Note4Students
From UPSC perspective, the following things are important :
Prelims level: SCO
Mains level: Expansion of SCO, Saudi distancing itself from West
Saudi Arabia’s cabinet decided to join the Shanghai Cooperation Organization, as Riyadh builds a long-term partnership with China despite US security concerns.
What is SCO?
- The SCO is primarily a geopolitical and security organisation with limited infrastructures to pursue economic integration.
- The group accounts for about one-third of the world’s land and exports trillions of dollars annually.
- It is governed by consensus, which limits the scope of major cooperation between its member states.
- It also functions more as a venue for discussion and engagement where high-level dignitaries from across the region can gather to confer, rather than an alliance like the EU, whose members have a common currency, or NATO.
Its establishment
- The SCO was founded in June 2001 by the leaders of Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia and China.
- The genesis of the grouping can be traced back to the post-soviet era in 1996 when these countries, termed ‘Shanghai Five’, came together
- Earlier, it focused on regional security to work on regional security, reduction of border troops, and terrorism.
- Its particular focus has been on “conflict resolution”, which provided early successes between China and Russia, and then within the Central Asian Republics.
Structure of SCO
- The organisation has two permanent bodies —
- SCO Secretariat based in Beijing and
- Executive Committee of the Regional Anti-Terrorist Structure (RATS) based in Tashkent.
- The SCO Secretary-General and the Director of the Executive Committee of the SCO RATS are appointed by the Council of Heads of State for a term of three years.
- But the venue of the SCO council meetings shifts between the eight members (including India and Pakistan).
Members of SCO
- Apart from the above-mentioned countries— Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Russia and China.
- India and Pakistan are also members of this organisation, both included in 2017.
- The SCO also has four observer states — Afghanistan, Belarus , Iran and Mongolia — which may be inducted at a later date.
- And “Dialogue Partners” —Armenia, Azerbaijan, Cambodia, Nepal, Sri Lanka, Turkey Egypt, Qatar as well as Saudi Arabia.
Main goals
The main goals of the SCO, as adopted in its Charter in St. Petersburg in 2002, is:
- Strengthening mutual trust and neighbourliness among the member states;
- Promoting their effective cooperation in politics, trade, economy, research and technology and culture, as well as in education, energy, transport, tourism, environmental protection, and other areas;
- Making joint efforts to maintain and ensure peace, security and stability in the region; and
- Moving towards the establishment of a democratic, fair and rational new international political and economic order.”
Why did Saudi Arabia join SCO?
- Saudi Arabia could benefit in several ways, such as increased trade and economic cooperation with member states, particularly with China and Russia.
- It could also gain a stronger voice in regional security issues and access to the SCO’s anti-terrorism framework.
- Additionally, Saudi Arabia could help the organization expand its influence in the Middle East and increase its strategic weight in global affairs.
- This is definitely a result of straining its ties with Washington.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: WTO subsdies, Bali Peace Clause
Mains level: India-WTO row over agricultural subsidies
Central idea: India has been criticized at the World Trade Organization (WTO) for not adequately addressing questions raised by members regarding its Minimum Support Price (MSP) programs for food grain, particularly rice.
Minimum Support Price (MSP)
- MSP is the price at which the government buys crops from farmers to support them against any sharp fall in farm prices.
- It is announced by the Government of India for 23 crops ahead of each sowing season based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
- It is an important tool to protect farmers from any sharp fall in farm prices.
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Genesis of the row
- WTO members such as the US, Australia, Canada, the EU, and Thailand have alleged that India did not provide sufficient responses during consultations.
- The MSP programs have breached prescribed subsidy limits and are under scrutiny at the WTO argued these countries.
- With this, India became the first country to invoke the Bali ‘peace clause’ to justify exceeding its 10% ceiling for rice support in 2018-2019 and 2019-2020.
What is ‘Bali Peace Clause’?
- India’s minimum support price (MSP) falls under the amber box subsidies category.
- India has exceeded its limits for amber box subsidies for rice for two consecutive years, which is why it has been challenged at the WTO.
- The Bali ‘peace clause’ allows developing countries to exceed their 10% ceiling without facing legal action by other members.
- However, it is subject to numerous conditions, such as not distorting global trade and not affecting food security of other members.
- India’s MSP programs are subject to the ‘peace clause’, but some WTO members have accused India of habitually not including all required information in its notifications.
Allegations of Inadequate Reporting by India
- WTO members have been accusing India of not reporting all public stockholding programs under the ‘peace clause’.
- Some members have pointed out that India also lacks an adequate monitoring mechanism to ensure that no stocks are exported.
- India, on the other hand, argues that it is not obligated to notify any public stockholding programs other than for the crop where the subsidy limits were breached.
Impact on India’s MSP Programs
- The criticism from WTO members could have an impact on India’s MSP programs for food grain, particularly rice.
- The conditions set under the ‘peace clause’ could limit India’s ability to exceed the subsidy limits and support its farmers.
- India may have to provide more detailed notifications and monitoring mechanisms to address the concerns of other members and ensure compliance with WTO regulations.
Why is India defending its stance on MSPs?
- India faces several challenges in the agricultural sector, including climate change, soil degradation, and water scarcity.
- The country also has to deal with farmers’ distress due to low prices for their produce, which is why the MSP program was introduced in the first place.
- The challenge posed by the WTO to the MSP program could further exacerbate the problems faced by Indian farmers.
Back2Basics: WTO and its Subsidies Boxes
The World Trade Organization (WTO) is an intergovernmental organization that is responsible for regulating international trade between nations.
- Establishment: It was established on January 1, 1995, and currently has 164 member countries.
- Objective: To ensure that trade flows as smoothly, predictably, and freely as possible.
- Frameworks: Negotiating and formalizing trade agreements, resolving trade disputes between member countries, and monitoring national trade policies.
- Working principles: Non-discrimination, transparency, and fairness in international trade.
The WTO has three types of subsidy boxes – green, blue, and amber. Each box represents a different level of trade-distorting subsidies.
- Green box subsidies: These subsidies are considered non-trade-distorting and are allowed under WTO rules. They include measures such as research, disease control, and infrastructure development.
- Blue box subsidies: These subsidies are considered less trade-distorting than amber box subsidies but can still distort trade to some extent. They include measures such as direct payments to farmers to reduce production, provided that certain conditions are met, such as the use of fixed areas or yields.
- Amber box subsidies: These subsidies are considered the most trade-distorting and are subject to reduction commitments under the WTO Agreement on Agriculture. They include measures such as price support, input subsidies, and direct payments that are not subject to certain conditions.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: IMF bailout mechanism
Mains level: Read the attached story
Central idea: The International Monetary Fund (IMF) last week confirmed a $3 billion bailout plan for Sri Lanka’s struggling economy. However, Pakistan failed to get a penny. Countries seek help from the IMF usually when their economies face a major macroeconomic risk, mostly in the form of a currency crisis.
International Monetary Fund (IMF)
- IMF is an international organization that provides loans, technical assistance, and policy advice to its member countries.
- It was established in 1944 with the goal of promoting international monetary cooperation and exchange rate stability, facilitating balanced economic growth, and reducing poverty around the world.
- It has 190 member countries, and its headquarters is located in Washington, D.C.
- Its main function is to provide financial assistance to countries facing economic difficulties, such as the balance of payments problems, currency crises, and high levels of debt.
- It also provides technical assistance and policy advice to help countries improve their economic policies and institutions, and to promote economic stability and growth.
Governing of IMF
- The IMF is governed by its Board of Governors, which consists of one governor and one alternate governor from each member country.
- The day-to-day operations of the IMF are managed by its Executive Board, which is responsible for making decisions on financial assistance and policy advice.
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What is an IMF Bailout?
- An IMF bailout, also known as an IMF program, is a loan package provided by the International Monetary Fund (IMF) to financially troubled countries.
- These loan packages come with specific terms and conditions that the borrowing country must meet to access the funds.
- They typically have a set of conditions that a country must meet to qualify for the loan package.
- These conditions, also known as “conditionalities,” typically include measures that promote fiscal discipline, monetary stability, and structural reforms to improve the country’s economic competitiveness.
IMF programs are often seen as a last resort for countries facing financial crises, and they are only granted if a country cannot access capital markets on its own. IMF programs can be classified into three main types:
- Stand-by Arrangements: They are short-term lending programs designed to provide financial assistance to countries experiencing short-term balance of payments problems. These programs typically last for one to two years and require countries to implement specific macroeconomic policies to stabilize their economies.
- Extended Fund Facility: Such programs are medium-term lending programs designed to help countries with balance of payments difficulties resulting from structural weaknesses. These programs are typically longer-term and come with more extensive policy conditionality, which requires more significant structural reforms to the country’s economy.
- Rapid Financing Instrument: It is a loan program designed to provide quick financing to countries facing an urgent balance of payments need. The program is designed to be more flexible than other IMF programs, with fewer conditions and a shorter application process.
Why do countries seek IMF bailouts?
- Countries need IMF bailout when their economies face major macroeconomic risks, such as a currency crisis, due to gross mismanagement of the nation’s currency by the central bank under the covert influence of the ruling government.
- Such currency crises cause a rapid rise in the overall money supply, which causes prices to rise across the economy and the exchange value of the currency to drop.
- Bad luck such as a decrease in foreign tourists can also contribute to a crisis in a country like Sri Lanka.
Benefits provided by IMF bailout:
IMF programs provide several benefits to countries in financial distress. For instance:
- Access to funding: An IMF bailout provides immediate funding to a country experiencing a financial crisis, allowing it to meet its immediate financial obligations.
- Credibility push: A bailout can provide credibility to a country’s economic policies, signalling to international investors that the country is taking the necessary steps to restore its economy.
- Assistance with structural reforms: IMF programs require countries to implement structural reforms that can help address the underlying problems that led to the financial crisis, improving the country’s long-term economic prospects.
Limitations of an IMF bailout
- Harsh austerity measures: IMF programs often require countries to implement strict economic policies, which can be unpopular and difficult to implement.
- Limited resources: The IMF has limited resources, which can limit the amount of assistance it can provide to countries in need.
- Stigmatization: Bailout can stigmatize a country in the eyes of international investors, signaling that the country is unable to manage its own economy without outside assistance.
Try this PYQ from CSP 2022
“Rapid Financing Instrument” and “Rapid Credit Facility” are related to the provisions of lending by which one of the following?
(a) Asian Development Bank
(b) International Monetary Fund
(c) United National Environment Programme Finance Initiative
(d) Word Bank
Post your answers here.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Interpol, Red Notices
Mains level: UAPA issues
In a major setback to Indian agencies, Interpol has taken down from its website the Red Notice against a fugitive who is wanted in connection with the ₹13,578-crore Punjab National Bank fraud cases.
What is the news?
- The person whom the Union Ministry of Home Affairs has listed as a “terrorist” under the Unlawful Activities (Prevention) Act (UAPA).
Why has Interpol rejected India’s request?
- The Interpol has said that India has failed to provide sufficient information to support its case.
- It criticized the UAPA for being misused to target minority groups and human rights activists without “respecting” their right to due process and a fair trial.
- While acknowledging the separatists leader, the Interpol has said that his activities have a “clear political dimension”, which cannot be the subject of a Red Corner Notice.
What is the Interpol?
- The Interpol, or International Criminal Police Organization, is an inter-governmental organization comprising 195 member countries, which helps police forces in all these countries to better coordinate their actions.
- It enables member countries to share and access data on crimes and criminals and offers a range of technical and operational support.
- It is run by a secretary general with its headquarters in Lyon, France, with a global complex for innovation in Singapore, and several satellite offices in different regions.
- India accepted Interpol membership in June 1956.
How does it function in member countries?
- Interpol has a National Central Bureau (NCB) in each member country, which is the central point of contact for both the general secretariat and the other NCBs around the world.
- Each NCB is run by police officials of that country, and usually sits in the government ministry responsible for policing. (MHA in case of India.)
- Interpol manages 19 police databases with information on crimes and criminals (from names and fingerprints to stolen passports), accessible in real-time to countries.
- It also offers investigative support such as forensics, analysis, and assistance in locating fugitives around the world.
What is a Red Notice?
- Criminals or suspects often flee to other countries to evade facing justice.
- A Red Corner Notice, or Red Notice (RN) alerts police forces across the world about fugitives who are wanted internationally.
- Red Notices are issued for fugitives wanted either for prosecution or to serve a sentence.
- A Red Notice is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action.
- An RN is published by Interpol at the request of a member country.
Indian fugitives on this RN
- Among the most popular Indians on this list are jeweller Mehul Choksi and diamantaire Nirav Modi.
Is an RN a warrant of arrest?
- An RN is only an international wanted persons’ notice; it is not an international arrest warrant.
- Interpol itself does not want individuals; they are wanted by a country or an international tribunal.
- This means the Interpol cannot compel law enforcement authorities in any country to arrest the subject of an RN.
- It is up to individual member countries to decide what legal value to give to an RN, and the authority of their national law enforcement officers to make arrests.
- Interpol says that an RN must comply with its constitution and rules.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Various vienna conventions
Mains level: Not Much
Central idea: The Indian government lodged a strong protest against the UK government and reminded obligations of the host nation under the Vienna Convention on Diplomatic Relations amid the vandalism incident that occurred at the Indian High Commission in London.
What is the Vienna Convention?
- The treaty being referred to by the MEA in this instance is the Vienna Convention on Diplomatic Relations (1961).
- It provides a complete framework for the establishment, maintenance and termination of diplomatic relations on a basis of consent between independent sovereign States.
FYI: Vienna Convention
Vienna, the capital city of Austria, has a long history of hosting international conventions and conferences.
There are several conventions that are named as “Vienna Convention”. Here is a list of some of the most well-known Vienna Conventions:
- Vienna Convention on Diplomatic Relations (1961)
- Vienna Convention on Consular Relations (1963)
- Vienna Convention on the Law of Treaties (1969)
- Vienna Convention on Civil Liability for Nuclear Damage (1977)
- Vienna Convention on Succession of States in respect of Treaties (1978)
- Vienna Convention on the Physical Protection of Nuclear Material (1987)
- Vienna Convention on the Protection of the Ozone Layer (1985)
- Vienna Convention for the Protection of the Stratospheric Ozone Layer (1985)
Note that there may be other treaties or agreements that have been signed in Vienna that may also be referred to as Vienna Conventions, but the above are some of the most commonly recognized ones. |
Obligations of a “receiving State” under the Vienna Convention
- As per the Vienna Convention, a “receiving State” refers to the host nation where a diplomatic mission is located.
- Article 22 of the Convention deals with obligations with regards to the premises of the Mission.
- Part 2 of this article states that “The receiving State is under a special duty to take all appropriate steps to protect the premises of the mission against any intrusion or damage and to prevent any disturbance of the peace of the mission or impairment of its dignity”.
Did the UK not fulfil its obligations in this instance?
- The fact that protestors were able to climb the walls of the High Commission premises indicates a breach.
- India finds the UK government’s indifference to the security of Indian diplomatic premises and personnel in the UK unacceptable.
- UK has condemned the event and promised to take the security of the Indian High Commission in London seriously.
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From UPSC perspective, the following things are important :
Prelims level: ICC
Mains level: Ukrainian War
The International Criminal Court (ICC) has issued an arrest warrant for war crimes for Russian President Vladimir Putin and Maria Lvova-Belova, Russia’s commissioner for children’s rights.
Charges against Putin
- The ICC issued the warrants because it believes that Putin bear individual criminal responsibility for the war crime of –
- Unlawful deportation of population and
- Unlawful transfer of population from occupied areas of Ukraine to the Russian Federation
The ICC and its Background
- The ICC is a standing body created two decades ago to investigate war crimes, genocide and crimes against humanity under a 1998 treaty known as the Rome Statute.
- The court is based in The Hague, a Dutch city that has long been a center for international law and justice.
- Many democracies joined the ICC, including close American allies such as Britain.
- However, the United States has kept its distance due to fears that the court may one day seek to prosecute American officials.
- Russia is also not a member.
Implications of the Warrants
- Human rights groups hailed the warrant as an important step toward ending impunity for Russian war crimes in Ukraine.
- The likelihood of a trial while Putin remains in power appears slim since the court cannot try defendants in absentia, and Russia has said it will not surrender its own officials.
- Putin’s isolation in the West deepens, and his movements overseas could be limited.
- If he travels to a state that is a party to the ICC, that country must arrest him according to its obligations under international law.
Possibility of Putin Facing Trial
- The ICC has no power to arrest sitting heads of state or bring them to trial, and instead must rely on other leaders and governments to act as its sheriffs around the world.
- A suspect who manages to evade capture may never have a hearing to confirm the charges.
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From UPSC perspective, the following things are important :
Prelims level: Chabahar Port
Mains level: India's central Asia connectivity push
Central idea: The article discusses India’s plan to send 20,000 metric tonnes of wheat to Afghanistan through the Chabahar port in Iran.
Why in new?
- Last year, the Indian side announced its partnership with UNWFP (UN World Food Programme) for the delivery of 20,000 MTs of wheat for Afghan people through the Chabahar Port.
UN World Food Programme
- The WFP is a leading humanitarian organization that provides food assistance in emergencies and works to improve nutrition and food security in poor and conflict-affected areas.
- It was established in 1961 and is a part of the United Nations system.
- The WFP is funded entirely by voluntary contributions from governments, non-governmental organizations, and private donors.
- The organization provides assistance to over 80 million people in around 80 countries every year.
- The WFP delivers food and other essential supplies in times of crisis and supports communities to build resilience and achieve long-term food security.
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India’s Assistance to Afghanistan
- India has been providing humanitarian aid and support to Afghanistan for several years, including food and medical supplies.
- The latest shipment of wheat is a part of India’s continued efforts to assist Afghanistan during its humanitarian crisis.
About Chabahar Port
- In 2016, India signed a deal with Iran entailing $8 billion investment in Chabahar port and industries in Chabahar Special Economic Zone.
- The port is being developed as a transit route to Afghanistan and Central Asia.
- India has already built a 240-km road connecting Afghanistan with Iran.
- All this were expected to bring cargo to Bandar Abbas port and Chabahar port, and free Kabul from its dependence on Pakistan to reach the outer world.
- Completion of this project would give India access to Afghanistan and beyond to Turkmenistan, Uzbekistan, Tajikistan, Kyrgyzstan, Kazakhstan, Russia and Europe via the 7,200-km-long multi-modal North-South Transport Corridor (INSTC).
India’s strategic vision for Chabahar
When the first agreement for Chabahar was signed by then PM Atal Bihari Vajpayee in 2003, the plan had a three-fold objective:
- To build India’s first offshore port and to project Indian infrastructure prowess in the Gulf
- To circumvent trade through Pakistan, given the tense ties with India’s neighbour and build a long term, sustainable sea trade route and
- To find an alternative land route to Afghanistan, which India had rebuilt ties with after the defeat of the Taliban in 2001
- Subsequently, PM Manmohan Singh’s government constructed the Zaranj -Delaram Highway in Afghanistan’s South.
- It would help connect the trade route from the border of Iran to the main trade routes to Herat and Kabul, handing it over to the Karzai government in 2009.
- In 2016, PM Modi travelled to Tehran and signed the agreement to develop Chabahar port, as well as the trilateral agreement for trade through Chabahar with Afghanistan’s President Ashraf Ghani.
Commencement of operations
- Since the India Ports Global Chabahar Free Zone (IPGCFZ) authority took over the operations of the port in 2018, it has handled 215 vessels, 16,000 TEUs (Twenty-foot Equivalent Units) and four million tons of bulk and general cargo.
Why is it gaining importance?
- In the last few years, a fourth strategic objective for the Chabahar route has appeared, with China’s Belt and Road Initiative making inroadsin the region.
- The government hopes to provide Central Asia with an alternate route to the China-Pakistan Economic Corridor (CPEC)through Iran for future trade.
Why is the Chabahar dream taking so long to realise?
- India’s quest for Chabahar has hit geopolitical road-blockafter road-block; the biggest issue has been over Iran’s relationship with western countries, especially the United States.
- In years when western sanctionsagainst Iran increased, the Chabahar project has been put on the back-burner.
- However, the nuclear talks resulted in the Joint Comprehensive Plan of Action (JCPOA)in 2015 came into being, the Chabahar port has been easier to work on.
- In 2018, the Trump administration put paid to India’s plans by walking out of the JCPOA and slapping new sanctions on dealing with Iran.
- India also snapped ties with Afghanistan after the Taliban takeover in August 2021, which put an end to the humanitarian aid of wheat and pulses that was being sent to Kabul via Chabahar.
- When India restarted wheat aid this year, it negotiated with Pakistan to use the land route to Afghanistan instead.
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From UPSC perspective, the following things are important :
Prelims level: BBNJ Treaty
Mains level: Read the attached story
For the first time, United Nations members have agreed for an early conclusion of the International Legally Binding Instrument of BBNJ under the United Nations Convention on the Law of the Sea (UNCLOS).
Background
- The UN Convention on the Law of the Sea was established in 1994 before marine biodiversity became a well-established concept
- An updated framework to protect marine life in the high seas had been in discussions for over 20 years.
- BBNJ is an agreement that aims to protect marine biodiversity in areas beyond national jurisdiction (ABNJ).
- ABNJ refers to the high seas, which are not governed by any country but are still important for global biodiversity.
What is the BBNJ treaty?
- The BBNJ Treaty also called the Treaty of the High Seas, is an international agreement that aims to preserve and sustainably use the marine biodiversity of areas beyond national jurisdiction.
- This includes the high seas, which are outside of countries’ exclusive economic zones and makeup nearly half of the Earth’s surface.
- These areas are currently poorly regulated and only 1% of them are protected.
- The High Ambition Coalition on BBNJ was launched in February 2022 to negotiate and achieve a comprehensive and ambitious outcome.
Key areas of agreement
The negotiations focus on elements agreed upon such as the-
- Conservation and sustainable use of marine genetic resources,
- Area-based management tools like marine protected areas,
- Environmental impact assessments, and
- Capacity-building and technology transfer
Consensus reached
- A new body will be created to manage the conservation of ocean life and establish marine protected areas in the high seas
- The treaty establishes ground rules for conducting environmental impact assessments for commercial activities in the oceans
- Several marine species, including dolphins, whales, sea turtles, and many fish, make long annual migrations, crossing national borders and the high seas
What is the significance of this treaty?
- Beyond jurisdiction coverage: BBNJ refers to the areas beyond the jurisdiction of any single country, such as the high seas, the deep sea floor, and the international seabed area. These areas are critical for the health of the ocean, the well-being of coastal people, and the overall sustainability of the planet.
- Covers entire oceans: BBNJ comprises 95% of the ocean and provides invaluable ecological, economic, social, cultural, scientific, and food-security benefits to humanity.
- Hard-arrived consensus: BBNJ is governed by a patchwork of international agreements, conventions, and bodies, but there is no single comprehensive framework that regulates activities in these areas.
Various threats
- BBNJ, despite its resilience in the past, is currently at risk due to several emerging dangers such as pollution, overexploitation, and the observable consequences of climate change.
- In the future, the escalating need for marine resources, whether for food, minerals, or biotechnology, may intensify these issues.
- For example, deep-sea mining, where valuable metals are extracted from the ocean floor, is becoming more prevalent despite the fact that little is known about the biodiversity in these areas.
Why protect deep seas?
- The deep seafloors, believed to be the harshest habitat, are also facing the extinction process.
- A recent study assessed 184 species of Molluscs in the deep sea and found that 62% are listed as threatened: 39 are critically endangered, 32 are endangered and 43 are vulnerable.
- Yet, the International Seabed Authority, a Jamaica-based intergovernmental body, is allowing deep-sea mining contracts.
Way forward
Ans. Create legally binding instrument
- To address these threats, there is a need for a legally binding instrument for BBNJ.
- The instrument would provide a framework for the conservation and sustainable use of BBNJ and would address gaps in the current international legal regime.
- The legally binding instrument would establish a mechanism for the conservation and sustainable use of BBNJ, including measures to protect biodiversity, manage human activities, and ensure the equitable sharing of benefits.
- It would also provide for capacity-building and technology transfer to support the implementation of these measures.
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From UPSC perspective, the following things are important :
Prelims level: Windsor Framework
Mains level: Not Much
The ‘Windsor Framework’ will replace the Northern Ireland Protocol, which had proved to be among the thorniest of Brexit fall-outs, creating problems both economic and political.
You must know!
England is a country in its own right and forms part of Great Britain, along with Scotland and Wales. Great Britain is a geographical term that refers to the island that contains England, Scotland, and Wales.
On the other hand, the United Kingdom (UK) is a sovereign state that includes England, Scotland, Wales, and Northern Ireland.
Hence, England is a part of Great Britain, and Great Britain is a part of the UK. |
What is the Northern Ireland Protocol?
- After the UK left the European Union, Northern Ireland remained its only constituent that shared a land border with an EU-member, the Republic of Ireland.
- Since the EU and the UK have different product standards, border checks would be necessary before goods could move from Northern Ireland to Ireland.
- However, the two Irelands have had a long history of conflict, with a hard-fought peace secured only in 1998 under the Belfast Agreement, also called the Good Friday agreement.
- Fiddling with this border was thus considered too dangerous, and it was decided the checks would be conducted between Great Britain and Northern Ireland.
- This was called the Northern Ireland Protocol.
Why was it contentious?
- Under the protocol, Northern Ireland remained in the EU single market, and trade-and-customs inspections of goods coming from Great Britain took place at its ports along the Irish Sea.
- The checks made trade between Great Britain and Northern Ireland cumbersome, with food products, especially, losing out on shelf life while they waited for clearance.
- Some taxation and spending policies of the UK government could not be implemented in Northern Ireland because of EU rules.
- The sale of medicines, too, was caught between different British and EU rules.
What does the Windsor Framework proposes?
- The Windsor Framework Deal proposes two crucial aspects. The first aspect is the introduction of a green lane and red lane system for goods.
- The green lane system will be for goods that will stay in Northern Ireland.
- The red lane system will be for goods that will go to the EU.
- The second aspect is the ‘Stormont Brake’.
- It allows Northern Ireland lawmakers and London to veto any EU regulation.
- The veto is applicable if they believe that the regulation affects the region adversely.
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From UPSC perspective, the following things are important :
Prelims level: New Start Treaty, INF Treaty
Mains level: Not Much
Central idea: The article provides an overview of the New START treaty, which was signed by Russia and the United States in 2010. It highlights how the treaty limits the number of nuclear weapons that the two countries can possess and deploy.
The New START, INF and the Open Skies …. Be clear about the differences of these treaties. For example- to check if their inception was during cold war era etc.
New START Treaty
- The New Strategic Arms Reduction Treaty (New START) pact limits the number of deployed nuclear warheads, missiles and bombers and is due to expire in 2021 unless renewed.
- The treaty limits the US and Russia to a maximum of 1,550 deployed nuclear warheads and 700 deployed missiles and bombers, well below Cold War caps.
- It was signed in 2010 by former US President Barack Obama and then-Russian President Dmitry Medvedev.
- It is one of the key controls on the superpower deployment of nuclear weapons.
Background of US-Russia Nuclear Relations
- The US formally QUIT the Intermediate-Range Nuclear Forces (INF)
- The agreement obliged the two countries to eliminate all ground-based missiles of ranges between 500 and 5,500 km.
When did nuclear disarmament begin?
- In 1985, the two countries entered into arms control negotiations on three tracks.
- The first dealt with strategic weapons with ranges of over 5,500 km, leading to the START agreement in 1991.
- It limited both sides to 1,600 strategic delivery vehicles and 6,000 warheads.
- A second track dealt with intermediate-range missiles and this led to the INF Treaty in 1987.
- A third track, Nuclear, and Space Talks was intended to address Soviet concerns regarding the U.S.’s Strategic Defence Initiative (SDI) but this did not yield any outcome.
Success of INF
- The INF Treaty was hailed as a great disarmament pact even though no nuclear warheads were dismantled.
- As it is a bilateral agreement, it did not restrict other countries.
- By 1991, the INF was implemented. USSR destroyed 1,846 and the US destroyed 846 Pershing and cruise missiles.
- Associated production facilities were also closed down.
- INF Treaty was the first pact to include intensive verification measures, including on-site inspections.
How has the nuclear behavior been?
- With the end of the Cold War and the break-up of the USSR in end-1991, former Soviet allies were joining NATO and becoming EU members.
- The U.S. was investing in missile defense and conventional global precision strike capabilities to expand its technological lead.
- In 2001, the U.S. announced its unilateral withdrawal from the 1972 Anti-Ballistic Missile Treaty (ABM Treaty).
- The US also blamed Russia for not complying with the ‘zero-yield’ standard imposed by the Comprehensive Test Ban Treaty (CTBT). This may indicate the beginning of a new nuclear arms race.
Implications of the New Start
- The 2011 New START lapsed in 2021. It may meet the fate of the INF Treaty.
- The 2018 NPR envisaged the development of new nuclear weapons, including low-yield weapons.
- China is preparing to operate its test site year-round with its goals for its nuclear force.
- CTBT requires ratification by U.S., China, and Iran, Israel and Egypt and adherence by India, Pakistan and North Korea. It is unlikely to ever enter into force.
Conclusion
- A new nuclear arms race could just be the beginning. It may be more complicated because of multiple countries being involved.
- Technological changes are bringing cyber and space domains into contention. It raises the risks of escalation.
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From UPSC perspective, the following things are important :
Prelims level: Munich Security Conference (MSC)
Mains level: Not Much
Central idea: The article is about the controversy surrounding billionaire philanthropist and political activist George Soros and his alleged statements on India and the Indian PM at the Munich Security Conference.
Who is George Soros?
- George Soros, the 92 YO billionaire philanthropist and political activist, has been at the center of several controversies over the years.
- Some of the key controversies associated with Soros include:
- Currency manipulation: Soros became famous in the 1990s for his role in the “Black Wednesday” financial crisis in the UK, where he was accused of profiting from the devaluation of the pound sterling by short-selling it.
- Insider trading: Soros has also been accused of insider trading in several instances, including the case of the French bank Societe Generale.
- Political meddling: Soros has been accused of using his vast wealth to influence political campaigns and events around the world, including in countries like Hungary, Ukraine, and the United States.
- Anti-Semitic accusations: Soros has been the subject of numerous conspiracy theories and accusations of anti-Semitism, with some critics alleging that he is part of a secret globalist agenda to control world governments and economies.
About Munich Security Conference (MSC)
- The MSC was founded by a German official and publisher Ewald-Heinrich von Kleist at the peak of the Cold War (1947-1991).
- Starting in 1963, the conference initially only focused on military issues and was mainly attended by western countries and their high-profile officials, who “came together to display a united front in their struggle with Soviet communism”.
- After the end of the Cold War, the conference expanded its agenda that went beyond defense and security matters to include issues such as climate change and migration.
- It also started to invite leaders from eastern nations, including Russia, India and China.
What will be the focus of this year’s MSC?
- This year’s edition might entail a refocus on its goal- the security order in Europe, in the backdrop of the Russia-Ukraine war that began just days after the MSC 2022 was concluded.
- The conference might also serve as a platform for diffusing tensions between the United States and China, especially after the former shot down an alleged spy balloon.
- Another theme on the agenda is to focus on diverse perspectives from the Global South, which included some of the poorest and least industrialized countries in the world.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: FATF
Mains level: Not Much
Central agencies, including the Financial Intelligence Unit (FIU) and the Directorate of Revenue Intelligence (DRI), have begun preparations for the Financial Action Task Force’s (FATF) mutual evaluation process of India.
What is the news?
- India is due to undergo the mutual evaluation process in the second half of 2022, which will assess the country’s compliance with international anti-money laundering and counter-terror financing standards.
What is FATF?
- FATF is an intergovernmental organization founded in 1989 on the initiative of the G7 to develop policies to combat money laundering.
- The FATF Secretariat is housed at the OECD headquarters in Paris.
- It holds three Plenary meetings in the course of each of its 12-month rotating presidencies.
- As of 2019, FATF consisted of 37 member jurisdictions.
India’s say in FATF
- India became an Observer at FATF in 2006. Since then, it had been working towards full-fledged membership.
- On June 25, 2010, India was taken in as the 34th country member of FATF.
What is FATF’s mutual evaluation process?
- The mutual evaluation process is a review of a country’s legal and institutional framework to combat money laundering and terrorist financing, as well as its implementation of measures to prevent these crimes.
- During the process, the FATF assesses a country’s compliance with its 40 recommendations on anti-money laundering and counter-terror financing, as well as the level of effectiveness of these measures in practice.
- The outcome of the mutual evaluation is a report that highlights a country’s strengths, weaknesses, and areas for improvement, and assigns a rating based on the level of compliance and effectiveness.
How will FATF evaluate India?
- The FATF’s evaluation will cover a wide range of areas, including India’s legal framework, regulatory system, law enforcement efforts, and international cooperation.
- Central agencies have been working to ensure that India’s anti-money laundering and counter-terror financing laws are in line with international standards, and that their implementation is effective.
Significance of this evaluation
- The outcome of the evaluation will be a report that highlights India’s strengths, weaknesses, and areas for improvement, and assigns a rating based on the level of compliance and effectiveness.
- The mutual evaluation process is an important tool in the global fight against money laundering and terrorist financing.
- Its outcome can have significant implications for a country’s access to international financial markets and its reputation in the global community.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: West Bank, Gaza
Mains level: Israel-Palestine Issue
US has urged Israel and the Palestinians to ease tensions amid a spike in violence that has put the West Bank region on edge.
Where is West Bank?
- The West Bank is a landlocked territory near the coast of the Mediterranean in Western Asia that forms the main bulk of the Palestinian territories.
- It is bordered by Jordan and the Dead Sea to the east and by Israel to the south, west, and north.
Point of discussion: Anti-Semitism
- Anti-Semitism (hatred against Jews) is an officially stated policy of many theocratic countries (created by divine orders of religion).
- This includes entire Arab world, the self-proclaimed caliphate ‘Turkiye’ and even Pakistan.
- Jews, the micro-minority religion of the world were denied access to their homeland.
What is the Israel-Palestine Conflict?
- The land to which Jews and Palestinians lay claim to was under the Ottoman Empire and then the British Empire in early 20th century.
- Palestinian people —the Arab people from the same area— want to have a state by the name of Palestine in that area.
- The conflict between Israelis and Palestinians is over who gets what land and how it’s controlled.
- Jews fleeing the persecution in Europe at the time wanted to establish a Jewish state on the land which they believe to be their ancient homeland.
- The Arab at the time resisted, saying the land was theirs. The land at the time was called Palestine.
- In 1917’s Balfour Declaration, the United Kingdom declared its support for the establishment of a “national home for the Jewish people” in Palestine.
- Arabs resisted it which led to violence.
Jews into West Bank: Arab hinterland in Israel
- Some 75,000 Jews migrated to Palestine from 1922-26 and some 60,000 Jews emigrated in 1935, according to a history published by the University of Central Arkansas.
- It adds that Palestinian Arabs demanded the UK to halt Jewish emigration, but the UK ignored such calls. There were violent incidents, leading to deaths of some 500 people.
- In 1923, the British Mandate for Palestine came into effect.
- The document was issued by the League of Nations, the failed predecessor of the United Nations (UN).
- The mandate gave the UK the responsibility for creating a Jewish national homeland in the region.
- In 1936, the UK government recommended the partition of Palestine into Jewish and Arab states.
How did the issue escalate?
- In 1947, Britain referred the issue of Palestine to the UN, which came up with a partition plan.
- It put up two proposals. One, two separate states joined economically —the majority proposal— and, two, a single bi-national state made up of autonomous Jewish and Palestinian areas, the minority proposal.
- The Jewish community approved of the first of these proposals, while the Arabs opposed them both.
Israel’s independence
- In May 1948, Israel declared its independence. This was eye-pricking development for Arabs.
- The Arab countries of Lebanon, Syria, Iraq, and Egypt invaded the newly-declared country immediately.
- When the war ended, Israel gained some territory formerly granted to Palestinian Arabs under the UN resolution in 1947.
- It also retained control over the Gaza Strip and the West Bank respectively.
Resolving the conflict
Ans. Two-state solution
- The two-state solution refers to an arrangement where Israeli and Palestinian states co-exist in the region.
- However, such a solution has not materialised over the decades.
- As outlined in the beginning and in the briefly explained roots of the conflict, the two-state solution means two separate states for Israelis and Palestinians.
Why it hasn’t worked out?
There are four main reasons why the two-state solution has not materialized by now:
[1] Borders
- There is no consensus as to how to draw the lines dividing the two proposed states.
- Many people say borders should have pre-1967 lines.
- In 1967 Israeli-Arab war, Israel captured Sinai Peninsula, Gaza Strip, West Bank, Old City of Jerusalem, and Golan Heights.
- Israel is not willing to give up these gains. It returned Sinai to Egypt in 1982.
- Moreover, there is the question of Israeli settlements in West Bank.
[2] Question of Jerusalem
- Both Israel and Palestinians claim Jerusalem as their capital and call it central to their religion and culture.
- The two-state solution typically calls for dividing it into an Israeli West and a Palestinian East, but it is not easy to draw the line — Jewish, Muslim and Christian holy sites are on top of one another.
- Israel has declared Jerusalem its ‘undivided capital’, effectively annexing its eastern half, and has built up construction that entrenches Israeli control of the city.
[3] Refugees
- A large number of Palestinians had to flee in the 1948 War.
- They and their descendants —numbering at 5 million— demand a right to return. Israel rejects this.
- The return of these people would end the demographic majority of Jews, ending the idea of Israel that’s both democratic and Jewish.
[4] Security
- Security concerns are also central to Israel as it’s constantly harassed by terrorist group Hamas that controls Gaza Strip.
- Hamas and other Islamist group in Gaza launch rockets into Israel time-to-time.
- Moreover, there are also concerns of Palestinians’ attack inside Israel.
- This year in March-April, at least 18 Israelis were killed in Palestinian attacks inside Israel.
- A total of 27 Palestinians were also killed in the period, including those who carried out attacks inside Israel. Palestinians too have their concerns.
- For Palestinians, security means an end to foreign military occupation.
Why the two-state solution is needed?
- Besides fulfilling the basic desire of both Jews and Arabs of their own states, supporters of two-state solutions say it must be backed because its alternatives are simply not workable.
- A single state merging Israel, West Bank, and Gaza would reduce Jews to a minority.
- At the same time, in such a state, Jews would be a significant minority which would mean that the Arab majority would be miffed.
Moral reasoning for a two-state solution
- It says that the aspirations of one person should not be overridden for others’ aspirations.
- It’s a struggle for collective rights between two distinct groups of people.
- Jews are the global micro-minority with a very small piece of land to exist.
- Depriving Israeli Jews of a Jewish state or Palestinians of a Palestinian state would represent a subordination of one group’s aspirations to someone else’s vision.
Way forward
- India opines that long-term peace in Israel and Palestine can be achieved only through a negotiated two-State solution leading.
- This can be done with the establishment of a sovereign, independent and viable State of Palestine living within secure and recognized borders.
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From UPSC perspective, the following things are important :
Prelims level: NAM
Mains level: Read the attached story
India and Egypt reiterated their support for the Non-Aligned Movement.
Non-Aligned Movement (NAM)
- NAM is a forum of 120 developing world states that are not formally aligned with or against any major power bloc.
- After the United Nations, it is the largest grouping of states worldwide.
- Drawing on the principles agreed at the Bandung Conference in 1955, the NAM was established in 1961 in Belgrade, SR Serbia, and Yugoslavia.
- It was an initiative of then PM Jawaharlal Nehru, Ghanaian President Kwame Nkrumah, Indonesian President Sukarno, Egyptian President Gamal Abdel Nasser and Yugoslav President Josip Broz Tito.
- The countries of the NAM represent nearly two-thirds of the United Nations’ members and contain 55% of the world population.
Reasons behind NAM creation
- Balancing the US and USSR: Non-alignment, a policy fashioned for the Cold War, aimed to retain the autonomy of policy (not equidistance) between two politico-military blocs i.e. the US and the Soviet Union.
- Platform beyond UN: The NAM provided a platform for newly independent developing nations to join together to protect this autonomy.
Relevance TODAY
- Changing with emerging scenarios: Since the end of the Cold War, the NAM has been forced to redefine itself and reinvent its purpose in the current world system.
- Focus towards development: It has focused on developing multilateral ties and connections as well as unity among the developing nations of the world, especially those within the Global South.
Fading significance of the NAM
- Loosing relevance: The policy of non-alignment lost its relevance after the disintegration of the Soviet Union and the emergence of unipolar world order under the leadership of the US since 1991.
- De-colonization was largely complete by then, the apartheid regime in South Africa was being dismantled and the campaign for universal nuclear disarmament was going nowhere.
- Freed from the shackles of the Cold War, the NAM countries were able to diversify their network of relationships across the erstwhile east-west divide.
India and the NAM
- Important role played by India: India played an important role in the multilateral movements of colonies and newly independent countries that wanted into the NAM.
- India as a leader: Country´s place in national diplomacy, its significant size and its economic miracle turned India into one of the leaders of the NAM and upholder of the Third World solidarity.
- The principle of ‘acting and making its own choices’ also reflected India’s goal to remain independent in foreign policy choices, although posing dilemmas and challenges between national interests on international arena and poverty alleviation.
- Preserving the state’s security required alternative measures: Namely, the economic situation with the aim to raise the population’s living standards challenged the country’s defense capacity and vice versa.
- Fewer choices: Wars with China and Pakistan had led India to an economically difficult situation and brought along food crisis in the mid-1960s, which made the country dependent on US food.
What dictates India’s alignment now?
- National security: China’s rise and assertiveness as a regional and global power and the simultaneous rise of middle powers in the region mean that this balancing act is increasing in both complexity and importance, simultaneously.
- Global decision-making: Another distinctive feature of India’s foreign policy has been the aim to adjust international institutions consistent with changes in international system.
- Prosperity and influence: India’s 21st century’s strategic partnerships aims for India becoming the voice of global South.
- Multi-polarism: Another means to execute India’s foreign policy strategy of autonomy has been forming extensive partnerships with other emerging powers.
Why NAM still matters?
- Global perception of India: India’s image abroad has suffered as a result of allegations that creep into our secular polity and a need arises to actively network and break out of isolation.
- For the Impulsive US: For India complete dependence on the U.S. to counter China would be an error.
- Ukrainian invasion has revitalized Cold War: Critics of NAM who term it as an outcome of the Cold War must also acknowledge that a new Cold War is beginning to unfold, this time between the US and China.
- NAM provides a much bigger platform:NAM becomes relevant to mobilize international public opinion against terrorism, weapons of mass destruction (WMDs), nuclear proliferation, ecological imbalance, safeguarding interests of developing countries in WTO etc.
- NAM as a tool for autonomy:NAM’s total strength comprises 120 developing countries and most of them are members of the UN General Assembly. Thus, NAM members act as an important group in support of India’s candidature as a permanent member in UNSC.
- NAM for multilateralism:Though globalization is facing an existential crisis, it is not possible to return to isolation. In the world of complex interdependence, countries are linked to each other one way or another.
- NAM as a source for soft power:India can use its historic ties to bring together the NAM countries. India’s strength lies in soft power rather than hard power.
Way forward
- Strategic autonomy: India is showing signs of pursuing strategic autonomy separately from non-alignment.
- Bilateralism: Indo-US ties are complementary, and a formal alliance will only help realize the full potential of these relations.
- Non-alliance: India interacts with other states in expectations to change the international system, but without expectations to ‘ally or oppose.’
- Deep engagement: India needs deeper engagement with its friends and partners if it is to develop leverage in its dealings with its adversaries and competitors.
Conclusion
- A wide and diverse range of strategic partners, including the U.S. as a major partner is the only viable diplomatic way forward in the current emerging multipolar world order.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: World Economic Forum
Mains level: Not Much
The World Economic Forum has begun its annual summit in Davos, Switzerland,
World Economic Forum (WEF)
- Headquartered in Geneva, Switzerland, WEF is an international not-for-profit organization, focused on bringing the public and private sectors together to address the global political, social, and economic issues.
- It was founded in 1971 by Swiss-German economist and Professor Klaus Schwab in a bid to promote the global cooperation on these most pressing problems.
- The first meeting of WEF was held more than five decades ago in Davos, which has been the home of the annual gathering almost ever since, also becoming the shorthand for the event.
Tap to read more about important reports published by the World Economic Forum (WEF).
WEF partners
- The WEF is largely funded by its partnering corporations.
- These are generally global enterprises with an annual turnover greater than $ 5 billion.
- For these corporations, the WEF provides a platform “to shape the future, accessing networks and experts to ensure strategic decision-making on the most pressing world issues.”
- Partners range from Apollo Tyres to Apple – they can be from any industry, as long as they wish to engage using WEF’s platforms.
- WEF also partners with public subsidies.
Why are the summits held at Davos?
- Sometimes described as Europe’s highest town, Davos has been the venue for the WEF’s annual meeting every year since its inception – with one exception.
- Davos, a ski resort, and the annual host of WEF’s meeting is a quaint town located on the lap of the Swiss Alps.
- In many ways, it is a surprising choice for a meeting of global economic giants and geopolitical leaders.
- The meeting was held in New York in 2002 in a gesture of solidarity following the 9/11 attacks.
Who are the attendees and what actually happens in Davos?
- Typically, Davos attracts global business executives and policymakers – and it’s strictly invite-only.
- Usually attending will be the sitting U.S. president, top EU and UN leaders, business leaders and entrepreneurs, academics, heads of NGOs and charities, the media, activists and even some celebrities.
- Donald Trump, Jens Stoltenberg, Ursula von der Leyen, Greta Thunberg, Elton John and many other high-profile names have all previously attended Davos.
- The conference includes hundreds of discussions, keynote speeches and panels, and all-important networking sessions, usually behind closed doors in five-star hotels.
- CEOs and investors seize the opportunity for face-to-face deal-makings.
Davos 2023: What’s on this year’s agenda?
- This year’s annual meeting in Davos will take place January 16–20, 2023.
- The theme is “cooperation in a fragmented world” and within that are five sub-themes, including the energy and food crises, inflation, technology for innovation, social vulnerabilities and geopolitical risks.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: APPU
Mains level: Not Much
India took over the leadership of the Asian Pacific Postal Union (APPU) having its Headquarters in Bangkok, Thailand.
About Asian Pacific Postal Union (APPU)
- APPU is an intergovernmental organization of 32-member countries of the Asian-Pacific region.
- It was formed by International treaty through an Asian-Pacific Postal Convention signed in Yogyakarta on 27 March 1981.
- The organisation has origins dating back to 1961.
- APPU is the only Restricted Union of the Universal Postal Union (UPU) in the region, which is a specialized agency of the United Nations.
- Secretary General leads the activities of the Union and is also the Director of the Asian Pacific Postal College (APPC) which is the largest intergovernmental postal training institute in the region.
Goals and objectives
- The goal of APPU is to extend, facilitate and improve postal relations between member countries and to promote cooperation in the field of postal services.
- As the regional center for various UPU projects, APPU also takes the lead in ensuring that all technical and operational projects of the UPU are fulfilled in the region.
Significance of India’s chair
- The Asia Pacific region accounts for around one-third of the world’s postal workforce and about half of the world’s mail volume.
- India seeks to improve the regional coordination with postal players in the Asia Pacific region to improve the growth of the business through the postal network, to ensure the sustainability of the Union.
- This is the first time an Indian is leading an international organization in the postal sector.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global Minimum Tax
Mains level: Not Much
Members of the EU last week agreed in principle to implement a global minimum tax of 15% on big businesses.
Global Minimum Corporate Tax
- Major economies are aiming to discourage multinational companies from shifting profits – and tax revenues – to low-tax countries regardless of where their sales are made.
- Increasingly, income from intangible sources such as drug patents, software, and royalties on intellectual property has migrated to these jurisdictions.
- This has allowed companies to avoid paying higher taxes in their traditional home countries.
What is the recent EU agreement?
- EU members have agreed to implement a minimum tax rate of 15% on big businesses in accordance with Pillar 2 of the global tax agreement framed by the OECD last year.
- Under the OECD’s plan, governments will be equipped to impose additional taxes in case companies are found to be paying taxes that are considered too low.
- This is to ensure that big businesses with global operations do not benefit by domiciling themselves in tax havens in order to save on taxes.
Need for a global minimum tax
- Corporate tax rates across the world have been dropping over the last few decades as a result of competition between governments to spur economic growth through greater private investments.
- Large multinational companies have traditionally paid taxes in their home countries even though they did most of their business in foreign countries.
- The OECD plan tries to give more taxing rights to the governments of countries where large businesses conduct a substantial amount of their business.
- As a result, large US tech companies may have to pay more taxes to the governments of developing countries.
History of such taxes
- Global corporate tax rates have fallen from over 40% in the 1980s to under 25% in 2020.
- The global tax competition was kick-started by former US President Ronald Reagan and former British PM Margaret Thatcher in the 1980s.
- The OECD’s tax plan tries to put an end to this “race to the bottom” which has made it harder for governments to shore up the revenues required to fund their rising spending budgets.
- The minimum tax proposal is particularly relevant at a time when the fiscal state of governments across the world has deteriorated as seen in the worsening of public debt metrics.
Response to the EU move
- Some governments, particularly those of traditional tax havens, are likely to disagree and stall the implementation of the OECD’s tax plan.
- High tax jurisdictions like the EU are more likely to fully adopt the minimum tax plan as it saves them from having to compete against low tax jurisdictions.
- Low tax jurisdictions, on the other hand, are likely to resist the OECD’s plan unless they are compensated sufficiently in other ways.
Way forward
- Supporters of the OECD’s tax plan believe that it will end the global “race to the bottom” and help governments collect the revenues required for social spending.
- The plan will also help counter rising global inequality by making it tougher for large businesses to pay low taxes by availing the services of tax havens.
- Critics of the OECD’s proposal, however, see the global minimum tax as a threat.
- They argue that without tax competition between governments, the world would be taxed a lot more than it is today, thus adversely affecting global economic growth.
- In other words, these critics believe that it is the threat of tax competition that keeps a check on governments that would otherwise tax their citizens heavily to fund profligate spending programs.
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From UPSC perspective, the following things are important :
Prelims level: Singapore Declaration
Mains level: Labour reform
CONTEXT: The 17th Asia-Pacific Regional Meeting of the International Labour Organisation (ILO) set ten-point priorities of national action under the Singapore Declaration.
Singapore Declaration
- It seeks to draw attention for the member countries to deal with the issue of dwindling wages of workers, inflation and unemployment.
- It was adopted by the delegates representing governments, employers and workers’ governments, employers and workers in the regions.
- Members agreed that social dialogue is essential to address labour market challenges and finding solutions in crisis situations such as the COVID-19 pandemic, natural disasters, and economic uncertainty.
Key point priorities
- Ensure labour protection for all through the promotion of freedom of association
- Recognition of the right to collective bargaining, including for workers in vulnerable situations and workers in the informal economy, as enabling rights for decent work
- Closing gender gaps, increase women’s labour force participation, promote equal pay for work of equal value, balance work and responsibilities, and promoting women’s leadership.
- Develop and implement inclusive labour market programmes and policies that support life transitions and demographic shifts.
- Pursue collective and determined efforts to promote and accelerate a smooth and sustained transition from the informal to formal economy
- Strengthen governance frameworks and respect for freedom of association for migrant workers
- Strengthen the foundation for social and employment protection and resilience
- Expanding social protection to all workers, guaranteeing universal access to comprehensive, adequate and sustainable social protection for all
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: Global South
Mains level: Global South Narrative
As India assumed the presidency of the G20 group of countries for 2022 to 2023, EAM S Jaishankar said on December 1 that India would be the voice of the Global South that is otherwise under-represented in such forums.
What is ‘Global South’?
- The term has since been used multiple times, such as when Jaishankar said of ongoing global conflicts, “polarisation may occur elsewhere, the people who suffer most are the Global South”.
- ‘Global North’ refers loosely to countries like the US, Canada, Europe, Russia, Australia and New Zealand, while ‘Global South’ includes countries in Asia, Africa and South America.
Behind the binary difference: ‘Global North’ and the ‘Global South’
- For a long time in the study of international political systems, the method of categorising countries into broad categories for easier analysis has existed.
- The concepts of ‘East’ and ‘West’ is one example of this, with the Western countries generally signifying greater levels of economic development and prosperity among their people.
- Eastern countries were considered as being in the process of that transition.
What are other such categorizations?
- Another similar categorisation is of First World, Second World and Third World countries.
- It referred to countries associated with the Cold war-era alliances of the US, the USSR, and non-aligned countries, respectively.
- The idea of the “third” world underlined that it was not only different from the “first” — the capitalist West — but also and the second — the socialist “East”.
Concept behind: World Systems Approach
- At the centre of these concepts is the World Systems approach introduced by sociologist Immanuel Wallerstein in 1974, emphasising an interconnected perspective of looking at world politics.
- He said there are three major zones of production: core, peripheral and semi-peripheral.
- The core zones reap profits, being the owners of cutting-edge technologies – countries like the US or Japan.
- Peripheral zones, on the other hand, engage in less sophisticated production that is more labour-intensive.
- In the middle are countries like India and Brazil.
Need for new terms
(1) Global shift of powers
- In the post-Cold War world, the First World/Third World classification was no longer feasible.
- This is because when the Communist USSR disintegrated in 1991, most countries had no choice but to ally at some level with the capitalist US – the only remaining global superpower.
(2) Monolithic classification
- The East/West binary was seen as often perpetuating stereotypical thinking about African and Asian countries.
- Categorising incredibly diverse countries into a monolith was felt to be too simplistic.
- Also, the idea that some countries were ‘developed’ while others were not was thought to be too wide a classification, inadequate for accurately discussing concerns.
(3) Issues with Developed vs. Developing
- Writing in 2014 from the perspective of his organisation’s philanthropic activities, Bill Gates said of the ‘developing’ tag.
- It found an irony that- any category that lumps China and the Democratic Republic of Congo together confuses more than it clarifies.
- Some so-called developing countries have come so far that it’s fair to say they have developed.
- A handful of failed states are hardly developing at all. Most countries are somewhere in the middle.
Emergence of Global South
- Colonial past: A big commonality between the South countries is that most have a history of colonization, largely at the hands of European powers.
- No say since de-colonization: Region’s historical exclusion from prominent international organizations – such as from the permanent membership of the UN is intriguing.
- Consciousness for decision-making: As bodies like the UN and the IMF are involved in major decision-making that affect the world in terms of politics, economy and society, the exclusion is seen by these countries as contributing to their slower growth.
- Economic emergence: China and India have emerged economically sound in the past two decades.
- Declining US hegemony: Many consider the world to now be multipolar rather than one where the US alone dominates international affairs.
- Climate reparations: In the ongoing debate adds Northern countries paying for funding green energy, having historically contributed to higher carbon emissions.
Criticism of the classification
- Only few players: South simply aims to replace the North and the positions it occupies, again continuing a cycle in which a few countries accumulate crucial resources.
- More of a India vs. China competition: Much controversy currently surrounds the question of whether elites of the global South and ‘rising powers’ genuinely have the intention to challenge the dominant structures of global capitalist development”.
- Anti-china motive: China’s tentative “going out” strategy at the turn of the century eventually morphed into the expansive Belt and Road Initiative.
Where does India stand?
- No further diplomatic groupism: EAM S Jaishankar India’s objective is not to rebuild a global trade union against the North.
- Bridging the divide: India is eager to become a bridge between the North and the South by focusing on practical outcomes rather than returning to old ideological battles.
Challenges
- Political consistency: In the past, India’s ideological enthusiasm for the Global South was not matched by material power and political will.
- Bridging the neighbours: India must also come to terms with the fact that the Global South is not a coherent group and does not have a single shared agenda.
- Despaired south: There is much differentiation within the South today in terms of wealth and power, needs and capabilities.
- Defiance from NAM: India’s Third World strategy (and Non-Aligned Movement) in the Cold War era was undermined by multiple internal and regional conflicts within the Global South.
Way ahead
- More engagement in neighborhood: Championing the Global South today would demand more active Indian engagement with the messy regional politics within the developing world.
- Political coherence: If India can translate this ambition into effective policy, there will be no contradiction between the simultaneous pursuit of universal and particular goals.
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Note4Students
From UPSC perspective, the following things are important :
Prelims level: 'No First Use' Policy
Mains level: Nuclear disarmament
China responded to a US report alleging a major build-up in Beijing’s nuclear capabilities. It said, it adheres to its policy of no first use of nuclear weapons.
What is the news?
- The Pentagon released an annual China security report that warned Beijing would likely have 1,500 nuclear.
- China currently has 350 nuclear warheads.
- As of 2022, Russia possesses a total of 5,977 nuclear warheads compared to 5,428 in the US inventory.
What is ‘No First Use’ Doctrine?
- In nuclear ethics and deterrence theory, NFU is a commitment to never use nuclear weapons first under any circumstances, whether as a pre-emptive attack or first strike, or in response to non-nuclear attack of any kind.
Where do nuclear-armed countries stand on No First Use?
- China is the only nuclear-armed country to have an unconditional NFU policy.
- India maintains a policy of NFU with exceptions for a response to chemical or biological attacks.
- France, North Korea, Pakistan, Russia, the UK and the US maintain policies that permit the first use of nuclear weapons in a conflict.
- Israel does not acknowledge the existence of its nuclear arsenal so has no publicly known position.
Why advocate for global NFU commitments now?
- The world after US bombing of Japan has never faced any crises that could escalate to nuclear conflict.
- In addition to the precarious situation on the Korean peninsula, we’re running acceptably high risks of nuclear weapons use between-
- NATO and Russia: Amid ongoing Ukrainian Invasion
- India and Pakistan: Jihadist acquiring nuclear weapons
- US and China: Due to provocations over the South China Sea and Taiwan
- In fact right now the chances that nuclear weapons will be used — intentionally, accidentally, or due to miscalculation — are the highest they’ve been since the worst days of the Cold War.
- Establishing global NFU would immediately make the world safer by resolving uncertainty about what a nuclear-armed country might do in a crisis.
- It removes pressure and incentive for any one country to “go nuclear” first in a crisis and thus create a moral obligation on others.
Consequences of nuclear war
- Any use of a nuclear weapon would invite massive retaliation.
- Not to mention the horrific aftermath of nuclear war.
- A 2014 study shows that so-called “limited” nuclear war in South Asia, in which 100 nuclear weapons are used, would have global consequences.
- Millions of tons of smoke would be sent into the atmosphere, plunging temperatures and damaging the global food supply.
- Two billion people would be at risk of death by starvation.
What lies ahead?
- Global No First Use would be an important step toward making nuclear weapons irrelevant to national security.
- These policies would strip nuclear weapons of value in the eyes of military planners, enable future nuclear disarmament negotiations, and accelerate the dismantling of these weapons.
- It would also serve as a “confidence-building measure” that establishes greater trust among nuclear-armed countries.
- It thus makes it easier to work together to reduce nuclear risks and ultimately eliminate all nuclear weapons.
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