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Daily Current Affairs 17.06.2022 (ASEAN-India meet discusses remarks on Prophet informally, No wild polio strain found, says official, India better placed to avoid risk of stagflation: RBI officials, Waiting for jobs, Race for relevance, The floundering of Israel’s uneasy coalition, Is COVID-19 becoming endemic?, The reasons behind the crashing crypto market)

Daily Current Affairs 17.06.2022 (ASEAN-India meet discusses remarks on Prophet informally, No wild polio strain found, says official, India better placed to avoid risk of stagflation: RBI officials, Waiting for jobs, Race for relevance, The floundering of Israel’s uneasy coalition, Is COVID-19 becoming endemic?, The reasons behind the crashing crypto market)

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1. ASEAN-India meet discusses remarks on Prophet informally

Singapore Foreign Minister flags need to flay hate speech

The controversy over the derogatory comments about Prophet Muhammed was discussed “informally” during the 24th ASEAN-India ministerial meeting, Foreign Minister of Singapore Vivian Balakrishnan said on Thursday.

The 10-member Southeast Asian grouping has countries such as Indonesia and Malaysia that have condemned the remarks made by Nupur Sharma and Naveen Kumar Jindal, who were sacked as BJP spokespersons over the remarks.

“This episode is another stark reminder why we need to be careful and why we need to strongly reject hate speech, incendiary speech, speech which incites or aggravates, or causes insult or division within societies,” said Mr. Balakrishnan, who described the comments as “a delicate subject”.

Minister meets Nadda

In an unusual turn, Mr. Balakrishnan met BJP president J.P. Nadda on Wednesday where a wide range of issues were discussed. The visiting Minister mentioned Singapore’s strict laws against hate speech, and said the country was “on the right track”. “And so long as we remember that and treat each other with respect, we can live and let live. In fact, we can live well as a cohesive, multiracial, multi-religious, multilingual society,” Mr. Balakrishnan was quoted as saying by a leading online channel of Singapore.

The ASEAN has Indonesia, the largest Muslim-majority country in the world, as its member. Malaysia and Brunei are two other Muslim-majority members of ASEAN. The rest of the member countries, Singapore included, have minority Muslim population.

Barring Myanmar, all the countries were represented at the level of the Foreign Ministers at the meeting. Myanmar was represented by the Embassy officials in Delhi. External Affairs Minister S. Jaishankar said the Ukraine crisis had added to the post-pandemic uncertainties and contributed to rising prices of a wide range of items such as fertilizers and energy. The meeting skipped mention of the Rohingya crisis and the military crackdown in Myanmar, but praised India-ASEAN cooperation to fight transnational crimes.

ASEAN

  • The Association of Southeast Asian Nations is a regional organization which was established to promote political and social stability amid rising tensions among the Asia-Pacific’s post-colonial states.
  • The motto of ASEAN is “One Vision, One Identity, One Community”.
  • 8th August is observed as ASEAN Day.
  • ASEAN Secretariat – Indonesia, Jakarta.

Member Nations

  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Brunei
  • Vietnam
  • Laos
  • Myanmar
  • Cambodia

Genesis of ASEAN

  • 1967 – ASEAN was established with the signing of the ASEAN Declaration (Bangkok Declaration) by its founding fathers.
  • Founding Fathers of ASEAN are: Indonesia, Malaysia, Philippines, Singapore and Thailand.
  • 1990s – Membership doubled after the changing conditions in the region following the end of the Vietnam War in 1975 and the Cold War in 1991.Addition of Brunei (1984), Vietnam (1995), Laos and Myanmar (1997), and Cambodia (1999).
  • 1995 – Members signed a deal to create a nuclear-free zone in Southeast Asia.
  • 1997 – Adoption of ASEAN Vision 2020.
  • 2003 – Bali Concord II for the establishment of an ASEAN Community.
  • 2007 – Cebu Declaration, to accelerate the establishment of ASEAN Community by 2015.
  • 2008 – ASEAN Charter comes into force and becomes a legally binding agreement.
  • 2015 – Launch of ASEAN Community.
  • ASEAN Community is comprised of three pillars:
  • ASEAN Political-Security Community
  • ASEAN Economic Community
  • ASEAN Socio-Cultural Community

Objectives

  • To accelerate economic growth, social progress and cultural development for a prosperous and peaceful community of Southeast Asian Nations.
  • To promote regional peace and stability through abiding respect for justice and the rule of law and adherence to the principles of the United Nations Charter.
  • To promote active collaboration and mutual assistance on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields.
  • To collaborate more effectively for the greater utilisation of agriculture and industries, the expansion of their trade, the improvement of transportation and communications facilities and the raising of the living standards of peoples.
  • To promote Southeast Asian studies.
  • To maintain close and beneficial cooperation with existing international and regional organisations.

Institution Mechanism

Chairmanship of ASEAN rotates annually, based on the alphabetical order of the English names of Member States.

ASEAN Summit: The supreme policy making body of ASEAN. As the highest level of authority in ASEAN, the Summit sets the direction for ASEAN policies and objectives. Under the Charter, the Summit meets twice a year.

ASEAN Ministerial Councils: 

The Charter established four important new Ministerial bodies to support the Summit.

  • ASEAN Coordinating Council (ACC)
  • ASEAN Political-Security Community Council
  • ASEAN Economic Community Council
  • ASEAN Socio-Cultural Community Council

Decision Making: 

The primary mode of decision-making in ASEAN is consultation and consensus.

However, the Charter enshrines the principle of ASEAN-X – This means that if all member states are in agreement, a formula for flexible participation may be used so that the members who are ready may go ahead while members who need more time for implementation may apply a flexible timeline.

ASEAN-led Forums

ASEAN Regional Forum (ARF): 

Launched in 1993, the twenty-seven-member multilateral grouping was developed to facilitate cooperation on political and security issues to contribute to regional confidence-building and preventive diplomacy.

ASEAN Plus Three: 

The consultative group initiated in 1997 brings together ASEAN’s ten members, China, Japan, and South Korea.

East Asia Summit (EAS): 

First held in 2005, the summit seeks to promote security and prosperity in the region and is usually attended by the heads of state from ASEAN, Australia, China, India, Japan, New Zealand, Russia, South Korea, and the United States. ASEAN plays a central role as the agenda-setter.

Strengths & Opportunities

  • ASEAN commands far greater influence on Asia-Pacific trade, political, and security issues than its members could achieve individually.
  • Demographic dividend – It constitutes 3rd largest population in the world, of which more than half is below thirty years of age.
  • Economic:
  • 3rd largest market in the world – larger than EU and North American markets.
  • 6th largest economy in the world, 3rd in Asia.
  • Free-trade agreements (FTAs) with China, Japan, South Korea, India, Australia and New Zealand.
  • Fourth most popular investment destination globally.
  • ASEAN’s share of global exports has also risen, from only 2 percent in 1967 to 7 percent by 2016, indicating the rising importance of trade to ASEAN’s economic prospects.
  • The ASEAN Single Aviation Market and Open Skies policies have increased its transport and connectivity potential.
  • ASEAN has contributed to regional stability by building much-needed norms and fostering a neutral environment to address shared challenges.

India and ASEAN

  • India’s relationship with ASEAN is a key pillar of her foreign policy and the foundation of Act East Policy.
  • India has a separate Mission to ASEAN and the EAS in Jakarta.
  • India and ASEAN already has 25 years of Dialogue Partnership, 15 years of Summit Level interaction and 5 years of Strategic Partnership with ASEAN.

Economic Cooperation:

  • ASEAN is India’s fourth largest trading partner.
  • India’s trade with ASEAN stands at approx. 10.6% of India’s overall trade.
  • India’s export to ASEAN stands at 11.28% of our total exports. The ASEAN-India Free Trade Area has been completed.
  • ASEAN India-Business Council (AIBC) was set up in 2003 to bring key private sector players from India and the ASEAN countries on a single platform.

Socio-Cultural Cooperation: 

Programmes to boost People-to-People Interaction with ASEAN, such as inviting ASEAN students to India, Special Training Course for ASEAN diplomats, Exchange of Parliamentarians, etc.

Funds: 

Financial assistance has been provided to ASEAN countries from the following Funds:

  • ASEAN-India Cooperation Fund
  • ASEAN-India S&T Development Fund
  • ASEAN-India Green Fund

Delhi Declaration: 

To identify Cooperation in the Maritime Domain as the key area of cooperation under the ASEAN-India strategic partnership.

Delhi Dialogue: 

Annual Track 1.5 event for discussing politico-security and economic issues between ASEAN and India.

ASEAN-India Centre (AIC): 

To undertake policy research, advocacy and networking activities with organizations and think-tanks in India and ASEAN.

Political Security Cooperation: 

India places ASEAN at the centre of its Indo-Pacific vision of Security and Growth for All in the Region.

2. No wild polio strain found, says official

Not wild poliovirus but vaccine-derived poliovirus (VDPV) was detected in the environmental surveillance of sewage samples from Kolkata, a senior Health Ministry official said on Thursday. “The genetic sequencing is done at the ICMR-National Institute of Virology, Mumbai, and this was discussed with the World Health Organization (WHO). It can occur in any country where oral polio vaccine (OPV) is given,” the official said.

The Ministry said that the last time such a VDPV was detected was in New Delhi in 2018.

State health officials detected the presence of VDPV from sewage in Kolkata earlier this week. A VDPV is a strain of the weakened poliovirus that was initially included in OPV and that has changed over time and behaves more like the wild or naturally occurring virus.

Officials from Kolkata added that sewage monitoring goes on throughout the country and this virus was found in a sample in Kolkata. “Most likely it has come from someone’s gut who is immune deficient and has since multiplied. It is not a case of human-to-human polio transfer,” said State health authorities.

According to the WHO, Poliomyelitis (polio) is a highly infectious viral disease that largely affects children under five years. The virus is transmitted person-to-person and spread mainly through the faecal-oral route or, less frequently, by a common vehicle (contaminated water or food) and multiplies in the intestine, from where it can invade the nervous system and cause paralysis. Of the three strains of wild poliovirus, type 2 and 3 strains have been globally eradicated. As on 2020, wild poliovirus type 1 affects two countries — Pakistan and Afghanistan, according to the WHO.

Poliomyelitis

Polio also called as Poliomyelitis. It is a viral disease that destroys the nerve cells present in the spinal cord, causing paralysis or muscle weakness to some parts of the body. It is a contagious disease affecting the nervous system and is caused by Picornaviridae – a poliovirus.

The virus is transmitted by person-to-person through the following ways –

1) Through the faecal-oral route.

2) By contaminated water or food.

This virus primarily grows and multiplies in the intestine, from where it can attack the nervous system and will cause polio and paralysis on an advanced level.

Poliovirus can spread from person to person or by food or water containing human faeces and less commonly from infected saliva.

Types of Polio

There are three types of polio infections:

1) Subclinical: This type of polio do not experience any symptoms as this does not affect the central nervous system – the brain and spinal cord. 95 per cent of polio cases identified are usually subclinical.

2) Non-paralytic: This type of polio does affect the central nervous system, but does not result in paralysis.

3) Paralytic: This is the most serious and rarest form of polio as it results in full or partial paralysis in the patient. Three types of paralytic polio are –

  1. Spinal Polio – As the name suggests, it affects the spine.
  2. Bulbar Polio – It affects the brainstem.
  3. Bulbospinal Polio – It affects the spine and brainstem.

Signs and Symptoms of Poliomyelitis

As we discussed, there are three different types of polio, so the symptoms also vary. If a person is infected with Sub-clinical Polio then he can face the following symptoms 

  • Headache.
  • Slight fever.
  • Sore and red throat.
  • General discomfort.
  • Vomiting.

The following are the symptoms of Non-paralytic Polio –

  • Fever.
  • A sore throat.
  • Vomiting.
  • Headache.
  • Fatigue.
  • Abnormal reflexes.
  • Stiffness and pain in arm and leg pain.
  • Problems with swallowing and breathing.
  • Back pain, particularly neck stiffness.
  • Muscle tenderness and spasms.

People with paralytic polio experience the symptoms of Non-paralytic Polio followed by these symptoms-

  • Loss of reflexes.
  • Severe spasms and muscle pain.
  • Loose and floppy limbs.
  • Sudden paralysis.
  • Deformed limbs.

3. India better placed to avoid risk of stagflation: RBI officials

Domestic economic activity is gaining strength, write authors of Bulletin article

India’s economy is better placed than many other countries to avoid the risk of potential stagflation, Reserve Bank of India officials headed by Deputy Governor Michael D. Patra wrote in an article in the June edition of the RBI Bulletin.

“Global economic conditions continued to deteriorate as ratcheting up of commodity prices and financial market volatility have led to heightened uncertainty,” the officials wrote in ‘State of the Economy’. “Forecasts of global growth and inflation by various agencies paint a grim picture and it is increasingly becoming clear that in advanced economies, the war against inflation would entail significant monetary tightening, complicating the growth-inflation outlook,” they added.

“Emerging market economies grapple with the global trade slowdown, capital outflows and imported inflation. Some abatement of supply chain pressures and relaxation in lockdown measures by key industrial hubs have emerged as silver linings amidst the dark clouds looming over the global economy,” they observed.

India’s economy, however, was better placed to skirt a potential stagflation given that most constituents of GDP had surpassed pre-pandemic levels, domestic economic activity was gaining strength, and the CPI inflation print for May had recorded a decline after seven months of continuous rise.

“The recovery remained broadly on track. This demonstrates the resilience of the economy… and the innate strength of macro fundamentals,” they wrote.

Inflation

  • The general rise in the price level of goods and services is called Inflation.
  • It is estimated as the percentage rate of change in price index over the reference time period.
  • In India, inflation rate is measured with the help of the Consumer Price Index- combined (Base year- 2012).
  • Rate of Inflation= (Current period price index-Reference period price index)/(Reference Period Price Index)×100

Type of Inflation

Based on the rate of rising in Inflation

1. Creeping Inflation

  • Price rise at the very small rate (< 3 %)
  • It is considered safe and essential for the economy.

2. Walking or Trotting Inflation

  • Price rise at moderate rate (3 % < Inflation < 10 %)
  • Inflation at this rate is a warning signal for the Economy.

3. Running Inflation

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  • Price rise at high rate (10 % < Inflation < 20 %)
  • It affects the economy adversely.

4. Hyperinflation or Galloping Inflation or Runway Inflation

  • Price rise at very high rate (20 % < Inflation < 100 %) and sometime more than 100%.
  • Hyperinflation brings the total collapse of the Economy.
  • Examples: Venezuela (9900%), Zimbabwe (670%), Sudan (76%) etc.

Based on the causes

  • Demand Pull Inflation: When Inflation arises due to higher demand for goods and services over the limited supply.
  • Cost-Push Inflation:  When Inflation arises due to higher input cost (Example- raw material, wages etc.) for goods and services over the limited supply.

Other definitions

1. Deflation

  • It is opposite of Inflation.
  • Reduction of general level of price in an economy.
  • In this price index measured is negative.

2. Stagflation: When stagnation and inflation coexist in the economy. Stagnation is an economic condition where there is low economic growth with high unemployment.

3. Disinflation

  • When the rate of Inflation is at a slower rate.
  • Example:
    If the Inflation of last month was 4 % and the rate of inflation in the current month is 3 %.

4. Reflation: 

  • Deliberate action of government to increase the rate of inflation to redeem the economy from a deflationary situation.

5. Core Inflation: 

  • It is a measure of price rise in the economy excluding the price rise of some products (whose price is volatile and temporary in nature.

Effects of Inflation

1. Redistribution of income and wealth

  • Due to the effect of inflation, some group of people loses and another group of people gains.
  • Example-
    In case of debtors and creditors

Debtor- gainer

Creditor- loser

In case of Producers and Consumers

Producer- gainer

Consumer- loser

2. Effects on Production and Consumption

  • Due to inflation, the demand decreases which curtails the production.
  • People try to use fewer services which lead to a decrease in consumption.

3. Unfavorable Balance of Payments

  • Export decreases and import increases from other countries which lead to a decrease in the forex reserve.

Measures to control Inflation

1. Credit control

  • It is used by RBI.

2. Increase in Direct Taxes

  • Due to the increase in direct taxes, people have less money available to them and low demand from them leads to a lower price.

3. Price Control

  • By fixing the maximum price limit by authorities.

4. Trade measures

  • Maintain proper supply in the economy by export and import of goods and services.

4. Editorial-1: Waiting for jobs

The Centre’s decision to recruit personnel is a nod to the festering unemployment issue

For a nation that has had a significant demographic dividend — the working age population is much larger than the non-working age sections — finding productive employment for its youth was to be an imperative for India. Yet, in the last few years, unemployment has remained a major concern — the leaked Periodic Labour Force Survey (PLFS) in 2018 revealed that India’s unemployment rate was the highest (6.07%) in four decades. The latest PLFS suggests that the numbers now are not so drastic, with the overall unemployment rate at 4.2% in 2020-21 compared to 4.8% in 2019-20 and the labour force participation rate (LFPR) increasing to 41.6%, up from 40.1% in 2019-20. In terms of the more widely used statistic internationally, the current weekly status of unemployment, the figure of 7.5% for all persons in 2020-21 is still worrying. But, the PLFS data will not bring much cheer to the Government despite a decrease in unemployment, according to official data. This is because the decrease, says the PLFS, has also coincided with the transfer of employment into lower productive and unpaid jobs away from salaried employment. Worryingly, industrial jobs have decreased with more employment in agricultural and farm-related jobs — a trend that accelerated following the lockdown and has not reversed since then. Unemployment rates among the educated (above secondary education — 9.1%) and the youth (age between 15-29 — 12.9%) have only declined marginally.

Wage rates have continued to remain lower for those employed in either salaried jobs or self-employed compared to the pre-pandemic period, with the increases being marginal in the year following lockdown-driven days of the pandemic. It is clear that the Government must tackle unemployment and, concomitantly, the quality of employment issue, on a war footing. In this regard, Prime Minister Narendra Modi’s announcement that the Government will be recruiting 10 lakh personnel within the next 18 months (vacancies in the Railways, the armed forces and GST departments among others) should be seen as a step in the right direction. The latest data showed that there were 8.86 lakh vacant jobs among all central government civilian posts as of March 2020. Mr. Modi’s announcement was not about the creation of a large chunk of new jobs; the bulk of the promised employment is to fill up vacancies. But even this measure would be ameliorative in the real economy that continues to remain distressed, a consequence of the BJP-led government’s mismanagement and the effects of the pandemic in the last few years. The country cannot afford to squander more years in its race to reap the benefits of its demographic dividend, and the push to provide jobs for those seeking to enter the labour force, even if belated, will help ease matters for the medium term.

5. Editorial-2: Race for relevance

The Fed’s rate hike can accelerate the exit of foreign portfolio investments

The U.S. Federal Reserve on Wednesday implemented its steepest interest rate increase in more than 27 years as it fights to rein in runaway inflation. Barely six weeks after raising the policy rate by half a percentage point and underscoring the likelihood of “additional 50-basis-point increases” at the next couple of meetings, Chairman Jerome Powell stressed it had become “essential” to increase the rate instead by 75 basis points to bring inflation down. The overarching message, he asserted, was that the Fed recognised the ‘hardship high inflation was causing’ and had the resolve to restore price stability with singular focus. Acknowledging that inflation had ‘surprised to the upside’ since the Federal Open Market Committee (FOMC) had last met in May, he said the committee agreed that the larger increase was required to anchor inflation expectations. With U.S. Consumer Price Index based inflation quickening to a fresh four-decade high of 8.6% in May, spurred by housing, petrol and food prices, the Fed admitted that price pressures had spread to a broad range of goods and services. Even as it realises that it has very little control over supply side factors, including Russia’s invasion of Ukraine and COVID-related lockdowns in China, the U.S. central bank said it was determined to continue raising interest rates till it saw ‘compelling evidence’ that inflation was slowing towards its 2% goal. Mr. Powell emphasised that yet another ‘unusually large’ 75-basis-point or a 50-basis-point increase was ‘most likely’ in the meeting in July.

For Mr. Powell and fellow FOMC members, focusing unrelentingly on taming price gains through monetary action, including raising borrowing costs and gradually tightening liquidity, risks squeezing the economy into a recession. It is also a scenario mirrored earlier this month in forecasts by almost 70% of academic economists, polled by the Financial Times and the University of Chicago, who foresee the U.S. economy shrinking in 2023. The Fed recognises that the tighter financial conditions have tempered demand, even as it posits that real GDP growth has rebounded on strong consumption spending. Mr. Powell, who had in May underlined that the Fed would not hesitate to move policy to ‘restrictive’ levels if needed, on Wednesday flagged the reductions in the FOMC’s median projections for growth. Central bankers now see the U.S. economy expanding by 1.7% both in 2022 and 2023, slower than the March forecasts of 2.8% and 2.2%, respectively. For India, the Fed’s actions are likely to result in an acceleration in the recent exodus of foreign portfolio investments, spur more gains for the dollar against the rupee thus widening the trade deficit, and also fuel faster inflation as imported goods, including crude oil, become costlier.

6. Editorial-3: The floundering of Israel’s uneasy coalition

Riven by crises, it believes that focusing on Iran as the enemy will somehow unite the polarised state

On June 13, just as the government of Naftali Bennett commemorated its one year in office, it was on the verge of collapse. A week earlier, a Bill to extend Israel’s criminal law to West Bank settlers, which had been routinely passed earlier, failed to get approval, signifying the deep divide among the coalition partners that make up the government.

This coalition has brought together parties from the hard right, the centre, some left-wing groups, and, uniquely, an Arab party, Ra’am, that has an Islamist background. Prime Minister Bennett is from the right wing and was, till recently, the darling of extremist religious groups.

But Mr. Bennett’s anxiety to upstage former Prime Minister Benjamin Netanyahu led him to join this eight-member coalition that had a majority of one in the 120-member Knesset. Mr. Bennett will head the government for half its term, before making way for his partner, Foreign Minister Yasir Lapid, for the balance of the term.

Holding the coalition together is a daily challenge: on April 6, it lost its majority when Idit Silman, long affiliated with the religious right, defected to the opposition on the ground that the Jewish identity of the country was being jeopardised. The government then acquired minority status when an Arab member quit the coalition, but promised to support it in the House to prevent a hard right government replacing it. She later withdrew her resignation, but insisted that the Bennett government “be genuine and attentive to the Arab community”.

National divisions

The Palestinian-Jewish divide has created turmoil in the country since April when, during the holy month of Ramadan, the two communities made the Al-Aqsa Mosque the locale for violent confrontations. There were further assaults exchanged between the two sides through to early May. Hardly had these died down when anger flared up again with what the Palestinians believe was the targeted killing of the Al Jazeera journalist, Shireen Abu Akleh, on May 11.

A Palestinian, Shireen had been reporting about events in her home region for nearly 30 years and had acquired an iconic status among Arabs across West Asia. The view across the region is that her killing has restored the Palestine issue to the global agenda.

Within two weeks, Israel was saddled with its next crisis — the annual flag march on May 29 to mark the capture of East Jerusalem in the 1967 war. Last year, the march, that is largely made up of Jewish youth from the extreme right who provocatively pass through the Muslim quarter of the city, had led to an 11-day conflict with Hamas in Gaza and communal violence in Israel itself. This year, Mr. Bennett, taunted by his traditional right-wing cohorts as being soft on Arabs and weak before threats, felt politically compelled to approve the march.

Nearly 70,000 youth, led by Mr. Netanyahu, descended on Jerusalem, waving Israeli flags. Their popular slogans were “Death to Arabs”, “Let us burn down your villages” and “The Jewish nation lives”. Despite stringent security arrangements, several hundred of them broke into the Al-Aqsa Mosque — they planted Israeli flags, indulged in provocative dancing, and chanted Talmudic prayers.

Still, on June 12, following the defeat of the settlers’ bill, the leaders of the coalition parties described their government as “one of the best governments” and pledged that “we will not despair and we will not break”. But two days later, Mr. Bennett warned that the government had just “a week or two” to avoid collapse, after a member from his own party refused to back the coalition in the Knesset.

War and peace in West Asia

Iran remains in the sights of all Israeli governments, regardless of their political complexion. On May 22, Israel carried out the killing of an Iranian colonel from the Al Quds Force in Tehran. He was accused in the Israeli media of planning attacks on Israeli and Jewish targets, a charge that was deemed sufficient for Israel to be prosecutor, judge and executioner in a long line of assassinations of Iranian scientists and military personnel.

Israel’s Ministers are reported to be lobbying robustly in Washington against the revival of the nuclear agreement. Defence Minister Benny Gantz has even announced that Israel was planning to attack Iran’s nuclear sites in a couple of years. A major exercise, involving hundreds of aircraft, took place on June 2, to signal preparations for the proposed assault.

Expanding diplomatic and economic ties with neighbouring Arab states, without conceding anything to Palestinian aspirations, is another area of political consensus in Israel. In early April, Israel hosted a meeting of Arab foreign Ministers of countries that have normalised ties with it, which was attended by the U.S. Secretary of State, Antony Blinken.

Since then, there are regular reports that ties with the United Arab Emirates (UAE) are flourishing — a major trade agreement was signed on May 31 which will cover 96% of bilateral trade, amounting to about $1 billion, and could take trade to more than $10 billion within five years. However, the signing ceremony was abruptly closed to mediapersons as the UAE Foreign Ministry condemned Israeli violence at the Al-Aqsa Mosque by “extremist settlers under the protection of Israeli forces”.

The outlook

As the country lurches from crisis to crisis, the government is seen to be paralysed, with the Prime Minister floundering to keep control. He is constantly haunted by the spectre of Mr. Netanyahu calling on the coalition’s right-wing members to abandon “the weak and flaccid government” that is harming the country’s Jewish identity, and “return home”.

But the coalition is holding together because no member is keen on another election; they fear defeats if they do not deliver on issues that immediately matter to the populace battered by the novel coronavirus pandemic — welfare measures for poor families, support for small business, upgradation of national infrastructure. Even the Arab party is anxious to keep the coalition going to prevent the return of Mr. Netanyahu and, over time, increasingly integrate Arabs with the Israeli mainstream.

Israel’s principal focus is to normalise ties with Saudi Arabia amidst reports of clandestine interactions between political and security officials and the visit by a major Israeli business delegation to the kingdom. As the Americans attempt to rebuild ties with Saudi Arabia in the context of the ongoing Russian war in Ukraine, it is likely that the kingdom might see value in its ties with Israel to consolidate its position in Washington regardless of who resides in the White House.

U.S. President Joe Biden’s visit to the kingdom and Israel next month will focus on promoting formal ties between the two countries as part of mobilising a tough regional coalition against Iran, even as Israel continues its violence and aggression in the region with impunity. This seems to be the only route its leaders have found to keep themselves in power.

7. Editorial-4: Is COVID-19 becoming endemic?

There are indications, but endemicity seems to be a little further away  

Is COVID-19 now approaching an endemic stage? While the common interpretation of endemicity is ‘this is a disease we no longer have to be worried about’, what does it actually mean in epidemiological terms and what are the concerns for public health for the future? Will the infection spread at more predictable rates and will it perhaps become more manageable? In a conversation moderated by Ramya Kannan, Tarun Bhatnagar and K. Kolandaisamy discuss the science behind these questions. Edited excerpts:

Is COVID-19 on the path to becoming endemic?

Tarun Bhatnagar: As per the classical definition, a disease is endemic when it spreads in a limited area and at a rate which is relatively constant across time. In contrast, during a pandemic, the disease spreads to all the regions of the world and is present in some form or the other in all parts of the world with a relatively high rate of spread. We know that SARS-CoV-2 is still being detected in all parts of the world. In that sense, it is still a pandemic. However, we are seeing that in most or many parts of the world, the rate of spread is coming down, either naturally or with the interventions that have been put in place. So, yes, we probably could be moving towards endemicity. But that seems to be a little further away than where we are now.

K. Kolandaisamy: There are indications that the virus is moving towards endemicity. For example, in Tamil Nadu, we are seeing 200-300 cases, most of them from clusters. This is one indication that the disease might be moving towards endemicity. But we need to be very careful because even after two years, we are not very clear about the origin of this virus. There are three coronaviruses which manifest as common cold in human beings. Then, there was SARS-CoV-1 (2002), later called SARS [Severe Acute Respiratory Sydrome], and MERS [Middle East Respiratory Syndrome] (2012), all respiratory viruses. While SARS is not being monitored, tests are still being done for MERS. We are not very sure whether this virus will go the way of SARS, or take the path of MERS, or become like the three common cold viruses. This is a question only time can answer.

During the early part of the pandemic, COVID-19 was likened to the Spanish flu of about 100 years ago, but that flu did not turn endemic. Why do some diseases become endemic while others seem to vanish?

TB: In order to understand the transmission of infectious diseases, we need to think of what is known as the epidemiological triad — the interaction between the agent, which is the organism that causes the disease, the host, which is the human body where the agent resides and spreads, and the environment in which both the agent and the host live and how conducive it is for the transmission of the agent.

The Spanish flu virus was not as transmissible as SARS-CoV-2. In fact, its reproduction rate was between 1 and 2. For SARS-CoV-2, it has gone up to 3, even 4, in some places. Second, we need to think in terms of the host, in order for the virus to spread. During the Spanish flu, it is understood that a bit, probably around a third, of the world’s population was affected and infected. It probably led to lower susceptibility, and herd immunity. Finally, the flu virus seemed to prefer a colder environment compared to SARS-CoV-2, which is probably agnostic to the environment, as we have seen.

KK: With the Spanish flu, the movement of soldiers, particularly in Europe, is said to have played a major role in the spread of the disease. Today, the movement of people has become quite phenomenal globally. This means that any disease can spread from anywhere to everywhere and human continuity will be there. Instead of disappearing like the Spanish flu, there is a greater possibility of SARS-CoV-2 moving to the endemic mode.

Can this move to endemicity within a short span of two years be attributed to a triumph of human efforts?

KK: Yes, the one important turning point in this case was the development of vaccines. That played a major role. Also, communication technology helped in disseminating information and awareness very quickly. And, as we now know, although some of the control measures were very harsh, travel restrictions and the initial lockdown measures also helped a lot. It is to be noted that the fact that the pandemic spread very fast was a blessing in disguise: a large number of people were infected and this hastened the process of herd immunity.

TB: I would distribute the credit equally between the virus and us, human beings. In the initial period, the virus spread so much that in a way it was a boon, in terms of people getting natural immunity to that particular strain of the virus. The vaccine has definitely been a game changer. I think it is historic to have a vaccine within such a short period of time, and completely incomparable to any other medical intervention that the world has seen. Even in terms of management of the disease, we le=arned a lot very fast.

What would be the link between cases and deaths in a possible endemic scenario?

TB: If we look at different parts of the world, and India, we’re not seeing as many deaths or even hospitalisations. The cases are considerably low, even if they are showing an upward climb. However, we are looking at another sub-lineage of Omicron, BA.4 and BA.5, initially reported from South Africa and now common in several countries. More recent reports from South Africa show a high number of excess deaths related to these sub-variants. Even Portugal, where the vaccination rates are pretty high, is reporting a high number of cases as well as hospitalisations. So, we will have to see how the virus is driving this — how good the virus is in terms of immune escape from natural immunity as well as from vaccine-induced immunity, how long does immunity persist, and the vaccine distribution in the population. These would be the three critical factors that would determine the future in terms of our interaction with the virus.

KK: We need to continue to be very careful in certain areas. We need to take care of people with co-morbid conditions and ensure that their health parameters are under control. For immunocompromised people, public health protocols such as wearing a mask, washing hands, and avoiding crowds are crucial. Besides this, we need to reach out to people who have not yet taken both shots and the booster dose and urge them to take the vaccines while explaining the risks of not being vaccinated. And we will need to continue to monitor [disease spread] and undertake surveillance of disease and morbidity in times to come.

What are the public health measures that governments will have to roll out in an endemic scenario versus a pandemic?

KK: Decades ago, our hospitals had separate wards for infectious diseases. Those were maintained by the local body. In those days, people with, say, smallpox, cholera, TB, chickenpox, acute diarrhoeal disease, etc. would be directed to these special wards or units in hospitals for treatment and, of course, would be segregated from others who were coming to the hospital too. However, over a period of time, with many public health successes — we have eliminated smallpox and there has been a huge decline in cholera cases and other infectious diseases such as chickenpox and measles — these units have been shut down, or are a shell of their former capacity. The system, therefore, had very little capacity to handle infectious diseases when COVID-19 began to spread. An exclusive facility to manage the cases with corresponding facilities for diagnostics and public health interventions is needed.

TB: We are definitely not expecting the virus to disappear. It will probably continue to circulate at various levels in the population. So, the first thing that we need to be thinking of is setting realistic levels of what are the expected deaths or hospitalisations, vis-a-vis the infrastructure that is available. Ultimately, it’s about preventing deaths as much as possible. The second is to set targets for reducing transmission. With more transmission, there is a risk of new mutations and variants emerging. So, we need to be looking at clusters or places where we see a higher rate of transmission. We need to set up routine testing facilities which are not camp-based and which are accessible and available to people. With the emerging variants, again, the role of genomic surveillance becomes very critical — to be able to identify which is the circulating variant, its characteristics in terms of transmissibility, and ability to cause severe disease. Accordingly, public health interventions would have to be in place. Two things are really critical: to stop airborne transmission (by wearing masks, especially indoors and in crowded places) and ensure sufficient air ventilation in indoor spaces. I think that is an area in the realm of public health engineering, in terms of designing our indoor spaces and having good ventilation. That would be really important as we move forward in terms of preventing transmission of the virus.

Have there been some missed opportunities in the past couple of years, though much has indeed been done in this country especially in terms of adding to health infrastructure?

KK: We have missed the opportunity to effectively enforce segregation for infectious diseases in our hospitals. A number of pregnant women who got COVID-19 contracted the infection when they were in hospital for a check-up. They were not diseased, but caught the infection in hospital, where there is poor or little infection control or segregation practices. This is unacceptable.

Also, engineering buildings to ensure air flow and good ventilation, particularly in hospitals and public institutions, is very important. We also need to get people to get back to the discipline of following COVID-19 protocols. The National Medical Council can consider offering more specialisation courses in infectious diseases.

TB: In terms of using data for decision-making, a positive that I see is that the pandemic brought together people who were working in their own silos — clinicians, mathematicians, epidemiologists, laboratory professionals, public health practitioners on the ground, anthropologists… So, we have an opportunity to now go further and change the culture of research. These kinds of collaborations help you get a bigger bang for the buck.

We’ve also developed systems to collect data, to transmit it, to analyse it and use it for various purposes at different levels. But there are opportunities to make that system more robust, more transparent and enable more efficient use of data. This can definitely go a long way in being prepared for the future and then tackling similar kinds of public health emergencies.

8. The reasons behind the crashing crypto market

Why do governments and central banks view cryptocurrencies negatively? Do these virtual currencies have intrinsic value?

Bitcoin has lost more than two-thirds of its value while Ethereum has lost almost 80% from its peak. As a result, the overall market capitalisation of cryptocurrencies has dropped under $1 trillion for the first time since January 2021.

Most analysts believe that the fall in the price of cryptocurrencies is in line with the fall in prices of stocks as central banks such as the U.S. Federal Reserve tighten monetary policy to fight inflation.

Cryptocurrency enthusiasts argue that cryptocurrencies have always been subject to extreme price swings and that the current crash is a good time to buy these virtual currencies at a tremendous bargain. Sceptics, however, believe that the current crash could very well be the end of the road for cryptocurrencies. 

Prashanth Perumal

The story so far: Bitcoin and many other cryptocurrencies have been crashing since they hit an all-time high late last year. Bitcoin has lost more than two-thirds of its value since it hit a peak of around $69,000 in November last year and is currently trading at around the $22,000 mark. Ethereum, another cryptocurrency popular among investors, has lost almost 80% from its peak. As a result, the overall market capitalisation of cryptocurrencies has dropped under $1 trillion for the first time since January 2021. The crash, which shows no signs of reversal yet, seems to have led to a drop in investor enthusiasm with trading volumes in Indian cryptocurrency exchanges dropping by 90% from their peak.

Why are cryptocurrencies crashing?

It may not be possible to pinpoint the exact reasons why investors are fleeing cryptocurrencies at the moment. Most analysts believe that the fall in the price of cryptocurrencies is in line with the fall in prices of stocks and other assets as central banks such as the U.S. Federal Reserve tighten monetary policy to fight price rise. As central banks withdraw liquidity from the market, there’s less money chasing assets, which in turn causes the prices of assets to drop. Others believe that the crash could also mark the popping of the bubble that has driven the prices of cryptocurrencies to stratospheric levels.

Sceptics have long argued that the price of cryptocurrencies seems driven more by speculative fervour fuelled by easy monetary policy than by any fundamental factors. For instance, the extreme volatility in the price of cryptocurrencies was seen by many as a feature that ruled out the use of cryptocurrencies as money. Such extreme volatility simply seemed to reflect investor behaviour that bordered on gambling. These sceptics also pointed to the fact that even though cryptocurrency prices were rising aggressively, the use of cryptocurrencies for real-life transactions was low. So, in essence, there was very little reason to believe that the rally in cryptocurrencies was driven by their wider acceptability as an alternative to fiat currencies.

How do governments view cryptocurrencies?

Some sceptics have also argued that even though private cryptocurrencies can rise to the status of alternatives to fiat currencies over time, governments and central banks may not allow this to happen. Many countries have taken several steps to discourage the widespread use of cryptocurrencies. While countries such as China and Russia have opted to impose outright bans on cryptocurrencies, others such as India have tried to tax and regulate them heavily. In India, while the government has not imposed an outright ban on cryptocurrencies, the Reserve Bank of India has been quite vocal about the need to ban them completely. It is no surprise that central banks are wary of private cryptocurrencies since they challenge the monopoly that central banks currently enjoy over the money supply of an economy. If cryptocurrencies became widely acceptable, it would affect the control that central banks possess over the economy’s money supply. It would also affect the ability of governments to fund their spending by creating fresh money as citizens could then opt to switch to alternative currencies.

Will cryptocurrencies rise again?

Cryptocurrency enthusiasts argue that cryptocurrencies such as Bitcoin have always been subject to extreme price swings and that the current crash is a good time to buy these virtual currencies at a tremendous bargain. To be fair, many crypto-enthusiasts have been handsomely rewarded in the past when they bought cryptocurrencies during times of panic selling. They argue that cryptocurrencies, just like gold, protect investors against the risk of price inflation. It should be noted that, unlike fiat currencies issued by central banks, the supply of various cryptocurrencies is limited by design. By holding their wealth in cryptocurrencies that either maintain their value or even appreciate in value over time, investors can protect themselves against the debasement of their wealth by central banks.

Sceptics, however, believe that the current crash could very well be the end of the road for cryptocurrencies. Even if cryptocurrencies manage to recover from the current crash, they may still not manage to hold on to their gains, because cryptocurrencies possess no fundamental value as money. In fact, some have argued that the real value of cryptocurrencies is somewhere close to zero. They point out that even the most popular cryptocurrencies such as Bitcoin are still not used very much in the daily purchase and sale of goods and services in the real economy. It should be noted that investors generally believe that the price of an asset gravitates towards its intrinsic or fundamental value in the long-run even though it may diverge from its fundamental value in the short-term.

Crypto-enthusiasts, however, argue that while cryptocurrencies may not be widely accepted as a currency, they still represent an independent asset class like gold that can help investors protect their wealth from central banks. This argument is still prone to the criticism that cryptocurrencies do not possess any independent value of their own to be compared to gold and silver, and thus cannot offer any wealth protection over the long-run.

Precious metals such as gold and silver are far more acceptable than cryptocurrencies, which is what gives them their intrinsic value. In fact, precious metals served as currencies for centuries and have been widely used for industrial and other purposes.

No cryptocurrency has such a record. The fact that precious metals are limited in supply definitely helped boost their value. But limited supply alone cannot make cryptocurrencies like Bitcoin a valuable asset like gold and silver.

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