of ethics
He Jiankui, who claims to have made the world’s first gene-edited babies, deserves to be rapped but not condemned
•In November, Chinese researcher He Jiankui set off a storm when he claimed that he had created the world’s first babies, a pair of twin girls, genetically edited with CRISPR-cas9. He said that the twins had genes now that protected them from HIV. Ideally this should have been a laudable scientific advancement. But Mr. He has been condemned, not only by peers in China but by geneticists, biotechnologists and ethicists worldover.
•Mr. He broke the scientific and regulatory protocol by not vetting his experiments, which involved embryos and hopeful parents, by his organisation’s ethics committees. He also expounded on his work to non-scientists before submitting his work for peer-review. These are enough grounds to invalidate any medico-scientific investigation, however novel and groundbreaking. Yet the greater consternation is that an ethical red line has been transgressed.
Defining what is permissible
•The current international consensus is that editing ‘germ line’ (or reproductive) cells of healthy humans is unethical and should only be used as a last resort as it could mean introducing unknown and potentially harmful changes in subsequent generations and even entire populations. While the principle of ‘do no harm’ pervades scientific practice, particularly in light of the early 20th century’s European and American experiments with eugenics, it shouldn’t be forgotten that ethical norms in science aren’t framed in a higher moral plane. What is permissible and ethical is also influenced by business interests, concerns among countries that they might lose a competitive advantage, and how medical advances have actually progressed.
•It might seem that the Space Wars of the 1960s between the U.S. and the Soviet Union hark back to a bygone era, but the U.S. has on many occasions expressed concerns about China shrinking its scientific dominance. The National Science Foundation’s Science and Engineering Indicators 2018 report says, “The U.S. still leads by many S&T measures, but our lead is decreasing in certain areas that are important to our country … from gene editing to artificial intelligence … and it’s critical that we stay at the forefront of science to mitigate those risks.” When China announced its first CRISPR-led human trial in 2016, Nature quoted cancer immunotherapy expert Carl June as saying, “I think this is going to trigger ‘Sputnik 2.0’, a biomedical duel on progress between China and the United States.” Private companies in both countries have spent billions on the prospects of gene-editing. Thus where cash is already riding on a technology that’s still many years away, those who develop tools towards realising these goals can often justify their ventures, however ethically problematic they may be.
Various scientific works
•Harvard geneticist George Church is on a project to resurrect a version of the extinct woolly mammoth. The purported reason for ‘de-extinctifying’ this animal is that the Asian elephant is endangered and susceptible to a herpes virus. Therefore, having a new closely related species, sans the virus, could mean saving it. There’s also a global warming kicker. The new species would live in the Siberian permafrost and punch holes in the snow and prevent tundra permafrost from melting and releasing greenhouse gases. While Professor Church agrees that these are speculative ideas, it would be naïve to assume that his work is of interest only to elephant conservationists. Every single step towards recreating the mammoth will inform understanding on how to safely and effectively alter cells to delete harmful genes and eventually promote ‘healthy ones’ in humans.
•Before Robert Edwards and Patrick Steptoe were awarded the 2010 Nobel Prize for pioneering the technique of In Vitro Fertilisation (IVF), they were accused of meddling with nature, and no further public funding for their research was allowed.
•The New York Times reported that a ‘three-parent baby’ (incorporating DNA from three people) was first created in the U.S. in the 1990s and no permissions were granted by the authorities for this. The doctors were denied public funding but there was no worldwide condemnation and no compelling reason other than infertility in some patients and educated guesses that motivated the doctors.
•The history of IVF shows that there was no demonstrable case made for the necessity of test-tube babies and neither were there years of evidence from, say, primate studies for scientists to conclude that IVF babies would be as healthy or no more at risk from infections than naturally conceived babies. The evidence for its suitability and safety only emerged over time. Assuming that Mr. He’s done what he claims, he deserves to be rapped but not condemned or vilified. He’s broken a red light, not crossed a rubicon.
📰 Jaitley pitches for easing trade barriers
‘Consumers globally can get the best products and services at a competitive cost’
•Union Finance and Corporate Affairs Minister Arun Jaitley on Monday made a strong pitch for free global trade, stressing it was in the larger interests of consumers around the world, and enabled them to get the best products and services at a competitive cost.
•“India remains committed to improving all hindrances in trade facilitation and easing trade across barriers. We are investing in our infrastructure and using technology to the best possible level and are willing to inculcate and implement best practices from the world,” he underlined.
•The Minister’s remarks during his opening address at a meeting of the World Customs Organisation’s policy commission here, assume significance at a time when protectionist tendencies in the developed world have triggered trade wars and built barriers to free movement of goods and services.
•“From the point of view of consumers, they are entitled to goods and services that are indeed the best and most cost-competitive… No nation can manufacture all products or specialise in all forms of services. And therefore, trading across the barriers of nations is an economic imperative of the time,” Mr. Jaitley said.
Initial resistance
•Recalling the initial resistance from some countries to trade facilitation measures when they came up on the World Trade Organisation’s agenda in 1996, the Minister said that over time, every country realised the importance of the subject and its implications for domestic reforms as well as the performance of individual economies.
•“Nations across the world have realised that increase in trade itself gives an impetus to the global economy (and their own),” Mr. Jaitley said.
•It is this recognition that has led countries to invest a lot in airports, ports, railways and other infrastructure to support trade in both goods and services.
•“India has, of course, been at the forefront of increasing its capacity. And this is evident from the fact that in the last three years, India has moved from 140 to 77 in the World Bank’s ease of doing business rankings. On trading across barriers, we were ranked 140th out of 190 countries just a few years ago. And within a year of all the reforms made within our country, we have come to 80th position – that’s a great movement upward of 60 positions,” the Minister said.
•Revenue Secretary Ajay Bhushan Pandey said that India’s focus in improving customs clearances is on the reduction in dwell time of cargo, transaction costs and bringing transparency in rules and regulations with simpler procedures. This, he said, is in sync with the WCO’s current focus theme of creating smart borders for seamless trade, travel and transport.
•However, Mr. Pandey said that the Customs department also needs to be effective and lethal when required, even as it seeks to facilitate seamless movement at the borders.
•“While all assistance is to be given for legitimate cross-border trade, dangers posed by illicit trade are too damaging to be ignored. The key challenge for the Customs today is to arrive at a convergence of facilitation and enforcement. The economic frauds cut at the very roots of our nation and must be dealt with severely,” he said, stressing that the solution lies in collaborative and co-operative management of borders, within a country’s official machinery as well as between countries.
📰 ‘CSO sourced data must be respected’
Current GDP growth on upward curve, says Finance Commission Chairman
•The Central Statistics Office (CSO) is a respected and credible organisation and its value and credibility should not be marred in any way, said Finance Commission Chairman N.K. Singh.
•To a query on the reliability of the new back-series GDP data released last week , he said: “CSO sourced data, figures and methodology deserve a degree of respect, which it traditionally had. Indian official statistics have a track record and it is accepted globally. We have to respect it. Otherwise, we will be doing a disservice.”
•Mr. Singh was in the city to deliver the fifth G. Ramachandran Memorial Lecture organised by the Southern Indian Chamber of Commerce and Industry.
•On the current GDP growth trend, he said it was on the upward curve and would most likely hit the 8% target by early 2019.
•“We need to do everything. Our macroeconomic stability looks to be durable; monetary and fiscal policy looks to be in tandem and I hope that in the coming period GDP would improve further,” he said.
•Asked about the State deficit and how it could be tackled, he said the deficit varied from State to State. In some States, debt-to-GDP ratio was closer to 20%. In other States, they were misaligned, Mr. Singh said.
States’ debt
•“We would need to calibrate the debt part of each State in accordance with their potential. For instance, in a State where debt-to-GDP ratio is 28% or 29%, bringing it down to 20% in one year would not be practicable. We have to give a credible debt trajectory, which is both practicable and fair,” he said. He said that fiscal federalism faced eight primary challenges that included the issue of Finance Commission and GST council; future of the VII schedule; broad issue of Centrally Sponsored Schemes; changes preceding the 15th Finance Commission; institutional mechanisms for fostering a robust and dynamic federal compact; issue of conditional transfers; revenue deficit grants; and restriction of borrowings by States.
•“Addressing these, and more importantly reconciling many inherent contradictions remains problematic. We are grappling with these complexities and hopefully will arrive at conclusions which will be fair, balanced, transparent, equitable and above all rational,” Mr. Singh said.
📰 Sailing prowess of world navies on show off Ezhimala
As many as 31 countries are taking part in Admiral’s Cup Regatta being organised by Indian Naval Academy
•Sailing and racing skills of naval cadets from 31 countries were on display in the waters of the Ettikulam Bay here on Monday. The cadets surfed downwind and upwind on their Laser Radial sailing boats on the first day of the Admiral Cup Sailing Regatta 2018 conducted by the Indian Naval Academy (INA) here.
•The ninth edition of the annual race was formally inaugurated by INA Commandant Vice Admiral R.B. Pandit on Sunday.
•Besides foreign cadets, two Indian teams, the INA and the National Defence Academy are participating in the regatta.
•The foreign teams are from Australia, Bahrain, Bangladesh, Brazil, Bulgaria, Canada, China, Egypt, France, Germany, Indonesia, Iran, Israel, Italy, Japan, Malaysia, the Maldives, Myanmar, Nigeria, Oman, Poland, Portugal, Qatar, Singapore, South Africa, Sri Lanka, the United Arab Emirates, the United Kingdom, the United States of America and Vietnam.
•Vietnam is participating as observer for the event.
Good participation
•Captain Abhimanyu Patanker, technical director of the event, said that the Admiral’s Cup Regatta 2018 had the distinction of having the highest number of participating countries in the world for any military sailing competitive event, he added.
•Participants also highlighted the importance of the event as a way of making bridges of friendship among the navies. “We may win or lose the race. That does not matter because we will take the friendship back to our homes,” said Lt. Commodore Kamrull Hasan of the Bangladesh Navy.
Great competition
•Lt. Benjamin Sleister of the United States Navy, the defending champions, said the team was anticipating great competition this time. Lt. Simon Schnetier of the Royal Navy of the United Kingdom said that while his team was used to dusty conditions and rapid changes in direction and strength, it was looking for a more competitive environment because of the consistency of the wind here on Monday afternoon.
•The races are divided into initial series and final series. All teams will initially sail in six races in two groups with one boat of each country placed in each group. On completion of the initial series, the top half of each group will form the gold fleet and sail four races in the final series.
•All races sailed in the initial and final series will count for the overall series positions.
•The top two teams would be selected on the basis of the combined performance of both boats. Individual medals would be awarded in the men’s and women’s category, the organisers said.
📰 Soyuz: first manned mission to ISS since October failure
The spacecraft entered the orbit and will stay on course for six-and-a-half months
•A Soyuz rocket carrying Russian, American and Canadian astronauts took off from Kazakhstan and reached orbit on Monday, in the first manned mission since a failed launch in October.
•Russian cosmonaut Oleg Kononenko, Anne McClain of NASA and David Saint-Jacques of the Canadian Space Agency blasted off for a six-and-a-half month mission on the International Space Station at 1131 GMT.
•A few minutes after their rocket lifted off from the Baikonur Cosmodrome, Russian space agency Roscomos announced that the capsule was “successfully launched into orbit”.
•NASA administrator Jim Bridenstine confirmed on Twitter that the crew were “safely in orbit” and thanked the U.S. and Russian teams “for their dedication to making this launch a success”.
•It was the first manned launch for the Soviet-era Soyuz since October 11, when a rocket carrying Russia’s Aleksey Ovchinin and U.S. astronaut Nick Hague failed just minutes after blast-off, forcing the pair to make an emergency landing.
•They escaped unharmed but the failed launch — the first such incident in Russia’s post-Soviet history — raised concerns about the state of the Soyuz programme.
•The Soyuz is the only means of reaching the ISS since the U.S. retired the space shuttle in 2011.
•Mr. Kononenko, Ms. McClain and Mr. Saint-Jacques showed no signs of worry as they boarded a bus to take them to the launch. They smiled and waved, with Saint-Jacques blowing kisses and giving the thumbs-up to a crowd of well-wishers.
•At a press conference on the eve of the launch, crew commander Kononenko said the crew was prepared and that “risk is part of our profession.”
•“We are psychologically and technically prepared for blast-off and any situation which, God forbid, may occur on board.”
•Ms. McClain, a 39-year-old former military pilot, said the crew looked forward to going up. “We feel very ready for it,” she said.
•Mr. Saint-Jacques, 48, described the Soyuz spacecraft as “incredibly safe”.
•The accident highlighted the “smart design of the Soyuz and the incredible work that the search and rescue people here on the ground are ready to do every launch,” he said.
•In a successful rehearsal for Monday’s flight, a Soyuz cargo vessel took off on November 16 from Baikonur and delivered several tonnes of food, fuel and supplies to the ISS.
•Russia said last month the October launch had failed because of a sensor that was damaged during assembly at the Baikonur cosmodrome but insisted the spacecraft remained reliable.
•Ahead of Monday’s launch a Russian Orthodox priest blessed the spaceship on its launchpad, in accordance with tradition.
•Of the trio set to reach the ISS six hours after blast-off, both Saint-Jacques and McClain are flying for the first time.
•Mr. Kononenko is beginning his fourth mission to add to an impressive 533 days in space.
•The veteran said the crew would conduct a spacewalk on December 11 as part of an investigation into a mysterious hole that has caused an air leak on the ISS.
•Mr. Saint-Jacques will be the first Canadian astronaut to visit the space station since Chris Hadfield, who recorded a version of David Bowie’s “Space Oddity” on board in 2013.
•Mr. Saint-Jacques joked that he had received so much training ahead of the flight “that I felt at the end that I could build a Soyuz in my backyard.”
•Ms. McClain served in Iraq and has represented the United States in women’s rugby.
•She has said that training to spacewalk resembled the sport since it demands “grit, toughness, mental focus, and more”.
•Russia-US cooperation in space has remained one of the few areas not affected by a crisis in ties between the former Cold War enemies.
•But comments by the combative chief of the Russian space agency, Dmitry Rogozin, have increasingly raised eyebrows.
•He recently joked Russia would send a mission to the Moon to “verify” whether or not NASA lunar landings ever took place.
•In recent years Russia’s debt-laden space industry has suffered a number of mishaps including the loss of cargo spacecraft and satellites.
