CAO Daily Editorial analysis for UPSC IAS 06-November, 2017

Current Affairs Only Daily Editorial Analysis for Competitive Exams

06 November, 2017


Beyond big game hunting {International}

(The Hindu)


This article deals with attracting superpowers in South Asia

Quad Meeting

As Prime Minister Narendra Modi heads to the East Asia summit in the Philippines next week, where the first ‘Quad’ meeting is likely to be held, it is necessary that India analyse the impact of this admission on all our relations.

It would also serve as a useful exercise to understand why India has conceded it requires “other parties” in the neighbourhood, even as it seeks to counter the influence of China and its Belt and Road Initiative.

Reason behind the quad meeting

  • There is a developmental model – and money – beyond the example of China and its financing for Asian countries such as Nepal, Sri Lanka, and Bangladesh, and perhaps beyond that in Africa. The United States, Japan, India and Australia could provide the alternative option.

    In the first articulation of its strategy to counter China’s growing influence in the region and across the world, a senior Trump administration official on Friday provided a broad framework of Washington working with Tokyo, New Delhi, and Canberra to arrive at what could in the near-term be a quadrilateral architecture that could later grow beyond that.

  •  Growing economy with ambitious domestic targets, India’s own needs often clash with those of its neighbours.
  •  More connectivity will eventually mean more competition, whether it is for trade, water resources, or energy.
  • Take, for example, the case of Bhutan, which is working, with India’s assistance, on its own goal of producing 10,000 MW of hydropower by 2020.


In April, the International Monetary Fund’s world economic outlook had already put Bhutan at the top of South Asia in terms of the highest debt per capita, second only to Japan in all of Asia for indebtedness.

Bhutan’s debt

Bhutan’s external hydropower debt financed by India at 9-10% rates was piling up, with the first interest and principal payments expected in 2018, and construction delays, mainly due to Indian construction issues, were taking the debt up higher.

The Cross Border Trade of Electricity (CBTE) guidelines issued by India had not been revised, which put severe restrictions on Bhutanese companies selling power.

History of forgetting

Over the past decade, since the defeat of the LTTE, India passed up offers to build the port in Hambantota, Colombo, and Kankesanthurai, despite Sri Lanka’s pressing need for infrastructure. At the time, given India’s crucial support in defeating the LTTE, Sri Lanka was considered “in the bag”.

With the U.S. and other Western countries also taking strident positions over human rights issues and the reconciliation process, Chinese companies stepped in and won these projects, for which Sri Lanka recklessly took loans from China’s Exim bank.

New Strategies

It is important to note that while the government’s new plan to involve the U.S. and Japan in development projects in South Asia will yield the necessary finances, it will come at the cost of India’s leverage in its own backyard.

India’s counter to China’s persistent demand for a diplomatic mission in Thimphu, for example, could be to help the U.S. set up a parallel mission there.

In Sri Lanka, the U.S. and Japan will now partner in India’s efforts to counter China’s influence, but whereas India objected to Chinese naval presence in the Indian Ocean, it will not be able to object to an increase in U.S. naval warships and Japanese presence there.

The new oil game {International Relation}

(The Hindu)


This article explains dependency of china for oil from Middle East and consequences to India


Imperial Britain, manipulated the boundaries of  politics of tribal Middle East in the early part of the 20th century to secure its requirements of oil

America, the dominant power in the second half of the century, sidestepped its liberal principles and cosied up to monarchs and unabashed despots, also to ensure it never ran out of oil.

Britain’s switch from oil to coalImage result for china and middle east

In 1911 Winston Churchill, persuaded his cabinet colleagues to support the recommendation to substitute oil for coal as the fuel for the British Navy.

But this proposal had some loop holes as coal would require more space in ship.

Finally it was decided they would go for oil, now the issue was there was no domestic oil in the country

Britain would secure oil supplies from the Middle East through a combination of hard power and political guile. This, he managed through the vehicle of an Anglo-Persian company which in 1935 was renamed Anglo-Iranian Oil company and in 1954 British Petroleum Company.

How will China the emergent power of the 21st century protect its energy interests? 

  • The Chinese leadership declared at the Congress that China will no longer hide its “light under a bushel” and “bide its time” — this was with reference to former president Deng Xiaoping’s advice that the country not display its strength prematurely
  • China consumes approximately 13 million barrels of oil a day (mbd). Of that, 60 per cent is imported of which 50 per cent (approximately 4 mbd) is sourced from the Middle East — mainly Iraq, Iran and Saudi Arabia — through the Straits of Hormuz, the Straits of Malacca and the conflictual South China seas.
  •  They have, for instance, committed $340 billion over the next four years to solar and wind. This is more than any other country in the world. They are operating 34 nuclear reactors and another 20 are under construction.

India’s concern

India has major strategic interests in the Middle East. Aside from its dependence on the region for oil, it has eight million citizens who remit approximately $70 billion annually.

A convulsion in the region would give India a massive logistic and financial headache. This could, however, sharpen into a severe migraine if China were in pole strategic position at that time. China plays a long game. We must track its moves.

From plate to plough: Farm to distant shores {Agriculture}

(Indian Express)


India can be competitive in cereals, pulses and oilseeds trade if policymakers invest in creating value chains. Policies that restrict exports should go

In news

The new Commerce and Industry Minister, Suresh Prabhu, has expressed his resolve to expand exports. He has said that increase in agri-exports will not only increase the country’s export basket, but also augment farmers’ incomes and ameliorate farm distress.

Is it possible?

Yes if there is a paradigm shift in policy-making from being obsessively consumer-oriented to according greater priority to farmers’ interests.

 Trends in agri-tradeRelated image

Both agri-exports and imports have increased substantially since 2004-05. 

As a share of the agri-GDP, the contribution of this trade increased from 11.1 per cent in 2004-05 to 16.7 per cent in 2016-17 after peaking at 19.6 percent in 2012-13, reflecting the increasing integration of Indian agriculture with global markets.

During UPA’s tenure in office, agri-trade surplus surged seven fold, from $3.6 billion in 2004-05 to $25.4 billion in 2013-14. But then fell dramatically by two-thirds after the NDA assumed office, touching $8.2 billion by 2016-17 


The tumbling agri-trade surplus was the result of falling exports and rising imports. Agri-exports, after peaking at $42.9 billion in 2013-14 fell to $33.7 billion in 2016-17, while imports kept rising — from $17.5 billion in 2013-14 to $25.5 billion by 2016-17.

Why did the agri-exports suffered?

Due to the significant fall in exports of cereals (especially wheat and maize), cotton, oilseeds and, to some extent, bovine meat.

This, in turn, was largely due to a steep fall in global prices and restrictive export policies. Global prices of wheat, maize, soybean, and cotton, for example, fell by 47, 39, 25 and 18 per cent, respectively, during 2013-2016.


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