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Daily News Analysis 19-04-2016

v

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

India-China military hotline likely (Page 12)

a)     I.R

a)     India and China are close to a breakthrough in establishing a hotline between two military headquarters as part of an effort to improve border management through a new round of confidence building measures.

2.

Sushma raises Masood Azhar issue with Wang (Page 12)

a)     I.R

a)    External Affairs Minister Sushma Swaraj told her Chinese counterpart Wang Yi that China needed to cooperate with Indias campaign to declare Masood Azhar (leader of Pakistan-based JeM) a global terrorist through the UNSCs 1267 Committee against terrorism.

3.

Jadhav arrest proves India sent state actors to Balochistan: Sartaj Aziz (Page 12)

a)     I.R

a) Indicating that Pakistan plans to raise more allegations about India fomenting trouble in Balochistan, Sartaj Aziz (Foreign Affairs Adviser to PM Nawaz Sharif) said that the arrest of Kulbushan Jadhav (a former naval officer) had revealed a network operating in Balochistan and more arrests had been made in the case.

4.

The road not taken (Page 10)

a)     International

a)     Nuclear Security Summits have yielded little by focussing on securing small amounts of nuclear material. Any real progress must entail the US and Russia reducing stockpiles and India and Pakistan reining in competitive nuclearisation.

5.

Suu Kyi reaches out to minority rebels (Page 14)

a)     International

a)     Aung San Suu Kyi vowed to press for greater autonomy for Myanmars ethnic minorities, in an early move to soothe the rebellions roiling the country after her partys ascent to power.

6.

Putin, Obama agree to strengthen Syria ceasefire (Page14)

a)     International

a)     Russian President Putin and his US counterpart Barack Obama agreed during a phone call to strengthen a Syria ceasefire brokered by their two nations.

7.

US-Saudi alliance faces new pressures ahead of Obama visit (Page 14)

a)     International

a)     Over the last seven decades, photographs of American Presidents side by side with the Kings of Saudi Arabia have provided visual evidence of an enduring, strategic alliance between the United States and the oil-rich kingdom in West Asia.

8.

How to better the new mediocre (Page 11)

a)     International

b)     Economy

a)    With the IMF paring down its global growth forecast, governments should first tweak economic policy to minimise vulnerabilities.

9.

Services corner bulk of FDI inflows (Page 1)

a)     National

b)     Economy

a)    Although India received an all-time high annual FDI in 2015, the surge is led by the inflows into the services sector rather than manufacturing or infrastructure.

10.

Asian economies at greater risk now: ADB report (Page 15)

a)     Economy

a)     According to an independent evaluation of the Asian Development Banks operations in South Asia, widening income inequality, slower growth and the growing dominance of China and India in the region has meant that Asian governments must integrate a more robust resilience into their national plans.

11.

Exports shrink 16 percent to $261 bn (Page 15)

a)     Economy

a)     Merchandise exports shrank 15.9 percent in 2015-16 to $261.13 billion amid weak overseas demand, a slump in commodity prices and currency volatility.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

India-China military hotline likely (Page 12)

a)     I.R

a)     India – China relations

b)     Border disputes

c)     Line of Actual Control (LAC)

d)     Confidence Building Measures (CBMs)

e)     India - US Logistics Support Agreement (LSA)

f)     China-Pakistan Economic Corridor (CPEC)

g)     Pakistan Occupied Kashmir (POK)

h)     China-initiated Maritime Silk Road (MSR)

 

a)   India and China are close to a breakthrough in establishing a hotline between two military headquarters as part of an effort to improve border management through a new round of confidence building measures.

b)    Defence Minister Manohar Parrikar said that neither side specifically raised Indias in principle agreement with the US on the LSA, though the Chinese side indicated its concerns on this topic.

c)     Without referring to US Defence Secretary Ashton Carters visit to India, the Chinese side pointed to Indias tradition of pursuing an independent foreign policy.

d)     Parrikar took up negative fallout of CPEC from Gwadar to Kashgar during talks. He said we have made our stand very clear and expressed strong reservations in regard to Chinas activity in POK.

e)     Asked to confirm whether the China-initiated MSR was discussed, Parrikar said that he had flagged the need for maintaining peace in the Indian Ocean during talks.

2.

Sushma raises Masood Azhar issue with Wang (Page 12)

a)     I.R

a)     India – China relations

b)     Terrorism

c)     Jaish-e-Mohammed (JeM)

d)     UNSCs 1267 Committee

a)    External Affairs Minister Sushma told her Chinese counterpart Wang Yi that China needed to cooperate with Indias campaign to declare Masood Azhar (leader of Pakistan-based JeM) a global terrorist through the UNSCs 1267 Committee against terrorism.

b)     The discussion between the two Foreign Ministers was the first bilateral high-level contact almost a fortnight after China put a technical hold on Indias bid to declare Masood Azhar a global terrorist through the 1267 Committee.

c)     Both the Foreign Ministers reviewed the number of high-level bilateral engagements planned for 2016. They noted that Defence Minister Parrikars first official visit to Beijing which began on April 18 would usher in bilateral and multi-lateral high-level activities, including the September G-20- meet in Hangzhou.

3.

Jadhav arrest proves India sent state actors to Balochistan: Sartaj Aziz (Page 12)

a)     I.R

a)     India – Pakistan relations

b)     Terrorism

c)     Balochistan issue

a) Indicating that Pakistan plans to raise more allegations about India fomenting trouble in Balochistan, Sartaj Aziz (Foreign Affairs Adviser to PM Nawaz Sharif) said that the arrest of Kulbushan Jadhav (a former naval officer) had revealed a network operating in Balochistan and more arrests had been made in the case.

b)     Aziz said the revelations in the case had proved Pakistans statements at the UN, accusing India of sending state actors to Balochistan.

c)     India had confirmed Jadhavs identity, but denied any government link to him, calling the confession tutored.

4.

The road not taken (Page 10)

a)     International

a)     Nuclear Security Summit (NSS)

b)     International Panel on Fissile Materials (IPFM)

c)     International Atomic Energy Agency (IAEA)

d)     Global Fissile Material Report 2015

 

a)     On March 31 and April 1, leaders of 52 countries including India came together in Washington DC for fourth Nuclear Security Summit.

b)     Held every two years since 2010, these summits started with the recognition of the risks posed by plutonium and highly enriched uranium (HEU), the key ingredients for making nuclear weapons, and aimed to secure all vulnerable nuclear material in four years.

c)     Despite the expansive declarations of the need to maintain effective security of all nuclear materials, which includes nuclear materials used in nuclear weapons, the summits narrowed their focus to civilian holdings in non-nuclear weapon states.

d)     Closing the 2016 NSS, US President Obama summed up what has been achieved in the six years since this effort started: we have now removed or secured all highly enriched uranium and plutonium from more than 50 facilities in 30 countries - more than 3.8 tons, which is more than enough to create 150 nuclear weapons.

e)  Since 2006, the International Panel on Fissile Materials (an independent group of arms-control and non-proliferation experts from 17 countries) has been keeping track of HEU and plutonium around the world.

f)     In Global Fissile Material Report 2015, IPFMs most recent annual assessment of stockpiles, it was estimated that there is about 1370 tons of HEU in the world, enough for more than 76,000 simple, first-generation fission implosion weapons with about 99 percent of this material held by nuclear weapon states, mostly Russia and the United States.

g)     The IPFM estimated the global stockpile of separated plutonium as about 505 tons, enough for about 1,30,000 nuclear weapons. About 98 percent of this material is stored in the nuclear weapon states. Taken together, this gives a total global stockpile of almost 1900 tons of nuclear weapons-usable material.

h)     No one at the NSS talked specifically about HEU or plutonium in South Asia. This is despite that fact that India and Pakistan lie at the centre of concerns for those wanting to reduce the risks from fissile materials.

i)  The two countries are among the four states in the world that continue to produce HEU and plutonium for weapons, the other two being Israel and North Korea. There are no official reports of the sizes of Pakistani and Indian stockpiles of HEU and plutonium.

j)     The IPFM estimates that India and Pakistan each have a stockpile of about three tons of HEU. In addition, India is estimated as of end-2014 to have a stockpile of about 0.6 tons of weapons-grade plutonium, while Pakistan has about 0.2 tons.

k)     India is also believed to have separated about 5 tons of reactor-grade plutonium. India has another 0.4 tons of reactor-grade plutonium that it has placed under IAEA safeguards and thus is not available for use in weapons. So for, Pakistan has no stockpile of reactor-grade plutonium.

l)   This insight has been lost on Indias Department of Atomic Energy, which is committed to separation of plutonium from the spent fuel from nuclear reactors. It has also pursued the construction of a special kind of nuclear power plant called a fast breeder reactor that makes more plutonium than it consumes as fuel.

m)     But nuclear developments in India and Pakistan did come up at the 2016 summit. Obama pointed out two major obstacles to nuclear disarmament. The first was that it is very difficult to see huge reductions in our nuclear arsenal unless the US and Russia (as the two largest possessors of nuclear weapons) are prepared to lead the way.

n)     The second was we had need to see progress in Pakistan and India making sure that as they develop military doctrines, they are not continually moving in the wrong direction. He is correct on both counts.

o)     Similarly, the nuclear situation in South Asia is bad and getting worse, just on a smaller scale. And this has been the failure of South Asian leaders. Both countries are developing nuclear arsenals that are basically scaled-down versions of those created by the superpowers during Cold War.

p)     To address the nuclear threats that actually imperil the world, the focus should be on getting states to make a clear commitment to eliminate nuclear weapons and agree to concrete and urgent plans to eliminate nuclear arsenals and the nuclear material stockpiles that make them possible.

5.

Suu Kyi reaches out to minority rebels (Page 14)

a)     International

a)     Myanmars internal issues

b)     Myanmars Constitution

c)     National League for Democracy (NLD)

 

 

a)  Aung San Suu Kyi vowed to press for greater autonomy for Myanmars ethnic minorities, in an early move to soothe the rebellions roiling the country after her partys ascent to power.

b)     She warned that the countrys prospects hinge on ending ethnic conflicts that have blistered the country since its independence in 1948. To do so, the NLD govt would seek a real federal democratic union.

6.

Putin, Obama agree to strengthen Syria ceasefire (Page14)

a)     International

a)     Syria crisis

b)     Islamic State (IS)

c)     Al-Nusra Front

 

 

a)     During a phone call, Russian President Putin and his US counterpart Obama discussed in detail the situation in Syria, confirming in particular their intention to facilitate the strengthening of a Russian-US initiated ceasefire in this country as well as access for humanitarian aid.

b)     Putin also stressed the need for moderate rebels to distance themselves from IS and al-Nusra Front jihadists and also urged the closure of border between Syria and Turkey from where supplies of arms for extremists are continuing.

c)     A partial ceasefire (which was negotiated by the US and Russia and took effect on Feb 27) had dramatically curtailed violence across much of Syria and raised hopes that a lasting deal could be struck in Geneva to end the bloodshed.

7.

US-Saudi alliance faces new pressures ahead of Obama visit (Page 14)

a)     International

a)     US – Saudi Arabia relations

b)     Syria crisis

c)     Islamic State

d)     Al-Qaeda

 

a)   Over the last seven decades, photographs of American Presidents side by side with the Kings of Saudi Arabia have provided visual evidence of an enduring, strategic alliance between the US and the oil-rich kingdom in West Asia.

b)     During Obamas tenure, there has been distrust and disagreement over how to contain Iran, the fight against the Islamic State, the future of Syria and clashes in Yemen.

c)     The US provides military and intelligence support to the kingdom for its regional security, and is expected to announce additional support this week. Saudi Arabia helps fight terror groups like al-Qaeda and remains the second-largest provider of oil imports to the United States, selling about 1 million barrels per day.

d)     In the 70 years since President Franklin D. Roosevelt initiated the alliance at the end of World War II, the Saudis have primarily looked to the US to help ensure its security in an often unstable region. They want the US to have their back, especially in a potential conflict with Iran, their longstanding regional rival.

e)     This week, the US is expected to announce that it will bolster ballistic missile defences in the region and provide new support for Saudi efforts to counter cyber-attacks from Iran and elsewhere.

f)    The US has looked to Saudi Arabia as a source of stability in the West Asian region, an ally whose oil reserves have only recently begun to diminish in importance for US interests.

8.

How to better the new mediocre (Page 11)

a)     International

b)     Economy

a)     Global economic situation

b)     World Economic Outlook (WEO)

c)     International Monetary Funds (IMF)

d)     Quantitative Easing (QE)

e)     US Federal Reserve

f)     European Central Bank (ECB)

 

a)     The IMF World Economic Outlook (April 2016) tells us that the world economy will grow at 3.2 percent in purchasing power parity terms in 2016, not 3.6 percent as forecast last October.

b)     In 2017, it will grow at 3.5 percent, not 3.8 percent as forecast earlier. Contrast these with growth of 4.2 percent in 1998-2007, the period before the financial crisis.

c)     The big surprise is that falling oil prices have failed to provide a shot in the arm for the world economy. Oil prices fell by nearly half in 2015 compared to 2014 but this has not helped. As revenues have fallen, oil exporters have cut their expenditure and this has depressed global demand.

d)     Falling oil prices have led to large cuts in capital expenditure in the oil and mining sectors. These cuts have had their own impact on non-energy sectors. A fall in oil prices translates into a fall in the inflation rate. Central banks should have cut their policy rates in response.

e)     Two aspects of the global economy today are worrisome. First, in periods of weak growth, financial markets are prone to bouts of turbulence. Second, geopolitical risks have risen sharply.

f)     The WEO mentions some of these: the humanitarian disaster and the influx of refugees into Europe; the possibility of the UK exiting the EU; the rise of protectionist tendencies in the US and elsewhere; and internal strife in several emerging markets.

g)     However, it omits a far more important development: the heightened tensions between Russia and the West. When geopolitical risks rise, investors tend to retreat.

h)     The IMF urges a familiar set of measures in order to pre-empt the new mediocre: loose monetary policies, fiscal support and structural reforms.

i)     Following the 2007 crisis, interest rates were cut in the US and elsewhere. Once interest rates come close to zero, they have little effect on aggregate demand. As a result, the US resorted to QE in 2008. This meant the central bank buying long-term securities and it was intended to lower the long-term interest rate. The ECB too commenced QE in 2009.

j)     Some economists now favour the use of helicopter money, that is, the central bank monetising government deficits. When economists advocate a measure long regarded as taboo because of its potential to create runaway inflation, we know the situation is pretty desperate.

k)  Others believe that monetary policy has run its course and it is time to bring back fiscal policies such as govt spending on infrastructure or tax incentives to promote a higher minimum wage. However, Governments are unwilling or unable to boost spending.

l) Some economists believe that the world has entered an era of low growth. There are several hypotheses. One is secular stagnation that investment has dropped because of slower population growth in advanced world, people needing fewer things, and modern investment being less capital intensive than in the past.

m)     Growing inequality also means more of the income goes into the hands of a few, whose capacity to consume is limited. This causes savings to rise. More savings and lower investment translate into lower growth.

9.

Services corner bulk of FDI inflows (Page 1)

a)     National

b)     Economy

a)     FDI

b)     Department of Industrial Policy and Promotion (DIPP)

c)     Make in India initiative

 

a)    Although India received an all-time high annual FDI in 2015, the surge is led by the inflows into the services sector rather than manufacturing or infrastructure. The Make in India initiative has not yet materialised into FDI inflows.

b)     According to an analysis of the official data by the DIPP, more than half of total FDI inflows in 2015 came into the services sector, comprising software, financial services, trading, hospital and tourism. In 2014, the sector accounted for about a third of the gross inflows. FDI into the sector in 2015 was 111 percent higher than in 2014.

c)     While inflows rose significantly into some sectors the BJP-led NDA government opened up, including insurance, construction, broadcasting and tourism, the impact of the FDI liberalisation measures in defence, railways and retail is not visible.

d)     In the 20 months of the NDA government, India has received total FDI of $85 billon compared to $59 billion in a similar period before that. FDI outflows (Indians investing overseas) declined 37 percent, confirming the change in investor sentiment.  

10.

Asian economies at greater risk now: ADB report (Page 15)

a)     Economy

a)     Asian economic growth

b)     Asian Development Bank (ADB)

c)     Poverty

a)  According to an independent evaluation of ADBs operations in South Asia, widening income inequality, slower growth and the growing dominance of China and India in the region has meant that Asian govts must integrate a more robust resilience into their national plans.

b)     The report also finds that the Asia and Pacific regions now account for 51 percent of the worlds poor.

c) The report said that countries in Asia are already grappling with slower growth and falling international trade, and need to find new drivers for growth while extracting extra mileage from existing industries.

d)     The report says, while the Asia-Pacific region in 1990 accounted for 1.5 billion people living in poverty, this proportion has come down to 51 percent as of 2012, or 456 million people.

e)     Within the region, South Asia accounts for 34 percent of this 456 million poor people. The report defines the poor as those living below $1.9 a day.

11.

Exports shrink 16 percent to $261 bn (Page 15)

a)     Economy

a)     Indias exports

b)     WTO

a)     Merchandise exports shrank 15.9 percent in 2015-16 to $261.13 billion amid weak overseas demand, a slump in commodity prices and currency volatility.

b)     The WTO said earlier this month that the global trade is projected to grow 2.8 percent this year, lower than a previous forecast of 3.9 percent.

c)     The WTO said risks to its latest forecasts were still mostly on the downside, including a sharper than expected slowing of Chinas economy, worsening financial market volatility and exposure of countries with large foreign debts to sharp exchange rate movements.

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