📰 The WHO’s relevance is fading
It has been reduced to a coordinating body, beholden to the interests of rich member states
•COVID-19 has infected more than 19 million people, claimed over 0.7 million lives and devastated economies. As the pandemic transcends geopolitical boundaries, one is forced to ruminate on a counterfactual with a series of timely global health interventions by the World Health Organization (WHO) duly supported by governments. An early warning and timely policy measures by the WHO would have forewarned countries and set their preparatory efforts in motion for mounting a decisive response strategy.
Slow response
•With regional offices in six geographical regions and country offices across 150 countries, the WHO was expected to play the dual role of a think tank and oversee global responses to public health emergencies. It was reported that the earliest COVID-19 positive case in China was reported in November, but China informed the WHO about the disease only in January. With the WHO country representative stationed in Beijing, it is unlikely that widespread transmission went unnoticed.
•Then, even though confirmed cases were reported from Japan, South Korea, Taiwan and the U.S. in January, the WHO continued to downplay the severity of the virus. It took some inexplicable decisions and actions such as declaring the pandemic as a public health emergency of international concern only on January 30 and ignoring Taiwan’s hints of human-to-human transmission and requests on sharing “relevant information”. Further, the WHO went on to praise China’s response to the pandemic.
•WHO was severely criticised for its poor handling of the Ebola outbreak in 2014 as well. Incontrovertibly, the relevance of the health agency has been fading. The WHO has been reduced to a coordinating body, beholden to the interests of rich member states. Its functional efficiency has been disadvantaged with organisational lethargy, absence of decisive leadership, bureaucratic indolence, underfunded programmes, and inability to evolve to meet the needs of the 21st century.
•Director General Tedros Adhanom has been criticised for his leadership abilities during this pandemic. In contrast, Gro Harlem Brundtland, former Director General of the WHO (1998-2003), spearheaded the global health response with a host of significant policy decisions. She focused on projecting WHO as one entity and publicly reproached the Chinese leadership for its response to the 2003 SARS pandemic. The timely containment of SARS despite an unfavourable response from China bears the stamp of her decisive leadership.
Relying on rich member states
•WHO is funded through assessed contributions made by the member states and voluntary contributions from member states and private donors. While assessed contributions can be spent as per the organisation’s priorities approved at the World Health Assembly, the irregular voluntary contributions are allocated in consultation with the donors. While voluntary contributions accounted for nearly 80% of the budget in 2018-19, assessed contributions merely constituted 17% of the total budgetary support. The challenges owing to constrained finances encumber autonomy in decision-making by favouring a donor-driven agenda.
•While the WHO has failed in arresting the pandemic, governments across the globe are equally responsible for their inept handling and ill-preparedness. However, that does not vindicate WHO’s tardiness in handling the crisis. Many countries, especially in Africa and Asia, rely predominantly on the WHO for enforcing policy decisions governing public health. Political leanings and financial compulsions of WHO cannot betray that trust. The burden of their expectations must weigh heavily on every policy decision taken by the global health agency, for when the WHO fails, many innocent lives are lost.
Countries like India must note that despite its belligerence, China is far from being quarantined given its economic clout
•The latest round of talks, August 2, between the Military Commanders of India and China, did not produce any breakthrough, and the situation along the Line of Actual Control (LAC) in the Ladakh sector thus remains essentially unchanged. All that is evident is that China has indicated a willingness to resile from occupying territory beyond its 1960 Claim line. A return to the status quo ante prior to May this year, is nowhere in sight.
•Meanwhile, a war of words between India and China has broken out. India’s External Affairs Minister has promulgated that “the state of the border and the future of our ties (with China) cannot be separated. That is the reality.” China’s riposte was to reiterate that their troops “were on its side of the traditional customary boundary line”. This was followed, thereafter, by China wading into and criticising what is essentially India’s internal matter, viz. , the changes effected to the status of Jammu and Kashmir in August last year.
China-U.S. ties and rhetoric
•In the meantime, relations between the United States and China continue to deteriorate. Talk of a new realignment of forces taking place, with the U.S. and China leading different camps, is very much in the air. After years of cooperating with one another, the U.S. and China are currently at the stage of confrontation, with both seeking allies to join their camps. The rhetoric has begun to resemble the Cold War era and both sides are even willing to display their military muscle. This places several countries, especially in Asia, in a difficult position as most of them are loathe to take sides — especially with a belligerent China as neighbour.
•The contrast between the U.S. and China could hardly be greater. While the U.S. may not necessarily be the first choice for many countries of Asia and the Asia-Pacific region, in the case of China it is clearly more feared than loved. No one in Asia (Pakistan is perhaps an exception) nurses any doubts about China’s ‘imperialist ambitions’, or about Chinese President Xi Jinping’s authoritarian world view. Beijing’s virtual takeover of Hong Kong, paying scant regard to the concept of ‘one country two systems’, has only confirmed what had long been known about China’s intentions under Mr. Xi. Well before this, the region had been a witness to China’s rampant land grab in the South China Sea. In the 1970s, China grabbed control over the Paracel Islands from Vietnam. In the 1990s, it occupied Mischief Reef in the Spratly Islands, an area of the South China Sea that the Philippines had always considered its territory. In the 21st Century, China has continued with the same tactics of taking control over territories belonging to smaller neighbours; one which attracted international attention was the Scarborough Shoal confrontation in 2012, when Chinese Marine Surveillance Ships came into direct confrontation with the Philippine Navy.
Aggressive and expansionist
•In March-April this year, while the rest of the world was wrestling with the COVID-19 pandemic, China further stepped up its aggressive actions, renaming almost 80 geographical features in the region as an index of Chinese sovereignty. Complaints galore also exist about China’s expansionist attitudes beyond the South China Sea; Taiwan, Japan, Vietnam, Indonesia and South Korea have all complained about China’s menacing postures in their vicinity. China’s favourite approach, it would seem, has been unilateralism rather than compromise, when dealing with its smaller neighbours. Implicitly also, it reflects the unwritten code of the Belt and Road Initiative and the Maritime Silk Road.
•Notwithstanding all this, China is far from being quarantined. Hardly any country in Asia is willing to openly confront China, and side with the U.S. Many countries, especially those in East Asia, are unwilling to be seen taking sides at this juncture, their explanation for this being that China was always known to be over-protective of the South China Sea, considering it a natural shield against possible hostile intervention by outside forces inimical to it. Neither the presence of U.S. aircraft carriers in the South China Sea, the presence of China’s missile sites in recently reclaimed areas, or the wariness that most Association of Southeast Asian Nations display vis-à-vis China, has been enough to make countries in the region openly side with the U.S. and against China. Meanwhile, China is determined to press home its advantage, irrespective of international law or regional concerns.
In a strong grip
•What is specially disconcerting is that despite a series of diktats from Washington to restrict economic and other relations with China, the United Kingdom’s decision to end reliance on Chinese imports and call off its Huawei 5G project, and growing anti-China sentiments heard across Europe — all of which make for good copy — China remains unfazed. China seems confident that its stranglehold on the global economy ensures that it does not face any real challenge. It would be wise for India to recognise this.
•It is equally necessary to realise how fickle some of these countries can be when it comes to economic issues. Australia is a prime example. The latter is a member of the Quad (the U.S., Japan, Australia and India), that is widely seen as an anti-China coalition. Nevertheless, at a recent meeting in Washington between U.S. Secretary of State Michael R. Pompeo, the U.S. Secretary of Defence Mark Esper, the Australian Foreign Minister and the Australian Defence Minister, Australia made it clear that China is important for Australia, that it would not do anything contrary to its interests, and a strong economic engagement was an essential link in the Australia-China relationship.
•Likewise, the U.K.’s Secretary of State for Foreign and Commonwealth Affairs, Dominic Raab, recently stated in its Parliament, that the U.K. wants a positive relationship with China, would work with China, and that there was enormous scope for positive constructive engagement.
•It is thus more than evident that few nations across the world are willing to risk China’s ire because of strong economic ties that have been forged over the years. Economic ties are proving way stronger than military and strategic ones. Even in Asia, while a majority of ASEAN countries have grave concerns about China’s predatory tactics, with the ASEAN having become one of China’s biggest trading partners, it adopts a default position. viz. , “not to take sides”.
India and the neighbourhood
•At this time, when the dice should actually have been loaded against China, it is India that is finding many of its traditional friends being less than helpful. While India’s relations with Pakistan had nowhere to go but downhill, India’s present stand-off with China has provided Pakistan with yet another opportunity to fish in troubled waters, including the production of a “fake map” of Pakistan, which includes parts of Indian territory such as Siachen, Jammu and Kashmir and Gujarat.
•India’s relations with Nepal, meanwhile, have hit a road block. Relations have soured in recent months, and Nepal has gone to the extent of publishing new maps which show the ‘Kalapani area’ as a part of Nepal. In Sri Lanka, the return of the Rajapaksas to power after the recent elections does not augur too well for India-Sri Lanka relations. It is, however, the strain in India-Bangladesh relations (notwithstanding the warm relationship that exists between Bangladesh Prime Minister Sheikh Hasina and Indian leaders), that is a real cause for concern, since it can provide a beachhead against Chinese activities in the region.
Beijing moves ahead
•China is, meanwhile, busy ‘stirring the pot’ elsewhere in South Asia. In July, Chinese Foreign Minister Wang Yi organised a virtual meeting of the Foreign Ministers of Nepal, Afghanistan and Pakistan,. Here, he proposed taking forward an economic corridor plan with Nepal, styled as the Trans-Himalayan Multi-Dimensional Connectivity Network, and expanding the China-Pakistan Economic Corridor (CPEC) to Afghanistan, touting benefits of new economic corridors on the lines of the CPEC.
•China has also made headway in Iran to an extent, again at India’s expense. Iran and China are reported to be currently pursuing an economic and security partnership that would involve massive Chinese investments in energy and other sectors in Iran, in exchange for China receiving regular supplies of Iranian oil for the next 25 years. China has also dexterously positioned itself to circumvent India’s monopoly over the Chabahar Port, by providing a munificent aid package for the Chabahar-Afghanistan Rail link, thereby undercutting India’s offer of aid and assistance for the rail project.
•Geo-balancing is not happening to China’s disadvantage. This lesson must be well understood, when countries like India plan their future strategy.
📰 The main bricks to use in India’s steel frame
Compassion and honesty are what must guide successful entrants into the still fiercely competitive civil service
•When the Union Public Service Commission (UPSC) announces the results of the Civil Services Main examination every year and the list of successful candidates, amidst all the fanfare it is legitimate for us to reflect on a few fundamental questions: Are the right type of men and women being inducted into the higher bureaucracy? Is there any mid-career review of their performance, so that the misfits and the dishonest are weeded out? Both these questions are extremely relevant if we want to see an upgradation in the quality of service to the poor.
Still a major draw
•The UPSC has, without doubt, a strenuous protocol. The process is clinical and as objective as possible. There is reason to believe (unlike many of its State counterparts) the UPSC is an honest organisation which allows no latitude to the few venal elements that may occasionally be inadvertently drawn into the various stages of the selection process. Evaluating civil service recruits for their intelligence and integrity is a difficult exercise if one takes into account that many attributes go into the fabric of a credible and performing civil service. Also, we are too diverse a nation, with a huge population of rising expectations to construct a one-size-fits-all reform formula.
•What is heartening is that several lakh Indian youth take the examination every year. Its popularity continues to grow despite the many hurdles which include a preliminary weeding out test, possibly because the challenges of a position in public service are still attractive and incentives in the form of salary and allowances are enlarging. I am happy that there are many success stories of children from the hitherto neglected sections of society making the grade. All this despite the cynicism with which many citizens now view a public servant, high and low. The competition is intense and spectacular. Only about 900 candidates, that is less than 4% of those who appear for the preliminary examination, ultimately get appointed.
The change now
•When my generation made a bid for selection in the 1960s, we were just about 15,000 to 20,000 candidates in the race for the same number of openings. There was also no preliminary examination which now cruelly eliminates a majority of applicants. The current stiff process of selection induces many of us in my age group to believe that most of us would not have passed muster under the present scheme of the examination. In the UPSC list released a few days ago, 304 candidates were from the General category and 78 from the Economically Weaker Sections. Other Backward Classes (251), Scheduled Castes (129) and Scheduled Tribes (67) constituted the rest of the group of successful candidates. Women among these were about 150, one of them bagging the third rank among all appointees. Undoubtedly, this phenomenon has brought about a new attitude and drive to achieve, which were not fully visible earlier. As usual there are a number of engineers who have made the grade. Two candidates from Tamil Nadu were visually challenged. Nothing can touch us more. Success stories of disadvantaged members of society such as these candidates should help to dilute the age-old prejudice against those who are challenged. The enormous care taken by successive governments to make our higher civil services reflect social diversity is commendable. This is as it should be in a country where despite all the gory happenings of violence in some regions, there is a desire to push forward to empower the poor and weaker sections.
On the ground
•However, can we rest content with the incremental progress that we have achieved towards transforming the image of the civil service? Not at all. My reservation is mainly on account of the two major charges levelled against the higher civil services, especially the Indian Administrative Service and the Indian Police Service (IPS) wherever we go within the country. These are to do with the glaring insensitivity to the poor citizen and the greed that still afflicts a segment of the civil service.
•The District Collector and the District Superintendent of Police are the two powerful and visible symbols of the administration. There are 739 districts in India and as many Collectors and SPs. Although the penchant of many State governments to create more small districts escalates administrative expenses, tiny districts make officials more easily available to the common man in distress, who looks up to the officialdom for assistance almost on a daily basis. If a Collector and an SP are inaccessible (as is the case in most of our districts) it shows the whole administration in a bad light. There are a few young officers who are different from the majority and put their heart and soul into the task of alleviating the miseries of the poor. It is this band of officers who should somehow be enlarged and quickly. The sheer workload of a Collector and SP may prevent them from finding time to interact with every citizen. But this reality does not convince the citizen who feels squarely aggrieved that only the rich and not the poor can get things done in post-Independence India.
•This unfortunate situation is exacerbated by the fact that officials at the lower levels of the bureaucracy are either insensitive or demand illegal gratification to provide a service which is the fundamental right of every citizen. In spite of admirable reforms, major and tiny, brought about by the present central government, the common belief is that very few things get done at the bottom of the pyramid of government without greasing somebody’s palm. As someone put it, in many countries in the West, a citizen will have to offer a bribe to persuade a civil servant to omit doing something which he is legally required to do. In India, one will have to resort to bribing a public servant to compel him to do something which he is enjoined by law to do. Nothing can be a more damaging commentary on the state of our civil service.
State of the police
•I am particularly concerned about the situation that prevails in our police stations. There are more than 15,000 of them in the country. A number of them have no doubt distinguished themselves with their readiness to serve the not-so literate and the poor. Sadly, a majority still have a blemished record of ill-treating the poor. As a result, a police station has become an institution that is shunned by the law-abiding citizen. This is where I would like to see a qualitative improvement in policing which has to be ushered in by the new IPS recruits.
•Wherever they see injustice or violence against unsuspecting citizens, it will be for them to rise in protest and instil sense in their subordinate ranks as well as their supervisors. There is a real danger of the image of the Indian Police diminishing further if the incoming young officers just mark their time and do not put their foot down when it comes to unethical practices. We have a large core of enlightened senior IPS officers who can mould the character of the new entrants. If they do not play this desperately needed role, they will have betrayed the confidence that the father of the civil service, Sardar Vallabhai Patel, reposed in the IPS and the IAS.
📰 Making up for shortfalls in GST collection
The GST (Compensation to States) Act assumes a 14% growth target for States, which is unrealistic
•Two weeks ago, the Central government announced that it has released the Goods and Services Tax (GST) compensation dues to States for 2019-20. The total compensation was Rs. 1,65,302 crore while the compensation cess fund collected was Rs. 95,444 crore. The shortfall was made up by excess collections in earlier years as well as some of the balance of inter-State GST from earlier years. This raises the question of how the compensation will be made in the current year.
Background of the cess
•The GST compensation cess has an interesting background. GST subsumed several taxes, including those which were the preserve of the States, such as sales tax, and therefore required an amendment to the Constitution of India. As the amendment affected the Seventh Schedule (which delineates the jurisdiction of the Centre and the States), it required ratification by the legislatures of half the States. That is, this Constitution Amendment needed wide political support.
•Prior to GST, States exporting goods to other States collected a tax. GST is a destination-based tax, i.e., the State where the goods are sold receive the tax. This implies that manufacturing States would lose out while consuming States would benefit.
•In order to convince manufacturing States to agree to GST, a compensation formula was created. The Constitution Amendment Bill, introduced in 2014, and passed by the Lok Sabha, had two provisions. First, it provided for a 1% tax on inter-State trade, which would be assigned to the supplying State. Second, it made provisions for a law to be passed by Parliament to provide compensation to States for loss of revenue for a period up to five years. However, a Select Committee of the Rajya Sabha recommended that the compensation be guaranteed for a period of five years. This was accepted when the Bill was passed by the Rajya Sabha, and subsequently by the Lok Sabha. As tax receipts of manufacturing States had been protected by the guarantee, the provision of the 1% tax on inter-State trade was dropped.
The cess fund
•The modalities of the compensation cess were specified by the GST (Compensation to States) Act, 2017. This Act assumed that the GST revenue of each State would grow at 14% every year, from the amount collected in 2015-16, through all taxes subsumed by the GST. A State that had collected tax less than this amount in any year would be compensated for the shortfall. The amount would be paid every two months based on provisional accounts, and adjusted every year after the State’s accounts were audited by the Comptroller and Auditor General. This scheme is valid for five years, i.e., till June 2022.
•A compensation cess fund was created from which States would be paid for any shortfall. An additional cess would be imposed on certain items and this cess would be used to pay compensation. The items are pan masala, cigarettes and tobacco products, aerated water, caffeinated beverages, coal and certain passenger motor vehicles. The Act states that the cess collected and “such other amounts as may be recommended by the [GST] Council” would be credited to the fund.
•In the first two years of this scheme, the cess collected exceeded the shortfall of States. In the third year, 2019-20, the fund fell significantly short of the requirement. This was on account of slowdown in tax collections as the economy slowed down coupled with negative growth in sectors such as motor vehicles which contributed to the cess fund.
Issue and possible resolution
•Most economists expect negative real GDP growth this year, and nominal GDP to be close to last year’s level. As indirect taxes are levied on the nominal value of transactions, this is likely to result in significant shortfall for States from the assured tax collection. A key source of the problem is that the 2017 Act guaranteed a tax growth rate of 14%, which is unachievable this year. Whereas no one could have foreseen the pandemic and its impact on the economy, the 14% target was too ambitious to start with. Given the government’s inflation target at 4%, this implied a real GDP growth plus tax buoyancy of 9%. That this was an unrealistic target is evident from the shortfall last financial year, when the lockdown was for less than two weeks.
•As we have discussed above, the Central government is constitutionally bound to compensate States for loss of revenue for five years. The assumed rate of growth of a State’s GST revenue is set at 14% by Parliament through the 2017 Act. There are several possible solutions to this issue.
•First, the Constitution could be amended to reduce the period of guarantee to three years (thus ending June 2020). This would be difficult to do as most States would be reluctant to agree to this proposal. It could also be seen as going back on the promise made to States when they agreed to subsume their taxes into the GST.
•Second, the Central government could fund this shortfall from its own revenue. States would be happy with this proposal. However, the Centre’s finances are stretched due to shortfall in its own tax collection combined with extra expenditure to manage the health and economic crisis. It may not be in a position to give further support to States.
•Third, the Centre could borrow on behalf of the cess fund. The tenure of the cess could be extended beyond five years until the cess collected is sufficient to pay off this debt and interest on it.
•Fourth, the Centre could convince States that the 14% growth target was always unrealistic. The target should have been linked to nominal GDP growth. If the Centre can negotiate with States through the GST Council to reset the assured tax level, it could then bring in a Bill in Parliament to amend the 2017 Act.
•The Constitution makes it obligatory for the Centre to make up for shortfall by the States. The cess collected will not be sufficient for this purpose. The GST Council, which is a constitutional body with representation of the Centre and all the States, should find a practical solution.
