Editorials/Opinions Analyses For UPSC 6 October 2021

Contents

1. Plethora of International Groupings: ‘Alphabet soup’
2. Crackdown in China, hope in India

Plethora of International Groupings: ‘Alphabet soup’

Context:

At present, there are more than 100 groupings from the EU to ASEAN – hence, there are a lot of international, bilateral, multilateral groupings which either became dormant or lose their relevance in today’s scenario.

The AUKUS – the trilateral security pact between Australia, the United Kingdom and the United States has revealed the hazards of group diplomacy.

Relevance:

GS-II: International Relations (Important International Groupings and Institutions, Foreign Policies and Agreements affecting India’s Interests, India’s Foreign Policy, India and its Neighbours)

Dimensions of the Article:

1. About the concern regarding multiple groupings
2. Example of Issues with Groupings 1: BRICS
3. Example of Issues with Groupings 2: BIMSTEC
4. Example of Issues with Groupings 3: SAARC
5. Example of Issues with Groupings 4: SCO
6. Example of Issues with Groupings 5: IORA
7. India and issue with AUKUS
8. Conclusion

About the concern regarding multiple groupings

• At present, the world has a whole spectrum of groups from the European Union at one end to the African Union at the other with varying shades of cooperation. There is a lack of ideological homogeneity and questionable outcomes with many of these organizations.
• The time, the money and the energy spent on convening not only summits but also ministerial, official and expert level meetings do not seem justified.
• Finding the agenda for these organisations and groups is another difficult exercise. E.g., The growing agenda of the United Nations includes everything.
• Bureaucracies, with United Nations salaries and perks, grow around these bodies, developing vested interests to perpetuate them.
• Groupings which do not have sunset clauses (a measure within a regulation that causes for the regulation to cease to have effect after a specific date unless extended) continue even after they diminish in importance.

Example of Issues with Groupings 1: BRICS

About BRICS:

• BRICS is the international grouping of Brazil, Russia, India, China and South Africa.
• This was set up as a move towards greater multi­polarity; hence the spread across three continents and both hemispheres.
• In terms of GDP, China occupies the second position; India the fifth; Brazil the ninth; Russia the 11th; and South Africa the 35th.
• BRICS does not exist in form of an organization, but it is an annual summit between the supreme leaders of five nations.
• The Chairmanship of the forum is rotated annually among the members, in accordance with the acronym B-R-I-C-S.
• The BRICS seeks to deepen, broaden and intensify cooperation within the grouping and among the individual countries for more sustainable, equitable and mutually beneficial development.
• BRICS takes into consideration each member’s growth, development and poverty objectives to ensure relations are built on the respective country’s economic strengths and to avoid competition where possible.
• BRICS is emerging as a new and promising political-diplomatic entity with diverse objectives, far beyond the original objective of reforming global financial institutions.

Issues with BRICS

• At the time of formation of BRICS, it was feared that, with the presence of China and Russia in it, it would be construed as an anti-American group.
• China quickly assumed the leadership of BRICS and tried to seek changes in the international economic system by establishing a bank, with the possibility of credit for its members. The result of this development was undermining the relevance of another, less ambitious, group of India, Brazil and South Africa (IBSA), which had several common interests.
• BRICS is losing credibility on the world forum. Goldman Sachs wound up its BRIC fund that had lost almost 88% of its assets since 2010.
• BRICS does not have the ‘strategic vision’ to deal with ‘global matters’ on its own. For this, it relies on other international organisations, like throwing its support behind the G20 when the latter came together to deal with the 2008 financial crisis.
• If the US-China rivalry intensifies, the already complex dynamics between India and China, India’s balancing act with the US, the growing Russia-China linkages, Russia-US tensions — raise the prospects of an ‘internal split’ in BRICS.
• In the recent BRICS summit in 2021, although the countries were able to reach conclusion on the issue of Afghanistan, it was only with different conditions. Russia and China were more sympathetic towards Afghanistan than the other BRICS nations.

Example of Issues with Groupings 2: BIMSTEC

About BIMSTEC

• The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) is an international organisation of seven nations of South Asia and Southeast Asia:
  1. Bangladesh
  2. Bhutan
  3. India
  4. Nepal
  5. Sri Lanka
  6. Myanmar (South-east Asia)
  7. Thailand (South-east Asia)

• Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka, and Thailand are the member states dependent on the Bay of Bengal.
• Its members lie in the littoral and adjacent areas of the Bay of Bengal constituting a contiguous regional unity. BIMSTEC not only connects South and Southeast Asia, but also the ecologies of the Great Himalayas and the Bay of Bengal.
• BIMSTEC acts as a platform for intra-regional cooperation between SAARC and ASEAN members.
• Fourteen priority sectors of cooperation have been identified and several BIMSTEC centres have been established to focus on those sectors.
• The permanent secretariat of the BIMSTEC is in Dhaka, Bangladesh.

Issues with BIMSTEC

• BIMSTEC has issues with internal conflicts as Bangladesh is facing one of the worst refugee crises of Rohingyas from Myanmar who are fleeing prosecution in the state of Rakhine in Myanmar. There is also a border conflict between Myanmar and Thailand.
• Uncertainties over SAARC hovers, complicating matters. Both Kathmandu and Colombo want the SAARC summit revived, even as they cooperate within BIMSTEC, with diluted zeal.
• BIMSTEC planned to hold summits every two years, ministerial meetings every year, but only four summits have taken place in 20 years up to 2018.
• The formation of another sub-regional initiative, the Bangladesh-China-India-Myanmar (BCIM) Forum, with the proactive membership of China, has created more doubts about the exclusive potential of BIMSTEC.

Example of Issues with Groupings 3: SAARC

About SAARC

• The South Asian Association for Regional Cooperation (SAARC) is the regional intergovernmental organization and geopolitical union of states in South Asia
• Its member states are Afghanistan, Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.
• SAARC comprises 3% of the world’s area, 21% of the world’s population and 3.8% (US$2.9 trillion) of the global economy, as of 2015.
• SAARC was founded in Dhaka on 8 December 1985.
• Its secretariat is based in Kathmandu, Nepal.
• The organization promotes development of economic and regional integration.
• It launched the South Asian Free Trade Area in 2006.
• SAARC maintains permanent diplomatic relations at the United Nations as an observer and has developed links with multilateral entities, including the European Union.

Political Issues in SAARC

• Lasting peace and prosperity in South Asia have been elusive because of the various ongoing conflicts in the region.
• Political dialogue is often conducted on the margins of SAARC meetings which have refrained from interfering in the internal matters of its member states.
• During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism.
• The 19th SAARC summit scheduled to be held in Pakistan was called off as India, Bangladesh, Bhutan and Afghanistan decided to boycott it. It was for the first time that four countries boycotted a SAARC summit, leading to its cancellation.

India’s issues with SAARC

• In the commencement itself, India joined SAARC with various conditions like the exclusion of bilateral issues, decision-making by voting, and holding of meetings without all members being present etc., because it faced the possibility of its neighbours ganging up and using the SAARC institutions to pressure India on various regional issues.
• SAARC’s future hangs in thread as Pakistan’s recalcitrance to act on terrorism has been a deal breaker. Also, despite the imperative for cooperation in vital fields, SAARC became an arena for India bashing, particularly by Pakistan.
• Connectivity with Afghanistan has been hampered due to lack of Pakistan’s cordial support.
• Air freight corridor cannot be sustainable in long term and also it will be unable to achieve the full potential of Indo- Afghan trade potentials.
• Chabahar port might fall prey to US-Iran escalations.
• Regular meetings need to happen, if this group has to become a driver in global economic setup.

Example of Issues with Groupings 4: SCO

About SCO

• The Shanghai Cooperation Organisation (SCO) is a Eurasian political, economic, and security alliance which was formed in 2001 in Shanghai, China.
• The SCO is the largest regional organisation in the world in terms of geographical coverage and population, covering three-fifths of the Eurasian continent and nearly half of the human population.
• The leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan were involved in the formation. (Prior to the creation of SCO in 2001, Kazakhstan, China, Kyrgyzstan, Russia and Tajikistan were members of the Shanghai Five.)
• India and Pakistan joined SCO as full members in 2017. (India was made an observer at the SCO in 2005 and has generally participated in the ministerial-level meetings of the grouping which focus mainly on security and economic cooperation in the Eurasian region.)
• Iran has been accepted as the ninth full member of the organization in the 21st Summit in 2021.
• The Chairmanship of the SCO is by rotation for a year by Member States.

Issues with SCO (Esp. India’s Issues)

• SCO started as a friendly group of China, but with the inclusion of India, Pakistan, and Iran it becomes the diverse one and struggled to reach a consensus.
• India has expressed its strict reservations against China-Pakistan Economic Corridor (CPEC) and has not accepted the Belt and Road initiative (BRI) of China. Since, all the group members except India have endorsed BRI, it makes India standalone on its position. 
• The growing closeness of the founder members of SCO Russia and China is a concern for India. As they are the dominant powers in the groupings, they limit India’s ability to assert itself.
• The deliberate raising of bilateral issues into the SCO is a blatant violation of principles and norms of the charter of the grouping – Hence, India and Pakistan rivalry makes it difficult in adopting a common stand.
• India’s definition of terrorism is different from the definition of SCO under Regional Anti-Terror Structure (RATS). India points to state-sponsored cross border terrorism, but for SCO, terrorism coincides with regime destabilization.

Example of Issues with Groupings 5: IORA

About Indian Ocean Rim Association (IORA)

• The Indian Ocean Rim Association was set up with the objective of strengthening regional cooperation and sustainable development within the Indian Ocean Region.
• Setup in 1997, it Consists of 22 coastal states bordering the Indian Ocean.
• The IORA is a regional forum, tripartite in nature, bringing together representatives of Government, Business and Academia, for promoting co-operation and closer interaction among them.
• It is based on the principles of Open Regionalism for strengthening Economic Cooperationparticularly on Trade Facilitation and Investment, Promotion as well as Social Development of the region.
• Indian Ocean Rim Association (IORA) has identified six priority areas, namely:
  • maritime security,
  • trade and investment facilitation,
  • fisheries management,
  • disaster risk reduction,
  • academic and scientific cooperation and
  • tourism promotion and cultural exchanges.

Issue:

IORA drags on without any significant progress.

India and issue with AUKUS

About AUKUS

• A new trilateral security partnership for the Indo-Pacific, between Australia, the U.K. and the U.S. (AUKUS) has been announced.
• An important aspect of this partnership would involve a trilateral 18-month effort to help Australia acquire nuclear-powered submarines.
• The partnership would also involve a new architecture of meetings and engagements between the three countries and also cooperation across emerging technologies like AI, quantum technologies and undersea capabilities.
• This trilateral grouping would be security-focused, implying that it would be different from — but complementary to — arrangements such as the Quad.
• The U.S. has announced that the new partnership is aimed at advancing strategic interests and upholding the international rules-based order, and promoting peace and stability in the Indo-Pacific.

Issue

• The Quad had not gained much prominence or years till the Chinese threat became real in 2020.
• India’s reluctance to strengthen QUAD has led to the USA joining hands with Australia and creating an AUKUS alliance.
• However, the reaction of France to AUKUS has raised the issue of loyalty among allies even though AUKUS has made it clear that it was meant only to enable the U.S. to transfer nuclear-propelled submarine technology to Australia.
• Even though India was not interested in Wassenaar Arrangement and the Australia Group, it received membership in them. On the other hand, the other active groups like Asia-Pacific Economic Cooperation (APEC) and Nuclear Suppliers Group (NSG) did not admit India as a member, despite its various efforts.

Conclusion

• The proliferation of alliances and groups will be a matter of close scrutiny by many countries in light of the new trend initiated by the U.S.
• Collective bargaining is the strength of group diplomacy but it cannot be effective without commitment to a common cause.
• India should also reconsider the plethora of groups it is in and rationalise them.

-Source: The Hindu

Crackdown in China, hope in India

Context:

In 2020, China stopped Ant Group’s blockbuster initial public offering and since then high-profile crackdowns on Chinese tech companies are increasingly common.

Relevance:

GS-II:     International Relations (India’s Neighbours and Foreign policies affecting India’s Interests), GS-III: Indian Economy (Growth and Development of Indian Economy)

Dimensions of the Article:

1. China’s crackdown on tech industry
2. Why China is tightening its grip on the Chinese private sector?
3. What has been the impact on India’s Startup market?
4. How India can benefit from China’s crackdown on the tech industry?

China’s crackdown on tech industry

• China has foisted sweeping regulations, antitrust and anti-monopoly lawsuits, cyber security probes, and algorithm controls on the entire tech segment, ranging from e-commerce websites, search engines, ride sharing and food delivery apps to e-learning portals.
• This decision to crack down on the tech industry, wiping out $1.5 trillion in market value.
• The crackdown began with the abrupt suspension of the much-anticipated initial public offering (IPO) of Ant Group.
• China’s regulators have also stopped the ride-hailing company, Didi Chuxing, from accepting new users, as soon as it went public on the New York Stock Exchange.
• There have been sweeping industry-wide changes, from anti-monopoly legislation to new rules governing data collection and use. All of this has investors spooked.

Why China is tightening its grip on the Chinese private sector?

• Chinese Capitalism: To ensure that compared to the West, “capital cannot dominate the country” and it “must not influence politics” in China.
• The economic and political rise of Chinese tech superpowers: The crackdown on digital economy firms now appears to be a case of China’s tech titans becoming too powerful. Such as e-commerce giant Alibaba and software giant Tencent.
• China’s policy of making education inclusive: Beijing has been especially hard on China’s $100 billion edtech sector. The CPC is determined to make education more affordable and inclusive. Online tutoring firms are no longer allowed to make a profit, list overseas or receive foreign investments.
• Issue of Politics: Xi wants to continue as the party supremo for another term and is clearing the road to power off his critics.

What has been the impact on India’s Startup market?

• Increasing Global investments: At least 104 of the 168 global investors in Indian fintechs this year were from the US and 40 were from Asia. In the past three years, US investor participation in Indian fintech startups went up by nearly 60%, Asian investor participation rose by 53%.
• Increasing Investments in Indian startups: India in July 2021 surpassed China in monthly venture capital deals for the first time since 2013. Over two dozen new Indian unicorns were created this year.
• Increasing Investments in India’s edtech sector: In edtech, Indian startups clocked over $2 billion in 2020 compared to $553 million in 2019. For instance, since last year, Byju’s has raised more than any other edtech firm in India. Following their path are firms such as Unacademy Group, an edtech firm that recently raised $440 million.

How India can benefit from China’s crackdown on the tech industry?

• Due to China’s crackdown, for the first time since 2013, the value of venture deals in India surpassed that of China.
• Converging factors in India: If this keeps up, India will experience a veritable blessing of unicorns, thanks not only to the fact that the money fleeing China needs refuge, but to many converging forces within India itself.
• India is the world’s second largest digital market.
• The use of the United Payment Interface has made digital payments easier in a society that was — and still is — so tied to cash.
• The pandemic lockdowns have driven an unusually large proportion of that digital population to spend an unusually large amount of time and spend money online.
• This means that in a very short time, the need to serve this digital population has exploded.
• The Chinese crackdown could not have come at a more opportune time.
• Many startups are in a hurry to capitalise on the boom with many investors looking to capitalise them.

-Source: The Hindu