Editorials/Opinions Analysis For UPSC 07 August 2023
- ‘Long Wave Boom’ commencing in India
- Nuclear Signaling: New Guardrails for a Changing Political Landscape
‘Long Wave Boom’ commencing in India
In a recent research, Morgan Stanley emphasised China’s and India’s economic prospects. India’s rating was raised to “overweight” by the brokerage company, while China’s was lowered to “underweight.” According to the analysis, India has enormous development potential due to its low GDP per capita of $2,500, which puts it at the beginning of a possible long-wave boom.
GS Paper 3- Economy
Discuss the elements that make India appealing to foreign direct investment (FDI) from nations like the US, Taiwan, and Japan as well as the variables that contribute to its expanding power in a multipolar world. (250 Words)
India’s growth potential and GDP per capita:
With a GDP per person of $2,500, India has a huge development potential. This low number shows that there is still plenty of space for economic growth, outpacing other emerging markets. Market analysts and fund managers are quite optimistic about India’s economic potential.
Slowing Growth in China:
China appears to be experiencing a downturn in its growth trajectory, with a GDP per capita of $12,700. According to the analysis, the nation’s economic boom might be coming to an end.
Ratio of household debt to GDP
India still has a manageable household debt-to-GDP ratio of only 19 percent, compared to China’s average of 48 percent. This statistic shows how well each country’s economy is doing.
India’s resilient economic indicators:
Following the relaxation of Covid limitations, India’s Purchasing Managers’ Index (PMI) for manufacturing and services has consistently risen. India differs from China, whose PMIs have sharply decreased, because of its resiliency.
Upgrades and Downgrades to Morgan Stanley’s Ratings:
India’s rating was raised from “equal weight” to “overweight” by Morgan Stanley, while China’s rating was decreased to “underweight.” This change in ratings reflects the firm’s optimistic assessment of India’s economic future.
The formalisation of the economy through the GST and IndiaStack, improvements to real estate laws, and infrastructure development are just a few of the supply-side policy reforms that India has implemented during the past ten years. Social handouts are now more effective and leak-proof thanks to digitization. Leverage has decreased in India’s corporate sector as a result of the passage of a new bankruptcy law. Along with adopting flexible inflation targeting, the nation also aimed to stimulate growth and preserve price stability.
The Rise of India in a Multipolar World:
India is quickly rising to prominence on the geopolitical stage of the world by taking advantage of its location in a multipolar world. Along with the US, Australia, and Japan, it is a member of the Quad political framework, which strengthens its authority.
Indian inbound foreign direct investment (FDI):
India gains from an increase in FDI coming in, especially from the US, Taiwan, and Japan. These businesses are drawn to India because of its sizable domestic market and upgraded export infrastructure, which includes ports, highways, and electrical supplies that are more effective.
China’s Challenges in a Multipolar World
In the context of demands from a multipolar world, particularly the US, China faces new problems. With a focus on semiconductors, artificial intelligence, and quantum computing, President Joe Biden intends to sign an executive order restricting crucial US technological investments in China.
India’s positive economic indicators:
India’s macro indicators are still strong, and the country’s economy is expected to grow its economy by 6.2 percent this year. Earnings per share (EPS) for the next 12 months are also heading upward, helped by a favourable demographic and increased labour productivity.
In addition, it is anticipated that India’s income pyramid would change during the next ten years as millions of people escape poverty and a large rise in middle- and upper-class homes occurs. India’s increasing terms of trade are projected to counterbalance the impact by lowering earnings lost to foreign enterprises compared to the prior period, despite a minor obstacle given by government deficit consolidation.
Despite the optimistic forecast, the report issues a warning against unanticipated spikes in inflation and modifications to monetary policy, which could endanger India’s economy. Additionally, it’s important to keep a close eye on how artificial intelligence can affect India’s exports of services and labour force.
According to Morgan Stanley’s analysis, India has a promising economic future and that country’s low GDP per capita serves as a driving force for progress. The business downgraded China’s rating as a result of the appearance of a slowdown in China’s boom phase. India has an advantage in the global market thanks to its robust economy, expanding influence in a multipolar globe, and a favourable demographic profile. However, the nation must continue to be on guard against any foreseeable hazards and difficulties.
Nuclear Signaling: New Guardrails for a Changing Political Landscape
Questions have been raised about the efficacy of conventional nuclear escalation management measures in light of the situation in Ukraine and the ensuing nuclear rhetoric between major nuclear countries. The lessons learnt at that time may no longer be applicable to managing nuclear tensions between the United States and Russia because of how the geopolitical landscape has changed since the end of the Cold War.
GS Paper 3: Security- Nuclear Doctrine
Analyse the function and influence of the “nuclear taboo” on global security and nuclear deterrence in the perspective of contemporary geopolitics. (150 Words)
The nuclear taboo and the idea of deterrence
With both nuclear-armed and non-nuclear-armed states paying heed, nuclear deterrence has long been a pillar of global security. As nuclear weapons developed, their might became more and more apparent, fueling the idea that any use of nuclear weapons would have global consequences. A nuclear taboo developed at the same time, and there is now widespread agreement that using nuclear weapons is almost never acceptable. Instead of having legal justifications, this taboo is based on moral, proportionality, and accountability grounds.
Nuclear Weapons’ individuality:
Bernard Brodie’s “absolute weapon” idea emphasises nuclear weapons’ individuality. Considering that conventional munitions have advanced to equivalent levels of devastating power, what makes them special is the indiscriminate character of nuclear destruction. Nuclear weapons have long-lasting radiation impacts on the communities they affect, do not distinguish between fighters and non-combatants, and pollute the environment for years. This extreme devastation highlights the taboo against using them.
Nuclear armaments limitation was given top priority when Presidents Joe Biden and Vladimir Putin met in June 2021, but little real progress was made. The presence of Russian troops close to the Ukrainian border in Belarus increased tensions, sparking a series of diplomatic encounters that ultimately failed to stop Russian action. Despite U.S. efforts at deterrence, Russia started a “special military operation” in Ukraine in February 2022.
NATO leaders worked to avert a wider NATO-Russia clash as the situation worsened. President Biden was adamant that the United States intended to avoid a Third World War and a direct confrontation with Russia. Gradually, Ukraine received sanctions and military support, which increased NATO’s role. The timing and speed of NATO’s response were impacted by Russia’s nuclear threats, but they did not stop NATO from acting.
Lessons from the Cold War:
During the Cold War, deterrence was based on the rivals’ rationality, presuming that both sides could grasp the advantages and disadvantages of their conduct. Massive nuclear arsenals served as a deterrent against unexpected first strikes, and rather than being considered lethal, nuclear weapons were seen as having political utility. Maintaining credible deterrence required escalation and the presence of danger. However, compared to the Cold War era, the geopolitical environment now is very different.
The nuclear doctrine of Russia
The nuclear doctrine of Russia permits the use of nuclear weapons in reaction to conventional aggression or nuclear or other weapons of mass destruction strikes that pose a threat to the state’s survival. The United States has rejected the “escalate-to-deescalate” strategy because it raises concerns about unchecked escalation. This strategy calls for employing tactical nuclear weapons to break a military deadlock.
Need for New Guardrails
In order to maintain the nuclear taboo and prevent unintentional escalation, new guardrails must be devised given the complexity of the present political situation. Red lines are continually being pushed by both the United States and Russia, creating uncertainty and unpredictability. Clearer rules and systems for communication and comprehending one another’s intentions are crucial to maintaining global security.
Responses and Hope for the Future:
NATO and other nuclear-armed governments stressed that any nuclear use would result in a robust and appropriate response, indicating that conventional retaliation would be the preferable option in response to the heightened tensions. Their considered comments emphasised their resolve to prevent nuclear escalation. In addition, President Xi Jinping of China echoed demands to resist the use or threat of nuclear weapons, supporting efforts made by nations around the world to maintain the nuclear ban.
In summary, Hiroshima’s legacy—the terrible events that occurred on August 6, 1945, when the Enola Gay dropped an atomic bomb on Hiroshima—serves as a sobering warning of the terrible repercussions of nuclear weapon usage. The international community needs to reconfirm its commitment to a world free from the atrocities seen in Hiroshima and Nagasaki as it negotiates the difficulties of nuclear deterrence and the nuclear taboo. We may work towards a safer and more peaceful world by supporting the prohibition on using nuclear weapons, maintaining international cooperation, and maintaining global security.