Most countries looking for a diplomatic solution: Jaishankar
Panel on AFSPA removal misses ‘45day’ deadline
India sends first batch of aid to Afghanistan
Germany suspends Nord Stream 2 gas pipeline
Inflation at record high in cashstrapped Sri Lanka
Examining the Russia-China axis
GS-3
Chinars return to iconic ‘Char Chinari’ island on Dal Lake
A new measure of inflation is brewing on the horizon
Most countries looking for a diplomatic solution: Jaishankar
Most of the countries are looking for a diplomatic solution to the escalating Ukraine-Russia crisis, said External Affairs Minister S. Jaishankar at the Ministerial Forum for Cooperation in the Indo-Pacific, in Paris on Tuesday.
Addressing the meeting, which was dominated by the Ukraine crisis, Mr. Jaishankar said France was a “resident power” in the Indo Pacific .
“The situation in Ukraine is the result of a complex chain of events over the past thirty years. Most countries, such as India or France which is very active, are looking for a diplomatic solution. India can talk with Russia, with other countries in the U.N. Security Council and support initiatives like those of France,” he said.
The quadrilateral “Quad” cooperation originally consisted of Australia, India, Japan and the United States, but France and the United Kingdom own overseas territories in the Indian Ocean and have therefore asserted their plans to be part of the Indo-Pacific future. However, in recent weeks, Indo-Pacific has also emerged as a concept that is connected to European security. Indicating that concern Mr. Jaishankar said, “Today, we see challenges on that score with the clarity that proximity brings. And believe me, distance is no insulation. The issues we confront in the Indo-Pacific will extend beyond, even to Europe.”
Mr. Jaishankar welcomed French involvement in the Indo-Pacific. “We have very close relationship with France, which is improving over time. The high quality of our relationship affects sensitive areas like defence, nuclear, space, etc. France has been a valuable partner in these areas,” he said.
Panel on AFSPA removal misses ‘45day’ deadline
A committee constituted by the Union Home Ministry in December to study the withdrawal of the Armed Forces (Special Powers) Act or AFSPA from Nagaland, slated to submit a report within 45-days as claimed by Chief Minister Neiphiu Rio, is yet to conclude its findings.
The panel was formed in the wake of a growing civilian anger against the botched ambush by an elite armed forces unit that led to the killing of 13 civilians at Oting in Nagaland’s Mon district on December 4.
The six-member committee headed by the Registrar General of India (RGI) Vivek Joshi made a solitary visit to the State in January.
T.R. Zeliang of the Naga People’s Front (NPF) and former Chief Minister of Nagaland said the committee has sought an extension for three-months but is likely to miss the extended deadline as well.
Mr. Zeliang who issued a joint statement with Chief Minister Neiphiu Rio announcing the constitution of the committee that their demand is for removal of AFSPA from Nagaland, except areas along the international boundary with Myanmar and inter-State boundaries with Assam, Arunachal Pradesh and Manipur.
“Repealing of AFSPA cannot be done by the State government, it has to be done by Parliament…..the process will take time. We are demanding and conveyed to the Union government that except international border and inter-State border, the AFSPA should be removed from the entire State,” Mr. Zeliang said. He said they were expecting to meet Union Home Minister Amit Shah after the Assembly elections in Manipur and Uttar Pradesh were over.
The announcement of the constitution of the committee was made by the Nagaland CM in Kohima on December 26, though the meeting chaired by Mr. Shah was held at North Block on December 23. Mr. Rio said in a press conference the committee will submit its report in 45-days adding that that it will look into the withdrawal of the AFSPA from not only Nagaland but in the entire northeast.
Significantly the Opposition-less Nagaland Assembly passed a resolution on December 20 demanding repeal of the AFSPA and an apology from the “appropriate authority” for the botched Army operation.
The Home Ministry is yet to issue any official statement on the subject nor it has specified the terms of reference of the committee.
Background
The AFSPA that has been in force in the northeast since 1958 gives unbridled power to the armed forces and the Central armed police forces deployed in “disturbed areas” to kill anyone acting in contravention of law, arrest and search any premises without a warrant and protection from prosecution and legal suits without Central government’s sanction.
The December 26 joint letter issued by Mr. Rio, Mr. Zeliang and Y. Patton, Nagaland Deputy CM and who is from the BJP, said the Army unit involved in the Oting incident will face disciplinary proceedings and the identified persons who will face the enquiry will be placed under suspension with immediate effect. Mr. Zeliang said none of the other demands made in the letter have been complied with yet.
India sends first batch of aid to Afghanistan
Foreign Secretary Harsh Shringla flagged off a convoy of 50 trucks carrying 2500 MT of wheat as humanitarian aid for Afghanistan at the India-Pakistan integrated check post (ICP) on Tuesday, the first of about 1000 truckloads which will head for Jalalabad over the next few weeks.
The wheat, is expected to be sent across Afghanistan to help people deal with the crisis caused by food shortages and an economic collapse after the Taliban takeover of Kabul, and was made “in response to appeals made by the United Nations for humanitarian assistance to Afghanistan,” the Ministry of External Affairs said.
Traders and truckers in Amritsar also welcomed the trans-shipment, which is taking place after being suspended for nearly three years, and expressed the hope that the opening for Afghan aid would also lead to a reopening of India and Pakistan trade, whose closure has caused massive economic losses in the border town.
“The shipment is part of the commitment made by the Government of India to supply 50,000 MT of wheat for the people of Afghanistan. The wheat assistance will be delivered in multiple consignments and will be handed over to the United Nations World Food Program (WFP) in Jalalabad, Afghanistan,” an MEA statement said, that made no reference to the Taliban regime, which India and other countries do not recognise.
World Food Program Country Director Mr. Bishaw Parajuli, who had helped complete the negotiations with India, and Afghan Ambassador Farid Mamundzay were also present at the ceremony. According to officials, the Wheat, procured by the Food Corporation of India (FCI) has been specially “double bagged” to protect it from contamination and moisture along the 500km journey from Attari to Jalalabad, and then to other centres for distribution.
The wheat shipment, which was packed in special bags stamped “Gift from the people of India to the People of Afghanistan”, marks an end to months of bureaucratic wrangles between New Delhi and Islamabad. The consignment had been originally offered to the Taliban leadership in October 2021, but was held up due to objections from Pakistan, which had shut down all trade from India after New Delhi’s decisions on Jammu Kashmir and Article 370.
Once Pakistan PM Khan announced he would allow the trans-shipment as an “exception”, and other permissions were secured from Islamabad, it was further delayed due to Punjab elections, and trucks from Afghanistan finally came into Attari on Monday to be loaded, a day after Punjab polling. Afghan trucks will ply the route, not Indian trucks, as per the Pakistani stipulations, and the drivers are being given special permits instead of visas by India.
Meanwhile commodities traders in Amritsar said the trade suspension that also followed India’s decision to cancel Pakistan’s MFN trading privileges in 2019 had led to massive losses for their earnings.
“Business is down by around 70% in comparison to what it used to be before the trade was stopped. We were regularly importing cement, gypsum, dry dates, and rock salt from Pakistan while exporting vegetable seeds, soybeans, cotton yarn,” said Dalip Singh, an Amritsar-based importer-exporter.
“We hope this is the first step to normalise trade relations between the neighbouring countries There’s an urgent need set the ball rolling now as the world was facing huge economic crises due to COVID pandemic during last two years and it would be a defining moment to reopen this trade route,” Director, Confederation of International Chambers of Commerce and Industry Ashok Sethi told.
Apart from wheat, India has already supplied 13 tonnes of essential medication and winter clothing, as well as 500,000 doses of COVAXIN to Afghanistan by commercial flights. Prior to the Taliban takeover, India had used the Chabahar port route through Iran to deliver a million tonnes of wheat to Afghanistan. However, officials, cited logistical difficulties in operating the route for the current consignment of 50,000 MT, despite offers from the Iranian government to facilitate the transfer.
Germany freezes Nord Stream 2 gas project as Ukraine crisis deepens
Germany on Tuesday halted the Nord Stream 2 Baltic Sea gas pipeline project, designed to double the flow of Russian gas direct to Germany, after Russia formally recognised two breakaway regions in eastern Ukraine.
Europes most divisive energy project, worth $11 billion, was finished in September, but has stood idle pending certification by Germany and the European Union.
The pipeline had been set to ease the pressure on European consumers facing record energy prices amid a wider post-pandemic cost of living crisis, and on governments that have already forked out billions to try to cushion the impact on consumers.
Germany gets half its gas from Russia and had argued that Nord Stream 2 was primarily a commercial project to diversify energy supplies for Europe.
But despite the potential benefits, the pipeline had faced opposition within the European Union and from the United States on the grounds that it would increase Europes energy dependence on Russia as well as denying transit fees to Ukraine, host to another Russian gas pipeline, and making it more vulnerable to Russian invasion.
This is a huge change for German foreign policy with massive implications for energy security and Berlins broader position towards Moscow, said Marcel Dirsus, non-resident fellow at Kiel Universitys Institute for Security Policy.
Inflation at record high in cashstrapped Sri Lanka
Sri Lanka’s inflation hit a record high for the fourth consecutive month, official data showed on Tuesday as an economic crisis driven by a crippling foreign exchange shortage worsens.
The National Consumer Price Index (NCPI) rose 16.8% in January from a year earlier, the fourth consecutive record rise and more than double October’s figure of 8.3%.
The record highs came as the South Asian island struggles to find dollars to finance essential imports, including food, fuel and medicines.
The Energy Ministry announced on Monday it was struggling to buy fuel on credit and reported shortages at many pumping stations, leading to queues and forcing some to shut.
The main petroleum company is banking on a proposed credit line of $500 million from the Indian government to procure oil in the coming months, officials said.
In a further blow to the government’s plans to raise much-needed revenue, the Supreme Court on Tuesday shot down a new tax bill which targeted an additional 50 billion rupees ($250 million) this year.
The court ruled that the Special Goods and Services Tax — which would have empowered the finance minister to determine rates and sectors to be taxed — was a violation of parliament’s financial authority.
Sri Lanka’s cabinet is divided on seeking a bailout from the International Monetary Fund while the opposition has called for restructuring the country’s $35 billion external debt to overcome the shortage of foreign exchange.
The worsening economic crisis has already led to food rationing with supermarkets restricting the quantity of rice, milk powder, sugar, lentils and tinned fish sold to consumers.
Many pumping stations have also rationed fuel issued to motorists in the provinces.
Sri Lanka’s economy has collapsed since the onset of the pandemic, with a nosedive in tourism revenue as well as foreign worker remittances. International rating agencies have downgraded Sri Lanka over expectations it may not be able to service its foreign debt. The government insists it can meet its obligations.
Examining the Russia-China axis
Russian President Vladimir Putin’s visit to China this month, as well as the Ukraine crisis, have turned the spotlight on Russia’s relations with China. Many in the west have blamed the Russia-China axis for emboldening Moscow’s recent moves and ensuring it will not be completely isolated in the face of western sanctions. At the same time, Beijing has found itself walking a tightrope in its response and has so far stopped short of endorsing Russia’s actions. Does the Russia-China relationship, for all its undeniable closeness, have its limits?
What explains the current state of Russia-China relations?
Last year, Russia’s Foreign Minister Sergey Lavrov described relations as the “best in their entire history”. This wasn’t hyperbole, he was keen to underline, but a “a well-deserved and fair assessment.” Presidents Vladimir Putin and Xi Jinping have met 38 times (in person and virtually) since 2013. Their last meeting, in Beijing in early February where Mr. Putin was attending the opening of the Winter Olympics, produced an ambitious and sweeping joint statement, as well as a number of energy deals, that underlined the strategic, ideological, and commercial impulses driving the relationship.
On the strategic front, the statement said “new inter-State relations between Russia and China are superior to political and military alliances of the Cold War era.” It added that the relationship “has no limits” and “there are no forbidden areas of cooperation”. It underlined how far ties had come between two neighbours that have had, to put it mildly, up-and-downs. For the new People’s Republic of China, the Soviet Union was the most important source of financial and technological support. But the early honeymoon period was followed by the Sino-Soviet split over ideology as well as a border dispute. After the collapse of the Soviet Union — an event that China’s Communist Party leadership continues to study with great interest — both neighbours worked to settle their border. Booming trade ties then followed.
The biggest factor behind their current closeness is their shared discomfort with the U.S. and its allies. The joint statement this month emphasised that point, with China supporting Russia in “opposing further enlargement of NATO and calling on the North Atlantic Alliance to abandon its ideological cold war approaches” and Russia echoing China’s opposition to “the formation of closed bloc structures and opposing camps in the Asia-Pacific region and the negative impact of the United States Indo-Pacific strategy.” China, for its part, said it was “sympathetic to and supports the proposals put forward by the Russian Federation to create long-term legally binding security guarantees in Europe”. Russia returned the favour, saying it “reaffirms support for the One-China principle, confirms that Taiwan is an inalienable part of China, and opposes any forms of independence of Taiwan.” In short, both have the other’s backs on key strategic issues.
This has been reflected in growing military closeness. China in 2014 became the first foreign buyer of the S-400 missile defence system, which India has also purchased (although there have been reported delays in delivery for reasons unknown). Their joint exercises have also grown in scope. Last year, a third joint strategic air patrol” over the East China Sea was described by Chinese military commentator Song Zhongping as “a practical action to warn some countries outside the region and some neighbouring countries, like AUKUS and Quad, not to stir up trouble.” There is also the ideological binding glue in shared opposition to what both countries described this month as the west’s “attempts to impose their own democratic standards on other countries” and “interference” by the west on human rights issues.
Commercial ties have also been growing. Two-way trade last year was up 35% to $147 billion, driven largely by Chinese energy imports. Russia is China’s largest source of energy imports and second largest source of crude oil, the Communist Party-run Global Times reported in January, with energy set to account for 35% of trade in 2022. China has been Russia’s biggest trading partner for 12 consecutive years and accounts for close to 20% of Russia’s total foreign trade (Russia, on the other hand, accounts for 2% of China’s trade). But Russia is, for China, a key market for project contracts besides energy supplies.
Chinese companies signed construction project deals worth $5 billion last year — for the third straight year — according to China’s Ministry of Commerce.
How has China responded to the Ukraine crisis?
Given these deep trade linkages, China does not want instability (or, for that matter, a spurt in energy prices). That was the message from Foreign Minister Wang Yi on February 19, when he told the security conference in Munich that “the sovereignty, independence and territorial integrity of all countries should be respected and safeguarded.” “This is a basic norm of international relations that embodies the purposes of the UN Charter,” he said. “It is also the consistent, principled position of China. And that applies equally to Ukraine.”
Mr. Wang also outlined China’s preferred resolution to the current crisis, which, he said, was a diplomatic solution and a return to the Minsk agreement. Only two days later, that agreement was left in tatters after President Putin ordered troops into two rebel-controlled areas (he called them “peacekeepers”) and decided to recognise the “people’s republics” of Donetsk and Luhansk. That, in of itself, showed China’s limited influence. Mr. Putin did, however, wait for the Winter Olympics to conclude on February 20 out of possible deference to Chinese sensitivities before making his move.
What are the implications for India and the rest of the world?
China has repeatedly underlined that it is sympathetic to Russia’s concerns on NATO, which mirror its own opposition to America’s allies in the Indo-Pacific (Chinese strategists have repeatedly called the Quad an “Asian NATO”, a label which its members reject).
On the possibility of Russia now coming under heavy sanctions, the Global Times said this week that “under this backdrop, close cooperation between China and Russia on energy, trade, finance and science and technology is all the more important.” “As strategic back-to-back fraternal partners, China is obliged to bolster Russia in time of need,” the newspaper said. “And, thanks to consistent support from China, the Russian economy has become increasingly resilient following years of sanctions imposed by the U.S. and other Western developed countries. A strong economy will back up Moscow to deflect ruthless economic coercion from the U.S..” Yet China’s capacities to do so, given its own domestic economic challenges, are in truth limited.
Strategists in the west and in India have often questioned the robustness of the relationship as well as Russia’s possible unease at being the “junior partner” and increasingly beholden to Chinese interests. But are there any signs of a divide that can be exploited (as Nixon did five decades ago)?
The evidence suggests no, and at least in the near-term, New Delhi should expect Sino-Russian closeness to continue, which poses its own challenges for India and how it navigates the three-way dynamic amid the worst period in relations with China in more than three decades, even as Russia remains a key defence partner.
This is not, however, an entirely new situation, as the historian Srinath Raghavan reminds us, on how the Soviet Union responded to China’s attack on India in 1962. “The Chinese had sounded out the Russians,” he writes in his book The Most Dangerous Place: A History of the United States in South Asia, “and got a wink and a nod from Nikita Khrushchev.”
Chinars return to iconic ‘Char Chinari’ island on Dal Lake
Jinxed by vanishing mighty chinars, iconic island Char Chinari in the middle of the Dal lake in Srinagar, which became famous after the Bollywood song Accha To Hum Chalte was shot there in the 1970s, has been brought to life again.
With J_amp;K Lieutenant Governor Manoj Sinha pursuing the department of floriculture, on Monday two tall Chinar trees were planted on the picturesque island with Zabarwan hills in the backdrop. This will be for the second time in the past decade that Chinar trees, which otherwise survive for centuries, will be planted on the island.
Earlier, the 2014 floods left two mighty chinars damaged, denting its iconic view from the boulevard around the lake. The island, in fact, owes its name to Chinar trees, as Char Chinari means four Chinars.
The wilting Chinars had left the then J_amp;K Governor N.N. Vohra, who showed keen interest to preserve the Dal lake, during his 10 years of tenure, worried and upset. Mr. Vohra had even ordered an inquiry into the drying up of the Chinars, which adds to the panoramic view of the lake.
The island caught the countrys imagination in the 1970s when the famous Bollywood song Accha Tou hum Chalte Hai, starring Rajesh Khanna and Asha Parekh, was shot there for the movie Aan Milo Sajna. Since, the island became meeting point for couples in the Valley, but it ended when militancy broke out in the 1990s, which was followed by wilting of Chinars too.
The floriculture department will be maintaining a constant vigil on the Chinar trees growth on the island, an official said.
A new measure of inflation is brewing on the horizon
About three decades ago, when I learned about the Consumer Price Index (CPI)— that reflects changes in the retail prices of selected goods and services on which a homogeneous group of consumers spends a major part of their income — my immediate query was about how the ‘basket’ of commodities and their weights are selected. Are they constructed in some objective way, say, by some well-defined survey on income and consumption? Or do they mostly depend on the ‘wisdom’ of a few experts?
Another important concern is that while the CPI corresponds to a “common man”, nobody knows who that common man is. Should we put a piece of imported chocolate, say, in the basket in the perspective of today’s India?
And what should be its size? Well, as the consumption pattern widely varies across different economic classes, different CPIs may help understand how different economic layers of the society are affected by the increasing cost of commodities.
A series of CPIs
However, we still have a distinct series of CPIs — for industrial workers (IW), for agricultural labourers (AL), and for urban non-manual employees (UNME). The CPI (IW), certainly, is the most popular one as the dearness allowance of Central government employees is calculated on the basis of movement in this index. The National Statistical Office (NSO) periodically releases the All India CPI and corresponding Consumer Food Price Index (CFPI) for Rural, Urban, and Combined.
Of course, India has no income survey and the last publicly available Household Consumer Expenditure Surveys’ data is a decade old. Hence, the choice of the ‘basket’ and fixing weights of its commodities are always tricky tasks.
Why it is skewed now
A radical shift in paradigm has recently been initiated in the United Kingdom, by the British journalist, cookbook author, and anti-poverty campaigner, Jack Monroe. This new index is intended to provide a third-party alternative to CPI, “provided by the U.K. Government’s Office for National Statistics (ONS), charting the effect of inflation on consumer goods and services, and highlighting the profound impact inflation has had on low-income families and supermarket value ranges of food and other basic goods”, as an article by James Whitbrook says.
Ms. Monroe was prompted “to create her index after the CPI measure for inflation in the U.K. rose to 5.4% in December 2021, the highest level for nearly 30 years”. Ms. Monroe was “infuriated” that the CPI “grossly underestimates the real cost of inflation as it happens to people with the least”, especially in the backdrop of the continuing economic effects of Brexit, the ongoing COVID-19 pandemic, prolonged lockdowns, and general supply chain issues, as the Whitbrook article highlights. She noticed, as a Guardian article highlights, that the price of rice, for example, in her local supermarket had increased from 45p a kilogram last year to £1 for 500g, a 344% increase! And the number of value products has also shrunk.
Ms. Monroe realised that the ONS reports a skewed and unfair version of the cost of living, which is not representative of millions of people’s experiences. In consultation with economists, charities, and analysts, she soon compiled her own index “that will document the disappearance of the budget lines and the insidiously creeping prices of the most basic versions of essential items at the supermarket” and “serve as an irrefutable snapshot of the reality experienced by millions of people”.
Ms. Monroe has been authorised by the Terry Pratchett estate to use the “Vimes Boots Index” as the name of a price index she planned to document inflation in prices of basic necessities.
An explanation
In the 1993 novel, Men at Arms in his book series ‘Discworld’, English fantasy writer Sir Terry Pratchett crisply explained the “Sam Vimes ‘Boots’ theory of socio-economic unfairness” in which Captain Samuel Vimes muses on the expensive nature of poverty! In reference to the captain, Sir Pratchett wrote: “A really good pair of leather boots cost $50. But an affordable pair of boots, which were sort of OK for a season or two and then leaked like hell when the cardboard gave out, cost about $10.” Good boots, however, last for years and years. Thus, “A man who could afford $50 had a pair of boots that’d still be keeping his feet dry in 10 years’ time, while the poor man who could only afford cheap boots would have spent a hundred dollars on boots in the same time and would still have wet feet.” Sir Pratchett’s work in ‘Discworld’ consists of ‘an insightful, often furious, view of class dynamics and social injustice’. “The reason that the rich were so rich, Vimes reasoned, was because they managed to spend less money,” wrote Sir Pratchett. Worse, being poor traps you in a cycle of being poor.
Sir Pratchett’s ‘boots theory’ is not new though. The adage “buy cheap, buy twice” is dated long back. Then, writer Paul Jennings divulged exactly the same idea in his column in The Observer, ‘Oddly Enough’ in 1954. And the character, Owen, in Robert Tressel’s 1914 classic The Ragged Trousered Philanthropists illustrated how the working classes are robbed: “Everybody knows that good clothes, boots or furniture are really the cheapest in the end, although they cost more money at first; but the working classes can seldom or never afford to buy good things; they have to buy cheap rubbish which is dear at any price.”
At the core of the index
As Ms. Monroe observed, a collection of 700 pre-specified goods that are used to calculate CPI includes items such as “a leg of lamb, bedroom furniture, a television and champagne”, which are not applicable for millions of the U.K.’s poorest “who were forced by an array of desperate circumstances to use food banks in the last year”, as a Guardian article notes. The proposed Index “aims to be a record of prices of the lowest-cost staple foods over time, to demonstrate the disproportionate impact of inflation on the poor”.
The index certainly gained prominence due to Ms. Monroe’s unorthodox name choice. The ONS is already been working on a radical overhaul of how it tracks prices, which “has the potential to kickstart an avalanche of change,” as Ms. Monroe believes. As the new price index is brewing, traditional statistical practices are getting redefined, for sure. And, who knows, the newly planned Boots index might eventually touch the horizon of societies of some other countries as well.
