AMIGOS IAS Daily Current Affairs (27^th Sept 2024)

Rising Tensions in the East and South China Seas

GS 2: International Relations: Conflicts in South China Sea

Why is it in the news?

• In recent years, maritime East Asia has become a focal point for escalating power politics. The East China Sea, bordering China, Taiwan, Japan, and South Korea, has seen China assert its claims over the contested Senkaku/Diaoyu islands, currently controlled by Japan.
• Similarly, the South China Sea, situated between China, Taiwan, and several Southeast Asian nations, has emerged as a significant flashpoint, primarily due to China’s aggressive territorial claims.

An Analysis

• China views the East and South China Seas as vital to its sovereignty, territorial integrity, and national security. According to its 2019 Defence White Paper, China considers the islands in these seas as “inalienable parts” of its territory.
• China defends its activities as exercises of national sovereignty, asserting its right to build infrastructure and conduct patrols. However, these actions are perceived as provocative and aggressive by neighbouring countries.
• These seas are crucial for global maritime trade routes, with the Taiwan Strait serving as a key chokepoint. Significant volumes of oil and natural gas pass through the South China Sea, making it strategically important.
• Additionally, the region houses undersea cables essential for the global digital economy and vast reserves of untapped resources.
• China has been increasingly assertive in both maritime regions, building military infrastructure, such as ports and airstrips, and confronting claims made by other nations.
• In the East China Sea, historical incidents have included confrontations over the Senkaku/Diaoyu islands, where tensions have fluctuated but remained high. In the South China Sea, China’s growing naval power and aggressive tactics, including ramming vessels and using water cannons, exemplify its attempts to alter the status quo without provoking outright conflict.
• The situation has been particularly tense between China and the Philippines, where resupply missions to the Second Thomas Shoal have faced repeated disruptions.
• Regional countries are responding to these tensions through several strategies:

1) Strengthening Defense Capabilities:

• Countries like Japan and the Philippines are ramping up their military spending and capabilities, with Japan aiming to double its defense budget by 2027.

2) Publicizing Incidents:

• The Philippines, under President Ferdinand Marcos Jr., has shifted to a more confrontational approach, documenting confrontations with Chinese vessels and leveraging social media to raise awareness.

3) Enhancing Alliances:

• As treaty allies of the U.S., Japan, South Korea, and the Philippines are bolstering their defense relationships with the U.S., engaging in joint exercises and enhancing cooperation.
• The U.S. has reaffirmed its “ironclad” commitment to Japan’s security, including its defense of the Senkaku islands, and is deepening trilateral cooperation with Japan and South Korea to counter Chinese aggression.

Conclusion

• Despite increased military collaboration and efforts to project a united front, uncertainties persist regarding the U.S.’s commitment to its allies amidst domestic political challenges.
• There is ongoing debate about whether U.S. involvement will effectively balance China’s growing influence or inadvertently escalate tensions.
• As the situation evolves, the potential for miscalculations and further conflicts remains a significant concern in this strategically vital region.

On Pakistan’s IMF Bailout

GS 2: International Relations: Pakistan’s economic crisis

Why is it in the news?

• Pakistan Prime Minister Shehbaz Sharif recently thanked IMF chief for approving a $7 billion Extended Fund Facility (EFF) for the country, marking the twenty-fifth IMF program in Pakistan’s history and the sixth under the current framework.

More about the news

• The need for the bailout stems from long-standing issues of poor governance and fiscal mismanagement. In 2022, while still managing the 2019 EFF, Pakistan faced a severe economic crisis worsened by the COVID-19 pandemic, the war in Ukraine, and devastating floods.
• The IMF halted disbursements of a pending $1.18 billion due to the government’s failure to meet conditions like increased energy rates and a flexible exchange rate, pushing the economy to the brink.
• By mid-2023, inflation peaked at 38%, the Pakistani rupee fell about 20% against the dollar, and foreign exchange reserves dwindled below $3 billion. In response, Pakistan secured a nine-month $3 billion Stand-By Arrangement (SBA) from the IMF, which required adherence to fiscal discipline and structural reforms.
• As of September 2024, inflation has decreased to around 7.5%, the lowest in five years, and foreign exchange reserves have risen to about $9 billion, supported by allies like China, Saudi Arabia, and the UAE. However, Pakistan still faces an external debt of approximately $130 billion, with $90 billion due over the next three years.
• The EFF is designed to assist countries with severe balance of payments issues requiring medium-term solutions. For Pakistan, this involves reforms to improve monetary and fiscal policies, enhance competition, and rebuild foreign exchange reserves.
• The IMF aims to build on macroeconomic stability achieved over the past year by strengthening public finances and reducing inflation. The initial disbursement will make $1.1 billion available immediately, but the package does not include plans to restructure Pakistan’s significant debt.
• To secure the funding, Pakistan had to meet several conditions, including obtaining assurances from bilateral partners for the rollover of $12 billion in debt. The government also secured a $600 million loan from Standard Chartered Bank prior to the EFF approval.
• The IMF required comprehensive tax reforms to broaden the tax base, with the government committing to an additional $6.5 billion in tax collections and a 51% increase in electricity prices.
• However, experts have criticized the IMF’s conditions as harsh. They warned that the EFF could increase economic instability and raise the debt-to-GDP ratio, which stood at 77% in July 2024.
• Moreover, there are doubts about the political will to implement the necessary reforms, with critics arguing that proposed tax reforms may merely squeeze existing taxpayers rather than broaden the tax base effectively.

G4 Countries urge for UNSC Reforms

GS 2: International Relations: Need for UNSC Reforms

Why is it in the news?

• As the United Nations approaches its 80th anniversary, the Group of Four (G4) countries—India, Brazil, Germany, and Japan—are advocating for urgent reform of the UN Security Council (UNSC).
• During a Foreign Ministers Meeting held on September 23, alongside the United Nations General Assembly (UNGA), the G4 reviewed progress on these reforms and released a joint statement highlighting significant challenges to the multilateral system.

More about the news

• The G4 Ministers called for an increase in both permanent and non-permanent UNSC membership to better represent developing countries and those contributing to international peace and security. They stressed the need for improved representation for regions such as Africa, Asia-Pacific, and Latin America and the Caribbean.
• Additionally, the L69 group, which includes India, met jointly with the C-10 group of ten African nations, emphasizing the need for transformative reform in the Security Council to include greater representation for the Global South.
• The Ministers acknowledged the vital role of developing countries in maintaining the relevance and effectiveness of the UNSC.
• They reiterated the urgent necessity to make the Security Council more representative, transparent, efficient, and accountable, viewing the recent ‘Summit of the Future’ as an opportunity for renewed commitment to reform.
• Both the G4 and L69 expressed support for the Common African Position based on the Ezulwini Consensus and the Sirte Declaration, stating that further delays in reform could undermine the UN’s credibility and legitimacy.

Karnataka Government revokes General Consent for CBI probes

GS 2: Polity and Governance: Consent principle for CBI 

Why is it in the news?

• The Karnataka government has decided to withdraw its general consent for the Central Bureau of Investigation (CBI) to conduct probes in the state, accusing the agency of being “biased and prejudiced” in its investigations.

General Consent Principle for CBI

• The CBI must obtain consent from the concerned state government before investigating any crime within that state, as mandated by Section 6 of The Delhi Special Police Establishment (DSPE) Act. This consent can be case-specific or general.
• General consent is typically granted to facilitate seamless investigations into corruption cases involving central government employees.
• However, as of 22 July 2024 states like Meghalaya, Mizoram, West Bengal, Jharkhand, Kerala, and Punjab have withdrawn general consent, meaning the CBI now requires case-specific approval to register any new cases against central government officials or private individuals in these states. This withdrawal prevents the CBI from initiating fresh investigations without prior permission.

Exceptions to General Consent:

• Despite the withdrawal, the CBI can still investigate cases that were registered before the consent was revoked. The agency retains the authority to probe cases registered in other states or Union Territories involving individuals in states that have withdrawn consent.
• Additionally, if a case receives approval from the High Court or Supreme Court, state consent is not required. Local court approvals also empower the CBI to conduct investigations within the state.

Progress of India-US Ties during Biden’s Presidency

GS 2: International Relations: India-U.S. Relations

Why is it in the news?

• On September 21, Prime Minister Narendra Modi met with President Joe Biden during the Quad leaders’ summit, potentially marking their last meeting before Biden’s departure from the White House in January 2025.
• Following their discussion, Biden highlighted that the partnership with India is “stronger, closer, and more dynamic than any time in history,” underscoring the advancements in bilateral relations during his presidency.

Progress made during his presidency

• Biden’s commitment to enhancing ties with India dates back to before his presidency. In 2006, he expressed hope that India and the US would become the two closest nations by 2020.
• He played a key role in passing the landmark India-US nuclear deal in 2008 and furthered these ties as Vice President during a visit to India in 2013.
• Biden inherited a strong relationship from Donald Trump, who framed China as a strategic rival, aligning US and Indian positions. Biden has continued this trajectory, particularly after Trump revived the Quad in 2017 and Biden elevated it to a leaders’ level in 2021, hosting the first summit shortly after taking office.
• Since then, Biden and Modi have met six times at the leaders’ level, including four in-person meetings, with bilateral interactions totalling at least ten. The COVID-19 pandemic emphasized the need for durable ties, leading both nations to focus on reducing reliance on China and building a resilient global supply chain.
• Recognizing the importance of technology, both countries aim to integrate India into the US tech ecosystem. The Initiative for Critical and Emerging Technology (iCET), launched on January 31, 2023, facilitates strategic collaborations in AI, quantum technology, telecom, space, and semiconductors.
• The outcomes of iCET are becoming apparent after several NSA-level meetings. Modi’s recent visit included an agreement to establish a semiconductor fabrication plant in India for national security and green energy applications, marking a significant milestone in tech collaboration with the US military.
• The semiconductor fab, named Shakti (or ‘power’), marks a significant advancement in tech diplomacy, focusing on manufacturing infrared, gallium nitride, and silicon carbide semiconductors. This partnership is the first between Indian businesses and the US Space Force, illustrating a major milestone in tech collaboration.
• Additionally, India and the US are pursuing other technological partnerships, including joint research on the International Space Station.
• Despite these advancements, challenges persist, particularly regarding the alleged assassination plot against pro-Khalistan separatist Gurpatwant Singh Pannun.
• A US court recently issued a summons to NSA Doval amid Pannun’s civil suit, which India has dismissed as “unwarranted.” Doval’s absence from Modi’s delegation further complicated the situation.
• The presence of pro-Khalistan activists at the White House prior to Modi’s visit indicated discontent and complicated diplomatic relations. India must address these issues to alleviate concerns about its democratic credentials in Washington.
• Nonetheless, New Delhi believes that the strategic alignment against China will help mitigate these challenges.