Current Affairs for today- 5th November 2019

GS Paper III

Bengal’s cities yield new species of tree frog

Specimens of the Brown Blotched Bengal Tree Frog were found in residential areas. Surprisingly, this species was not found in the deep jungles.

After the required data collection and the measurements were done, the herpetologists concluded that the frog belonged to the genus Polypedates. According to the genetic analysis and identification, it was established that the new species- mid-sized tree frog as the 26^th species under the genus Polypedates.

Species name:  Brown Blotched Bengal Tree Frog

Scientific name: Polypedates bengalensis

Characteristics: Series of 6-9 dark-brown patches that laterally extend from behind to the frog’s eye to the vent. Its body color ranges from Yellowish-brown to greenish-brown.

GS Paper II, Paper III

Saying RCEP will hurt farmers, India walks out ; Refusing to bite the bullet (Editorial)

Context

In the RCEP Summit, Bangkok held on November 4, 2019, India pulled out of the Regional Comprehensive Economic Partnership (RCEP) at the last minute on the ground that signing it, would hurt the farmers, MSMEs, workers, consumers and businesses.

What is RCEP?

RCEP is a comprehensive, high-quality, mutually beneficial free trade agreement (economic partnership) being negotiated between the 10 ASEAN Member States and ASEAN’s free trade agreement partners Australia, China, India, Japan, Korea and New Zealand. This would be the biggest Asia Pacific Trade Pact that would involve the region’s top economies to cover nearly a third of the world’s gross domestic product (without India).

Who signed the pact?

Except India, the 15 other nations- 10 Association of Southeast Asian Nations (ASEAN) nations and its free trade partners- China, Japan, South Korea, Australia and New Zealand are members of what would form a major trading bloc.

Why did India opt out?

• Reluctance from India’s side was the ill effects the opening of its market would cause to the domestic producers in the race with Chinese goods influx.
• The Prime Minister addressing his reason before the 15 other nations at the Summit mentioned that the RCEP has lost its original principles of the framework and that it does not satisfactorily address the outstanding issues and concerns of India.
• Textiles, dairy, and agriculture were flagged as three vulnerable industries for India to exit the bloc pact.
• India is more worried about the surge in Chinese imports (despite significant concessions and safeguards) and the lack of progress in the offensive interests it has in services market access.

What does the author say? (Editorial)

• The benchmark in the overall exports is overshadowed by the larger rise in manufactured goods imports, which displaces many vulnerable sectos of the economy.
• The scale of the deficit in the electronic goods and related parts could have even tipped the economy towards a current account contingency/ deficit.
• The plurilateral trade agreements such as the RCEP are welfare-enhancing for India. But India must first reform its factor markets (input markets- inputs like land, capital, labor, raw material that would help in the manufacture of goods and services) in order to enable its small and medium enterprises to profitably slot themselves within East Asia’s vibrant value chains, which otherwise would experience displacement and steep unemployment in the current trends.
• No industrializing economy has experienced a steady 7% growth rate without a sharp and sustained growth in manufactured goods exports. Concerted efforts of both investments and exports must be the key to the foundation of India’s growth.

With its opting out of the RCEP, that furnishes  a liberalization framework which when paired with the domestic factor market would have propelled the nation towards its “Make in India” targets in areas that no amount of dabbling with the “Ease of Doing Business” ranking would achieve.

What happens to the bloc?

With trade frictions still dominating the global narrative, Asia needs to look inwards and strengthen regional integration for sustaining and propelling growth. It must be noted that the bloc lost on a vast market in India and the prospective gains also would weaken thereby.

What India plans needs to do now?

• India wants to be more sensitive towards the growing services sector in India by uplifting and opportuning the depressed economy and industries reeling from foreign competition in its own market.
• India must try to make positive noises about progressing trade talks with the US and EU and will expedite efforts to upgrade its free trade agreement with ASEAN members. India wrapped up with its announcement of the final stages of review of the Free Trade Agreement with Japan, Korea and ASEAN grouping.
• India must desperately sign-on to both an export-oriented growth model and the regional integration strategy to stimulate its latent manufacturing prowess and overcome its steep development challenges. (RCEP provided both, but at a high cost to Indian domestic market)
• The implications of joining RCEP on the regional integration front and the “Act East” policy were heavily appalling as it would have given India the entire roadmap to integrate better into global supply chains.
• India is not a participant in the Asia-Pacific Economic Cooperation forum, where best practices in trade and digital economy endeavors are formulated, nor is it a member of the Chiang Mai Initiative, which has evolved from a currency swap arrangement into an embryonic form of Asian financial regionalism. India was excluded from the Comprehensive and Progressive Trans-Pacific Partnership negotiations, and is only marginally attached to the region by way of shallow economic partnership agreements with Japan, South Korea and the ASEAN countries.

RCEP afforded a fleeting opportunity for New Delhi to  perch its feet to the wagon to the global epicenter of ‘open regionalism’ at a time when US-China trade wars, protectionism and populism are casting a foil over India’s economic rise in the global system.

Way forward

Without an economic integration strategy in Asia, India will have no economic edge in Asia and the sum total of its ‘Act East’ policy will amount to little more than becoming the naval doorman of the Indo-Pacific.  It was a great opportunity to integrate India within the Asian trade regionalism by instituting structural reforms by signing on RCEP.

Hence, India must look into trade, investment and people-to-people relations with this region (RCEP bloc).

GS Paper II, Paper III

India, Russia to conclude the mutual logistics agreement

Context

India and Russia are expected to conclude a mutual logistics agreement and review the setting up of joint ventures for manufacturing spares for Russian defence platforms in India during the visit of Defence Minister in Moscow.

What’s in the news?

• The Defence Minister will chair the 19^th India-Russia Inter-Governmental Commission on Military and Military Technical Cooperation with his Russian counterpart.
• The Agreement on Reciprocal Logistics Support (ARLS) is to be signed during the visit, as the draft was sent early last year and the nod had to be given on the sidelines of the recently held 5th Eastern Economic Forum (EEF), but was held back. Another important deal they need to close is the purchase of S-400 air-defence missile systems, over which the US has been adamantly threatening to issue sanctions under The CAATSA law.
• The current agreement is under formalization as a follow-up of the Inter-Governmental Agreement (IGA) signed in September by India and Russia to “operationalize a mechanism for collaboration on joint manufacturing of spare parts, components, aggregates and other products for the maintenance of Russian-origin arms and defence equipment in India under the banner of “Make in India” initiative through the transfer of technology and setting up of joint ventures.
• The Russian delegation of 50- Industry members are flying to India  with the objective of exploring ways to jointly manufacture spares and components with Russian Original Equipment Manufacturers (OEM).
• With a flurry of deals between the two countries surrounding the EEF wherein energy cooperation in Russia’s Far East was in focus, the main deals discussed were on possible areas of collaboration in other sectors like coking coal and shipping routes.

What is a Logistics agreement?

Logistics agreements are administrative arrangements facilitating access to military facilities for exchange of fuel and provisions on mutual agreement when the Indian military is operating abroad.

• A similar agreement is signed between India and the USA in 2016- The Logistics Exchange Memorandum of Understanding (LEMOA) with the U.S. in August 2016 after decade-long negotiations.
  Since then, it has concluded several such agreements with France, Oman, the Philippines and Singapore and gained access to the Sabang port in Indonesia.
• The MLSA with Japan is called the Acquisition and Cross-Servicing Agreement (ACSA) and with Russia, the Agreement on Reciprocal Logistics Support (ARLS). The agreements with Australia, Japan and Russia are in advanced stages.

What does the ARLS provide?

• The Russian agreement gives India access to its facilities and to tap energy resources in the Arctic and northern routes and ports of Arctic region that is ushering with resource inflow and news shipping routes.
• India could be looking at Russia to partner with for setting up its Arctic Station base.
• The Indian Navy, with a significant strength of Russian origin warships, will be able to smoothly transit through for exercises or refits using the agreement while the air force will find it easier to deploy aircraft for joint exercises.
• After the agreement, Russians would have access to not only the port in Mumbai and Visakhapatnam, it would have access to the Indian airbases, and India can do the same with its Russian counterparts.

Joint Statement at the 5^th EEF regarding the military co-operation under IGA between the two countries mentioned:

• India-Russia close cooperation in military and military-technical fields is a pillar of their bilateral Special and Privileged Strategic Partnership- with regular military contacts and joint exercises of the Armed Forces of the two countries. They welcomed the successful implementation of the 2011-2020 Long-Term Program for Military and Technical Cooperation. They agreed to speed-up elaboration of a new long-term plan of interaction in this area.
• The Sides expressed their commitment to upgrading their defense cooperation, including by fostering joint development and production of military equipment, components and spare parts, improve the after-sales service system.
• Both Sides agreed to take forward ongoing engagement to encourage joint manufacturing in India of spare parts, components, aggregates and other products for maintenance of Russian origin Arms and defense equipment under Make-in-India program through transfer of technology and setting up of joint ventures.
• To create favorable conditions for further development of bilateral cooperation between their Armed Forces and recognized the requirement of an institutional arrangement for reciprocal provision of logistic support and services for the Armed Forces. It was agreed to prepare a framework for cooperation on reciprocal logistics support.