Insights Daily Current Events, November 08, 2013

ARCHIVES

November, 08, 2013

NATIONAL

Union Cabinet clears climate negotiation strategy for the ‘global climate pact’, 2015

• The Union Cabinet has cleared the climate negotiation strategy, to reassert the importance of historical emissions in the new climate agreement, which is to be discussed at Warsaw beginning from 11th November, 2013.

• The Cabinet cleared the non-negotiable lines, deciding that India would ensure that in a pledge-based top-down agreement the onus to take emission cuts for meeting the 2 degree Celsius target lies strongly on the developed countries.

• At the ongoing U.N. Framework Convention on Climate Change (UNFCCC) talks, the 195-member countries have all but come around to having what is called a ‘bottoms-up’ approach under the new global climate compact to be signed in 2015.

• In this format (bottom-up approach) each country volunteers targets for emission reduction based on its capability instead of a top-down approach where targets are set down through the negotiations for each country.

• Some countries have suggested that the volunteered targets can then be assessed to see if they add up to meet the requirement of keeping the global temperature rise below 2 degree Celsius. The U.S. has disagreed and demanded that increasing the volunteered targets should be left to the respective country to decide and there should not be a formal mechanism forcing the nations to do so.

India’s Stand:

• In the Cabinet decision taken, the government has decided that the global agreement should be along the bottoms-up approach but any gap between volunteered cuts of all countries and the cumulative global agreement should be met by the developed countries which have a historical obligation to fight climate change.

• The government is open to make a voluntary commitment under the 2015 agreement to reduce the growth of emissions. But India would not agree to processes outside the UNFCCC set up to fight climate change become mandatory. The Cabinet also decided that sector-specific targets or targets for administrative entities lower than the Union government, such as city and town councils, would not be agreed to.

• The 2015 agreement would have to be under the existing U.N. convention and not in breach of any of its elements and principles for India to be part of it. For instance, any phase out of the gases is done under the principles of common but differentiated responsibility and equity.

• India will not permit private investments in green technologies from developed countries to be sold as a replacement for inter-country transfers.

• India has also reasserted on the controversial issue of HFCs — refrigerant gases that harm the climate, which had recently found support from China and selected G20 countries besides others.

• Ms.Jayanthi Natarajan (Minister of Environment & Forest) will lead the Ministerial round of the two-week negotiations and has been empowered to work with the BASIC and the Like-Minded Developing Countries to ensure that the rich countries put a clear timeline to how and when they shall provide the promised U.S. $100 billion by 2020.

INTERNATIONAL

Geneva talks could be inching towards a breakthrough

• Iran, six global powers focus on framework of confidence building measures

• Iran and the six global powers initiated crucial talks that are likely to focus on a framework of confidence building measures (CBM) that could culminate in abatement of western fears of military diversion, and allow Iran sanction-free access to peaceful nuclear energy.

• U.S administration has assured that there could be some easing of sanctions, if Iran agreed to freeze its nuclear programme, and showed readiness for a partial roll back.

• Negotiations are likely to focus on Iran’s 20% enrichment of uranium, which potentially would take Iran closer to the bomb that requires enrichment above a 90% level.For this; Iran has to halt construction of its Arak heavy water reactor, which could support the development of a plutonium-based atomic bomb.

• The possibility of a breakthrough in the two-day talks is expected to hinge on ‘reversible steps’ that either side can take in the initial stage. For instance, in return for 20% freeze, the global powers could allow Iran access to some of the oil revenues accumulating in countries like Japan, China and India, which continue to purchase Iranian crude.

• If either side defaults from its commitments during this phase, return to the status quo will remain an option.

• Iran’s interlocutors, the five permanent members of the U.N. Security Council and Germany are also seeking the definition of an “end result” that they wish to achieve, which could become a reference point to channel confidence building steps.

• The Iranians are expressing readiness to be accommodative, but insist that they would not relinquish their “right” to enrich uranium. It would not give up its 5 % uranium enrichment, as this would be required to produce fuel for its civilian atomic power plants in the future.

• The incremental process of confidence building is in line with the Russian step-by-step proposal. This initiative in 2011, envisaged that sanctions against Iran should progressively decrease as it addresses concerns about its nuclear programme.

• However, the expectation of a solid outcome at the Geneva talks has triggered a negative response from Israel. Israel would ‘strongly oppose’ a proposal that world powers are “examining” regarding Iran’s nuclear programme.

Tajikistan’s Presidential election and ‘Geo-politics’

• Tajikistan’s President Imomali Rakhmonhas won a re-election extending his 20-year-long rule by another seven years.

• Several opposition parties, including the popular Islamic Revival Party of Tajikistan, boycotted the election, accusing the government of campaign violations and intimidation.

• Mr.Rakhmon has ruled Tajikistan since 1992 and is credited with winning a five-year civil war against Islamic militants relying on Russia’s support. Mr.Rakhmon’s new presidential term would be his last under the Constitution, which has been changed twice to enable him to prolong his stay in power.

• Tajikistan is one of the poorest states in the former Soviet Union, with more than one million Tajiks earning a living in Russia.

• Tajikistan, in the run-up to its Presidential election has signed an agreement with Russia on a 30-year extension of the Soviet-era 201st military base, which Russia considers as a bulwark against Islamist insurgency and drug trafficking from Afghanistan. The Tajik Parliament ratified the deal after Russian President Vladimir Putin promised to support Mr.Rakhmon’s re-election for another term. Russia has also allowed Tajik migrant workers to stay in Russia for three years running, against one year for the citizens of other former Soviet states.

• India helped Tajikistan refurbish an airbase at Ayni in the past decade in the hope of securing a bridgehead in the strategically located region.

Central Investigation Agency’s (CIA) role in counterterrorism spying stirs-up hornet’s nest

• The CIA was said to have paid $10 million a year to telecom giant AT&T under a voluntary contract that required the company to supply telephone records of calls made abroad and in some cases in the U.S.

• The CIA would provide phone numbers of overseas terror suspects to AT&T, after which the company would search its database and supply call records that might have helped in identifying foreign associates.

• This involvement of the CIA in counterterrorism spying marks a change from a series of reports since June,2013 based on exposes provided by fugitive whistleblower Edward Snowden – who gave newspapers confidential information about global surveillance of Internet and phone communications conducted by the National Security Agency (NSA).

• Some of these reports noted that the NSA paid “hundreds of millions of dollars a year to U.S. companies for clandestine access to their communications networks, filtering vast traffic flows for foreign targets in a process that also sweeps in large volumes of American telephone calls, e-mails and instant messages.”

• The disclosure of CIA’s role and companies’ involvement suggest a deeper voluntary participation by these companies than was initially suggested.

• The CIA’s ties to AT&T suggested that many of the spying programmes deployed were ‘regulated by an inconsistent patchwork of legal standards, procedures and oversight’.

• However, tech companies such as Google and Yahoo have distanced themselves from these allegations, saying that they have not compromised their user privacy.

M23 leader surrenders

• The commander of the M23 insurgent group, Sultani Makengain eastern Democratic Republic of Congo (DRC) has surrendered following M23 renounciation of its 20-month rebellion after a decisive campaign by the Congolese military backed by U.N. peacekeepers.

• The group would henceforth rely solely on ‘political means’ to begin the ‘Peace process’.

• However, several other armed groups continue to operate in the conflict-prone, mineral-rich region.

Global meet for making farming profitable

• The 9th World Agricultural Forum (WAF) congress and Agri-Tech trade fair has focused on making agriculture a sustainable and profitable profession. This will bring cheers to the farming fraternity.

• Farming should be made sustainable keeping in mind the depleting natural resources and increasing scarcity of labour. Also to retain more people in the farming sector especially the youth, there was a need to bridge the rapidly growing gap between farm and non-farm income.

ECONOMICS

Oil Ministry move to change contract terms to woo global players

• The Petroleum and Natural Gas Ministry has decided to move the Union Cabinet for undertaking major changes in the production sharing contract (PSC) terms and conditions, a move seen to woo global oil and gas players.

What is the Proposal?

• The Ministry has called for inter-Ministerial consultations to put in place an Empowered Group and vest it with powers to grant extensions in the timelines prescribed in the PSC pertaining to appraisal, submission of commerciality, field development plan (FDP) submission and other issues.

• The proposed changes would be applicable to all the discoveries in existing PSCs and future contracts except where the cancellationof the block has been done.

• Under the proposed changes, in case of extension of time period for submission of the Declaration of Commerciality (DOC) in respect of hydrocarbon discovery, it is proposed to empower the management committee (MC) to grant extension of appraisal period by six months for onland blocks and by 12 months for offshore blocks whenever MC is satisfied with the reasons cited by the operator for such extension. Accordingly, FDP submission date will also get extended.

• In case of reduction of minimum works programme (MWP) of blocks overlapping with SEZ, reserve forest, naval exercise areas, DRDO danger zones, national parks, urban areas, firing ranges of police and armed forces where delays take place in execution of the mining lease due to various reasons including denial of permission to work from security point of view, it is proposed to permit the contractor to exit the contract without payment of cost of unfinished work programme.

• They would also be allowed proportional reduction in MWP in 2D, 3D work programme. “If the delay due to lack of clearances is beyond two years in any of the blocks, then the operator will be given a choice to choose the option to exit the project or have proportional reduction in MWP.

• To make things smoother for exploration, it is proposed to allow swapping of 2D and 3D MWP with each other in case of technical or logistical reasons.

Why such a move?

• The move will not only end rigidity in decision making pertaining to exploration and production (E&P) of oil and gas blocks but also help in optimising the hydrocarbon potential in the country.

• This will also attract global players in oil & gas exploration in India and bring in better technology for the exploration.

RBI pact with central bank of Australia

• The RBI has signed cooperation agreement with central banks of Australia and New Zealand for exchange of information. The MoUs provide a formal, yet legally non-binding, channel for information exchange between the supervisors.

• With this, the Reserve Bank has signed such MoUs with 18 supervisors.

S&P warns India of fresh rating downgrade

• Standard & Poor’s (S&P), the global rating agency has warned India that its sovereign rating would be lowered from the current outlook of “negative” within a year if the “policy drift” continued.

• The outlook on the long-term rating remains “negative”.

• S & P has warned that, the ‘negative’ outlook would be lowered to ‘speculative grade’ in the coming year, if the government is not capable of reversing India’s low economic growth. In April, 2012 S&P had downgraded India’s rating to “negative”.

• However, if India can restore its lost growth potential, consolidate its fiscal accounts, and deploys an effective monetary policy, then S&P would revise the outlook to ‘stable’.

S&P’s Rating based on-

• The rating agency’s affirmation of the current rating is based on several key strengths of India, including a robust participatory democracy of more than 1 billion people and a free press; low external debt and ample foreign exchange reserves; and an increasingly credible monetary policy with a largely freely floating exchange rate.

India’s Weakness:

• However, these strengths were counter-balanced by significant weaknesses, which included an heavy burden from its public finance, lack of progress on structural reforms, and shortfalls in basic services and India’s subsidy policy.

• Especially, the Food Security Act, could almost double the size of the government’s food subsidy in future budgets to about 1.5% of GDP.

• India’s CAD widened significantly in 2013 to about 5% of GDP, the highest in more than a decade, which had seen deficits more in the range of 1-2% of GDP.

• The deterioration of the current account and changing perceptions about global liquidity conditions weakened confidence in the rupee, leading to a 22 per cent fall in its value against the dollar between May and August in 2013.

• In the general elections slated in 2014, the new government would face the difficult task of placing its fiscal accounts on a firmer footing: phasing out of diesel subsidies, financing the expansion of food subsidies, addressing other subsidies such as those for fertilizer, and introducing the nationwide rollout of a common goods and services tax.

What are the consequences of S&P’s downgrade of India sovereign rating ??

(This question is ‘open’ to discussion)

EDITORIAL

Trouble in tourist paradise

• The murder of Nigerian national Obodo Uzoma Simon at a village in Goa, which was followed by a street protest by the small community from the African nation, and the knee-jerk reaction of the authorities in beginning an eviction drive against Nigerian’s have brought under focus racial overtones, nexus between drug dealers and the authorities and mismanagement of administration of the State government.

• The crime is viewed as a turf war between local and international gangs in the narcotics trade.

• The drive to evict Nigerians, has made the the African country to seek a reassurance that its nationals are not unfairly treated and has also demanded that the culprits involved in the murder be arrested.

• But the Goa Chief Minister has held his ground saying that, the drive was against all foreign nationals staying on without valid documents and was not confined to Nigerians alone.

• If India does not pay heed to this issue, it might have possible ramifications on the bilateral relationship between the two countries. India imports oil in considerable quantity from Nigeria, which is one of its major trading partners. There is also a sizeable Indian community in Nigeria.

• Though there is local resentment against the activities of some foreign nationals, care must be taken that foreign nationals are not targeted indiscriminately.

• Prejudices and perceptions often come together to put communities to disadvantage, especially in the backdrop of nasty incidents like these. Perceptions that various nationalities operate with impunity does not hold water, since the Crime statisticshas revealed that, ‘there is no unusual spike in recent years in the number of foreign nationals arrested for such offences’.

• Goa’s reputation as fun-loving tourist place needs to be safeguarded and it is the onus of the State Government to crack-down the ‘organised crime’without targeting any specific nationality.

TIT-BITS

Goa International Film Festival to kick off on Nov. 20th, 2013

• India will host two international film festivals in November. The Children’s Film Festival will be held in Hyderabad between 14th and 20th, followed immediately by the International Film Festival of India between the 20th and 30th of November, 2013.

• According to Mr.Tewari (Minister of Information & Broadcasting), getting representatives of US and Iran together, is a ‘reflection of India’s soft-power’.

• A new centenary award, to mark 100 years of Indian cinema, would be instituted and given on the occasion. Acclaimed actress Michelle Yeoh would be the chief guest for the closing ceremony of the event.

CBI- Identity Crisis !!

Refer the following link to know about this issue

And for the continuation of this article– see this