9 PM Daily Brief – 10 May 2016

Brief of newspaper articles for the day bearing
relevance to Civil Services preparation

What is 9 PM brief?

• GS PAPER 2
  1. All up in smoke? {Bills and Laws}
  2. A licence to kill innovation {Bills and Laws}
  3. All’s not well in the kingdom {Foreign Policy}
  4. Indian aid for Ramayana trail may be finalised soon {Foreign Policy}
  5. A crisis of solidarity {International Relations}
• GS PAPER 3
  1. Gilead gets patent for Hepatitis C drug Solvadi {IPR}
  2. Annual core sector growth at decade low as steel drags {Economy}
  3. The Ponzi scheme in global trade {Economy}

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GS PAPER 2

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 [1] All up in smoke?

The Hindu

Supreme court gave direction to mandate larger pictorial warnings on tobacco products.

• Tobacco companies are resisting new regulation.
• The legal challenge to the new rule is likely to be finally settled in the weeks ahead, but till then, as per the Supreme Court’s directives, the larger warnings must be printed.
• Cartons will have up to 85 per cent of the packet devoted to graphic messaging.
• The smoking habit is often picked up by suggestive nudges — through advertising, peer pressure, and cultural signals that associate smoking with hipness, attitude, stress-busting, and so on.

Experience from other companies:

• Australia has become a shining example for the rest of the world to follow in clamping down on suggestive branding. In 2012, it pioneered a move to have cigarettes sold in logo-free plain cartons to deter smokers.
• The European Court of Justice (ECJ) backed a measure to cover two-thirds of a cigarette packet with health cautions in the 28 member-states of the European Union. Earlier, the ECJ had prohibited the use of descriptive terms such as “light” and “mild” to differentiate among cigarettes. This was in addition to the mandatory disclosure on cigarette packs of the ingredients.
• Canberra’s post-implementation report shows that there has been a statistically significant drop in the prevalence of smoking since packages have gone logo-less.
• In tandem with the latest restrictions on how cigarettes are packaged, the EU and the U.S. have clamped down on the sale of electronic cigarettes.
• In the U.S., e-cigarettes cannot be sold to people under 18 years of age.
  • This is the result of a growing consensus that far from being a harm-free alternative as claimed by industry lobbies, e-cigarettes could sooner or later lure consumers to take up the real thing.

Conclusion:

• This is an effective way to help break the smoking habit.
• Countries such as India have enforced rules that warnings be affixed in films when someone lights up on screen.
• Having temporarily won its battle in the Supreme Court on packaging, it is time New Delhi did more to discourage smoking.

[2] A licence to kill innovation

The Hindu

Issue

• Government has posted the draft of a bill aimed at regulating the acquisition and use of geospatial information pertaining to India and it is alleged that  it threatens to destroy the innovation ecosystem.
• The draft Bill has come under scathing criticism on social media and other online platforms for its draconian features.
• For background, refer earlier article, Journey without Maps.

Provisions of the Bill

• According to the draft Bill, it will be mandatory to take permission from a government authority before acquiring, disseminating, publishing or distributing any geospatial information of India.
• “No person shall depict, disseminate, publish or distribute any wrong or false topographic information of India including international boundaries through internet platforms or online services or in any electronic or physical form.
• Whoever acquired any geospatial information of India in contravention of the law shall be punished with a fine ranging from Rs 1 crore to Rs 100 crore and/ or imprisonment for a period upto seven years.
• The government also proposed to set up a Security Vetting Authority to carry out security vetting of the Geospatial Information of India in a time bound manner and as per the regulations framed by an apex committee.

What is Geospatial Information?

• Geospatial Information means geospatial imagery or data acquired through space or aerial platforms such as satellite, aircrafts, airships, balloons, unmanned aerial vehicles including value addition or graphical or digital data depicting natural or man-made physical features, phenomenon or boundaries of the earth or any information related thereto including surveys, charts, maps, terrestrial photos referenced to co-ordinate system and having attributes.

Questions raised by this Bill

1. What happens if the data need an update?

• The draft bill’s definition of geospatial information has a wide remit.
• It covers information that we think of as relatively stable but also talks about “graphical or digital data depicting… man-made physical features”.
• Geospatial information, especially when so widely defined, keeps changing.

2. Do we have the bandwidth to handle all applications for this usage inside and outside India?

• A government regulator that is yet to be set up will need hundreds of experts who can “vet” terabytes of data from each applicant.
• The logistics of getting these data across to the vetting authority alone boggles the mind, forget about the logistics of hiring and training these hundreds of experts.
• Unless this bill, on becoming an act, manages to single-handedly kill the innovation ecosystem that depends on geospatial data, the number of requests will keep going up.
• And all these people will be “acquiring” and wanting to propagate updates.

3. Does every single end user of such data also need a licence? How will a user get its data acquisition vetted?

• The complexity of the ecosystem and the trajectories such data can take are only limited by the imagination of developers and service creators working on different kinds of problems in a host of different sectors.
• And, in fact, typically such complexity emerges organically as different actors in the innovation ecosystem work to create new efficiencies or leverage existing ones, and so it is something to be encouraged.
• To satisfactorily “vet” the complex mishmashes of data that are bound to emerge over time will be a challenging task; in fact some of the questions raised in vetting involved data provenance patterns may almost be research-level questions.
• All this will further burden the vetting authority and stretch its capabilities.

Is there an alternative? And if there is, does it solve all the related problems?

• An alternative modality that can serve national security purposes would involve switching to a simple registration-based system that doesn’t make the acquisition of a licence a precondition to using data.
• However, such a registration-based system is also fraught with danger in a framework that insists on scrutinising the credentials of every end user.
• A clear distinction must be made between the producers and consumers of geospatial data.

Innovation ecosystem should not be threatened

• In order to not constrict the innovation ecosystem, the definition of consumers must be as wide as possible.
• It may be okay to require all publishers of geospatial data to register with the security-vetting authority and provide an online window through which the authority can conduct an audit of their data.
• The vetting authority can go through the data and raise an objection if it finds anything objectionable, and it can do this in its own time.
• In the meantime the data can be used by end users and updated by the publisher as required.
• In other words, the onus has to be on the vetting authority to regularly check that the data are in order, rather than on the service.
• By shifting the onus onto the service we run the risk of creating a significant roadblock for a major part of the innovation ecosystem. This is undesirable.

[3] All’s not well in the kingdom

The Hindu

Issue

• Saudi Arabia’s attempts to  reshape its economy and reposition itself in West Asia.

Current situation in the Kingdom

• Oil  prices remain persistently low.
• The kingdom is grappling with regional setbacks.
• The oil-geopolitics industrial complex, which has been the bedrock of the Saudi-Wahhabi system, is in jeopardy.

New plans

• It has unveiled a plan to diversify the country’s economy, according to which  the kingdom will end dependence on oil in four years.
• It  has proposed to sell a stake in Saudi Aramco, the nation’s oil producer, and create the world’s largest sovereign wealth fund which will diversify into non-petroleum assets.
• The idea is to make investments, and not oil, the key source of Saudi Arabia’s government revenue.

Oil shock

• The fall in oil prices (from around $110 a barrel in June 2014 to less than $50 now) has left a gaping hole in Saudi Arabia’s budget, which is predicted to be $100 billion this year.
• The government has taken several steps to deal with the crisis. It has cut spending, issued domestic bonds, and tapped its foreign exchange reserves.
• The political implications of this crisis could be enormous.
• But despite the oil shock, the Saudis are not ready to cut production to pump up prices.

Saudi’s interest in keeping prices low

• The Saudis are ready to live with lower prices for a longer time. The key reason is that Riyadh is afraid of losing market share to its rivals.
• Second, lower oil prices are hurting the shale oil producers in the U.S. worse than the Gulf countries. A vibrant shale oil industry is not in the long-term interests of the kingdom.
• Third, lower oil prices will hit Saudi Arabia’s geopolitical rivals, mainly Iran and Russia, as well.
• So the Saudis have turned to a road not taken earlier — they want to reduce the dependency on oil while letting their oil-dependent rivals struggle.

The Salman doctrine

• The Salman doctrine has two main components.
• The economic part is one, of course. An economy not vulnerable to oil fluctuations would put Saudi Arabia in an enviable position.
• The second part is geopolitical. Today, Saudi Arabia and Iran are locked, though indirectly, in at least two conflicts — Syria and Yemen.

New reality

• None of the Saudi interventions is paying off, at least on the geopolitical front.
• For more than five years, the Saudis and their friends in the Gulf have invested in Syria to topple the Assad regime. They armed the rebels and succeeded in protracting the civil war. But they were never close to unseating President Assad.
• In Yemen, the ill-planned airstrikes turned out to be disastrous both for the Saudis and the Yemenis. After a year-long campaign, the Houthis are still in Sana’a.
• Moreover, Saudi-U.S. relations are at the crossroads. U.S. President Barack Obama in a recent interview referred to the Saudis as “free riders”. The U.S. Congress is discussing a bill that, if passed, would let the families of the 9/11 victims sue Saudi Arabia for its alleged financial support to al-Qaeda. If the chill in U.S.-Saudi ties spills into the next U.S. presidency, it would pose an unprecedented regional challenge to Riyadh.
• The youth unemployment rate is 29.5 per cent, according to the World Bank.
• The kingdom also faces radicalisation of its youth; several of them have travelled to Syria to join the Islamic State.
• Even on the economic front, there’s no guarantee that the reform measures unveiled by Prince Mohammad will succeed. Last year, oil provided 73 per cent of state revenue. The promise to overcome this dependence in four years sounds unrealistic, given the practical and structural challenges.

[4] Indian aid for Ramayana trail may be finalised soon

The Hindu

India’s assistance for the Ramayana trail in Sri Lanka may be finalised in a high level meeting between the two governments next month.

• India’s help has been sought for development of infrastructure or amenities in the sites that form part of the Ramayana circuit.

About a dozen places have been identified as part of the circuit and Sita Eliya in Nuwera Eliya of the Central Province is one of them.

• It is in this place where Sita was held captive by Ravana.
• Renovation of a temple for Sita is under way.
• The temple’s consecration is scheduled for May 18.

The Meeting:

• The scale and the total amount of financial assistance will come up for discussion in the next month meeting.
• Legal and other issues would also be examined.
• The finalisation of the details would lead to signing of a memorandum of understanding.

[5] A crisis of solidarity

Indian Express

Context

• This article is written by Ban Ki-moon,  secretary-general of the United Nations. He has called for world leaders to address one of the leading challenges of our time: responding to large movements of refugees and migrants.

Reasons for Migration

• War, human rights violations, underdevelopment, climate change and natural disasters are leading more people to leave their homes .
• Migrants  have also left their countries in search of better opportunities or simply for survival.

Crisis of solidarity

• Almost 90 per cent of the world’s refugees are hosted in developing countries. Eight countries host more than half the world’s refugees.
• Just 10 countries provide 75 per cent of the UN’s budget to ease and resolve their plight.
• With equitable responsibility sharing, there would be no crisis for host countries. Yet, too often, fear and ignorance gets in the way. Human needs end up overshadowed, and xenophobia speaks louder than reason.

“In Safety and Dignity”

• It is a report issued by SG of UN. It deals  with recommendations on how the world can take more effective collective action towards refugee crisis.Salient points :-
• First, we need to begin by recognising our common humanity. Refugees and migrants are not “others”; they are as diverse as the human family itself. Movements of people are a quintessentially global phenomenon that demands a global sharing of responsibility.
• Second, far from being a threat, refugees and migrants contribute to the growth and development of host countries as well as their countries of origin. The better new arrivals are integrated, the greater their contribution to society will be
• Third, political and community leaders have a responsibility to speak out against discrimination and intolerance, and to counter those who seek to win votes through fear mongering and divisiveness. This is a time to build bridges, not walls, between people.
• Fourth, we have to give greater attention to addressing the drivers of forced displacement. The UN continues to strengthen its work to prevent conflict, resolve disputes peacefully and address violations of human rights before they escalate. One powerful new tool is the 2030 Agenda for Sustainable Development, a blueprint agreed last year by all 193 members of the UN that includes a strong focus on justice, institutions and peaceful societies.
• Fifth, we need to strengthen the international systems that manage large movements of people so that they uphold human rights norms and provide the necessary protections. States must honour their international legal obligations, including the 1951 Refugee Convention. Countries where refugees arrive first should not be left to shoulder the demands alone.

Expectations

• Refugee and migrant crises are far from insurmountable, but they cannot be addressed by states acting alone.
• Today, millions of refugees and migrants are being deprived of their basic rights, and the world is depriving itself of the full benefits of what refugees and migrants have to offer.
• On September 19, the General Assembly will hold a high-level meeting to strengthen our efforts for the longer term.
• And it is expected that it will point the way toward solutions to the most immediate refugee and migration challenges, and commit world leaders to greater global cooperation on these issues.

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GS PAPER 3

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[1] Gilead gets patent for Hepatitis C drug Solvadi

The Hindu

What happened?

• In direct contradiction to its earlier order, the Controller General of Patents, Designs and Trademark granted American pharmaceutical company Gilead Sciences the patent for the blockbuster Hepatitis C drug Sofosbuvir (brand name Sovaldi) in India.
• An application for the same patent was first rejected in January 2015 as lacking inventiveness and novelty.

Allegations of Pressure on Government

• There has been excessive pressure building up on the Indian government to dilute the independent functioning of the patent office to ensure that patent claims are granted far more easily to U.S. firms.
• In the process, the patent office has completely ignored recent proceedings in the U.S. against Gilead regarding the same application which have been found to infringe two of Merck’s patents, clearly defeating Gilead’s claim that its application on the drug was novel.
• The decision is a major blow to the access to drug movement.

[2] Annual core sector growth at decade low as steel drags

The Hindu

India’s annual core sector growth slowed to a decade low of 2.7 per cent in 2015-16, slower than the 4.5 percent pace in the previous financial year, according to government statistics.

• The growth was pulled down by steel and crude oil.
• Both of these saw output contracting by 1.4 per cent.
• Natural gas that dropped 4.2 per cent.

This contrasts with the data showing robust core sector growth in March, when the infrastructure sectors expanded 6.4 per cent, the fastest pace in 16 months.

• Eight core industries which include crude oil, fertilisers, steel, cement and electricity account for 38 per cent of India’s industrial output.
• The index for industrial production (IIP) has grown at 2.7 per cent in the first 11 months of 2015-16, lower than the 2.8 per cent recorded in the previous year.
• What is IIP?
  • The Index of Industrial Production (IIP) is an index for India which details out the growth of various sectors in an economy such as mining, electricity and manufacturing.
  • The all India IIP is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period.
  • It is compiled and published monthly by the Central Statistical Office (CSO) six weeks after the reference month ends.
• Forecast for industrial output growth in the month of March is two per cent, so the full year 2015-16 growth could be a shade lower than in 2014-15.
• Overall, the financial year 2015-16 hasn’t been great, though there are a few green shoots of recovery visible in consumers’ discretionary demand (car sales) and certain infra sectors like coal, electricity and cement due to the government’s capex efforts.
• The larger question is if those green shoots can broaden into other sectors and revive private investments.
• Private capex, rural demand and external demand still remain weak

Base effect

• What is a base effect?
  The Base effect relates to inflation in the corresponding period of the previous year, if the inflation rate was too low in the corresponding period of the previous year, even a smaller rise in the Price Index will arithmetically give a high rate of inflation now.

• While oil and gas output has been shrinking for about four years now, it is the decline in steel output in the backdrop of plunging global prices that has hurt the most as it had been growing at an average of 7 per cent in the past four years.
• The March and April infrastructure output numbers may seem a little exaggerated owing to the base effect, as the same months had clocked negative growth last year.
• The big disappointment is steel that has been hit by the low global prices and competition from China.
• The steel industry employs six million people directly and generates associated employment for more than 2.5 million.

Wake-up call

• These data and facts should serve as a wake-up call for the government to move away from incremental reforms to relieve the distress in the steel sector and push construction and real estate sectors.

Realty focus

• Some emergent ‘out of the box’ actions are called for as the real estate industry is also not showing any recovery and would continue to impact cement and steel.
• The earlier months of 2015-16 saw low growth, it is critical to see if there’s a turnaround showing up as an uptick from quarter to quarter.

Conclusion

• Steel is a mother industry and could be in a comatose position despite import price and anti-dumping curbs to restrict the influx of cheaper Chinese steel.
• Several plants can go under sooner rather than later so they need a lifeline.

[3] The Ponzi scheme in global trade

Livemint 

Context

• The author has criticised European Union (EU) for dictating its terms to developing countries.

Strengths of EU

• The European Union (EU) commands influence because of its dominant status in the global trading system.
• Over one-third of the international trade in goods and services originates from EU members

Vulnerability  of EU

• Referendum on the UK’s membership next month
• Economic crisis in Greece
• The worsening refugee problem
• Growing opposition to globalization

Policies and Strategies of the EU

• When it comes to trade and unveiling new trade agendas, the EU invariably claims leadership. At “The fundamental role of EU trade policy must be to create economic opportunity for people, starting with people in Europe.”
• The EU’s strategy “Trade for All” is based on economic realities in Europe, particularly “global value chains”. Over 30 million jobs—“one of every seven jobs in our whole economy”—depend on global value chains that provide imports of “energy, raw materials, or intermediate goods or services”.

What are the implications of these policies?

• Effectively, the EU trade commissioner is suggesting that for exporting state-of-the-art technologies and products to the daridra narayans of the world (to use Gandhi’s phrase) the EU companies need guaranteed flow of imports such as raw materials, energy and back-office outsourcing services from the developing countries.
• This would also imply that the developing countries must continue to produce what they are good at, such as raw materials, intermediate goods and back-office services.
• The raison d’être of global value chains, or GVCs, is that industrialized countries will continue to produce the state-of-the-art iPhones and technologies while the Make in India types provide the components and parts.

Is it a fair deal?

• Why would anybody take these sermons on uninterrupted trade liberalization seriously when the proponents have a tendency to pocket gains in areas of their interest without paying others what they deserved in reciprocity?
• Increasingly, trade liberalization looks like a Ponzi scheme, with countries asked to pay and pay for promised benefits that, invariably, never materialize.