Daily Current Affairs for UPSC IAS | 3rd September 2021

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1.  Noble intentions

UPSC Syllabus: Mains – GS Paper II: INTERNATIONAL RELATIONS
Sub Theme: UNSC Reforms | UN | UPSC

The United Nations Security Council has several significant problems. First, the membership of the Security Council has  changed very little since its inception in 1945, even though the number of UN member states has almost quadrupled since  then and the relative power of member states has changed significantly. The only change in membership has been the  addition of 4 non-permanent seats in 1965. African states call the under-representation of Africa a historical injustice which  needs to be corrected.

Second, the differences between permanent and non-permanent seats produce a highly unequal and inefficient Security  Council. The five permanent members (P5) – Britain, France, United States, Russia and China – possess permanent seats  and have the privilege of the veto whilst the status of non-permanent members is low. The former Ambassador of New  Zealand Colin Keating has explained that the non-permanent members have essentially been relegated to a role of  rubberstamping decisions made by the P5 or choosing between their contending positions. Similarly, the Permanent  Representative of Ireland has publicly called the Security Council debates a sham that very few governments even stay to  hear. Moreover, the P5 have on many occasions abused their veto powers.

Another important issue regarding the veto is that the decision probability in the Security Council remains very low.  Although the formal, public use of the veto has decreased in the last few decades, this has mostly been caused by moving  the activities of the Security Council behind closed doors where threats of veto are made in private.

Most importantly, the performance of the Security Council in maintaining international peace and security has been poor.  It failed in its actions in Somalia, Bosnia and Rwanda. In Somalia, the choice of strategy was counterproductive and  Washington’s political timetable for the mission too arbitrary. In Bosnia, the operation was severely undermanned and the  Security Council failed to provide adequate protection for the UN safe areas, resulting in the Srebrenica Massacre. In  Rwanda, an insufficient mandate and the Council’s refusal to strengthen the peacekeeping force once the genocide began  doomed the operation. Britain, the United States and France all actively avoided using the term “genocide” to escape their  responsibility to intervene. France actually supported the Rwandan government and provided it with arms and  ammunition even during the genocide. Interventions in Iraq (2003) and Kosovo (1999) proceeded without Security Council  approval.

More recently, the Security Council has failed to act to resolve crises in Crimea, Syria and Yemen. As a result, Nabil Elaraby  – an Egyptian diplomat, a former Secretary General of the League of Arab States, and a former judge in the International  Court of Justice – claims that the international protection system enshrined in the UN Charter has ceased to exist. However,  member states are not abandoning the Security Council as is shown by its ever-increasing workload.

As a result of its shortcomings, reform of the Security Council has been deemed necessary. In 2009, some 140 member  states requested to move on to text-based negotiations to pursue reform.

The Current Reform Proposals 

The current negotiation process is based on Decision 62/557 which was adopted in 2008. It defines five key issues for  reform: categories of membership, the question of the veto, regional representation, the size of an enlarged Security  Council and its working methods, and the relationship between the Security Council and the General Assembly. Decision  62/557 also stipulates that any solution must garner “the widest possible political acceptance”, although in 1998 the UN  General Assembly already agreed that the support of two-thirds of UN member states is sufficient. Yet even if these  conditions are met any of the P5 will still be able to veto the final resolution. For example, China and Russia have  previously stated that reform should be based on a consensus and not on a majority vote.

On the issue of reform, the UN member states are divided into several groups. Their positions on the most important  questions, membership and the veto, are as follows.

First, the G4 consists of Germany, Japan, India and Brazil. The G4 mainly seek permanent seats for themselves, but are  willing to forego their veto rights for fifteen years or possibly even longer.

Second, the Uniting for Consensus (UfC) consists of various states – including Italy, Spain, Argentina, Canada, Mexico, South  Korea and Pakistan – which oppose the G4 and the addition of any new permanent seats. The UfC would instead add only  non-permanent seats and preferably abolish the veto or at least restrict its use.

Third, the African group consists of members of the African Union. It seeks two permanent and five non-permanent seats  for Africa. The African group would preferably abolish the veto, but it insists that as long as the veto exists all permanent members should possess it.

Fourth, the L69 consists of some 40 developing countries from all over the world, including Brazil and India. It seeks six new  permanent seats and six new non-permanent seats balanced across UN regions. Its stance on the veto is similar to that of  the African group; either the veto is abolished or it is extended to all permanent members.

Fifth, the Arab group consists of 22 states and it demands a permanent Arab seat. It heavily criticises the veto, but does  not present any solution to it.

The final significant group is the ACT which consists of 21 smaller member states, such as Ireland, Switzerland, Peru,  Uruguay and Liechtenstein. The ACT concentrates solely on improving the working methods – accountability, coherence,  and transparency – of the Security Council so that all UN member states, not just the Council members, can take part in its  decisions.

The P5 are generally hesitant towards reform. Of the five, France and Britain are most open to reform. Whilst all permanent  members accept the reform in principle, they have often fought popular reform proposals. For example, when in 2005 it  seemed that the G4 and the African group might reconcile their differences, China and Russia declared any reform to be  out of the question and with the aid of the United Stated started publicly gathering support to defeat the reform attempt.  Similarly, in 2012 intense pressure from the permanent members forced a draft resolution on improving the working  methods of the Council to be abandoned.

The Four Major Flaws of Design 

There are four major flaws in the design of the Security Council which cause it to be dysfunctional and these flaws are  currently ignored in the reform process. The four flaws are: inequality, exclusiveness, rotating seats, and representation. First, inequality results from the veto and from the difference between permanent and non-permanent seats. As has been  discussed earlier, the unequal design concentrates most of the power to the P5 who are then able to act in self-interest  and ignore the rest of the UN. This means that even when there would be overwhelming support for the UN to act, a single  member can make action impossible.

Second, exclusiveness results from limiting the Council’s membership to a small portion of the total UN membership. This  causes the Security Council to lack legitimacy, because it displays little awareness of the views under-represented regions,  such as the Middle East or the Small Island Developing States. Another example is Africa which is the subject of nearly 75  percent of the Council’s work and the target of over 60 percent of all Security Council resolutions, but is severely under

represented. For example, in 2008 a draft resolution called for sanctions against Robert Mugabe and his associates. The  African Union was against sanctions, but had no say in either the draft resolution or the result. The South African permanent  representative summarised the problem in the following way: “How can we have a situation in which other people are  discussing what is happening on our continent without our participation?”

Third, the system of rotating seats results in unpredictability and randomness because Security Council decision-making  and agenda setting follow the interests of its members. For example, before the Rwandan genocide the government of  Rwanda used its seat in the Council to gain information that the United States was unwilling to intervene and during the  genocide Rwanda used its seat to spread misinformation. Rwanda was also supported by two other non-permanent  members: Djibouti and Oman. Had these seats been held by other states, the result would have likely been different.

Fourth, the system of single countries representing their respective regions does not work, because states are unwilling to  represent and to be represented by others. Instead, states campaign vigorously to gain seats for themselves. As a case in  point, the African group has been unable to agree on the distribution of seats among its members even after more than a  decade of negotiations.

The current reform proposals do not solve any of these flaws as the focus is on the issues defined in Decision 62/557.  Instead, some reforms might further exacerbate the flaws. In particular, the addition of several new permanent members  with veto power would decrease the decision probability of the Council even further.

 

2.  Is monetizing public assets a good idea?

UPSC Syllabus: Mains – GS Paper III – Economy
Sub Theme: National Monetization Pipeline | UPSC

The government on Monday unveiled a four-year National Monetisation Pipeline (NMP) worth an estimated  Rs 6 lakh crore. It aims to unlock value in brownfield projects by engaging the private sector, transferring to  them revenue rights and not ownership in the projects, and using the funds so generated for infrastructure  creation across the country.

The NMP has been announced to provide a clear framework for monetisation and give potential investors  a ready list of assets to generate investment interest. The government has stressed that these are  brownfield assets, which have been “de-risked” from execution risks, and therefore should encourage  private investment. Structuring the monetisation transactions, providing a balance risk profile of assets, and  effective execution of the NMP will be key challenges.

What is monetisation? 

In a monetisation transaction, the government is basically transferring revenue rights to private parties for  a specified transaction period in return for upfront money, a revenue share, and commitment of  investments in the assets. Real estate investment trusts (REITs) and infrastructure investment trusts (InvITs),  for instance, are the key structures used to monetise assets in the roads and power sectors. These are also  listed on stock exchanges, providing investors liquidity through secondary markets as well. While these are  a structured financing vehicle, other monetisation models on PPP (Public Private Partnership) basis include:  Operate Maintain Transfer (OMT), Toll Operate Transfer (TOT), and Operations, Maintenance &  Development (OMD). OMT and TOT have been used in highways sector while OMD is being deployed in case  of airports.

What is the government’s plan? 

Roads, railways and power sector assets will comprise over 66% of the total estimated value of the assets  to be monetised, with the remaining upcoming sectors including telecom, mining, aviation, ports, natural gas and petroleum product pipelines, warehouses and stadiums. In terms of annual phasing by value, 15%  of assets with an indicative value of Rs 0.88 lakh crore are envisaged for rollout in the current financial year.  The NMP will run co-terminus with the National Infrastructure Pipeline of Rs 100 lakh crore announced in  December 2019. The estimated amount to be raised through monetisation is around 14% of the proposed  outlay for the Centre of Rs 43 lakh crore under NIP.

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The assets on the NMP list include: 26,700 km of roads, railway stations, train operations and tracks, 2,8608  Ckt km worth of power transmission lines, 6 GW of hydroelectric and solar power assets, 2.86 lakh km of  fibre assets and 14,917 towers in the telecom sector, 8,154 km of natural gas pipelines and 3,930 km of  petroleum product pipelines. In the roads sector, the government has already monetised 1,400 km of  national highways worth Rs 17,000 crore. Another five assets have been monetised through a PowerGrid  InvIT raising Rs 7,700 crore.

Also, 15 railway stations, 25 airports and the stake of central government in existing airports and 160 coal  mining projects, 31 projects in 9 major ports, 210 lakh MT of warehousing assets, 2 national stadia and 2  regional centres, will be up for monetisation. Redevelopment of various government colonies and  hospitality assets including ITDC hotels is expected to generate Rs 15,000 crore.

What are the challenges? 

Among the key challenges that may affect the NMP roadmap are: lack of identifiable revenues streams in  various assets, level of capacity utilisation in gas and petroleum pipeline networks, dispute resolution  mechanism, regulated tariffs in power sector assets, and low interest among investors in national highways  below four lanes. While the government has tried to address these challenges in the NMP framework,  execution of the plan remains key to its success. Structuring of monetisation transactions is being seen as  key. The slow pace of privatisation in government companies including Air India and BPCL, and less-than-

encouraging bids in the recently launched PPP initiative in trains, indicate that attracting private investors  interest is not that easy.

“Monetisation potential of toll road assets, though being a market-tested asset class with established  monetisation models, is limited by the percentage of stretches having fourlane and above configuration.  The total length of national highway (NH) stretches with four-lane and above is estimated to be about 23%  of the total NH network,” as per the NMP framework. The government has tried to address this with a plan  to monetise assets that are four-lane and above.

The MNP framework notes that other key impediments to the monetisation process are asset-specific  challenges such as presence of an identifiable revenue stream. This is specifically relevant to the railway  sector, which has seen limited PPP success as a mode of project delivery.

Konkan Railway, for instance, has multiple stakeholders, including state governments, which own stake in  the entity. Creating an effective monetisation transaction structure could be a bit challenging in this case.

 

3.  Exports rose 45% to $33 bn in August

UPSC Syllabus: Mains – GS Paper III – Economy
Sub Theme: Export model of Growth | UPSC

India’s vision of becoming a $ 5 trillion economy by 2024 is intricately linked with an export-oriented approach. An  Export-led model would help us attract foreign investments, integrate into global value chains (GVCs), enhance job  creation and thus sustain virtuous economic cycle. In this regard, let us look into the following dimensions: 1. Important aspects about India’s Trade 

  1. Need for Export-led Model 
  2. Constraints and Challenges 
  3. Strategies needed. 

Important aspects of India’s Trade 

  • India’s share in the world’s exports has remained stagnant at 1.6% in the last decade.
  • India is still critically dependent on import of critical goods such as Pulses, Oilseeds, Electronic Goods, Active  Pharmaceutical Ingredients (APIs) etc. which shows lack of self-sufficiency of Indian Economy. • Imports into India is much higher than exports. This usually leads to Current Account deficit. • India’s export basket is dominated by Capital intensive goods such as Petroleum products, Gems, Jewelry etc.  (rather than Labor intensive goods such as Textiles, Leather etc.)
  • Undoubtedly, the forex reserves have increased to all time high. However, it is mainly on account of increase in  volatile FPI inflows rather than on account of export surplus.
  • Unlike China, India has failed to get integrated into Global value chains (GVCs).

Need for Export-Led Model 

India’s Experience during 1947-91: Inward-oriented and protectionist policies followed prior to LPG reforms affected the  economy in terms of lower exports, lower foreign investment, poor competitiveness of industries and overall reduced GDP  growth rate. Need to learn from the past mistakes and adopt outward-oriented policies which focusses on boosting  exports.

Empirical Evidence: Countries such as Japan, China, Vietnam etc. have been able to sustain higher economic growth by  integrating with the global economy. In the recent times, such an export-led strategy has benefitted both bigger economies  such as China as well as smaller economies such as Vietnam.

Shift from Consumption-led to Investment and Export driven ModelTo ensure $ 5 trillion economy, we cannot rely only  on domestic demand. Like China, we need to cater to global demand by boosting our exports. Conducive environment in terms of US-China Trade war, rising Labour costs in China, growing anti-china sentiment etc.  India needs to fill up the vacuum which is slowly left by China.

Boost Make in India and Assemble in India: By integrating “Assemble in India for the world” into Make in India, India can  raise its export market share to about 3.5 percent by 2025 and 6 per cent by 2030. India would create about 4 crore well paid jobs by 2025 and about 8 crores by 2030 (Eco Survey 2019-20)

Innovation and Efficiency: The export-led model would force domestic Industries to innovate and adapt to boost exports.

Challenges
Supply-Side  Demand Side
Dominance of Dwarf Firms in MSME SectorMSMEs  account for around 40% of the exports and 45% of  manufacturing output. However, these MSMEs face  problems with respect to factors of production such  as Land, labour and capital. Plus, most of the MSMEs  use obsolete technology which leads to poor  efficiency and competitiveness.

Higher Logistics Cost: India’s logistics cost as a share  of GDP is 14 percent, which is high when compared  to developed nations, where it ranges between eight

Rising Protectionist Policies in importing countries:  High import duties and Quota limits in export  markets

Easier market access to India’s competitors: Goods  from countries such as Bangladesh, Vietnam etc.  enter export markets such as EU, USA etc. at almost  zero customs duty. However, Indian goods enter such  markets with comparatively higher customs duty and  thus our goods become uncompetitive. India’s

 

and ten percent. Higher logistics cost in turn reduces  the overall competitiveness of Indian economy.  Trade Facilitation: Involves reducing the number of  documents needed for trade. Trade facilitation  reduces the time to export and cost of exports. In  India, Trade facilitation, as measured by “Trading  Across Borders” is quite poor. “Trading Across  Borders” is one of the parameters for measuring  World Bank’s Ease of Doing Business.

Poor Innovation: India spends hardly around 0.7% of  its GDP on R&D, which is quite lower in comparison  to USA (2.1%), China (2.8%), Israel (4.3%) etc.  Improvement in innovation ecosystem would help us  improve manufacturing competitiveness and help us  manufacture high quality goods for the global  market.

Lack of Market Intelligence related to consumer  preference in export markets. For example, higher  sweetness in Indian mangoes is not necessarily in  demand in many countries.

Identification Challenges: Each district of a country  has a potential equivalent to that of a small country  in boosting exports. However, there is lack of focus  on identifying potential export clusters within a state.

Lack of coordination among multiple government  ministries and departments involved in boosting  exports.

Adverse Impact of FTAs: Some of the FTAs with  countries such as Japan, South Korea etc. has led to  inverted duty structure which has in turn  encouraged import of finished goods and  discouraged domestic manufacturing.

exports of Textiles and Leather to USA and EU has  been declining on account of this.

WTO Norms: Indiscriminate application of sanitary  and phytosanitary measures by other countries  against Indian products. For example, basmati and  non-basmati rice exports to the US have been  rejected multiple times on the grounds of low  hygiene standards. Similarly, the issue of pesticides  residues is frequently raised by the EU and Japan

Way Forward 

Improve Trade Competitiveness by improving access to factors of production (Land, Labour, Capital), Reduce  Logistics costs (14% of GDP) to global benchmarks (8% of GDP), improving Ease of Doing Business etc. Protect the domestic Market from the import cheap foreign goods through (a) strong and effective technical  regulations (b) trade safeguards such as Anti-dumping duties and safeguard duties.

Better Inter-Ministerial Coordination: The ministry of Commerce and Industry must hold regular Inter ministerial meetings. Further, regular Interactions with the State Governments is also crucial so that trade  facilitation takes place under cooperative federalism.

Handholding support to MSMEs The MSMEs need to be provided handholding support to have access to  factors of factors and use appropriate technology to boost exports.

Reorient SEZs (Baba Kalyani Committee): The SEZs should be renamed as 3 E’s- Employment and Economic  Enclaves. Focus should not only be on boosting exports, but also on employment creation and GDP growth  rate. Incentives given to companies in SEZs should depend upon factors such as Value addition, Technology  adoption etc. This would encourage the companies to innovate and compete at the global level.

 

4.  Jallianwala Bagh conservation was supervised by ASI: Culture Ministry

UPSC Syllabus: Mains – GS Paper I- Independence Movement
Sub Theme: Jallianwala Bagh | UPSC

Jallianwala Bagh conservation was supervised by  ASI: Culture Ministry

Context: Recently renovated Jallianwala Bagh has attracted criticism from many local people and  historian about wrong presentation of historical facts and figures.

However, from the perspective of UPSC we are more concerned about the Jallianwala Bagh from the  point of modern history in prelims and mains examination.

About Jallianwala Bagh massacre: 

The Jallianwala Bagh massacre marked a turning point in India’s struggle for Independence. A  memorial was set up by the Government of India in 1951 at Jallianwala Bagh to commemorate  the spirit of Indian revolutionaries and the people who lost their lives in the brutal massacre. It stands as a symbol of struggle and sacrifice and continues to instill patriotism amongst the  youth. In March 2019, the Yaad-e-Jallian Museum was inaugurated showcasing an authentic  account of the massacre.

Events led to the Jallianwala Bagh massacre:  

  • The Rowlatt Act (Black Act) was passed on March 10, 1919, authorizing the government to imprison or confine, without a trial, any person associated with seditious activities. This led to nationwide unrest.
  • Gandhi initiated Satyagraha to protest against the Rowlatt Act.
  • On April 7, 1919, Gandhi published an article called Satyagrahi, describing ways to  oppose the Rowlatt Act.
  • The British authorities discussed amongst themselves the actions to be taken against  Gandhi and any other leaders who were participating in the Satyagraha. • Orders were issued to prohibit Gandhi from entering Punjab and to arrest him if he  disobeyed the orders.
  • Sir Michael O’ Dwyer, the Lieutenant Governor of Punjab (1912-1919), suggested  that Gandhi be deported to Burma but this was opposed by his fellow officials as they  felt it might instigate the public.
  • Dr Saifuddin Kitchlew and Dr Satyapal, the two prominent leaders who were a symbol  of Hindu-Muslim unity, organised a peaceful protest against the Rowlatt Act in Amritsar. • On April 9, 1919, Ram Naumi was being celebrated when O’ Dwyer issued orders to  the Deputy Commissioner, Mr Irving to arrest Dr Satyapal and Dr Kitchlew. 
  • On April 13, 1919, the public had gathered to celebrate Baisakhi. However, the British point of view, as seen from the documents present in the National Archives of India, indicates that it was a political gathering.
  • Inspite of General Dyer’s orders prohibiting unlawful assembly, people gathered at  Jallianwala Bagh, where two resolutions were to be discussed, one condemning the firing  on April 10 and the other requesting the authorities to release their leaders.
  • When the news reached him Brigadier-General Dyer, headed to the Bagh with his  troops.

He entered the Bagh, deployed his troops and ordered them to open fire without giving  any warning. People rushed to the exits but Dyer directed his soldiers to fire at the exit. • The firing continued for 10-15 minutes. 1650 rounds were fired. The firing ceased only  after the ammunition had ran out. The total estimated figure of the dead as given by  General Dyer and Mr Irving was 291. However, other reports including that of a  committee headed by Madan Mohan Malviya put the figure of dead at over 500. • As the news of the massacre spread across the nation, Tagore renounced his  Knighthood. 

  • On October 14, 1919, the Disorders Inquiry Committee was formed to inquire about the massacre. It later came to be known as the Hunter Commission.
  • The Hunter Commission was directed to announce their verdict on the justifiability, or  otherwise, of the steps taken by the government. All the British officials involved in the  administration during the disturbances in Amritsar were interrogated including General  Dyer and Mr Irving.
  • General Dyer’s actions on the day of the Massacre received a prompt acknowledgement from Sir Michael O’ Dwyer who at once wired to him: “Your action correct. Lieutenant-Governor approves.” Both Dyer and Dwyer faced violent criticism from  various newspapers who gave their own accounts of the brutal massacre.

Impact on struggle for Indian independence: 

  • Ignited a new wave of nationalism.
  • Supported the cause for Non-cooperation movement and Khilafat movement. • It supported the cause for revolutionary movement in Punjab such as rise of Hindustan  republican association.
  • Extremist wing of Indian national congress got mass support in order to go hard on British  Policies.
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