1. The Shanghai Cooperation Organisation and its stature in the modern world
What is the SCO and how does the grouping impact India? Is it set up to counter the West?
Founded in June 2001 as the ‘Shanghai Five’, the grouping consisted of Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan. They came together in the post-Soviet era in 1996, in order to work on regional security and reduction of border troops.
India acquired the observer status in the grouping in 2005 and was admitted as a full member in 2017.
Through the years, the SCO hosts have encouraged members to use the platform to discuss differences with other members on the sidelines.
The story so far: Iran and Belarus could soon become the newest members of the China and Russia-backed Shanghai Cooperation Organisation (SCO). “In the Samarkand summit [in September], we expect the leadership to adopt a document on the obligations Iran must fulfil to gain membership. The legal procedures of Belarus’s accession are about to start. We need to build consensus on the acceptance of Belarus,” Chinese diplomat and incumbent Secretary-General of SCO, Zhang Ming, stated last week. According to him, the suggested expansion would exhibit the collective’s rising international influence and its principles being widely accepted.
What is the SCO?
Founded in June 2001, it was built on the ‘Shanghai Five’, the grouping which consisted of Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan. They came together in the post-Soviet era in 1996, in order to work on regional security, reduction of border troops and terrorism. They endowed particular focus on ‘conflict resolution’, given its early success between China and Russia, and then within the Central Asian Republics.
Some of their prominent outcomes in this arena entail an ‘Agreement on Confidence-Building in the Military Field Along the Border Areas’ (in 1996) between China, Russia, Kazakhstan, Kyrgyzstan and Tajikistan, which led to an agreement on the mutual reduction of military forces on their common borders in 1997. It would also pitch in to help the Central Asian countries resolve some of their boundary disputes.
In 2001, the ‘Shanghai Five’ inducted Uzbekistan into its fold and named it the SCO, outlining its principles in a charter that promoted what was called the “Shanghai spirit” of cooperation. The charter, adopted in St. Petersburg in 2002, enlists its main goals as strengthening mutual trust and neighbourliness among the member states; promoting their effective cooperation in politics, trade, economy, research and technology, and culture. Its focus areas include education, energy, transport, tourism and environmental protection.
It also calls for joint efforts to maintain and ensure peace, security and stability in the region; and the establishment of a democratic, fair and rational new international political and economic order. The precise assertion, combined with some of the member states’ profiles, of building a “new international political and economic order” has often led to it being placed as a counter to treaties and groupings of the West, particularly North Atlantic Treaty Organisation (NATO).
The grouping comprises eight member states — India, Kazakhstan, China, Kyrgyzstan, Pakistan, Russia, Tajikistan and Uzbekistan. The SCO also has four observer states — Afghanistan, Iran, Belarus and Mongolia — of which Iran and Belarus are now moving towards full membership.
How is this relevant to India?
India acquired the observer status in the grouping in 2005 and was admitted as a full member in 2017. Through the years, the SCO hosts have encouraged members to use the platform to discuss differences with other members on the sidelines. It was on such an occasion that Prime Minister Narendra Modi held a bilateral meeting with former Pakistani Prime Minister Nawaz Sharif in 2015 in Ufa, and Foreign Minister S. Jaishankar negotiated a five-point agreement with his Chinese counterpart Wang Yi on the sidelines of the Moscow conference in 2020.
India is also a part of the ‘Quadrilateral’ grouping with the U.S., Japan and Australia. Its association with the grouping of a rather different nature is part of its foreign policy that emphasises on principles of “strategic autonomy and multi-alignment”.
What is the organisational structure?
The SCO secretariat has two permanent bodies — the SCO Secretariat based in Beijing and the Executive Committee of the Regional Anti-Terrorist Structure (RATS) based in Tashkent. Other than this, the grouping consists of the Heads of State Council (HSC), the Heads of Government Council (HGC) and the Foreign Ministers Council.
The HSC is the supreme decision-making body of the organisation. It meets annually to adopt decisions and guidelines on all important matters relevant to the organisation. The HGC (mainly including Prime Ministers) also meets annually to zero in on the organisation’s priority areas and multilateral cooperation strategy. It also endeavours to resolve present economic and cooperation issues alongside approving the organisation’s annual budget. The Foreign Ministers Council considers issues pertaining to the day-to-day activities of the organisation, charting HSC meetings and consultations on international problems within the organisation and if required, makes statements on behalf of the SCO.
Is it about countering the West?
The Council on Foreign Relations (CFR) noted in 2015 that decades of rapid economic growth had propelled China onto the world’s stage, whereas Russia found itself beset with economic turmoil following the Crimean annexation in 2014 and ejection from the G8 grouping.
Most recently, Russia’s action in Ukraine caused it to be subjected to sanctions on multiple fronts by the West. China, in what could be referred to as ‘distance diplomacy’, had held that security of one country should not be at the expense of another country — blaming the West (specifically referring to NATO) for the entire episode. Thus, the organisation spearheaded by both Russia and China does not find its supporters in the West. Moreover, on the proposed induction of Iran, journalist and commentator Nazila Fathi, writing for the Middle East Institute, stated in September 2021 that the country might not see much short-term benefit, however, it would signal closer ties with both China and Russia.
The Iranian leadership has often stressed that the country must “look to the East”. This is essential not only to resist its economic isolation (by addressing the banking and trade problems on account of U.S. sanctions) from the West, but also find strategic allies that would help it to reach a new agreement on the nuclear program. In other words, using its ties with China and Russia as a leverage against the West. Additionally, it would help it strengthen its involvement in Asia.
The same premise applies for Belarus, which lent its support to Russia for its actions in Ukraine. An association with the SCO bodes well for its diplomacy and regional stature.
2. The Pakistan and IMF talks: What lies ahead?
Why was the Extended Fund Facility (EFF) signed between the two? Why is IMF important for Pakistan’s economy?
The 39-month EFF between Pakistan and the IMF was signed in July 2019 to provide funds amounting to Self-Drawing Rights (SDR) — $4,268 million.
Structural reforms have been sacrificed due to Pakistan’s short-sighted political goals; hence the urge to go to the IMF for fiscal stability has been repeated over time.
The latest EFF was on the verge of collapse, but the ruling coalition government continued its efforts to revive the discussions.
The story so far: On July 14, the staff-level talks between Pakistan and the International Monetary Fund (IMF) concluded for the seventh and eighth review under Extended Fund Facility (EFF). The talks were originally aimed at releasing a tranche of $900 million. The talks, which began on March 4, were expected to conclude by March 16; however, it took five months to reach the staff-level agreement. Finally, last week, the IMF team reached an understanding with Pakistan to release $1.17 billion, subject to the board’s approval. This brings the total disbursement under the current EFF to $4.2 billion so far, to support policy actions under FY 2023 budget, power sector reforms, and monetary policy to restrain inflation. The latest IMF press release maintains it would consider an extension of the current EFF to end June 2023 and augment the fund amount to $7 billion.
What was the Extended Fund Facility (EFF), and why did the talks take longer to conclude?
The 39-month EFF between the two was signed in July 2019 to provide funds amounting to Self-Drawing Rights (SDR) — $4,268 million. The EFF was signed by Pakistan to address the medium-term balance of payment problem, and work on structural impediments and increase per capita income.
The IMF placed demands including fiscal consolidation to reduce debt and build resilience, the market-determined exchange rate to restore competitiveness, eliminate ‘quasi-fiscal’ losses in the energy sector and strengthened institutions with transparency.
The decision to freeze the fuel prices by the then Pakistani President Imran Khan in February 2022 was considered a major deviation under the EFF benchmarks. Mr. Khan’s government, that gave tax amnesties to the industrial sector, impacted the tax regime and a structural benchmark for fiscal consolidation. Loans under Kamyab Pakistan Program were another point of contention. The IMF insisted on its demands before approving any release of the tranche.
How important is the IMF support to Pakistan?
Pakistan’s economic situation is dire. According to the Economic Survey of Pakistan 2022, the fiscal deficit in FY 22 was $18.6 billion, and the net public debt at $252 billion, which is 66.3% of the GDP. The power sector’s circular debt is $14 billion.
According to the State Bank of Pakistan’s latest report, the current account deficit has peaked to $48.3 billion. The budgeted expenditure outlay for FY 23 states that 41% ($19 billion) of total expenditure will be used in debt servicing.
The IMF’s support in addressing the above numbers is crucial. According to the latest quarterly report of the Economic Affairs Division, during the financial year 2021-22, the IMF’s contribution to the total external debt (of $9.4 billion), is only $834 million. However, the IMF’s support is not limited to fixing the balance sheet, but validates and provides economic confidence to other multilateral institutions.
Why have the Pakistan-IMF relations remained complicated? Will the new government be able to improve the trust deficit?
Structural reforms require long-term commitment, which have been sacrificed due to Pakistan’s short-sighted political goals; hence the urge to go to the IMF for fiscal stability has been repeated over time.
Pakistan has signed various lending instruments with the IMF, and sought support from IMF around 22 times. However, only once has a programme been completed. Since the 1990s, the IMF has placed specific demands but were addressed by Pakistan in bits and pieces. For example, during the Pakistan People’s Party (PPP) rule in 2008, Pakistan was to implement economic reforms, including improvements in tax administration, removal of tax exemptions as well structural reforms. However, successive governments kept domestic political calculations a priority, than the economic reforms.
The latest EFF was on the verge of collapse, but the ruling coalition government continued its efforts to revive the discussions. To address the structural benchmarks of the IMF, the authorities have worked on specific legislations, for example, the State Bank of Pakistan (SBP) amendment act, and the Finance Bill 2022.
What lies ahead for Pakistan and the IMF?
Despite the latest agreement, the road ahead for the IMF and Pakistan is not an easy one. Political calculations and the elections ahead will play a role in Pakistan’s economic decision-making.
In 2019, the Director-General Debt Office of the Ministry of Finance revealed that Pakistan has to pay $31 billion by 2026. Total public debt as a percentage of gross domestic product is expected to increase further.
There is also a narrative that Pakistan has the fifth largest population with nuclear weapons that cannot be allowed to fail. A section within Pakistan also places the geo-strategic location of the country would provide an edge for cooperation, rather than coercion. Hence, this section believes, the IMF would continue to support.
Given the IMF’s increased assertion, Pakistan’s political calculations and the elections ahead, the relationship between the two is likely to remain complicated.
3. Crypto law needs global teamwork: FM
Minister’s statement in Parliament signals legislation on cryptocurrencies may be off the table for now
The Reserve Bank of India has recommended a ban on cryptocurrencies citing ‘destabilising effects’ for the country’s monetary and fiscal health, but a law to regulate or ban cryptocurrencies can only be effective once there is some form of international agreement in place, the Finance Minister said.
“Cryptocurrencies are by definition borderless and require international collaboration to prevent regulatory arbitrage,” Finance Minister Nirmala Sitharaman said in a written reply on Monday to a question from Lok Sabha MP Thol Thirumavalavan asking about the government’s plans to legislate restrictions on such instruments.
“Any legislation for regulation or for banning can be effective only after significant international collaboration on evaluation of the risks and benefits and evolution of common taxonomy and standards,” she added.
The Minister’s comments assume significance as they suggest a legislation for reining in activity in cryptocurrencies, which had been included in Parliament’s list of business for two sessions last year, is off the table till a global compact of some form can be firmed up.
Informing the Lok Sabha about the RBI’s concerns over the adverse effects cryptocurrencies could have for the economy, Ms. Sitharaman said: “RBI mentioned that cryptocurrencies are not a currency because every modern currency needs to be issued by the central bank or Government.
‘Value solely speculative’
“Further, the value of fiat currencies is anchored by monetary policy and their status as legal tender, however the value of cryptocurrencies rests solely on the speculation and expectations of high returns that are not well anchored, so it will have a destabilising effect on the monetary and fiscal stability of a country,” she added.
“In view of the concerns expressed by RBI on the destabilising effect of cryptocurrencies… RBI has recommended for framing of legislation on this sector. RBI is of the view that cryptocurrencies should be prohibited,” the Minister said.
The Ministry noted that the RBI had been cautioning people against the use of virtual currencies since as far back as 2013. In April 2018, the RBI had prohibited regulated entities from dealing in virtual currencies or providing services for facilitating any person or entity in dealing with or settling them. The directive was set aside by the Supreme Court in March 2020.
Subsequently, in May 2021, RBI advised regulated entities to continue to carry out customer due diligence processes for transactions in such currencies, in line with regulations including KYC and Anti-Money Laundering.
In simplistic terms, Cryptocurrency is a digitised asset spread through multiple computers in a shared network. The decentralised nature of this network shields them from any control from government regulatory bodies.
The term “cryptocurrency in itself is derived from the encryption techniques used to secure the network.
As per computer experts, any system that falls under the category of cryptocurrency must meet the following requirements.:
- Absence of any centralised authority and is maintained through distributed networks
- The system maintains records of cryptocurrency units and who owns them
- The system decides whether new units can be created and in case it does, decided the origin and the ownership terms
- Ownership of cryptocurrency units can be proved exclusively cryptographically.
- The system allows transactions to be performed in which ownership of the cryptographic units is changed.
Types of Cryptocurrency
The first type of crypto currency was Bitcoin, which to this day remains the most-used, valuable and popular. Along with Bitcoin, other alternative cryptocurrencies with varying degrees of functions and specifications have been created. Some are iterations of bitcoin while others have been created from the ground up
Bitcoin was launched in 2009 by an individual or group known by the pseudonym “Satoshi Nakamoto. As of March 2021, there were over 18.6 million bitcoins in circulation with a total market cap of around $927 billion.
The competing cryptocurrencies that were created as a result of Bitcoin’s success are known as altcoins. Some of the well known altcoins are as follows:
Today, the aggregate value of all the cryptocurrencies in existence is around $1.5 trillion—Bitcoin currently represents more than 60% of the total value.3.
Significance of Cryptocurrencies
- Corruption Check: As blocks run on a peer-to-peer network, it helps keep corruption in check by tracking the flow of funds and transactions.
- Time Effective: Cryptocurrencies can help save money and substantial time for the remitter and the receiver, as it is conducted entirely on the Internet, runs on a mechanism that involves very less transaction fees and is almost instantaneous.
- Cost Effective: Intermediaries such as banks, credit card and payment gateways draw almost 3% from the total global economic output of over $100 trillion, as fees for their services.
- Integrating blockchain into these sectors could result in hundreds of billions of dollars in savings.
Concerns over Cryptocurrencies
- Sovereign guarantee: Cryptocurrencies pose risks to consumers. They do not have any sovereign guarantee and hence are not legal tender.
- Market volatility: Their speculative nature also makes them highly volatile. For instance, the value of Bitcoin fell from USD 20,000 in December 2017 to USD 3,800 in November 2018.
- Risk in security: A user loses access to their cryptocurrency if they lose their private key (unlike traditional digital banking accounts, this password cannot be reset).
- Malware threats: In some cases, these private keys are stored by technical service providers (cryptocurrency exchanges or wallets), which are prone to malware or hacking.
- Money laundering: Cryptocurrencies are more vulnerable to criminal activity and money laundering. They provide greater anonymity than other payment methods since the public keys engaging in a transaction cannot be directly linked to an individual.
- Regulatory bypass: A central bank cannot regulate the supply of cryptocurrencies in the economy. This could pose a risk to the financial stability of the country if their use becomes widespread.
- Power consumption: Since validating transactions is energy-intensive, it may have adverse consequences for the country’s energy security (the total electricity use of bitcoin mining, in 2018, was equivalent to that of mid-sized economies such as Switzerland).
Cryptocurrencies in India:
- In 2018, The RBI issued a circular preventing all banks from dealing in cryptocurrencies. This circular was declared unconstitutional by the Supreme Court in May 2020. Recently, the government has announced to introduce a bill; Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to create a sovereign digital currency and simultaneously ban all private cryptocurrencies.
- In India, the funds that have gone into the Indian blockchain start-ups account for less than 0.2% of the amount raised by the sector globally. The current approach towards cryptocurrencies makes it near-impossible for blockchain entrepreneurs and investors to acquire much economic benefit.
Issues Associated with Banning Decentralised Cryptocurrencies
- Blanket Ban: The intended ban is the essence of the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021. It seeks to prohibit all private cryptocurrencies in India.
- However, categorising the cryptocurrencies as public (government-backed) or private (owned by an individual) is inaccurate as the cryptocurrencies are decentralised but not private.
- Decentralised cryptocurrencies such as bitcoin aren’t or rather, can’t be controlled by any entity, private or public.
- Brain-Drain: Ban of cryptocurrencies is most likely to result in an exodus of both talent and business from India, similar to what happened after the RBI’s 2018 ban.
- Back then, blockchain experts moved to countries where crypto was regulated, such as Switzerland, Singapore, Estonia and the US.With a blanket ban, blockchain innovation, which has uses in governance, data economy and energy, will come to a halt in India.
- Deprivation of Transformative Technology:A ban will deprive India, its entrepreneurs and citizens of a transformative technology that is being rapidly adopted across the world, including by some of the largest enterprises such as Tesla and MasterCard.
- An Unproductive Effort: Banning as opposed to regulating will only create a parallel economy, encouraging illegitimate use, defeating the very purpose of the ban.
- A ban is infeasible as any person can purchase cryptocurrency over the internet.
- Contradictory Policies: Banning cryptocurrency is inconsistent with the Draft National Strategy on Blockchain, 2021 of the Ministry of Electronics and IT (MeitY), which hailed blockchain technology as transparent, secure and efficient technology that puts a layer of trust over the internet.
4. Editorial-1: Sharing power with the next generations
A new idea of ‘inter-generational justice’ is gaining traction as a better way of producing a more equitable global order
After the horrific destruction in the 20th century in two World Wars — the second ending with a wanton display of scientific progress and the destruction of thousands of innocent civilians in Hiroshima and Nagasaki — the victors of the wars vowed “never again”. A new breed of global institutions was created to prevent the proliferation of weapons of mass destruction, rebuild shattered economies, and maintain global peace. These were the United Nations headquartered in New York and the Bretton Woods institutions — the World Bank and the International Monetary Fund (IMF) — in Washington. Power in these institutions was retained by the victors: in the UN in the five-member Security Council, and in the World Bank and the IMF by the United States and Europe who appoint their own at the top. The UN General Assembly is theoretically democratic. But the real power, of guns and money, is controlled by the Security Council and Washington institutions. The North Atlantic Treaty Organization (NATO) is back in the picture to keep the centre of gravity of global power in the West.
A fresh concept
The power struggle has heated up in and around Ukraine, camouflaged as an ideological war between democracies and dictators. All countries are expected to declare whose side they are on. Institutions of global governance which were supposed to guarantee peace have failed. Clearly, new ideas for global governance are required. A new concept of “inter-generational justice” is gaining traction as a better way of producing a more equitable global order and, hopefully, arresting mankind’s breakneck destruction of the planet despite — or because of? — great advances in technologies.
The answer to the rhetorical question — what sort of world we want to leave for our grandchildren — is to ask them what sort of world they want to live in. Older generations listening to younger generations, rather than younger people following their elders, may be a radical civilisational shift. However, elders listening to youth will not be enough. Youth must also be given charge of producing the world they want to live in. They cannot leave solutions to the older generation whose ways of working have caused these global problems. The problem is that if youth apply the same old ways which are being taught in universities and also learned where they work, they will make global problems worse.
Time is running out
The modern approach to progress, disseminated widely through “STEM” (Science, Technology, Engineering, and Math) education, is to extract resources from the planet to create new products for human benefit. And then to find new technological approaches to repair the damage caused to the planet by those technologies. Thus, scientific technology goes round in circles. On each round, owners of technologies become wealthier. The people suffering the harm from a relentless growth of economies are advised to be patient until the size of the pie produced is large enough to share with them. Time is running out. The climate is heating up. Inequalities are growing. People are losing their patience. New ways must be found to solve complex global problems.
A new theory of change
The prevalent scientific theory of change is both “outside in” and “top down”. Scientific experts try to be “objective” about the systems they study by placing their minds outside the systems. From their supposedly objective perches, they try to map the systems’ shapes detachedly. Like engineers, they look for levers within systems they can pull to improve efficiency and increase outputs. However, this way cannot work in socio-ecological systems. Because, in them, unlike in machines designed by engineers, social scientists and economists are situated within the systems they wish to observe objectively. Unlike ‘scientific’ design thinkers who try to design systems ‘objectively’, natural systems thinkers learn to live with and within the systems that give them life. They do not feel the need for rockets to take them to other planets after they have spoiled this one.
The global approach to governance is “outside in” and also “top down”. Many disciplines must be brought together to understand the social, economic, and physical facets of complex issues such as climate change. Moreover, stakeholders with conflicting needs must be aligned. Therefore, central coordination seems essential for large-scale change. This is the standard model of a hierarchical organisation, which is applied in the corporate sector, in national governments, and in international development organisations too.
The problem is this is the wrong approach for solving complex global problems. Because experts, remote from the diverse ways in which these complex problems manifest themselves on the ground, are not equipped to find effective solutions for large-scale outcomes. Since standard, “one size”, solutions cannot fit all, not only do their solutions not work well but trust also breaks down between the leaders on top of large international organisations (and the experts who advise them) and people on the ground. This is a principal cause of the rise of populism and revolts against “the Establishment” of ideas and institutions governing the world.
A new configuration, the G7, was formed in the 1970s when the Bretton Woods institutions seemed unable to prevent the global economic crisis caused by large “oil shocks”. The United States, the United Kingdom, France, Germany, Japan, and Italy formed the G6. Canada and later the European Union, joined later. Russia was invited later (G8) when the Soviet Union collapsed and was swiftly removed in the Crimean war (2014). China, now the second largest economy in the world, was never included. The G7 was expanded to the G20 in the 1990s, when China, Russia, India, Indonesia, and other large economies were added. And now the G20 is being cracked up because the G7 wants to throw Russia out. India will be the chair of the G20 this year and must try to keep the group together.
Power must shift between generations to create a more equitable global order. Less than 10% of the world’s citizens, and less than 6% of the world’s children below 10 years, are in the G7. Power must shift within economies from older persons to youth. Globally, it must shift from the older, so-called ‘advanced’ countries to younger ‘emerging’ economies. The G7 and the Security Council must invite the rest to find new solutions for global problems.
Recycle this wisdom
Inter-generational dialogue is imperative. Though all countries are aging, older persons in economies are not burdens to be cast aside. Already the numbers of older persons in the world exceed the numbers of children below five years, and will soon exceed the numbers below 10. Older persons are humanity’s fastest growing yet least used resource. While power must shift towards younger generations and emerging economies, all generations and countries must work together. All are stages in a larger process of evolution. All must listen to others’ aspirations and must understand others’ wisdom. Emerging economies must not be arrogantly considered, in the colonial legacy, as a ‘white man’s burden’ to be improved by a more advanced West. Many native communities have not yet lost their wisdom of living within natural systems and living as families and communities. Such wisdom on the ground needs to be cycled to the top to save the world for everyone.
The UN’s Sustainable Development Goals list 17 complex global problems. They appear in different forms everywhere in the world. Centrally managed organisations cannot solve such problems. Local systems solutions, cooperatively implemented within their communities by old and young persons together, are the way to solve these global systemic problems.
5. Editorial-2: Growth and welfare
Populism might mean different things to different people at different times
In a span of four days, Prime Minister Narendra Modi questioned twice the practice of politicians making mindless promises of ever profligate schemes in pursuit of votes, and termed it a dangerous trend. He has a point. In Deoghar, Jharkhand, on July 12, he said it was easy to make populist promises and collect votes through “shortcut” methods. In Jalaun, Uttar Pradesh on July 16, he added flourish to the argument by linking populist proclivity to a sweet dish and termed it ‘revari’ culture. He also advanced his own ‘development as justice’ theory — expressways and power projects, providing gas, toilets and houses in backward areas such as Bundelkhand were all leading to “true social justice”. He was challenging the more commonly understood meaning of social justice in the heartland, which is the expansion of rights defined in terms of caste groups. The Bundelkhand Expressway passes through one of the most underdeveloped regions. What should be the threshold of precariousness at which state interventions such as free food, job guarantees, or cash doles should kick in to provide social security is a debate long overdue. But it should not be forgotten that India is far behind the standards of social security that advanced capitalist democracies guarantee to their citizens.
Perhaps one reason why politicians are showering voters with doles is the disconnect between overall economic growth and job creation. The notion that growth is the panacea for all development challenges is viewed with increasing suspicion by voters, though they may not articulate it in those terms. The clamour for more state intervention for redistribution in democracies must be viewed against the backdrop of mounting evidence of inequality on the one side, and the increasing vulnerability being experienced by classes ranging from white collar workers to farmers on the other. While the situation requires a cool-headed and rigorous inquiry into the development model that the country pursues, many politicians cutting across party lines have resorted to wide-ranging schemes to calm or enthuse voters. Besides the quick political gains that they seek, this also pre-empts any discussion on the existing development paradigm. The Prime Minister would have done better had he opened a debate on the impact of big projects too rather than concluding that they invariably lead to development and social justice. India cannot achieve its development goals in education, health or infrastructure without considerable state support. In what conditions does it become dangerous populism that could ruin the financial stability of the state and when does it function as enabling and empowering welfarism are discussions that are desirable. He may have raised the question rhetorically, but Mr. Modi should now lead the conversation on it, involving Chief Ministers and other actors.
6. Editorial-3: India’s climate imperative
For public pressure to drive climate action, we need to consider climate catastrophes as largely man-made
In the absence of COVID-19, climate change-induced disasters would have been India’s biggest red alert in recent years. The heatwave that scorched Rajasthan, Uttar Pradesh, Gujarat, and New Delhi this year; torrential downpours in south India in 2021; and the super cyclone Amphan that battered West Bengal and Odisha in 2020 are symbols of man-made climate change. But India, like elsewhere, still attributes these catastrophes to the wrath of mother nature rather than anthropogenic global warming.
Temperatures over the Indian Ocean have risen by over 1°C since the 1950s, increasing extreme weather events. India is the fourth worst-hit in climate migration. Heat waves in India have claimed an estimated 17,000 lives since the 1970s. Labour losses from rising heat, by one estimate, could reach ₹1.6 lakh crore annually if global warming exceeds 2°C, with India among the hardest hit. India needs a two-part approach: one, to adapt to climate impacts by building resilience against weather extremes, and two, to mitigate environmental destruction to prevent climate change from becoming more lethal.
Extreme heat waves hit swathes of India. Heatwaves are aggravated by deforestation and land degradation, which also exacerbate fires. Agriculture, being water-intensive, does not do well in heat wave-prone areas. A solution is to promote agricultural practices which are not water-intensive and to support afforestation that has a salutary effect on warming. Financial transfers can be targeted to help farmers plant trees and buy equipment — for example, for drip irrigation that reduces heavy water usage. Insurance schemes can transfer some of the risks of extreme heat faced by industrial, construction and agricultural workers to insurers.
Climate-resilient agriculture calls for diversification — for example, the cultivation of multiple crops on the same farm. There will need to be more localised food production. Weather-based crop insurance would help.
Floods and storms are worsened by vast sea ingress and coastline erosion in the low-lying areas in the south. Southern States need stronger guidelines to avoid construction in locations with drainages. It is vital to map flood-risk zones to manage vulnerable regions. Environment Impact Assessments must be mandatory for commercial projects.
Kerala has some flood-resistant houses constructed on pillars. Communities can build round-shaped houses, considering optimum aerodynamic orientation to reduce the strength of the winds. Roofs with multiple slopes can stand well in strong winds, and central shafts reduce wind pressure on the roof by sucking in air from outside.
Arresting runaway climate change
Adaptation alone will not slow climate damages if the warming of the sea level temperatures is not confronted. Leading emitters, including India, must move away from fossil fuels. But climate mitigation everywhere is painfully slow, because of a lack of political will. India has made slow progress in choosing 2070 as its target for net zero emissions.
Meanwhile, a big part of climate action lies in protecting and expanding forest coverage. Regulation needs to be tightened and enforced to ensure forest protection while acquiring land. India gains from being part of the Glasgow declaration on forest protection that 141 countries signed in 2021.
Management of dams can exacerbate glacier lake outbursts and floods. Nearly 295 dams in India are more than 100 years old and need repairs. In stemming landslides in Uttarakhand, regulations must stop the building of dams on steep slopes and eco-fragile areas, as well as the dynamiting of hills, sand mining, and quarrying. Dams in the southern States can moderate floods, but only if operated year-round to anticipate the need to control flows during floods.
India’s share in disaster management should be raised to 2.5% of GDP. Climate finance is most suited for large-scale global funding from the World Bank, the International Monetary Fund, and the Asian Development Bank. But smaller-scale financing can also be vital: the World Food Programme’s funding for Nepal and Bhutan for community-based adaptation and agricultural resilience for vulnerable communities provides an interesting model.
States can tap into the Union government’s resources, financial and technological, from early warning meteorological systems to centrally sponsored climate schemes. MGNREGA funds can be used for climate adaptation in agriculture, waste management and livelihoods. States could make compensatory payment to local self-government resources being used for climate adaptation. For public pressure to drive climate action, we need to consider climate catastrophes as largely man-made.