IASbaba's Daily Current Affairs Analysis, IASbaba's Daily Current Affairs Dec 2016, International, UPSC

IASbaba’s Daily Current Affairs – 31st December 2016

ECONOMY

TOPIC:

General Studies 3

Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Inclusive growth and issues arising from it.

General Studies 1

Effects of globalization on Indian society

The leadership priorities for 2017

True leadership in a complex, uncertain and anxious world requires leaders to navigate with both a radar system and a compass. It means that the leaders need to provide a vision and a way forward so that people can get a better future.
It has been demonstrated in 2016 that leaders must be responsive to the demands of the people who have entrusted them to lead.
The leaders have to be receptive to the signals that are constantly arriving from an ever-changing landscape and they should be willing to make necessary adjustments. In these efforts, they should not deviate from their truth of having a strong vision based on authentic values.

Responsive and Responsible Leadership

The World Economic Forum has organised their annual meeting on the theme of ‘Responsive and Responsible Leadership’.
Here, the leaders in the government, business and civil society chart a course for 2017, where five key challenges will warrant their attention.

Fourth Industrial Revolution

The new industrial revolution is evident with new technology redefining entire industries and creating new ones from zero.
The ground-breaking advances in artificial intelligence, robotics, the Internet of Things, self-driving vehicles, 3D printing, nanotechnology, biotechnology, and quantum computing is making inroads into new revolutionary industrial development.
2016 has shown what their potential is and 2017 will eventually will be witnessing science fiction becoming a reality.
But, with such development comes the drawback. The fourth industrial revolutions threatens to divide the world between the world that embraces the technology and those who don’t for any reason. This division threatens the well-being of the society.

Global governance system

Today’s economic, technological, environmental and social challenges can be well addressed through global public-private collaboration.
For this, the leaders have to build a dynamic, inclusive multi-stakeholder global-governance system.
The current framework for international cooperation is based on the post-war era, when nation-states were the key actors. But now, the private players are equally playing a key role in defining the global market as well as governance system.
The geopolitical shifts have made the world multi-polar as new global players bring new ideas about how to shape national systems and the international order.
This has made the existing order more fragile as the countries interact on the basis of shared interests, rather than shared values. Hence, the extent to which they will be able to cooperate will be limited.
Moreover, non-state actors are now capable of disrupting national and global systems, not least through cyber attacks.
Thus, the countries cannot isolate themselves from the global occurrences. The only way forward is to make sure that globalization is benefiting everyone.

Restoring growth

The global leaders have a crucial challenge to restore global economic growth.
Permanently diminished growth translates into permanently lower living standards: with 5% annual growth, it takes just 14 years to double a country’s gross domestic product (GDP); with 3% growth, it takes 24 years.
If the current stagnation persists, the next two generations will have a difficult life than the predecessors.
The global population is forecasted to reach 9.7 billion by 2050, from 7.4 billion today. Even without today’s technologically driven structural unemployment, the global economy would have to create billions of jobs to accommodate a growing population.
Thus, leaders have to chart out the roadmap to create ways to accommodate social inclusion and youth unemployment which has become critical global and national issue.

Reforming market capitalism

There is a need to reform market capitalism and restore the compact business and society.
Today, free markets and globalisation have improved living standards and lifted people out of poverty since few decades.
However, this has structural flaws of having myopic short-termism, increasing wealth inequality and cronyism. This has fuelled severe political backlashes.
Thus, there is a need to create permanent structures for balancing economic incentives with social well-being.

Identity formation

There has been crisis in identity formation that has resulted from erosion of traditional norms over past two decades.
Many people are searching institutions who share their distinct beliefs and thus furnish a sense of purpose and continuity. This is the result of globalisation making world small but a complex place.
Identity formation is not a rational process; it is deeply emotional and often characterized by high levels of anxiety, dissatisfaction, and anger.
Similarly, politics is also driven by emotion where the leaders don’t attract votes by addressing needs or presenting long-term visions, but rather by offering a sense of belonging, nostalgia for simpler times or a return to national roots.
This was evident from Brexit and US’s Presidential election result.

Conclusion

In 2016, populists made gains by fostering reactionary and extreme beliefs. However, the responsible leaders must recognize people’s fears and anger as legitimate, while providing inspiration and constructive plans for building a better future.

Just by looking at the surroundings, there is overwhelming presence of pessimism, negativity, and cynicism. But not all is lost as there is an opportunity to lift millions more people out of poverty so that they can lead healthier and more meaningful lives. The narrow interest shoul be replaced by interests of the global society.

The leaders have the duty to work together toward a greener, more inclusive, and peaceful world. Success will also not be dependent on external events during the year but the choices made by the leaders.

Hence, responsive and responsible leaders are required to address the collective challenges and restore people’s trust in institutions and in one another.

Connecting the dots:

Critically evaluate the global economic challenges recognised in recent years.
Leadership plays a critical role in steering the global ship. But the present leadership don’t emanate positive environment for the same. Analyse the role of leaders in maintaining the global collectively.

INTERNATIONAL RELATIONS

TOPIC: General Studies 2

India and its neighbourhood- relations.

Effect of policies and politics of developed and developing countries on India’s interests, Indian diaspora.

India and China – Need for Convergence rather than Confrontation

Introduction

In 1950, India was the first non-socialist nation to establish diplomatic relations with China. In the last six to seven decades, the relationship has seen a lot of ups and downs. India-China border conflict in 1962 was a major setback to the relationship. Later, during the reign of Prime Minister Rajiv Gandhi and P V Narsimha Rao the relationship did experience some stability and substance. However, in this multipolar world and complex geopolitics, both nations have once again come to face each other at times. The attitude has been confrontationist though the need for convergence is supreme.

Western Influence and Partnerships

India’s approach to China has been somewhat influenced by the western prejudices.
India is trying to get closer to nations in the Pacific such as Japan and Vietnam to forge an alliance with nations which have traditionally been on the opposite side of China.
There is also a lot of focus on increasing the bonding with United States of America (USA). This should be done very cautiously considering the emergence of Donald Trump as the president and the egocentricism displayed by USA in the past.

These actions seem to be a safeguard against the rising Chinese influence and supremacy.

India’s Avoidable Actions

India is not only boosting its defence might against China but also trying to challenge Chinese military strength in the neighbourhood.
India is incurring a huge expenditure on matching China’s militarily.
Geopolitically as well India is trying to compete with China in terms of infrastructure creation which China is carrying out under the One Belt One Road (OBOR) initiative.

These steps by India are not only unaffordable and counterproductive but will also lead to reinforcement of rivalry between the two nations. India needs to understand that China is financially way stronger. As a result, China announced a package of $24 billion in response to India’s package of $2 billion for Bangladesh.

Impact of the Competition

One of the most important impacts of this approach towards China has been the increasing bonding between China and Pakistan. India cannot afford to have disputes along two of its most critical borders, especially when the already existing dispute is here to stay.
India is also incurring a lot of expenditure in terms of military infrastructure and infrastructure creation in the continent. This can have a huge impact on the twin deficit of the country as well.
China is making transformational investment in the region, building roads, ports and railroads across Asia and connecting them with Europe as well. The first freight train to Europe was flagged off on its 9,800-km journey to Hamburg in 2015 and another arrived in Tehran earlier this year through Kazakhstan and Turkmenistan from Zhejiang province.
With the help of this growing connectivity and infrastructure, China will be at our doorstep in the East, the West and the North.

Beneficial Partnership

China has been one of the fastest growing nations in the world. It has all by itself challenged the supremacy and dominance of USA in all areas. Therefore, India can benefit from a congenial relationship with China in many ways.

China’s universities and research establishments are among the best in the world. India could use this in various development initiatives and the field of education as well.
Industrially, China is not only a leader in electronics but has also surpassed South Korea and Japan as the world’s leading shipbuilder.
In terms of science and technology and medicine, China is the world leader in DNA sequencing and is placed second to the USA in nano technology.

What India needs to do?

To wipe off historic animosity, accept that the 1962 border war with China was a fault of both the nations.
Just like China has arrived at border settlements with Russia and Vietnam, India should also seal a similar deal with China. India needs to accept geopolitical reality and show willingness to settle the issue.
Use the growing friendship between China and Pakistan to strike peace with Pakistan and accelerate development and stability in the neighbourhood.
India should not see the OBOR initiative as China’s strategy to counter India’s growth. It should in fact consider this as an opportunity, both economic and strategic, to partner with China and make the best use of the infrastructure also.
Both the nations are located in the Himalayan vicinity and are highly vulnerable to impact of climate change. India should partner with China to not only tackle the impact in our neighbourhood but also forge a stronger partnership at global fora for climate change.

Conclusion

It is high time that India rethinks on the relationship with China before it gets too late. India needs to move away from the early 20th century perceptions, conjured grievances and western influences to forge a mutually beneficial partnership with our largest neighbour and most important trading partner.

India needs to strengthen its expertise in understanding China and its relationship with China and not continue to see it through western eyes. Such an attitude will ensure that the 21st century witnesses an Indian-Asian growth rather than just Chinese growth. Together both these nations have the potential to define this century as the Asian Century.

Connecting the dots

Critically analyse India’s foreign policy approach towards China. Do you agree that both that nations can go ahead and shape an Asian Century? If yes, elaborate on the reforms required in the foreign policy of both the nations.

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