Daily Current Affairs 20.10.2022 (Held up by the Chinese, Why is Japan’s Unification Church being investigated?, Reading and understanding China in all its complexity and wonder, Nurture diversity by condemning hate speech unequivocally: UN chief, Tamil Nadu launches mission to save critically endangered vultures, Pressure on rupee may rise if U.S. raises rates further: Fitch, Turkish foreign policy the East-West divide, A new lease of LIFE for climate action, The politics of the madrasa survey)

Daily Current Affairs 20.10.2022 (Held up by the Chinese, Why is Japan’s Unification Church being investigated?, Reading and understanding China in all its complexity and wonder, Nurture diversity by condemning hate speech unequivocally: UN chief, Tamil Nadu launches mission to save critically endangered vultures, Pressure on rupee may rise if U.S. raises rates further: Fitch, Turkish foreign policy the East-West divide, A new lease of LIFE for climate action, The politics of the madrasa survey)


1. Held up by the Chinese

Why does China keep blocking the names India suggests for listing under the United Nations Security Council’s list of terrorists who are affiliated to the Al Qaeda and ISIS? Which was the most recent event? What is the mandate of the 1267 Committee that was set up in 1999 by the United Nations?

China placed a “hold” on a joint India-U.S. proposal, to designate Lashkar-e-Taiba commander Shahid Mehmood under the United Nations Security Council’s (UNSC) 1267 list of terrorists affiliated to Al Qaeda and ISIS.

When asked by The Hindu in August this year for a reason for the persistent “holds” on India’s requests for various terror listings, Chinese Ambassador to India Sun Weidong said they needed “some time to study these specific cases, but that doesn’t mean China has changed its position on counter-terrorism cooperation efforts.”

Since the Mumbai attacks in 2008, India has tried a number of different ways to build international consensus on cross-border terrorism, and the UNSC terror listings have been one such route.

Suhasini Haidar

The story so far:

On Wednesday, China placed a “hold” on a joint India-U.S. proposal, to designate Lashkar-e-Taiba commander Shahid Mehmood under the United Nations Security Council’s (UNSC) 1267 list of terrorists affiliated to Al Qaeda and ISIS. The hold marked the fourth time China had attempted to block a listing move by India and the U.S. in the past four months.

What does “placing a hold” mean?

The 1267 committee that was set up in 1999 (updated in 2011 and 2015) allows any UN member state to propose adding the name of a terrorist or terror group to a consolidated list, maintained by the Committee, that has affiliations to Al Qaeda and ISIS. India has successfully proposed the listing of several terror entities in the past two decades, including Pakistan-based Jaish-e-Mohammed (JeM) and Lashkar-e-Taiba. According to the rules, once a listing is proposed, it will be adopted into the list according to a “no-objections” procedure: which means, if any member of the Committee, which comprises all members of the UN Security Council, places a hold on the listing or objects outright to it, the listing cannot be adopted. As a permanent member of the UNSC, China can do this any number of times as its term doesn’t run out, and it carries a veto vote.

The Committee is bound to resolve all such pending issues within six months, but can allow extensions, meaning that technically at the end of the six-month period, the “holding” country has to decide whether to accept the listing or place a permanent objection to it. However, in practice, many of the listing proposals have had prolonged waits.

What are the reasons China has given for holding the listings?

Since 2001, China has placed holds on a number of listing proposals relating mainly to Pakistan-based groups and their leaders, given the close bilateral ties between the two countries. Most notable was China’s objections to the listing of JeM founder Masood Azhar. Azhar was released from prison by India in 1999 and handed over to terrorists in return for hostages onboard Indian Airlines flight IC-814, which should have left little doubt about Azhar’s own status as a terrorist. While the JeM was listed at the UNSC in 2001, and Azhar was mentioned as the group’s founder, he wasn’t designated for several years. Even after the Parliament attack and the Mumbai 26/11 attacks, China kept placing a hold on the UNSC terror listing proposals for him: in 2009, 2010, 2016-18, claiming it had “inadequate information” on Masood Azhar’s terror activities. In May 2019, three months after the Pulwama attacks that were traced to the JeM, China finally withdrew its hold.

When asked by The Hindu in August this year for a reason for the persistent “holds” on India’s requests for various terror listings, Chinese Ambassador to India Sun Weidong said they needed “some time to study these specific cases, but that doesn’t mean China has changed its position on counter-terrorism cooperation efforts.” In addition, it is possible that China objects to the listing proposals being brought by a group of countries, especially the joint proposals by India and the U.S. rather than by India alone, but has never given any comprehensive reason for the holds. At the UNSC meet in August, India’s Permanent Representative to the UN Ruchira Khamboj had called for an end to the practice of placing holds and blocks on listing requests “without giving any justification”. “It is most regrettable that genuine and evidence-based listing proposals pertaining to some of the most notorious terrorists in the world are being placed on hold. Double standards and continuing politicisation have rendered the credibility of the sanctions regime at an all-time low.”

Does India have options?

Since the Mumbai attacks in 2008, India has tried a number of different ways to build international consensus on cross-border terrorism, and the UNSC terror listings have been one such route. While China has blocked many of the listings, there are hundreds of names of terrorists and entities in Pakistan that pose a threat to India. As a UN member state, Pakistan has an obligation under the sanctions to block access for all designated entities to funds, arms and travel outside its jurisdiction.

This is something India has also pursued with the Paris-based Financial Action Task Force, where Pakistan was placed on a “grey list” due to its inability to curb terror financing and money laundering from 2012-2015 and 2018-2022. While Pakistan is likely to be taken off that list this week, it has had to carry out several actions against terror entities on its soil, and will continue to be under scrutiny.

Finally, India and the U.S. have built their own separate list of “most wanted” terrorists that document the cases against them, with a view to eventually receiving global cooperation on banning them.

2. Why is Japan’s Unification Church being investigated?

Why is the Fumio Kishida administration facing anger and backlash? What are the allegations of former members of the controversial religious group?

On October 17, the Japanese government ordered an immediate investigation into the Unification Church, a religious group that has come under scrutiny after the assassination of the country’s former Premier Shinzo Abe.

The Unification Church is a religious group, often described as a ‘cult’ by critics. Members were recruited in Japan through door-to-door campaigns, engaging relatives of existing members, railway station drives and university campaigns.

After Mr. Abe’s assasination, an internal probe by the ruling LDP found that 179 of 379 lawmakers of the party had ties with the church. This subseqently pushed Mr. Kishida’s approval ratings to record lows and forced a cabinet reshuffle.

Diksha Munjal

The story so far:

On October 17, the Japanese government ordered an immediate investigation into the Unification Church, a religious group that has come under scrutiny after the assassination of the country’s former Premier Shinzo Abe, as the suspected assassin revealed that he targeted Mr. Abe owing to his ties with the Church. Revelations about the association of nearly half of the ruling Liberal Democratic Party (LDP) lawmakers with the religious group has resulted in public anger against the government of Prime Minister Fumio Kishida.

What is the Unification Church?

The Unification Church is a religious group, often described as a ‘cult’ by critics, founded by late Reverend Sun Myung Moon in 1954 in South Korea. The Church, known for its ultra-conservative and anti-communist views, first expanded its international reach in Japan in the late 1950s and early 1960s. Reverend Moon, who died in 2012, was a self-declared messiah who tapped into the Japanese demographic by invoking traditional family values and leveraging a feeling of guilt over the country’s past colonisation of the Korean Peninsula. According to The New York Times, an ardent Korean nationalist, Mr. Moon had an ambivalence toward Japan and told his followers that their country and ancestors had sinned greatly for which they had to sacrifice everything for the Church. Members were recruited in Japan through door-to-door campaigns, engaging relatives of existing members, railway station drives and university campaigns. The religious group collected massive donations from its adherents in multiple ways. Mr. Moon reportedly used these donations to expand his business empire and the Church’s affliated organisations.

Why is it facing public backlash?

Former followers of the Church have come out over the decades as victims of brainwashing and monetary exploitation.

Late Prime Minister Shinzo Abe’s suspected assassin, 41-year-old Tetsuya Yamagami confessed to the police that he targeted Mr. Abe because of his ties with the Unification Church, which he said had pushed his mother into bankruptcy and destroyed his family. Mr.Yamagami said that the Church managed to extract nearly 100 million yen ($7,36,000) from his mother in the past two decades. The Church confirmed that his mother had indeed been a member of the group since 1998 and further stated that it had paid back 50 million yen to Mr. Yamagami’s mother as part of a settlement in 2009. According to victims of the group’s exploitation, the Church extracts huge amounts through ‘spiritual pressure-sales” and by selling religious or blessed items and even blessings for exorbitant prices.

What is known about its political ties?

In 1968, Mr. Moon established the Federation for Victory Over Communism, the Chruch’s political wing, and during the Cold War, used the anti-communist sentiment to get into the circles of global political leaders including those in Japan and the U.S. Mr. Abe, while not a member of the Church, was reported to have participated in multiples events of platforms associated with it. After Mr. Abe’s assasination, an internal probe by the ruling LDP found that 179 of 379 lawmakers of the party had ties with the church. This subseqently pushed Mr. Kishida’s approval ratings to record lows and forced a cabinet reshuffle, which included removing Mr. Abe’s brother and former Defence Minister, Nobuo Kishi, from his post. Mr. Kishida further said that he would humbly listen to the people’s “harsh voices” criticising his governing party’s ties to the Church and help victims of its allegedly fraudulent businesses and huge donation collection.

3. Reading and understanding China in all its complexity and wonder 

Through history, geography, culture and a study of its policies, domestic and foreign, writers, experts and academics explain why it is imperative for India to know its neighbour better. Only through such engagement will one realise why the country functions the way it does 

With memories of 1962 still fresh in Indian minds, President Xi Jinping’s statement, made at the on-going 20th Congress of the Chinese Communist Party, that China needs to be able to “stage military operations readily, create a secure environment, deter and control risks and conflicts, and win regional wars,” is ominous for we have little idea of what China will do.

Our public understanding of China is woefully inadequate. What little we know of our giant neighbour comes from books, mostly written by retired diplomats. These reinforce Indian perceptions of China as a difficult country to deal with. Several recent books have tried to lift the curtain to provide a better understanding of China’s domestic and foreign policies. Think Nirupama Rao’s, a former Indian ambassador to China, The Fractured Himalaya: India Tibet China 1949-1962, Natwar Singh’s My China Diary 1956-88, A.S. Bhasin’s Nehru, Tibet and China or Vijay Gokhale’s Tiananmen Square: The Making of a Protest. Also add to the list Ananth Krishnan’s 2020 book, India’s China Challenge: A Journey Through China’s Rise and What it Means for India. Krishnan’s appreciation of China’s history enhanced by his travels through China and interactions with, and interviews of many Chinese, including dissidents, gives us a balanced account of a proud, deeply troubled and insecure country, with its people, for all their material prosperity, enduring unremitting surveillance and control by the Chinese state.

Deeper accounts

For even deeper accounts of China, however, we need to turn westward. The West, unlike India, has engaged with China for decades. Despite all their rivalry, over the last four decades, Chinese students have been studying in the best universities in America, Europe and Australia in the thousands. In many of these universities, they constitute the largest foreign presence. Similarly, several fine Western schools and universities are present in China where western journalists and experts, fluent in Mandarin, have studied China over the decades. Their works are the most authoritative we can lay our hands on. The latest by Hong Kong based academic Frank Dikötter, the acclaimed author of Mao’s Great Famine: The History of China’s Most Devastating Catastrophe 1958-62, is one such.

His tightly written new book, China after Mao: The Rise of a Superpower (September 2022), is being widely praised for its depth of research based on data and archival material no longer available to researchers. Dikötter’s book brings out how poorly China is managed economically, how fraught its rise is and how compromised its long-term stability has become, not least due to the actions of a strengthened President Xi Jinping, the “Chairman of Everything.”

China’s rise to superpower status, next only to the U.S., however, is real. Dikötter’s account therefore needs to be read along with Mark Leonard’s 2008 book, What Does China Think? and another by the Chinese-American economist, Yukon Huang’s Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong (2017).

Both Leonard and Huang highlight what Dikötter underplays: the fact that China, however inadequately, does think things through and that its spectacular economic success — perhaps one of the greatest in human history — was the outcome of well-thought-out policy measures.

Bleak prospects

It is possible that China’s economic transformation may be running out of steam. Its management of the COVID-19 pandemic has been draconian and its population is in decline exacerbated by its long-running one-child policy. Another major failure appears to be an opaque state-controlled economy which, among other things, has led to the dramatic collapse of its real estate sector, with just one builder, Evergrande, running up a debt of $300 billion.

The long-term economic prospect of China is indeed bad but not so much because of its overleveraged building sector. China’s economic policies have led to a huge and unbridgeable rural urban divide leaving over 600 million Chinese impoverished and insecure and mostly out of sight. The Stanford University developmental economist, Scott Rozelle, who has spent decades researching in China, brings this out in considerable detail in his book (co-authored with Natalie Hell), Invisible China: How the Urban-Rural Divide Threatens China’s Rise. According to Rozelle, China’s long-term prospects are bleak, chiefly because most of its population, contrary to popular perception, “does not have the skills to move up the supply chain,” with 70% of its labour force unskilled and unfit for anything more than manual labour.

With so many books on China coming out with such frequency, anyone interested in the country will do well to start off with the renowned historian Michael Wood’s wonderfully illuminating and entertaining book, The Story of China: A Portrait of A Civilisation and Its People, revealing China, warts and all, while unhesitatingly highlighting western and Japanese depredations of the country through the 19th and 20th centuries, a period the Chinese bitterly recall as their “century of humiliation.”

Through this book, written for a popular audience, we can better understand why the Chinese behave the way they do, and read other writers to further an understanding of a country Indians need to know much better and engage more broadly with, as the West does.

4. Nurture diversity by condemning hate speech unequivocally: UN chief

Guterres says that diversity is a richness that makes India stronger, adds concrete actions should be taken in support of rights and freedoms of journalists, activists, students and academics

Making a strong pitch for the protection of human rights and pluralism in India, UN Secretary-General António Guterres on Wednesday urged Indians to condemn hate speech. Addressing a gathering at the Indian Institute of Technology (IIT)-Bombay, Mr. Guterres said India’s global role will benefit if “concrete actions” are taken in support of the “rights and freedoms of journalists, human rights activists, students and academics”.

“Diversity is a richness that makes your country stronger. That understanding…must be nurtured, strengthened and renewed every day by practising the values of Gandhi; by securing and upholding the rights and dignity of all people, especially the most vulnerable; by taking concrete action for inclusion, recognising the enormous value and contributions of multi-cultural, multi-religious and multi-ethnic societies; by condemning hate speech unequivocally,” Mr. Guterres said.

India was re-elected on October 13 to the UN Human Rights Council but the country’s recent human rights record has received criticism from a number of UN experts who have called upon New Delhi to ensure the safety of human rights activists, journalists and student leaders like Teesta Setalvad, Rana Ayyub, Siddique Kappan and Umar Khalid, who have been in the focus of government agencies.

“I urge Indians to be vigilant and to increase your investments in an inclusive, pluralistic, diverse community and society,” Mr. Guterres said.

“As an elected member of the Human Rights Council, India has a responsibility to shape global human rights, and to protect and promote the rights of all individuals,” he added.

Mr. Guterres referred to the impact of the Ukraine crisis that has engulfed the commodities market across the world and said: “I urge India to continue speaking up for peace; to expand its global leadership; to align its development and its foreign policy with the SDGs (Sustainable Development Goals) and the Paris Agreement; to find innovative solutions to today’s global crises.”

Mr. Guterres praised India’s non-violent struggle for Independence from colonial rule. He said the upcoming Presidency of India at the G-20 will provide an opportunity for highlighting the “values and vision of the developing world”.

Earlier, Mr. Guterres visited the memorial for the victims of the 26/11 terror attack in Mumbai and spoke against violent extremism, saying, “Fighting terrorism must be a global priority for every country on earth.”

Hate Speech Meaning

Hate speech refers to words whose intent is to create hatred towards a particular group, that group may be a community, religion or race. This speech may or may not have meaning, but is likely to result in violence.

  • The primary reason for the propagation of hate speech by individuals is that they believe in stereotypes that are ingrained in their minds and these stereotypes lead them to believe that a class or group of persons are inferior to them and as such cannot have the same rights as them.
  • The stubbornness to stick to a particular ideology without caring for the right to co-exist peacefully adds further fuel to the fire of hate speech.
  • In order to determine whether a particular instance of speech is a hate speech or not, the context of the speech plays an important role.
  • The Court in the State of Maharashtra v. Sangharaj Damodar Rupawat observed that the effect of the words used in the offending material must be judged from the standards of reasonable, strong-minded, firm and courageous men, and not those of weak and vacillating minds, nor of those who scent danger in every hostile point of view.
  • The existence of hate speech is not a new phenomenon by any stretch of the imagination but the creation of multiple platforms, especially social media has led to hate speech not only increasing but also becoming more vile and abhorrent.
  • The amount of hate that is perpetuated through social media platforms like Facebook has been well documented.
  • The most prominent instance in this regard has been the persecution of Rohingya Muslims by Myanmar’s military junta.
  • Multiple investigative journalists have laid bare the connection between the call for violence against Rohingyas on Facebook and the unabashed killings in Myanmar.

Hate Speech – Position in India

Freedom of Speech and Expression is guaranteed under Article 19(1) (a) of the Constitution as a fundamental right but this right is not absolute and as such restrictions are imposed on this right under Article 19(2).

  • It has to be understood that the right to free speech ends where hate speech begins.
  • Under the pretext of exercising inherent rights, many commit the crime of hate speech, leading to an air of distrust and terror.
  • It must be appreciated that liberty is there for all. If in the name of free speech, a ‘hate speech’ is delivered which marginalises certain people, then the liberty of those people is snatched away.
  • In the 267th Report of the Law Commission of India, it was stated that “Liberty and equality are contemporary and not antithetical to each other. The intention of having the freedom of speech is not to disregard the weaker sections of society but to give them an equal voice. The intent of equality is not to restrain this liberty but to balance it with the necessities of a multicultural and plural world, provided such constraint does not unduly infringe on the freedom of expression. Thus, incitement to not only violence but also to discrimination has been recognized as a ground for interfering with freedom of expression.”

The penal provisions which relate to this aspect are as follows:

  • Sections 153A and 153B of the Indian Penal Code (IPC) punish acts that cause enmity and hatred between two groups.
  • Section 295A of the IPC deal with punishing acts which deliberately or with malicious intention outrage the religious feelings of a class of persons.
  • Sections 505(1) and 505(2) make the publication and circulation of content which may cause ill-will or hatred between different groups an offence.
  • Section 8 of the Representation of People’s Act, 1951 (RPA) prevents a person convicted of the illegal use of the freedom of speech from contesting an election.
  • Sections 123(3A) and 125 of the RPA bar the promotion of animosity on the grounds of race, religion, community, caste, or language in reference to elections and includes it under corrupt electoral practices.

5. Tamil Nadu launches mission to save critically endangered vultures

Alarmed at the 96% decline in India’s vulture population between 1993 and 2003, the Central government put into place two action plans to protect the species at the national level — the first in 2006 and the second, ongoing plan for 2020-2025. One of the important action points in this nationwide plan is the formation of State-level committees to save the critically endangered population of vultures.

Acting on it, the Tamil Nadu Government formed a State-level Committee to set up an institutional framework for the effective conservation of vultures, which almost went extinct in the country at the beginning of the 21st century. A formal order was issued by Supriya Sahu, Additional Chief Secretary, Environment, Climate Change and Forests, on Wednesday.

In Tamil Nadu, four species of vultures are found — the Oriental white-backed vulture, the long-billed vulture, the red-headed vulture, and the Egyptian vulture. “The first three are residents and can be found in the landscapes of the Nilgiris and Sathyamangalam,” S. Bharathidasan, secretary of Arulagam, which works for vulture conservation, said. “There is evidence of Egyptian vulture breeding only at one site in Dharmapuri,” he said.

The committee, apart from the senior officials of the Forest Department, also has other experts, including K. Ramesh from the Wildlife Institute of India, S. Muralidharan of SACON, Vibhu Prakash of the Bombay Natural History Society, and two locals involved in conservation — B. Ramakrishnan of the Government Arts College, Uthagamandalam, Mr. Bharathidasan of Arulagam. The committee, which has a two-year tenure, will take steps for monitoring the conservation and recovery of existing vulture sites.

Vultures play a key role as nature’s scavengers, keeping the environment clean. Their social and ecological significance cannot be underestimated, Ms. Sahu said, adding “It is the last level scavenger.”

Vulture Action Plan

  • Vulture numbers saw a decline as much as 90% in some species in India since the 1990s in one of the most drastic declines in bird populations in the world.
    • Between the 1990s and 2007, numbers of three presently critically-endangered species, the Oriental white-backed, long-billed and slender-billed vultures decreased massively with 99% of the species having been wiped out.
    • The number of red-headed vultures, also critically-endangered now, declined by 91% while the Egyptian vultures by 80%.
    • The decline in vulture populations came into limelight in the mid-90s.
    • Reason for decline:
      • The cause of the decline was established as diclofenac, a veterinary nonsteroidal anti-inflammatory drug (NSAID) in 2004, which is used to treat pain and inflammatory diseases such as gout in carcasses that vultures would feed off.
      • Just 0.4-0.7% of animal carcasses contaminated with diclofenac was sufficient to decimate 99% of vulture populations.
    • The MoEFCC released the Action Plan for Vulture Conservation 2006 with the Drugs Controller General of India (DCGI) banning the veterinary use of diclofenac in the same year.
  • Objectives of the Action Plan for Vulture Conservation 2020-2025.
    • Drug control:
      • To ensure minimum use of Diclofenac.
      • To Prevent the poisoning of the principal food of vultures, the cattle carcasses, with veterinary NSAIDs, by ensuring that sale of veterinary NSAIDs is regulated and is disbursed only on prescription and by ensuring that treatment of livestock is done only by qualified veterinarians.
      • To carry out safety testing of available NSAIDs on vultures and to develop new ones which do not affect vultures.
      • To ensure that DGCI must institute a system that automatically removes a drug from veterinary use if it is found to be toxic to vultures.
        • Such a system would ensure that drugs other than diclofenac that are toxic to vultures like aceclofenac and ketoprofen are banned for veterinary use.
    • Upscaling conservation:
      • To establish Additional Conservation Breeding Centres along with Vulture Conservation Centres with samples and information collected from the wild analysed and stored at these centres.
      • To implement the Vulture Safe Zone programme at eight different places in the country where there are existing populations of vultures.
      • To launch conservation plans for the Red-headed and Egyptian vultures, with breeding programmes for both.
      • To declare a Vulture Safe Zone only when no toxic drugs are found in undercover pharmacy and cattle carcass surveys, for two consecutive years, and the vulture populations are stable and not declining.
      • To build Four rescue centres for different geographical areas like Pinjore in the north, Bhopal in ventral India, Guwahati in Northeast and Hyderabad in South India.
  • Other Efforts:
    • National:
      • The Central Zoo Authority (CZA) and Bombay Natural History Society (BNHS) also established the Vulture Conservation Breeding Programme.
      • Vulture Care Centre (VCC) was set up at Pinjore, Haryana in 2001 to study the cause of deaths of vultures in India.
        • The Jatayu Conservation Breeding Centre in Pinjore is the world’s largest facility within the state’s Bir Shikargah Wildlife Sanctuary for the breeding and conservation of Indian vulture species.
    • International: SAVE (Saving Asia’s Vultures from Extinction)
      • The consortium of like-minded, regional and international organizations, created to oversee and coordinate conservation, campaigning and fundraising activities to help the plight of south Asia’s vultures.
      • Objective: To save three critically important species from extinction through a single programme.
      • SAVE partners: Bombay Natural History Society, Bird Conservation Nepal, RSPB (UK), National Trust for Nature Conservation (Nepal), International Centre for Birds of Prey (UK) and Zoological Society of London.

Vultures in India

There are nine species of Vultures in India which are as follow.

  • Five belong to the genus Gyps:
    • Oriental White-backed Vulture (OWBV) Gyps bengalensis,
    • Long-billed Vulture (LBV) G. indicus,
    • Slender-billed Vulture (SBV) G. tenuirostris (all residents),
    • Himalayan Vulture (HV) Gyps himalayensis (largely wintering) and
    • Eurasian Griffon (EG) Gyps fulvus (strictly wintering).
  • Rest four are monotypic. These include
    • Red-headed Vulture (RHV) Sarcogyps calvus,
    • Egyptian Vulture (EV) Neophron percnopterus,
    • Bearded Vulture (BV) Gypaetus barbatus (all residents)
    • Cinereous Vulture (CV) Aegypius calvus (strictly wintering).
  • A sub-species of Egyptian Vulture Neophron percnopterus is largely spotted in winters in India.

6. Pressure on rupee may rise if U.S. raises rates further: Fitch

‘Public finances remain key driver of rating; India relatively insulated from global volatility due to limited reliance on external financing’

Higher than expected interest rate increases in the U.S. could put further downward pressure on the rupee and increase imported inflation in India, but there is a limited risk to the country’s sovereign rating from external pressures, Fitch Ratings said on Wednesday.

“We expect the authorities will continue to use reserves to manage exchange-rate volatility. This will probably erode reserve buffers further in the near term, but the impact will depend on the scale and duration of intervention,” Fitch said on a day the rupee weakened to a fresh record low of 83 to the U.S. dollar.

‘Risks to repo forecast’

While domestic factors are the primary driver of the RBI’s monetary policy tightening, Fitch said risks to its current forecast of a peak repo rate of 6% in 2023-24 were ‘skewed to the upside’.

“There is a significant chance of rate hikes in the U.S. beyond those in our assumptions, which could put further downward pressure on the rupee and increase imported price inflation,” it said. Though external finances are ‘becoming less of a strength’ in India’s credit profile, the rating firm said it expected foreign exchange reserves to remain robust and the current account deficit (CAD) to be ‘contained at a sustainable level’.

“India’s external buffers appear sufficient to cushion risks associated with rapid monetary policy tightening in the U.S. and high global commodity prices… Public finances remain the key driver of the rating and are only modestly affected by these developments, particularly as India is relatively insulated from global volatility due to the sovereign’s limited reliance on external financing,” the firm said in a note.

While India’s forex reserves have shrunk by $101 billion between January and September this year, Fitch said they were still large at about $533 billion and provide a ‘strong’ reserve cover to support 8.9 months of imports.

“This is higher than during the ‘taper tantrum’ in 2013, when it stood at about 6.5 months, and offers the authorities scope to utilise reserves to smooth periods of external stress. Large reserves also provide reassurance about debt repayment capacity,” Fitch noted. It added that short-term external debt due was equivalent to only about 24% of the reserves.

Fitch expects India’s CAD to rise to 3.4% of GDP in FY23 from 1.2% last year, given the surge in imports due to strong domestic demand as well as high oil and coal prices.

7. Editorial-1: Turkish foreign policy, the East-West divide

Amidst the sharp East-West hostilities generated by the war in Ukraine, there is one country that is at the centre of regional diplomacy — Turkey. Following earlier rapprochement with Saudi Arabia, Egypt and the United Arab Emirates, Turkish President Recep Tayyip Erdoğan has rebuilt bridges with Israel by meeting its Prime Minister Yair Lapid on the sidelines of the United Nations General Assembly in September this year, and pledging to cooperate on shared security and energy interests. And, in a dramatic overture, on August 19, Mr. Erdoğan indicated Turkey’s readiness to engage with Syrian President Bashar al-Assad, saying “there is no resentment in politics”.

But, despite this bonhomie, Turkey’s mailed fist has also been on display. It retains its tough posture on Sweden’s membership of the North Atlantic Treaty Organization (NATO), insisting on the repatriation of Kurdish leaders, described as “terrorists”, who are enjoying sanctuary in the Nordic capital. And, it maintains its confrontation with fellow NATO member, Greece.

The Grecian churn

Turkey is concerned about expanding ties between Greece and the United States; Ankara recently summoned the Ambassadors of both countries to protest about the deployment of U.S. military supplies on islands in the Aegean that are close to Turkey, in violation of several agreements, including those of Lausanne (1923) and Paris (1947).

Two other areas of dispute are Cyprus and the East Mediterranean. In early September, the U.S. removed restrictions on defence supplies to Cyprus in response to the island nation denying refuelling and repair facilities to Russian naval vessels. Turkey has belligerently announced that it will expand its military presence on the divided island, going beyond its present strength of 40,000 troops.

In a further provocation to Greece, in early October, Turkey concluded an energy agreement with the Tripoli-based Libyan government for joint exploration of hydrocarbon resources in the East Mediterranean. The agreement was signed in the presence of Mr. Erdoğan who was accompanied by his Foreign, Defence, Energy and Trade Ministers, signalling Turkey’s wide-ranging strategic interests in the region.

Turkey has affirmed that it is the only NATO member which can engage with Russia and mediate in the Ukraine war. Turkey successfully negotiated the grain agreement with the two warring parties — the first shipment of Ukrainian grain left Odessa on August 1, and, within the next month-and-a-half, three million tonnes had been shipped from Ukraine.

Russian-Turkish ties, though marked by important differences on Armenia, Syria, Libya and the East Mediterranean, remain substantial and mutually advantageous. They are marked by significant Russian investments and financial transfers to Turkish banks, including a $15 billion transfer from Russia’s nuclear company, Rosatom, to its Turkish partner to purchase the required equipment for the Akkuyu nuclear power plant and avoid sanctions. Turkey’s exports to Russia have increased 75% over the last year, even as it has emerged as a major importer of Russian energy. Russian President Vladimir Putin has reciprocated by proposing that Turkey become a hub for supplies of Russian gas to Europe.

Turkey has also indicated its interest in membership of the Shanghai Cooperation Organisation (SCO): in response to criticisms that this is an anti-West grouping, Mr. Erdoğan has said that Turkey is positioning itself as a “global power”.

Global ambitions

Turkey’s diverse diplomatic forays are bewildering: mired in serious economic crises, with inflation well over 80%, and facing a tough general election in June next year, is Mr. Erdoğan being impelled by domestic political considerations or does he have a grand vision for his country? It is possible that like most populist leaders in a democratic system, Mr. Erdoğan sees no contradiction between the two interests. Anti-Kurdish hostility and confrontations with Greece please the nationalists at home. They are also enthused by Turkey’s central position in world affairs that is drawn from Turkey’s own Ottoman traditions rather than its links with the West.

Perhaps the best way to understand Mr. Erdoğan is to see him as seeking to maximise advantages from Turkey’s geopolitical place at the confluence of Europe and Asia, abutting the Caucasus and Central Asia, the Mediterranean and North Africa, and placing this geography in the frame of Ottoman authority and influence at its peak.

At the global level, Mr. Erdoğan has positioned Turkey at the centre of the East-West divide, reaping benefits from both sides, but fully committing to neither of them.

Closer home

Nearer home, he works closely with Russia and Iran, but parts company from them when Turkey’s crucial interests are involved. This explains Turkey’s military posture vis-à-vis the Kurds in Syria and Iraq, while maintaining links with the governments in Baghdad and the Kurdistan Regional Government in Arbil.

In Syria, Mr. Erdoğan has nurtured ties with Turkmen and Islamist groups, to the chagrin of Russia and Iran, but the recent outreach to Damascus will please both his regional partners. Similarly, in West Asia, he has got close to the Arab monarchies, but not at the expense of relations with Iran.

This pattern is being repeated in the Caucasus and the Balkans: in the Azerbaijan-Armenia conflict, Turkey has backed the former, but then worked with Russia to maintain the ceasefire and also mend ties with Armenia. Again, in early September, Mr. Erdoğan undertook a three-day tour of the Balkans to patch up differences between Bosnia-Herzegovina and its breakaway Serb community, followed by visits to Belgrade and Zagreb to improve ties between the three successor states of the erstwhile Yugoslavia

8. Editorial-2: A new lease of LIFE for climate action

Our world today is in turmoil, facing multiple, mutually reinforcing crises. Even as we mount a fragile recovery from the COVID-19 pandemic, war fuels a devastating energy, food, and cost-of-living crisis. And for the first time since it began over 30 years ago, the United Nations Development Programme’s Human Development Report has warned that global human development measures have declined across most countries in the past two years. This comes against the backdrop of the greatest existential threat of all — the triple planetary crisis of climate change, pollution and biodiversity loss. Nine of the warmest years on record have come in the past decade alone. This year’s record-breaking heat waves, floods, droughts, and other extreme forms of weather have forced us to face these increasingly devastating impacts. Climate change is a disruption multiplier in a disrupted world, rolling back progress across the global Sustainable Development Goals.

The Paris Agreement and the COP26 summit in Glasgow represent urgent, collective steps countries are taking to limit emissions. Yet, the window for action is closing fast. Commitments we have now will not keep warming below the 1.5°C target that gives us the best chance of averting catastrophe.

With the narrative so focused on geo-politics, the scope for each of us to make a difference as individuals seems increasingly lost. While governments and industry carry the lion’s share of responsibility for responding to the crisis, we as consumers play a large role in driving unsustainable production methods.

LIFE, a fresh perspective

LIFE, or Lifestyle for Environment, announced by Prime Minister Narendra Modi at COP26 in November 2021, brings a fresh and much-needed perspective. Rather than framing climate change as a ‘larger than life’ challenge, LIFE recognises that small individual actions can tip the balance in the planet’s favour. But we need guiding frameworks, information sharing and the scale of a global movement. Mindful choices cultivated by LIFE animate this spirit — actions such as saving energy at home; cycling and using public transport instead of driving; eating more plant-based foods and wasting less; and leveraging our position as customers and employees to demand climate-friendly choices.

Many of the goals of LIFE can be achieved by deploying ‘nudges’, gentle persuasion techniques to encourage positive behaviour. The UN Environment Programme (UNEP) employs proven nudging techniques such as discouraging food waste by offering smaller plates in cafeterias; encouraging recycling by making bin lids eye-catching; and encouraging cycling by creating cycle paths. According to the UNEP, more than two-thirds of greenhouse gas emissions can be attributed to household consumption and lifestyles — the urgent cuts to global emissions we need can only be achieved through widespread adoption of greener consumption habits.

And while LIFE is a global vision, India is an excellent place to start. With over 1.3 billion people, if we achieve a true jan andolan here, the momentum generated will be enormous. As India leads, we see the world increasingly follow.

India’s track record

Today, in Gujarat, from the Statue of Unity, this vision of LIFE is taking flight as a global mission launched by Mr. Modi together with UN Secretary-General António Guterres, who has come to India to show his support. The Prime Minister and Secretary-General are calling on all consumers across the world to become “Pro Planet People” by 2027, adopting simple lifestyle changes that can collectively lead to transformational change. India has a proven track record translating the aspirations of national missions into whole-of-society efforts. The success of the Swachh Bharat Mission, which mobilised individuals and communities across socio-economic strata to become drivers of collective good health and sanitation is an example.

The LIFE mission also recognises that accountability is relative to contribution. Emissions across the poorest half of the world’s population combined still fall short of even 1% of the wealthiest. Those who consume the least, often the most vulnerable and marginalised members of society, will not be asked to consume less, but rather supported to participate in the green economy. Each ‘Pro Planet’ stakeholder is nudged according to differentiated approaches.

Onus on the developed world

The same applies across countries. LIFE resonates with the global climate justice India has rightfully called for — highlighting enhanced obligations those in developed countries bear, to support climate adaptation and mitigation for those most affected, yet least responsible. The average carbon footprint of a person in a high income country is more than 80 times higher than that of a person in a least developed country. It is common sense and only fair to call on the developed world to shoulder a proportionate share of this transition. In the words of Mahatma Gandhi, “the world has enough for everyone’s need, but not enough for everyone’s greed.”

And there has never been a better time for India’s leadership on climate action, at home and on the international stage. From the Panchamrit targets announced by Mr. Modi at COP26, to support for the International Solar Alliance, the Coalition for Disaster Resilient Infrastructure and South-South cooperation platforms, from the world’s fifth largest economy with vibrant businesses making enormous investments in renewables and electric mobility, to a world class public digital tech stack, India brings scale, expertise and legitimacy; a well-positioned founding UN Member State bridging the G20 and G77.

With COP27 next month, and India set to assume the G20 Presidency weeks after, followed by the halfway mark to Agenda 2030 next year, we at Team UN India and our 26 entities are proud and committed partners in this mission to help give a new lease of LIFE to climate action.

9. Editorial-3: The politics of the madrasa survey

The Uttar Pradesh government’s decision to undertake a survey of madrasas has raised serious concerns not just over the fate of these institutions but also on the future of Muslim identity. Other BJP-ruled States have also expressed concerns about madrasas. In May, Assam Chief Minister Himanta Biswa Sarma said the word ‘madrasa’ should cease to exist. In September, Uttarakhand Chief Minister Pushkar Singh Dhammi said his State would also conduct a survey of madrasas, like Uttar Pradesh. The stated reason is to check the availability of basic facilities for the students. Responding to this, Maulana Arshad Madani, head of the Darul Uloom Deoband, appealed to Ulemas in charge of various madrasas to cooperate in the survey, taking the stated logic of governance at face value.

In politics, the logic of governance has always been a handy tool to achieve ideological objectives. This was the case in the 1905 Bengal Partition and, as some may argue, during the 2014 general election campaign. The ideological aspect of this survey will become clear only after the survey is completed and various political parties respond to its outcomes. What strands of majoritarianism inspired the survey? Is the survey motivated by prejudice towards Muslims? Whatever the answer, madrasas have become a new battlefront between the Hindu Right and Indian Muslims, and the survey has the potential to offer material that could shape Muslim identity.

Views about madrasas

In India, two arguments are often made about madrasas. The first is that Muslims are economically backward because most of them are educated in madrasas. The second argument is that madrasas are nurseries of radical Islam. This view gained momentum globally after the 9/11 attack. The response of the Western states, or the War on Terror, was formulated based on this argument. Despite the fact that the al-Qaeda failed to attract Indian Muslims, the Indian political class was swayed by this view of madrasas. The most surprising endorsement of this view came from former West Bengal Chief Minister Buddhadeb Bhattacharya in 2002.

The Sachar Committee Report (2006) demolished both these arguments with robust empirical evidence. It found that only 3% of Muslim children of school-going age go to madrasas at the national level. It also drew a distinction between madrasas and maktabs. Maktabs are neighbourhood schools, often attached to mosques. They offer religious education to children who attend other schools to get mainstream education. The share of Muslims who attend madrasas and maktabs is not more than 6.3%, the report said. The report’s most crucial observation was that Muslims are aspirational. Muslim parents are eager to see their children enrolled in modern education institutions, but often fail to do so owing to their poor financial condition. The report therefore recommended that scholarships be given to Muslim students so that they don’t drop out of school. This was even implemented by some BJP-ruled States such as Madhya Pradesh, but not by the then Gujarat government. Such scholarships have made a difference, say some researchers, though scholars have expressed concerns over the lack of commitment of various national governments, including the United Progressive Alliance governments that helped formulate the report, in implementing the committee’s recommendations.

A policy for Muslims

It is clear that the governments of Uttar Pradesh, Assam or Uttarakhand have little appreciation for these findings. One BJP leader dismissed the Sachar report as an act of appeasement. Curiously, the authors of the Sachar Committee report deliberately chose to stay away from discussions over party politics or issues of secularism or communalism and the implications of these for the welfare of Muslims. They pretended as if no causal relationship exists between ideology and development. The politics that is expected to follow the madrasa survey will highlight how crucial this relationship is, and how utopian the authors of the Sachar report were in hoping that they could frame a policy for Muslims outside the framework of secularism and communalism.

Madrasas have a long and complex history. In the post-mutiny period, they emerged mainly to help save Muslim identity in the face of growing colonial interventions, which they suspected might impose Christian values on fellow Muslims. Madrasas, particularly Deoband, chose not to seek state support because they suspected that the colonial state, among others, would eventually expect them to produce “loyal subjects for the British Crown” as became the case with Aligarh Muslim University. So, they sought autonomy. Deoband took a political stand and fiercely resisted Partition. While there are issues concerning madrasas and modernity, particularly with regard to issues such as patriarchy and child rights, some of which were raised by the Sachar Committee, to have any state intervention inspired by Islamophobic views will only help deepen majoritarianism.

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