Current Affairs Analysis

21th April 2020 Current Affairs Analysis – IASToppers

Real Effective Exchange Rate; Currency exchange rate; Nominal Effective Exchange Rate; New Development Bank; Issues faced in the pandemic by women; WTO’s Trade without discrimination principle; National Blood Transfusion Council; Civil Services Day; Draft Electricity Act (Amendment) Bill, 2020; Prime Minister Award for Excellence in Public Administration; Enigma Shipwrecks Project; Agro-ecology; Daporijo bridge; Conversion of rice into alcohol-based hand-sanitizers; Electro-catalyst from fish gills; Artificial Neural Networks based global Ionospheric Model; Nightingale-19
By IASToppers
April 22, 2020

Contents

 

Polity & Governance

  • Civil Services Day
  • Draft Electricity Act (Amendment) Bill, 2020

Issues related to Health & Education

  • COVID-19 is wake up call for global food systems, say experts

Social Issues

  • The invisible face of the fallout
  • Blood banks running on low reserves, seek urgent help

Economy

  • FM attends 5th meeting of New Development Bank’s Board of Governors
  • India’s new FDI norms violate WTO’s principle of free trade: Chinese embassy
  • What explains crude oil prices falling below the $0 mark
  • How COVID-19 is hurting the rupee’s exchange rate with other currencies

Bilateral & International Relations

  • Facebook disappointed by Australia’s attempt to make pay for news content

Art & Culture

  • Mediterranean shipwrecks reveal ‘birth of globalisation’ in trade

Key Facts for Prelims

  • Daporijo bridge
  • Chandigarh city uses Vehicle tracking applications
  • Conversion of rice into alcohol-based hand-sanitizers
  • Electro-catalyst from fish gills
  • Artificial Neural Networks based global Ionospheric Model (ANNIM)
  • Nightingale-19

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Polity & Governance

Civil Services Day

  • The National Civil Services Day is celebrated every year on April 21.
  • This day coincides with the date on which Sardar Vallabhbhai Patel had addressed the first batch of probationers at the All India Administrative Service Training School at Metcalfe House, New Delhi in 1947.

National Civil Service Day objective behind celebration:

  • To motivate and appreciate the work and efforts of Civil Service officers.
  • Central Government uses this opportunity to evaluate the work of various departments under the civil services.
  • The central government felicitate and provide awards to the best working individuals and groups.

Prime Minister Award for Excellence in Public Administration

  • On this day, the ‘Prime Minister Award for Excellence in Public Administration’ is presented in three categories. These awards were instituted in 2006. 

It is awarded in three categories:

Category 1: Comprises eight North Eastern States and the three hill states namely Uttarakhand, Himachal Pradesh and Jammu and Kashmir.

Category 2: Consists of seven Union Territories

Category 3: Comprising rest of the eighteen states of India

About Civil Services

  • Civil Service word date back to the British time when British East India Company civilian staffs involved in administrative jobs and were known as ‘Public Servants’.
  • Its foundation has been laid by Warren Hastings and later more reforms were done by Charles Cornwallis and so he was known as the “Father of Civil Services in India“.
  • Civil Service in India consists of Indian Administrative Service (IAS), Indian Police Service (IPS), Indian Foreign Service (IFS) and comprehensive list of All India Services and Central Services Group A and Group B.
[Ref: Indian Express]

Draft Electricity Act (Amendment) Bill, 2020

Power Ministry floats draft Electricity Act; invites suggestions within 21 days. This will amend the 2003 act.

  • The draft pitches for privatisation of distribution companies, cost-reflective electricity tariff without subsidy, strengthening of payment security mechanism and Electricity Contract Enforcement Authority to bring in investment and ease of doing business in the power sector.

Key provisions in the bill:

  • Proposes to privatise discoms by way of sub-licensing and franchisee models. The sub-licensing will allow states to choose a private company for the distribution of electricity supply of a particular area to help it bring down losses of both electricity and finances.
  • Proposes to restrict deferment of revenue recovery and reduction in cross-subsidy to bring in a cost-reflective tariff, simplified tariff.
  • Proposes to bring in an Electricity Contract Enforcement Authority (ECEA) to deal with the issues of non-performance of contracts leading to uncertainty.
  • For the renewable sector, the draft proposes to bring National Renewable Energy Policy and may bring in a minimum percentage of the purchase for the states from renewable sources.
  • Enables state as well as central power regulators to specify transmission charges under open access. Earlier, both functions were with the central commission.
  • Provides additional roles to the National Load Desptach Centre that include scheduling and dispatch of power across the country in accordance with contracts.
  • Provides that the cross (power) border trade shall cover import or export of electricity from India and any other country. The transaction related to passage of electricity through India would be treated as transit between two other countries.
  • Provides that the Electricity Act would be applicable to the entire country, including the Union Territories of Jammu and Kashmir and Ladakh.

 Composition and powers of Electricity Contract Enforcement Authority:

  • The Authority will be headed by a retired Judge of the High Court.
  • It is proposed to be set-up with powers of the Civil Court.
  • It will enforce performance of contracts related to purchase or sale or transmission of power between a generating, distribution or transmission companies.

Significance of these amendments:

  • The proposed amendments are formulated to remove the regulatory impediments/shortcomings that were being experienced in sectoral functioning.
  • Creation of Electricity Contract Enforcement Authority will help to instil discipline amongst the contracting parties to adhere to their contractual obligations which was amiss in current environment.

Issues related to Health & Education

COVID-19 is wake up call for global food systems, say experts

The COVID-19 has exposed a crisis in the global food system, the International Panel of Experts on Sustainable Food Systems (IPES-Food) said.

Details

  • Current industrial agriculture models drive habitat loss and create conditions for viruses to emerge and spread.
  • Intensive livestock production amplified the risk of diseases as a large number of animals are confined in small spaces.
  • This confinement results in narrowed generic diversity, fast animal turnover and habitat fragmentation through expansion of livestock production.
  • More than 70 % of infectious diseases that emerged in humans since the 1940s could be traced back to animals, with the Ebola disease, HIV/AIDS, the West Nile fever, Lyme disease and SARS, all rooted in environmental change and ecosystem disturbances..

Vulnerabilities of existing food systems

  • Approximately 820 million were under-nourished and 2 billion suffered from food insecurity before the pandemic.
  • More than 50 % of farmers and rural workers live below the poverty line in different countries across the global south.

Way forward: Agro-ecology

  • Agro-ecology had the unique capacity to reconcile economic, environmental and social dimensions of sustainability.
  • Agro-ecology uses natural synergies and is based on land sharing instead of clearing landscapes for uniform farming systems.
  • This territorial approach advocated by several agro-ecologists provides an opportunity for food producers to allow the production of healthy food and to protect important wildlife habitats.
  • Agro-ecological food systems increase disease resistance by relocalising and decentralising breeding of plants and livestock to harness diversity.
  • It can also rebuild local food cultures and local community structures — critical during vulnerable times — by enhancing access to fresh food, ensuring greater monetary values for farmers and reducing vulnerabilities to disruptions in international markets.
[Ref: Down To Earth]

Social Issues

The invisible face of the fallout

While catastrophes affect people at large, the economical, sociological and psychological impact that each catastrophe has on women is profound.

Crises and gender

  • In the 2004 Indian Ocean tsunami, more than 2,00,000 people were killed or listed missing; a fourth of them were women.
  • Women stay around looking for their loved ones in order to see them safe. Besides this, women lack many life skills such as swimming and climbing.
  • During tsunami recovery phases, aid organisations and governments house the homeless in camps where women face many difficulties including abuse by men.
  • Women also faced hygiene challenges in these camps due to inadequate sanitation facilities.
  • In the United States, which has a high incidence of tornadoes, families headed by women are affected the most. Women often are engaged in sector-specific employment which when impacted result in unemployment. Women are also engaged in post-calamity care, missing job opportunities.
  • An economic slowdown also leaves women with additional wage cuts, on a paradigm where pay disparity between genders is a norm.

Issues faced in the pandemic by women

  • According to World Health Organization data, around 70% of the world’s health workers are women, 79% of nurses are women.
  • Health workers in general are highly vulnerable. India has a million-plus accredited social health activist (ASHA). ASHAs, who work at the ground level, are reporting incidents of attacks while on COVID-19 duty.
  • Women from all strata face substantial additional household work. Alongside this is the fear of job loss and reduced income which can create mental pressure on women, in turn affecting their physical well-being.
  • The lower income groups are already facing job losses and anxiety is leading to domestic tensions and violence against women. A large number of daily wageworkers resort to alcohol consumption. 
  • Women are twice as likely to face depression when compared to men. Premenstrual syndrome (PMS) among re-productive age groups, pregnancy-related depressive conditions, postpartum depression (PPDs) among new mothers are common, interfering in everyday life.
  • According to 2015-16 National Family Health Survey, around 30% of women in the age group 15 to 49 years face domestic violence.

Suggestions

  • Assigning ASHA workers to specifically address women’s welfare during this pandemic,
  • Setting up exclusive cells to quickly address domestic violence and women’s health-related issues, including men in conversations,
  • Online counselling for alcoholism in men
  • Roping in non-governmental organisations, psychology students, teachers and volunteers and also using technology platforms would help speed action.
  • Develop a culture of including women’s safety in the planning phase itself irrespective of whatever the nature of the crisis is.
[Ref: The Hindu]

Blood banks running on low reserves, seek urgent help

Human blood in storage

Hospitals across India have now started contacting individual blood donors to tide over the acute shortage of blood that most of them are facing with the continued lockdown.

  • According to the National Blood Transfusion Council, there are 2,023 blood banks in India, which receive 78% of their blood supply from voluntary donors. 

National Blood Transfusion Council

  • In accordance with the directive of the Supreme Court, National Blood Transfusion Council was constituted in 1996.
  • It is the apex policy making body for issues pertaining to blood and plasma and for monitoring of blood transfusion services.
  • It is a part of National AIDS Control Organization.
  • It is the central body that coordinates the State Blood Transfusion Councils (SBTCs) and also ensures involvement of other Ministries and other health programmes for various activities relate to Blood Transfusion Services (BTS).

Objective

  • Promote voluntary blood donation,
  • Ensure safe blood transfusion,
  • Provide infrastructure to blood centres,
  • Develop human resource and
  • Formulate and implement the Blood Policy.
[Ref: The Hindu]

Economy

FM attends 5th meeting of New Development Bank’s Board of Governors

In 5th Annual Meeting of Board of Governors of New Development Bank, Finance minister of India appreciated NDB’s effort of financial assistance of about $5 billion to BRICS countries including Emergency Assistance of $1 billion India to combat COVID-19 pandemic.

About New Development Bank

  • The NDB was established by the BRICS countries (Brazil, Russia, India, China and South Africa) in 2014. 
  • It aims to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries to complement the existing efforts of multilateral and regional financial institutions for global growth and development. 
  • The bank is headquartered in Shanghai, China.
  • The idea for setting up the bank was proposed by India at the 4th BRICS summit in 2012 held in Delhi. During the 6th BRICS Summit in Fortaleza (2014), the New Development Bank was established.
  • Fortaleza Declaration said that The Bank shall have an initial authorized capital of US$ 100 billion and the first President of the Bank shall be from India. 
  • Voting power of each member is equal to the number of its subscribed shares in the capital stock of the bank.
  • NDB has so far approved 14 projects of India for an amount of $ 4,183 million.
[Ref: PIB]

India’s new FDI norms violate WTO’s principle of free trade: Chinese embassy

India’s recent policy to curb opportunistic takeovers of domestic companies goes against the World Trade Organisation (WTO) principles, Chinese embassy said.

Background

Recently, India made grant of prior approval mandatory for foreign investments from countries that share land border with India to curb opportunistic takeovers of domestic firms following the coronavirus pandemic.

China’s argument

  • India’s new norms for foreign direct investment (FDI) from specific countries violate the WTO’s (World Trade Organisation’s) principle of non-discrimination and are against the general trend of free trade.
  • It said the new policy introducing additional barriers was also against the consensus arrived at the G20 grouping to realize a free, fair, non-discriminatory and transparent environment for investment.

WTO’s Trade without discrimination principle

The principle of non-discrimination rests on two pillars: the most-favored nation (MFN) treatment obligation and the national treatment obligation. 

Most-favoured-nation (MFN), treating other people equally

  • Under the WTO agreements, countries cannot normally discriminate between their trading partners.
  • In general, MFN means that every time a country lowers a trade barrier or opens up a market, it has to do so for the same goods or services from all its trading partners — whether rich or poor, weak or strong.
  • Some exceptions are allowed. For example, countries can set up a free trade agreement that applies only to goods traded within the group —   discriminating against goods from outside.

National treatment, Treating foreigners and locals equally

  • Imported and locally-produced goods should be treated equally — at least after the foreign goods have entered the market. The same should apply to foreign and domestic services, and to foreign and local trademarks, copyrights and patents.
  • National treatment only applies once a product, service or item of intellectual property has entered the market. Therefore, charging customs duty on an import is not a violation of national treatment even if locally-produced products are not charged an equivalent tax.
  • This principle of national treatment is also found in all the three main WTO agreements (GATT, GATS and TRIPS).
[Ref: Times of India, The Hindu]

What explains crude oil prices falling below the $0 mark

A pumpjack operates on an oil well in the Permian Basin near Orla, Texas.

US oil markets created history recently when prices of West Texas Intermediate (WTI), the best quality of crude oil in the world, fell in minus $40.32 a barrel in New York.

  • At this price, the seller would be paying the buyer of crude oil $40 for each barrel that is bought.

Background

  • Even before the Covid-19 induced global lockdown, crude oil prices had been falling over the past few months.
  • Because the price of a commodity falls when supply is more than demand. To a great extent, oil markets, globally and more so in the US, are facing an enormous glut.
  • Historically, the Organization of the Petroleum Exporting Countries (OPEC), lead by Saudi Arabia, which is the largest exporter of crude oil in the world, used to fix prices in a favourable band. It could bring down prices by increasing oil production and raise prices by cutting production.
  • In the recent past, the OPEC has been working with Russia, as OPEC+, to fix the global prices and supply.
    • Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela (the five founders), plus the United Arab Emirates, Libya, Algeria, Nigeria, and five other countries.
  • Cutting production or completely shutting down an oil well is a difficult decision because restarting it is both costly and cumbersome. Moreover, if one country cuts production, it risks losing market share if others do not follow suit.

The start of trouble

  • In March, Saudi Arabia and Russia disagreed over the production cuts required to keep prices stable. As a result, oil-exporting countries, led by Saudi Arabia, started offering oil at a lower price than each other while continuing to produce the same quantities of oil.
  • By the time the Saudi Arabia and Russia discord was sorted out, oil-exporting countries decided to cut production by 6 million barrels a day (the highest production cuts) and yet the demand for oil was shrinking by 9 to 10 million barrels a day.
  • This meant that the supply-demand mismatch continued to worsen. The mismatch resulted in almost all storage capacity being exhausted. Trains and ships, which were typically used to transport oil, too, were used up just for storing oil.

What happened recently?

  • The May contracts for West Texas Intermediate (WTI), the American crude oil variant, were due to expire on April 21. As the deadline came near, prices started plummeting. This was for two broad reasons.

1. Oil producers who wanted to get rid of their oil even at unbelievably low prices instead of shutting production, which would have been costlier to restart when compared to the marginal loss.

2. From the consumer side, that is those holding these contracts, contract holders wanted to avoid the compulsion to buy more oil as they realised that there was no space to store the oil if they were to take the delivery.

  • This desperation from both sides — buyers and sellers — to get rid of oil meant the oil prices not only plummeted to zero but also went deep into the negative territory.
  • In the short-term, for both — the holders of the delivery contract and the oil producers — it was less costly to pay $40 a barrel and get rid of the oil instead of storing it (buyers) or stopping production (producers).
[Ref: Indian Express]

How COVID-19 is hurting the rupee’s exchange rate with other currencies

The economic disruption due to the spread of COVID-19 has adversely affected various aspects of the Indian economy.

What is currency exchange rate?

  • A currency’s exchange rate vis-a-vis another currency reflects the relative demand among the holders of the two currencies.
  • This demand, in turn, depends on the relative demand for the goods and services of the two countries.
  • If the US dollar is stronger than the rupee, then it shows that the demand for dollars (by those holding rupee) is more than the demand for rupees (by those holding dollars).
  • Typically, stronger economies have stronger currencies. For instance, the US economy is relatively stronger than India’s and this is reflected in one US dollar being equal to around 76 rupees.

Nominal Effective Exchange Rate

  • The Reserve Bank of India tabulates the rupee’s Nominal Effective Exchange Rate (NEER) in relation to the currencies of 36 trading partner countries.
  • This is a weighted index — that is, countries with which India trades more are given a greater weight in the index.
  • A decrease in this index denotes depreciation in rupee’s value; an increase reflects appreciation.
  • Real Effective Exchange Rate (REER) is essentially an improvement over the NEER because it also takes into account the domestic inflation in the various economies.

How does inflation affect exchange rates?

Many factors affect the exchange rate between any two currencies ranging from the interest rates to political stability. Inflation is one of the most important factors.

Example:

  • Imagine that the Re-$ exchange rate was exactly 1 in the first year i.e. Rs 100 = $100
  • But suppose the Indian inflation is 20% and the US inflation is zero. Then, in the second year, an Indian would need Rs 120 to buy the same item priced at $100, and the rupee’s exchange rate would depreciate to 1.20.
[Ref: Indian Express]

Bilateral & International Relations

Facebook disappointed by Australia’s attempt to make pay for news content

Australia announced that it will now force technology giants such as Facebook and Google to pay news companies for using content.

  • This was meant to ensure a level playing field, and came after an 18 month investigation into the power of these digital platforms by the country’s competition and consumer commission.

Need

  • For too long, Media organisations invest tremendous resources — personnel, editorial gatekeeping, overhead costs and distribution.
  • Big digital intermediaries such as Facebook and Google take their content and push it on their platforms. But operating under ambiguous regimes, they pretend not to be media companies.
  • This means they neither have the legal accountability that media organisations have, nor do they incur the same levels of expenditure. But they monopolise the revenue that streams into the digital news world.
  • This has made several genuine media organisations unviable — reducing their profitability, forcing them to scale down their operations or even close down.
  • This, in turn, hits not just particular companies but hurts democracy and the right of citizens to be informed.
[Ref: Hindustan Times]

Art & Culture

Mediterranean shipwrecks reveal ‘birth of globalisation’ in trade

In 2015, a British-led team of scientists discovered 12 shipwrecks in the Levant Basin in the Mediterranean Sea. Now, the first findings are being published. 

  • The findings were part of Enigma Shipwrecks Project (ESP).

Findings

  • The ships found are of Hellenistic, Roman, early Islamic and Ottoman vessels. The largest among these is a 17th-century Ottoman merchant ship.
  • Its cargo from 14 civilisations ranges from ancient Chinese artefacts and includes cups repurposed for drinking coffee and spices from India.
  • According to the ESP, this ship reveals a previously unknown “silk route” and also goes some way in establishing the degree of cosmopolitanism in Islamic societies at the time.
[Ref: Indian Express]

Prelims Key Facts

Daporijo bridge

  • Daporijo bridge over Subansiri river has been constructed by Border Roads Organisation (BRO) in Arunachal Pradesh.
  • Bridge on Daporijo River is a strategic link towards the Line of Action (LAC) between India and China. 

Chandigarh city uses Vehicle tracking applications

  • The quarantined persons in Chandigarh are being tacked through CVD Tracker App. 
  • Vehicles equipped with PPE kits were deputed for collection and transportation of waste from Quarantines households. All the drivers of these collection vehicles wear GPS enabled smart watch under e- Human Resource Tracking Project (E-HRTS). 

Conversion of rice into alcohol-based hand-sanitizers

  • Recently, it was approved that the surplus rice available with Food Corporation of India (FCI) may be converted to ethanol for utilization in making alcohol-based hand-sanitizers and in blending for Ethanol Blended Petrol (EBP) programme.
  • National Policy on Biofuels, 2018 under Para 5.3 envisages that during an agriculture crop year when there is projected over supply of food grains as anticipated by the Ministry of Agriculture & Farmers Welfare, the policy will allow conversion of these surplus quantities of food grains to ethanol, based on the approval of National Biofuel Coordination Committee (NBCC).

Electro-catalyst from fish gills

  • Scientists at the Institute of Nano Science and Technology (INST), Mohali, have recently come up with an efficient, low-cost electro-catalyst from fish gills that can help develop environmentally friendly energy conversion devices.
  • It is better than commercial Platinum on carbon (Pt/C) catalyst and could be utilized as next-generation nonprecious carbon-based electrocatalyst for energy conversion and storage applications.

Artificial Neural Networks based global Ionospheric Model (ANNIM)

  • Researchers from Indian Institute of Geomagnetism (IIG) have developed a global model to predict the ionospheric electron density with larger data coverage.
  • Artificial Neural Networks replicate the processes in the human brain (or biological neurons) to solve problems.
  • Tracking the variability of the Ionosphere is important for communication and navigation. 
  • The ionospheric variability is greatly influenced by both solar originated processes and the neutral atmosphere origin, therefore, difficult to model. 

Nightingale-19

  • The district COVID centre at Ancharakkandi, Kannur, Kerala made a robots to fight COVID-19.
  • Named ‘Nightingale-19’, the robot assists health workers in caring for patients, taking food and medicines to them.

Goa is now COVID free

  • Goa has become the first zero COVID-19 State in the country with the last seven positive cases also turning negative.
  • This makes Goa the first green State in the country with no case of coronavirus being reported since April 3.

Bangalore Blue variety of grape:

  • It is a variety of fox grape grown in districts around Bangalore.
  • It is one of the three major varieties of grape in the state of Karnataka (the other two being Thomson seedless and Anab-E-Shahi Dilkush).
  • It received a geographical indication tag from the Government of India in 2013.

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