Daily Current Affairs – 13th October, 2016

Daily Current Affairs – 13th October, 2016

Opportunity at the Indian Ocean

The recent Uri attack had one of its prominent casualty- postponing of SAARC summit, 2016. The regional cooperation is India’s boost for a wider economic prospect and thus India has to look at other alternatives for regional cooperation.

  • After the Uri attack, SAARC summit was boycotted by India, Bangladesh, Afghanistan, Sri Lanka and Bhutan.
  • But it has brought into view the Indian Ocean Region and the idea of placing the wider region at the heart of a new neighbourhood policy for India itself.
  • Though the PM has made multiple foreign visits, there is still a need for India to have a defining international economic project.

SAARC has been ineffective

  • The eight nation body’s November annual summit was cancelled after September’s terrorist attack in India.
  • SAARC has often been viewed as ineffectual and many observers have asked if its position has become untenable.
  • Recently, Sri Lankan PM expressed for a body that focuses on Indian Ocean.

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Reviving the Indian Ocean Focus

  • Recently, a think tank- The India Foundation held an Indian Ocean summit in Singapore in September 2016 which aimed to raise India’s profile as a power with interests across Asia.
  • Though the event’s agenda had a softer focus—on cultural ties based on Hinduism and Buddhism, there was a harder edge too, with India positioned as a counterweight to an increasingly assertive China.
  • When the Foreign Secretary of India argued in favour of ‘reviving the Indian Ocean as a geopolitical concept’, it indirectly pointed against Chinese encroachment in the Bay of Bengal.
  • Many East African nations have been visited by Indian PM alongside trips to the Seychelles, Mauritius and Sri Lanka. This initiative should focus on developing potential of economic benefits from greater regional trade rather than undue importance to narrow cultural concerns on the one hand, and vague geopolitical worries about China on the other.


African focus in the Indian Ocean Region

  • India will be the world’s fastest growing nation in the decade to 2024, with its gross domestic product expanding by an average of 7% per year.
  • But also of the world’s six fastest growing economies over that same period, four will also be in east or southern Africa, including Kenya and Tanzania.
  • This potential growth is already attracting corporate India, with groups like Tata and Mahindra targeting African markets.
  • Many countries like Myanmar and Indonesia are also expected to be a part of fast growing economies.
  • With the schemes like Make in India, the goods manufactured in domestic factories will have markets around eastern Africa and South-East Asia.
  • This will be a big boost for India’s presence beyond South Asian sub-continent.

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Aligning the interests

  • Though the economic and trade potential are immense, the problem lies in the fact that the links between these nations are often feeble.
  • South Asia is one of the world’s least economically integrated regions. But the Indian Ocean, which encompasses roughly 40 nations and stretches from Australia to East Africa, is hardly any better connected.
  • As per estimates, a third of global bulk cargo and two-thirds of oil shipments cross the Indian Ocean.
  • But most of this goes to different countries, rather than being traded between countries in the region.


Way forward- Improving the situation

  • India has to take the lead role in defining and implementing the economic trade within the Indian Ocean region.
  • The idea of creating a new regional body, or expanding an old one, is one approach being discussed.
  • Expansion of Indian Ocean Rim Association, a low-profile grouping of 21 countries is a starter. Though it has its drawbacks. In SAARC, India dominated the group, the Indian Ocean Group countries would suffer the opposite problem where the countries having hardly anything in common will have to be diffused together.
  • Also, the record of previous attempts to push alternative regional bodies is not very encouraging. For instance, BIMSTEC which has been not so active despite pursuing of stronger regional ties. Hence, the evidences which stated that regional bodies hardly do much to improve trade flows in any case, stand true.
  • China’s successful OBOR initiative shows that tangible projects between countries are normally the best basis for new economic cooperation across regions.
  • Thus, to improve the situation, India should make bigger, unilateral push to improve regional connectivity, including greater financial support for new infrastructure investment and a new push to reduce trade barriers, beginning with its own.
  • India has to push projects like Myanmar-Bangladesh-India gas pipeline or provide greater development funding assistance to poorer neighbours.
  • The Indian Ocean has the potential to become the most important source of new global growth over the next 20 years, just as the Pacific rim powered the world’s economy for much of the last 20 years.
  • For India to emerge at the heart of new regional order, it should be ready to give finances to support developmental activities in region.

Connecting the dots:

  • Moving away from SAARC, India has immense opportunities to develop various other regional groupings. What are they and briefly mention their importance.
  • IOR provides plethora of opportunities to India to develop its economic, political and geographic importance. Evaluate.

The everyday relevance of 2016 economics Nobel

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