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News: Recently, the Indian PM pointed towards the domestic political stability in the face of external threats and challenges like global conflict, instability and mounting inflationary pressures.
Consequences of the ongoing Russia-Ukraine Conflict and the economic sanctions
The military campaign in Ukraine has destabilised the European security order. The western economic sanctions on Russia are destabilising the global economic order
Due to the ongoing crisis, India and developing countries are going to pay a heavy price. The unintended consequences may range from rising commodity prices to shrinking markets, from devalued currency to fiscal constraints at home.
– India is also facing challenges of rising price of oil, gas, coal, fertilisers and vegetable oils.
The developing economies are already facing risk of another wave of COVID-19. If it comes, it may slow down the global trade and the movement of people across the world.
What measures can be taken to address the situation?
Short Term
It is in everyone’s interest that a ceasefire be immediately declared by Russia.
It is also equally in global interest that the US and EU step back from the reckless attempt to weaponize global economic links.
There is a need to focus on inflation control, employment generation, external economic & security challenges and internal social and political stability.
India:
– India has very well resisted US pressure on Indian purchase of Russian oil. India cannot afford to ignore low-cost options considering India’s external dependence in oil and gas.
– India has the opportunity to discuss common issues important for India and the global south in the upcoming G20 Summit next year (India to host). These issues are related to the comprehensive national power through the building of economic, social and human capabilities
– The “neighbourhood first” should be India’s foreign policy priority. There is a need to improve India’s relations with its neighbourhood. Stability and peace in our neighbourhood should be part of our strategy for building comprehensive national power. For example, India has renewed ties with Sri Lanka.
Long Term
Sustained economic growth is needed to generate the revenues needed to fund the welfare programmes.
– India would have to grow at 9% per annum over the next five years so that India can grow from the current level of $2.7 trillion to $5 trillion economy by 2022.
– India needs to expand its nuclear and renewable energy programmes to reduce India’s external energy dependence.
– India’s RuPay card can be promoted both at home and abroad. It can insure against potential threats to the SWIFT system.
Source: The post is based on an article “When West Weaponizes Sanctions” published in the Business Standard on 22nd Mar 22.
