Editorials/Opinions Analysis For UPSC 02 June 2023

Editorials/Opinions Analysis For UPSC 02 June 2023

Contents

1. BRICS FM summit in South Africa
2. Manufacturing in India: Overlooking Ecosystem Needs

BRICS FM Summit in South Africa

Context:

• S. Jaishankar, the minister of external affairs, is in Cape Town, South Africa, for a meeting of the foreign ministers of the BRICS nations, which include South Africa, Brazil, Russia, India, and China.
• The BRICS nations are thought to be the closest the “Global South” has come to organising itself as a group to challenge a western global narrative.

Relevance – 

GS Paper 2 – International Relations – Regional organizations and summits

Mains Question

What does “multipolarity” mean to you? Why is there a shift towards multilateralism in the globe today? Describe your response in light of the approaching BRICS summit. (150 Words)

The BRICS

• BRICS (Brazil, Russia, India, China, and South Africa) is a significant alliance that brings together the world’s five largest emerging economies.
• The notion itself gave rise to the grouping in 2006 and was included into the foreign policies of Brazil, Russia, India, and China.
• South Africa joined the organisation, which had chosen to go by the abbreviation BRICS, in 2011, on the occasion of the Third Summit.
• According to World Bank estimates from 2019, it accounts for 41% of the global population, 24% of the global GDP, and more than 16% of global trade.

The agenda for the summit

• The agenda for the 15th BRICS summit, which will take place in South Africa in August, will be decided upon at the meeting of foreign ministers.
• Two issues on the agenda stand out for their potential to strengthen the grouping’s geopolitical confederation:
• South Africa, which is in the chair this year, is hosting a Friends of BRICS summit on Friday with 15 foreign ministers from Africa and the Global South. The gathering will discuss: 1. a strategy to increase the membership of BRICS; 2. and a single currency.

In search of multipolarity:

• According to reports, 19 nations are waiting in queue to join BRICS. Since last year, Argentina, Nicaragua, Mexico, Uruguay, Venezuela, Nigeria, Algeria, Egypt, Senegal, and Morocco from Africa, Saudi Arabia, the United Arab Emirates, Turkey, Syria, and Iran from West Asia, Kazakhstan from Central Asia, Bangladesh and Afghanistan from South Asia, and Indonesia and Thailand from South-east Asia have all been frequently mentioned.
• Although it is unclear which nations would join, any growth would increase the group’s authority as a voice for developing nations. By include certain significant nations on the list, BRICS may assert that they represent more than half of the global population.
• Notably, the list includes major oil producers including Saudi Arabia, Iran, the United Arab Emirates, Nigeria, and Venezuela.
• First, there is a lot of anti-US feeling in the world, and all these countries are searching for a grouping where they can use that attitude to unite together.
• This is thought to be the primary motivation behind the rush towards BRICS. Second, there is a strong desire for multipolarity and a stage for the Global South to demonstrate their solidarity.

Chinese involvement in BRICS

• Between 2001 and 2003, Goldman Sachs’ top economist Jim O’Neill proposed the formation of the BRICS, predicting that South Africa will join the other three rising nations as the world’s future economic superpowers.
• The war in Ukraine has brought the West together on the one hand while strengthening the China-Russia cooperation on the other, and despite the BRICS’ uneven economic performance, it has transformed it into an aspirant bloc that appears to be challenging the western geopolitical view.China is the group’s main source of growth. China’s foreign ministry stated following a BRICS summit in February that “membership expansion has become part of the core agenda of BRICS,” but sought to dispel the notion that this was done to forge a bloc.
• The statement reported South Africa’s President Cyril Ramaphosa as saying that BRICS was about giving the “voices of the marginalised to actually be heard,” and that its goal was to expand the living space for the Global South.
• Interestingly, whenever it criticises “US hegemony,” China uses “multilateralism” rather than the word “multipolarity.” “BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism” is the topic of BRICS 2023.

Multilateralism vs. Multipolarity

• Multilateralism refers to a cooperative strategy incorporating the participation of several states in decision-making, whereas multipolarity refers to the allocation of power among several significant actors in international relations.
• Multilateralism refers to the act of cooperating, whereas multipolarity refers to the power structure.

India in the BRICS

• If India’s attendance at the G7 summit in Hiroshima, where Prime Minister Narendra Modi also took part in an informal Quad summit, was seen as an indication of New Delhi’s pro-US stance, the significance it accords to the “anti-West” BRICS is an apparent contradiction — similar to the numerous others it has negotiated over the past year.
• Indian diplomats are trying to dispel the notion that their country is joining up with an anti-Western alliance. Many nations are misinterpreting this. India, despite its issues, is a member of the Shanghai Cooperation Organisation (SCO) and has diplomatic ties with both China and Russia.
• Indians believe that BRICS should continue to be a “non-western” group despite China’s desire for it to be anti-Western.According to some observers, the BRICS is an implausible alliance because rivals like China and India are unlikely to ever find common ground. As more countries join, this problem could become more obvious.
• One perspective on the growing membership is that it would marginalise India’s participation in the group.

Ordinary money

• At the BRICS conference in Beijing last year, Russian President Vladimir Putin floated the notion of a single currency. The leaders gave the concept a cautious response and decided to form a committee to investigate its practicality.
• There are further challenges, such as establishing a common central bank among member nations with diverse political and economic systems that are spread across various continents.Members can also trade with one another in their individual currencies, but this is also difficult as the India-Russia example has demonstrated. Because it does not purchase enough from India to use rupee payments, Moscow wants to be paid in dollars. The talks have stalled.
• At a news conference in Mozambique in April, when asked if India supported the idea of a single currency, Jaishankar responded, “Individual countries have their own position on the matter.”
• In an effort to promote the yuan as a trading currency in Central Asia, China has criticised the “hegemony of the US dollar” as the cause of all global turmoil. However, there is no proof that it is yet prepared to dump the dollar.

Manufacturing in India: Overlooking Ecosystem Needs

Context

• India’s manufacturing industry has long struggled to expand and contribute to the nation’s economy. There has been constant discussion about whether manufacturing or services are the better course for economic growth.
• Although India’s manufacturing sector has seen qualitative improvements since the economic reforms of 1991, manufacturing’s proportion of the GDP has not expanded appreciably.What are the underlying causes of India’s manufacturing problems, and what are the essential elements that have been missed in building a supportive environment for manufacturing to thrive?

Relevance: 

GS Paper3:Economic planning and Develoment

Mains Question

Analyse the success of the “Make in India” initiative and the Production-Linked Incentive programme in fostering India’s manufacturing sector. Analyse the effects of India’s skilled workforce and manufacturing capacity’s neglect of vocational training institutions. (150  Words)

Potential Ignored: The Unimpressive Track Record

• The 1991 economic reforms put a strong emphasis on manufacturing, but despite a large reduction in tariffs and the end of the “licence-permit Raj,” manufacturing’s share of the economy did not rise.
• The ‘Make in India’ initiative and the Production-Linked Incentive programme did not have the expected impact.
• Despite governmental attempts, manufacturing growth has been continuously low, pointing to underlying structural problems.

The Make in India Initiative

• The government of India launched the “Make in India” campaign to entice businesses to design, produce, and assemble goods in India as well as to stimulate targeted investments in the sector.
• The goal of the policy was to foster a business-friendly atmosphere, build out an effective infrastructure, and open up new markets to foreign investment.
• The project sought to “transform India into a global design and manufacturing export hub” by focusing on 25 economic areas for job development and skill enhancement.

Production-Linked Incentive Programme:

• The Government of India’s Production-Linked Incentive, or PLI, programme is a type of performance-linked incentive that rewards businesses for additional sales of goods produced domestically. Its objectives are to increase production and lower imports.
• These programmes’ goals include Make in India, which encourages international manufacturers to begin production in India and domestic manufacturers to increase production and exports.

The Function of Domestic Demand

• Demand for household basics including food, housing, healthcare, and education is higher than that for manufactured items.
• When compared to other countries, India’s percentage of spending on food is large, which restrains the expansion of the demand for manufactured goods.
• The association between per capita income and the percentage of global food expenditure that is negatively skewed highlights India’s difficulty.

The Export Possibility

• Infrastructure and workforce skill levels are key determinants of a country’s export competitiveness. India faces challenges in reaching seaports, poor infrastructure at ports, longer turnaround times, and a lack of affordable power and industrial waste disposal services.
• Smaller countries in East Asia succeeded in manufacturing by leveraging exports.

Gaps in education

• International evaluations and domestic research both show that India’s educational system lags behind those of nations with thriving manufacturing industries.
• The reading and math achievement levels of Indian students are notably low. (Report on Pratham’s Learning Assessment)
• A shortage of skilled workers is caused by a lack of employability among university graduates and underfunded vocational training facilities. Only about 5% of Indian adolescents have any form of technical training, according to data given by the NITI Aayog. Over 85% of the population was from South Korea.

Conclusion

• While aiming to increase manufacturing, the economic reforms of 1991 ignored the critical requirement for a holistic ecosystem that consists of infrastructure, education, and training.
• It is insufficient to merely rely on liberalising policies. A comprehensive strategy that prioritises the improvement of education outcomes, infrastructural development, and skill development is needed to address India’s manufacturing crisis.
• Only by tackling these vital issues will India’s manufacturing industry prosper and make a substantial economic contribution.