📰 India, Iran agree to accelerate Chabahar port development
Indians in Tehran raise concerns over Citizenship Act
•Days after his visit to Washington, External Affairs Minister Subrahmanyam Jaishankar met with Iranian Foreign Minister Javad Zarif for a meeting of the 19th India-Iran joint commission, including talks on the Chabahar port, during a visit that could see him dealing with concerns of Indian expatriates over the Citizenship (Amendment) Act as well.
•In a tweet after the meeting on Sunday, Mr. Zarif said they had “excellent discussions on closer bilateral relations and regional and global issues affecting our respective countries,” adding that India-Iran ties are “ancient, historic and unbreakable”.
Productive meeting
•Mr. Jaishankar said the meeting with Mr. Zarif and the Iranian delegation had been “very productive”. “ [We] reviewed the entire gamut of our cooperation [and] agreed on accelerating our Chabahar project,” he said in a tweet.
•The meeting of the two ministers was the first since last month, when Mr. Zarif had told a group of visiting Indian journalists that he was “disappointed” that India had allowed itself to be “bullied” by the United States and stopped all oil imports from Iran. Speaking in Delhi, Iran’s Ambassador Ali Chegeni had earlier suggested that India’s adherence to U.S. sanctions was also affecting Chabahar port development plans.
•In Washington last week, however, a senior U.S. official made it clear that it would continue its “narrow exemption” to India to develop the Chabahar port, recognising its role as “as a lifeline to Afghanistan in terms for India to be able to export humanitarian supplies and potentially helping Afghanistan diversify its export opportunities.”
•Subsequently, diplomats from India, Iran and Afghanistan met in Delhi on Friday and discussed several new initiatives for the trilateral project at Chabahar.
Citizenship Act flagged
•Meanwhile, the Mehr news agency reported that a “number of Indian businesspersons, professionals, university and seminary students and scholars living in Iran” sought a meeting with Mr. Jaishankar to discuss protests in India.
•MEA officials did not respond to a query about whether the groups had been granted a meeting with Mr. Jaishankar, or if the CAA had come up during his talks with the Iranian leadership. Mr. Jaishankar is expected to meet with Iranian President Hassan Rouhani before he leaves Tehran on Monday and travel next to Oman for bilateral talks.
We are watchful of the evolving food inflation situation — at this point it looks transient. But we need some time to confirm that, says RBI Governor
•As he steps into his second year as Reserve Bank of India Governor, Shaktikanta Das says the inflation targeting process is working well, and stresses that his priority will be to boost growth and resolve financial sector issues.
It is over three years now since the Monetary Policy Committee (MPC) was first constituted. The term of the present committee will end in 2021. How has been the experience with it?
•On the whole, the inflation targeting has worked well, in many senses. Number one, it is a committee-based approach, so more minds are going into decision-making. There are three external experts which bring in outside perspective. This definitely improves the quality of decision-making and the outcome or final decision itself.
•Since the time the MPC has been in place, by and large, inflation has remained within the target. Of course, one can argue that headline inflation is impacted by so many factors to which RBI has no influence. But at the end of the day, inflation has remained around 4% over the last three years so that the targets have been maintained. Without a target, we had a situation about five or six years ago when CPI [consumer price index] inflation was 10%.
•Also the minutes of the MPC meeting are also published which brings in a greater transparency to the process of decision-making. The minutes also reflect the thinking of each member. That brings in lot of transparency. So looking back, I think the inflation targeting framework has worked well.
But has inflation targeting turned out to be detrimental for growth?
•The provision in the RBI Act is very clear. It is to maintain price stability, keeping in mind the objective of growth. Therefore, the prime target is inflation. You have to suitably factor in the growth aspect also. Therefore, there is scope to give due weightage to growth also.
Do you think the target should be core inflation rather than the headline CPI inflation?
•We are still about little less than two years away from the five year of current inflation targeting regime. I think it is too early to comment on that. The present scheme is going very well. As we go closer to the date, the government will take a view on the inflation target for next five years. Of course, the RBI will be suitably consulted by the government. So far it looks to have worked quite well.
•What matters more for the common man of our country is the food inflation. Therefore, you cannot keep it away; the weightage of which is 47-48% in the overall CPI basket. The headline inflation is something that everybody understands. If you say, core inflation, that is excluding food and fuel, you are entering into complications which will not have the kind of clarity and the straightforwardness of the headline number.
Are you concerned where inflation is going currently, in the immediate short term, especially food inflation?
•Broadly, we have articulated that it is a matter which needs to be closely monitored, that is, the food inflation. We have to be watchful of the evolving situation and evolving numbers. But at this point in time, it also looks transient. And going forward, it should come down. But we need some time to watch that it is indeed transient.
Despite all that the RBI has done, monetary transmission has been unsatisfactory. What are the options before you now?
•First thing is transmission does take time. Two, the system liquidity which was in deficit till the end of May, is in surplus from June 1 onwards and hugely surplus. Every day, we are absorbing [Rs. ] two-and-a-half lakh crore. So we have kept the system in comfortable and surplus liquidity. The third thing is that the external benchmark [for loan pricing] which we had introduced from October 1. Going forward, the impact of external benchmark will be felt more and more.
Do you think there are structural issues also behind the growth slowdown?
•We have said in our annual report that it would appear that the slowdown is cyclical. However, there are structural factors also. Without getting into categorisation of the current slowdown, the focus should be on what steps need to be taken by the fiscal and monetary authorities. There has to be some countercyclical steps. There will have to be structural reforms which have been undertaken and the process needs to be continued.
RBI has identified 50 large NBFCs which are closely monitored. Out of the 50, how many are stressed. Are you going to increase the number?
•Actually 100 are being monitored. Fifty are being intensively done by the central office. From 51 to 100 are monitored by regional offices [of the RBI]. Wherever there are vulnerabilities, we have identified them and our officers are constantly engaged with the promoters and management, and nudging them to take necessary, market-related measures like to mobilise additional capital and to deleverage, to show better recoveries, etc. They [the number of such NBFCs] are not too many.
Post the PMC Bank failure and the PNB scam, the question that arises is how did they happen when the regulator does regular inspections and also has a representative on the board? How did these escape the attention of the regulators?
•In this case of the urban cooperative bank, there was no RBI representative on the board. Secondly, it is a fraud. What RBI does is supervision. RBI does not do any audit, RBI does not do any investigation. If there is a fraud, that is investigated by the law enforcement agencies. Supervision is done on the basis of certified records by the bank’s management. When that is produced before the RBI supervision team, there is no reason why the RBI should doubt its correctness.
•Having said that, and not related to the PMC Bank crisis, even well before the PMC Bank crisis, in our central board meeting it was decided to set up a separate department of supervision and a department of regulation. That was because there was lot of interconnectedness between banks, NBFCs, HFCs.
•Along with that, we have said we will also have a college of supervision to provide better skill to our officers. We are creating a separate cadre for supervision officers. We are also going to use technology, data analytics, in a big way. Plus we are also internally setting up a research and analysis wing within the department of supervision which will collate and correlate all the data, see the interconnectedness and will be able to comprehensively look at the banking structure.
What is the road ahead for PMC Bank? Is RBI open for merging it with another bank?
•There is a forensic audit which is under way. We will get the report may be in another fortnight. PMC Bank, with the help of outside valuers, they are assessing the realisable value of the assets which are securitised by the borrower group. The other assets, including land assets, the realisable value of that asset is also been assessed. So with the permission of the court, the effort is to monetise those assets and put that money into the bank.
•For that we have formed a coordination mechanism consisting of senior officer from Economic Offences Wing, the Enforcement Directorate, RBI and the administrator of the PMC Bank to quicken the process of the monetisation. So only when we have clarity with regard to the actual realisable value of all these assets which I have referred to, we will be able to decide on a next step.
What are the regulatory changes proposed for the regulation of cooperative banks?
•One aspect is changes to regulation which are within RBI, which we are going ahead and doing it. The other is making legislative changes to the law. There we have given our suggestions to the government which is under consideration. We have tried to strengthen the regulation.
What will be your immediate priority as you enter the second year?
•For a central bank, it is a constantly evolving situation. At this point in time our priority would be growth and financial sector issues — financial sector issues like the NPA resolution in the banks, and our expectation is that the resolution process become even faster. That is one; second is the NBFC sector which we are monitoring. Third is carrying out necessary changes in the regulation of urban cooperative banks.
In the recent past, couple of times, the RBI has had to publicly state that the health of the banking system is fine post the PMC Bank crisis. Do you find a case to revisit the deposit insurance limit?
•We issued those statements because of unnecessary rumours floating in the market, various names were floating saying this bank is in problem. It was creating unnecessary, unjustified uncertainties in the market. So as the regulator of banks, we thought it was necessary that we give a clear message that the banking system is safe.
•Deposit insurance is a matter which the Deposit Insurance and Credit Guarantee Corporation will decide. The matter is under review in DICGC.
📰 Afghanistan's Ashraf Ghani secures 50.64% of presidential vote in preliminary result: election commission
Candidates now have three days to file any complaints they may have before final results are announced, probably within a few weeks
•Afghanistan's President Ashraf Ghani appeared to have won a second term on December 22, narrowly scoring an outright win in preliminary polling results, but his main rival immediately vowed to challenge the tally.
•After months of political limbo and bitter allegations of fraud and corruption in the September 28 poll, Afghanistan's Independent Election Commission (IEC) said Mr. Ghani had won 50.64 percent of the vote.
•If it holds, the result is enough for Mr. Ghani to avoid a run-off. He easily beat his top challenger, Chief Executive Abdullah Abdullah, who scored 39.52 percent.
•Candidates now have three days to file any complaints they may have before final results are announced, probably within a few weeks.
•As soon as results were announced, Mr. Abdullah's office said in a statement he would contest them.
•"We would like to make it clear once again to our people, supporters, election commission and our international allies that our team will not accept the result of this fraudulent vote unless our legitimate demands are addressed," the statement read.
•Mr. Abdullah lost to Mr. Ghani in 2014 in a divisive election that saw the U.S. intervene to broker an awkward power-sharing deal between the two rivals.
•Mr. Ghani's office did not immediately comment, but the president was due to give an address at 5:00 pm (1230 GMT).
•U.S. Ambassador to Afghanistan John Bass said it was vital the full electoral process plays out.
•"It's important for all Afghans to remember: these results are preliminary. Many steps remain before final election results are certified, to ensure the Afghan people have confidence in the results," Mr. Bass wrote on Twitter.
•Preliminary results were originally due October 19 but were repeatedly delayed amid technical issues and allegations of fraud from various candidates, particularly Mr. Abdullah.
•"We, with honesty, loyalty, responsibility and faithfulness completed our duty," IEC chairwoman Hawa Alam Nuristani said.
•"We respected every single vote because we wanted democracy to endure."
Complaints procedure
•The protracted limbo between the vote and the preliminary result heaped additional uncertainty on Afghans who already are anxiously awaiting the outcome of talks between the U.S. and the Taliban.
•The U.N. Assistance Mission in Afghanistan (UNAMA), which provided support to electoral authorities, welcomed the announcement of preliminary results and called on the Electoral Complaints Commission to listen carefully to any grievances.
•"The ECC has an obligation to adjudicate any complaints it receives transparently and thoroughly so the election process may conclude in a credible manner," UNAMA head Tadamichi Yamamoto said.
•The election was meant to be the cleanest yet in Afghanistan's young democracy, with a German firm supplying biometric machines to stop people from voting more than once.
•But problems immediately emerged, with allegations of vote stuffing, illegal voting and other fraud coming almost as soon as the polls had closed.
•Nearly one million of the initial 2.7 million votes were purged owing to irregularities, meaning the election saw by far the lowest turnout of any Afghan poll.
•Ultimately, only 1.8 million votes were counted, a tiny number considering Afghanistan's estimated population of 37 million and a total of 9.6 million registered voters.
•Many people stayed away amid Taliban vows to attack polling stations, compounded by voter apathy and despair that any politician can ever improve the lot of the average Afghan.
•Thirty-one percent of votes were cast by women, the IEC said.
•Mr. Abdullah has repeatedly cried foul over 300,000 votes the IEC counted even though his team claims many of these ballots were fake or had been cast outside of polling hours.
•His apparent loss to Mr. Ghani makes Mr. Abdullah a three-time loser and his future in government is uncertain as he has ruled out another power-sharing deal with Mr. Ghani.
📰 Undoing harms: about criticism on Citizenship Amendment Act
Making the CAA non-discriminatory is the only way to dispel fears
•As the Centre tries to fend off criticism that its Citizenship (Amendment) Act excludes Muslims from its beneficial provisions and quell strident protests, it must look for ways to undo the incalculable harm caused by fears set off by the law. Indications that it is open to suggestions on the rules to implement the CAA are welcome. However, these should not be confined to the proposed rules. The government must heed the call for meaningful changes that would dispel fears gripping the country, especially minorities. The stated objective is the fast-tracking of applications from minorities from three Muslim-majority neighbourhood countries for citizenship by naturalisation. Can’t this be achieved without violating the Constitution or its secular ideals? A first step would be to further amend the Act, even by an ordinance, to drop its religion-specific wording, and make it explicit that the benefit would be open to all undocumented migrants who can prove persecution in their home countries. For allowing a Hindu, Sikh, Christian, Jain, Buddhist or Parsi to apply for citizenship after staying in the country for six years, there is no need to bar Muslims from making a similar claim. It is only an enabling law and does not oblige the government to grant citizenship to anyone. And Muslims and atheists have been persecuted in these and other countries by authorities and dominant sections.
•Regarding others such as Sri Lankan refugees, the legal bar on their applying for citizenship stands out. A 2004 amendment to the citizenship law introduced a clause that ‘illegal migrants’ will not be eligible to apply for citizenship. The definition of ‘illegal migrants’ as those who arrived without valid travel documents includes refugees. A provision of the present CAA is to remove this ‘illegal’ tag from non-Muslim minorities from Bangladesh, Afghanistan and Pakistan. Dropping the reference to ‘illegal migrants’ will automatically enable any refugee to apply for citizenship, subject to the residential requirement. Therefore, a general enabling provision to allow a relaxation of the minimum residency requirement will serve the purpose of considering citizenship to any persecuted people. This would be non-discriminatory, without obligation to grant citizenship. Finally, India should enact a refugee law wherein the right to live a life without fear or confinement can be protected. If the fear is that people may seek permanent asylum, the UNHCR can work with them officially for their voluntary repatriation, and without rendering long-term refugees ineligible for applying for citizenship. Finally, the government must end the process once the National Population Register is updated. It must give up the notion of a citizenship register. No good will come out of setting off a clamour for inclusion and panic over possible exclusion. That is a pain Indians of all persuasions can do without.
📰 A Hindu critique of Hindutva
We need to rescue religion from zealots and rediscover the spirit of religiosity
•The question I ask myself as we witness the assertion of the ideology of Hindutva and its resultant fear among minorities is this: Is it possible to have yet another reading of my religion or the experience of religiosity and take part in a collective movement for creating a society filled with love, empathy and pluralism? This is both a sociopolitical and an ethico-existential question. At a time when the Citizenship Amendment Act (CAA), 2019 has caused fear and existential insecurity among the minorities, there is a danger of the movement against the discriminatory nature of the CAA degenerating into violent communal politics. Therefore, it is important to introspect and redefine one’s politics, culture and religiosity for a collective struggle.
Transcending limiting identities
•Yes, there is a Left-Ambedkarite version of secularism, and many of us — university-educated/metropolitan intellectuals and civil society activists — are reasonably free from the burden of the conditioned mind that religious orthodoxy causes. Yet, a careful look at India’s culture and society would indicate that religion is all-pervasive: it can be seen in beliefs, rituals as well as in the dangerous stereotypes we nurture about others. Hence, the mere act of debunking religion will not help. We need to rescue religion from zealots and rediscover the spirit of religiosity as, to use Rabindranath Tagore’s language, our ‘surplus’. It is in this context that as someone born in a Hindu family, I would like to critique Hindutva or, for that matter, any deterministic/one dimensional doctrine of religion. This critique emanates not from scientism or soulless secularism, but from deep religiosity, the urge to transcend limiting identities.
•The kind of Hindutva we see today is against some of the finest aspects of my religiosity that I learned as a Hindu. While the discourse of Hindutva with its hypermasculine nationalism is essentially monolithic and centralising, I have learned about the beauty of the elasticity of human consciousness and merger of multiple faiths and paths from the likes of Ramakrishna Paramahansa. While the doctrine of militant Hindutva is recklessly engaged in an act of ‘othering’ and stigmatising Muslims, I have learned about love, empathy and listening from M.K. Gandhi’s remarkably nuanced engagement with Hinduism. Likewise, while Hindutva intensifies aggression, Mira’s bhajans teach me that love and religiosity are not separate. The character of ‘Anandamayee’ that Tagore created in his classic novel Gora makes me see the enchanting power of maternity, the current that absorbs everything. And hence, I begin to see the hollowness in the assertion of brute masculinity seen in instances of mob lynching by zealots, which ruthlessly denies the possibility of an evolutionary journey towards what Sri Aurobindo regarded as the ‘divine consciousness’.
•Yajnavalkya’s conversation with Maitreyi in the Brihadaranyaka Upanishad helps me conceive the depths of spirituality, the quest for the Eternal, and also helps me see the ugliness in a doctrine that reduces religion into mere identity politics, or a weapon for intensifying the narcissistic ego of the ‘Hindu nation’. Engagement with the Bhagavad Gita acquires a different meaning. I see the ethos of niskam karma (or the spirit of work as an offering without selfish interests) in Gandhi’s politico-spiritual pilgrimage to Noakhali in 1946, not in the calculative Machiavellian urge to build a temple at Ayodhya at the demolished site of the Babri Masjid. Moreover, there is a culture of conversation and argumentation in the broad tradition of Hinduism. While Nachiketa dared to converse with Yama, the proponents of Lokayata did argue with the followers of Vedanta. In a way, it is possible to be a Hindu with the spirit of pluralism and dialogue in our consciousness. Paradoxically, it is possible to be a Hindu, yet be a non-Hindu. This is why the ideology of Hindutva is not in conformity with religiosity as people’s inner quest for moving towards a world of love and togetherness.
•We are passing through difficult times. First, as the CAA and the National Register of Citizens together indicate, the minority community has further been stigmatised. And in a society with a long history of the tension-ridden relationship between the two communities, the ghettoisation of space and mind has further erected a huge wall of separation. Hence, the danger is that the anger against the CAA might take a communal turn, and it is not impossible for the ‘nationalist’ media to project it as a conflict between ‘patriotic’ Hindus and ‘problematic’ Muslims. From Seelampur in Delhi to Aligarh Muslim University in Uttar Pradesh, these ‘Muslim sites’ might be immediately projected as ‘war zones’. And in a vicious cycle of humiliation and provocation, the minorities could feel more and more lonely.
A culture of communion
•Majoritarian Hindutva is not merely against Muslims; it is no less hostile to those Hindus who think and live differently — while some would be castigated as ‘leftists’, ‘pseudo secularists’ and ‘urban Naxals’, the rest would be regarded as ‘effeminate idealists’ or ‘Gandhian fools’. Therefore, in such a situation, it is important to try to evolve a culture of communion between the two communities, and fight together for a better world. However, the discourse of communalism or a politics based on exclusivist religious identity (and even though majority communalism is immensely destructive, minority communalism is no answer to it) is essentially against this spirit of communion. Likewise, a soulless secularism which fails to deal with the religious/spiritual quest doesn’t succeed much in touching people’s hearts for inspiring them to create a new moral politics for collective redemption.
•In troubled and directionless times, Gandhi could tap the therapeutic power of religiosity and move towards this communion. He could be a Hindu; yet, dialogic, experimental and elastic. In a way, as Nathuram Godse might have thought, he was also a non-Hindu. Likewise, I would imagine that a Muslim with true religiosity is equally eager to resist the attempt by the orthodox clergy or the fundamentalist elements to hijack the religious sphere. He/she ought to be inherently against the Talibanisation of consciousness. Because true religiosity is the art of using the ‘form’ in order to be formless. Imagine a world where Kabir and Rumi, Gandhi and Maulana Azad, and Tagore and Nizamuddin Auliya work with us, become our educators, and inspire us to heal the world through the power of love and understanding. Even though in the age of dystopia it may appear to be impossible, it is a challenging task we ought to strive for. This is precisely the most important sadhana, or the meaning of being a ‘Hindu’ — a seeker who seeks to break the iron cage of Hindutva or, for that matter, any other fundamentalist doctrine.
📰 Ironing out the wrinkles in trade disputes adjudication
The fall of the World Trade Organization Appellate Body is an opportunity to rectify issues with the present system
•Mark Twain famously quipped that “the reports of my death are greatly exaggerated”. With the retirement of two of the remaining three members of the World Trade Organization (WTO) Appellate Body on December 10, and a veto by the United States on fresh appointments, the “crown jewel” of the WTO been rendered dysfunctional. Although the demise of the Appellate Body has struck a blow to the rule of law, those drawing up the obituary of the WTO in the aftermath of its demise may have greatly exaggerated its consequences.
•The consequences of the Appellate Body’s fall are overstated for a number of reasons. First, because this effectively marks a return to the dispute settlement system under the General Agreement on Tariffs and Trade (GATT) which, on the whole, proved surprisingly successful in resolving disputes. Second, most of the disputes at the WTO concern rules that are actually “self-enforcing”, with the Appellate Body only policing its enforcement by domestic authorities. Finally, many States have conceived “alternative” strategies to overcome difficulties arising out of the absence of a functioning Appellate Body.
•The Appellate Body was set up in 1995 as a “safety valve” against erroneous panel reports in return for the membership agreeing to adopt reports using the “reverse consensus” rule in lieu of the “positive consensus” rule. Under the erstwhile positive consensus rule, reports issued by panels composed to hear disputes under GATT, could be adopted only if each of the contracting states favoured its adoption. This effectively handed a veto to the losing state.
•However under the reverse consensus rule, the report would be automatically adopted, unless each member objected to the adoption of a report. To eliminate the likelihood of erroneous panel reports, the membership proposed the establishment of an Appellate Body, and the adoption of the report was postponed till after such appeal was adjudicated by the Appellate Body.
Return to GATT
•The fall of the Appellate Body effectively marks a return to the previous system as it hands states an opportunity to appeal an adverse panel ruling and effectively indefinitely delay its adoption. While one would be forgiven to think that states under the GATT regime would almost always veto unfavourable reports, a remarkable 71% of panel reports were adopted using the positive consensus rule. Even where panel reports were not adopted by states they served as a basis for the parties to “bilaterally” resolve their disputes in a mutually satisfactory manner. In a vastly changed global economic landscape, the re-emphasis on diplomatic solutions in lieu of judicialised solutions to resolve inter-state trade disputes may not be an entirely bad outcome.
Trade remedy matters
•The majority of the disputes at the WTO concern trade remedy matters. In such matters, if a state violates the rules, for example those concerning dumping of goods or grant of subsidies, affected states can without recourse to the WTO, adopt countermeasures such as imposition of anti-dumping and countervailing duties. The dispute resolution mechanism primarily aims to police the adoption of such countermeasures, namely whether they were warranted and otherwise imposed consistently with the rules. As trade scholar Pauwelyn notes, the mechanism is geared to address “over-enforcement” rather than “under-enforcement” of WTO rules. While the fall of the Appellate Body may see the adoption of more unilateral sanctions by states, possibly leading to increased trade wars, it will not render the WTO rules unenforceable. The threat of reciprocal sanctions may in fact serve to encourage states to remain compliant with the rules even in the absence of a functional Appellate Body at the helm of the dispute mechanism.
Alternative pathways
•Finally, although the membership could not prevent the fall of the Appellate Body as we know it; several states have adopted ad hoc solutions. States such as Indonesia and Vietnam have, through a no appeal pact, agreed in advance not to appeal the ruling of the panel in the dispute between them, effectively waiving their right of appeal. The European Union (EU), Norway and Canada have agreed on an interim appeal system for resolving any disputes through arbitration using Article 25 of the dispute settlement understanding in a process mirroring that of the Appellate Body with former Appellate Body members appointed as arbitrators. The EU has even threatened to launch countermeasures under general international law for countries that lose at the panel stage but refuse recourse to the interim appeal system under Article 25 of the dispute settlement understanding and instead appeal the report “in limbo” with a view to avoid the adoption of the report altogether. Although the overall effectiveness of such alternative strategies to overcome the demise of the WTO Appellate Body is uncertain, they do represent good faith efforts by some members at resolving future trade disputes.
•In sum although the fall of the WTO Appellate Body represents a turbulent period in the history of trade disputes adjudication, it by no means spells the end of the WTO. On the contrary it presents an opportunity to the members to rethink and “iron out some of the creases” with the present system. The ongoing negotiations between the United States and India in relation to the Panel report in US-Carbon Steel, where the U.S. has appealled an adverse report to a dysfunctional body, may offer an insight into how the dispute settlement system evolves.
