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Friday, July 28, 2017

Brics dreams fade as trade spats, border tensions cloud meeting

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Beijing: Trade ministers of the Brics nations—Brazil, Russia, India, China and South Africa—will meet in Shanghai next week under the shadow of rising trade spats and border tensions between the group’s Asian members.

The meeting precedes the annual leaders’ summit in September and will discuss trade liberalization, commitment to a multilateral system and other issues, according to a Chinese ministry of commerce briefing this week. But prospects for the group to develop into a united powerhouse of emerging economies look as distant as any time since economist Jim O’Neill coined the term back in 2001.

The split among emerging market economies may create strains between winners and laggards, according to Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. “This tension is likely to get worse rather than better in the coming decade and will reduce the ability of the Brics group to speak with one voice.”

The Brics have found little common ground in recent years as their growth trajectories diverged and geopolitical ambitions spurred tensions. China has kept up its rapid, albeit moderated, growth pace and India has vied with it for bragging rights as the world’s fastest growing major economy. But life has been tougher for the commodity dependent economies of Russia, South Africa, and Brazil, with the latter also plagued by political turmoil.

Just three years ago, Chinese president Xi Jinping laid out his “blueprint” for the Brics nations, calling for closer ties within the block and a more “integrated market.” His Russian counterpart Vladimir Putin also hoped the group would reshape the global economic order, and named Brics cooperation as a national priority. The $50 billion New Development Bank, with equal capital contributions from the five economies, was launched in Shanghai in 2015 to provide an alternative funding source to the World Bank.

But instead of increasing integration, the club remains loose and divided. Trade relations between China and some of the other four nations have soured, with the export powerhouse’s rising shipments of manufactured products fuelling calls for protection.

India recently opened an anti-dumping probe into Chinese solar-equipment makers, the latest in a string of such investigations. The south Asian nation launched 12 trade cases against Beijing in the first six months of 2017, the most in the world, according to China’s ministry of commerce.

Brazil and China have also locked horns. Latin America’s biggest economy extended a probe on Chinese steel, while China imposed additional tariffs on sugar imports, triggering complaints from Brazil.

Trade relations are heavily tilted in China’s favour. China was the largest trading partner for the other four nations last year. By contrast, India, Russia and Brazil ranked 13th, 14th and 15th on China’s tally, with South Africa further down the list, according to IMF data compiled by Bloomberg.

Geopolitics is also getting in the way.

“Individual Brics nations are more focused on expanding their economic space and geopolitical influence in their immediate geographical neighbourhoods,” said Chua Hak Bin, a Singapore-based senior economist with Maybank Kim Eng Research.

The ambitious Belt and Road initiative, proposed by president Xi to link China with Europe, encroaches onto the other Brics nations’ areas of influence, particularly India’s and Russia’s, he said.

In a move to soothe opposition to its massive trade surplus—not least from US President Donald Trump—China has offered to beef up imports from all over the world. Vice commerce minister Wang Shouwen said in a briefing this week that China expects to import over $8 trillion worth of goods in the coming five years, and the other Brics members are welcome to further tap into the vast Chinese market.

The Asian nation’s imports from the quartet hit $70.2 billion in the first half of 2017, official data showed — a 34% jump from a year earlier.

While trade within the block may continue to strengthen as their economies pick up, China’s most important relationships will still be with the US, Europe and the rest of Asia, said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong.

The lion’s share of China’s trade is tied to the global supply chain, and none of the four other Brics nations are a major player in that respect, Shen said. Chinese imports from other Brics nations are mainly raw materials, which are volatile due to commodity price fluctuations, he said.

Jammu & Kashmir tops list on rights abuses under AFSPA, Assam second

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New Delhi: Even as it mulls over the future of the Armed Forces Special Powers Act (AFSPA) in the northeast, the Union home ministry has released data revealing human rights violations under the controversial Act are the highest in Jammu and Kashmir, followed by Assam. The documents which have been made public through a Right to Information (RTI) query filed by Venkatesh Naik, a human rights activist, show that Jammu and Kashmir tops the list of human rights violations committed under the AFSPA, with 92 complaints against the Indian Army and paramilitary forces in 2016. Assam comes in second with 58 complaints, Manipur third at 21, while Meghalaya and Arunachal Pradesh follow next at five and six complaints, respectively.

Of the 186 complaints received, 74 were against the Indian Army. Death in army encounters saw 24 complaints. Death in army firings saw 16 complaints, while there were 21 cases of alleged fake encounters and 10 cases of rape and abduction.

The home ministry has made it clear that all security personnel deployed in conflict zones governed by AFSPA have to abide by a strict code of conduct.

“For preventing human rights violations under the AFSPA, guidelines have been issued for the armed forces. Violation of these guidelines by members of the Armed Forces makes them liable for prosecution under the Army Act and the respective Acts of the CAPFs (central armed police forces),” a home ministry official said on condition of anonymity.

An army officer who did not wish to be identified said the human rights cells of the Army and the CAPFs closely monitored alleged human rights violations.

Experts and former army officials, however, stated that in conflict regions such as Jammu and Kashmir—given the recent onslaught of stone-pelting on the forces—“human rights violations” took on a very different meaning.

“If a soldier rapes a woman, he deserves a punishment that’s severe. There is no other punishment. But for situations where civilians are throwing stones at the soldiers or hindering security operations, the soldiers have to defend themselves because civilians there who pelt stones at forces don’t care for the lives of a soldier,” said Gaurav Arya, defence expert and former Indian Army officer.

An expert on the issues of the northeast, however, stated that the matter was totally different in the region—with Assam, Arunachal Pradesh, Meghalaya, Manipur and Nagaland under AFSPA, the armed forces enjoyed impunity despite gross violations.

The expert said that a majority of the “encounters” carried out in the northeast were staged.

“There is a huge mafia nexus in the region, especially Assam that identifies people who can’t leave a trail and whose disappearance will not be reported. They are then sold to the security forces, passed off as ‘militants’ and killed in ‘encounters’,” said Kishalay Bhattacharjee, author and expert on northeast India. On 14 July, in a breakthrough judgment, the Supreme Court for the first time took cognizance of 1,528 cases of fake encounters under AFSPA in Manipur, ordering a Central Bureau of Investigation (CBI) probe into 97 of them.

Ordinarily, if there are human rights violations, the complainant can approach the police station, which conducts an immediate inquiry into the allegation and then lodges a first information report (FIR). The security forces too conduct parallel semi judicial processes. At the same time, the CBI can also be ordered by a higher court to investigate or re-investigate such allegations.

Exide looks to start making batteries for electric vehicles

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Exide Industries Ltd is looking to start producing batteries for electric vehicles, managing director and chief executive officer Gautam Chatterjee said on the sidelines of the company’s annual general meeting on Thursday.

The e-rickshaw market offers “huge opportunities” for growth because sales of e-rickshaws have expanded “spontaneously” without much government backing, Chatterjee said, adding that around one million e-rickshaws have already been launched on Indian roads.

E-rickshaws run mostly on cheap batteries that typically last 9-12 months, he said.

E-rickshaws could potentially offset the recent decline in sales of inverter batteries, said Chatterjee.

E-rickshaws use four batteries of a much bigger capacity than those used in cars. The consumption of batteries in e-rickshaws is estimated at 30 times per vehicle compared with cars, Chatterjee said.

Exide is also exploring the market to launch batteries for electric two-wheelers.

However, the two-wheelers run only on lithium-ion batteries, which are more expensive, Chatterjee said, adding that production of these batteries would start when demand for electric two-wheelers picks up.

Both the new offerings are to be developed with technology sourced in partnership with other manufacturers, he added.

The implementation of the goods and services tax has created an opportunity for organized-sector battery manufacturers to expand their market share, according to Chatterjee.

Battery manufacturers in the unorganized sector, who currently control 35-40% of the replacement market, mostly didn’t pay taxes, he said.

Under the new tax regime, the pricing edge of manufacturers in the unorganized sector is largely lost and Exide is using its competitively priced Dynex brand to penetrate the market controlled by them.

Exide is looking to sell at least one million Dynex batteries in the current fiscal year, Chatterjee said.

About the dispute between Exide and the US’s Exide Technologies over the use of the Exide trademark in India, Chatterjee said both companies were moving towards settling the issues, and that if the US-based company wished to sell its mothballed manufacturing facility in Gujarat, his company would consider buying it.

However, Exide Technologies’ Indian brand Prestolite was not attractive from the standpoint of goodwill, Chatterjee said adding Exide was unlikely to be interested in buying it.

Ajit Doval calls on Brics to show leadership on counter-terrorism

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Beijing: National Security Advisor Ajit Doval on Friday called on BRICS countries—Brazil, Russia, India, China and South Africa—to show leadership on issues of regional and global importance, including countering terrorism.

Speaking at the meeting of NSAs from Brics (Brazil, Russia, India, China and South Africa), Doval said, “We should hold a BRICS forum to discuss security issues that impact global peace and stability.” He said the five-member bloc of emerging countries needs to “show leadership in countering terrorism”.

In his brief opening remarks at the meeting hosted by his Chinese counterpart Yang Jiechi, Doval said Brics countries also should take leadership role on strategic issues of regional and global importance specially in the areas where they have “consensus”.

There was no reference to the ongoing Dokalam standoff in his speech. Yang and Doval are Special Representatives for the India-China boundary talks. The two officials held a separate meeting on Thursday to discuss bilateral issues.

During that meeting, they were understood to have discussed the standoff between the troops of both the countries at Doklam area in the Sikkim section. Earlier, the Chinese foreign ministry said the 7th meeting of ‘Brics High Representatives for Security Issues’ is a major platform for Brics countries to discuss and carry out cooperation in the political security field.

The meeting aims to enhance strategic communication, political mutual trust and international influence of Brics countries, it said. The meeting will focus on global governance, counter- terrorism, cyber security and energy security, international and regional hotspots, and national security and development, it said.

Constant CM: Decoding Nitish Kumar

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In the end, cleanliness trumped secularism. Nitish Kumar’s carefully cultivated image of Mr. Clean proved to be far dearer to him than the ‘Mahagathbandhan’ or Grand Alliance, even if it meant sacrificing the CM’s position, albeit for a few hours. His entire political career, especially since the turn of the century has been built on being a politician who prides himself on development and running a clean administration. So continuing with a tainted deputy CM, Tejashwi Yadav in this case, was out of the question.

There are several adjectives doing the rounds to describe Kumar’s sudden resignation on Wednesday as Bihar CM, and the breaking up of the alliance with the Lalu Yadav-led Rashtriya Janata Dal (RJD), but opportunist is perhaps the most common one. After all he broke the 17-year alliance of his party Janata Dal (united) or JDU with the Bharatiya Janata Party (BJP) on the grounds of secularism, when Narendra Modi was declared BJP’s prime ministerial candidate. And now he is back in power with their support.

But according to those who know him well, the discrepancy between Kumar’s earlier stand vis-a-vis the BJP and Modi and the situation today is not of much importance, to the man himself at least. “Nitish Kumar has carefully crafted his own brand of politics. He doesn’t get bothered what BJP or for that matter Lalu Prasad is doing, Nitish Kumar would never compromise on his brand of politics which basically represents good governance, law and order,” said a senior JDU leader based in Delhi, on the condition of anonymity. In 2014  had quoted a senior journalist as saying that Kumar had himself admitted that he could never work as a shreeheen, someone with a tarnished image.

The son of a freedom fighter, Kumar, like most political leaders of his generation, came of age during the Emergency. As a student (he studied electrical engineering), he was heavily influenced by the socialist ideals of Jaya Prakash Narayan and Ram Manohar Lohia, and even went to jail during the Emergency.

His stint in politics started with the 1985 assembly elections and was followed by a swift elevation to Lok Sabha in 1989 when he won the election from Barh. In 1996 he was one of the politicians to tie up with the BJP, then under the leadership of Atal Behari Vajpayee and L.K. Advani. Though he has several stints as cabinet ministers under his belt, including a successful one as minister for railways where he is credited with introducing online ticket booking to Indian Railways, Kumar’s focus had always been his home state. “The idea of brand Bihar was started and promoted by Nitish Kumar. He has nurtured this idea for three decades and he has been successful in changing the image of Bihar to a great extent, how can he now allow RJD or any other party to damage it. Brand Bihar is the USP of Nitish Kumar. BJP is also coming to Nitish Kumar because of this,” the JDU leader added.

Kumar has been chief minister of Bihar since 2005 and is credited with turning the state around. Its economic growth has grown by leaps and bounds under him and he has fought all elections on the plank of development rather than caste. However, the caste considerations still retain a stronghold over the Bihar voter as is evident from the success of the RJD in the 2015 assembly election.

Soft spoken and articulate, Nitish is described as a perfectionist. A widower, he has one son, who is an engineer and prefers to stay away from the hustle and bustle of politics. Nitish is a survivor who has weathered every storm, including near isolation after his decision to break away from Lalu Prasad Yadav, his “bade bhaiya”, in 1994. Then, in the 2014 general elections, in spite of his stellar performance as chief minister, the electorate gave his party, JDU, only two seats out of the 40 it contested, but Kumar survived to see and rule another day.

The question being raised is—now that after denouncing the BJP publicly and stressing his secular credentials, he is back in bed with them—what does that really say about the man? “This is not a win-win situation for Nitish (the tie-up with BJP). He cannot go back to RJD… the electorate will think of him as an opportunist politician. Nitish has taken this decision, looking at the long term. At the end of it, he wants to maintain an image of a clean, no-nonsense leader,” said Sanjay Kumar, director of New Delhi-based Centre for the Study of Developing Societies. And JDU sure doesn’t seem very worried.

A senior leader based in Patna said, “The JDU has been raising concerns over the ongoing violence by self-styled cow vigilantes in the country. Nitish Kumar would never support such actions as it divides the country on religious lines. Nitish Kumar will never compromise on his secular credentials. The independence of JDU as a political party will not be compromised just because JDU is now part of NDA.” Let us see how accurate the claims turn out to be.

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