The predominance of nation-states in the 21st century is the continuation of a trend set by “archaic globalisation”, dating back to thousands of years. Shipping routes and natural resources which were primary reasons back then, continue to hold high importance even in today’s technologically revolutionised world. Consequently, the international world order today is shaped by the economic, military and strategic relevance of countries and regions. Such can be seen in the (not so) curious case of the Pacific Islands. Over the last five months, the Pacific Island countries have witnessed increased levels of attention from international media, experts, world leaders, international forums etc., unlike in the past. The renewal of this latent attention in the South Pacific region by powerful regional players like Australia, the US, New Zealand and now China was last witnessed at the time of World War II, rendering them a prominent denominator in the ongoing power contest between the US and China.
The beginning of this renewed attention owes to the security pact signed between Solomon Islands (SI) and China back in April 2022. The security pact was aimed at filling the gap left after the Regional Assistance Mission to Solomon Islands (RAMSI) ended in 2017, following which clashes and violent episodes resurfaced in the island nation. Internal conflict and ethnic violence have plagued Solomons for nearly three decades, resulting in Australia and New Zealand initiating financial and security assistance in the region under RAMSI in 2003. These developed nations infused over USD$3 billion into the peacekeeping operations over a period of 17 years to restore social order and stability, build stronger institutional mechanisms and re-establish functionality.
Details of the security pact signed between China and Solomon Islands were kept hidden from the world, including the Pacific Islands Forum, which sent shockwaves not only within the Forum, but also among regional powers like the US. Speculation was rife that the pact could possibly allow Chinese warships to dock on the Solomon Islands. Furthermore, the Chinese efforts to persuade the Pacific Island nations to endorse the Common Development Vision (CDV), a sweeping agreement covering everything from security to resources, also alerted the traditional powers in the South Pacific. Nevertheless, Beijing could hold fast to its position that employing military power and securing stability in the Solomon Islands is a matter of Chinese national interest, allowing it to protect its personnel as well as the economic assets it is investing towards.
It is important to contextualise China’s proactiveness in the Solomon Islands strategically and economically. On the strategic front, the PI offers China an opportunity to turn the South Pacific into a ‘strategic choke point’ for both Australia and the US if they ever intended to make their way to East Asia for force projections in times of conflict. Although this futuristic rationale should not be discounted, it does not account for the whole picture. PI’s wealth of marine resources and crucial sea lanes of communication makes the region even more appealing for China, leading to increased investments since 2006. Though China is only the third highest investor in the region after the US and Australia, it has played a silent and agile game, gradually escalating engagement with PI nations such as Micronesia, Papua New Guinea, Vanuatu, Fiji, Niue, Cook Islands, Samoa, Kiribati, Solomon Islands and Tonga, particularly on the condition that they after the endorse the One-China policy.
Xi Jinping recently stated that China’s proposition of the Belt and Road Initiative (BRI), the Common Development Vision (CDV) as well as the latest Global Security Initiative (GSI) will “contribute to mustering consensus and strength in solving global challenges for growth and security”. The BRI acts as the economic plank of China’s foreign policy engagements, whereas the GSI, announced in April 2022, was a call to adhere to a new international order by rejecting zero-sum games and the US hegemony and providing Chinese solutions to international security challenges. Although by 2020, China had managed to on-board 12 Pacific Island nations to the BRI, it is struggling to acquire similar confidence among PIF leaders in the other two initiatives. At present, the PIF leaders are predominantly focused on climate change, development and regional stability. The PIF leaders are proceeding with caution regarding the nations’ involvement with China.
The Pacific Islands have witnessed economic and geopolitical implications on countries that have been deeply involved with China through BRI, directly or indirectly. Coupled with prioritising national and regional interests and stability, the PI nations are also cognizant of China utilising its initiatives as strategic tools to counter US hegemony. Therefore, so far the countries in PI have remained independently judicious in their foreign policy. They have kept their national interests at the forefront and stayed away from becoming pawns in the China-US great power rivalry.
PI nations who have strong economic and commercial ties with China will continue down that path of engagement for economic and regional development, through post-pandemic economic recovery, and building new centres for agriculture and disaster. However, their area of cooperation in sectors of security will be dictated by the larger geopolitics and great power rivalry in the region.
The current framework of China’s GSI does not have many enthusiastic takers in the Pacific region. China’s recent initiatives and attempts to introduce themselves into the region, and resuscitated interest of the West in the South Pacific provide PIF leaders an opportunity to leverage such renewed interest for their own gains.
Meanwhile, for China to succeed it must give utmost importance to the power of consensus within the PIF before making its next move. Otherwise, the alternate route of divide and conquer will take years before the PI nations come on board individually one by one. As for the West, they must start working seriously with the island countries on matters of climate change and regional development if they wish to continue being important players in the South Pacific. Western nations must remember that China will bring modified, more suitable deals in the future to the PI nations. Non-agreement to CDV is not the last of it.
China will ramp up its security, economic, commercial, logistical and diplomatic efforts to bring a more acceptable deal. Therefore, they need to stop waiting for China to start dominating the region, and instead take a more proactive role in tackling the challenges of the region.
Sharon Susan Koshy is a Research Associate at Centre for Public Policy Research, Kochi. Akanksha Gupta is a Senior Associate at Centre for Public Policy Research, Kochi.
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Unlike U.S., Indian Supreme Court upholds Women’s Rights for Abortion
In a landmark judgment on Thursday, the Supreme Court provided enormous relief to all women, upholding their right to medically terminate their pregnancy, if they so willed. This is in sharp contrast to what happened in the United States, a few months ago where the Supreme Court of that country reversed the Roe vs Wade ruling of 1973, thereby making abortion illegal in several states. This ruling was described as regressive by women groups there and several protests were held in multiple cities of the country, which is looked up to by people around the world for freedom of individual rights. Roe was the legal pseudonym of Norma McCorvey, a 22-year old mother of two children, who wanted to medically terminate her foetus of the third child, which was the result of her rape. The Texas court had decided in Norma’s favour and against the pleadings of Wade, who was the Attorney General. The US Supreme Court reversed this decision. The Indian Apex court while providing a detailed interpretation of who all were legally eligible for an abortion, also included in its decision, the right of even single women to go in for abortion, if they so wished. The Supreme Court also made very significant observations regarding marital rape and held that it was not legal, thus leaving the wider interpretation open for the future. This is the first time that the highest Court of the land, has talked about marital rape and has stated that any pregnancy caused because of force or pressure by the husband, came under the purview of an abortion, if it was against the will of the wife. The historic judgment widely welcomed by women rights activists seeks to tilt the balance in favour of pro-choicers as against pro-lifers. Many religions do not permit abortion and it is considered to be a sin, if a woman chooses to terminate her pregnancy. However, there is no ambiguity in the Supreme Court order which seeks to give the women, an option to go in for abortion. In case of single women, the Court has opined that they could use their choice till the first 24 weeks. Importantly, the order shall allow women, many of them victims, to seek medical assistance at all authorized hospitals instead of risking their lives by going to quacks for the termination of pregnancy and make this act legally valid. This order can also be a boon for women in live-in relationships where their partner may try to dump them once they were pregnant. Abortion in other words would no longer be a taboo, at least constitutionally and as per the law of the land. Many women have to bear a child, even if it is known that he or she was going to be medically unfit or may suffer from some sort of physical or mental disorder following his or her birth. The order has further vindicated the faith of the common man in the topmost court and is a tribute to the wisdom of the Judges. The Order should also serve as a warning to bully husbands and overbearing in-laws who may wish to impose their will on helpless women for being pregnant a multiple-times. It is a decision which favours family planning and welfare and needs to be universally hailed.
For RBI, not much space left to be restrictive
Global externalities weigh on MPC decision
The Monetary Policy Committee (MPC) expectedly raised the policy rate by another 50bps for the third consecutive time, with the repo rate now at 5.90%. The decision had a 5-1 split, with one of the members Prof. Ashima Goyal voting in favour of a 35bps hike. The supposed stance has been kept unchanged at “focus on withdrawal of accommodation”, albeit with consistent dissent from Prof Jayanth Varma, another member. The broad underlying narrative is in line with our expectations: the world order is changing, and outsized Fed hikes will lead the synchronized global monetary-tightening cycle. To that extent, global externalities and financial conditions override domestic dynamics. We had argued that the fast-evolving global dynamics and consistent repricing of Fed’s massive hikes are strong-arming Emerging Markets (Ems), indirectly pressing their assets to offer higher risk premia to the world. India has not been spared here, with concerns on the external front continuing to simmer despite easing global supply chain issues. The instability inherent with the classic EM central bank trilemma is exposed: one cannot have a stable currency, unfettered capital flows, and independent monetary policy all at the same time. This painful adjustment has also impacted RBI’s reaction function, which realised the net cost of a supposed soft signalling via a shallow hike could be higher than the explicit cost of a higher 50bps hike. Else, the avoidable noise in financial asset classes would have made the steady state equilibrium even more far-fetched.
INR and external debt pressures seem manageable
The Governor noted that INR weakness has been orderly and in the middle of the EM pack. He again asserted that INR is market determined and pre-determined by RBI, with the central bank only intervening to curb excessive volatility and anchor expectations. He also noted that of the near $70bn loss in spot forex reserves FYTD23, about 67% loss is owing to valuation changes from surging USD and higher US bond yields. This, of course, does not include the run down on forward position. He also added that the umbrella of adequacy of forex reserves continues to be strong and external financing requirements will be met comfortably.
Inflation-growth outlook little changed
The broad narrative on inflation and growth remains unchanged. The tone on the inflation assessment was cautious; the press release again highlighted the risk that sustained high inflation could unmoor inflation expectations and lead to second round effects in the medium term. Even with mild easing in input cost of production, the inflation outlook is fraught with considerable uncertainty, given the volatile geopolitical situation, global financial market volatility and supply disruptions, while demand side resilience could also keep core inflation high. The inflation forecast has been kept unchanged at 6.7% for FY23. On the growth front, the sectoral value-add should be boosted by broad-based gains in agri, industrial and services sectors, while the demand side could be buoyed by rural and urban consumption in H2FY23. However, net exports could be a drag to growth. Keeping that into consideration, the RBI cut the growth forecast to 7% with balanced risks.
RBI unlikely to go too restrictive
We think the conscious front-loading of policy rates gives the MPC some breather on shallow hikes ahead. With inflation likely to be largely in line with RBI’s estimates, today’s 50bps hike will make the ex-post forward real repo rate positive, albeit still lower than the RBI’s estimated real neutral rate of 0.8-1%. At this point, we still think that the RBI would not go too restrictive and terminal rate could hover near the estimated neutral real rates, implying not more than 50bps hikes ahead.
However, the extent of global disruption will remain key to the RBI’s reaction function ahead. The situation globally is still fluid, and macro assessments might require frequent adjustments from the policy perspective. With Banking liquidity now closer to deficit levels, and comfortably below the threshold of 1.5% NDTL (which is seen as inflation-pressing), the policy focus will now also be on to transmission of past rate hike actions, in case of some calm in global asset classes. The system liquidity may improve ahead only at the margin as government spends may be partly offset by higher currency in circulation and consistent high C/D ratios. This liquidity tightening also tantamount to another estimated 25bps+ of rate hike, implying less pressure on conventional repo hikes to take place.
Madhvi Arora is the Lead Economist with Emkay
A fine balance between external headwinds and domestic inflation
The Monetary Policy Committee (MPC) of Reserve Bank of India (RBI) on expected lines increased the repo rate by 50 basis points to 5.90% with a cumulative rate hike of 190 basis points during this rate hiking cycle starting with an off-cycle 40 basis points hike in May. From the Governor’s message it was clear that the MPC was decisive to act swiftly to minimise the spillover impact of “the third major shock” of aggressive monetary policy tightening of advanced economy (AE) central banks post Covid-19 and Russia-Ukraine crisis. Increase in policy rate was needed for a few factors.
India’s retail inflation measured in terms of consumer price index (CPI) remained higher than RBI’s upper tolerance band of 6% for the eighth straight month till August 2022. Food inflation is expected to stay higher due to higher cereal prices. Wheat production got affected due to heat waves in the northern part of India earlier this year and now lower rice production during the kharif season will weigh on prices. Uneven spatial distribution of monsoon adversely impacted prices of perishable items such as tomatoes. Moreover, with the service sector getting back strong, the pricing power is coming back that could fuel inflation. Nonetheless, lower commodity and crude prices will cool off inflation a bit. These factors will keep inflation above MPC’s target of 6% for most part of FY23 and thus a 50 basis points increase in repo was appropriate.
On the growth front, India’s economy is resilient. Credit growth of SCB’s remained robust and increased by 16.2% in the earlier fortnight. GST collections remained above INR 1.4tn for the sixth consecutive month till August. Manufacturing PMI stayed resilient at 56.2 in August with increased capacity utilization in manufacturing. Service sector indicators such as rail freight traffic, domestic air passenger traffic, toll collection show strong resilience. Moreover, kharif sowing being higher by about 1.7% of normal sowing; agriculture remains resilient. Both consumption and investment demand are showing signs of traction. Vehicle sales increased by 20% in August and now on a 3-year CAGR basis up by 1.7%. The rate hiking cycle will not have a very significant adverse impact on India’s growth outlook which allows MPC to deliver bigger hikes.
Real repo rate that is adjusted for inflation is still negative and that will dwindle household savings. Gross household financial savings decreased to 10.8% in FY22 from 15.9% in FY21. It is expected that the MPC will continue to increase the repo rate to take it to neutral level to boost savings.
MPC retained its stance of “withdrawal of accommodation” despite banking system liquidity remaining in deficit on some days recently. This is the correct approach since the government is expected to spend higher on capex and subsidies, liquidity will come to the banking system and RBI will have to mop-up excess liquidity to bring it to neutral level. Government has about INR 3.5tn cash balance with RBI.
Going forward repo rate is expected to become the operating rate since eventually RBI will go in liquidity injection mode. This will see market rates moving higher across tenures. RBI is expected to continue its forex market intervention to stabilize volatility in rupee and outflow of funds. Forex reserves even though decreased but still remain favourable compared to the peer economies which gives RBI the room to do forex intervention.
(Dr. Sudarshan Bhattacharjee is currently the Principal Economist of Yubi (CredAvenue). He has 15 years of professional experience cutting across different domains like banks, ratings, regulator, think tank, etc. In his previous role he worked as a Senior Economist in ICICI Bank. Dr. Bhattacharjee has published various research papers in national and international journals. He holds a PhD from University of Mumbai)
Growing women’s power in IAF on display
Amid the growing number of women pilots and ground crew in the Indian Air Force, the female forces are operating fighter aircraft and choppers extensively in the eastern sector over Arunachal Pradesh and Assam.
Indian Air Force officials in eastern command said the female pilots and ground crew officers are deployed across the country and operate in all types of terrain, from the world’s highest battlefield, the Siachen glacier sector, to the easternmost landing ground in Vijaynagar in Arunachal Pradesh in support of troops and the local population.
“We have had brilliant women who have broken the glass ceiling and paved the way for us to follow our dreams to serve the country,” said Flight Lieutenant Tejaswi, who deservedly became the newsmaker of the week.
“It is no longer a unique experience to have women in the fighter aircraft fleet. Everyone, including men and women, works and trains equally hard. We are on equal footing. In the skies and on the base, we are all first and foremost air warriors, and everything else comes after that,” she said.
The first time the Indian Air Force allowed women in the fighter stream was when three females, including Avni Chaturvedi and Bhawna Kanth, were commissioned in the fighter stream. Later, Kanth became the first person to fly a solo sortie in a MiG-21, while Shivangi Singh went on to fly Rafale planes.
ALH Dhruv Mark 3 pilot Flight Lieutenants Ani Awasthi and A Nain regularly fly their ALH choppers over the Arunachal Pradesh sector through thick forests and close to the LAC.
These pilots are doing a great job, and for us in the IAF, they are air warriors first who have to handle the machines well to perform the assigned tasks, an Eastern Command official said.
The Indian Air Force has more than 1300 female officers working on ground and air duties.
Women are used as pawns in political and ideological battles
The morality and good social conduct of a man fall under the accountability of a woman.
The recent massive ban on the eight organisations led by the PFI (Popular Front of India) highlights how women are merely pawns in these so-called neo-social-political movements.
Women are used for these political causes to rouse gender sentiment among people.
Many Muslim women in India have come out as pro-hijab and for the right to freedom of choice to pick their attire.
Unfortunately, they are blind to the reasoning behind the hijab or the ghunghaat.
Both are ways of conditioning women to make them the culprits, and therefore they must cover themselves from the unhindered lust of men. This lust, unchecked, isn’t punishable. The skewed logic is the woman whose clothing is revealing, which leads to the man lusting after her.
The morality and good social conduct of a man once again fall under the accountability of a woman.
As per the data released by the National Crime Records Bureau (NCRB), a total of 4,28,278 cases of crime against women were registered in 2021, up from 3,71,503 cases in 2020, registering an increase of 56,775 cases this year, marking a 15% increase.
It is the covering up of women that remains the modus operandi for safety. In Cameroon, young girls when they attain puberty have their breasts ironed by their mothers, and sometimes grandmothers, to avoid rape.
Even today, there is Female Gender Mutilation (FGM), which is a part of the Dawoodi Bohras of India. It is called khafz. This practice is offensive, oppressive, harmful, and not religious at all. The practice is simply a hangover of patriarchy and it is done to repress women sexually. The role of her genitalia is viewed to be limited to giving birth to progeny.
FGM is usually carried out on young girls between infancy and the age of 15, most commonly before puberty starts. It’s illegal in the UK and is child abuse. This can seriously harm the health of women and girls. It can also cause long-term problems with sex, childbirth, and mental health.
These forms of oppression have been carried out throughout history, using women as a means to curtail crime, lust, and power.
The hijabi women of Iran too were used shrewdly by Ayatollah Khomeini to bring down the monarchy, and again the same man has ordered a free hand to the moral police of Iran to kill any woman who disobeys the hijab law.
What women fail to understand is that hijab or ghungaat is an archaic way to protect oneself from gender violence. By no means, a woman in a hijab can avoid rape as much as a woman in a pair of shorts and a tee shirt. Violence doesn’t see the clothing as an encouragement; it is the mindset of the criminal.
In India too, multiple women have suddenly donned the hijab in classrooms and are vocal about the right of choice. This isn’t a choice, but a brainwash that must be addressed.
The PFI has been allegedly accused of the sudden commotion of young impressionable girls who have been manipulated to be pro hijab and has also been vocalising the freedom to wear the same.
To know a little about the PFI, it was created in 2007 through the merger of three Muslim organisations in southern India; the National Democratic Front in Kerala, the Karnataka Forum for Dignity, and the Manitha Neethi Pasarai in Tamil Nadu. This grew bigger and wider.
A decision to bring the three outfits together was taken in November 2006 at a meeting in Kozhikode, Kerala. The formation of the PFI was formally announced at a rally in Bengaluru during what was called the ‘Empower India Conference’ on February 16, 2007. The very women who took part in the rally forgot that the empowerment of women is to be free and not hide under the hijab or be the moral keepers of the men who have no such rules in society.
PFI’s national general secretary, Nasaruddin Elamarom, is one of the founding leaders of the outfit. The chairman of NDF National Development from an outfit under PFI, E. Abubaker, also hails from Kerala. Both attempted to arouse religious sentiment and used pro-hijab conditioning to support this movement.
The raids, coordinated by the National Investigation Agency (NIA), the Enforcement Directorate (ED), and state police, took place across 13 states, including Uttar Pradesh, Kerala, Tamil Nadu, and Bihar. The officials mentioned that the searches took place at the premises of the people involved in terror funding, organising training camps, and radicalising people to join proscribed organisations.
We are yet to see how many feminist groups will come forth and talk against the hijab and the ghungaat tradition, which is merely an eye wash to curtail women’s ability to reach their full potential.”We realise the power of our voices only when they are silenced, “said Husna Sait, a bridal couturier for the brand Limited Edition,
“I strongly feel for the women in Iran. Choices are basic, fundamental rights. As a Muslim woman, I have made the active choice of not wearing the hijab. Many of my family women do. In my opinion, this is something that you should do if you believe in it. It can’t be imposed, “ Husna added.
It must not be portrayed as a religious protest but as a voice against misogyny and patriarchy.
Mohua Chinappa is an author and a podcaster of a show called The Mohua Show.
India’s ‘mission’ for a permanent UNSC seat gets a fillip at UNGA
During one of his interactions with the media in the US, External Affairs Minister S. Jaishankar emphatically and unequivocally said that the need to reform the United Nations Security Council (UNSC) cannot be denied forever. Jaishankar also said that India deserved a place as a permanent member of this global body. He, however, in the same breath, said that India never believed that this would be an easy process. What Jaishankar seemingly sought to suggest was that the Indian diplomacy led by him is going to be more aggressive in future for New Delhi’s mission, aimed at achieving a permanent UNSC seat.
Undeniably, India has been at the forefront of the years-long efforts for the Security Council reform. It has long sought for itself a permanent seat on UNSC as well. In what augurs well for India’s quest for a permanent membership of this body, Jaishankar succeeded in giving further momentum to the entire campaign in this direction during his week-long visit to the United Nations. His efforts saw renewed momentum on the front of reform at the UN General Assembly in New York, with scores of countries including four of the five powerful nations openly supporting India’s claim for a permanent seat on the council. China continues to be opposed to India’s campaign for membership. It has pushed Pakistan’s candidacy just to scuttle India’s move to gain entry into the coveted global body. Beijing is opposing any proposal on Japan’s permanent seat on the council as well. This is the reason why India and Japan have decided to run the campaign jointly for their UNSC ambitions.
Irrespective of what China may be thinking, Jaishankar continued to work hard at UNGA and successfully set a strong and powerful narrative, underlining the urgent need to reform the UNSC and its expansion to accommodate New Delhi as a permanent member. At the UNGA, a number of countries including the US and Russia, both having veto powers in the UNSC, reaffirmed India’s views after deliberating on the narrative given by the EAM. It is a big diplomatic achievement that the “reform the UNSC” campaign by India got such a big boost, with massive support from various global quarters. Over 30 countries led by India with St Vincent and Grenadines finally issued a joint statement calling for reforms of the UNSC. This amounts to India’s success in mobilizing global opinion in favour of UN reform, with China obviously watching. It was a good move by the EAM that he raised this issue during his all bilateral meetings in New York. India believes, and rightly so, that the campaign at this level will go a long way in building pressure on China, which is one of the five permanent members having veto power. The other four permanent members are France, Russia, the UK and the US. India is among the 10 non-permanent members of the body. Only a permanent member has the power to veto any substantive resolution. India seeks permanent membership with the veto power.
That US President Joe Biden endorsed India for a permanent seat on the Council came as a big boost for India’s mission in Washington. Jaishankar himself pointed it out, saying that Biden has offered most explicit American backing on UNSC reforms. In fact, Washington has supported India’s campaign for a permanent UNSC seat on earlier occasions as well. What is also true is that all the five permanent members were earlier opposed to any idea of UNSC expansion.
But gradually, the US, France, the UK and Russia started changing their mind, which is attributable also to a strong campaign by India that succeeded in garnering support of other members of the global community. What India needs to do is to continue to work hard to ensure that the other major powers persuade China to remove its objection to India’s claim for a permanent seat. So, the annual gathering of the UN General Assembly in New York saw India’s “robust campaign” seeking a permanent seat on UNSC. The campaign got the much-needed fillip by virtue of Jaishankar being able to reach out to various countries at UNGA on the same issue.
What is needed is that New Delhi must continue to maintain the momentum that has been generated so far. With the SC reform set to be one of the themes of India’s Security Council (SC) presidency this December, New Delhi must utilise the opportunity to give further push to its campaign. December will mark the last of India’s current two-year stint as an elected non-permanent member of the Council.
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