9 PM Daily Current Affairs Brief – June 27th, 2023

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Mains Oriented Articles

GS PAPER - 1

We need a better grasp of our oceanic see-saws

Source: The post is based on the article “We need a better grasp of our oceanic see-saws” published in “Mint” on 27th June 2023.

Syllabus: GS 1 – Indian geography: Monsoon.

News: Accurate predictions of the Indian monsoon remain a challenge. Although the Indian Meteorological Department has forecasted a normal monsoon, a private company called Skymet has predicted a deficient monsoon. To enhance the accuracy of these forecasts, it is crucial to better understand the interplay between El-Nino, the IOD (Indian Ocean Dipole), and climate change.

What is El-Nino and its impact on monsoon?

During an El Nino event, the weakening of tropical trade winds causes warm waters in the Pacific Ocean to flow eastwards, from Asia towards the Americas.

As a result, the coast of the Americas experiences increased heat and low pressure, further aggravating the weakening of the trade winds in a feedback loop. This phenomenon leads to cooler and drier conditions with reduced rainfall in Asia, including India.

An El-Nino was indicated recently by high sea surface temperatures in Eastern Pacific (0.5° C more than the normal). Its probable severity and duration are under study. The estimates must also take into account the effect of global warming.

Data since 1950 reveal a clear link between El-Nino years and droughts in India.

What is IOD and its impact on monsoon?

IOD refers to warmer than usual waters in the western Indian Ocean than in its eastern part. It results in wetter East Africa and drier Indonesia.

Currently, the IOD has been neutral, but experts suggest that it may transition to a positive phase in the upcoming months.

As monsoon winds reach India from south-west, a positive IOD could have aided in rainfall in India and counter the effect of El-Nino.  For example, in 1997, there was an acute El-Nino but due to a highly positive IOD India got excess rainfall.

What should be done?

Understanding the interplay between El Nino, IOD and climate change is crucial as accurate forecasts can have significant implications for agriculture, water resources, and broad economic policy decisions. Therefore, India must invest for a better understanding of factors which impact the monsoon.

Express View on RWAs and prejudice: Pettiness of power

Source- The post is based on the article “Express View on RWAs and prejudice: Pettiness of power” published in “The Indian Express” on 27th June 2023.

Syllabus: GS1- Social issues. GS2- Vulnerable sections of the population

Relevance– Issues related to domestic workers

News- A housing society in Bengaluru has barred maids from using common areas.

What are significant issues raised by this notice?

The notice shows the elitist upper-class attitude towards workers.

The notice shows casteism, class prejudice prevalent in society. Their prejudices and bigotries are presented as concerns for “security” and “hygiene”.

Part-time politicians of the RWA impose their will on those who do not have the means to object.

Lord Acton was right when he said that “power corrupts”. Perhaps, petty power corrupts more absolutely.

GS PAPER - 2

Transparency in governance

Source: The post is based on the article “Transparency in governance” published in “Business Standard” on 27th June 2023.

Syllabus: GS 2 – Statutory, regulatory and various quasi-judicial bodies.

News: The SEBI (Securities and Exchange Board of India) has set significantly higher standards of transparency and corporate governance for listed stocks by amending the LODR (Listing Obligations and Disclosure Requirements) and introducing several critical changes.

What are some of the changes?

KMP: The timeline for filling vacant positions of KMP (key managerial personnel) has been reduced to three months from the earlier six months. Also, interim appointments cannot be made to KMP. Also, reappointment of directors must be cleared by shareholder vote at least once every five years.

New ‘majority of minority’ rule: Minority shareholders will have a say (through vote) in the sale or transfer of an undertaking by a listed company through slump sales. Also, the object and commercial rationale for such transaction must be disclosed to shareholders through a special resolution at a general meeting.

“Material impact”: SEBI has also introduced quantitative thresholds for determining the “materiality” of events and transactions.

Fraud and default: SEBI has clarified the definitions of fraud and default. It has also enhanced disclosures for listed companies on fraud, or defaults, by a director or senior management, and for cybersecurity breaches, or any regulatory action affecting KMP.

Why may some provisions be practically difficult to comply with?

“Mainstream media” has been defined quite broadly to cover both registered newspapers and social-media platforms. SEBI has asked the top listed companies to confirm, deny, or clarify any rumour or information reported in such media within 24 hours.

The implementation of such a provision would place a significant burden on companies. Ensuring full compliance with this requirement would be extremely challenging due to the potential presence of mentions on lesser-known platforms or by obscure influencers.

What will be the impact of the changes?

Changes would mostly lead to tighter governance and protect the interests of minority shareholders. Corporations must disclose all communications from any authority, which would help in bringing more transparency.

However, the regulator should review the directives about responding to rumours in the media and it may need to fine-tune the definition of material impact.

New Delhi’s approach to multilateral ties needs clarity

Source: The post is based on the article “New Delhi’s approach to multilateral ties needs clarity” published in “Mint” on 27th June 2023.

Syllabus: GS 2 – Important International institutions, agencies, and fora.

News: The recent resignation of the Canadian director for global communications at the AIIB (Asian Infrastructure Investment Bank), alleging influence by the CCP (Chinese Communist Party), has led the Canadian government to freeze ties and initiate an investigation. This situation prompts India to reconsider its involvement in Chinese-led economic organizations given their governance structure and China’s mercantilist approach to trade.

Why India participated in Chinese-led economic organizations?

India’s involvement in Chinese-led economic organizations was driven by a previous approach which aimed to separate the boundary dispute from other aspects of the India-China relationship.

India hoped that economic ties could make it easier to resolve more complex issues. However, the Galwan clashes and China’s mercantilist approach have challenged this belief.

India’s participation in such institutions, including the AIIB and NDB (BRICS New Development Bank), has been driven by conveying geopolitical signals to the West about India’s ‘strategic autonomy’ rather than purely economic benefits.

Arguing that the AIIB was expected to follow international standards and practices, India decided to join it in 2016 despite its strong opposition to China’s BRI (Belt and Road Initiative) of which the AIIB is a part.

Why should India rethink its approach to Chinese-led economic organizations?

The AIIB serves to divert attention from China’s more significant policy banks, which operate outside of international standards and play a central role in funding BRI projects.

AIIB is structured to promote Chinese influence. The AIIB’s Articles of Agreement suggest that China, as the largest shareholder, holds the equivalent of a veto over important issues such as admitting or suspending members.

Further, the AIIB has been headed from the start by a former Chinese finance vice-minister, and both the AIIB and NDB are headquartered in China. This comes with the risks of CCP influence and exposure of bank’s communications and data.

The AIIB and NDB have not succeeded in encouraging China to adopt more transparent international lending practices or improve governance. Furthermore, heightened financial engagement with China appears to introduce additional economic risks for financially vulnerable countries, as evidenced by the experiences of Sri Lanka and Pakistan.

Thus, given that India exercises no effective influence on Chinese behaviour, it ends up on the losing side even from the perspective of geopolitical signalling.

What should India do?

The current scandal in the AIIB gives India an opportunity to head for the exit. India has already achieved significant benefits through institutions like the World Bank, where it stands as the largest recipient of loans.

Considering its current geopolitical influence and the attention it receives from Western nations, India should explore alternative avenues to drive global institutional reforms, rather than relying on China.

Laying the foundation for a future-ready digital India

Source– The post is based on the article “Laying the foundation for a future-ready digital India” published in The Hindu  on 27th June 2023.

Syllabus: GS2- Government policies and issues arising out of implementation

Relevance: Issues regarding Digital Technologies

News- .The Ministry of Electronics and IT has been actively organising consultations on the proposed “Digital India Bill” to build conceptual alignment on a new law that will replace India’s 23-year-old Information Technology (IT) Act.

What are the issues in the present IT Act?

The definition of Social Media Intermediaries” (SMIs) is so broad that it can encompass a variety of services such as video communications, matrimonial websites, email and even online comment sections on websites.

The rules also lay down stringent obligations for most intermediaries, such as a 72-hour timeline for responding to law enforcement asks.

By virtue of being licensed, intermediaries are treated like conventional social media platforms not only adds to their cost of doing business but also exposes them to greater liability without meaningfully reducing risks presented by the Internet.

The European Union’s Digital Services Act is probably one of the most developed frameworks for us to follow.

What are Focus areas for India?

What we need, is a classification framework that creates a few defined categories, requires intermediaries to undertake risk assessments and uses that information to bucket them into relevant categories.

One way to do this would be to exempt micro and small enterprises, and caching and conduit services from any major obligations.

Another way is to clearly distinguish communication services (where end-users interact with each other) from other forms of intermediaries (such as search engines and online-marketplaces).

Alternative approaches to curbing virality, such as circuit breakers to slow down content, could also be considered.

Metrics for risk assessment and appropriate thresholds could help create a regulatory environment that helps achieve the government’s policy goal of creating a safer Internet ecosystem, while also allowing businesses to thrive.

India-Egypt Relations – Recent Developments -Explained, pointwise

For 7 PM Editorial Archives click HERE

Introduction

India-Egypt relations have taken significant strides recently, especially following Indian Prime Minister visit to Egypt in June 2023. These engagements underline India’s focus on deepening ties with this key Middle Eastern nation. Egypt’s geopolitical significance and India’s rising global stature provide a backdrop for this growing partnership. From enhanced defence collaboration to trade agreements, these strategic dialogues are setting a positive direction for the future of India-Egypt relations.

Recent Developments and their importance

Strategic Partnership Agreement: Both nations elevated their bilateral relationship to a strategic partnership, with an agreement signed to formalize this status. This strategic partnership focuses on four main areas: politics, defence and security; economic engagement; academic and scientific exchanges; and cultural and people-to-people contacts.

The “India Unit” in the Egyptian government: Egypt constituted an “India unit” within his government. This unit consists of seven cabinet ministers who will work alongside Prime Minister Mostafa Madbouly to strengthen the India-Egypt relationship.

Defence trade and cooperation: India has shown interest in expanding its defense trade with Egypt, with a focus on promoting its domestic defense production. Egypt has expressed interest in the Tejas Light Combat Aircraft, an Indian-made fighter jet.

Economic engagement and trade opportunities: India and Egypt are exploring opportunities in the Suez Canal Economic Zone (SCZONE), which offers easy access to markets in Europe, Africa, and the Gulf.  This holds potential for the ‘Made by India for the World’ export-oriented program.  Several Indian companies already use Egypt as a manufacturing base.

G20 invitation: India has invited Egypt as a guest country for the G20, recognizing Egypt’s significant influence in the Arab world and its strategic location.  Egypt’s participation in the G20 is seen as beneficial due to its representation of developing countries’ aspirations.

Award recognition for PM Modi: PM Narendra Modi was conferred with the Order of the Nile, Egypt’s highest award, signifying the importance of India-Egypt ties and acknowledging India’s stature as a rising global power.

Historical connections: Indian PM visited the Heliopolis War Memorial, which commemorates the 3,799 Indian soldiers who sacrificed their lives in various battles in Egypt during the First World War. He had also visited the 11th-century Al-Hakim Mosque, restored with the help of the Dawoodi Bohra community in India

A Brief Overview of India-Egypt Relations

Ancient connections: Both have a long history of contact dating back to the time of Ashoka. Fine Indian muslin, a type of cotton fabric was also used for wrapping mummies.

Mahatma Gandhi and Egypt: Mahatma Gandhi, philosophy of nonviolence and civil disobedience inspired several Egyptian nationalists in their own fight for independence. There was a mutual admiration between Gandhi and Egypt’s nationalist leader Saad Zaghloul, and this connection had a profound impact on the bilateral ties of the two nations.

Post-Independence relations: After gaining independence, diplomatic relations were established in 1947, and a friendship treaty was signed in 1955. India also condemned the attack on Egypt during the 1956 Suez Crisis and tried to mediate. Both adopted a non-aligned foreign policy, and they co-founded the Non-Alignment Movement (1961) during the Cold War era. Their shared commitment to anti-colonialism and anti-imperialism brought them closer. This led to strong diplomatic relations, with the likes of Jawaharlal Nehru and Gamal Abdel Nasser fostering these ties.

Modern-Day relations: In the contemporary era, India and Egypt have nurtured their strategic partnership, symbolized by high-level diplomatic visits, such as the Indian Prime Minister’s tour to Egypt in June 2023. However, despite these promising diplomatic endeavours, their economic ties have not yet reached their full potential, with a decline in trade by 17% amounting to $6,061 million in 2022-23. This points towards the need for diversifying the economic relationship beyond oil and petroleum.

Read more: India-Egypt Relationship – Explained, pointwise

What is the significance of India Egypt Relations?

Strategic importance: Egypt’s geopolitical position, straddling Asia and Africa, and its control of the Suez Canal, a key global commercial artery, gives it significant strategic value. This makes Egypt an important partner for India in the region.

Counter-Terrorism cooperation: There is strong convergence between India and Egypt in the fight against religious extremism and terrorism. Given the global challenge posed by these issues, cooperation in this area is significant for both nations.

Economic potential: Trade relations between India and Egypt are expanding, with India now among Egypt’s top ten trading partners. Further, the potential for India to expand its presence in the Suez Canal Economic Zone (SCZONE) offers exciting opportunities for growing economic relations. Egypt holds huge potential for the domestic industry in various sectors like agri products, steel items and light vehicles.

Cultural and historical Ties: India and Egypt share deep cultural and historical ties that date back to ancient times. These ties play a significant role in fostering mutual understanding and people-to-people connections, enhancing the overall relationship.

Regional influence: Egypt, as the largest country in the Arab world and home to the Arab League’s headquarters, exerts considerable influence in the Middle East and North Africa. An enhanced relationship with Egypt can aid India’s engagement with the broader region.

Defence cooperation: The bilateral defence cooperation has seen a fair bit of activity with joint exercises and high-level visits. As India shifts its focus towards defence exports, Egypt could be a potentially significant market.

Education and knowledge sharing: The presence of an Indian Centre for Excellence in IT at Cairo’s prestigious Al Azhar University is indicative of the potential for further educational collaboration and knowledge sharing between the two nations.

What are the challenges of India Egypt Relations?

Read here: India and Egypt relationship

Domestic economic instability. Egypt Government is battling high inflation of 21%, which has resulted in historically high prices of commodities and daily-use items. Its foreign debt is over $163 billion (43% of the GDP) and its net foreign assets are minus $24 billion. Prolonged economic instability may lead to mass discontent and movement similar to the 2011 revolution.

Political differences: There have been differences on key international issues. For instance, Egypt has not always shared India’s position on the United Nations Security Council (UNSC) reforms.

Regional instability: Egypt’s geographical location in North Africa places it in proximity to several unstable regions and conflict zones, including Libya and Sudan. This instability can indirectly impact India-Egypt relations by creating uncertainties in areas of mutual interest such as regional security and economic investment.

Navigating regional politics: Both India and Egypt have complex regional relationships to navigate. Balancing these relationships, particularly as they pertain to issues such as Kashmir for India or the Israeli-Palestinian conflict for Egypt, could pose challenges.

China’s growing influence: China’s growing economic presence in Africa, including Egypt, is another significant challenge. China’s Belt and Road Initiative has been making significant inroads in Africa and this has increased China’s influence in the region. Balancing relations with China while trying to increase India’s economic engagement in Egypt and the broader African region could be a tricky diplomatic challenge for India.

Competition with other powers: Apart from China, there are other global and regional powers also engaging actively with Egypt, including the United States, European Union countries, Russia, and Gulf states. Managing the relationship with Egypt in the face of competition from these powers can pose diplomatic challenges for India.

What should be the future path?

Enhanced bilateral trade and investment: Both nations should aim to increase trade volumes and investment flows. India should consider negotiating a free trade agreement (FTA) with Egypt. India’s expertise in areas such as IT, healthcare, and pharmaceuticals could be leveraged in Egypt. At the same time, opportunities should be explored for Indian investments in Egypt.

Strengthening defence cooperation: As the partnership has shown growth in defence and security sectors, it would be beneficial to keep this momentum going. Joint military exercises, information sharing, and collaboration on counter-terrorism efforts can be prioritized.

Cultural and educational exchanges: Increased cultural exchanges can foster greater understanding between the two peoples, particularly among the youth. India could offer more scholarships for Egyptian students, while Egypt could facilitate deeper understanding of the Arab world for Indian students and scholars.

Cooperation on regional and global issues: As significant players in their respective regions and at the global stage, India and Egypt can seek to align their stances on key issues more closely, whether it be climate change, UN reforms, or regional stability.

Managing third-party relations: Given the interest of other powers like China, the US, and Russia in Egypt, India should strive for a balanced approach that respects Egypt’s relationships with these countries, while clearly articulating its own strategic interests.

Sources: –

Sources: The Hindu (Article 1 and Article 2), The Indian Express (Article 1 and Article 2), Livemint, Daily Pioneer, Economic Times and Hindustan Times 

Assam delimitation draft: What changes it proposes, why it has led to protests

Source: The post is based on the article “Assam delimitation draft: What changes it proposes, why it has led to protests” published in Indian Express on 27th June 2023

What is the News?

Election Commission (EC) has released a draft delimitation document for Assam, proposing a change in boundaries of several Lok Sabha and Assembly constituencies of the state.

What is Delimitation?

Click Here to read

Why is Delimitation being done in Assam now?

The slated delimitation process was done in the rest of the country in 2008. But it was deferred in Assam (as well as some other Northeastern states) citing security concerns of the time. 

A 2020 notification from the Law Ministry officially revived the exercise in Assam. Following that, in December 2022 the EC announced that it would initiate the Delimitation exercise.

What are the key highlights of the Draft delimitation document for Assam?

The number of seats (126 Assembly and 14 Lok Sabha) have been retained the same. But the EC has proposed changes in several other areas, such as:

Reserved seats increased: SC assembly seats have increased from 8 to 9; ST assembly seats have increased from 16 to 19.

Districts with autonomous councils (administered under the Sixth Schedule of the Constitution) get more seats: one assembly seat increased in West Karbi Anglong District; three assembly seats increased in the Bodo Territorial Region.

Change in nomenclature: Kaliabor Lok Sabha constituency is now named ‘Kaziranga’.

Why has the Draft delimitation document for Assam been criticized?

Firstly, the state’s Bengali-origin Muslim community has opposed this draft, alleging that it deprives them politically. They have alleged that constituencies have been shaped in such a manner that minority areas have been mixed with majority [Hindu] populations. 

Secondly, opposition parties had raised concerns about the use of 2001 Census data instead of the more recent 2011 Census records for delimitation.

GS PAPER - 3

Invest ahead of time. After a Caribbean cyclone an automatic payment is sent to scuba divers to immediately repair the reef

Source: The post is based on the article “Invest ahead of time. After a Caribbean cyclone an automatic payment is sent to scuba divers to immediately repair the reef” published in The Times of India on 27th June 2023.

Syllabus: GS 3 – Disaster Management

Relevance: About the role of CDRI and G20 in tackling disaster related concerns.

News: The article discusses the role of Coalition for Disaster Resilient Infrastructure (CDRI) and measures taken by the G20 in addressing disaster related concerns.

What is Disaster Resilient Infrastructure?

Disaster resilient infrastructure refers to the building or upgrading of structures while also understanding the ways in which natural and climatic events intersect with that infrastructure.

What measures are being taken by the CDRI in building disaster resilient infrastructure?

CDRI is designing infrastructure to sustain certain Richter scale events of earthquakes, taking pre-emptive measures to prevent collapse of infrastructures, and prevent loss of lives.

CDRI is also implementing capacity-building programs, and developing a curriculum on disaster risk in collaboration with institutes such as IITs.

What role is being played by CDRI in tackling the effects of climate change?

There are two important things associated with climate change – mitigation and adaptation.

While mitigation aims to limit global warming within a specific limit and focuses on achieving net-zero emissions, the adaptation accepts global warming as a reality and focuses on the impact of global warming, especially from an infrastructural point of view.

Hence, CDRI tries to analyse how the intersections between infrastructure and changing climatic patterns affect human lives and aims to reduce the risks from becoming disasters.

What is disaster risk financing and why is it needed?

DRF is about reducing the risk of disasters by investing ahead of time so that when hazards occur, the impact of the disaster is minimal and recovery can be made easily.

Risk pool mechanism set up in the Caribbean, a cyclone-prone region, is an example of DRF.

Under this mechanism, whenever a cyclone increases beyond a threshold, an automatic payment is sent to scuba divers, who immediately go and repair the coral reef. Because, coral reefs help in reducing wave strengths.

Hence, DRF can help in mitigating the impact of disaster.

How can awareness be raised about disaster-related events?

Technology plays an important role in increasing awareness. For instance, receiving messages on mobile phones about weather conditions enables people to take appropriate actions.

However, awareness alone is not sufficient and it is equally important for individuals to make informed decisions.

Hence, the Sustainable Development Goals initiative is one such programme which helps people in making decisions. Sharing and communicating information is also crucial.

What are key takeaways of the G20 meeting on disaster risk reduction?

Every member has expressed its concern towards disaster risk reduction and a roadmap is being developed.

Since the first G20 Disaster Risk Reduction Working Group (DRR WG) meeting was held under India’s G20 Presidency, efforts are initially being taken about sharing the information to initiate the process. DRF is also being emphasized as a priority.

Must Read: India’s G20 presidency can show the way on disaster management

How can G20 play a role in financial risk management?

The G20 already emphasizes infrastructure investments through its Quality Infrastructure Investment (QII) principles. However, disaster risks can also be included in financing mechanisms of the G20.

For this, G20 can work with the bankers and private investors to establish a framework for implementation. This can be done at a global stage with certain guidelines for the financiers.

Indo-US: Take 2

Source: The post is based on the article “Indo-US: Take 2 – India’s economic size has come mostly through adding physical capital. Intellectual capital needs a big boost” published in The Times of India on 27th June 2023.

Syllabus: GS 3 – Growth & Development, Science and Technology

Relevance: India’s position in R&D investments and measures needed to boost investments.

News: The current phase of India-US engagement highlights the exchange in high technology areas. This exchange has the potential to boost India’s progress in science and technology.

How can India-US engagement boost India’s progress in science and technology?

It can be done by promoting knowledge transfer between the two nations beyond the areas of engagement.

For example, when China’s Zhonguanccun Science Park was established, it created space for universities as well as high technology overseas and domestic firms. It was designed to help diffusion of knowledge to a wider range of firms.

India should also adopt a policy approach that fosters such ecosystems. Research and development (R&D) can play an important role in this process.

However, despite being the world’s fifth largest economy, India’s track record in R&D is unimpressive.

What is the current position of India in R&D?

As per the observations made by the Niti Aayog, India’s R&D spending is around 0.7% of GDP, while most technologically advanced nations allocate over 2% of GDP. For instance, in Israel, it’s almost 5% of GDP.

Further, data by the World Intellectual Property Organisation shows that India’s economic output is not based much on intellectual capital.

For instance, India ranked 25th in 2021 while South Korea, China and Japan took the top three spots. This poor performance was due to the relatively low R&D investments when compared to other market-based economies.

Moreover, despite the government currently accounting for 55% of the total R&D budget, the investment by the private sector has not yet increased.

Further, India ranks ninth globally in terms of patent applications, which is mostly contributed by IITs and CSIR. Therefore, the private sector’s investment in R&D is crucial for improving India’s position in R&D.

Note: The World Intellectual Property Organisation’s database ranks countries according to domestic patent applications for every $100 billion of GDP.

Must Read: Research and Development in India: Status, Challenges and Recommendations – Explained

What can be the course of action?

A measure of an economy’s competitiveness is also derived from its human capital. 

Since India has done well in surpassing most countries in economic size, it will be the intellectual capital that will be crucial in boosting per capita GDP further.

Hence, the government should encourage Indian corporations to increase their R&D spending while also acting as an enabler.

A lifeline for Indian science

Source- The post is based on the article “A lifeline for Indian science” published in the “Business Standard” on 27th June 2023.

Syllabus: GS3- Science and Technology

Relevance- Issues related to scientific research in India

News- In 2009, Ramaswamy Subramanian, a leading researcher in the US, set up the Institute for Stem Cell Biology and Regenerative Medicine (inStem) at National Centre for Biological Sciences in Bengaluru.

However, the original purpose of identifying five or six complex research problems in life sciences did not materialise.

What are the issues related to scientific research in India?

Outcome vs output: The central focus is on publishing academic papers in prestigious journals, rather than on discovering real-world applications.

Research grants only on paper: The government allocates research budgets. But, the funds are either not disbursed or experience delays in disbursing. Departmental secretaries are aware but helpless.

There were Financial advisors, usually at the level of an undersecretary. He has control over money matters and reports to the expenditure secretary in the finance ministry. Consequently, departmental secretaries seldom had the power to get the funds disbursed.

Without research grants coming through on time, the actual work remained shrouded in uncertainty. Over time, any ambitious research effort is impacted by bureaucratic red tape and long delays in importing reagents and expensive instruments.

The risks of raising external funding: Private donors are willing to contribute. On occasion, private donors made a significant contribution to the research budget.

But, the financial advisors in the bureaucracy would reduce the share of the government’s contribution. They would demand accountability for how the money was spent, even the portion that came from the private sector.

Family foundations that came forward to support research wanted updates on progress rather than details on how the money was being spent.

But the scientists themselves are reluctant to be accountable for outcomes. They simply furnish the same utilisation certificate that they were used to sharing with the bureaucracy. This is an endemic issue.

The result is that India spends a minuscule 0.6% of its gross domestic product on research, compared to the global average of 1.8%.

What is the silver lining visible in the field of scientific research?

A growing pool of philanthropic capital, both in India and in the Indian diaspora, is gradually coming into play.

Long-standing philanthropists like Nadir Godrej, Kiran Mazumdar Shaw, Smita Crishna, G V Prasad, Sunil Handa, Nandan and Rohini Nilekani are recognising the need to fund specific challenges that Indian science can address.

The obvious advantage is that it comes without any institutional baggage.

What is the way forward for boosting scientific research in India?

Younger generation of tech entrepreneurs in India don’t seem inclined to invest their wealth in scientific research. There is a need to tap new gen entrepreneurs in the Indian diaspora.

Reforming Multilateral Development Banks, advocating for the Global South

Source– The post is based on the article “Reforming Multilateral Development Banks, advocating for the Global South” published in “Indian expres” on 27th June 2023.

Syllabus: GS3- Economy

Relevance: Multilateral Development Banks and the need to reform them

News –  President Joe Biden and PM Modi underscored the need to strengthen and reform the multilateral system to reflect contemporary realities.

What is the relevance of MDBs and the need to reform them?

World Bank Group (WBG)  was responsible for providing financial assistance for the post-war reconstruction and economic development of the less developed countries.

The WBG lends to low-and middle-income (LICs and MICs) countries , to the private sector and encourages private companies to invest in foreign countries.

These institutions are no longer suited in terms of the resources, cultural ethos and methods to address the emerging challenges. These relate to global public goods, climate change and pandemics.

MDBs are in a quagmire, trapped in their procedures, approach and methods of work and reticent to structural changes.

The new challenge is transboundary issues and the opportunities connected with climate change.

How do we secure credible sources of finance to meet these enhanced challenges?

The MDBs need to optimise their current balance sheets to create higher leverage from existing funds and to attract private capital.

They need to fix annual targets and judge performances by the outcomes secured in this altered framework of accountability.

De-risking approaches such as blended finance and guarantees aimed at tilting the balance do exist.

Financial channels for capital mobilisation need to be strengthened.

What is the way forward?

Broad and deep changes are required to significantly strengthen performance, such as first loss guarantees, realistic return targets and risk management.

For India, reforming MDBs would mean advocating the voice of the Global South.

Making MDBs more relevant for addressing 21st-century challenges would contribute towards enhancing human welfare.

Deeper integration with multiple stakeholders is crucial.

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