Editorials/Opinions Analysis For UPSC 25 February 2022

Editorials/Opinions Analysis For UPSC 25 February 2022  

Contents:

1. Shaking up Europe’s security architecture
2. Crude threat

Shaking up Europe’s security architecture

Context:

Russia has commenced military action on Ukraine.  Russian air strikes hit military installations across the country and ordering ground troops across the border in fighting left dozens of people dead.

Relevance:

 GS-II: Bilateral Groupings & Agreements, Effect of Policies & Politics of Countries on India’s Interests

Dimensions of the Article:

1. U.S and Russia talks
2. North Atlantic Treaty Organization (NATO
3. Divisions with NATO
4. Need for sustainable security
5. Implications on India
6. Way Forward

U.S and Russia talks:

• The military action of Russia is at the heart of the instability in the post-Cold War security order.
• The U.S President Biden and Russia’s President Vladmir Putin met in June last year was a significant step ahead.
• United States’ Objective: This act of U.S President signalled a U.S. geopolitical rebalancing, seeking a peace with Russia and disengagement from conflicts in Europe and West Asia, to enable a sharper U.S. focus on domestic challenges and the external challenge from its principal strategic adversary, China.
• Russia Objective: Russia saw this opportunity to Russia’s economy and expand its freedom of political action globally.
• Russia’s demands: Russia wanted this engagement on equal terms that can bring in geopolitical rebalancing.
  • Securing its territorial integrity and constraining external influence, especially the North Atlantic Treaty Organization (NATO) and U.S policies was its foremost demands.

North Atlantic Treaty Organization (NATO):

• NATO was formed originally with an aim to fee the world against communist expansion and an existential military threat — dissolved with the collapse of communism and the Warsaw Pact.
• However, today composition of NATO includes members reflecting the uneven economic development and a diversity of political traditions and historical consciousness.
• There is no ideology and threat perceptions vary, depending on geographical location and historical experience.
• The heterogeneous composition reflects diversity of interests.
• NATO’s Expansion:
  • U.S: U.S’s sole aim was to expand NATO, as a politico-military alliance, even after the dissolution of the Soviet Union and the Warsaw Pact.
    • It aimed to temper European ambitions for strategic autonomy from the sole superpower and to counter Russia’s resurgence.
  • Russia: Russia repeatedly expressed its concerns on NATO’s expansion and as the expansion violated promises made prior to the breakup of the Soviet Union.
    • Ukraine joining NATO would pose a security threat to Russia
• Limitation of the United States:
  • Given the present composition of NATO, the American leadership has normally succeeded in papering over differences to some extent.
  • However, the current crisis in Ukraine has highlighted the divisions and exposed the limitations of the U.S.’s ability to bridge them.

Divisions with NATO:

• U.S, the country that tried to bridge the divisions within NATO is in fact responsible for bringing in these divisions.
• U.S in 2008, pressurised NATO 2008 to recognise Ukraine’s membership aspirations and its encouragement for a change of government in Kyiv in 2014.
• This provoked Russian annexation of Crimea.

Minsk Accords:

• The armed separatist movement that emerged as a consequence in eastern Ukraine (Donbas) led to the Minsk accords of 2014-15.
  • The accord provided for a special status for this region within Ukraine.
  • Ukraine was opposed  to granting special status to the region.
  • U.S. has supported the efforts of Ukraine to reinterpret the accords to its advantage. Though many European countries supported this, France and Germany — which brokered these agreements — have periodically tried to progress implementation, in the effort to break the impasse and resume normal engagement with Russia, which serves their economic interests.

Energy Security:

• U.S.’s “geopolitical” argument against Nord Stream 2 is aided by its commercial interest in exporting LNG to Europe.
  • It has also reinforced legislation for sanctions against companies building gas pipelines from Russia
• Nord Stream 2 (NS2) Project:
  • For Germany, the NS2 Russia-Germany gas pipeline is the cheapest source of gas for its industry.
  • However, other sees this as a geopolitical project, increasing European dependence on Russian energy.
  • European countries that oppose NS2 are ramping up their LNG import infrastructure to increase imports from the U.S.
  • Ukraine fears the diminution of gas transit revenues, and also that if its importance for gas transit declines so will Europe’s support in its disputes with Russia.
• The NATO countries have promised to implement harsh sanctions against Russia. However, it is uncertain that how long the current crisis will keep them united.

Need for sustainable security:

• The current crisis is mainly attributed to the broken security architecture in Europe.
• A sustainable security order has to reflect current realities: it cannot be simply an outgrowth of the Cold War order, and it has to be driven from within.
• Europe must also accommodate Russia’s concerns through genuine negotiation to ensure stability in the long-term.
• This was rightly put forward by France’s President Emmanuel Macron.
  • He has called NATO “brain-dead” and said that Europe, as a “geopolitical power” should control its own destiny, regaining “military sovereignty” and re-opening a dialogue with Russia, managing the misgivings of post-Soviet countries.

Implication on India:

• As an immediate challenge that India has to face as a consequence of Russia’s actions is the pressure from one strategic partner to condemn the violation of international law, with that from another to understand its legitimate concerns.
• The U.S. Administration’s intensified engagement in Europe will inevitably dilute its focus on the Indo-Pacific, causing India to make some tactical calibration of actions in its neighbourhood.

Way Forward:

Europe must, reopen the question of how Russia fits into the European security order and also accommodate Russia’s concerns through genuine negotiation to ensure stability in the long-term.

-Source: The Hindu

Crude threat

Context:

The current Russia and Ukraine conflict led to an increase in crude oil prices, that touched multi-year highs, breaching the $100 per barrel mark. This poses a risk to India as it has the potential to disrupt supplies.

Relevance:

GS-III: Mobilization of Resources, Growth & Development, Effect of Policies & Politics of Countries on India’s Interests

Dimensions of the Article:

1. Disruptions in the Economy
2. India faces risk of Inflation
3. What are the impacts?
4. Way Forward

Disruptions in the Economy:

• The Russian-Ukraine conflict has sent shock waves across the globe.
• Estimates shows that Russia accounts for one in every 10 barrels of oil consumed globally.
• Russia is also the largest supplier of natural gas to Europe.
• Disruptions in these markets will have adverse consequences on the global economy, affecting both industries and households.
• This can adversely impact the global economy which is on the pace of recovery.

India faces risk of Inflation:

• India is one of the countries that could be significantly impact by this crisis.
• India imports around 80 per cent of its crude oil requirement, the risks stemming from higher prices are particularly challenging.
• The Economic Survey had projected growth for 2022-23 at 8-8.5 per cent assuming crude oil prices to range between $70-75 per barrel.
• Elevated crude prices will not only be inflationary but also pose risks on the fiscal front and the external sector.
• According to research by analysts at the RBI, a $10 increase in oil prices could raise inflation by 49 basis points, unless it is absorbed by the government.
• But while retail fuel prices in India are currently not in line with market prices, post the conclusion of the ongoing state elections, oil marketing companies are expected to hike pump prices.
• Additionally, as per Crisil, for the past three months, the OPEC countries have not been meeting their production targets “which has influenced prices”.
• This will significantly increase retail inflation and limits the degrees of freedom before the monetary policy committee.

What are the impacts?

• The government has an option to offset these price hike by lowering their fuel taxes , at both the central and state level.
• However, doing so will impact the revenues of centre and states.
• States are already facing considerable uncertainty over their revenues once the GST compensation cess, that ends in its current form in the coming financial year.
• Hence, this move pose more challenges to States in particular.
• Higher oil prices will also exert pressure on the current account deficit.
• The Indian currency will also come under pressure.

Way Forward:

• The current rise in oil prices, mainly attributed to the low production by OPEC countries is already causing Inflationary pressures.
• The Ukraine-Russian conflict has accelerated this. The longer this conflict goes on, the greater is the upside risk to the price of crude, and greater will be the costs to the Indian economy.

-Source: The Indian Express