Editorial Analysis 27 July

INTERNATIONAL RELATIONS

CHINA AS BROKER OF PEACE: HOW COLD WAR 2.0 IS HEATING UP

Source: INDIAN EXPRESS

Introduction

• The ongoing global geopolitical dynamics, often referred to as Cold War 2.0, reflect the rising influence of China and its challenge to the existing international order dominated by the United States and its allies.

China's Increasing Global Role

Diplomatic Successes and Strategic Moves

Iran-Saudi Arabia Agreement (March 2023):

• China brokered a significant diplomatic breakthrough by facilitating reconciliation between Iran and Saudi Arabia, two long-standing rivals in the Middle East.
• This agreement, which restored diplomatic ties between the two nations, marked a notable success for Chinese diplomacy and highlighted China’s growing influence in regional affairs traditionally dominated by the US.

Palestinian Unity Initiative (2024):

• Following the Iran-Saudi Arabia agreement, China successfully convened a meeting in Beijing involving multiple Palestinian factions, including Hamas and Fatah. The outcome, the “Beijing Declaration,” aimed to unify these factions and address the Palestinian conflict through a comprehensive ceasefire, humanitarian aid, and a two-state solution.
• This initiative faces significant challenges due to existing geopolitical tensions and differing international stances on Hamas and Palestinian statehood.

China’s New Global Initiatives

• Global Security Initiative (GSI): Announced in April 2022, the GSI promotes principles such as state sovereignty, non-interference, and opposition to unilateral sanctions. This initiative is positioned as an alternative to the US-led “rules-based order,” aiming to reframe global security discussions according to Chinese principles.
• Global Development Initiative (GDI): Launched in 2021, the GDI focuses on reviving efforts to achieve the Sustainable Development Goals (SDGs) by 2030. It aims to shift the global development agenda under Chinese influence, promoting a vision aligned with Chinese interests and strategies.
• Global Civilisation Initiative (GCI): Proposed in March 2023, the GCI emphasizes respecting cultural diversity and fostering international exchanges. It challenges Western-centric views of global civilization and advocates for a multipolar approach to global cultural and civilizational development.

Implications for Global Order

Conclusion

• As China asserts its role as a global power, it is driving a significant shift in international relations. Its strategic moves, including brokering peace agreements and proposing new global initiatives, reflect a growing confidence in its ability to challenge the established international order. Cold War 2.0, characterized by competition between major powers, is intensifying, with China positioning itself as a central player in shaping the future global landscape.

ECONOMICS

GOVERNMENT ACKNOWLEDGES PROBLEMS IN THE ECONOMY, BUT ONLY INDIRECTLY SO

Source: INDIAN EXPRESS

Introduction

• The Union Budget for 2024-25 has elicited mixed reactions from economists, policymakers, and analysts. While it addresses fiscal stability, it falls short of presenting a comprehensive growth strategy.

Fiscal Stability and Budgetary Achievements

Addressing Economic Problems Indirectly

Acknowledgement of Economic Issues

• Growth Concerns: The Budget indirectly acknowledged the slowdown in aggregate demand, especially with the decline in private consumption growth from 11% in 2021-22 to 4% in 2023-24. This slowdown is partly due to economic distress in rural areas.
• Investment and Exports: The Budget reflected concerns about weak private investment and declining merchandise exports, which have been struggling despite increased government infrastructure spending.

Measures and Schemes

• Employment-Linked Incentives: The Budget introduced schemes like providing Rs 15,000 to new employees in the formal sector and reimbursing EPFO contributions for two years. These measures aim to incentivize job creation but may have a limited impact due to the small scale of the interventions.
• Agriculture and Rural Economy: The allocation for MGNREGA remained unchanged, despite significant stress in rural areas. This suggests a limited scope for addressing deeper rural economic issues.
• Direct Tax Regime: Tweaks in tax slabs are expected to have only a marginal impact on household demand, lacking the substantial stimulus needed to revive consumption.

Infrastructural and Institutional Improvements

• Insolvency and Bankruptcy Code (IBC): The Budget proposed setting up additional tribunals to expedite resolution processes. However, the effectiveness of these measures depends on adequate staffing and operational efficiency.

Misses and Gaps in the Budget

Privatisation

• Lack of Focus: The Budget did not address the privatisation of public sector undertakings (PSUs). Given the high valuations of PSUs and the potential for raising private investment, this omission is notable.
• Example: The privatisation of Air India has been successful in attracting investment and improving operational efficiency, demonstrating the benefits of such a strategy.

Merchandise Exports

• Limited Measures: Although customs duties were reduced on some items, the Budget did not take significant steps to reverse the protectionist stance or enhance trade relations. A more aggressive approach in lowering import tariffs and pursuing free trade agreements could have bolstered exports.

Long-Term Growth Strategy

• Missing Vision: The Budget did not outline a comprehensive economic strategy or vision for long-term growth. While it addressed immediate fiscal concerns and introduced various schemes, it lacked a coherent plan for sustained economic development.
• Structural Reforms: The Finance Minister mentioned ongoing fundamental structural reforms without providing details or timelines, leaving uncertainties about the government’s long-term economic strategy.

Conclusion and Future Outlook

• Fiscal Stability: The Budget made significant strides in improving fiscal stability through reduced deficits and increased capital expenditure, which can provide a foundation for future growth.
• Growth Strategy: Despite addressing some economic issues indirectly, the Budget fell short of presenting a clear, long-term growth strategy. The focus on piecemeal schemes and lack of major reforms leaves uncertainties about how the government plans to tackle structural economic challenges.
• Implementation and Reforms: The effectiveness of the Budget will depend on the implementation of proposed measures and the success of forthcoming structural reforms. The government’s ability to address deeper economic issues and foster a conducive environment for private investment will be crucial in shaping future economic outcomes.

Conclusion

• While the Union Budget for 2024-25 made notable progress in fiscal consolidation and infrastructure investment, it lacked a detailed growth strategy and clear long-term vision. The government will need to provide more comprehensive plans and effectively implement reforms to address the underlying economic challenges and sustain growth.

SOCIAL ISSUES

USING CHILDREN’S PERSONAL DATA LEGALLY AND SECURELY

Source: THE HINDU

Introduction

• In India, managing the education system efficiently involves handling the personal data of millions of students. Ensuring this is done legally and securely is crucial due to the sensitive nature of children’s data.
• The editorial is about the Unified District Information System for Education Plus (UDISE+), the Automated Permanent Academic Account Registry identification (APAAR), and the legal and ethical considerations surrounding their use.

Key Issues and Challenges

• Parental Consent: Verifiable parental consent is required for minors’ data. The current mechanisms under UDISE+/APAAR may not fully comply with this requirement, leading to potential legal and ethical issues.
• Legitimate Purposes: Data collection must be for specified legitimate purposes. Using data for additional purposes without clear consent could violate the DPDP Act.
• Integration with Third Parties: Entities like DigiLocker and ed-tech companies access student data through UDISE+ and APAAR. Ensuring their compliance with data protection standards is challenging, especially without updated regulations.
• Grievance Redressal: There is a lack of a clear grievance redressal mechanism for data principals (students). The current system directs grievances to an officer without clear liability or procedural clarity.

The Three-Part Test for Privacy

• Supreme Court Ruling: In Justice K.S. Puttaswamy (Retd.) v. Union of India (2018), the Supreme Court established a three-part test to assess state actions impacting privacy. This includes:
  1. Legitimate State Interest: There must be a legitimate state interest in restricting the right to privacy.
  2. Necessity and Proportionality: The restriction must be necessary and proportionate to achieve the interest.
  3. Legal Imposition: The restriction must be imposed by law.
• Application to APAAR/UDISE+: Integration of Aadhaar in these systems must comply with this test, ensuring restrictions on privacy are justified, necessary, and lawful.

Need for Specific Protocols

• Data Sharing: Sharing children’s data for unspecified purposes and integrating third parties raises questions about roles and liabilities. Identifying data fiduciaries, processors, and principals is essential but currently lacking.
• Security and Liability: Although the APAAR privacy policy outlines data security measures, specific protocols for sharing children's data are absent. The Ministry disclaims legal liability for data disclosure/accuracy, highlighting the need for clear legal obligations and protections.

Recommendations for Improvement

• Regulatory Updates: Update the data-sharing policy to reflect changes under the DPDP Act and establish clear guidelines for consent, data use, and third-party integration.
• Grievance Mechanism: Develop a robust grievance redressal system to address concerns and ensure accountability.
• Standard Operating Procedures: Implement technical and legal SOPs under a comprehensive governance framework to ensure data authenticity and legal compliance.
• Awareness and Training: Educate all stakeholders, including school administrators, parents, and third parties, on data privacy principles and legal requirements.

Conclusion

• Handling children’s personal data in India’s education system requires a delicate balance between operational efficiency and legal compliance. By updating regulatory frameworks, establishing clear protocols, and ensuring robust grievance mechanisms, the Ministry of Education can enhance data security and privacy, fostering trust and protecting the rights of students.

ECONOMICS

A NEW PUSH IN THE BAY OF BENGAL

Source: THE HINDU

Introduction

• The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) has been making significant progress in strengthening regional cooperation.
• Recently the 2nd Foreign Ministers’ Retreat held in New Delhi, hosted by India, is a testament to this effort. This retreat aimed to provide an informal platform for member states to discuss security, connectivity, trade, and investment within the Bay of Bengal region, setting the stage for the sixth summit meeting scheduled for September.

BIMSTEC

• Membership and Sectors: BIMSTEC includes five South Asian countries (Bangladesh, Bhutan, India, Nepal, Sri Lanka) and two Southeast Asian countries (Myanmar, Thailand). These countries cooperate across seven sectors: trade, technology, energy, transport, tourism, fisheries, and agriculture.
• Strategic Importance: BIMSTEC serves as a bridge between South and Southeast Asia, providing a platform for India to engage with its eastern neighbours and address regional challenges, especially in light of China's growing influence in the Bay of Bengal.

Objectives and Focus of the Retreat

• Informal Platform: The retreat provided an informal setting for member states to discuss ways to accelerate cooperation in key areas such as security, connectivity, trade, and investment.
• Preparation for the Summit: The discussions aimed to prepare for the upcoming sixth summit, where BIMSTEC leaders will meet in person for the first time post-pandemic. A significant agenda item is the signing of the BIMSTEC Agreement on Maritime Transport Cooperation to improve regional connectivity.

Strengthening Regional Ties

• India's Strategic Vision: The retreat reinforced India’s commitment to its 'Neighbourhood First', 'Act East Policy', and SAGAR (Security And Growth for All in the Region) vision. By strengthening ties with Bangladesh and Myanmar, India aims to provide its northeastern region with better access to the sea and enhance its presence in the Indo-Pacific.
• ASEAN Connection: Improved relations with Myanmar and Thailand, both ASEAN members, are crucial for India’s Indo-Pacific strategy. Thailand’s identification as a bridge between BIMSTEC and ASEAN highlights the importance of regional integration.

Key Outcomes and Discussions

• Review of Regional Cooperation: The first segment of the retreat assessed the current state of cooperation, with India presenting the implementation of outcomes from the 1st Retreat. Ideas shared included establishing Centers of Excellence in agriculture, disaster management, and maritime transport, and India’s support for cancer research and e-visas for patients.
• Private Sector Involvement: The need for involving the private sector in trade, promoting young entrepreneurs, enhancing connectivity, cyber-security, and countering trafficking were key highlights.
• Country-Specific Proposals:
  • Sri Lanka: Mapping mineral resources and promoting vertical integration in production.
  • Bangladesh: Cooperation in the Blue Economy and banning fishing during the breeding season.
  • Bhutan: Collaboration in tourism and cultural exchanges.
  • Nepal: A ‘whole of the region’ approach to leverage synergies among member states.
  • Thailand: Cooperation in non-traditional security domains.
  • Myanmar: Combating online scamming.

Bilateral Merits

• India-Myanmar Relations: Concerns over displaced persons, narcotics, and arms flow across the border were discussed, along with the return of unlawfully detained Indians.
• India-Bangladesh Relations: Ensuring a smooth supply of daily essentials and technical support for the Teesta project were key points of discussion.
• Engagement with Prime Minister Modi: The Foreign Ministers called on Prime Minister Narendra Modi, underscoring the significance of the retreat.

Future Collaborations and Vision

• A Decade of Policies: This year marks a decade of India’s Act East and Neighbourhood First policies. The retreat highlighted India’s continued commitment to nurturing regional growth and cooperation.
• Encouragement for Future Collaborations: External Affairs Minister S. Jaishankar encouraged future collaborations through new energies, resources, and a renewed commitment to cooperation.

Conclusion

• The 2nd BIMSTEC Foreign Ministers’ Retreat in New Delhi was a crucial step in enhancing regional cooperation in the Bay of Bengal. The retreat provided a platform for discussing key issues and preparing for the forthcoming summit. By fostering stronger ties and addressing regional challenges, BIMSTEC aims to promote sustainable growth and stability in the region. The commitment and vision of the member states were clear, setting the stage for a more integrated and cooperative future.