International Relations - 3 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

UN – Challenges and Reform

About Multilateralism
In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal. Multilateralism leads to collective effort on part of nations over their narrow national interest to tackle global issues.

Benefits of Multilateralism:

• Binds powerful nations – To avoid possibility of future conflict.
• Discourages unilateralism.
• Gives small powers a voice.
• Encourages consensus on the emerging global issues such as terrorism, climate change and other challenging global issues.
• Examples of Multilateral bodies: UN System, WTO , UNFCCC, EU etc.

Challenges to Multilateralism

• Rise of Nationalistic politics: Seen in global as well emerging powers. Example: BREXIT or withdrawal of UK from the EU marks a dent to the spirit of multilateralism.
• The powerful nations are challenging the multilateral world order.
• Rise in conflicts such as in Syria, Yemen, Afghanistan. This reflects lack of effort on the important players across the globe to collaborate and address critical issues.
• Changing Geopolitics: The rise of China, Concretization of Russia China axis. SCO etc. has made the West conscious of preserving its hegemony. The west sees China as a challenger to the US led world order and does not seem to cooperate with China and Russia. At the same time, China and Russia try to counter the west. This competition has led to erosion of spirit of cooperation and collaboration, hurting multilateralism.
• Lack of consensus on Global issues: Most challenges are cross-national and cross-domain in character requiring multilateral approach. poverty and hunger, climate change, inequality, fake news, terrorism. Thus, a lack of common, collaborative global approach to these multi-dimensional problems and a zero-sum attitude leads to sub-optimal outcomes for everyone.

Challenges In The Functioning of UN And Other Multilateral Bodies

• Issues with UNSC: Rift between the permanent members of the Security Council – Veto power of P5. UNSC permanent members are not representative of the current world order. Despite efforts the expansion of UNSC has not been materialised. Failure of UN on emerging conflicts such as Myanmar, Afghanistan etc.
• UNGA has no substantive powers: UN General Assembly which is a more representative body of global voice plays second fiddle to the super-powers led UNSC.
• World Health Organization failed to provide early warnings during the COVID-19 pandemic.
• World Trade Organisation has failed to conclude the negotiations of the Doha Agenda started in 2001, as bilateralism and protectionism are resurging worldwide, and its dispute settlement system has stalled.
• Lack of accountability: Countries that violate international law have not been held accountable.
• Pursuit of narrow geo – political interest by member nations for their allies and against the enemies. Ex – UNESCO – stopping funding of UNESCO in 2019.
• Higher leadership of World Bank and IMF are taken by USA and EU alternatively. While the poor and developing countries where these institutions mostly work do not get to decide their agenda.

Issues in Financing of UN

• Around 40 UN political missions and peacekeeping operations engage 95,000 troops, police, and civil personnel. But the UN peacekeeping budget, is just a little over $8 billion. Also, countries providing most troops for the peacekeeping efforts are rarely made party to decide the mandate of the peacekeeping missions, which is often dominated by UNSC P5 members.
• Lack of contribution by the member nations: There was an outstanding $711 million in the assessed contribution for the general budget.
• Voluntary contributions dominate: Most of the humanitarian assistance, developmental work, and budgets of the specialised agencies are based on voluntary contributions.
• Climate change financing: Developed nations despite repeated promises have failed to meet their promise to provide $100 bn of climate finance for developing countries despite being responsible for historical emissions which are the prominent reason for present climate change, which is hurting the developing nations hardest.

Our Common Agenda 

•  To mark the 75th Anniversary of UN, Member States came together to recognise that our challenges are interconnected and can only be addressed through stronger international cooperation and reinvigorated multilateralism with the United Nations at the Centre of our efforts.
• Global leaders pledged to strengthen global governance for the sake of present and coming generations and asked the Secretary General to prepare a report with recommendations to advance our common agenda and respond to current and future challenges.
• UN Secretary General prepared a comprehensivereport titled outlining 12 comprehensive action areas named ‘Our Common Agenda’.
• The important proposals in the report are given below. The Secretary General proposed a Summit of the Future to forge a new global consensus on what our future should look like and what we can do to secure it.

India- UAE Virtual Summit

• Earlier in September 2021, India and the UAE formally launched negotiations on the India-UAE Comprehensive Economic Partnership Agreement (CEPA).

What are the Key Highlights of the Meeting?

• Comprehensive Strategic Partnership: Issued a Joint Vision Statement “Advancing the India and UAE Comprehensive Strategic Partnership: New Frontiers, New Milestone”. The Statement establishes a roadmap for a futureoriented partnership between India and UAE and identifies focus areas and outcomes.  The shared objective is to promote new trade, investment and innovation dynamics in diverse sectors.
• Defence and Security: Agreed to enhance maritime cooperation contributing to maintenance of peace and security in the region. Reaffirmed joint commitment to fight against extremism and terrorism, including cross-border terrorism, in all forms, at both regional and international levels.
• Climate Action and Renewables: Agreed to support each other’s clean energy missions and establish a joint Hydrogen Task Force to help scale up technologies, with special focus on production of Green Hydrogen.
• Emerging Technologies: Agreed to expand cooperation on critical technologies and mutually promote e-businesses and e-payment solutions and promote start-ups from both countries.
• Education Cooperation: Agreed to establish an Indian Institute of Technology in the UAE.
• Health Cooperation: Decided to collaborate in research, production and development of reliable supply chains for vaccines and enhance investments by UAE entities in the health infrastructure in India as well as collaborate in providing healthcare in underprivileged nations.
• Food Security: Acknowledged the need to enhance the resilience and reliability of food supply chains.  Also decided to expand cooperation through enhanced bilateral food and agriculture trade and, promote and strengthen the infrastructure and dedicated logistic services connecting farms to ports to final destinations in the UAE.
• Skills Cooperation: Agreed to enhance cooperation in skill development so as to align with the market needs and address the changing needs for the future of work. Released Joint Commemorative Stamp on the occasion of 75th anniversary of India’s independence and 50th year of UAE’s foundation.
• Comprehensive Economic Partnership Agreement (CEPA): In a significant development, the two sides inked a CEPA to further boost trade and investment ties.  Plastic, agriculture, food products, automobile, engineering, pharmaceuticals are some of the areas that will be boosted because of the pact.  The deal will open up to 10 lakh jobs for the young people in the country and would also open access to broader African and Asian markets for India.  The CEPA is expected to increase bilateral trade from the current level of USD 60 billion to USD 100 billion in the next five years (2022-27).

What is CEPA?

• It is a kind of free trade pact which covers negotiation on the trade in services and investment, and other areas of economic partnership. It may even consider negotiation on areas such as trade facilitation and customs cooperation, competition, and Intellectual Property Rights.
• Partnership agreements or cooperation agreements are more comprehensive than Free Trade Agreements.
• CEPA also looks into the regulatory aspect of trade and encompasses an agreement covering the regulatory issues.
• India has signed CEPAs with South Korea and Japan.

What is the Current State of India-UAE Relations?

1. About

India and the UAE enjoy strong bonds of friendship based on age-old cultural, religious and economic ties between the two nations. The relationship flourished after the accession of H.H. Sheikh Zayed Bin Sultan Al Nahyan as the Ruler of Abu Dhabi in 1966 and subsequently with the creation of the UAE Federation in 1971.

2. Political Relations

• In 2019, UAE awarded the ZAYED Medal, their highest civilian award, to the Prime Minister of India for consolidating the long-standing friendship and joint strategic cooperation between the two nations.
• The Indian Prime Minister’s visit to the UAE in August 2015 marked the beginning of a new and comprehensive and strategic partnership.

3. Economic Relations

• India-UAE trade was around USD 60 billion making UAE, India’s third-largest trading partner for the year 2019-20 after China and the USA. The UAE is the second-largest export destination of India with an amount of over USD 29 billion for the year 2019-20.
• For the UAE, India is the second-largest trading partner for the year 2019 with an amount of around USD 41.43 billion for non-oil trade.

4. Cultural Relations
The two nations share historical ties and have maintained regular cultural exchanges both at official and popular levels. They signed a Cultural Agreement in 1975 and the embassies continue to organise various cultural activities on their own as well as by collaborating with other cultural organisations.

5. Indian Community

• The UAE is home to the Indian expatriate community of more than 2.6 million, the largest expatriate community in the UAE, which has played a major role in the economic development of the UAE.
• Recently, India has asked the members of the Gulf Cooperation Council (GCC) which also includes UAE, to facilitate the return of Indians who want to resume work with the relaxing of Covid-19- related restrictions.

Russian Banks Excluded from SWIFT

• The intention behind this action is to further isolate Russia from the international financial system.
• The move against Russia is only partly implemented for now, with only some Russian banks being covered.
• The option of expanding it further to a pan-country ban is something that the US and its allies are holding back as a further escalatory move.

What is the SWIFT Messaging System?

• SWIFT provides the trusted messaging platform that enables financial institutions to exchange information about global monetary transactions such as money transfers.
• While SWIFT does not actually move money, it operates as a middleman to verify information of transactions by providing secure financial messaging services to more than 11,000 banks in over 200 countries. Most of the world trade takes place with financial messaging passing through SWIFT.
• It was established in 1973 and is based in Belgium.
• It is overseen by the central banks from eleven industrial countries: Canada, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom, and the United States, besides Belgium. India’s financial system has access to the SWIFT.
• Prior to SWIFT, the only reliable means of message confirmation for international funds transfer was Telex. It was discontinued due to a range of issues such as low speed, security concerns, and a free message format.

What will be Impact on Russia?

• Russia is heavily reliant on the SWIFT platform for its key natural resources trade, especially the payments for its oil and gas exports. It will freeze the assets of Russia’s central bank, which would stop Russia from “using its war chest”, referring to its forex reserves.
  Further, the curbs on Russia’s central bank will prevent it from dipping into its forex deposits to limit the effect of sanctions.
• Targeting only some Russian banks seems to be aimed at both keeping the option of further escalation open.  it also envisages that the sanctions have the maximum possible impact on Russia, but prevent a major impact on European companies dealing with Russian banks for payments for their gas imports.
• There is going to be a catastrophe on the Russian currency market.
• Prior to this, only one country had been cut off from SWIFT — Iran. It resulted in it losing a third of its foreign trade.

How did Russia React?

• Russia has worked on alternatives, including the SPFS (System for Transfer of Financial Messages) — an equivalent of the SWIFT financial transfer system developed by the Central Bank of Russia. 
• Russia is reported to be collaborating with the Chinese on a possible venture which will be a potential challenger to SWIFT.
  There are plans to integrate it with China’s Crossborder Inter-bank Payments System (CIPS).

What are Other Global Alternatives to SWIFT?

• There are financial technology companies like Ripple, which has been offering its platform based on interledger protocol (the same technology behind cryptocurrencies) as an alternative.
• Cryptocurrencies are another avenue for cross border remittances. Russia has also been working on a ‘digital’ rouble, which is still not launched.

How will the Sanctions Impact India?

• Following the collapse of the Soviet Union in 1991, India had entered into a rupee-rouble trade arrangement with Russia to ensure that defence and other imports could continue.
• In 2018, a pilot project was run where Indian importers paid in roubles for diamond imports.
• These payments were made to the Indian branch of Russia’s Sberbank. SBI and Canara Bank have a joint venture (The Commercial Indo Bank), which might be able to help Indians there.

Sri Lanka's Opposition Proposes Constitutional Amendment

Key Highlights Of The Bill

• The amendment bill seeks to abolish the presidential system of governance. The presidential system of governance is in existence in Sri Lanka since 1978.
• The bill proposes to replace the current system of governance with a system that reinforces constitutional democracy.

2. No Personal Discretion Of President

• According to the proposal, the President has no personal discretion in appointing or dismissing the Prime Minister.
• Although, the President will remain the Head of State and the Commander in Chief.

3. Role of PM Strengthened

• The Prime Minister shall be the head of the Cabinet of ministers and the ministers are to be appointed by the President on the prime minister’s advice

4. Seeks to Annul 20th Amendment

• The amendment, while seeking to annul the 20th Amendment adopted in 2020, aims to restore the 19th Amendment to the Constitution.
• By doing so, it wants to curb the powers of the President and empower Parliament.
• Recent Constitutional Amendments In Sri Lanka
• It was introduced in 2015 which curtailed the powers of the President and strengthened the role of Parliament. It was passed during the former President Maithripala Sirisena-Prime Minister Ranil Wickremesinghe’s term (2015-19).
• Changes made by 19^th Amendment
  (i) Reduced the terms of President and Parliament from six years to five years.
  (ii) Re-introduced a two-term limit for a person as President.
  (iii) Ensured revival of Constitutional Council and the establishment of independent commissions.
  (iv) Power of President to dissolve Parliament only after four and a half years
  (v) Prevented dual citizens from contesting elections
• At the time, two of the Rajapaksa family members including the current president were dual citizens of the USA and Sri Lanka
• In October 2020, the Sri Lankan Parliament abolished the 19th amendment with a two-thirds majority.
• The 20^th amendment (20A), which replaced the 19^th Amendment (19A) had again enhanced the executive powers of the President in an unprecedented way.
• The 20^th amendment:
  (i) Abolished the independent constitutional council for a Parliamentary Council.
  (ii) Gave electoral rights to dual citizens.
  (iii) Reduced the Prime Minister’s role to a ceremonial one.
  (iv) Abolishes the binding limitations on presidential powers in relation to key appointments to independent institutions through the Constitutional Council.
  (v) It gave sweeping powers to the President to appoint individuals to key institutions.

Extra mile: Abolishment of 19th Amendment

• In his 2019 presidential bid, the current president Gotabaya Rajapaksa had expressed his intention to abolish the 19th Amendment to the Constitution.
• The Rajapaksa family had alleged that the amendment was brought specifically to target the family.
  (i) Due to the 19th amendment, Mahinda Rajapaksa could not contest the November 2019 Presidential elections because of term limit.
  (ii) His younger brother Gotabaya became the Presidential candidate.
• Finally, in October 2020, the Sri Lankan Parliament abolished the 19th amendment with a two-thirds majority.
• This was done by passing the 20th Amendment to Sri Lanka’s Constitution.

United States Commission on International Religious Freedom Annual Report 2022

• The United States Commission on International Religious Freedom (USCIRF) has released its 2022 Annual Report. 
• The report recommended to designate India, China, Pakistan, Afghanistan and 11 other nations as "Country of Particular Concern" in the context of status of religious freedom.
  (i) The recommendation was made to the US government.
  (ii) The recommendations of the USCIRF are not binding on the US Government.
• This was for the 3rd consecutive year that the USCIRF has recommended to the US State Department to designate India as a “Country of Particular Concern”.
• USCRIF is a U.S. federal government commission created by International Religious Freedom Act of 1998.
• The commission has 9 commissioners out of which three are appointed by US president, four by the opposition and two by the ruling party.
• Its principal responsibilities are
  (i) To review the facts and circumstances of violations of religious freedom internationally
  (ii) To make policy recommendations to the President, the Secretary of State and the Congress.

Visit of Indian President to Turkmenistan

• President of India, Ramnath Kovind, paid an official visit to Turkmenistan. This was the first-ever visit of the President of India to independent Turkmenistan.
• This visit comes at a time when:
  (i) India is celebrating 75 years of Indian independence,
  (ii) Turkmenistan is celebrating 30 years of its independence, and
  (iii) Together both India and Turkmenistan marked 30 years of establishment of diplomatic relations.

Key Highlights of the Visit

TAPI Pipeline Development: Timeline

• The project was originally conceived in the 1990s and an inter-governmental agreement was signed in 2010 by the heads of four member nations.
• A Gas Pipeline Framework Agreement was signed in December 2010 and bilateral gas sale agreement was signed in May 2013.
• In February 2018, ground-breaking ceremony for Afghanistan's section of TAPI gas pipeline was held in the western Afghan city of Herat.

Reasons For The Delay

1. Tensions Between India and Pakistan
   • Many analysts believe that the $10 billion project failed to make any progress mainly due to tensions between India and Pakistan.
   • One of India’s primary concerns is that once the project becomes operational, a lot of Indian industries will become dependent on it.
   • Pakistan can take advantage of this and can shut off supplies during periods of tension.
2. Concern Over Safety And Security
   • It have grown manifold with the return of the Taliban in Afghanistan.
   • New Delhi doesn’t officially recognise the Taliban regime in Afghanistan, which is one of the stakeholders of the project.
   • This will make it difficult for India to move ahead with this project.
3. Role of ADB
   • The main impediment in the TAPI project is the ADB pausing the due diligence and processing activities until the Taliban regime is recognised by the UN. 

Future

• Turkmenistan will continue to push for the project as it has to monetise its energy assets.
• Taliban is also badly short of money so they see this project as a money-spinner.
• Pakistan’s economy is also in dire condition and a project like this will help Pakistan’s economy.
• India is now moving closer to Central Asia, but it has no relations with Taliban and dialogue with Pakistan stands disrupted.
• Hence, India would be interested in the project only when it is adequately assured of its political stability and security.
• Also, India will only buy TAPI gas if the landed price beats the price India pays for liquefied natural gas

India-Australia Economic Cooperation and Trade Agreement

• India and Australia signed an Economic Co-operation and Trade Agreement (ECTA).
• The aim of this agreement is to double the bilateral trade to $50 billion in 5 years and ease movement of people, goods and services across borders. 

Key Highlights

Significance

• This is the first trade agreement signed by India with a developed economy after more than a decade.
• The pact is expected to give a big push to bilateral trade. It will eliminate or lower tariffs on a large number of goods.
• It will also address the non-tariff barriers such as technical barriers to trade, apart from sanitary and phytosanitary restrictions.
• Since India is not part of any significant regional trading bloc, this agreement will ensure that it does not lose out on preferential market share and weaken its export competitiveness.
• The FTA with Australia will give a positive signal to other developed countries such as the UK, Canada and the EU, who are already on the negotiating table for similar pacts with India.
• On the basis of this agreement, both the countries will be able to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region.
• The deal is also significant for Australia who is in the midst of a protracted trade battle with China.

Financial Crisis in Pakistan

The financial package includes:

Help Extended By Saudi Arabia To Pakistan In The Past

• In December 2021, Saudi Arabia provided USD 3 billion deposits to the State Bank of Pakistan.
• The Saudi oil facility was operationalized from March 2022, providing Pakistan with USD 100 million to procure oil.
• From 2013-18, Saudi Arabia had provided Pakistan with a USD 7.5 billion package.
• Under the regime headed by Imran Khan, Saudi Arabia provided.
  • Package of USD 4.2 billion, including USD 3 billion deposits and a USD 1.2 billion oil facility for one year and linked it with an IMF programme

Ailing Economy of Pakistan

• Pakistan has been facing growing economic challenges, including high inflation, sliding forex reserves, a widening current account deficit and a depreciating currency.
• Its foreign exchange reserves have depleted by $6 billion in the last six to seven weeks and nosedived to $10.5 billion.
• The current account deficit stood at $13.2 billion in the first nine months and there is a pressing requirement for external loan repayment.
  • For this, Pakistan requires financial assistance of $9-12 billion till June 2022 to avert further depletion of foreign currency reserves.

Reasons Of The Present Economic Crisis In Pakistan
The present crisis is primarily attributed to Pakistan’s policy decision leading to extensive spending on non-developmental and economically unviable projects.

• The infrastructure projects like Gwadar-Kashgar Railway line were financed through long-term debt instruments.
• Pakistan relied massively on external borrowing rather than from domestic institutions which added to its troubles.

CPEC Projects
Roll out of the China–Pakistan Economic Corridor (CPEC) increased the debt burden opening the doors of the ever-increasing external loans.

• Notably, CPEC created a Chinese debt of US$ 64 billion on Pakistan which was originally valued at US$47 billion during 2014
• Persistent Fall in the Pakistani Rupee Against the US Dollar
• This has further contributed to the ballooning external debt.

Role of International Institutions

• Low ranking by international rating agencies and grey listing of Pakistan in Financial Action Task Force (FATF) kept foreign investors away.
• The State Bank of Pakistan data suggests that in the past 10 years, FDI inflows into Pakistan never exceeded 1% of GDP.
• The vicious cycle of seeking fresh loans and repaying old ones has led Pakistan into the notorious ‘debt trap’.

Other Reasons

• Pakistan has been struggling with mounting trade deficit driven by its ever-increasing import bills and falling exports.
• In February 2022, ADB reported that Pakistan has one of the lowest trade-to-GDP ratios in the world.
• The outbreak of the Covid-19 pandemic further deteriorated the situation.
• Inflation in Pakistan touched its highest level in November 2021. This is primarily because of the global rise in crude oil prices.

EU Slaps Anti-Trust Charge Against Apple

Background

• European Union’s executive arm, the European Commission, has been investigating Apple since 2020.
• Following this investigation, the European Commission has submitted its preliminary investigation report in which Apple has been charged with antitrust case.

What Happens Now?

• Apple will now have a chance to respond before a final judgment is announced.
• The company could be fined up to 10% of its global revenue. It could also reach a settlement with regulators

Antitrust Policy of EU

• EU Antitrust policy is developed from Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU).
  • Article 101 prohibits anti-competitive agreements between two or more independent market operators.
  • Article 102 prohibits abusive behaviour by companies holding a dominant position on any given market.
• Under these articles, European Commission is empowered to start investigation on charges of companies abusing their dominant position to scuttle competition.