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27th June – Editorials/Opinions Analyses

Contents

  1. Getting out of the ‘guns, germs and steel’ crisis
  2. Anthropause period Explained

GETTING OUT OF THE ‘GUNS, GERMS AND STEEL’ CRISIS

Focus: GS-II Indian Economy

Introduction

Arguably, The Current situation of Chinese Clashes, Covid-19 and Economic Slowdown – is the gravest confluence of military, health and economic crises threatening our nation in more than a generation.

Current Stand-off and Kargil parallel

  • The common thread across the current situation India is facing with respect to Chinese aggression and Kargil war against Paksitan, is that their resolution requires significant financial resources.
  • Standing up to a military threat by a superpower neighbour will pose an inevitable drain on the finances of the government.
  • India’s war against Pakistan in Kargil in May 1999 provides hints of the financial burden of a military threat, as India’s defence expenditure in the war year (compared to the year before the war) shot up by nearly 20%.
  • It had also forced the then government to increase India’s defence budget for the next financial year to 2.7% of nominal GDP, the highest in decades.
  • China is a far mightier power than Pakistan, and asserting India’s rights will necessitate higher expenditure.
  • India’s defence budget has been whittled down to just 2% of GDP for the financial year 2021. China’s defence budget is nearly four times larger.

Health care

  • The combined public health expenditure of States and the central government in India is a mere 1.5% of GDP, compared to China’s at 3% and America’s at 9%.
  • Many public health experts are of the opinion that the central government will need additional funds of the equivalent of at least one percentage point of GDP to continue the fight against COVID-19.

Economy

  • India’s economy has four major drivers — people’s spending on consumption, government spending, investment and external trade, of which “Spending by people” is the largest contributor to India’s economic growth every year.
  • The lockdown shut off people from spending for two full months, which will contract India’s economy for the first time in nearly five decades.
  • Even prior to COVID-19 when the global economy was robust, India’s trade levels had fallen from 55% of nominal GDP in 2014 to 40% in 2020.
  • Now, with the global economy in tatters, trade is not a viable alternative to offset the loss from consumption.
  • Investment is also not a viable option at this stage since the demand for goods and services has fallen dramatically.

Incremental funds needed

The only options that remain for helping the economy survive then are:

  1. to either put money in the hands of the needy to stimulate immediate consumption or
  2. for the government to embark on a massive spending spree

Potential new sources of revenue such as a wealth tax or a large capital gains tax are ideas worth exploring for the medium term but will not be of much immediate help.

The ‘junk rating’ risk

  • The only option for the government to finance its needs is to borrow copiously, which will obviously push up debt levels.
  • When government debt rises dramatically – it leads to a “junk” crisis – Which is international ratings agencies likely downgrading India’s investment rating to “junk”.
  • This will then trigger panic among foreign investors.

Another Option

  • There is another option according to some economists: to simply print how much ever money the government needs to overcome these crises.
  • Economic theory states that if money is printed at will, it can lead to a massive spike in prices and inflation.
  • However, in the past decade, this theory has been proven wrong in developed nations such as America where the creation of phantom money has not led to inflation.
  • There are multiple problems with this argument but the most important one is that regardless of whether money is printed or borrowed from others, it will still be counted as government debt and not escape a potential downgrade to a “junk” rating.

-Source: The Hindu


ANTHROPAUSE PERIOD EXPLAINED

Focus: GS-III Science and Technology

Introduction

  • The unprecedented curbs imposed on millions of people around the world, mainly due to restrictions in travel, led to reports of unusual animal behaviour.
  • For instance, there were pumas sighted in Chile’s Santiago, jackals in the parks of Tel Aviv in Israel, dolphins in the waters of Italy and even a monkey fight on the streets of Thailand.
  • The researchers believe studying this period will provide valuable insights into the relationship between human-wildlife interactions in the 21st century.

What is the ‘anthropause’ period?

  • Researchers in the UK are set to study the “anthropause”, a term they have coined to refer to the coronavirus-induced lockdown period and its impact on other species.
  • ‘Anthropo-’ (for ‘human’) and pause – to signify the pause in Human Activities.

What are the expected findings?

  • In their outline, researchers mention how the scientific community can use these “extraordinary circumstance” provided by global lockdowns to understand how human activity affects wildlife. They maintain that as a result of the lockdown, nature appears to have changed, especially in urban environments, since not only are there now more animals, but also some unexpected animals appearing in places where they were never sighted before.

Are there any Animals that could be adversely affected?

  • There are some animals for whom the lockdown may have made things more challenging.
  • For instance, for various urban-dwelling animals, such as rats, gulls and monkeys who depend on food provided or discarded by humans, the lockdown would have made life more difficult.

Why is studying the lockdown important?

  • According to the researchers, as expanding human populations continue to transform their environments at “unprecedented rates”, studying how human and animal behaviour may be linked can help provide insights that may be useful in preserving global biodiversity, maintaining the integrity of ecosystems and predicting global zoonoses and environmental changes.
  • Further, because the reduction in human activity during the lockdown on both land and sea has been “unparalleled” in recent history, the effects have been “drastic, sudden and widespread”.
  • Essentially, this gives them a chance to study the extent to which modern human mobility affects wildlife.

-Source: Indian Express

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