📰 Troubled waters: On India-Sri Lanka fishing conflict
India and Sri Lanka should find a lasting solution to the issues facing fisherfolk on both sides
•Fishermen from Tamil Nadu keep getting caught with alarming regularity in the territorial waters of Sri Lanka for “poaching”. Yet, the stakeholders concerned have yet to demonstrate the alacrity required for well-known solutions. In the latest development, the Sri Lankan Navy arrested 22 fishermen who are from Nagapattinam and neighbouring Karaikal, on Wednesday. There are already 29 fishermen in custody in Sri Lanka, as pointed out by Tamil Nadu Chief Minister M.K. Stalin in his letter to External Affairs Minister S. Jaishankar a few days ago. As per an estimate, Sri Lankan authorities have also impounded 84 boats. The frequency with which Tamil Nadu’s fishermen allegedly cross the International Maritime Boundary Line, despite being aware of the consequences, highlights their level of desperation driven by livelihood concerns. This is, however, not to absolve them of their culpability in endangering Sri Lanka’s marine biodiversity, which is of vital importance to Tamil fishermen of the Northern Province, who suffered in the civil war. The vexatious problem has also been aggravated by events over the past month — the reported death of two Jaffna fishermen following “mid-sea clashes with their Tamil Nadu counterparts” on January 27 and 29, subsequent protests by northern Sri Lankan fishermen, and the reported auctioning by Sri Lanka of 140 impounded boats even before a Tamil Nadu government team and fishermen’s representatives could visit Sri Lanka to finalise modalities on the disposal of unsalvageable boats. There has been no word from Colombo on permitting fishermen-devotees to attend, in March, the annual festival of St. Anthony’s Church at Katchatheevu.
•Apart from getting the arrested fishermen released, the governments of the two countries should fix a date for an early meeting of the Joint Working Group, last held in December 2020. They should also facilitate the resumption of talks at the level of fisherfolk, especially from Tamil Nadu and the Northern Province. Sri Lanka should be proactive as its citizens in the North bear the brunt of the alleged acts of transgression. Besides, its positive actions would be in tune with what the Prime Ministers of India and Sri Lanka agreed at the virtual summit in September 2020 — to “continue engagement to address the issues related to fishermen through regular consultation and bilateral channels”. New Delhi should also consider providing additional incentives and concessions to fishermen of the Palk Bay districts of Tamil Nadu to elicit a better response from them for its deep sea fishing project. It could also propose assistance for the fishermen of the Northern Province as a gesture of goodwill. There is no paucity of ideas in the area of the Palk Bay fisheries conflict, but adequate action on the part of the stakeholders is found wanting.
Russia’s Ukraine gambit could unravel key assumptions driving India’s economic policy
•The combative advent of the Russian military into Ukraine early Thursday has predictably spooked markets across all asset classes the world over. Oil prices surged to an eight-year high of around $105 a barrel, stock markets tumbled with the Indian bourses crashing nearly 5% on Thursday and the rupee dipping perilously close to the 76 to a dollar mark. The flight to safety amid all this mayhem propped up India’s favourite yellow metal to a 15-month high. Domestic stock indices that have already been witnessing tumultuous swings in recent weeks as global inflation flared up and the US Federal Reserve signalled faster throttling of ‘easy money’ liquidity, did pare some of these initial losses on Friday. But multi-layered uncertainty will keep investor nerves on edge, as will the diplomatic fallout of how the UNSC decides to tackle Russia in its vote, with the western world seeking strict condemnation and sanctions, while India has thus far preferred not to take a side. There could be double-edged economic ramifications for those sitting on the fence if the extent of sanctions against Russia are intensified. This could deter Indian interests, be it in terms of trade financing, investment flows and even banking transfers as calls to bar Moscow from the SWIFT global payment network grow louder. For now, Russia’s oil exports have not been explicitly targeted yet.
•India’s imports of petroleum products from Russia are only a fraction of its total oil import bill and thus, replaceable. But getting alternative sources for fertilizers and sunflower oil may not be as easy. Exports to Russia account for less than 1% of India’s total exports; pharmaceuticals and tea could face some challenges, as will shipments to CIS countries. Freight rate hikes could make overall exports less competitive too, but it is the indirect impact on the trade account that is more worrying. The surge in crude oil prices will drum up India’s inelastic oil import bill, and gold imports could jump back up and keep the rupee under pressure. Trade and current account deficits may be jeopardised, although forex reserves are healthy. The biggest concern, for India, however, remains the impact of oil prices on inflation, and the unravelling of the Budget math which hinges on average oil prices of $75 a barrel. The RBI’s assertion that retail inflation had peaked at 6.01% in January, as well as its growth-accommodative stance may need a rethink with oil prices 11% higher since its February 10 monetary policy review. On the fiscal side, the Government, which has been conservative in its revenue assumptions in the Budget, has the room to pre-emptively cut domestic fuel taxes to nip inflationary expectations, stoke faltering consumption levels and sustain India’s fragile post-COVID-19 recovery through this global churn.
📰 Inflection point for the West-led global order
Its future will be defined by how it responds to the crisis in Ukraine, and in the shadow of growing Russia-China ties
•The Ukraine crisis has come to a head with Russia biting the bullet and launching “a full-scale invasion of Ukraine.” Even as the United Nations Secretary-General António Guterres was warning that the world was facing a “moment of peril” and calling for “restraint, reason and de-escalation” to avoid “a scale and severity of need unseen for many years”, Russian troops that had massed on Ukraine’s borders for months now were preparing to launch an assault on Ukraine — after Russian President Vladimir Putin recognised the Russian-backed, rebel-held areas of Donetsk and Luhansk as independent and even challenged the historical right of Ukraine to exist.
•Mr. Putin continued to insist that he was open to “direct and honest dialogue” but with every step of the escalatory ladder he climbed, he ensured that dialogue was becoming difficult to sustain. And the Russian Foreign Ministry even suggested that the idea that Russia is to blame for the crisis in Ukraine is an invention by the West. But the invasion has now happened in full view of the international community, with Mr. Putin saying that Russia did not plan to occupy Ukraine and demanding that its military lay down their arms. Launching a “special military operation” and alleging that Ukraine’s democratically elected government “had been responsible for eight years of genocide”, Moscow’s seeming goal is demilitarisation and a “denazification” of Ukraine.
Putin versus the West
•Hours before the invasion, the western countries had imposed a new round of sanctions against Moscow (targeting Russian individuals and banks linked to Mr. Putin’s regime), and German Chancellor Olaf Scholz suspended certification of Nord Stream 2, a major gas pipeline between Russia and his nation. But clearly it had no real impact on Mr. Putin’s calculus.
•United States President Joe Biden, in his response to the invasion, has suggested that Washington and its allies would respond in a united and decisive way to “an unprovoked and unjustified attack by Russian military forces” on Ukraine. But the future course of action for the West remains rather murky. Perhaps because of this, Charles Michel, the head of the European Council, has continued to insist on the need “to be united and determined and jointly define our collective approach and actions”. The European Union has announced a “massive” package of sanctions as it comes to terms with “the darkest hour in Europe since the Second World War”.
•Where Mr. Putin has shown resolve and a single-minded sense of purpose, the West has been incoherent in its response — not being able to present a united front, and worse, not even speaking the same language at times. For Mr. Putin, this is a moment to use Ukraine to highlight his broader demands of restructuring the post-Cold War European security order. For the West, this has been a moment when it has been found wanting — a lack of imagination, lack of will and lack of leadership, all rolled into producing a lackadaisical response to the one of most serious security crises in decades.
General disarray
•Mr. Biden’s leadership has been found wanting. For all his talk of leading through coalitions, all he has to show for is a disarray in the European ranks. Where Germany has been reluctant to allow North Atlantic Treaty Organization (NATO) allies to ship German-origin weapons to Ukraine, France has used this moment of crisis in trying to showcase its own leadership credentials. French President Emmanuel Macron has been talking of the European Union taking decisions independent of the U.S. in an attempt to showcase its ‘strategic autonomy’. The trans-Atlantic alliance has barely functioned despite all those who had argued that it was the fault of U.S. President Donald Trump fracturing this partnership. It turns out that even Mr. Biden has not been able to build the trans-Atlantic engagement around common objectives to be pursued collectively.
The energy factor
•Moreover, the EU’s energy dependence on Russia is a reality that has to be factored into strategic considerations. With the EU importing 39% of its total gas imports and 30% of oil from Russia, and with the Central and Eastern European countries being almost 100% dependent on Russian gas, the reasons for internal EU dissonance are not that difficult to fathom.
•Where Russia repeatedly made it clear that it remains willing to even use the instrumentality of force to attain its diplomatic objectives, the singular refrain from the West has been that it has no intention of escalating. In such a scenario, the initiative is always with the side that can demonstrate a willingness to ratchet up tensions. Mr. Putin is willing to take significant strategic risks which the West is not ready to do. And, as a result, the initiative since the very beginning of this conflict has been with Russia. The West has been left to respond reactively to the developments around it. And it is in the very nature of great power politics that smaller and weaker nations such as Ukraine struggle to preserve their very existence.
A strong Beijing
•This ineffectual western response has emboldened not only Russia but also China as the focus of the West is in danger of moving away from the Indo-Pacific. The Russia-China ‘axis’ is only getting stronger as the two nations seem ready to take on the West that seems willing to concede without even putting up a fight.
•It was this week in 1972 that U.S. President Richard Nixon shook hands with Chinese Premier Zhou Enlai and radically altered the contours of the global order by reshaping the extant balance of power. It allowed China to emerge as the leading global economic power and helped the U.S. in winning the Cold War.
•Today, the balance of power is once again in flux, and as China develops a strategic partnership with Russia, the future of the West-led global order will be defined by how effectively it responds to the crisis in Ukraine. The tragedy of great power politics is unfolding in Europe but its embers will scorch the world far and wide, much beyond Europe.
