Content:
- Four years on, Myanmar and its continuing nightmare
- A pragmatic picture
- A note for New Delhi on dealing with ‘Trumperica’
Four years on, Myanmar and its continuing nightmare
Context : Myanmar’s Crisis
- Political Instability: The 2021 military coup has led to prolonged internal conflict and political paralysis.
- State Fragmentation: Myanmar is divided into three zones: military-controlled central areas, resistance-held peripheral regions, and contested battle zones.
- Humanitarian Catastrophe: Over 3.3 million internally displaced people (IDPs); thousands killed and detained by the junta.
- Economic Collapse: Sanctions, lack of foreign investment, and ongoing conflict have crippled Myanmar’s economy.
Relevance: GS 2(International Relations)
Practice Question : Discuss the impact of the 2021 Myanmar coup on regional stability in Southeast Asia. How have key stakeholders, including ASEAN, India, and China, responded to the crisis? (250 words)
Armed Conflict and the Resistance
- Actors Involved: The military (Tatmadaw) vs. Ethnic Armed Organizations (EAOs) & People’s Defence Forces (PDFs).
- Role of National Unity Government (NUG): An unrecognized government coordinating resistance efforts.
- Militarization of Civilian Areas: Airstrikes, ground battles, and indiscriminate attacks on civilians continue.
- Tatmadaw’s Weakening Position: Reports indicate desertions, low morale, and heavy casualties among military personnel.
The Junta’s Election Plans and Their Legitimacy
- Military’s Proposed Elections: A strategy to regain control and legitimacy.
Challenges to Elections:
- Over 50% of the country outside military control.
- Ongoing violence makes free and fair elections impossible.
- Opposition arrests, detentions, and killings undermine democratic participation.
Global Response:
- UN officials call elections under military rule “delusional.”
- ASEAN urges dialogue instead of elections, but the junta dismisses it.
ASEAN’s Response and Limitations
- Five-Point Consensus (5PC): A framework for peace, but remains ineffective.
ASEAN’s Dilemma:
- Lack of enforcement mechanisms to implement peace plans.
- Members divided in their approach toward Myanmar’s crisis.
- Limited diplomatic influence over the junta.
Role of Regional Powers
- China’s Expanding Influence:
- Strongest foreign player in Myanmar post-coup.
- Military and economic aid provided to the junta.
- Infrastructure projects (e.g., China-Myanmar Economic Corridor) ensure Chinese leverage.
India’s Challenges:
- Myanmar’s border areas controlled by EAOs, raising security concerns.
- Balancing strategic interests while upholding democratic values.
Bangladesh’s Concerns:
- Refugee influx due to the Rohingya crisis exacerbates instability.
Thailand’s Limited Role:
- As an ASEAN member, it is positioned to mediate but lacks decisive influence.
Global Indifference and Myanmar’s Isolation
- Western Apathy: As global attention shifts to Ukraine and Gaza, Myanmar is sidelined.
Limited UN Intervention:
- UN has delegated responsibility to ASEAN, which has been ineffective.
- No direct action to curb military violence or enforce sanctions effectively.
Self-Reliance as the Only Option: Myanmar’s people are left to either continue resistance or negotiate a political solution internally.
A Pragmatic Picture
Context and Challenges
Signs of Slowing Growth:
- Post-pandemic recovery is tapering off, with major economic indicators showing stress.
- The Economic Survey 2024-25 projects real GDP growth between 6.3% and 6.8% in 2025-26, lower than the desired 8% growth for India’s 2047 goals.
Relevance: GS 3(Economy)
Practice Question : The Economic Survey 2024-25 emphasizes the need for deregulation and a pro-market approach to sustain India’s growth trajectory. Discuss the key challenges and policy measures required to achieve this goal. (250 words)
Declining Market Confidence:
- Stock markets are volatile, reflecting investor uncertainty.
- The rupee is depreciating faster than expected, raising import costs.
Weakening Growth Drivers:
- Public sector capital expenditure (capex) grew at 16% CAGR (2019-24) but is now losing momentum.
- Household investments grew by 12%, but corporate investments only at 6%, despite corporate tax cuts.
- Private investment remains sluggish, affecting job creation and industrial growth.
Global Headwinds Affecting India
US Trade and Taxation Policy Shift
- The new U.S. administration is reshaping global trade rules, which may impact India’s exports.
Retreat of Globalization:
- The Economic Survey warns that India must focus more on domestic demand while improving global competitiveness.
Policy Recommendations from Economic Survey
Need for Higher Growth:
- To become a developed nation by 2047, India needs sustained 8%+ growth.
- A “business-as-usual” approach could lead to stagnation.
Deregulation and Market Reforms:
- The government should reduce excessive regulation and micromanagement.
- Advocates for a “minimum necessary, maximum feasible” approach to regulation.
- Calls for a trust-based system between businesses, regulators, and citizens.
Ease of Doing Business & Economic Freedom:
- Emphasizes empowering small firms and creating a level-playing field.
- Suggests reducing market distortions from excessive government controls.
Contradictions in Current Government Policies
Return to Protectionist Policies:
- Recent policy decisions, such as import curbs and production-linked incentives (PLIs), resemble 1970s-style state intervention.
- Critics argue that these measures distort free-market efficiency.
Regulatory Uncertainty:
- Frequent policy changes and taxation experiments discourage private investment.
Budget Session – A Litmus Test
- The government’s response in the upcoming Budget will reveal:
- Whether it takes pro-market economic reforms seriously.
- If it shifts towards deregulation and business-friendly policies.
- Its commitment to long-term growth strategies vs. short-term populist measures.
A note for New Delhi on dealing with ‘Trumperica’
Context: Trump 2.0 and Its Implications for India
- Former U.S. President Donald Trump’s return to power has led to a rapid implementation of executive orders (EOs) and policy changes that impact the global order.
- These policies, aimed at strengthening the ‘America First’ agenda, will have far-reaching consequences for India, particularly in the domains of immigration, trade, artificial intelligence (AI), and geopolitics.
- As India recalibrates its approach towards the U.S., it must prepare for economic and diplomatic challenges.
Relevance: GS2 (International Relations)
Practice Question : Trump’s second term as U.S. President poses both challenges and opportunities for India. Discuss how his policies on immigration, trade, and technology could impact India’s economy and diplomacy. Suggest measures India should adopt to mitigate potential risks. (250 words)
Key Issues and Their Impact on India
Immigration Crackdown: Stricter Rules and Deportations
- Tighter border controls & enhanced vetting: Trump’s policies emphasize securing U.S. borders against illegal immigration.
- Deportation of undocumented migrants: About 7.25 lakh Indians are undocumented in the U.S., with 18,000 already in detention.
Potential economic losses for India:
- Remittances reduction: Deportations may cut foreign exchange inflow.
- Burden on domestic economy: Returnees will add to India’s unemployment crisis.
Diplomatic leverage through trade threats:
- Trump previously pressured Colombia into accepting deportations via tariff threats. India may face similar coercion.
H-1B visa restrictions & reduced birthright citizenship:
- India’s IT workforce may suffer due to restrictions on work visas and spousal employment.
- India’s STEM graduates will need alternative opportunities domestically.
Trade Protectionism: ‘America First’ and Tariff Wars
- Trump’s exit from multilateral agreements (e.g., Paris Climate Accord, WHO, OECD tax deal) signals a nationalist economic shift.
India’s vulnerability to U.S. trade actions:
- Generalized System of Preferences (GSP) withdrawal: Under Trump 1.0, India lost duty-free access to the U.S. market.
- Tariffs as an economic weapon: The U.S. has previously forced India to halt oil imports from Iran and Venezuela.
U.S.-China trade dynamics:
- Trump’s less aggressive stance on China than expected could reduce India’s advantage as a manufacturing alternative.
- Uncertainty over U.S.-China relations impacts foreign investments in India.
AI Disruptions: The ‘AI-Pocalypse’ and Its Threat to Indian IT Jobs
Trump’s AI initiatives:
- The $500 billion Stargate AI Infrastructure project could reduce reliance on foreign tech professionals.
- AI-driven automation will replace mid-level engineers, affecting India’s IT services sector.
India’s IT dominance at risk:
- IT-BPM contributes 55% to GDP and 40% to exports—a decline would be detrimental.
- AI advancements may reduce demand for Indian software engineers.
- Companies like Google & Meta already shifting to AI-generated code, threatening future migration prospects.
Geopolitical Challenges: Shifts in U.S. Foreign Policy
Trump’s mixed signals on China:
- Lower-than-expected tariffs (10% instead of 60%) suggest potential U.S.-China rapprochement.
- U.S. stance on Taiwan independence may impact India’s Indo-Pacific strategy.
Exit from climate & development funding:
- India may lose U.S. support for renewable energy & infrastructure projects.
- Cuts to USAID funding could affect India’s health & social welfare programs.
- Revival of QUAD? Despite uncertainties, QUAD engagement remains strong with Jaishankar’s meeting with U.S. Secretary of State Marco Rubio.
Conclusion: India’s Response Strategy
- Diversification of trade partners: Strengthening EU, ASEAN, and Middle Eastern economic ties.
- Strengthening domestic job markets: Investing in AI, automation, and STEM education.
