International Relations This Week: Episode 94

International relations is a very important segment of the UPSC syllabus. In this series, we present an analysis of the most important international issues and developments that occurred over the past week relevant for the IAS exam. In this article, you can learn more about the ASEAN & East Asia Summit, G7 Global Shield Initiative, removal of India from Currency Monitoring List, Nirav Modi’s Extradition and  End of France’s military operations in  Sahel region.

TABLE OF CONTENTS

1. ASEAN & East Asia Summit
2. G7 Global Shield Initiative
3. US Treasury removes India from Currency Monitoring List
4. Nirav Modi’s Extradition
5. France ends military operations in African Sahel

1. ASEAN & East Asia Summit

Context: The annual summits of the Association of South East Asian Nations (ASEAN) & East Asia Summit (EAS) were held recently under the chairmanship of Cambodia. 

Introduction: 

• The Vice President, Shri Jagdeep Dhankhar led the Indian delegation at the 19th ASEAN-India Summit in Phnom Penh, Cambodia & took part in the 17th EAS.
• This year marks the 30th anniversary of ASEAN-India relations and is being celebrated as the ASEAN-India Friendship Year.
• This Summit is being hosted by Cambodia under the theme A.C.T (Addressing, Challenging, Together). 
  • This theme aims to counter regional issues, seeking prosperity, growth and stability among the states, in accordance with the central theme of ASEAN. 
  • Cambodia has played an important role in India-ASEAN engagements, the 1st India-ASEAN Summit took place in 2002 during the first chairship of Cambodia.
• The Vice President hailed the deep cultural, economic and civilizational ties that have existed between India and South East Asia from time immemorial. 
• These summits hold a great deal of significance for India as India has prioritised its relations with Southeast Asian countries.
• Under its Act East policy, these two groupings are also central to India’s Indo-Pacific strategy through which India has been trying to extend its influence across the Indo-Pacific.

Read about the Look East Policy of India.

Enhanced collaboration in the 19th ASEAN-India Summit:

• At the summit, ASEAN and India adopted a joint statement announcing the elevation of the existing Strategic Partnership to a Comprehensive Strategic Partnership. 
• Both sides reaffirmed the importance of maintaining and promoting peace, stability, maritime safety and security, freedom of navigation and overflight in the Indo-Pacific region.
• It also recognised the importance of “unimpeded lawful maritime commerce” and the disputes should be resolved by following “universally recognised principles of international law, including the 1982 United Nations Convention on the Law of the Sea (UNCLOS), and the relevant standards and recommended practices by the International Aviation Organisation (ICAO), and the International Maritime Organisation (IMO).
• Both sides also agreed to intensify maritime cooperation including anti-piracy operations, armed robbery against ships, maritime safety, search and rescue (SAR) operations, humanitarian assistance, and emergency response and relief.
• Both sides announced plans to enhance collaboration against “terrorism and transnational crimes including international economic crimes and money laundering, cybercrime, drugs and human trafficking and arms smuggling.” 
• They also said that they would further enhance ASEAN-India cooperation in the space sector including through the establishment of tracking, data reception and processing stations in Vietnam and Indonesia, and encourage cooperation between ASEAN and Indian space industry players. 
• It also agreed to enhance ASEAN-India cooperation on the digital economy through a series of regional capacity-building activities in digital transformation, digital trade, digital skills and innovation, as well as Hackathons.
• Both sides sought to expedite the review of the ASEAN-India Trade in Goods Agreement (AITIGA) to make it more user-friendly, simple, and trade-facilitative, and work together to forge resilient supply chains.
  • India feels that it has been affected by the Free Trade Agreement as the terms of the Free Trade Agreement are largely benefiting the Southeast Asian countries.
  • In certain sectors, there is a flood of cheap products from Southeast Asia which is harming India’s domestic producers. For example, the coconut industry in India especially in Kerala has taken a hit due to cheaper coconut imports coming in from Thailand and Indonesia. The coffee industry especially in Karnataka and other parts of India has been hit due to cheaper coffee imports coming in from Vietnam.
  • Therefore, India wants these trade issues to be addressed by reviewing and upgrading the FDA.
• First ASEAN-India Defence Ministers Meeting is to be held after the ADMM+ meeting and the maiden ASEAN-India maritime exercise is to be held in 2023.
  • The ADMM Plus is a platform for ASEAN and its eight Dialogue Partners Australia, China, India, Japan, New Zealand, the Republic of Korea, Russia, and the United States (collectively referred to as the “Plus Countries”), to strengthen security and defence cooperation for peace, stability, and development in the region.

2022 East Asia Summit: 

• Vice President Jagdeep Dhankhar addressed the 17th East Asia Summit (EAS) and highlighted two significant issues which are affecting India.
  • Global concerns on food and energy security as a result of ongoing global conflicts.
  • Role of the EAS mechanism in promoting free, open and inclusive Indo-Pacific with freedom of navigation and overflight. 
    • India pointed to the ongoing South China Sea dispute where China has displayed a lot of military aggression against other Southeast Asian countries and also against Japan in the East China Sea.
    • India called upon the East Asia Summit to stabilise the South China Sea and ensure that freedom of navigation and overflight is protected in line with international law.
• The Vice President also inaugurated the completed conservation work of ‘Hall of Dancers’ in Ta Prohm Temple in the Angkor archaeological complex in the Cambodian city of Siem Reap. 
  • The Hall of Dancers is part of a $4-million collaborative project between India and Cambodia for the preservation and restoration of cultural heritage in Cambodia.
  • The restoration work at this Buddhist monastery of Ta Prohm has been completed by the Archaeological Survey of India (ASI).
  • Dedicated to Lord Brahma, the Ta Prohm temple is located inside the Angkor Archaeological Park in the northern part of the country. 

2. G7 Global Shield Initiative

Context: The ‘Global Shield Against Climate Risks initiative’ was launched recently at the U.N. COP27 summit. 

Introduction: 

• The ‘Global Shield Against Climate Risks initiative’ was launched at the U.N. COP27 summit by the Vulnerable Twenty (V20) countries and G7 countries. 
• While V20 countries represent 58 countries that are vulnerable to climate change, the G7 represents seven of the world’s most industrialised countries.
• It is coordinated by G7 president Germany and the V20 group of climate-vulnerable countries.
• It is a social protection and insurance-based finance mechanism for loss and damage outside the UNFCCC process.
• It aims to rapidly provide pre-arranged insurance and disaster protection funding after events such as floods, droughts and hurricanes hit, like the devastating flood that occurred in Pakistan in August 2022.
• It will help expand the financial protection instruments for governments, communities, businesses and households.
• It is backed by 170 million euros ($175.17 million) in funding from Germany and 40 million euros from other donors including Denmark and Ireland.
• These instruments will minimise the impacts of disasters by helping vulnerable economies become more resilient, ensure sustainable development and protect lives and jobs.
• The Global Shield will develop support to be deployed in countries including Pakistan, Ghana, Fiji and Senegal when events occur.

 V20 countries:

• The Vulnerable Twenty (V20) Group of Ministers of Finance of the Climate Vulnerable Forum is a dedicated cooperation initiative of economies systemically vulnerable to climate change. 
• The V20 works through dialogue and action to tackle global climate change.
• It was established with the inaugural meeting of the V20 Ministers of Finance of the Climate Vulnerable Forum on 08 October 2015 in Lima, Peru in conjunction with the 2015 Annual Meetings of the World Bank Group and International Monetary Fund.

Image Source: V20.org

Image Source: V20.org

Image Source: V20.org

Image Source: V20.org

Concerns:

• Some countries and campaigners are concerned that this might derail the ongoing negotiations on the ‘Loss and Damage’ fund at UN Climate.
• Some research suggests that by 2030, vulnerable countries could face $580 billion per year in climate-linked “loss and damage”. 
• Some vulnerable countries also questioned the scheme’s focus on insurance, with insurance premiums adding another cost to cash-strapped countries that have low carbon emissions and contributed least to the causes of climate change.
• It is also not clear how much of the Global Shield funding announced so far was in grant form.

3. US removes India from Currency monitoring List

Context: The US recently removed India and several other countries from its Currency Monitoring List.

Introduction: 

• The US Department of Treasury removed India along with Italy, Mexico, Thailand and Vietnam from its Currency Monitoring List of major trading partners that merit close attention to their currency practices and macroeconomic policies.
• India had been on the list for the last two years.
• China, Japan, Korea, Germany, Malaysia, Singapore, and Taiwan are the seven economies that are a part of the current currency monitoring list.

What is the Currency Monitoring List?

• The US Treasury Department has established the Currency Monitoring List to pay close attention to the major US trading partners’ currency practices and microeconomic policies. 
• If a country appears on the list, it is regarded as a “currency manipulator”. 
• A ‘currency manipulator’ is a designation that the US government authorities give to countries that, according to the US, engage in “unfair currency practices” for trade benefits.
• According to the report, economies that meet two of the three criteria in the Trade Facilitation and Trade Enforcement Act of 2015 Act are added to the Monitoring List.

1. Significant bilateral trade surplus with the United States–A significant bilateral trade surplus with the United States is a goods and services trade surplus that is at least $15 billion.
2. Material current account surplus –A material current account surplus is one that is at least 3% of GDP, or a surplus for which the Treasury estimates there is a material current account “gap” using Treasury’s Global Exchange Rate Assessment Framework (GERAF).
3. Persistent one-sided intervention in the forex market–Persistent, one-sided intervention occurs when net purchases of foreign currency are conducted repeatedly, in at least 8 out of 12 months, and these net purchases total at least 2% of an economy’s GDP over a 12-month period.

• Thus, inclusion in the list simply means that the country is artificially lowering the value of its currency to get an advantage over others.
  • This is because a lower currency value leads to reduced export costs from that country.

Impact of removal on India:

• India and four other countries were removed from the Monitoring List as they now only met one of the three criteria for two consecutive reports.
• The removal of India from the list can be seen as positive news both in terms of market aspect and India’s monetary policy-making which also signifies the growing role of India in global growth. 
• If a country is included in the Currency Manipulation Watchlist then it will not be included in the US Government procurement contracts and also cause significant damage to the global financial image of the country.
• The Reserve Bank of India (RBI) can now take robust measures to manage the exchange rates effectively, without being tagged as a currency manipulator. 
• To manage exchange rates amid the rupee fall, the Reserve Bank of India had recently taken measures like greater purchases of dollars at the time of excess inflows and selling dollars at the time of outflows. 
• The Rupee could appreciate on account of India’s removal from the list.

4. Extradition of Nirav Modi

Context:  High Court in London rejected the appeal of fugitive diamond merchant Nirav Modi and ordered his extradition to India.

Background: 

• Nirav Modi and his uncle Mehul Choksi are accused of routing transactions of about Rs 13,600 crore through fraudulent Letters of Undertaking (LoUs) of Punjab National Bank (PNB). 
• Both fled India in 2018 and have since been designated as Fugitive Economic Offenders.
• The Enforcement Directorate (ED) had alleged that Nirav Modi diverted over Rs 4,000 crore of the Rs 6,519 crore outstanding fraudulent LoUs issued by PNB to his firms, through 15 “dummy companies” based in the UAE and Hong Kong.
• On October 31, 2022, a special court allowed the Enforcement Directorate (ED) to confiscate 39 properties belonging to Modi under the Fugitive Economic Offenders Act. A similar order was first passed in 2020. 

Letters of Undertaking (LOU):

• It is a bank guarantee under which a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of short-term credit.
• In other words, it is an assurance given by one bank to another to meet a liability on behalf of a customer.
• The loan is used to make payment to the customer’s offshore suppliers in foreign currency.  The overseas bank usually lends to the importer based on the LoU issued by the importer’s bank. 
• An LoU involves four parties — an issuing bank, a receiving bank, an importer and a beneficiary entity overseas. 
• The messages are sent through SWIFT — an inter-bank messaging network for securely transmitting instructions for financial transactions.  

Letter of Credit:

• It is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
• In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Nirav Modi’s arrest and Extradition:

• Modi was arrested in March 2019, and his extradition was approved by the court in February 2021, and by the UK government in April 2021. 
• Since his arrest, he has remained at Wandsworth Prison in southwest London. 
• However, he challenged the extradition in the High Court in London on the grounds of his mental health by arguing that his mental condition had deteriorated. 
• The leave to appeal in the High Court was granted on two grounds,
  • Under Article 3 of the European Convention of Human Rights (ECHR) to hear arguments if it would be “unjust or oppressive” to extradite Modi due to his mental state, and
  • Section 91 of the Extradition Act 2003, also related to mental health.
• The court noted that India is a “friendly foreign power” and the UK must honour its extradition treaty obligations as the Indian government had assured that Nirav Modi will be provided with adequate medical care. 
• Modi can approach the Supreme Court on a point of law of public importance, to be applied to the Supreme Court against the High Court’s decision within 14 days of a High Court verdict.
  • “However, this involves a high threshold as appeals to the Supreme Court can only be made if the High Court has certified that the case involves a point of law of general public importance,” it said.
• If all avenues in UK courts are exhausted, Modi can seek a so-called Rule 39 injunction from the European Court of Human Rights (ECHR).  

What is the extradition treaty between India and the UK?

• India is a designated Part 2 country by virtue of the Extradition Act 2003, which means it is the UK Cabinet minister who has the authority to order a requested person’s extradition after all legal issues are dealt with in the courts.
• India and the UK signed an extradition treaty in 1992. Since then the UK has accepted only two requests for extradition of a fugitive living in that country. All other requests remain pending till date. 
• The UK doesn’t require an individual to hold a valid passport in order to remain in the country if their passport was valid when leave to remain or enter the UK was conferred. Cancellation of passport by the Indian government does not result in automatic deportation by the UK. 
• Most of the extradition cases involve high value economic offenders.UK’s soft approach towards extradition hearings has made it a new sanctuary for economic offenders.

5. France’s military operation in Sahel region

Context:  On November 9,2022, French President Emmanuel Macron announced the end of Operation Barkhane in Africa. 

What is Operation Barkhane?

• France began its military operations in Sahel in January 2013. Initially, Operation Serval was started primarily to target Islamic extremists linked to al-Qaeda who took control of northern Mali.
• In 2014, the mission was expanded, renamed ‘Operation Barkhane’ and was aimed at counter-terrorism. 
• The objective was to assist local armed forces to prevent the resurgence of non-state armed groups across the Sahel region. 
  • Around 4,500 French personnel were deployed with the local joint counter-terrorism force.

Sahel region of Western Africa:

• The recent announcement comes after the French soldiers withdrew from Mali on August 15, 2022. 
• The development also marks a strategic shift for the French military forces deployed in the Sahel region of Western Africa, which are assisting several countries to contain jihadist insurgencies.
• The Sahel region consists of the vast semi-arid and mostly inhospitable region of Africa, separating the Sahara Desert to the north and tropical savannas to the south. 
• It includes parts of Senegal, Mauritania, Mali, Burkina Faso, Algeria, Niger, Nigeria, Cameroon, the Central African Republic, Chad, South Sudan, Eritrea, and Ethiopia. 

Image Source: euractiv.com

Has France achieved its objectives?

• French operations had two objectives in the Sahel. 
  • To liberate Mali from the insurgency in the north and to see through counter-terrorism operations in West Africa, including the neutralisation of key terrorists.
• In its major successes, France regained Mali’s northern regions from the extremists in 2014 through Operation Serval. 
• In 2020, Abdel Malek Droukdel and Bah Ag Moussa, key leaders of al-Qaeda were killed in French-led operations. 
• The success of Operation Serval led to the inception of Operation Barkhane aimed at counter-terrorism in Mali, Niger, Burkina Faso, Mauritania and Chad. However, Operation Barkhane saw a series of failures.
• The region witnessed the growth of new groups affiliated to terrorist organisations, including the Islamic State despite the operation.
• The failure of the operation led to a humanitarian crisis. 
  • According to the Armed Conflict Location & Event Data Project (ACLED), the violence had claimed 5,450 lives across Mali, Burkina Faso, and Niger in just the first half of 2022, recording a significant increase from the previous years. 
• Operation Barkhane’s unfulfilled objective to resolve the region’s insurgencies sparked an increase in civilian support to the military and has contributed to the subsequent political uncertainties in the Sahel.

Why did France end its operation?

• France’s relations with the military rulers grew hostile after a series of coups in Mali, Burkina Faso and Guinea. 
  • Mali recently expelled the French ambassador when he disagreed with the junta’s decision to remain in power until 2025.
  • France was also insolent about Malian authorities negotiating a peace deal with insurgent groups. 
• Anti-French sentiments and questions over France’s intentions erupted in the region, with a further demand for France’s withdrawal as Operation Barkhane was widely perceived as a failure.
• France, and other Western countries claim that the Wagner Group, a private military company close to Russia, is playing a major role in fuelling the insurgency and discrediting French withdrawal. 
  • For Africa, the Wagner Group is an alternative that engages with military governments, without abiding to human rights and democratic standards.

Read more International Relations This Week articles in the link.

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