iastoppers-narendra-modi-saarc
Editorial Notes

Editorial Notes 29th September 2016

Global Competitiveness Index for 2016-17; Indo-Russia Relations; SAARC minus one.
By By IT's Editorial Notes Team
September 29, 2016

Contents

Economy

  • Miles To Go Before True Competitiveness

Bilateral & International Relations

  • To Revive An Old Friendship
  • SAARC minus one

 

Economy

GS (M) Paper-3: “Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment”

Miles To Go Before True Competitiveness

Introduction:

It is notable that, in the World Economic Forum’s Global Competitiveness Index for 2016-17, India is ranked a credible 39th, and has risen 16 places, the highest rise among all economies.

iastoppers-global-competitiveness-index-india

About the report:

  • The report assesses the ability of countries to provide high levels of prosperity to their citizens. This in turn depends on how productively a country uses available resources.
  • Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.

Key concerns:

India’s competitiveness seems to have improved across the board, and in particular when it comes to goods market efficiency, business sophistication and innovation. However, there are some concerns too:

  • The current account deficit has been reduced to the tiny decimal points of national income, meaning that the Indian economy is unable to absorb foreign savings to boost domestic investments.
  • Outward investments keep rising, suggesting that our corporates are somewhat keener to invest abroad than here
  • Banks remain saddled with bad debt, state power utilities are financially moribund and there is scant growth in formal employment
  • Besides, when it comes to the Networked Readiness Index, the WEF earlier in July, ranked India a lowly 91st on readiness to transition to a digitised economy and society

Conclusion:

  • This improvement in global competitiveness ranking is definitely commendable. Efforts of government in areas of governance, transparency, ease of doing business are paying its dividends.
  • We need to reduce infrastructural bottlenecks and improve digital access and skills to step-up productivity and boost innovativeness economy-wide.
  • And in tandem, we need transparency in electoral funding across political parties to purposefully stem corruption and the generation of unaccounted black money. It would rev up our competitiveness.
[Ref: Economic Times]

 

Bilateral & International Relations

GS (M) Paper-2: “Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests”

To Revive An Old Friendship

Introduction:

The recent Russia- Pakistan joint military exercise (Druhzba-2016) was scheduled at Gilgit-Baltistan area. Amidst Uri attack, the tension between Indo-Pak is at a high, as this Russian move has raised many questions.

iastoppers-indo-russia-relations

Russia’s move:

  • Under President Vladimir Putin, Russia has shown assertiveness in international affairs. It has taken a clear position on opposing Western intervention and militarist regime-change policies in Iraq and Libya and now in Syria.
  • It retook the province of Crimea that it had gifted Ukraine in 1954 due to (Soviet) historical reasons.
  • Russia has become a strategic partner of China and they have significant convergence of interests.

Indo-Russia relations in changing scenario:

  • Russia has always backed India on the Kashmir issue.
  • India and Russia have been strategic Defence partners and Russia still continues to provide technology in critical areas like Nuclear energy.
  • Trade between the countries have not been diversified or extended much. Russia has seen negative growth rate in last two decades and is much dependent on arms and energy exports.
  • It is constantly looking for new markets and Pakistan is a potential one.

Suggestions and conclusion:

  • India needs to move on in the international system. In some ways it has, but in other ways it is moving backwards. Its foreign policy is only an extension of its domestic politics.
  • India has to fix its domestic issues to further social cohesion and make special efforts to build bridges between communities.
  • As far as Russia is concerned, it might appear that there is some strategic shift. But Russia has been pushed into that position. In reality, it knows that India is still its most reliable ally.
  • But India has to actively ensure not to take this strategic partnership for granted.
  • Besides defence and strategic co-operation, India has in place BRICS and SCO. India must leverage this to further trade opportunities between two nations.
[Ref: The Hindu]

 

GS (M) Paper-2: “Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests”

SAARC minus one

Introduction:

Prime Minister Narendra Modi’s decision to skip the South Asian summit in Islamabad next month is, in essence, about the deteriorating relationship with Pakistan and growing irrelevance of SAARC for India’s regionalism.

iastoppers-narendra-modi-saarc

About SAARC:

  • Established in 1984 at the initiative of Bangladesh.
  • The South Asian Association for Regional Cooperation (SAARC) is regional intergovernmental organization and geopolitical union in South Asia. Its member states include Afghanistan, Bangladesh, Bhutan, India, Nepal, the Maldives, Pakistan and Sri Lanka.
  • Its secretariat is based in Kathmandu.

Relevance of SAARC:

  • It envisaged regional co-operation as developed in ASEAN countries. However, this has not been fruitful, largely owing to veto from Pakistani Army.
  • Pakistan’s problem was with the idea of economic integration with India. Neither the initiatives of SAARC, nor the Indian appeals, were capable of changing this.
  • All its proposals have been left on paper, SAFTA being one of them.

SAARC minus one:

  • The BBIN framework was seen by many as heralding the era of ‘SAARC Minus One’ and hostile to Pakistan.
  • Result of coming together of nations which were ready for integration, leaving behind one hostile region-Pakistan.
  • The SAARC charter allows two or more countries of the forum to embark on what is called ‘sub-regional cooperation’.
  • Utilising this policy instrument, a forum called the he BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) was formed in 1997.
  • The GoI is now eager to re-energise the BIMSTEC forum. As part of that commitment; it has invited the BIMSTEC leaders to join the BRICS leaders at the Goa summit next week.

Conclusion:

  • Rawalpindi believes that restoring historic economic connectivity with India is a threat to Pakistan. India can’t compel Pakistan to join the project of South Asian integration.
  • Instead of bemoaning that fact, Delhi must devote itself to bilateral, sub-regional and trans-regional cooperation with our neighbours, all of whom except Pakistan want India to do more.
  • This economic isolation of Pakistan, which India is seeking, might further delay the TAPI pipeline project. So India must look out to other options- Ashgabat Agreement, Chabahar and Bandar Abbas port development.
[Ref: Indian Express]

 

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