1. India extends $1 billion credit to Sri Lanka
Neighbourhood first, says Jaishankar
India on Thursday extended a $1 billion credit facility to Sri Lanka to assist the island nation through its worst foreign exchange crisis and enable it to procure food, medicines and other essential items.
An agreement to this effect was signed between the State Bank of India and the government of Sri Lanka on Thursday, during a visit of the country’s Finance Minister Basil Rajapaksa to New Delhi. “Neighbourhood first. India stands with Sri Lanka,” External Affairs Minister S. Jaishankar tweeted.
Mr. Rajapaksa met Prime Minister Narendra Modi on Wednesday to discuss Indian assistance amid Sri Lanka’s extraordinary economic crisis.
Why is Sri Lanka’s economy in trouble?
A number of factors have led to the current economic crisis in Sri Lanka.
The tourism industry, which represents over 10% of the country’s Gross Domestic Product and brings in foreign exchange, has been hit hard by the coronavirus pandemic. As a result, forex reserves have dropped from over $7.5 billion in 2019 to around $2.8 billion in July this year. With the supply of foreign exchange drying up, the amount of money that Sri Lankans have had to shell out to purchase the foreign exchange necessary to import goods has risen. So the value of the Sri Lankan rupee has depreciated by around 8% so far this year. It has to be noted that the country depends heavily on imports to meet even its basic food supplies. So the price of food items has risen in tandem with the depreciating rupee.
The government’s ban on the use of chemical fertilisers in farming has further aggravated the crisis by dampening agricultural production. Earlier this year, Mr. Rajapaksa made public his plan to make Sri Lanka the first country in the world with an agriculture sector that is 100% organic. Many, such as Sri Lankan tea expert Herman Gunaratne, believe that the forced push towards organic farming could halve the production of tea and other crops and lead to a food crisis that is even worse than the current one.
What has been the government’s response to the crisis?
The Sri Lankan government has blamed speculators for causing the rise in food prices by hoarding essential supplies and has declared an economic emergency under the Public Security Ordinance. The army has been tasked with the duty of seizing food supplies from traders and supplying them to consumers at fair prices. It has also been given the powers to ensure that forex reserves are used only for the purchase of essential goods. The government has refused to end its aggressive push for complete organic farming claiming that the short-term pain of going organic will be compensated by its long-term benefits. It has also promised to supply farmers with organic fertilisers as an alternative. Further, Sri Lanka’s central bank earlier this year prohibited traders from exchanging more than 200 Sri Lankan rupees for an American dollar and stopped traders from entering into forward currency contracts.
Will the government’s response help the economy?
Mr. Rajapaksa’s drive to make Sri Lankan agriculture fully organic is likely to lead to a significant drop in domestic food production and cause a further rise in prices. Also, the various steps taken by the government to tackle the crisis may actually make things worse. The capping of food prices, for instance, can lead to severe shortages as demand exceeds supply at the price fixed by the government. People have already had to queue up to buy essential goods due to rising shortages.
The strong-arm tactics of the army can also have unintended consequences. When supplies are seized from traders, there is lesser incentive for them to bring in fresh supplies to the market. This can lead to a further drop in supplies and even higher prices for essential goods. It is also worth noting that speculative traders help contain price volatility by allocating scarce supplies rationally across time. So, to the extent the army’s actions discourage speculation, it can lead to greater volatility in food prices.
Further, the decision of the Sri Lankan central bank to ban forward contracts and the spot trading of rupees at above 200 rupees to an American dollar may affect essential supplies. For example, a rice trader who wants to pay more than 200 rupees for an American dollar to import rice may no longer be able to carry out the trade. In fact, trading of currency in the spot market has dried up since the central bank’s order. Also, without forward contracts, which help traders offload the risk of currency volatility onto professional speculators, many traders may be unwilling to import essential supplies.
2. Indian firms buy more oil from Russia, energy ties may deepen
After IOC, HPCL buys two million barrels of crude
India is expected to deepen energy cooperation with Russia as several major Western economies have continued to source Russian energy despite tough U.S. sanctions against Moscow’s rulers. An official confirmation in this regard came against the backdrop of reports that after the Indian Oil Corporation (IOC), Hindustan Petroleum Corporation Ltd (HPCL) has bought two million barrels of Russian crude oil as Indian energy majors forge ahead with attempts to secure a part of Russian energy supply.
In response to a question on whether India would opt for Russian energy which is reportedly being offered at a “discount”, an informed source said, “We will take it.”
The policy decision, it appears, is part of India’s plans to ensure energy security as the oil and gas market continues to witness volatility in the backdrop of European developments of the past few weeks. The official clarified that the energy cooperation with Russia will require some necessary adjustments in the financial front because of the challenges posed by the American sanctions.
The comments from the senior official indicated the government has adopted a pragmatic approach in this matter and is likely to forge ahead. Already, like the IOC, the HPCL also bought Russian Urals crude via European energy trader Vitol, sources with knowledge of the exchange said. Another similar energy consignment is expected as Mangalore Refinery and Petrochemicals Ltd (MRPL) has floated a tender, seeking one million barrels of same kind of crude.
The Indian orders for Russian crude oil are prompted by the fact that the Western sanctions have forced many countries to avoid Russian oil and gas. This has created an opportunity for some of the major energy importers like India who can source Russian crude from the market at special discounts. To capture the opportunity, Indian refiners are floating tenders to buy such discounted oil. The tenders are mostly won by traders, who would have stocked inventories of the lesser-priced Russian oil.
3. BARC resumes ratings of news channels
Body releases data for Week 10 of 2022, to release data for past 13 weeks
Broadcast Audience Research Council (BARC) India has resumed ratings for individual news channels, with the release of data for Week 10 of 2022.
The BARC India had temporarily suspended the viewership ratings of news channels in October 2020, amid the allegations of a Television Rating Point (TRP) scam.
Following an industry-wide consultative process, the BARC Team, along with BARC TechComm, developed the Augmented Data Reporting Standards for News and Special Interest genres, aligned with the industry’s needs, said BARC India.
“As per revised approved standards, audience estimates will only be released based on a four-week rolling average, every week,” it said.
A level playing field had been ensured for all channels within its ecosystem, with a single YUMI login access to the audience estimates.
“Sensitive to the industry’s need for past data for informed and equitable decision making, and as advised, BARC India will also release data for the previous 13 weeks, i.e., for the period of Week 49, 2021 to Week 9, 2022, only for the channels that have not chosen to opt out from receiving this data, which will also be based on a four-week rolling average. This data will be released over the next three working days,” it said.
“This review process has not only resulted in a statistically sound solution which works in the interest of the ecosystem but has also helped evolve changes in the reporting for Special Interest Genre Channels,” it added.
4. Russia-Ukraine conflict: ICJ’s provisional measures on military operations
Can the International Court of Justice mandate a ruling in the current crisis happening in Eastern Europe?
On February 26, Ukraine approached the ICJ, to hold that no acts of genocide defined under the Genocide Convention 1948, as claimed by Russia have been committed by Ukraine. Additionally, they also requested the court to indicate certain provisional measures against Russia.
The power to indicate provisional measures is subject to three main conditions. The rights which are being asserted should be “at least plausible”. Secondly, there must exist a link between the provisional measure and the plausible right that is to be preserved by such measure. Finally, there must be a “real and imminent risk” of “irreparable prejudice” to the rights claimed before the court.
The provisional measures indicated by the ICJ are binding, and non-compliance entails breach of an international legal obligation.
The story so far: The ongoing conflict between Ukraine and Russia has entered its fourth week. It has led to one of the most severe humanitarian crises in Europe since World War II. Russia has sought to justify its “special military operation” as a response to the alleged act of genocide of the Russian speaking people in the territories of Donetsk and Luhansk. Ukraine on February 26 approached the International Court of Justice (ICJ), the principal judicial organ of the United Nations (UN), requesting the ICJ among other things, to hold that no acts of genocide defined under the Genocide Convention 1948 and as claimed by Russia have been committed by Ukraine in Donetsk and Luhansk. Additionally, Ukraine also requested the court to indicate certain provisional measures, such as directing the Russian Federation to “immediately suspend military operations” in Ukraine, and to ensure that Russia will not aggravate or extend the dispute. The ICJ on March 16, rendered its order directing the Russian federation inter alia to immediately suspend all military operations in Ukraine.
Where does the ICJ’s jurisdiction lie?
Article 36(1) of the Statute of the ICJ provides that the ICJ shall have jurisdiction in all matters relating to the UN Charter, or other treaties or conventions in force. The Genocide Convention 1948 under Article IX provides that disputes between states relating to the interpretation, application or fulfilment of the Genocide Convention, as well as those relating to the responsibility of a state for genocide shall be submitted to the ICJ at the request of any of the parties to the dispute. Russia and Ukraine are both parties to the Genocide Convention. The ICJ held that there exists a prima facie dispute between Ukraine and Russia over the question of whether the acts of genocide have been committed in Ukraine, and accordingly it has the jurisdiction.
What do the ICJ’s powers to indicate provisional measures entail?
The Statute of the International Court of Justice, under Article 41 empowers the ICJ to indicate provisional measures in any case before it in order to preserve the rights of the parties involved. When the ICJ indicates such provisional measures, the parties to the dispute and the UN Security Council have to be notified. Until 2001, there was uncertainty as to whether the provisional measures indicated by the ICJ were binding. However, in the LaGrand (2001) case between Germany and the U.S. relating to the denial of consular access to a German national in the U.S., the ICJ made it clear that provisional measures are binding in character and create international legal obligations. Further, provisional measures may be indicated by the ICJ either on the request of a state party or proprio motu i.e., on its own motion. The ICJ has also held in the Tehran Hostages Case (1980) that the non-appearance of one of the parties concerned cannot itself be an obstacle to indication of provisional measures. In the present case, the Russian Federation chose not appear in the oral proceedings before the court. Notwithstanding, the ICJ proceeded to decide the case.
Under what conditions can the ICJ’s powers be exercised?
The power to indicate provisional measures is subject to certain conditions.
In the Gambia v. Myanmar (2020) case dealing with genocide of Rohingyas in Myanmar, the ICJ held that it may exercise the power to indicate provisional measures only if it is satisfied that rights which are being asserted by the party which is requesting provisional measures is “at least plausible”. The ICJ in the present case held that Ukraine indeed has a plausible “right of not being subjected to military operations by the Russian Federation for the purpose of punishing and preventing alleged acts of genocide.” The ICJ expressed doubt regarding the use of unilateral military force against another state for preventing and punishing genocide, as a means under the Genocide Convention 1948. It highlighted that the Genocide Convention provides for other means such as resort to other UN organs under Article VIII, and for peaceful dispute settlement by ICJ under Article IX. It is important to note here that the ICJ at the stage of provisional measures does not engage in a definitive analysis of whether rights which are claimed by the applicant actually exist. That analysis is for the merits phase.
Second, there must exist a link between the provisional measure which has been requested and the plausible right that is to be preserved by such measure.
Third, there must be “real and imminent risk” of “irreparable prejudice” to the rights claimed before the ICJ. The court observed that the mounting loss of human lives, harm to environment, and the refugee crisis are all instances of irreparable harm and prejudice justifying the indication of provisional measures.
What lies ahead?
The provisional measures indicated by the ICJ are binding, and non-compliance certainly entails the breach of an international legal obligation. However, the ICJ does not have the means or mechanism to secure the enforcement of the judgment itself. Indeed, the UN Charter under Article 94(2) provides that if any state fails to perform obligations pursuant to an ICJ decision, the UN Security Council (UNSC) may take measures necessary to give effect to the judgment. However, the possibility in the present case is bleak given that Russia has veto power in the UNSC.
Additionally, if there is an impasse in the Security Council, the UN General Assembly (UNGA) is empowered under Article 14 of the UN Charter to recommend measures for the peaceful adjustment of any situation “which it deems likely to impair the general welfare or friendly relations among nations.” In Nicaragua v U.S. (1984) when the U.S. refused to comply with the ICJ decision, and the Security Council was deadlocked, the UNGA adopted several resolutions deploring the behaviour of the U.S.. Further, the Uniting for Peace Resolution adopted in 1950 by the UNGA in the context of the Korean War, authorises the UNGA to consider any matter which may threaten international peace and security, and to make appropriate recommendations to the members for collective measures, including the use of armed force. The power of the UNGA to ‘recommend measures for peaceful adjustment’ has been affirmed by the ICJ in several cases including the Certain Expenses Advisory Opinion (1962), and Wall Advisory Opinion (2004). Russia’s non-participation in the oral proceedings has already reflected its disrespect for international law and international institutions. If Russia does not comply with the provisional measures of the ICJ, the reputational harm to its regime will only be compounded. Moreover, non-compliance with provisional measures will legitimise and justify counter-measures against Russia. Interestingly enough, Russia has been kicked out of the Council of Europe with immediate effect on the same day as ICJ’s provisional measures were indicated.
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