Nuclear Winter…What if India and Pakistan Were to Engage Here?

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We split the sub-continent with atomic burn,

The population is dead, we seal the urn,

Negotiations are over, we’re off the beaten track,

Civilizations en masse are interred through the crack.

 

Skies are turning to a horrific crimson,

The smoking bodies hide the moon and the sun,

The nuclear winter descends from the stratosphere,

Scorched earth is the writing on the wall everywhere…

China’s Belt and Road and India’s Infrastructural Ambitions – Where is the line to be drawn?

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When in 2017, China organized the first-ever Forum on Belt and Road, almost 130 countries from all over the world, including the United States had sent in their representatives to witness and be part of the diplomatic showcase of China’s global ambitious project, which aims to create an interlocked trade, financial and cultural network stretching from East Asia to Europe and beyond. There was, however, one notable miss, India. India was always opposed to Chinese ambitions of erecting this vast infrastructural network and the primary reason was that it violated India’s state sovereignty. The showcase arm of the Chinese Belt and Road happens to be the China-Pakistan Economic Corridor, a $62 Billion pet project of Chinese President Xi Jinping and traversing the entire length and breadth of Pakistan with nodal points in Xinjiang province of China, and Pakistan’s port town of Gawdar. CPEC is marked by modern infrastructure of transportation networks, special economic zones, industrial clusters and energy hubs, and considered China’s main plank of Belt and Road Initiative aimed to underscore China’s economic might and dominance over the Asian-Pacific seas. That a segment of CPEC cuts through the disputed territory of Pakistan Occupied Kashmir has irked India no ends, which it considers a direct, uncalled-for and aggressive nature of China’s global ambitions at the cost of state sovereignty. Though, the CPEC is yet to be fully commissioned, some segments have started to function. This is turning out to be major bone of contention between the two Asian economic giants. But, relations have a gotten a bit murkier since 2017, and two major geopolitical events have confounded matters further. 

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The first one is the Doklam Standoff between China and India. This tiny plateau nestled between China, India and Bhutan witnessed a three-month standoff between the two largest armies in the world over a road that the Chinese were building and which India apprehended would function more as a surveillance apparatus over the narrow path of land that connects the Indian mainland with the Northeastern states. Though the tension was eventually diffused, the state of affairs between China and India never really thawed as could have been anticipated. It was in 2017 that India and Pakistan became newly installed members of the Shanghai Cooperation Organization (SCO), having been elevated from observer states. China, anticipating an increasing amount of divisiveness within a regional economic and security organization by being accustomed to extreme comity and cooperative discussions was frustrated at India’s becoming a member state that Russia, another founder-member of SCO pushed for. Russia wanted to constrain China’s growing influence in the organization as it was concerned that post-Soviet SCO members were drifting too far into the Chinese geostrategic orbit. Moscow had long delayed implementing Chinese initiatives that would have enabled Beijing to reap greater benefits from regional trade. As China gained more clout in Central Asia, Moscow choice New Delhi’s inclusion to slow and oppose Beijing’s ambitions. It is under these circumstances that New Delhi would likely continue to criticize the CPEC in the context of the SCO because, as a full member, India now has the right to protest developments that do not serve the interests of all SCO members. The SCO also offers another public stage for India to constantly question the intent behind China’s exceptionally close ties to Pakistan.

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The second is the recent escalation of hostilities between India and Pakistan, and how Pakistan felt betrayed over China’s so-called neutral stand by asking both countries to take recourse to meaning dialogue in resolving the contentious issue of Kashmir and Terror and cease all military adventures. It is to be noted that the second convention of the Belt and Road Forum is to take place in April this year, and China is all hopeful to get India’s positive support for its infrastructural might. India’s notable absence from the 2017 meet has hit Chinese plans, and the latter wants to reverse the course this time around. Even if India were to take part this year, or send in their dissent note via an official communique, it would reliably and reasonably highlight the contradiction between China’s stated anti-terrorism goals and the reality of its policy. Most notably, Beijing has consistently looked the other way as Pakistani Intelligence Services continue to support terrorist groups in Afghanistan and Pakistan. Moreover, because India is particularly close to the Afghan Government, it could seek to sponsor Afghanistan to move from observer status toward full SCO membership. This would give India even greater strength in the group and could bolster Russia’s position as well.  

Lingering border disputes and fierce geostrategic competition in South Asia between China and India is likely to temper any cooperation Beijing might hope to achieve with New Delhi in latter’s inclusion at the Forum. Mutual suspicions in the maritime domain persist as well, with the Indian government shoring its position in the strategically important Andaman and Nicobar island chain to counter the perceived Chinese “string of pearls” strategy – aimed at establishing access to naval ports throughout the Indian Ocean that could be militarily advantageous in a conflict. Such mutual suspicions will likely impact Forum’s deliberations and discussions in unpredictable ways. Although India may be an unwelcome addition and irritant, China’s economic and military strength makes it far more formidable on its own – a point that is only magnified as Russian influence simultaneously recedes, or rather more aptly fluctuates. Even when India rejected Beijing’s Belt and Road Initiative overture, China remains India’s top trading partner and a critical market for all Central and South Asian states, leaving them with few other appealing options. India’s entry into the Forum, however, could put Beijing in the awkward position of highlighting the value, while increasingly working around or outside of it. Outright failure of the Forum would be unacceptable for China because of its central role in establishing it in the first place. Regardless of the bickering between countries that may break out, Beijing can be expected to make yet another show of the importance, with all of the usual pomp and circumstance, at the upcoming summit in April, 2019.

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What then is India’s infrastructural challenge to Belt and Road? India’s Prime Minister Narendra Modi instantiated the need for overhauling the infrastructure in a manner hitherto not conceived of by emphasizing that the Government would usher in a ‘Blue Revolution’ by developing India’s coastal regions and working for the welfare of fishing communities in a string of infrastructure projects. That such a declaration came in the pilgrim town of Somnath in Gujarat isn’t surprising, for the foundations of a smart city spread over an area of about 1400 acres was laid at Kandla, the port city. The figures he cited during his address were all the more staggering making one wonder about the source of resources. For instance, the smart city would provide employment to about 50000 people. The Blue Revolution would be initiated through the Government’s flagship Sagarmala Project attracting an investment to the tune of Rs. 8 lakh crore and creating industrial and tourism development along the coast line of the entire country. Not just content with such figures already, he also promised that 400 ports and fishing sites would be developed under the project. One would obviously wonder at how tall are these claims? Clearly Modi and his cohorts are no fan of Schumacher’s “Small is Beautiful” due to their obsession with “Bigger is Better”. What’s even more surprising is that these reckless followers of capitalism haven’t even understood what is meant by “Creative Destruction” both macro- or micro- economically. The process of Joseph Schumpeter’s creative destruction (restructuring) permeates major aspects of macroeconomic performance, not only long-run growth but also economic fluctuations, structural adjustment and the functioning of factor markets. At the microeconomic level, restructuring is characterized by countless decisions to create and destroy production arrangements. These decisions are often complex, involving multiple parties as well as strategic and technological considerations. The efficiency of those decisions not only depends on managerial talent but also hinges on the existence of sound institutions that provide a proper transactional framework. Failure along this dimension can have severe macroeconomic consequences once it interacts with the process of creative destruction. Quite unfortunately, India is heading towards an economic mess, if such policies are to slammed onto people under circumstances when neither the macroeconomic not the microeconomic apparatuses in the country are in shape to withstand cyclonic shocks. Moreover, these promotional doctrines come at a humungous price of gross violations of human and constitutional rights of the people lending credibility once again to the warnings of Schumacher’s Small is Beautiful: A Study of Economics as if People Mattered…

So, is there any comparison between Belt and Road and Blue Economy? Well, pundits could draw far-fetched comparisons between these infrastructural advances, but, for the Chinese, Belt and Road is geographically much vaster as compared to Indian Blue Economy, which is more confined to domestic consumptions but do have elements of exim and trade aspects to it. Apart from that, when it comes to fulfilling these ambitions, China with its economic might have much better resources at commissioning the initiative, whereas India, with its faltering banking industry and waning investor confidence is finding its increasingly difficult to map out routes of funding and financing. On a more geopolitical note, and especially in the wake of current events between India and Pakistan, china would do well to factor in the larger perspectives of its relations with South Asia. It’s well known that China has been using Pakistan as a foil against India since the 1960s, and with its CPEC has upped its commitment to Pakistan that includes the assurances of Pakistani well-being. But can China remain oblivious to Pakistan’s scorpion-like behavior of devouring itself? On the other hand, a stable India is providing opportunities for Chinese companies to expand themselves. The reset in Sino-Indian ties following the Wuhan Summit of 2018 has created conditions which can be of great benefit to Beijing in an era when it is facing a fundamental challenge from the United States. Who knows, New Delhi may even consider supporting the Belt & Road Initiative in some indirect fashion as the Japanese are doing?  

Fascism’s Incognito – Brechtian Circular Circuitry. Note Quote.

Carefully looking at the Brechtian article and unstitching it, herein lies the pence (this is reproduced via an email exchange and hence is too very basic in arguments!!):

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1. When Brecht talks of acceding to the capitulation of Capitalism, in that, being a historic phase and new and old at the same time, this nakedest manifestation of Capitalism is attributed to relationality, which are driven by functionalist propositions and are non-linear, reversible schemas existing independently of the specific contents that are inserted as variables. This may sound a bit philosophical, but is the driving force behind Brecht’s understanding of Capitalism and is perfectly corroborated in his famous dictum, “Reality as such has slipped into the domain of the functional.” This dictum underlines what is new and what is old at the same time.
2. Sometime in the 30s, Brecht’s writings corroborated the linkages between Capitalism and Fascism, when the victories of European fascism prompted consideration of the relationship between collective violence and regressive social configurations. At its heart, his corpus during the times was a defining moment of finance capital, an elaborate systemic treatment of economic transactions within the literary narrative with fascistic overtones. It is here the capitalist is consummate par excellence motivated by the rational calculus (Ayn Rand rings the bells!!!). Eschewing the narrative desire of the traditional dramatic novel, Brecht compels the readers without any recourse to emotional intensity and catharsis, and capturing the attention via phlegmatic and sublimated pleasures of logical analysis, riddle solving, remainder less, and bookkeeping. This coming together of the financial capital with the rise in European Fascism, despite leading to barbaric times in due course, brought forth the progeny of corporation merging with the state incorporating social functions into integrated networks of production and consumption. What Brecht reflects as barbaric is incidentally penned in these tumultuous ear, where capital evolves from Fordist norms into Corporations and in the process atrophy human dimensions. This fact is extrapolated in contemporary times when capital has been financialized to the extent of artificial intelligences, HFTs and algorithmic decision making, just to sound a parallel to Nature 2.0.
But, before digressing a bit too far, where is Brecht lost in the history of class consciousness here? With capital evolving exponentially, even if there is no or little class consciousness in the proletariat, there will come a realization that exploitation is widespread. This is the fecund ground when nationalist and fascist rhetoric seeds into a full-grown tree, inciting xenophobias infused with radicalization (this happened historically in Italy and in Germany, and is getting replicated on micro-to-macro scales contemporarily). But, what Brecht has failed to come to terms with is the whole logic of fascists against the capitalist. Fascists struggle with the capitalist question within their own circles (a far-fetched parallel drawn here as regards India is the right ideologue’s opposition to FDI, for instance). Historically speaking and during times when Bertotl was actively writing, there were more working class members of the Italian fascists than anyone else with anti-capitalist numbers. In Nazi Germany, there were close to 30 per cent within stormtroopers as minimal identifies and sympathizers with communism. The rest looked up to fascism as a stronger alternative to socialism/communism in its militancy. The intellectual and for moral (might be a strikethrough term here, but in any case…) tonic was provided for by the bourgeois liberals who opposed fascism for their capitalist bent. All in all, Brecht could have been prescient to say the most, but was too ensconced, to say the least, in Marxist paradigms to analyze this suturing of ideological interests. That fascism ejected itself of a complete domineering to Capitalism, at least historically, is evident from the trajectory of a revolutionary syndicalist, Edmondo Rossoni, who was extremely critical of internationalism, and spearheaded Italian fascist unions far outnumbering Italian fascist membership. Failure to recognize this fractious relationship between Fascism and Capitalism jettisons the credibility of Brechtian piece linked.
3. Althusser once remarked that Brecht’s work displays two distinct forms of temporality that fail to achieve any mutual integration, which have no relation with one another, despite coexisting and interconnecting, never meet one another. The above linked essay is a prime example of Althusser’s remark. What Brecht achieves is demonstrating incongruities in temporalities of capital and the human (of Capitalism and Barbarianism/Fascism respectively), but is inadequate to take such incongruities to fit into the jigsaw puzzle of the size of Capitalism, not just in his active days, but even to very question of his being prescient for contemporary times, as was mentioned in point 2 in this response. Brecht’s reconstructing of the genealogy of Capitalism in tandem with Fascism parses out the link in commoditized linear history (A fallacy even with Marxian notion of history as history of class consciousness, in my opinion), ending up trapped in tautological circles, since the human mind is short of comprehending the paradoxical fact of Capitalism always seemingly good at presupposing itself.
It is for these reasons, why I opine that Brecht has a circular circuitry.

Global Significance of Chinese Investments. My Deliberations in Mumbai (04/03/2018)

Legends:

What are fitted values in statistics?

The values for an output variable that have been predicted by a model fitted to a set of data. a statistical is generally an equation, the graph of which includes or approximates a majority of data points in a given data set. Fitted values are generated by extending the model of past known data points in order to predict unknown values. These are also called predicted values.

What are outliers in statistics?

These are observation points that are distant from other observations and may arise due to variability in the measurement  or it may indicate experimental errors. These may also arise due to heavy tailed distribution.

What is LBS (Locational Banking statistics)?

The locational banking statistics gather quarterly data on international financial claims and liabilities of bank offices in the reporting countries. Total positions are broken down by currency, by sector (bank and non-bank), by country of residence of the counterparty, and by nationality of reporting banks. Both domestically-owned and foreign-owned banking offices in the reporting countries record their positions on a gross (unconsolidated) basis, including those vis-à-vis own affiliates in other countries. This is consistent with the residency principle of national accounts, balance of payments and external debt statistics.

What is CEIC?

Census and Economic Information Centre

What are spillover effects?

These refer to the impact that seemingly unrelated events in one nation can have on the economies of other nations. since 2009, China has emerged a major source of spillover effects. This is because Chinese manufacturers have driven much of the global commodity demand growth since 2000. With China now being the second largest economy in the world, the number of countries that experience spillover effects from a Chinese slowdown is significant. China slowing down has a palpable impact on worldwide trade in metals, energy, grains and other commodities.

How does China deal with its Non-Performing Assets?

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China adopted a four-point strategy to address the problems. The first was to reduce risks by strengthening banks and spearheading reforms of the state-owned enterprises (SOEs) by reducing their level of debt. The Chinese ensured that the nationalized banks were strengthened by raising disclosure standards across the board.

The second important measure was enacting laws that allowed the creation of asset management companies, equity participation and most importantly, asset-based securitization. The “securitization” approach is being taken by the Chinese to handle even their current NPA issue and is reportedly being piloted by a handful of large banks with specific emphasis on domestic investors. According to the International Monetary Fund (IMF), this is a prudent and preferred strategy since it gets assets off the balance sheets quickly and allows banks to receive cash which could be used for lending.

The third key measure that the Chinese took was to ensure that the government had the financial loss of debt “discounted” and debt equity swaps were allowed in case a growth opportunity existed. The term “debt-equity swap” (or “debt-equity conversion”) means the conversion of a heavily indebted or financially distressed company’s debt into equity or the acquisition by a company’s creditors of shares in that company paid for by the value of their loans to the company. Or, to put it more simply, debt-equity swaps transfer bank loans from the liabilities section of company balance sheets to common stock or additional paid-in capital in the shareholders’ equity section.

Let us imagine a company, as on the left-hand side of the below figure, with assets of 500, bank loans of 300, miscellaneous debt of 200, common stock of 50 and a carry-forward loss of 50. By converting 100 of its debt into equity (transferring 50 to common stock and 50 to additional paid-in capital), thereby improving the balance sheet position and depleting additional paid-in capital (or using the net income from the following year), as on the right-hand side of the figure, the company escapes insolvency. The former creditors become shareholders, suddenly acquiring 50% of the voting shares and control of the company.

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The first benefit that results from this is the improvement in the company’s finances produced by the reduction in debt. The second benefit (from the change in control) is that the creditors become committed to reorganizing the company, and the scope for moral hazard by the management is limited. Another benefit is one peculiar to equity: a return (i.e., repayment) in the form of an increase in enterprise value in the future. In other words, the fact that the creditors stand to make a return on their original investment if the reorganization is successful and the value of the business rises means that, like the debtor company, they have more to gain from this than from simply writing off their loans. If the reorganization is not successful, the equity may, of course, prove worthless.

The fourth measure they took was producing incentives like tax breaks, exemption from administrative fees and transparent evaluations norms. These strategic measures ensured the Chinese were on top of the NPA issue in the early 2000s, when it was far larger than it is today. The noteworthy thing is that they were indeed successful in reducing NPAs. How is this relevant to India and how can we address the NPA issue more effectively?

For now, capital controls and the paying down of foreign currency loans imply that there are few channels through which a foreign-induced debt sell-off could trigger a collapse in asset prices. Despite concerns in 2016 over capital outflow, China’s foreign exchange reserves have stabilised.

But there is a long-term cost. China is now more vulnerable to capital outflow. Errors and omissions on its national accounts remain large, suggesting persistent unrecorded capital outflows. This loss of capital should act as a salutary reminder to those who believe that China can take the lead on globalisation or provide the investment or currency business to fuel things like a post-Brexit economy.

The Chinese government’s focus on debt management will mean tighter controls on speculative international investments. It will also provide a stern test of China’s centrally planned financial system for the foreseeable future.

Global Significance of Chinese investments

17th Century England – Onwards to Restoration.

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In the 17th century England, the middle class had carried forward their rebellion against absolute monarchy based on divine rights. The Parliament was the representation of this class and its fight. The men who now fought the Stuart Kings were precisely those who had profited from Tudor absolutism, which now began to irritate them. The lower middle class then split from their upper counterpart and rallied Cromwell. So far as the untitled and unmoneyed class was concerned, they stood largely by the throne, although they had as little to gain by the King as by the Parliament. The middle class was so afraid of the poor people as of the King. When the parliamentarians talked of a government based on consent, they had no intention of extending the franchise to the people; it was to be their own consent. Right to property, which they held to be sacred, meant to them the principle that the King had no right to tax them without their consent; it also meant a denial of property to the people who were poor.

Coke, who was appointed the Attorney General (and also the Chief Justice) in 1594, was attacking the divine rights of Kings and he regarded both King and the Parliament, as subject to common law which, to him, was the truly sovereign power in the land. Common law had to be interpreted by the judges. Throughout Europe, absolute state was becoming the order of the day. Louis XI had first subjugated the feudal nobility. The Reformation then enabled the monarchs to better the Church. Henry VIII had claimed jurisdiction and powers, which earlier no British King had done. To the discomfiture of Hobbes, the cursed Puritans had undone the work so artistically done by Henry VIII and the price had to be redesigned so that the fabric may be saved from total destruction in the hands of the rabble. Someone, like Thomas Hobbes agrees with Machiavelli that man is selfish and that human nature is bad but insists that the state could transfer the man into a moral being by the exercise of the master’s rod.  He is indebted to Bodin for his concept of sovereignty, but, unlike Bodin, would impose no limitations of Divine, Natural or Constitutional law on his subjects. He agrees with Grotius that, reason is the basis of law but insists that it must be sovereign’s reason alone. He modifies the Divine Right theory by discarding the divine origin of state and by giving Divine Right to the State instead to the King. Hobbes like Machiavelli, subordinated ethics and religion to politics and was the first prophet of unlimited sovereignty.

Elizabeth (1558 – 1603)

Elizabeth was the daughter of Henry VIII and Anne Boleyn. She ascended to the throne at the age of 25 in 1558 on the death of Queen Mary. She was not only regal but also human. Like her father, she had courage, determination and self-confidence. She was willful and domineering in all matters. Like her mother she was fond of pomp and pleasure. Her great virtue was that she loved the people of England and for their sake she was prepared to make any sacrifices. Her conservative mind made extreme Protestantism suspect to her, separated the foreign policy from any enthusiasm and fitted her to be the real maker of Anglicanism.

When she ascended to the throne, she had to face many difficulties. There was the danger of the civil war in the country. The orthodox Catholics regarded Elizabeth as an usurper and they were prepared to take up arms against her in order to support the cause of Mary Stuart. The Protestants were also bitter. They were determined to carry the Reformation further. There was also a danger of foreign invasion and conquest. A lot of money had been wasted in the French war during the reign of Mary Tudor. The coinage had also been debased. The credit goes to Elizabeth that she not only surmounted all these difficulties but were also able to make her country great and strong.

Religion at her time of ascension

The first great achievement of Elizabeth was her religious settlement. The policy followed by her was that she stopped the burning of the people. The “Act of Supremacy” eliminated the authority of the Pope in England and made Elizabeth the head of the Church of England. She took up the title of “Supreme Governor” and not “Supreme Head” as had been done by her father. The monasteries were dissolved and their lands were passed to the crown. A Book of Common Prayer in English was issued. Extremists among the Catholics and the Protestants were not prepared to reconcile themselves with her religious settlement. However, Elizabeth did not take any strong action against them so long as the people attended the Church. The Church settlement got a setback after 1570, when the Pope issued an excommunication and deposed Elizabeth and declared her to be longer a Queen of England. Her subjects were absolved from their allegiance to her. In 1571, the British Parliament passed an Act, which declared to be high treason for anyone in England to call the Queen a heretic, and usurper or an infidel. The puritans also attacked the Church settlement. They were utterly dissatisfied by the moderate character of it. Most of the ceremonies prescribed by the Church were considered by them to be a relic of Popery and they would like to abolish the same. However, the fact remains that, Elizabeth succeeded in attaining a large unity in the Church and that is the reason why she was successful against Spain, when the Armada attacked England in 1558.

Her foreign policy

The foreign policy of Elizabeth was essentially that of peace. Since England had been weakened in the reigns of Edward VI and Mary Tudor, it was not in her interest to fight against any foreign power in that condition. Her great danger was an invasion from France or Spain, both Catholic countries. However, Elizabeth took advantage of the bitter rivalry going on between France and Spain and was successful in playing off the one against the other. Her foreign policy approach was not dogmatic, but was guided by enlightened national interest. The reign of Elizabeth saw the beginning of English maritime activity. It brought naval supremacy to England.

Her rule in general

Elizabeth can rightly be called as one of the greatest rulers of England. No other ruler was called upon to face so many difficulties and none else faced them so boldly and successfully. She addressed in these words a deputation of both the houses of Parliament: “Though I be a woman, I’ve as good a courage answerable to my place as ever my father had. I’m your anointed Queen. I’ll never be by violence constrained to do anything. I thank God that I’d been endued with such qualities that if I were turned out of the realm in my petticoat, I were able to live in any place in Christendom.” She was the child of the Renaissance rather than that of the Reformation. Skeptical and tolerant in the age of intolerance, she was born and brought up to re-establish the Anglican Church and to evade religious war by a compromise between the Catholics and Protestants.

Tudor rule 

Tudor rule was arbitrary and autocratic in nature. It was despotism, under more or less parliamentary forms. Though despots, their rule was not a tyranny. It was popular despotism based upon the assent of the people and it was assented to because in the main it identified itself with national interests. Their rule in nature was of the dictatorship. The rising middle class called for a strong ruler and was ready to overlook his violence and unconstitutional acts if he would maintain peace and order. The policy of the Tudors was to rule with the support of the subservient Parliament. As a result, Parliament was degraded into an instrument of royal will. The Tudors had broken the power of the great nobles. Monarchs could influence elections and so secure the return of members who favoured his views. Thus, as against the sovereign, Parliament had little influence. The Tudors, however, never sought to override the authority of the Parliament. On the contrary, they encouraged the parliamentary action of the commons. Grave and momentous questions were brought before it such as the anti-papal measures, which cut off Pope’s authority in England. As a consequence, the importance of Parliament increased. The commons grew more self-reliant and were gradually fitted to shake off their tutelage to the crown. There was little friction between the Crown and the Parliament. Parliament submitted to royal guidance and the sovereign in its turn never sought to override its legislative authority.

One of the most important characteristics of the Tudor rule was the growth of the strong monarchy built upon the ruins of the feudal system. That was partly due to the decline of the power of the nobility and the invention of the gunpowder. Another important point was the broadening of the people’s minds on account of the Renaissance movement. The new spirit paved the way for the Reformation movement.

James I (1603 – 1625) 

James I ruled from 1603 to 1625. He was born in 1556 and he came to the throne after the expulsion of his mother from Scotland. When his mother was a prisoner in England, he was the King of Scotland. He did nothing to support the cause of his mother. The result was that Elizabeth accepted him as her successor to the throne of England. He had been brought up under rigid Calvinist discipline. He failed as the King of England, even though he was a man of great learning. He was so fond of “unbuttoning his royal stores of wisdom for the benefits of his subjects” that Henry IV of France called him the “wisest fool in Christendom”. He was intolerant to any criticism. He believed that Kings should have supreme authority over all. He believed that people had no right to revolt. “The state of monarchy is the supremest thing on Earth; for Kings are not only God’s lieutenants upon Earth and sit upon God’s throne, but even by God Himself, they are called Gods…it is sedition in subjects to dispute what a King may do in the height of his power. I will not be content that my power be disputed on.” 

Here is an extract from the Vicar of Bray, an old ballad:

                  To teach his flock he never missed,

                  Kings are by God appointed,

                  And damned are they, who do resist,

                  Or touch the Lord’s Anointed.

He had fixed views about politics and the status of Kings. He believed in the Divine Rights of Kings. This view was that Kings were Kings because God made them Kings and they were responsible to God alone for whatever they did and the people had no right to either find fault with them or to challenge their authority. It was this concept of monarchy that was responsible for all his troubles. James I stood for universal peace. He raised the slogan of “Beati Pacifici” (Blessed are the peace makers). His ideas of religious toleration were a cry in the wilderness. In spite of his good intentions, he was a complete failure as a king.

His relations with the Parliament

The relations between James I and the Parliament were not cordial. He believed in the Divine Rights of Kings, but the Parliament claimed certain rights on the basis of tradition, customs and evolutionary growth. Parliament based its rights and privileges on the score of History. Parliament, during the reign of James I, asserted with success its right to impeach the ministers of the King. It protested against the new impositions. It passed its law against monopolies. It asserted its rights to discuss all the affairs of the State although the King strongly protested against the claim. It failed to secure the right of meeting regularly. From these relations, it was clear that the struggle between the two had begun.

Common law

No account of the reign of James I can be complete without a reference to the common law lawyers headed by the Chief Justice Coke. In 1594, Coke was appointed Attorney General. He was a great champion of the common law. His view was that the propriety of all actions must be judged by the common law. There was no place for the Divine Rights of the Kings. The judges alone could resolve the conflicts between the prerogatives and the statutes. The view of Coke was different from that of Bacon who held that judges were lions, but lions under the throne. It was during the reign of James I that many English colonies were established beyond the seas. In 1612, the English East India Company set up its factory at Surat (Gujarat, India). Thus, the beginnings of the future British Empire in India and America were laid during the reign of James I.

Charles I (1625 – 1649)

James I died on the 27th March 1625 and was succeeded by his second son, Charles I. Charles I loved those who were close near him, but was cold towards others. He was devoted to the Church of England and was punctual in his devotion to it. To Charles I, the Divine Right was the question of his faith, as deeply rooted as his belief in the Church. He was a bad judge of public questions and political men. He viewed them through the lens of his affections. He saw only rebellion in the critics of the Church of England. The reign of Charles I can be divided into four periods. The first four years of his reign from 1625 to 1629 covered the first period. During this period foreign wars were fought but lost and the relations between the King and the Parliament were bitter. The second period was covered by the years from 1629 to 1640. During this period, he ruled without a Parliament. The third period was covered by the years 1640 to 1642. It was also a period of short and long Parliament. The fourth period is covered by the two Civil wars (1642 – 1649). Charles I was executed in January 1649.

Relations with the Parliament 

The fundamental dispute between the King and the Parliament was that the Parliament was determined to become the sovereign of the country and was not prepared to allow the King to do whatever he wanted to do. The execution of Charles I shocked the people. The people were not in favour of Parliament going to such an extreme. The dignified behaviour of the King at the time of his execution also excited universal admiration. There was a strong reaction in favour of the monarch. Many called him the martyr who died for the Church of England. There were others who gave him the credit for having died for the laws and liberties of the English men. A few days after his death, a book entitled “Sikon Basilike” was published. It purported to give the views of the King on Government. It was felt that the dictatorship of the army was no guarantee to safeguard the popular institutions of England and the liberties of the people. The army could fight but could not reconstruct society. This execution was followed by military despotism, which was as bad as the tyranny of the King himself. The question has been asked whether the execution of Charles I was justified or not. From the legal point of view, there was no justification for trying the King as no process could be issued against the monarch. Moreover, the members of the court were partisans and did not come up to the ideal of impartiality as required by the judges. The only justification for the execution of Charles I was moral and political. Cromwell was right in saying that it was a cruel necessity. It was cruel because it was an extreme measure involving the execution of the King. It was a necessity because without it there would have been no liberty for Englishmen. Charles I was not at all prepared to accept any limitations on his powers. He was given many opportunities both by the Parliament and the army to come to reasonable compromise but he was declared dishonest by these very bodies and hence it was difficult to come to any sort of an agreement with him. The Parliament and the army always thought of him as extremely cynical and his dealings with these two constitutional bodies were inherently insincere in nature and thus no wonder such an insincere man was put to death.

Commonwealth 

The Commonwealth was established in England on January 4, 1649 by a proclamation by the Rump Parliament that “the people are, under God, the origin of all just power…that the commons of England in Parliament assembled, being chosen by and representing the people have the supreme power in this nation”. On February 5, the Rump decided that the House of Lords, being dangerous and useless, should be abolished. On February 6, it was resolved that “it hath been found by experience and this House doth declare that the office of the King in this nation and to have power thereof in any single person, is unnecessary and burdensome and dangerous to the liberty, safety and public interest of the people of this nation and thereof ought to be abolished”. On March 17 and 19, 1649, two Acts were passed by which the offices of the King and the House of Lords were abolished. Thus the House of Commons became the sole governing body of England. The chief organ of administration of the Commonwealth was the Council of the State. It was annually chosen by the Parliament. The council was concerned with the army, the navy, foreign affairs etc. In July 1649, was passed the “Treason Act”, which made it treasonable for anyone who published maliciously that “the Government is usurped or unlawful or that the Commons assembled in Parliament are not the supreme authority of this nation”. In September 1649, was passed the “Press Act” which muzzled the freedom of the press. The publication of any printed material without a license from the Government was forbidden. A special court of justice consisting of 12 judges was established to liquidate the enemies of the Commonwealth.

The members of the Parliament were Presbyterians and they insisted on imposing “certain fundamentals before a man should be free to propagate his opinions”. Cromwell was in favour of religious toleration for all except the Roman Catholics. Certain changes were introduced in the Church whereby it became less Presbyterian. It lost its autonomy and became subordinate to the State. Rump Parliament was “the first English Government to appreciate the importance of sea power”. It also was responsible for England a great sea power. The Rump Parliament also attended to foreign trade and the overseas empire of England. In 1651, was passed the “Navigation Act”. This Act was intended to strike a blow at the commercial power of Holland and no wonder it aroused the indignation of that country. The Rump had become unpopular with the army because it was a small body, which did not represent the whole nation. Moreover, many of its members were guilty of favouritism and corruption. Cromwell and his army urged the dissolution of the Parliament but the Rump refused to be dissolved. Cromwell could not tolerate the pride ambition and self-seeking of the members of the Parliament. On April 20, 1653, Cromwell himself went to the House of the Commons and turned out the members of the House and had the doors locked. The same afternoon, the Council of State also fell before military violence. After the dissolution of the Rump, Cromwell set up a new council of State which recommended that a Parliament of saints composed of 140 Godly men, 129 from England, 5 from Scotland and 6 from Ireland be summoned. This Parliament met in 1653. it is also known as Barebone’s Parliament. This Parliament was a unique one and it passed many laws like the solemnization of marriage a civil institution, public registration of births, marriages and death. Another law provided for the better custody of insanes. But this Parliament too failed. Cromwell was essentially a reluctant and an apologetic dictator. Lambert drew up a constitutional document called the “Instrument of Government”. It was the first and the last written English constitution. By this instrument, Cromwell was made Lord Protector for life with Council of State to help him. England, Scotland and Ireland were to be united in a single commonwealth with a Parliament representing the three countries. Parliament consisting of one House was to possess the legislative power and was to be elected every three years by a reformed electorate. This instrument gave Cromwell a limited monarchy for life. While the peculiarity of the English constitution was that it was flexible and unwritten, but the instrument tried to make it rigid and written.

Cromwell

Cromwell was one of the greatest figures in the History of England. He was born in 1599 at Huntington. He was a son of a country gentleman and was educated in a college in Cambridge. He emerged as a leader of his country when she was plunged in a Civil war on account of the conflict between the King and the Parliament. He not only won victories for the Parliament but also restored law and order in the country. Cromwell was the first pronounced imperialist in the history of England. His objective was to extend the power of England overseas and he did not hesitate to use all possible means to achieve that end. In his foreign policy, he showed zeal for Protestantism, but while doing so, he did not ignore the trade and commerce of his country. He was himself a Republican, but circumstances forced him to act as a military despot. He tried to govern by a system involving the division of power between himself and the Parliament. When he failed in that objective, he ruled despotically. He levied taxes without the sanction of the Parliament. He imprisoned people without trial. As a matter of fact, he set up a military tyranny. He wished for the Parliament to be supreme and did not wish to take up the title of the King. His faith in God was both a source of his strength and his weakness. In all that he did, whether good or evil, in the three kingdoms, his conviction was that God would support him in everything that he undertook. What he judged to be necessary for the present, that he thought to be predestined for the future. His victories seemed to him, not the result of the means, which he employed, but proofs that his policies were also the will of the Divine. Although he is regarded by some as the greatest patriot and by others as the greatest traitor, he was without doubt one of the greatest men of his country. He possessed military capacity of a very high order. He organized and maintained an army, which was so efficient that he did not meet with any defeat. Oliver Cromwell died on September 3,1658. When his strong hand was removed, the country was plunged into confusion. The Levellers stood for a Republic in which the common people were to rule without Lords, Priests or Lawyers. They had a very treatment from Oliver Cromwell but now they felt that they could do whatever they pleased. Another set known as the Fifth Monarchy Men was led by Harrison. They foretold the immediate end of the world. According to their reading of Daniel, the four monarchies of antiquity, Babylonia, Persia, Greece, and Rome were to be succeeded by the fifth monarchy, now at hand, the reign of Christ and his Saints.

Oliver Cromwell had named his son Richard Cromwell to succeed as the Lord Protector. He lacked political capacity and had no advisers. The gulf between Richard and the army was widening. In order to strengthen his position, Richard decided to summon the Parliament and the members of the Parliament were hostile to the army. The army did not like the law, which forbade the army officers from having political meetings. Parliament was dissolved by force in April 1659 and the Rump was recalled. Richard resigned his charge. About the period between 1649 and 1660, monarchy had gone and the House of Lords was established as “useless and dangerous”. This “freedom” was to rise to a climax of Puritan democracy, to decline by reaction into military dictatorship and at last to expire through faction. But it left a legacy. Puritanism released an energy, which called for liberty in religion and every department of life with efficiency greater than anything England had seen. It took long strides towards union with Scotland and Ireland. Its administrative machinery pointed towards the cabinet and its economic doctrine led to the capitalist Britain of the next two centuries.

Restoration

The Restoration of Charles II to the throne of England in 1660 was not merely the restoration of the King but also of Parliament, the Anglican Church, the historic law courts and the old system of local governments in the country. It is wrong to say that the monarchy that was restored was the unlimited and absolute monarchy of Charles I and James I. The “Triennial Act” of 1641 had not been repealed and it meant that the King could not carry on Government without calling a Parliament at least once in three years. Thus, the “Triennial Act” put a check on the power of the King. The result was that Charles II had to be less arbitrary and act according to the law. The very fact that Parliament had made Charles II, the King of England implied that in the last resort Parliament could also unmake him. The Divine Right of Kings to rule was practically dead. A point of conflict between the first two Stuart Kings and the Parliament was the question of taxation. Charles I had levied taxes without the consent of the Parliament. Now it was clearly understood that new taxes could be levied only with the consent of the Parliament. It is clear that although monarchy was restored, it was restored with a difference. Restoration gave to Parliament its old form and organization, which had so radically been changed during the Commonwealth period. The two Houses of the Parliament were restored and the House of Commons became more powerful than the House of Lords. Charles II never questioned the privileges of the Parliament. As a matter of fact, most of his important laws were passed through the Parliament.

Restoration of the Church

Restoration was also the restoration of the Church of England. The Parliament, which was elected in 1661 after the dissolution of the convention Parliament, was predominantly Anglican in nature. The Presbyterian element had disappeared altogether. The so-called Cavalier Parliament ended the work of the Presbyterian majority and restored the Anglican Church to its former position. The “Act of Uniformity” of 1662 provided that all clergymen and teachers were to declare their acceptance of the Anglican Prayer Book. The “Conventicle Act” of 1664 forbade under severe penalties, attendance of any public worship, which was not of Anglican form, of more than four persons, unless they belonged to the same family. The “Test Act” of 1673 provided that all civil and military officers were to take the oath of allegiance and accept the supremacy of the Church of England. In 1679, was passed the “Parliamentary Test Act” which provided that no person was to be a Member of Parliament unless he belonged to the Church of England. 1679 was also the year of Hobbes’ death. It is clear that the Anglican Church was established as a State Church, but with the difference that the headship of the Church no longer belonged to the King as a prerogative right. The leadership of the Church lay with the King-in-Parliament. As has been rightly put by Sir D. L. Keir that the restoration of monarchy in 1660 was especially a return to Government by Law. In this period, the legislative union with Scotland and Ireland was dissolved.

The reign of Charles II

During the reign of Charles II, some constitutional progress was made. The system of appropriation of supplies was established. While granting money to the King, the Parliament laid down the specific purpose for which the money was granted. The responsibility of the Ministers of Parliament was also secured to some extent. During the reign of Charles II, parliamentary parties with definite political programmes were formed and that also added to the strength of the Parliament. The passing of the “Habeas Corpus Act” in 1679 has become a cornerstone of the liberties of the people of England. The Parliament, which placed Charles II on the throne, was known as the Convention Parliament because it was summoned without a royal writ. The lands of the Royalists, which were confiscated, were restored. The Royal revenue was fixed at a fixed sum. Feudal dues and purveyance were abolished. A permanent excise tax was granted to the King as a compensation for the loss of his feudal revenues. The Convention Parliament was dissolved in 1661 and fresh elections were held. The new Parliament, which met in 1661, sat for 18 years and is known as the Cavalier Parliament. It was so called because the cavalier spirit was present among its members. This Parliament was royalist in nature in politics and Anglican in religion. It hated the Puritans and stood for the strengthening of the Church of England. It is true that during the reign of Charles II, the court was corrupt and there were pleasures all around. However, during this period, humanity and refinement spread rapidly in England. Literature, art and science, architecture and etiquette and fashions were copied from the court off Louis XIV, the grand monarch of France. One of the most notable men of this age wasIsaac Newton (1642 – 1727). There were great strides made in the disciplines of Astronomy, Physics, Chemistry and Medicine.

Sino-India Doklam Standoff, #BRICS and Shanghai Cooperation Organization (SCO). How the Resolution Could Have Been Reached?

The National Security Adviser of India, Mr. Ajit Doval was posed with a blunt question by China’s state councillor Yang Jiechi when the two met on July 27 to make a settlement over the disputable patch in the Bhutan-owned Doklam stretch. He was asked: Is it  your territory? However, this tough question failed to faze Doval, who, according to reliable sources, had most calmly replied that the stretch of land in question is not China’s territory either – Does every disputed territory become China’s by default? Doval asked in return. This has the potential to read a lot in between and thus without getting awed by the response, deconstructing what transpired is the imperative. This sharp exchange between the two countries was followed by several rounds of negotiations between the two sides in Beijing, with India’s foreign secretary S Jaishankar and India’s ambassador to China Vijay Gokhale trying to reach out to a mutually acceptable solution. These meetings were also sanctioned by the prime ministers of both the countries, especially when they met in Hamburg on the sidelines of G20 meeting on July 7. In fact, the Indian Prime Minister Narendra Modi and his Chinese counterpart Xi Jinping also agreed to the fact that the negotiations should be held at the NSA level in order to let the dispute not escalate any more. Modi later asked his diplomatic team to reach to a solution at the earliest as this dispute had been the worst in numerous years and the two countries cannot afford to lose each other’s support any more.

This is Doklam, the tri-junction between India, Bhutan and China.

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It was here that India and China were involved in a three-month standoff with the two largest militaries in the world in a eyeball-to-eyeball contact. While, it was in everybody’s interest that the countries do not spark a conflagration, the suspense over this tiny out-of-bounds area had consequences to speculations trajectory. It all started in June this year, when the Indian troops crossed over the disputed territory claimed by both China and Bhutan as its sovereign territory to halt a road construction at Doklam, which could have given China the surveillance and access mechanism over India’s Chicken Neck, the narrow strip that connects the NE Indian states with the mainland. But, other reason for India’s crossing over the boundary lies in a pact with Bhutan where the country would defend any incursions into Bhutan. The standoff was pretty tense with piling up of the war machinery and the troops from either side in a ready-to-combat stature, but still showed extreme presence of mind from getting involved in anything adventurous. China’s blistering state-owned media attacks from instigating to belligerent to carrying out travel advisories on the one hand, and India’s state-purchased media exhibiting peppered nationalism to inflating the 56″ authoritarianism on the other did not really help matters boil down to what was transpiring on the ground. We had pretty much only these two state-owned-purchased behemoths to rely upon and imagine the busting of the myths. But, this week, much to the respite of citizens from either side of the border and the international community at large keenly observing the developments as they were unfolding, the tensions eased, or rather resolved almost dramatically as they had begun in the first place. The dramatic end was at least passed over in silence in the media, but whatever noises were made were trumpeting victories for their respective sides. Even if this were a biased viewpoint, the news reports were quantitative largely and qualitative-ness was generally found at large. The resolution agreed on the the accelerated withdrawal of troops from the site of the standoff.

China still vociferously insists that the territorial dispute in Sikkim was resolved as long ago as in 1890, when Beijing and the British Empire signed the so-called Convention of Calcutta, which defined Sikkim’s borders. As per Article (1) of Convention of 1890, it was agreed that the boundary of Sikkim and Tibet shall be the crest of the mountain range separating the waters flowing into the Sikkim Teesta and its affluents, from the waters flowing into the Tibetan Mochu and northwards into other rivers of Tibet. The line commences at Mount Gipmochi, on the Bhutan frontier, and follows the above-mentioned water-parting to the point where it meets Nepal territory. However, Tibet refused to recognise the validity of Convention of 1890 and further refused to carry into effect the provisions of the said Convention. In 1904, a treaty known as a Convention between Great Britain and Tibet was signed at Lhasa. As per the Convention, Tibet agreed to respect the Convention of 1890 and to recognise the frontier between Sikkim and Tibet, as defined in Article (1) of the said Convention. On April 27, 1906, a treaty was signed between Great Britain and China at Peking, which confirmed the Convention of 1904 between Great Britain and Tibet. The Convention of 1890 was entered by the King of Great Britain on behalf of India before independence and around the time of independence, the Indian Independence (International Arrangement) Order, 1947 was notified by Secretariat of the Governor-General (Reforms) on August 14, 1947. The Order provided, inter alia, that the rights and obligations under all international agreements to which India is a party immediately before the appointed day will devolve upon the Dominion of India. Therefore, in terms of Order of 1947, the government of India is bound by the said Convention of 1890. However, India’s affirmation of the Convention of 1890 was limited to the alignment of the India-China border in Sikkim, based on watershed, and not with respect to any other aspects. However, India-backed Bhutan is convinced that Beijing’s attempt to extend a road to the Doklam area goes against a China-Bhutan agreement on maintaining peace in the region until the dispute is resolved.

The question then is: how could have the tensions that were simmering just short of an accident resolved? Maybe, for the Indians, these were a result of diplomatic procedures followed through the time of tensions, whereas for the Chinese, it was a victory and yet another lesson learnt by the Indians after their debacle in the 1962 conflict. The victory stood its claim because the Chinese maintained that even if the Indians were withdrawing from the plateau, the Chinese would continue patrolling the area. Surprisingly, there isn’t a convincing counterclaim by the Indians making the resolution a tad more concessionary as regards the Indians. It was often thought that amid tensions over the dispute, there had been growing concerns over whether Indian Prime Minister Narendra Modi would skip the upcoming BRICS summit in China as he did in May when Beijing hosted an international event to celebrate the One Belt One Road Initiative championed by Chinese President Xi Jinping. Harsh Pant, a professor of International Relations at King’s College, London, and a distinguished fellow at Observer Research Foundation, said,

If the road is not being built, it’s legal enough for India to pullback, because the boundary dispute is not the problem and has been going on for ages. The real issue was China’s desire to construct a concrete road in this trijunction under dispute. If the Chinese made the concession to not build the road, the whole problem went away.

The Chinese Foreign Ministry’s spokeswoman said on Tuesday that China would adjust its road building plans in the disputed area taking into account of various factors such as the weather. In his turn, Prime Minister Modi would not have gone ahead with the visit to China if the border dispute remains unresolved, according to the expert. Following the resolution of the border dispute, India’s MEA said that Modi plans to visit Xiamen in China’s Fujian province during September 3-5, 2017 to attend the 9th BRICS Summit. But, the weather angle refused to go, as in the words of Hu Zhiyong, a research fellow at the Institute of International Relations of the Shanghai Academy of Social Sciences,

The weather condition is still the main reason. We all know that heavy snowfall is expected in the Donglang region by late September. The snow will block off the mountain completely, making it impossible to continue road construction. This incident has allowed China to clearly understand potential threat from India. I would call India an ‘incompetent bungler.’ That’s because India always is a spoiler in all the international organizations it becomes a part of. It always takes outrageous and irrational actions. After this incident, China realized that India is not a friendly partner, but a trouble-maker.

The Shanghai-based expert pointed out that the recent standoff has helped China better understand the potential harm India can cause. Chinese Foreign Minister Wang Yi said that Beijing hopes that New Delhi will remember the lessons of latest border confrontation and will avoid such incidents in the future. Despite both China and India agreeing to deescalate the border dispute for the sake of the BRICS summit, the temporary compromise may not last long, as tensions could quickly flare again. In the words of Brahma Chellaney, a professor of strategic studies at the New Delhi-based Center for Policy Research,

The standoff has ended without resolving the dispute over the Doklam plateau. The Indian forces have retreated 500 meters to their ridge-top post at Doka La and can quickly intervene if the Chinese People’s Liberation Army (PLA) attempts to restart work on the military road – a construction that triggered the face-off. As for China, it has withdrawn its troops and equipment from the face-off site, but strongly asserts the right to send in armed patrols. A fresh crisis could flare if the PLA tries again to build the controversial road to the Indian border.

Hu, the Shanghai-based Chinese professor, asserted that the recent standoff has allowed China to better prepare for future border disputes with India. The Chinese Defense Ministry said that China will maintain a high combat readiness level in the disputed area near the border with India and Bhutan and will decisively protect China’s territorial sovereignty.

So, where does Shanghai Cooperation Organization (SCO) fit in here?

With India and Pakistan as newly installed members of the Shanghai Cooperation Organization, or SCO, China is likely to face an increasing amount of divisiveness within a regional economic and security organization accustomed to extreme comity and cooperative discussions. India’s entry could especially frustrate Beijing because of rising geopolitical competition between the Asian giants and different approaches to counterterrorism. Beijing may not have even wanted India to join the SCO. Russia first proposed India as a member, likely in part to complement bilateral economic and security engagement, but mainly to constrain China’s growing influence in the organization. Russia is increasingly concerned that post-Soviet SCO members  –  Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan – are drifting too far into China’s geostrategic orbit. Moscow had long delayed implementing Chinese initiatives that would enable Beijing to reap greater benefits from regional trade, including establishing an SCO regional trade agreement and bank. As China gains more clout in Central Asia, Moscow may welcome New Delhi by its side to occasionally strengthen Russia’s hand at slowing or opposing Chinese initiatives. Indeed, during a visit to Moscow, Modi said, “India and Russia have always been together on international issues.”

Going forward, this strategy is likely to pay big dividends. New Delhi has a major hang-up related to the activities of its archrival Pakistan – sponsored by Beijing at the 2015 SCO summit to balance Moscow’s support of India – and continues to be highly critical of China’s so-called “all-weather friendship” with Islamabad. In May, New Delhi refused to send a delegation to Beijing’s widely publicized Belt and Road Initiative summit, which was aimed at increasing trade and infrastructure connectivity between China and Eurasian countries. According to an official Indian statement, the flagship project of the Belt and Road Initiative – the China-Pakistan Economic Corridor – was not being “pursued in a manner that respects sovereignty and territorial integrity.” Indian opposition stems from the plan to build the corridor through the disputed Kashmir region and to link it to the strategically positioned Pakistani port of Gwadar, prompting Prime Minister Narendra Modi to raise the issue again during his acceptance speech at the SCO summit last month. New Delhi likely will continue to criticize the corridor in the context of the SCO because, as a full member, India has the right to protest developments that do not serve the interests of all SCO members. The SCO also offers another public stage for India to constantly question the intent behind China’s exceptionally close ties to Pakistan.

India-Pakistan tensions occasionally flare up, and Beijing may have to brace for either side to use the SCO as a platform to criticize the other. In the absence of a major incident, Beijing has admirably handled the delicacy of this situation. When asked in early June whether SCO membership would positively impact India-Pakistan relations, China spokesperson Hua Chunying said: “I see the journalist from Pakistan sit[s] right here, while journalists from India sit over there. Maybe someday you can sit closer to each other.” Additionally, the Chinese military’s unofficial mouthpiece, Global Times, published an op-ed suggesting that SCO membership for India and Pakistan would lead to positive bilateral developments. Even if that is overly optimistic, it would set the right tone as the organization forges ahead. But the odds are against China’s desired outcome. Beijing needs to look no farther than South Asia for a cautionary tale. In this region, both India and Pakistan are members of the multilateral grouping known as the South Asian Association for Regional Cooperation. New Delhi, along with Afghanistan, Bangladesh and Bhutan, boycotted last year’s summit in Islamabad because it believed Pakistan was behind a terrorist attack on an Indian army base. Even with an official ban on discussing bilateral issues in its proceedings, SAARC has been perennially hobbled by the intrusion of India-Pakistan grievances. Beijing can probably keep its close friend Islamabad in line at the SCO, but this likely won’t be the case with New Delhi. Another major issue for the SCO to contend with is the security of Afghanistan. An integral component of the organization is the Regional Anti-Terrorist Structure, aimed at combating China’s “three evils” – terrorism, extremism, and separatism. India, however, is likely to reliably and reasonably highlight the contradiction between China’s stated anti-terrorism goals and the reality of its policy. Most notably, Beijing has consistently looked the other way as Pakistani intelligence services continue to support terrorist groups in Afghanistan, including the Afghan Taliban and Haqqani Network. Moreover, because India is particularly close to the Afghan government, it could seek to sponsor Afghanistan to move from observer status toward full SCO membership. This would give India even greater strength in the group and could bolster Russia’s position as well.

Lingering border disputes and fierce geostrategic competition in South Asia between China and India is likely to temper any cooperation Beijing might hope to achieve with New Delhi in the SCO. Mutual suspicions in the maritime domain persist as well, with the Indian government recently shoring up its position in the strategically important Andaman and Nicobar island chain to counter the perceived Chinese “string of pearls” strategy – aimed at establishing access to naval ports throughout the Indian Ocean that could be militarily advantageous in a conflict. Such mutual suspicions will likely impact SCO discussions, perhaps in unpredictable ways. Although India may be an unwelcome addition and irritant to Beijing at the SCO, China does not necessarily need the SCO to achieve its regional objectives. From its announcement in 2001, the SCO gave Beijing a productive way to engage neighbors still dominated by Moscow. But today, China’s economic and military strength makes it far more formidable on its own – a point that is only magnified as Russian influence simultaneously recedes, or rather more aptly fluctuates. For instance, even though India rejected Beijing’s Belt and Road Initiative overture, China remains India’s top trading partner and a critical market for all Central and South Asian states, leaving them with few other appealing options. India’s entry into the SCO, however, could put Beijing in the awkward position of highlighting the organization’s value, while increasingly working around or outside of it. Outright failure of the SCO would be unacceptable for China because of its central role in establishing the forum. Regardless of the bickering between countries that may break out, Beijing can be expected to make yet another show of the importance of the SCO, with all of the usual pomp and circumstance, at the next summit in June 2018. China as host makes this outcome even more likely.

Taking on the imagination to flight, I am of the opinion that its the banks/financial institutions, more specifically the Shanghai Cooperation Organisation (SCO) and the upcoming BRICS Summit that have played majorly into this so-called resolution. India’s move to enter Doklam/Donglang was always brazen as India, along with Pakistan entered the Shanghai Cooperation Organisations (SCO) shortly before India entered Chinese territory. In this sense, India was almost mocking the Shanghai Cooperation Organisation by refusing to utilise the SCO as a proper forum in which to settle such disputes diplomatically. So, even if diplomatically it is a victory for #BRICS, materially it is #China‘s. Whatever, two nuclear-powered states in a stand-off is a cold-threat to….whatever the propaganda machine wants us to believe, the truth is laid bare. This so-called diplomatic victory has yielded a lot of positive, and in the process have snatched the vitality of what economic proponents in the country like to express solemnly of late, growth paradigm, wherein the decision is rested with how accelerated your rate of growth is, and thus proportionally how much of a political clout you can exercise on the international scenario. India’s restraint is not to be taken as how the Indian media projects it in the form of a victory, for that would indeed mean leading the nation blindly at the helm of proto-fascism. This could get scary.

Activists’ Position on New Development Bank, Especially in the Wake of 2nd Annual Meetings Held at New Delhi (31st March – 2nd April). Part 1.

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This is an uncut version and might differ largely from the Declaration which the Civil society Organizations put up. It is also inspired by inputs from the Goa Declaration. So, here goes:

Peoples’ Forum on BRICS is a forum of peoples’ movements, activists, trade unions, national-level networks and CSOs. We intend to win our demands for social, economic and environmental justice. We heard testimonies confirming that the BRICS countries and corporations are reinforcing the dominant neoliberal, extractivist paradigm. Negative trends in the areas of global and local politics, and on issues of economics, environment, development, peace, conflict and aggressive nationalism, or social prejudice based on gender, race, caste, sexual orientation are not being reversed by the BRICS, but instead are often exacerbated. The BRICS speak of offering strong alternatives to the unfair North-dominated regimes of trade, finance, investment and property rights, climate governance, and other multilateral regimes. But on examination, we find these claims unconvincing.The victories we have won already on multiple fronts – such as halting numerous multinational corporations’ exploitation, gaining access to essential state services, occupying land and creating agricultural cooperatives,  and generating more humane values in our societies – give us momentum and optimism.

Our experience with other Multilateral Development Banks in the past have had bitter experiences with their involvement leaving a trail of destruction and irreparable damage involving devastation of the ecologies, forced eviction and displacement, inadequate policies of rehabilitation and resettlement, catalyzing loss of livelihoods and responsible for gross human rights violations. Despite having redress mechanisms, these MDBs have proven to carry forward their neoliberal agenda with scant respect for environment and human rights. Not only have their involvement resulted in the weakening of public institutions on one hand, their have consciously incorporated sharing the goods with private players and furthering their cause under the name of growth-led development, ending extreme poverty and sharing prosperity on the other. Moreover, with Right to Dissemination of Information forming one of the pillars of these MDBs, concerns of transparency and accountability are exacerbated with a dearth of information shared, inadequate public consultations and an absolute lack of Parliamentary Oversight over their involvement in projects and at policy-levels. There are plenty of examples galore with privatizing basic amenities like drinking water and providing electricity that have backfired, but nevertheless continued with. In other words, MDBs have stripped the people of the resources that commons.

The Forum views the emergence of New Development Bank in the context of:

  1. Threat to Democracy with an upsurge of right-wing nationalism, not only in BRICS, but also beyond on the global scale.
  2. As a result of this threat, state repression is on an upswing and aggravated under different norms, growth-led development being one among them.
  3. Widespread ecological destruction, with catastrophic rates of species loss, pollution of land and air, freshwater and ocean degradation, and public health threats rising, to which no BRICS country is immune.
  4. The precarious health of the economy and continuing financial meltdown, reflected in the chaos that several BRICS’ stock and currency markets have been facing, as well as in our countries’ vulnerability to crisis-contagion if major European banks soon fail in a manner similar to the US-catalyzed meltdown in 2008-09.
  5. The longer-term crisis of capitalism is evident in the marked slowdown in international trade and in declining global profit rates, especially evident in the three BRICS countries (South Africa, Russia and Brazil) which have negative or negligible GDP growth.
  6. Addition to commodity crashes, one cause of the economic crisis is the deregulatory, neoliberal philosophy adopted by BRICS governments, which puts corporate property rights above human and environmental rights; in the guise of development.
  7. The new generation of Bilateral Trade and Investment Treaties will potentially have adverse impacts on lives and livelihoods of people across the BRICS and their hinterlands, and need complete rethinking.
  8. The world’s workers are losing rights, farmers are suffering to the point of suicide, and labour casualisation is rampant in all our countries, with the result that BRICS workers are engaged in regular protest, including the strike by 180 million Indian workers which inspired the world on 2 September 2016.
  9. The social front, the threat to our already-inadequate welfare policies is serious, especially in Brazil’s coup regime but also across the BRICS where inadequate social policies are driving people on the margins to destitution.
  10. 10.Patriarchy and sexual violence, racism, communalism, caste discrimination, xenophobia and homophobia run rampant in all the BRICS, and because these forces serve our leaders’ interests, they are not addressing the structural causes, perpetuating divide-and-rule politics, and failing to dissuade ordinary people from contributing to oppression.

New Development Bank calls itself Green. However, the Bank is shrouded under a veil of secrecy. The website of the Bank lacks information about its activities to the extent that more than official records, one has to rely on secondary and tertiary sources of information. Not that such information isn’t forthcoming officially, it is the nature of unproven, untested environmental and social safeguards that is the point of contentious concerns for the communities who might adversely impacted by the projects financed by the Bank in their backyards. Unlike the World Bank and the Asian Development Bank, which somewhat robust safeguards to be followed and grievance redress mechanisms (not discounting sometimes questionable efficacies though), the NDB is yet to draft any such operational guidelines and redressal. Although speculative at large, such an absence could be well off the mark in meeting established benchmarks. Due to the lack of such mechanisms, communities may face threats of displacement, evictions, ecological destruction, loss of livelihoods, and severe curtailment of basic rights to life. These issues have recurred for decades due to projects funded by other multilateral development banks. Moreover, as a co-financier with other development institutions, the intensity of NDB’s seriousness on the objectives of promoting transparency, accountability and probity stands questioned. Furthermore, the NDB intends to be “fast, flexible and efficient”, without sacrificing quality. The Bank will use various financial instruments to ‘efficiently’ meet the demands of member states and clients. This is where things could get a little murkier, as NDB too has agendas of economic development dominating social and political developments, and the possibilities of statistical number jugglery to establish the supremacy of the ‘gross economic development’ sometimes trampling on human rights and environmental concerns. Consequently, the economic measures taken on many occasions forgo the human capital in a relentless pursuit of development agenda.

NDB could likely put issues concerning the marginalized on the back-burner in its accelerated economic means without justifying the ends. Whatever be the underlying philosophy of development finance, questions of sustainability from both social and ecological perspective should always be decided along with genuinely informed peoples’ participation. This is possible only when the information is transparently disseminated and there are measures for qualifying accountability rather than quantifying it. Furthermore, the NDB seems to have learnt no lessons from other MDBs with not only an absence of safeguards and dependency on country systems, but with all the more reliance on national development financial institutions which are liable to be relaxed in specific cases. The NDB has not engaged with the people directly and its engagement with the CSOs is a farce considering that there is massive absence of communities, marginalized groups, indigenous peoples who are likely to face the brunt of its investments. Free Prior and Informed Consent (FPIC) does not even exist in its dictionary. Adding to the woes is the accelerated pace of investing in projects without the policies being in place.

Everywhere that people’s movements have made alternative demands – such as democracy, peace, poverty eradication, sustainable development, equality, fair trade, climate justice – the elites have co-opted our language and distorted our visions beyond recognition. While we criticize the way world power is created and exercised, the BRICS leaders appear to simply want power sharing and a seat at the high table. For example, the BRICS New Development Bank is working hand-in-glove with the World Bank; the Contingent Reserve Arrangement empowers the International Monetary Fund; and the Asian Infrastructure Investment Bank serves mainly corporate interests – and all these financial institutions, despite their rhetoric of transformation, are opaque and non-transparent to people in BRICS countries, with no accountability mechanisms or space for meaningful participation by our movements. We have raised constructive critiques of BRICS in our plenaries and workshops. But beyond the analysis, we understand that only people’s power and activism, across borders, can make change. This Forum has found many routes forward for cross-cutting BRICS internationalism on various issues. We intend to win our demands for social, economic and environmental justice. The victories we have won already on multiple fronts – such as halting numerous multinational corporations’ exploitation, gaining access to essential state services, occupying land and creating agricultural cooperatives,  and generating more humane values in our societies – give us momentum and optimism.

BRICS Bloc, New Development Bank and Where the Heck is it

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Some of this post is a bit dated, as this was meant to be written as an editorial for a BRICS Journal way back towards the fag end of 2015, and a lot of water has flown under the bridge ever since, with India holding the BRICS Summit in October last year in Goa, which also saw parallel sessions being organized by Peoples’ BRICS Forum, a conglomerate of civil society organizations from BRICS member countries raising concerns over the possible funding patterns the Bloc would be undertaking at the expense of environmental degradations and human rights violations. So, let us get on with it:

The BRICS bloc, a conglomerate of five of the biggest emerging economies is home to 43% of the world’s population with a share of 22% of the global GDP. These staggering statistics make Brazil, Russia, India, China and South Africa truly a force to reckon with. The bloc’s initiative to erect a development finance institution in the form of New Development Bank (NDB), is often attributed in the West as a reaction to the institutional sclerosis of Washington-DC-dominated World Bank and the International Monetary Fund (IMF), whereas it is a catalyst complementing rather than challenging the Bretton Woods institutions or the Asian Development Bank in fighting poverty in the emerging economies. Whatever be the attributions, the logic of fighting global poverty is itself steeped in controversies ranging from applying mathematical and statistical juggleries to determine the number of poor according to standards that are a far cut from realities on ground, to economic measures built upon the plinth of models that on many occasions forgo the human capital in a relentless pursuit of development agenda, which is meaningless if only persevered in concentrating on the extreme poverty and purblind to the gap yielding inequalities.

The world is watching with keenness on the mushrooming of New Development Bank, which was officially launched in Shanghai in July, 2016. What would be the underlying rationale of this model? How and where would the finances flow? If the investments were complemented to fill a vast infrastructural gap, how would the safeguards be architected to prevent socio-economic and environmental violations on ecologies? What of the democratic set-up that underlies the formation of this bloc and subsequently of NDB getting hijacked by the political and economic clout and prowess of China? These have been some of the pressing and contentious questions that could either derail the rationale behind this initiative or leave no stone unturned in replicating the western-dominated financial institutions that find themselves increasingly in the eye of the storm for fostering irreversible violations and damages. Aside from that, China’s growing eminence in G20 is a step to rival G8’s macroeconomy, international trade and energy capitalisation lending it legitimacy for a foreign policy geared towards a north-south dialogue in addition to the south-south dialogue efficacious through BRICS and G20. Moreover, China views G20 as an economic platform with other emerging countries on board for a resolve on international affairs. G20 along with BRICS Bank is a contrivance for a financial architecture that focuses on development issues on the one hand, and internationalising its currency on the other. Clearly, it is not a case of what Deng Xiaoping called for “China keeping a low profile”. So, is it merely a speculative materialism that is the engine behind China’s true intentions?

The Asian Development Bank has calculated an infrastructural gap worth $8 trillion in the Asia Pacific needing to be filled by 2020. This is where NDB would cash-in most, and likely create a polarity between infrastructural funding and other developmental concerns. But, what is infrastructure is as hazy as the fuzzy logic of the calculated gap. It is a prerogative to continuously industrialise the BRICS, of building and upgrading ports, gateways, intelligent transportation and communication, power generational and distributional capabilities to augment developmental agenda, which incidentally sets parameters for economic prosperity, the fruits of which permeate to the hitherto-considered peripheries in a fight against poverty. However, the Articles, according to NDB President KV Kamath have a purpose sketched out for the Institution, “To mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging economies, complementing the existing efforts of multilateral and regional development banks.” This is imperative of sustainability, pragmatism, innovation and speed of execution, of which the last could accelerate in a more experimental manner. The speed could pierce through bureaucratic red tapes, blunt operating procedures, and intensify delivery of massive infrastructural projects. Dang Xiaoping, in a rather philosophically pensive manner referred to reform as a process of feeling stones while crossing the river. Although, this should be the dictum NDB needs to seriously gravitate to, dangers of transgressions are lurking heavily.

The BRICS economies are undergoing economic upheavals, and China, the second largest economic power in the world with a nominal GDP more than the rest of bloc’s combined GDP is seeing NDB along with the Asian Infrastructure Investment Bank (AIIB) and Shanghai Cooperation Organisation (SCO) as cardinal tools of its foreign policy initiatives. All of the three have a vision to revive China’s economic might through One Belt One Road (OBOR) and Silk Route through regional collaboration on the one hand and transcending state boundaries for facilitating trade links on the other. How would this augur for India is as important a question as how would the Government in India prioritize its policies for the NDB to plug in? The Government has sockets in place to provide the necessary plug ins, be they in the form of new tax allocations providing more funding for the states in order to empower growth, set budgetary allocations in order to expedite transport, communication and power capacities, proposal to create National Investment in Infrastructure Fund with a base capital of $3.25 billion, to planning and implementing regulatory reforms keeping a steady eye on growing influx of private capital and associated technologies to finally expunge bottlenecks to growth-led development model as a result. This is crucial, not just for India but for the entire bloc as a whole, since NDB’s priorities will be in line with the national development banks of member countries in effectuating the removal institutional roadblocks to growth. With a stated lending of up to $34 billion every year to begin with for filling up the huge infrastructural gap, NDB will act as an additional source of funding for India where the estimated gap in infrastructure is up north of $500 billion till 2020.

For the vast number of Indians, reality is far from development modelled on growth as envisaged by the political machinery at the centre. Growth forecasts have been revised downwards fearing a significant deceleration in exports and a capital flight from the country, courtesy unfavourable investment climes and a pitiable ease of doing business standards. While the Index of Economic Freedom ranks the country at 128 on a scale that defines the economy as situated in a mostly “unfree” zone, socio-economic concerns like malnutrition, falling public health indices, extreme poverty and growing inequality continue to plague the country. NDB’s role will be put under an intense scanner in addressing such internal contradictions of a magnitude that cannot be resolved merely by an external makeover tied to a growth that belittles its own citizenry. Unless Human Development Index, which emphasises life expectancy, education and income and GINI Coefficient Index, which measures inequality representing income distribution to country’s citizens are brought to affect the rating agencies’ take on India’s investment climate, Government’s relentless pursuit of developmental ends would never reach the multitude of people caught between the scylla and charybdis of regimental vagaries.

(DATED) With the upcoming India-Africa Summit to be hosted by New Delhi in October, there is a likelihood of trade relations between the two regions getting an uplift. Not only are India-Africa relations much softer compared to China’s scrambling for the African continent, it could also signal the way NDB gets projected by India in tune with its own foreign policy and diversify trade patterns seeking inroads into natural resources rich countries to augment a new investment destination for the increasing global profile of Indian corporate sector. As the Bank’s focus is concentrated on private investments, this gears in well with India’s investment in Africa in services and manufacturing sectors, roping in a vast population of non-resident Indians on the continent in a drive to foster economic regionalism on the one hand and throw around diplomatic weight on the other in a benign manner underlying India’s unique power equations. NDB could be a strong node bringing these realities to fruition, by promoting a reform in global economic governance with far-reaching significance and consequences. What remains to be seen is how much the NDB will abide by operation guidelines and procedures to see itself as not only different from other multilateral development institutions in terms of expediency, but also hold true to safeguards that protect vulnerabilities rather than exploiting and expropriating them. The latter is still a desiderata!!

Where is it all headed now?

The bank is planning to raise funds by issuing bonds in India, denominated in the local currency, the rupee, after to issued renminbi-denominated bonds in China in 2016. “In 2017, predominantly we’ll aim at taking up more lending tools to raise another $2.5bn for projects spreading over our member countries that are sustainable and do economic good. Virtually, we will try to double the lending of 2016 this year. What we are doing here at NDB is only a fraction of the need. Beyond lending, we would like to act as a catalyst, to get more parties involved in the lending process for projects that contribute to economic growth and sustainability,” said Kamath.

Major challenges for the bank lie in the changing global economic situation, which is seeing interest rates rise in developed countries. But, developing countries’ fast economic growth will help offset the effects, said he. Kamath also called the China-led OBOR a sound initiative that would bring benefits across several countries by investing in a significant way and creating economic momentum. “The program also brings synergy, making regions come together all along the Belt and the Road,” he said. Further he called, “We see it as something that will clearly spur economic activity in the region, and we think that the program is going to succeed.” On to renewable energy, where the focus seems to be concentrated….

In October last year, a new strategic report was produced by the Institute for Energy Economics and Financial Analysis (IEEFA), reviewing how successful the NDB has been so far. The report looked both at the increased renewable capacity of all five BRICS countries, but also the economic strain of such an ambitious project, a strain that is clear from the funding gap already present.

The NDB set targets tailored to each of the BRICS countries, taking into account their plans and their existing renewable capacity. The bank is designed to offer loans quickly and flexibly to the BRICS countries to make achieving these possible. “They had financed about $911m and that they had declared intent to finance or increase their loan by about $1.2bn every year,” says IEEFA consultant and the report’s author Jai Sharda. “So [the NDB is providing] about 11% of the public capital required.”

The report uses the concept of blended finance to work out the progress made and the progress required by the BRICS countries. “The concept of blended finance is basically built on the idea that when there is public money going into a sector it draws private money into that sector,” Sharda explains. “For every one dollar of public finance – the sort of finance being provided by the New Development Bank – it is estimated that it will make four dollars more of private money. So we built our estimations on that basis.”

Developing countries are some of the biggest consumers of energy in the world, as expanding a country’s infrastructure is energy-intensive. Economic development often requires large-scale industrialisation, such as we have seen in China, which has led to a more prosperous economy but also meant that China is the largest producer of CO2 in the world. All five of the BRICS countries rank in the top 20 polluters.

As such, the NDB has set goals to reduce the BRICS environmental impact while increasing the amount of energy they produce through renewable energy sources. Brazil is arguably in the best position to do this, as in 2015, 74% of its energy came from renewable sources. According to the IEEFA’s report, “Brazil’s 2024 Energy Plan envisages an increase in total installed renewable capacity, including large hydropower, from 106.4GW in 2014 to 173.6GW in 2024.”

India, China and South Africa have all set impressive targets, and have begun work to reach them. India intends to increase its renewable energy production by 40% by 2030, as well as reducing emissions intensity by 33%-35% over 2005 levels. China’s targets are even greater, as it plans “to reduce emission intensity by 60%-65% over 2005 levels”, the IEEFA report says. “China is estimated to increase its solar capacity to 127GW by 2020 from 43GW at the end of 2015, and wind capacity from 145GW in 2015 to 250GW by 2020.” South Africa has the furthest to go of the BRICS, as at present it gets 94% of its energy from fossil fuels but has plans to install a further 17.8GW of renewable energy capacity by 2020.

Russia is slightly different to the other BRICS countries as it has technically already met its target. Russia’s target was to reduce emissions by 25%-30% over 1990 levels, and emissions are currently around 40% lower than 1990 levels. However, the country is planning a 4.5% increase in the amount of renewable energy it produces by 2020.

All five BRICS countries have made progress, although to different extents. Brazil currently produces the most renewable energy, with 74% of its energy coming from renewable sources, the vast majority coming from large hydroelectric plants.

Sharda suggests that Brazil’s current success is, in part, due to its long-standing history of renewable projects, necessitated by a lack of coal: “I think Brazil has been better off than especially China and India in implementing more renewable energy because they lacked fossil fuel alternatives.”

Despite their fast-growing economies, India and China have historically been slower to develop their renewables sectors. “India and China have massive amounts of coal deposits, similarly Russia has large amounts of oil and gas deposits, and South Africa is one of the biggest exporters of coal,” Sharda says. “All of these countries have had a traditional, natural advantage.”

But things are beginning to change for both China and India, and they are expected to see the biggest boom in renewable energy of any of the BRICS countries in the next few years. “China led the coal and thermal power boom, they didn’t have an issue with dealing with worsening environmental conditions at a national level then,” Sharda says. “But the government and policy makers have actually become very sensitive to environmental issues which are why they are focusing a lot on renewable energy now.”

There is a massive trend moving towards renewable energy sources in China so, despite the fact that 74% of its energy came from fossil fuels in 2015, the IEEFA report estimated that China would increase its solar capacity to 127GW and increase its wind capacity to 250GW by 2020. However, in January, China increased its targets and its spending on renewable energy, and now plans to invest at least $360bn by the end of 2020, solidifying its position as a global leader on clean energy. Meanwhile, India increased its renewable capacity to 225GW by August 2016, a huge leap from 97GW in 2005. This is predominantly from using hydro.

Russia and South Africa are making slower progress. South Africa still relies on fossil fuels, increasing its renewable capacity to just 2.1GW in March 2016 from 1.8GW the previous year. Russia is making small progress predominantly due to a lack of investment from the country itself, only allocating $1bn for renewable technologies in all 17 Russian states in 2014.

Despite rapid development in the BRICS countries, for Brazil, China, India and South Africa there is a long way to go for any country to meet its targets. There is a funding gap which the NDB, among others, need to fill to help stimulate the development of the renewable energy industries in each country. The IEEFA estimates that “meeting these targets would require an annual investment of around $177bn. In comparison, the investment in the renewable sector in BRICS countries in 2015 was $126bn, leaving an average shortfall of $51bn.”

It is clear, therefore, that a vast increase in investment is needed. “Brazil’s renewable capacity expansion plans would require an investment of $86bn, or 85.2% of overall electricity generation capacity investment,” the IEEFA report states. This is despite Brazil’s impressive hydroelectric infrastructure. Meanwhile Russia would require an investment of $44bn, India will require $128bn, China $254bn and South Africa $30bn.

Whilst these figures are for varying timescales and some countries, China in particular, are likely to be able to channel enough money to meet their targets, it is clear that a much greater and more sustained investment will be needed if the BRICS countries as a whole are to achieve their goals. Furthermore, these figures do not include the knock-on infrastructure upgrade costs that renewable energy generation will create. India alone will need a further $26bn over the next ten years to update its grid.

But more is going to be done, starting with an announced increase in the loans available from the NDB. “The development bank has actually declared that they were targeting to expand and increase their support of energy development this year,” Sharda says. “Their target is actually about 35% percent of the overall public capital required.” This large increase could make all the difference.

At present, despite impressive advances in renewable capacity in the BRICS countries, some look set to miss their targets. If the NDB and other multilateral development banks and financial institutions manage to increase investment, the BRICS could have a massive effect on the environmental damage currently being created by their energy systems. Their success will be evident across the next ten years and beyond, and will be keenly anticipated around the world.

Is Indian GDP data turning a little too Chinese? Why to be Askance @ India’s Growth Figures?

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India defied expectations on Tuesday to retain the title of the world’s fastest growing major economy, despite the pain caused by Prime Minister Narendra Modi’s shock crackdown on cash.

Annual gross domestic product (GDP) growth for the October-December period came in at 7.0 per cent, a tad slower than 7.4 per cent in the previous quarter but much faster than the 6.4 per cent expansion forecast by economists in a Reuters poll. Economists are scratching their heads its almost seen for the economy is untouched by demonetisation now you are one of the strongest defendant of demonetisation. Would you agree that the economy was almost left untouched by demonetisation some pain was warranted was it not?

Shaktikanta Das: As we have explained earlier, we have to go by real statistics. Now, when the Q2 figures where the second quarter figures for the current year released the advanced estimates were released that time also we had explained that we have to go by real statistics and not by anecdotal evidence.

Being the fastest-growing large economy in the world is India’s destiny, and even the most poorly conceived economic policy imaginable can’t stop destiny….To say the data is startling is an understatement. The IMF had predicted that India would grow at around 6 percent in the half-year after “demonetisation,” as it’s called. Most independent economists forecast GDP growth would come in somewhere between 6 and 7 percent. Those economists naturally assumed that withdrawing 86 percent of the country’s currency and reducing access to bank accounts would dampen private consumption.  

Yet if one believes the government’s numbers, taking away most of India’s cash overnight didn’t hurt private spending at all. In fact, private consumption rose by 10.1 percent over the quarter. That’s the highest growth in spending in over five years, and it came at a time when consumer confidence was falling sharply. 

My take on the statistics:
Well, this is a simple tweaking of the equations that differentiate the growth curve. In short, we have all been a part of exams where 9/10 is different from 99/100, even if just one number distances the actual score from the maximum one could score. On similar lines, the crimes of growth are factored in on growth year/base year. This is mathematical jugglery narrowed in on political ends. Whichever way one looks at the data, some of the indicators are still found lagging the composite growth, thereby dumbing down the economists when the growth curve mandates a pattern recognition.
GDP, when calculated at Factor Cost is related with GDP at Market Price, and written as an equation of the form,
GDP (FC) = GDP (MP) – indirect takes + subsidies
While, Gross Value Added,
GVA (basic prices) = Sum (net of production taxes & subsidies) to GDP (factor cost)
Stamp duties and property taxes make up the production taxes, whereas labour, capital and investment subsidies are the other half. Why is this done? To inflate GDP after it starts representing the GDP of a country in terms of total GVA, i.e. without discounting for depreciation. Moreover, GDP at market price adds taxes and deducts subsidies on products and services to GDP at factor cost. The sum total of the GVA in various economic activities is called the GDP at factor cost. With a change in method and a subsequent change in base year, India has increased or rather expanded its manufacturing base in the sense of capturing it.  This has also enabled the country to include informal sectors, which hitherto had not found its true manifestation. This is mere adherence to standards that become internationalized.
Now, what happens in India’s case is the part subsidies, which has been the fixed denominator for our GDP, unlike most of the developed world, or even the developing economies. So, our GDP hitherto had largely been GDP (FC). After rearranging the equation above, GDP (FC) would have subtraction of the subsidies part, and yield GDP (MP), thus changing the base completely, and giving a large share of the economy as growing, rather than the dismal one predicted in the wake of demonetization. This has been effectuated since 2012 implying that whatever happens after demonetization, the growth period would project only redundant figures. Slip that into the quarterly period, and yes, the new base would indicate a growing economy, as used by the WB/IMF to forecast India growing more than China. So, there is nothing really dastardly an act here, but more about how to integrate the parts into the composite to yell at the world, we are growing.