📰 Assam wetland at risk till dumping stops: activists
‘Notification alone will not help’
•Green activists in Assam say that the Environment Ministry’s recent notification on the eco-sensitive zone (ESZ) of the Deepar Beel Wildlife Sanctuary is meaningless unless the government puts an end to the dumping of garbage near the wetland.
•The 4.1 sq.km. sanctuary is within the Deepar Beel, a wetland on the south-western edge of Guwahati that expands up to 30 sq. km in summer and reduces to about 10 sq. km in the winter. It is Assam’s only Ramsar site, a wetland designated to be of international importance under the Ramsar Convention.
•The Environment Ministry’s notification of August 25 specified an area “to an extent varying from 294 metres to 16.32 km” as the eco-sensitive zone, with the total area being 148.97 sq.km.
•“The notification is meaningless if the government does not stop the dumping of garbage perilously close to the wetland. Seepage from this dump and sewage from Guwahati have already made the sanctuary toxic,” said Bakul Rongpi, president of Deepar Beel eco-development committee.
•He is from Mikirpara Chakardeo, where residents have for long resisted development projects around the wetland in vain.
•“A thorough study of the notification showed the ESZ will serve no purpose. The minimum distance for polluting units should have been 5 km from the boundary of the sanctuary,” Chakardeo-based dairy farmer and green activist Pramod Kalita told The Hindu .
Fiscal measures should ensure overall consumption demand does not weaken
•The latest GDP estimates expectedly show that national output rebounded in Q1 of the current fiscal from the record contraction in April-June 2020, when the pandemic’s onset and the lockdown gutted the economy. National Statistical Office data show GDP expanded 20.1% from a year earlier, as every one of the eight industries spanning the broad agriculture, manufacturing and services categories posted positive growth. And gross value added, which aggregates output from all the eight sectors, grew by 18.8%. The numbers, however, show a different picture when compared with either the preceding quarter or the pre-pandemic first quarter of fiscal 2019-20. GDP at constant prices was estimated at ₹32.38-lakh crore, a 16.9% contraction from January-March’s ₹38.96-lakh crore and more than 9% shy of the ₹35.66-lakh crore in April-June 2019. That the second COVID-19 wave extracted a significant toll is evident. With the exceptions of electricity and other utility services and the non-contact intensive services grouping of financial, real estate and professional services, all other six industries posted double-digit quarter-on-quarter contractions. On the expenditures front, private consumption spending flattered to deceive, posting year-on-year growth of 19.3% but still shrinking by 17.4% from the preceding three months. And most disconcertingly, government consumption expenditure, which has invariably in the past helped shore up the economy, contracted 4.8% from a year earlier and 7.6% from the previous quarter.
•Looking ahead rather than in the rear-view mirror, there have been signs of some traction in the current quarter as most States have gradually eased their localised second wave restrictions. Exports have been one of the bright spots as the U.S. and other western economies have ramped up vaccinations and posted economic recoveries that have underpinned demand for goods and services from India. And manufacturing has surged almost 50% year-on-year to be just under ₹24,000 crore short of the April-June 2019 output level. A fact borne out by the Manufacturing Purchasing Managers’ Index from IHS Markit, whose August release shows the sector experienced a second straight month of increase in production, albeit at a slower pace than July. Still, the same PMI survey also points to the challenges ahead. Rising raw material costs have been forcing manufacturers to either absorb the impact or raise prices, as several automakers have done, risking the prospect of dampening the already tenuous demand. And lingering uncertainty has led companies to yet again freeze hiring, according to IHS Markit. With monsoon rains in deficit, agricultural output and wider rural consumption also face a likely downturn. Policy makers must remain laser focused on expediting vaccination coverage and taking fiscal measures to ensure overall consumption demand does not weaken any further.
📰 Where liberalism and nationalism are placed in Asia
India and China have used the present world system to fashion their rise, with no alternative based on Asian nationalism
•Liberalism and nationalism mean different things to different people, and the two concepts are often considered mutually exclusive. Over 70 years after Indian independence, it is worth recalling that the British claimed that their empire rested on liberal foundations and the transfer of power to nationalists evidenced this claim. But liberalism often clashed with anti-colonial nationalism; the greatest material support to anti-colonial movements during the Cold War came from the illiberal Soviet Union.
A ‘cause’ of war
•After the rise of the nation state, wars were attributed to the power and expansionist policies of nations. In Europe, nations were in almost constant conflict, and Japanese nationalism led to wars, particularly with China. In the early period of the last century, nationalism was regarded as the root cause of war, but this was an oversimplification, since many, especially Marxists, would argue that capitalism, which led to colonialism, was equally if not mainly responsible. In Europe, as the national idea spread, it became ethnic-oriented and increasingly illiberal, with an exception being Giuseppe Mazzini’s nationalist activism.
The early decades
•Before Indian independence, nationalism was regarded with suspicion; Rabindranath Tagore had considered it a malign ideology, making a subtle distinction between the Nation of the West, which he critiqued as a mechanical and soulless, and the Spirit of the West representing Enlightenment values of internationalism and universalism. There were alternative strands of thinking; Vinayak Damodar Savarkar contrasted his espousal of Hindutva nationalism with Buddha’s universalism, the latter’s non-violence being regarded by him as weakening Indian patriotism, since “Buddhism had its centre of gravity nowhere”.
•Jawaharlal Nehru saw merit in nationalism as the focus of the Independence movement. In 1950, he asserted that “the strongest urge in Asia ...is the anti-colonial urge and the positive side of it is nationalism”, and in 1953, “nationalism has been and is a very good thing. It has been a great liberating force in certain stages of a country’s history”. Yet, he feared that extreme nationalism among colonised peoples could degenerate into fascism and expansionism.
•Prime Minister Narendra Modi’s party’s dogma harks back to the thinking of Savarkar and M.S. Golwalkar, representing Indian cultural nationalism and attempting an impossible balance between the projection of hard power and promotion of peace. Nationalism may take various forms but essentially, it is about collective identity, whereas liberalism implies the defence of individual freedom and self-determination, the state’s role being to protect the private sphere. In practice, liberalism has advantages and disadvantages; it can underpin universal rights and Adam Smith’s natural laws of economics, but its appeal is mainly to the professional educated class, and lacks nationalism’s emotional appeal.
Asian democracy
•Asian politics are politically conservative when the economy is booming, shown by lengthy autocratic governments in China, Singapore and Vietnam, whereas the Asian financial crisis of 1997 led to a democratic impulse in Taiwan, Indonesia, South Korea, and intermittently in Thailand. Democracy in Asia is not shaped by the liberalism of the West; the centrality of civil and political rights is less dogmatic and a degree of state intervention considered acceptable when it comes to individual autonomy.
•The liberal tradition contributes the ideas underlying the post-Second World War international system, embracing democracy, free trade, international law, multilateralism, environmental protection and human rights. Problems arise when such ideas become a doctrine for nation-building irrespective of context, with western intervention in the developing world and its consequences of turmoil and Islamist extremism and terror. The current example of Afghanistan is a case in point.
Power hierarchy
•Liberalism is now attacked in the West by both the far-right populism illustrated by former U.S. President Donald Trump, and the left represented by such as Senator Bernie Sanders who regard the global situation as the neo-liberal preserve of the rich and powerful. Despite American diplomatic rhetoric, there never has been a community of mutually supportive liberal democracies. International relations are conducted at the axial point of an egalitarian order of law and a hierarchical order of power: the United Nations represents this tension in the differing principles on which the Security Council and General Assembly are based. This is why the reform of the UN to include India, Japan, Germany and a few others as permanent members of the Security Council proves so difficult to achieve.
In a future Asia
•How will nationalism and liberalism be reflected in a future Asia? Both India and China were at the receiving end of western imperialism and emerged as supporters of principles of international society reflected in the Panchsheel, namely sovereignty, territorial integrity and non-interference. This implies rejection of western efforts to qualify sovereignty by making it dependent on human rights protection. The Non-Aligned Movement and Afro-Asianism were efforts to project a soft power model, but soon China, India and Pakistan joined the nuclear weapons club of hard power. The two leading Asian nations, India and China, used the present world system to fashion their rise while protesting against the control of the United Nations and world financial institutions but have not formulated any alternative based on Asian nationalism. Their current rivalry makes such a desirable outcome a remote prospect.
📰 India must commit to net zero emissions
The country will need to take a stand on climate change action or risk being cast globally as an outlier
•India is at the risk of being cast globally as an outlier on climate action, with a negative fallout. With over 50% of the global economy already committed to net zero emissions by 2050 — and China committing to be so before 2060 — this is not where you want to be.
•The pace and scale of climate action is only set to increase, with the recent Intergovernmental Panel on Climate Change (IPCC) report unequivocal on the need for urgent and stronger responses. Events around the world underline the point — towns washed away in Germany, subways turned into storm water drains in China, forests fried in the United States and so many more lives lost to flooding in India.
Massive opportunities
•It is not only governments that are increasing climate action. The business world is too, not just to protect themselves against the risks of climate change but also to take advantage of the massive opportunities arising as the global economy shifts to net zero emissions. Last year, investors injected over $500 billion into climate transition. In my country, Australia, the number of major companies that have put in place a target of reaching net zero emissions by 2050 has more than trebled in the past year.
•The United Nations Climate Change Conference (COP26) in November in Glasgow is shaping up to be the most important climate meeting since the Paris Agreement in 2015. It is squarely focused on supercharging global ambition and action on climate change, as all countries, including India, agreed to do in the historic Paris Agreement.
•Over 100 countries have already committed to net zero emissions by 2050, with more expected at COP26. Two key holdouts are India and Australia. In the case of my country, under mounting pressure at home and internationally, the government is moving toward such an announcement and I am confident they will do so by or at COP26.
•I am not so confident about India. From what I hear through networks from my time as the Australian High Commissioner to India and as Australia’s Ambassador for the Environment, India is resolutely not committing to net zero by 2050, including on the basis that as a developing country, it needs to see significant support from developed countries for climate action as part of making any such commitment.
•Perhaps this is negotiating tactics. Either way, I fear India may shoot itself in the foot by resisting net zero by 2050.
•First, India itself has a national interest in ambitious global and national climate action. Like Australia, it is among the most vulnerable countries to climate change and, therefore, should be among the more active against the threats. India faces harmful impacts related to sea level rise, heat stress, drought, water stress and flooding, biodiversity and natural disasters. Climate change is not coming — it is here.
•Second, as a rising power, India naturally seeks stronger influence globally. Being an outlier on the global challenge facing our generation does not support this aim. India is already the third largest emitter in the world, and is set to be the largest as the United States, China, and the European Union are all now signed up to net zero.
•This will become a significant drag on India’s international diplomacy. This applies not just to key relationships like with the U.S., where President Joe Biden’s administration is mainstreaming climate action into its economic, foreign and security policy, but also with much of the Group of 77 (G77) states, who are increasingly concerned to see climate action, and in multilateral groupings such as the United Nations and ASEAN-APEC.
No longer a trade-off
•Finally, as the famous phrase goes, “it’s the economy, stupid”. There is no longer a trade-off between reducing emissions and economic growth. For example, the U.K. has reduced emissions over 40% and grown its economy over 70% since 1990. Solar energy costs have fallen 90% in recent years, providing the cheapest electricity in India ever seen. Also, given the negative impacts, addressing climate change in India’s economic development is now central to success, not an added luxury to consider. For example, agricultural policy that does not consider adaptive approaches to maximise productivity in the face of increased flooding and drought due to climate change is derelict.
•The transition of the global economy to net zero emissions is the biggest commercial opportunity in history. In just the energy sector alone, an estimated $1.6 to $3.8 trillion of investment is required every year until 2050. China gets this, which is why it is investing heavily in gaining an advantage in the technologies of the new economy, be it renewable energy and storage, electric and hydrogen transport, low emissions industry, green cities or sustainable agriculture. India needs to be riding this wave.
•It is not as if India is at a standing start. It is set to significantly exceed its Paris Agreement commitment of reducing the emissions intensity of its GDP by 33-35% below 2005 levels by 2030, providing ready room for higher ambition. India is impressing the world with its leading roll-out of renewable energy and target for 450GW by 2030, linked to its leadership on the International Solar Alliance and recent national hydrogen strategy. Indian corporates are also stepping up, with the Tata Group winning awards on sustainability, Mahindra committing to net zero by 2040 and Reliance by 2035. There is plenty on which to build.
•And India should not be expected to build alone. India’s national interests on climate action are now engaged in ways that go significantly beyond waiting for donor support to drive ambition, notwithstanding reasonable arguments about historical responsibility, per capita emissions and equity. With growing wealth and stature, India is increasingly disinclined toward handouts. But that does not mean well-targeted donor investments and international partnerships should not be a factor in raising India’s climate ambition. In fact, they should be, as it is more and more obvious that the world needs to work together for success.
•This could come in many guises, from stronger political engagement and dialogue to policy support in areas of mutual challenge such as energy policy, carbon markets and post-COVID green economic recovery. Practical support and cooperation in areas like rolling out renewable energy and integrating it with the national grid, zero emissions transport, decarbonising hard to abate sectors like steel, cement and chemicals and decarbonising agriculture offer significant scope to raise ambition. As does working with India on innovative green financing for decarbonising investments, including using donor support to mobilise private sector finance, green bonds and climate transition funds. Whichever it is, they need to be lasting partnerships that deliver results.
•Yet, in the end, India’s tryst with destiny rests in its own remarkable hands, as it always has been. In a land where the earth is called mother, and Mahatma Gandhi, major religions and the Constitution enshrine environmental care, commitment to net zero emissions by 2050 should almost be foretold. The world hopes we will see it soon.
📰 Gauging household income key for microfinance clients
An assessment of cash inflows can avoid over-indebtedness
•The microfinance movement in India is set to receive another dose of impetus with the Reserve Bank of India’s (RBI) recently released Consultative Document on Regulation of Microfinance in June 2021. Following the Malegam Committee Report, which is a decade old now, the current document looks to reassess and realign the priorities of the sector.
•Some of the key regulatory changes proposed in the document takes household income as a critical variable for loan assessment. The definition of microfinance itself is proposed to mean collateral-free loans to households with annual household incomes of up to ₹1,25,000 and ₹2,00,000 for rural and urban areas respectively. The document requires all Regulated Entities to have a board-approved policy for household income assessment. Moreover, it caps loan repayment (principal and interest) for all outstanding loans of the household at 50% of household income. Given the importance accorded to household income, measuring this accurately becomes critical for effective implementation of these norms.
An elusive figure
•Household income, however, is an elusive figure. With a high degree of informality in our economy, income streams, especially for non-salaried workers, tend to be erratic in time and volatile in volume. Low-Income Households (LIHs), who typically form the customer base for Microfinance Institutions (MFIs), often also have seasonal and volatile income flows. An agricultural worker earns the most during the sowing seasons; a land-owning agricultural household sees an income spike during the harvest season; households with migrant workers who migrate to the city for certain months of the year see an income peak during those months; and a flower vendor near a temple sees an income increase during festivals. These highs are also contrasted by lows during certain lean seasons when remunerative work is unavailable (drought), during growing season (before harvest) or general lull times (a tailor, who was busy just before Diwali, receives much lesser orders right after the festival).
•Since income for LIHs are seasonal and volatile, there have been attempts to understand their inflows by measuring their expenditure. But, given the rotational debts they avail to fund a consumption expenditure here and a loan repayment obligation there, expenditure also does not truly reflect the household’s income. Moreover, for most LIHs, their expenditure on income-related activity is not separate from their personal expenses. Ask a farmer what their profit was during the last season and you would likely be told the market price they got for the produce. All the input and labour costs that a farmer incurred would be subsumed under general expenses. Therefore, it is difficult to separate the household’s personal expenses from that of their occupational pursuits. Given these complexities, we need to understand and accept that for the bulk of LIHs, household finance is not just personal family finance, but their business finance as well.
•In spite of the complexity in assessing household income for a typical microfinance client, creative and cost-effective ways to capture accurate data about household-level cash flows could be devised. Here, we present three ways. First, a structured survey-based approach could be used by Financial Service Providers (FSPs) to assess a household’s expenses, debt position and income from various sources of occupation. However, attention must be paid while designing such a questionnaire so that it captures seasonality and volatility in cash flows, which is an inherent characteristic of the financial lives of LIHs. Second, a template-based approach could be used wherein FSPs could create various templates for different categories of households (as per location, occupation type, family characteristics, etc.). Household templates could be defined based on publicly available data sets that contain State/district-level information about household cash flows and occupation types. These templates could then be used to gauge the household income of a client matching a particular template. Third, FSPs could also form a consortium to collect and maintain household income data through a centralised database. This would allow for uniformity in data collection across all FSPs and, over time, can be used to validate the credibility of any new client’s reported income. Such a database would also enable FSPs to track the changes in household income over time.
•It is worth acknowledging that the proposed suggestions to capture household income require time, energy and money on the part of FSPs. Therefore, finding cost-effective yet accurate ways of capturing this information becomes crucial. Technology service providers could play a crucial role in this exercise and create customised digital architecture for FSPs depending on their specific needs. Creating new technology to document and analyse cash flows of LIHs would not only facilitate credit underwriting/decisioning but also innovation in the standard microcredit contracts through customised repayment schedule and risk-based pricing, depending on a household’s cash flows. Eventually, an accurate assessment of household-level incomes would avoid instances of over-indebtedness and ensure long-term stability of the ecosystem.
📰 Effectiveness of vaccines
Natural infection builds better immunity, says study
•That natural immunity following a virus infection stays robust and lasts longer is already well known. People infected with the 2002 Severe Acute Respiratory Syndrome (SARS) and the Middle East Respiratory Syndrome (MERS) have been shown to have strong immunity for up to three years, while the immunity lasts for life after a chickenpox infection. Now, a vaccine effectiveness study undertaken in Israel has shown that natural infection confers stronger immunity against the SARS-CoV-2 virus than even full vaccination. They found that people previously infected with the SARS-CoV-2 virus had better immunity and had reduced risk of reinfection, symptomatic disease and hospitalisation caused by the highly transmissible Delta variant than uninfected people who were fully immunised with the Pfizer vaccine.
•The results have been posted on medRxiv, a preprint server. Preprints are yet to be peer-reviewed and published in scientific journals.
•Since Israel was the first country to aggressively vaccinate a large percentage of the population with the Pfizer vaccine, the researchers were able to compare over 16,000 people who were previously infected but not vaccinated with an equal number of people who had not been naturally infected but fully vaccinated.
•During the follow-up, it became clear that even full vaccination with the Pfizer vaccine did not confer immunity that was superior to the one acquired through natural infection. There were 238 instances of breakthrough infections in the fully vaccinated compared with just 19 reinfections among those previously infected but not vaccinated. The infection or vaccination occurred during January and February this year. After adjusting for comorbidities, it was found that the risk of breakthrough infections was 13-fold higher than reinfection among the naturally infected group. Differences in protection were seen in symptomatic diseases too. At 191, the number of people with symptomatic disease in the fully vaccinated group was higher than in the previously infected group, which remained at eight. After adjusting for comorbidities, there was a 27-fold risk for symptomatic breakthrough infection compared with symptomatic reinfection.
•But waning of natural immunity against the Delta variant was seen when infections that had occurred anytime between March 2020 and February 2021 were compared with vaccination during January-February 2021. The risk of breakthrough infections and symptomatic disease in the fully vaccinated was nearly six-fold and over 7.1% higher respectively than in those previously infected. Risk of hospitalisation was also higher among the vaccinated.
•This study does not tell if the level and duration of protection varies depending on the severity of the disease, and whether asymptomatic infection confers the same protection as those with the disease. Since the correlates of protection are not yet known, it is unknown if the broad immune response from natural infection might be proving to be superior to antibodies generated in response to spike proteins in the case of vaccines.
•Though this is the largest real-world study evaluating the effectiveness of the Pfizer vaccine in preventing infections compared with natural immunity, it is only an observational study. Testing for the infection was not undertaken, thereby underestimating asymptomatic infections. Also, the number of events — infections or symptomatic disease — in all groups were fewer.
•More such studies involving Pfizer and other vaccines, carried out over a longer time period, are needed to fully understand the level and duration of protection conferred by COVID-19 vaccines. One encouraging finding is the absence of death among the vaccinated, a clear signal that the vaccine offers formidable protection against serious disease. Hence, natural immunity, even if found to be superior and long-lasting than vaccine-induced protection, is not what one should opt for.
•Since January 2020, there have been 4.5 million COVID-19 deaths recorded globally, a vast majority of which could have been prevented. A sizable number of deaths have been among the healthy and those younger than 60 years, which flies in the face of a section of scientists that came up with the Great Barrington Declaration before vaccines became available.
•Vaccination will always remain a safe and sure way to remain protected against severe COVID-19 disease and death, even if it means the protection is not highly robust or long-lasting.
