International Relations: May 2022 Current Affairs | UPSC Mains: International Relations PDF Download

1. Financial Crisis in Pakistan 

Saudi Arabia has agreed to provide Pakistan with a sizeable package of around $8 billion to help revive its ailing economy. Key Highlights Of The Financial Package 

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.

To read more information on this topic:

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2. EU Slaps Anti-Trust Charge Against Apple

EU stepped up its antitrust case against Apple by accusing the company of abusing its dominant position by limiting access to technologies allowing contactless payment.

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.

To read more information on this topic:

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3. Bangladesh Offers Chittagong Port For Use To India

Bangladesh PM Sheikh Hasina offered India the use of the Chittagong Port. This port would be of benefit to India’s north-eastern States, particularly Assam and Tripura. Meghalaya and Mizoram could also benefit from access to the port.

What Does The Bangladesh PM’s Offer Mean?

• Assam, Meghalaya, Tripura and Mizoram — share a 1,879 km border with Bangladesh. The Northeast has been the key to the increase in bilateral engagements between India and Bangladesh in recent years.
• With a special focus on railways and waterways, many of the pre-Partition trade routes are being revived.
• Most of these roads lead to Chittagong port, which has historically been the largest and the most convenient for trade and commerce for the region.
• Against this backdrop, the current offer of Bangladesh will help these states to flourish economically.

Activities On The Ground To Increase The Connectivity

• In March 2021, the Prime Ministers of the two countries inaugurated the Maitri Setu, a bridge built over the Feni River. This has reduced the distance between Sabroom in southern Tripura and the Chittagong port to just 111 km.
• The government is working on a multi-modal transit hub at Sabroom that can help goods reach the Chittagong port in a few hours.
• Road connectivity in Meghalaya’s Dawki, southern Assam’s Sutarkandi and Tripura’s Akhaura linking eastern and south-eastern Bangladesh is also being improved.
• Apart from the India-Bangladesh Protocol Route involving the Brahmaputra, cargo ships from Bangladesh have reached Tripura through the Gomati River and Assam’s Karimganj via the Kushiyara River.

Mujib-The Making Of Nation

• The first trailer of the feature film, ‘Mujib- the Making of a Nation’, was unveiled at the Cannes Film Festival.
  • This year, India was the Country of Honour at the Marche du Film, or Cannes Market, which runs parallel to the Cannes Film Festival.
• The film is a biopic of the founder and first Prime Minister of Bangladesh, Bangabandhu Sheikh Mujibur Rahman.
• The feature film directed by Indian filmmaker Shyam Benegal is a co-production of India and Bangladesh.
• It is a tribute to the great leader on his birth centennial and to mark the 50 years of Bangladesh’s formation.

To read more information on this topic:

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4. Visit of PM Modi to Nepal

PM Modi paid an official visit to Lumbini on the occasion of Buddha Purnima. This was his fifth visit to Nepal since 2014.

Key Highlights Of The Visit

A. India International Centre for Buddhist Culture and Heritage

• PM Modi launched the construction of the India International Centre for Buddhist Culture and Heritage during a day-long visit to Lumbini in Nepal.
• The construction of the India International Centre for Buddhist Culture & Heritage is to be undertaken by the International Buddhist Confederation (IBC), India, with financial support from the Ministry of Culture.
  • The IBC is a grantee body under the Ministry of Culture and it was registered in November 2012.
  • It aims to propagate and preserve the teachings and heritage of the Buddha across the world, and especially in India’s immediate neighbourhood.
• Most foreign nations, including US, China, Canada, France, Germany etc. have already built their centres in Lumbini as an instrument of promoting Buddhist philosophy.

B. MoUs Signed

• The Indian Council for Cultural Relations (ICCR) will sign two MOUs with authorities in Nepal:
  • One on setting up the Dr B R Ambedkar Chair for Studies on Buddhism at Lumbini University and
  • Another on a Chair Professor at Kathmandu University.

C. Sister City Relations Between Lumbini and Kushinagar

• The two sides agreed in principle to establish sister city relations between Lumbini and Kushinagar.

Trans-national Buddhist Tourist Circuit

• India’s Ministry of Tourism has collaborated with Nepal to build a trans-national Buddhist Tourist Circuit to trace the footsteps of Buddha.
  • This circuit will be starting from Lumbini and concluding at Kushinagar.
  • An international airport was recently inaugurated at Kushinagar.
• This circuit will be in addition to the project to build the Ramayana circuit linking various sites in the two countries.

Analysis Of This Visit

A. Use of soft power

• His brief visit to Lumbini was focused on bringing soft power to the centre stage of India-Nepal relations.
• This also marked India’s formal presence at the holy site that’s barely 10 km away from the border.

B. Countering China

• ‘The PM’s visit to Lumbini comes amidst China’s evident interest in Lumbini.
• Almost a decade ago, China had offered to build Lumbini as a world peace centre at a cost of three billion dollars. China is also holding talks on bringing its railway right up to Lumbini.{For more details, refer the topic “Visit of the Prime Minister of Nepal to India” from April 2022 Recitals}

5. PM Modi’s Meeting With President of the USA

• On the sidelines of Quad summit, PM Modi met with President of the USA in Tokyo.
• The two Leaders welcomed the signing of the Investment Incentive Agreement.
  • This agreement enables the US Development Finance Corporation to continue providing investment support in India in sectors of shared priority such as healthcare, renewable energy, SMEs, infrastructure etc.
• Both sides launched an India-U.S. Initiative on Critical and Emerging Technologies (iCET) to facilitate outcome-oriented cooperation.
  • iCET would be co-led by the National Security Council Secretariat in India and the U.S. National Security Council.
  • It would forge closer linkages between government, academia and industry of the two countries in areas such as AI, quantum computing, 5G/6G, biotech, space and semiconductors.
• India and USA extended the longstanding Vaccine Action Programme (VAP) until 2027 to continue joint biomedical research which had resulted in development of vaccines and related technologies.

6. US Becomes India’s Biggest Trading Partner

The US surpassed China to become India’s top trading partner in 2021-22, reflecting strengthening economic ties between the two countries.

Key Highlights: Statistics

1. Bilateral Trade Between India and US in 2021-22

• According to the data of the Commerce Ministry, in 2021-22, the bilateral trade between the US and India stood at $119.42 billion. It was $80.51 billion in 2020-21.
• Exports to the US increased to $76.11 billion in 2021-22 from$51.62 billion in previous fiscal year. Imports from US rose to $43.31 billion as compared to about $29 billion in 2020-21.
  • America is one of the few countries with which India has a trade surplus. In 2021-22, India had a trade surplus of $32.8 billion with the US.

2. Bilateral Trade With China

• During 2021-22, India’s two-way commerce with China aggregated at $115.42 billion as compared to $86.4 billion in 2020-21.
• Exports to China marginally increased to $21.25 billion last fiscal year from $21.18 billion in 2020-21.
• On the other hand, imports from China jumped to $94.16 billion from about $65.21 billion in 2020-21.
• Trade gap rose to $72.91 billion in 2021-22 from $44 billion in previous fiscal year.

3. Trade With Other Countries

• In 2021-22, the UAE with $72.9 billion, was the third largest trading partner of India.
• It was followed by Saudi Arabia ($42,85 billion), Iraq ($34.33 billion) and Singapore ($30 billion)

To read more information on this topic:

• Globalization, Economy Traditional
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7. 2nd India-Nordic Summit

• PM Modi participated in the second India-Nordic summit in Copenhagen, hosted by Denmark, along with the Prime Ministers of Denmark, Iceland, Finland, Sweden and Norway.
  • The first India-Nordic summit took place in Stockholm, Sweden, in 2018.
• The summit provided a unique opportunity for India to expand cooperation with the Nordic nations.

Significance of Nordic Countries for India

• The Nordic nations of Denmark, Sweden, Norway and Finland are believed to be some of the most advanced economies in Europe.
• It can play a crucial role in India’s quest for clean energy, sustainability, digitisation and innovation.
• At present, India's trade with the Nordic countries is more than $5 billion (2020-21). Cumulative FDI stood at over $3 billion between April 2000 and March 2021.
• India-Nordic cooperation holds immense significance for India’s Arctic Policy. This will provide opportunities for increased co-operation in the Arctic on polar research, climate and environmental issues.

Bilateral Meeting On The Sidelines Of India-Nordic Summit 
PM Modi held a series of bilateral meetings with his counterparts from Nordic countries which includes Norway, Sweden, Iceland and Finland

• This was the first meeting between the two leaders since the assumption of office by Prime Minister Store in October 2021.
• PM Modi highlighted that Norway's skills and India's scope provided natural complementarities.
• Both leaders discussed the potential for deepening engagement in areas like Blue Economy, renewable energy, green hydrogen etc.
• During this meeting, the two leaders expressed satisfaction at the progress made by the Lead IT initiative.
  • This was an India-Sweden joint global initiative to set up a Leadership Group on Industry Transition (LeadIT) in September 2019.
  • It was set up at the UN Climate Action Summit to help guide the world’s heaviest greenhouse gas (GHG) emitting industries towards the low-carbon economy.
• Technology, Investment and R&D collaborations provide the bedrock of the current relationship between these two countries.
• During the 2018 visit of PM Modi to Sweden, the two sides had adopted a wide-ranging Joint Action Plan and signed a Joint Innovation Partnership.
  • In 2018, PM Modi visited Sweden on the occasion of the 1st India-Nordic Summit.
• This year both countries are celebrating the 50th anniversary of establishment of diplomatic relations.
• Both leaders discussed ways to further strengthen economic cooperation especially in the sectors of geothermal energy, Blue Economy, Arctic, etc.
• Geothermal energy, in particular, is an area where Iceland has special expertise.
• In this regard, both sides stressed on collaboration between universities of both countries in this sector.
• Discussions also took place on expediting the India – EFTA (European Free Trade Association) trade negotiations.
• This was the first in-person meeting between the two leaders.
• Both leaders noted that areas like sustainability, digitalization and cooperation in science and education were important pillars of the bilateral partnership.
• They discussed opportunities to expand cooperation in the fields of new and emerging technologies like AI, quantum computing, future mobile technologies, clean technologies and smart grids.

8. India Elected As Chair Of The Association of Asian Election Authorities

• India has been unanimously elected as the new Chair of the Association of Asian Election Authorities (AAEA) for 2022-2024.
• It was elected at the recently held meeting of the Executive board and General Assembly at Manila (current chair of AAEA), Philippines.

About AAEA

• AAEA was conceived to promote and institutionalize open and transparent elections, independent and impartial election authorities, professionalization of Asian election authorities.
• This important process to establish AAEA began with the January 1997 Symposium in Manila.
  • In pursuance of the resolution passed by participants of the Symposium, the Association of Asian Election

Authorities (AAEA) was finally established in 1998.

• Election Commission of India is a founder member of the AAEA and also served on the Executive Board of the AAEA as the Vice Chair during 2011-13 and Chair during 2014-16.
• Currently, 20 Asian Election Monitoring Bodies are members of AAEA.
• AAEA is an Associate Member of 118 members Association of World Election Bodies (A-WEB).
• The mission of the AAEA is
  (i) To provide a non-partisan forum in the Asian region for sharing experiences and best practices among election authorities
  (ii) To act upon ways to promote open and transparent elections with the objective of supporting good governance and democracy

9. 'Hindi @ UN' Project

• India has contributed USD 800,000 to the United Nations as part of the initiative to enhance public outreach of the organisation in Hindi.
• The Govt of India has been making continuous efforts to expand the use of Hindi in the United Nations.
• As part of these efforts, 'Hindi @ UN' project, in collaboration with the UN Department of Public Information, was launched in 2018.
• This project was launched with an objective:
  (i) To enhance the public outreach of the United Nations in Hindi language, and
  (ii) To spread greater awareness about global issues among millions of Hindi-speaking people around the world.
• India has been partnering with the UN Department of Global Communications (DGC) since 2018 by providing an extra-budgetary contribution to mainstream and consolidate news and multimedia content of DGC in Hindi.
  • Since 2018, the UN News in Hindi is disseminated through the UN's website and social media handles and a UN Facebook Hindi page.
  • A UN News-Hindi audio bulletin (UN Radio) is released every week.

Extra Mile

• Official languages of the UN: Arabic, Chinese, English, French, Russian and Spanish. These 6 languages are used in UN meetings and in these 6 languages all official UN documents are written.
  • India is making efforts to get Hindi recognized as the official United Nations language.
• Working languages of the UN Secretariat: English and French are the two working languages.
• Process to recognize a language as the official language of the UN: A resolution should be adopted by the UN General Assembly (UNGA) with at least a two-thirds majority.

10. 75th World Health Assembly

• The Seventy-fifth World Health Assembly was held in Geneva, Switzerland. It was the first in-person Health Assembly since the start of the COVID-19 pandemic.
• Theme of this year’s Health Assembly was: Health for peace, peace for health.
• Union Health Secretary Rajesh Bhushan has been appointed as the chairperson of the Committee B at the summit.
  • The Assembly functions through two committees -- A and B.
  • The Committee A meet to debate technical and health matters.
  • Committee B primarily discusses administrative and financial matters of the WHO.

Key Outcome

• At the 75th World Health Assembly, Member States adopted a landmark decision to improve the WHO’s financing model.
• WHO's current financing model has been identified by many experts as posing a risk to the integrity and independence of its work.
  • WHO’s over-reliance on voluntary contributions, with a large proportion earmarked for specific areas of work, results in an ongoing misalignment between organizational priorities and the ability to finance them.

About the World Health Assembly

• The World Health Assembly is the decision-making body of WHO. It focuses on a specific health agenda prepared by the Executive Board.
• The main functions of the World Health Assembly are to:
  • determine the policies of the Organization, appoint the Director-General, supervise financial policies, and review and approve the proposed programme budget.
• The Health Assembly is held annually in Geneva, Switzerland.

To read more information on this topic:

• International Organizations: International Relations