CURRENT AFFAIRS – 24/01/2024
WEF meeting in Davos (2024): 5 key takeaways
(General Studies- Paper III)
Source : The Indian Express
Every year, leaders from diverse fields convene in the Swiss town of Davos for the World Economic Forum (WEF) to deliberate on global challenges and chart paths for the future.
- Despite criticism for its elite and expensive nature, the Davos summit continues to be relevant, offering insights into the perspectives of the rich and powerful on pressing global issues.
- Artificial Intelligence in the Spotlight:
- The predominant theme of this year’s WEF meeting was Artificial Intelligence (AI).
- Discussions delved into the transformative potential of AI for human welfare, as well as concerns regarding the need for regulation, fear of job losses, risks of impersonation and misinformation, and the potential exacerbation of inequalities.
- The overall sentiment conveyed at the summit was that the positive aspects of AI outweigh the negatives.
- Sam Altman, CEO of OpenAI, who had previously raised alarms about the existential risks of AI, conveyed a more optimistic stance.
- Altman emphasized that human intelligence still holds a significant advantage, stating that humans understand each other’s desires and will continue to possess superior tools.
- The consensus was that while AI can enhance capabilities, the unique understanding and connection between humans remain paramount.
- Regulation and Mitigation Strategies:
- Discussions acknowledged the importance of regulatory frameworks to address the challenges associated with AI.
- Concerns about job displacement, potential risks, and ethical considerations prompted conversations on implementing measures to guide the responsible development and deployment of AI technologies.
- War and Uncertainty:
- Business leaders at the Davos 2024 summit expressed concerns over the global geopolitical landscape, highlighting the risks posed by fragile situations in the Middle East and Europe.
- The Israel-Gaza conflict, a notable point of contention, lacked concrete plans or roadmaps for peace.
- Participants hesitated to address the conflict openly, potentially due to a lack of obvious solutions or fears of sparking controversy.
- The head of the Palestine Investment Fund estimated a minimum of $15 billion for Gaza’s house reconstruction, but Arab states insisted on lasting peace before committing to funding.
- Saudi Foreign Minister Prince Faisal bin Farhan emphasized the necessity of a Palestinian state for regional peace, acknowledging the interconnected nature of peace in the Middle East.
- Climate Change Urgency:
- A significant focus at Davos was the imperative for businesses to adapt to climate change and for global collaboration in combating it.
- Ajay Banga, President of the World Bank Group, underscored the severity of the “existential climate crisis” and emphasized the need for urgent action.
- Discussions also touched on the advantages businesses could derive from adopting sustainable practices.
- The responsibility of developed countries to financially support climate action in developing nations was also highlighted, warning that failure to do so would exacerbate global inequality.
- Rebuilding trust, he argued, must be a global effort that includes all countries, emphasizing the interconnectedness of climate action on a worldwide scale.
- China’s Economic Challenges:
- Facing a slowdown, China sought increased Western investment amid cooling relations.
- Despite a 5.2% GDP growth in 2023, still below pre-pandemic levels, China grappled with structural economic challenges.
- The semiconductor trade standoff with the U.S. exemplified attempts to isolate China.
- A shift in Western companies’ investment patterns was noted due to China’s challenges, but highlighted that even a 3-4% growth remains significant for many businesses attending Davos.
- India’s Transformative Presence:
- McKinsey and Company’s assessment of Davos 2024 recognized India’s rapid transformation as one of the world’s fastest-growing large economies.
- Industrialist Gautam Adani emphasized India’s rise, making it a major theme at the forum.
- Beyond economic potential, India showcased its influence in diverse areas.
- Discussions at WEF highlighted the potential economic boost of $1 trillion annually by 2040 through investments in women’s health.
- The announcement of the Global Good Alliance for Gender Equity and Equality, supported by WEF and the Government of India, aimed to unite global efforts in women’s health, education, and enterprise.
- This initiative, emerging from the G20 Leaders’ Declaration, aligns with India’s commitment to women-led development.
About the World Economic Forum (WEF)
- The World Economic Forum (WEF) is an international non-governmental organization established on January 24, 1971, by German engineer Klaus Schwab.
- Headquartered in Cologny, Canton of Geneva, Switzerland, the foundation’s mission is to “improve the state of the world” by fostering collaboration among business, political, academic, and societal leaders.
- The WEF envisions global, regional, and industry agendas shaped through collective engagement.
- Guiding Principles:
- The Forum advocates for a model where the world is effectively managed by a self-selected coalition comprising multinational corporations, governments, and civil society organizations (CSOs).
- This unique collaboration aims to address complex global challenges through a multi-stakeholder approach.
- The WEF is widely recognized for its annual meeting held at the end of January in Davos, a picturesque mountain resort in the eastern Alps region of Switzerland.
- This gathering serves as a global platform, attracting around 3,000 paying members and selected participants.
- Attendees include investors, business leaders, political figures, economists, celebrities, and journalists.
- The event spans up to five days, featuring approximately 500 sessions where participants engage in discussions on a wide array of global issues.
- The World Economic Forum (WEF) produces a variety of reports and publications covering a wide range of topics related to global economic, social, and environmental issues.
- Some notable reports published by the WEF include:
- Global Competitiveness Report
- Global Gender Gap Report
- Travel and Tourism Competitiveness Report
- The Global Enabling Trade Report
- Human Capital Report
- Some notable reports published by the WEF include:
Free Movement Regime along India-Myanmar Border
(General Studies- Paper II)
Source : The Indian Express
Union Home Minister Amit Shah announced on January 20 that the Indian government has decided to fence the entire length of the India-Myanmar border to curb the free movement of people.
- The decision is part of a broader strategy to enhance border security along the 1,643 km boundary that passes through Manipur, Mizoram, Assam, Nagaland, and Arunachal Pradesh.
- Currently, a significant portion of the border is unfenced.
- Background and Free Movement Regime (FMR):
- The Free Movement Regime (FMR) was implemented in 2018, marking a mutually agreed arrangement between India and Myanmar.
- This agreement allowed tribes residing along the border on both sides to travel up to 16 km inside the other country without requiring a visa.
- The introduction of FMR was aligned with the Narendra Modi government’s Act East policy, emphasizing stronger diplomatic ties between India and Myanmar.
- Initially scheduled for implementation in 2017, the FMR’s rollout was delayed due to the Rohingya refugee crisis that emerged in August of that year.
- Rationale and Discussions for Withdrawal:
- The FMR was introduced during a period of improving diplomatic relations between India and Myanmar.
- However, discussions about reconsidering and potentially withdrawing the FMR agreement surfaced last year.
- The context for this reconsideration was the ongoing ethnic conflict between the Meiteis and Kukis in Manipur.
- The security concerns arising from the conflict prompted a reassessment of the FMR, leading to contemplation on ending the ease of cross-border movement.
- Historical Border Demarcation:
- The British demarcated the India-Myanmar border in 1826 without consulting the local populace, leading to the division of people of the same ethnicity and culture into two nations.
- The current border reflects this historical line, causing divisions among communities without their consent.
- The region exhibits strong ethnic and familial ties across the border, with villages in Manipur’s Moreh region and Nagaland’s Mon district experiencing the border passing through homes and villages.
- Despite geopolitical divisions, people maintain cultural and familial connections transcending national boundaries.
- Significance of Free Movement Regime (FMR):
- The FMR, implemented as part of the Act East policy, aimed to foster people-to-people contact and ease movement for tribes residing along the border, acknowledging the historical ties.
- Beyond cultural ties, the FMR was designed to stimulate local trade and commerce.
- The region has a history of trans-border trade through customs and border haats, crucial for sustaining local livelihoods.
- Criticism and Ongoing Manipur Conflict:
- The illegal migration of tribal Kuki-Chin people from Myanmar into India has become a focal point in the ongoing Manipur conflict.
- The Meiteis accuse these migrants and an alleged “narco-terror network” along the India-Myanmar Border of contributing to unrest.
- The unfenced, difficult-to-monitor border, especially in Manipur where less than 6 km is fenced, raises concerns about unintentional facilitation of illegal immigration, drug trafficking, and gun running.
- Following the military coup in Myanmar on February 1, 2021, persecution against Kuki-Chin peoples has led to an influx of Myanmaresetribals into India, seeking shelter in Manipur and Mizoram.
- The situation has further intensified concerns about the FMR’s implications in light of increased refugee movements.
- A committee formed by the Manipur state government in 2023 identified 2,187 illegal migrants.
- In September 2022, 5,500 illegal immigrants were apprehended in Moreh, with 4,300 being pushed back.
- Government Response and Concerns:
- Chief Secretary Vineet Joshi wrote to the Assam Rifles in 2023, expressing concern over reports of 718 new infiltrations from Myanmar.
- He urged the paramilitary force to identify and deport these infiltrators.
- The Manipur government alleged that village chiefs have been settling migrants illegally in new hill villages, resulting in deforestation.
- An eviction drive against these settlements led to violence in March, particularly between the Kuki and Naga peoples in the hills and the government.
- The Imphal valley is predominantly inhabited by the Meiteis.
- Chief Minister Biren Singh disclosed that 410 people from Myanmar were detained in Manipur for residing without proper documents.
- An additional 2,400 were seeking shelter in detention homes along the border areas after fleeing Myanmar.
- The Chief Minister appealed to people in border areas to cooperate in recording details of such immigrants.
- The appeal was framed in the context of national and state interests and for security purposes.
- Overall Impact and Context:
- The issue of illegal migration has become a significant concern, contributing to tensions and violence in the region.
- Deforestation resulting from the alleged illegal settlements adds an environmental dimension to the conflict.
- The geopolitical and security implications of such migrations, particularly in the context of strained Indo-Myanmar relations and the ongoing ethnic conflicts in Manipur, underscore the complexities involved in managing border dynamics.
- Security Challenges Linked to Free Movement Regime (FMR):
- According to a paper by AnuradhaOinam from the Centre for Land Warfare Studies (CLAWS), several insurgent groups, including the United National Liberation Front (UNLF), People’s Liberation Army (PLA), United Liberation Front of Assam (ULFA), National Socialist Council of Nagaland (NSCN), and smaller Kuki and Zomi factions, have established camps in Sagaing Division, Kachin State, and Chin State in Myanmar.
- These groups utilize these locations for shelter, arms acquisition, cadre training, and engaging in illicit activities like drug smuggling and weapon sales to generate funds.
- The paper suggests that porous borders and the frequent misuse of the Free Movement Regime (FMR) contribute to the challenges.
- Insurgent groups exploit the FMR for illegal activities, taking advantage of the relaxed movement norms along the unfenced borders.
- Effectively managing and administering border areas is deemed crucial to mitigating drug trafficking and curbing illegal cross-border movements.
- Data from the Manipur Chief Minister’s Office reveals that 500 cases were registered, and 625 individuals were arrested under the Narcotic Drugs and Psychotropic Substances (NDPS) Act in Manipur in 2022.
- Substantial quantities of narcotics, including heroin, opium, brown sugar, ganja, crystal meth, and yaba (methamphetamine and caffeine), along with prescription drugs like pseudoephedrine and spasmoproxyvon, were seized.
- The value of the drugs confiscated or destroyed is estimated to exceed Rs 1,227 crore in the international market.
- Security Implications and the Need for Border Management:
- The interconnected challenges of insurgent activities, drug trafficking, and illegal cross-border movements underscore the security implications associated with the FMR and porous borders.
- Effective management and administration of border areas are deemed essential for addressing these security concerns, necessitating a comprehensive approach to border security and regulation.
- Expert Views on FMR Removal:
- The Free Movement Regime (FMR) has been periodically reviewed, and experts generally agree that it requires improved regulation.
- The escalating crisis in Myanmar and the rising influx of refugees prompted India to suspend the FMR in September 2022.
- While acknowledging the need for better regulation, most experts caution against the complete removal of the FMR, emphasizing the potential impact on local interests.
- A balance is sought between addressing security concerns and safeguarding the livelihoods and essential travel of the local population.
- Complete removal of the FMR or extensive border fencing may have adverse consequences.
- Livelihoods of local communities could be significantly impacted, and essential travel for healthcare and education might be disrupted.
- Balancing Security and Local Interests:
- The “killing the snake without breaking the stick” approach is suggested, emphasizing the need for a nuanced strategy that deals with security challenges while preserving the essential aspects of the FMR that benefit the local population.
- Security sources acknowledge the difficulty of preventing illegal immigration and drug trafficking across an unfenced border in challenging terrain.
- Robust patrolling and intelligence efforts may encounter challenges, even in the absence of the FMR.
- Sources in the security establishment highlight the complexity of managing borders, whether fenced or unfenced, particularly in dealing with drug trafficking.
Maldives rules out research by Chinese vessel in its waters
(General Studies- Paper II)
Source : TH
The Chinese research vessel Xiang Yang Hong 03 is scheduled to make a port call in the Maldives, drawing attention, especially from India.
- This development follows Sri Lanka’s decision to impose a one-year moratorium on foreign research vessels in response to Indian concerns about visits by a Chinese vessel.
- Maldives’ Statement:
- The Government of Maldives clarified that the Chinese vessel will not conduct research in Maldivian waters but is seeking necessary clearances for a port call, personnel rotation, and replenishment.
- The Ministry of Foreign Affairs emphasized that the Maldives has always welcomed vessels from friendly countries for peaceful purposes, contributing to bilateral ties.
- The Chinese government made a diplomatic request to the Maldives for clearances, indicating that the vessel’s visit is for routine activities like rotation of personnel and replenishment, not research.
- Xiang Yang Hong 03 had previously called at Sri Lankan ports but did not obtain clearance for a visit earlier in the year, coinciding with Sri Lanka’s announcement of the one-year moratorium.
- Tensions with India:
- The visit of the Chinese vessel to the Maldives adds to the strain in India-Maldives relations.
- Maldivian President Mohamed Muizzu, elected in September 2023, has demanded the withdrawal of Indian troops from the Maldives and terminated a joint hydrographic survey exercise with India.
- During his recent state visit to China, President Muizzu pledged to enhance strategic ties with the Asian giant.
The truth about India’s booming toy exports
(General Studies- Paper III)
Source : TH
India’s toy industry, historically small, has gained prominence in policy discussions, notably during the ‘Make in India’ initiative.
- Recent official data reveals a substantial increase in toy exports by 239% and a 52% decline in imports between 2014-15 and 2022-23, turning India into a net exporter.
- An unpublished case study from the Indian Institute of Management Lucknow, sponsored by the Department for Promotion of Industry and Internal Trade (DPIIT), attributes this success to ‘Make in India’ initiatives.
- India became a net exporter, with a negative trade balance of ₹1,500 crore in 2014-15 turning positive from 2020-21, after 23 years.
- Possible Reasons for Success:
- The case study credits the success to promotional efforts under ‘Make in India’ since October 2014.
- The toy industry’s turnaround is notable given challenges faced by other labor-intensive industries during the same period.
- There could be two potential reasons for the industry’s success.
- Protectionism: Rising import duties and non-tariff barriers may have reduced toy demand, positively impacting domestic production.
- Investment Upswing: Increased investment, capacity expansion, and improved labor productivity may have enhanced competitiveness and spurred exports.
- The transformation of India’s toy industry from a net importer to a net exporter is a remarkable feat, especially amid challenges faced by similar labor-intensive sectors.
- Policy Changes in the Toy Industry:
- In February 2020, India tripled the customs duty on toys (HS code 9503) from 20% to 60%.
- Further, since January 2021, non-tariff barriers (NTBs), such as the quality control order (QCO) and mandatory sample testing, were introduced, leading to a decline in toy imports and turning India into a net exporter.
- In response to a subsequent spike in imports after the restoration of the global supply chain in 2022-23, the government raised the basic customs duty to 70% in March 2023.
- Impact of Policy Changes on Trade Dynamics:
- During the COVID-19 pandemic, disrupted global supply chains, along with increased import duties and NTBs, resulted in a decline in toy imports, turning net exports positive.
- With the global supply chain restoration, net exports decreased to ₹1,319 crore in 2022-23, from ₹1,614 crore the previous year.
- The dip was steeper (31%) for toys under HS code 9503 despite high import duties, compared to a more moderate dip (18%) for all toys.
- In response to rising imports, the government increased the basic customs duty on toys to 70%, further solidifying protectionist measures.
- Analysis of Domestic Productive Capabilities:
- Data Source: The analysis extends to the Annual Survey of Industries (ASI) covering 2014-15 to 2019-20.
- Organised Sector Contribution:
- In 2015-16, the organised sector represented 1% of total factories but employed 20% of workers, used 63% of fixed capital, and generated 77% of the value of output.
- Over the six years from 2014-15, the Annual Survey of Industries (ASI) data indicates a lack of consistent growth in fixed capital per worker and gross value of output in real terms.
- Notably, there has been a steady decline in labor productivity from ₹7.5 lakh per worker in 2014-15 to ₹5 lakh in 2019-20.
- This raises questions about improved domestic supply and competitiveness driving India’s shift to a net toys exporter.
- EXPORT GROWTH AND PROTECTIONISM:
- The analysis finds no significant difference in export growth patterns before and after 2014-15.
- India’s transformation into a net toys exporter since 2020-21 is primarily a result of increased protectionism, i.e. rising tariff and non-tariff barriers as key factors.
- Such protectionism is viewed as a means for domestic industries to make necessary investments, enhance productivity, and develop competitiveness.
- NEED FOR COMPLEMENTARY POLICIES:
- It is emphasized that protectionism should be accompanied by investment policies and the provision of industry/cluster-specific public infrastructure.
- This approach aims to stimulate a virtuous circle, allowing domestic industries to expand capabilities and effectively face international competition.
- While an officially sponsored research study attributes the toy industry’s turnaround to ‘Make in India’ policies, it is important to highlight that rising tariff and non-tariff barriers played a significant role.
About the Annual Survey of Industries (ASI)
- The Annual Survey of Industries (ASI) is an economic census conducted annually by the Ministry of Statistics and Programme Implementation (MoSPI), Government of India.
- The primary objective of the ASI is to collect and compile comprehensive data on the structure, composition, and performance of the industrial sector in the country.
- The survey provides valuable insights into various aspects of industrial activity, enabling policymakers, researchers, and analysts to assess trends, plan interventions, and formulate industrial policies.