29 September, 2020

  • UN and the retreat from multilateralism (Challenges to United Nations) (International Relations)
  • RBI extends enhanced borrowing limit for banks till March-2021 (Economy) (Marginal Standing Facility)
  • Engineering Exports drop 18% during April to August 20 (India's Merchandise Export and Import) (Economy)
  • True Issue (100 years of Non-Cooperation Movement) (Indian History)
  • QOD

Prelims Quiz

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    UPSC Current Affairs: UN and the retreat from multilateralism |Pg 07

    UPSC Syllabus: Prelims: International Relations | Mains: GS Paper-II – International Relations

    Sub Theme: Decline of Multilateralism| Downfall of UN | UPSC  

    Context:

    • The United Nations commemorated its 75th anniversary on September 21, 2020 by adopting a Declaration. The anniversary comes at a time when the world is witnessing a retreat from multilateralism. It also faces an unprecedented pandemic.

    Before starting the discussion, let us first understand Multilateralism

    • Multilateralism
      • In international relations, multilateralism refers to an alliance of multiple countries pursuing a common goal.
    • How does it helps?
      • Multilateralism, in the form of membership in international institutions, serves to
        • Bind powerful nations
        • Discourage unilateralism
        • Gives small powers a voice and influence that they could not otherwise exercise. For a small power to influence a great power, the Lilliputian strategy of small countries banding together to collectively bind a larger one can be effective.
        • Similarly, multilateralism may allow one great power to influence another great power. For a great power to seek control through bilateral ties could be costly; it may require bargaining and compromise with the other great power.

    Global community adopted the Multilateralism post WWII, in the form of UNO. But it has been seen that the importance of UN has been eroding owing to the Challenge to multilateralism

    Challenge due to increasing Nationalism:

    • The U.S. has increasingly grown vociferous in its opposition of UN.
      • the U.S., which created the international system as we know today, is no longer willing to be its “guarantor of last resort.
    • Brexit has shown that nationalism remains strong in Europe. It has delivered a blow to the idea of Europe, united and whole.
    • And the challenge to multilateralism is coming not from the have-nots, but the main stakeholders of the system.

    The rise of China and its emphasis on Bilateralism

    • China has stepped in to take advantage of the West’s retreat from multilateralism.
    • But China’s assertion of a role on the world stage is not an embrace of the idea of multilateralism.
    • Its flagship Belt and Road Initiative consists of a series of bilateral credit agreements with recipient countries with no mechanism for multilateral consultation or oversight. Curiously, President Xi Jinping’s speech at the UN General Assembly did not mention it. The European Union’s and U.S.’s sanctions against Russia have driven it closer to China.

    Issues with UNO and its organizations

    • The rift between the permanent members of the Security Council has already started affecting the work of the UN Security Council.
    • The World Health Organization failed to provide early warnings.
    • The WTO 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.
    • The complex architecture of arms control set up at the end of the Cold War is threatened by the dismantling of the Iran nuclear deal. Multilateral efforts to address climate change have made symbolic progress at best.
    • The governance of the internet is forfeiting its initial aspiration of a borderless knowledge society as a few private companies are hoarding data exponentially and authoritarian states are misusing it as a tool of surveillance and repression.

    Issue of Finances

    • As we all know that UN is a large organization with offices scattered around the globe. And to be effective, they need a lot of resources.
      • Just take the Example of UN Peacekeeping forces:
        • 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 $8 billion
        • If you compare it with annual military spending of nations: USA ($ 650 Billion).
      • Even the required amount is not allocated and hence it suffers from a paucity of resources.
        • There was an outstanding assessed contribution of $1.7 billion for peacekeeping activities by the end of the financial year.
        • Similarly, there was an outstanding $711 million in the assessed contribution for the general budget.
      • Not only that, most of the humanitarian assistance, developmental work, and budgets of the specialised agencies are based on voluntary contributions.
        • There are calls for increasing public-private partnerships. This is not a satisfactory arrangement. The UN provides ‘public goods’ in terms of peace and development often in remote parts of the world. There may not be enough appetite on the part of corporations. The UN remains an inter-governmental body.

     

    The danger, ultimately, is that without a shared normative ground for collaboration and collective action going beyond mere pragmatic alliances, global governance risks relapsing into a neo-Hobbesian state of nature characterised by a dangerous cocktail of confrontational politics, zero-sum games, and neoliberal concentration of power in the hands of a few. Such a scenario would eventually forfeit the interests of smaller and medium-sized powers as well as civil society at large.

     

    UPSC Current Affairs: RBI extends enhanced borrowing limit for banks till March 31|Pg 14

    UPSC Syllabus: Prelims: Economy | Mains: GS Paper-III – Economy

    Sub Theme: Basics of Monetary Policy| MSF | Marginal Standing Facility | UPSC  

    Context:

    In March 2020, the RBI had increased the borrowing limit for the scheduled Banks under the Marginal Standing Facility (MSF). This facility was a temporary measure to enhance liquidity position of the Banks and was applicable for 6 months up to September, 2020. Now, the RBI has decided to extend the deadline for enhanced borrowing limit by an additional 6 months and would be applicable up to March 31, 2021.

    Marginal Standing Facility (MSF)

    The MSF is a tool used by the Banks to borrow money from the RBI on an overnight basis. The mechanism is similar to Repo transaction. In case of Repo, the Banks use G-Secs which are not part of SLR. However, under the MSF, the Banks use the G-Secs which are part of SLR to borrow money from the RBI. The MSF is typically used when the Banks do not have enough G-Secs outside the SLR.

    Since the Banks use G-Secs which are part of SLR  under the MSF, the RBI imposes limits on borrowings. Earlier, the Banks can borrow only up to 2% of their deposits. But, the limit was enhanced to 3% in March 2020. This enhanced borrowing limit would now be applicable up to March 31, 2021.

     

    UPSC Current Affairs: Engineering exports drop 18% in April August’ |Pg 14

    UPSC Syllabus: Prelims: Economy | Mains: GS Paper-III – Economy

    Sub Theme: Basics of Monetary Policy| MSF | Marginal Standing Facility | UPSC  

    Context:

    According to Engineering Export Promotion Council of India (EEPC), the export of Engineering goods has declined by over 18% between April - August 2020. Keeping in mind the context of this article, let us look at India's Trade Performance for the Financial year 2019-20, which becomes quite important for the UPSC Prelims.

    India's Merchandise Trade Performance- Composition and Direction of Foreign Trade

    Merchandise Exports

    Trends in Merchandise Exports: Between 2009-14, the merchandise exports accounted for 16% of GDP. However, since then the merchandise exports as % of GDP has steadily declined to 11.3% of GDP in first half of 2019-20.

    Top 5 Export commodities: Petroleum Products, Pearls and Precious Stones, Drug Formulations, Gold Jewelry, Iron and Steel.

    Top 5 Export Destinations for India: USA, UAE, China, Hongkong and Singapore.

    Merchandise Imports

    Trends in Merchandise Imports: Between 2009-14, the merchandise imports accounted for 24.3% of GDP. However, since then the merchandise imports as % of GDP has steadily declined to 17.6% of GDP in the first half of 2019-20.

    Reasons for the decline in merchandise Imports as % of GDP:

    • Decline in the International Crude oil prices (Crude oil accounts for 26% of India's imports)
    • Slowdown in the Indian Economy on account of declining demand has also led to decline in imports.

    Top 5 Import Commodities: Crude Oil, Gold, Petroleum Products, Pearl and Precious stones, Coal and Coke,

    Top 5 Exporters to India: China, USA, UAE, Saudi Arabia, Iraq.

     

    UPSC Current Affairs: Two Speeches |Pg 06

    UPSC Syllabus: Prelims: History | Mains: GS Paper-I – Modern History 

    Sub Theme: NCM | Non Cooperation Movement | UPSC  

    The true issue (From an editorial)

    This except from The Hindu from 100 years ago highlights the opinion before launching Non-cooperation movement –

    1. There was one section of leaders among whom were Sir Ashutosh Chandari, Besant, Dewan Bahadur Govindaraghavier and others who were against the principle and programme of Non-Co-operation and urged the acceptance of the Reform Act as a partial instalment of Swaraj.
    1. The exponents of this view formed however a very small minority in the Congress. The great majority of the delegates were decidedly in favour of the principle of Non-Co-operation. They were agreed as to the basic grounds on which the Congress should proceed to shape its future policy and action. They were firmly of opinion that constitutional methods of agitation have entirely failed to achieve our object.

    Important points on Non-cooperation movement

    • The Non-cooperation movement was launched on 1st August, 1920 by Mahatma Gandhi with the aim of self-governance and obtaining full independence.
    • The immediate cause was the Indian National Congress (INC) withdrawal of its support for British reforms following the Rowlatt Act of 21 March 1919, and the Jallianwala Bagh massacre of 13 April 1919.
      • The Rowlatt Act in March 1919, suspended the rights of defendants in sedition trials, was seen as a "political awakening" by Indians and as a "threat" by the British. Although it was never invoked and declared void just a few years later, the Act motivated Gandhi to conceive the idea of satyagraha (truth), which he saw as synonymous with independence.
    • Gandhi's planning of the non-cooperation movement included -
      • Persuading all Indians to withdraw their labour from any activity that "sustained the British government and economy in India", including British industries and educational institutions.
      • In addition to promoting “self-reliance” by spinning khadi, buying Indian-made goods only and doing away with English clothes.
    • Gandhi‘s non-cooperation movement called for the restoration of the Khilafat in Turkey and the end to untouchability.
    • Veterans such as Bal Gangadhar Tilak, Bipin Chandra Pal, Mohammad Ali Jinnah, and Annie Besant opposed the idea outright.
    • The movements ended suddenly in February 1922 after the Chauri Chaura incident. Many nationalists had felt that the non-cooperation movement should not have been stopped due to isolated incidents of violence. Although most Congress leader's remained firmly behind Gandhi, the determined leaders broke away.
      • The Ali brothers would soon become fierce critics.
      • Motilal Nehru and Chittaranjan Das formed the Swaraj Party, rejecting Gandhi's leadership.

    In 1930, the civil disobedience movement was launched. However the main difference this time was the introduction of a policy of violating the law. Tens of millions again revolted in the Salt Satyagraha. There was unerring adherence to non-violence. The Satyagraha ended in success. Gandhi's commitment to non-violence was redeemed.

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