Daily Current Affairs 24.08.2020 (Food insecurity, Chinese Companies)

Daily Current Affairs 24.08.2020 (Food insecurity, Chinese Companies)

1. More evidence of India’s food insecurity

The SOFI report and lockdown distress have renewed focus on what is also the world’s largest food insecure population

Data from the latest edition of the State of Food Security and Nutrition in the World (SOFI) report show that India retains the dubious distinction of being the country with the largest population of food insecure people. Estimates presented in the report which was released by several United Nations organisations show that the prevalence of food insecurity increased by 3.8 percentage points in India between 2014 and 2019, the first term of the Narendra Modi government. By 2019, 6.2 crore more people were living with food insecurity than the number in 2014.

Authoritative indicators

  • The SOFI report, which is published annually, presents the most authoritative evaluation of hunger and food insecurity in the world. Since 2017, SOFI presents two key measures of food insecurity: the conventional measure called the Prevalence of Undernourishment (PoU) and a new measure called the Prevalence of Moderate and Severe Food Insecurity (PMSFI).
  • Both of these are globally-accepted indicators of progress towards the Sustainable Development Goals (SDG) Target 2.1 to end hunger and food insecurity. While PoU is focused on estimating the proportion of population facing chronic deficiency of calories, the PMSFI is a more comprehensive measure of the lack of access to adequate and nutritious food. Estimates of PoU are based on food balance sheets and national surveys of consumption. Given that consumption surveys are done infrequently in most countries, these estimates are often based on outdated data and are revised when better data become available.
  • In contrast, the PMSFI is based on annual surveys that collect information on experiences of food insecurity (such as food shortages, skipping meals, and changing diet diversity because of a lack of resources). The PMSFI uses the Food Insecurity Experience Scale (FIES), a gold standard in food security measurement developed by the Food and Agriculture Organization of the United Nations (FAO), for estimating globally-comparable prevalence rates. Given the solid conceptual foundations of this methodology and the ease of collection of data, FIES and the PMFSI have been widely adopted by countries across the world.
  • The FAO commissions Gallup to include FIES questions in the Gallup®World Poll (FAO-GWP) survey conducted in more than 140 countries across the world. Many countries have also started conducting their own FIES surveys. Unlike most other countries, the government of India neither conducts official FIES surveys nor accepts estimates based on FAO-GWP surveys. Although FAO-GWP surveys are conducted in India, India is among the few countries that do not allow publication of estimates based on these surveys. Consequently, as in the past years, estimates of PMSFI for India are not published in SOFI.

Country data

  • However, interestingly, these estimates can be derived for India from the information provided in the report. The report provides three-year average estimates of the number of food insecure people for South Asia as a whole and for South Asia (excluding India). By taking a difference between the two, one can derive the estimates for India.
  • These estimates show that while 27.8% of India’s population suffered from moderate or severe food insecurity in 2014-16, the proportion rose to 31.6% in 2017-19. The number of food insecure people grew from 42.65 crore in 2014-16 to 48.86 crore in 2017-19. India accounted for 22% of the global burden of food insecurity, the highest for any country, in 2017-19. It is also noteworthy that while the PMSFI increased in India by 3.7 percentage points during this period, it fell by 0.5 percentage points in the rest of South Asia.
  • India has not released the latest National Sample Survey Office (NSSO) consumption expenditure survey data for 2017-18. As a result, conventional measures of poverty and food consumption are not available for recent years. Lack of availability of data from this consumption survey also has implications for the FAO’s PoU estimates for India.
  • Because of a lack of regular availability of consumption survey data from most countries, the FAO uses supply-wise data on per capita food availability to measure changes in average per capita calorie intake. While this is a reasonable approach, it has become untenable for India because of a large and growing disparity between the supply-side data and data from the consumption surveys. Not only do the supply-side data show a much higher level of per capita availability of food than the amount of food that is captured to have been consumed in the surveys, even the direction of change between the two does not seem to be consistent.
  • While the per capita dietary energy supply in India increased by 3.8% between 2011-13 and 2015-17, the consumption survey data that became available through a media leak showed that the average consumption expenditure (covering food and other expenses) fell by 3.7% between 2011-12 and 2017-18. On the whole, withholding of consumption survey data by the government has meant that SOFI continues to use outdated data for variability of food intake, making PoU estimates for India untenable.
  • Given this, estimates of the PMSFI for India have become particularly valuable.

Causes of suffering

  • The significant rise in food insecurity, as shown by these data, is a clear manifestation of the overall economic distress during this period marked by a deepening agrarian crisis, falling investments across sectors and shrinking employment opportunities. The latest PLFS data have shown that the unemployment rates in the recent years have been higher than in the last four decades. It is widely believed that demonetisation and introduction of the Goods and Services Tax were two prime causes of economic distress during this period.
  • A sudden imposition of an unprecedented and prolonged lockdown in the wake of the COVID-19 pandemic has brought renewed focus on the problems of hunger and food insecurity. With a sudden loss of livelihoods, a vast majority of India’s poor are faced with increased food insecurity, hunger and starvation. A number of starvation deaths have also been reported in the media.
  • Given this, these estimates of the PMSFI provide an important baseline estimate for the situation before the COVID-19 pandemic. It is critical for India to conduct a national survey on food insecurity to assess the impact of the COVID-19 pandemic on food security of different sections of the population.

2. Not possible to fully block Chinese firms: officials

They say many companies have linkages of some sort with military

  • Despite the uproar against the use of Chinese products amid the border stand-off in eastern Ladakh and the government’s decision to ban several apps, government officials say it is not possible to fully decouple the trend due to the substantial investments by Chinese companies in India.
  • Intelligence assessments have cautioned on the direct and indirect links many companies have with the People’s Liberation Army (PLA).
  • “While some measures can be taken, several Chinese investments are quite substantive. It is not possible to fully block them. A worrisome factor is that these Chinese companies have linkages of some sort with the Chinese military,” one government official said on condition of anonymity.
  • In June 2017, China passed a national intelligence law, which gave Beijing powers over Chinese companies’ overseas investments as well. As per the Annual report of the U.S. Secretary of Defence to the Congress on the “Military and Security Developments involving the People’s Republic of China 2019”, this law requires Chinese companies, such as Huawei, ZTE and TikTok to support, provide assistance, and cooperate in China’s national intelligence work, wherever they operate.
  • Article 7 of the law states, “Any organisation or citizen shall support, assist and cooperate with the state intelligence work in accordance with the law… The state protects individuals and organisations that support, assist and cooperate with national intelligence work.”
  • It has direct security implications for all overseas Foreign Direct Investment from China, a second official said.
  • Intelligence assessments have flagged some large Chinese companies with major presence in India having direct or indirect links with the PLA. They include Xindia Steels Limited, China Electronics Technology Group Corporation (CETC), Huawei, Alibaba and Tencent.
  • For instance, Xindia Steels Limited is considered one of the largest joint ventures between India and China and has commissioned a 0.8 mtpa iron ore pelletisation facility in Koppal district of Karnataka at a cost of over ₹250 crore. Its main investor is Xinxing Cathay International Group Co. Ltd. which, as per its website, is “reorganized, reconstructed and unhooked from previous production department and subordinate enterprises and institutions of the General Logistics Department of the PLA”.
  • Huawei, which has generated global concern over its 5G services, was founded by Ren Zhengfei, a former deputy director of the PLA’s engineering corps in 1987. A government decision on its bid for 5G services in India is expected shortly.

Multi-million funding

  • CETC in 2018 announced $46 million investment in a 200 MW photo-voltaic manufacturing unit in Andhra Pradesh. Officials pointed out that CETC is China’s leading military electronics manufacturer, and also makes Hikvision CCTV cameras.
  • It has been implicated by the U.S. Department of Justice in at least three cases of illegal exports and many employees have been convicted for military espionage, the second official stated.
  • CETC also provides technology used for human rights abuses in Xinjiang, where around one million are held in re-education camps, assessments noted.
  • Another aspect that raised red flags is Chinese investments in Indian technology start-ups. The U.S.-China Economic and Security Review Commission, a U.S. Congressional commission, said in its 2019 report, “The Chinese government’s military-civil fusion policy aims to spur innovation and economic growth through an array of policies and other government-supported mechanisms, including Venture Capital VC) funds, while leveraging the fruits of civilian innovation for China’s defence sector.”
  • This raises a question mark on Chinese VC investments in India, including big names like Alibaba and Tencent, the second official said.
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