The HINDU Notes – 14th April 2019 - VISION

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Sunday, April 14, 2019

The HINDU Notes – 14th April 2019

πŸ“° Oil import from Iran may be reduced as U.S. mulls waiver

Oil import from Iran may be reduced as U.S. mulls waiver
Efforts on to beat deadline on GSP trade status

•Far from the din of elections, Indian officials are working closely with U.S. officials to ensure that two upcoming deadlines in early May, for the extension of the Iran oil sanctions waiver, as well as the final decision on withdrawing India’s preferential Generalised System of Preferences (GSP) status, end positively for the government, multiple sources in Delhi and Washington confirmed.

Lower quotas

•While the decision on the GSP could be deferred until after elections, the discussions on the Iran oil sanctions waiver have indicated an extension is likely, with India allowed a lower quantity of oil imports from Iran.

•Last week, following discussions with U.S. Under Secretary for Terrorism and Financial Intelligence Sigal Mandelkar, who visited Delhi in early April to discuss “U.S. nuclear-related sanctions on Iran and the global coalition to combat Iran’s state support for terrorism and ongoing malign behaviour, ” the Ministry of External Affairs (MEA) had said both sides had been “continuously engaged” on the issue of India’s oil imports from Iran since November.

•India, Turkey and China remain the only countries with significant imports. After initial defiance where it said it only recognised “UN sanctions, not unilateral sanctions”, the Modi government has softened its stand in negotiations for the sanctions waiver from America.

•According to informed sources, the U.S. is considering an extension of the six-month waiver, but reducing the quantity of oil India can import from the previous allowance of nine million barrels a month. “The waiver lapses on May 4; let’s wait and see what happens. But I think the important thing is that we will continue our engagement to see if we are taking care of our energy security; but the important thing is that the discussions and the engagement should continue and which is continuing between India and U.S.,” said MEA spokesperson Raveesh Kumar.

•The deadline, for the announcement of the cancellation of U.S. preferential duties or GSP status, set for May 2, may be put off if the U.S. Trade Representative in Washington Mark Lightizer accepts an appeal from India-Causus co-chairs senators Mark Warner and John Cornyn, who wrote to him on April 12, as well as one from Republican Congressman George Holding who wrote to him on March 27.

Elections cited

•In the letter, the senators asked that the U.S.TR should “consider delaying the issuance of a Presidential proclamation to withdraw India’s GSP benefits by at least 30 days, beyond the 60 day calendar, in order to move the negotiations beyond India’s elections…to provide a real opportunity to resolve these market access issues, potentially improving the overall U.S.-India relationship or years to come. ”

•Despite the appeals, U.S. officials say there has been a growing sense of frustration in their administration on trade issues.

Outstanding issues

•“While we were pleased that growing U.S. exports to India, largely crude oil and LNG, led to a 7.1% reduction in our bilateral goods trade deficit last year, many structural challenges in our trade relationship have yet to be resolved. Trade has frankly been an area of frustration in the relationship, but the door is open if India is prepared to bring a serious proposal to the table,” a Senior State Department official told The Hindu last month.

•According to the officials, out of the nine outstanding issues on trade, the two sides were able to narrow differences on all but two or three, which were irreconcilable, and led to the U.S. notice on cancelling GSP.

•These include the issue of certifying dairy products from “vegetarian” cows, and the price caps on medical devices like stents — both of which had originally triggered the GSP review in April 2018.

Case in WTO

•The U.S. also remains concerned about duties and regulations in the Information Technology industry, — an issue for which the European Union has filed a case against India at the World Trade Organisation (WTO) this week.

•In addition, officials said the U.S. is watching India’s decision on 5G technology closely, particularly the fate of the bid by Chinese company Huawei, given the U.S.’s cases against it.

πŸ“° Sudan’s new ruler vows civilian govt.

Defence Minister and intelligence chief quit as protesters keep up pressure on the military council

•The new head of Sudan’s military council said on Saturday a civilian government would be formed after consultations with the opposition and the transition period would last for a maximum of two years, as protesters kept up pressure for rapid change.

•In his first televised address, Lt. Gen. Abdel Fattah al-Burhan Abdelrahman said he was also cancelling a night curfew ordered by his predecessor and ordered the release of all prisoners jailed under emergency laws ordered by ousted President Omar al-Bashir.

•Mr. Bashir was overthrown on Thursday after weeks of mass protests brought on by rising food costs, high unemployment and increasing repression during his three decades in power.

•Protest organisers had earlier on Saturday urged people to keep marching to demand a civilian government after the Defence Minister and the intelligence chief stepped down.

•Thousands of people gathered in front of the Defence Ministry in central Khartoum. Salah Abdallah Mohamed Saleh, known as Salah Gosh, the former head of the National Intelligence and Security Service, quit on Saturday. He was once the most influential person in the country after Mr. Bashir and protesters held him responsible for the killing of demonstrators demanding an end to military rule.

•Defence Minister Awad Ibn Auf stepped down as head of the transitional military council late on Friday after only a day in the post.

•Celebrations erupted on the streets of Khartoum overnight after Mr. Ibn Auf's resignation. Thousands of protesters waved flags and illuminated mobile phones in the darkness and drivers hooted car horns. People chanted: “The second has fallen!”

•“Islamists have now lost control and they are in shock. Their ability to project influence in an organised way inside the state appears weak,” said Sudanese analyst Khalid al-Tijani.

Pressure from protesters

•“The reason for the changes in Sudan is the pressure from protesters and pressures within the Army, and the fear among military commanders of a split in the armed forces.”

•Mr. Burhan, the new head of the military council, was the third most senior general in the Sudanese armed forces and is little known in public life. As head of Sudans ground forces, he oversaw Sudanese troops fighting in the Saudi-led Yemen war and has close ties to senior Gulf military officials.

•The Sudanese Professionals Association (SPA), which has been leading protests to demand a civilian government, called for more demonstrations on Saturday.

•“Today, we continue the march to finish the victory for our victorious revolution,” the SPA said in a statement. “We assert that our revolution is continuing and will not retreat or deviate from its path until we achieve... our people’s legitimate demands of handing over power to a civilian government,” it said.

•The protests against Mr. Bashir escalated last Saturday when thousands of demonstrators, apparently bolstered by change in Algeria following similar protests, marched towards the Defence Ministry in Khartoum to deliver a memorandum demanding the military side with them.

πŸ“° China enlarges its circle in Europe

Italy and Greece have joined BRI; it has lined up investments in other countries

•China’s Premier surveyed construction of a long-sought bridge over Croatia’s Mali Ston Bay, home to China’s largest infrastructure project in Europe — built by a Chinese company with Chinese workers, and financed in large part by EU money.

•A driving rain lashed the hills while Li Keqiang was there on Thursday. But, Mr. Li declared. “This bridge will be a rainbow on earth.”

•The reassuring language was part of a broader effort to convince increasingly sceptical European nations that China comes in peace.

•Fresh from a summit meeting with EU leaders this week, Mr. Li arrived in Croatia for the annual meeting of an economic bloc that China has forged with 16 Central and Eastern European nations.

•The thickening ranks of China’s economic allies have left European officials increasingly wary. Last month, Italy formally signed on to China’s vast Belt and Road Initiative (BRI). On Friday, the summit was capped by Greece’s announcement that it had joined, too.

Dragon head

•China has already moved ahead with plans to make the Greek port of Piraeus the “dragon head” of its infrastructure push, and it has stepped up investment in Greece, which is still smarting from the austerity measures imposed by its European partners.

•China’s presence is no longer a novelty in this part of Europe, where its track record is decidedly more complicated than it was when the economic bloc was formed.

•For instance, after years of investments failing to materialise, Poland, the largest nation in the group and once one of its biggest champions, has cooled on China. The arrest in Poland of a Chinese regional director of the tech giant Huawei underscored the changing nature of the relationship.

•In fact, the pace of Chinese investment in Europe has slowed for the past two years, according to the Mercator Institute for Chinese Studies.

•In 2018, there was more than $19 billion in direct Chinese investment in Europe, a decline of 40% from 2017, and more than 50 percent from the 2016 peak of around $42 billion.

πŸ“° Drug advisory board proposes stringent norms for medical devices

Urges Health Ministry to notify them under drug laws

•In a move that would give end users more protection while using a medical device, the Drugs Technical Advisory Board (DTAB), India’s top drug advisory body, has recommended that the Health Ministry should notify all medical devices under the drug laws.

•When enforced, this translates into medical devices being treated as drugs, more stringent tracking systems, mandatory reporting of all adverse reactions and registration of device before it is allowed into the market.

•A decision to this effect was taken at a meeting earlier this month and the recommendations, when brought in for implementation by the Central Drugs Standard Control Organisation (CDSCO), would be introduced in a phased manner to help the manufactures/importers adhere to the new laws.

•Currently of the 5,000-6,000 medical devices in the Indian market, there are only 23 notified medical devices under government control.

•When enforced, medical devices will be recognised as drugs under Section 3 (b) (iv) of the Drugs and Cosmetics Act, 1940.

Call for separate law

•The decision, however, has not gone down well with the Association of Indian Medical Device Industry (AIMED) which says that all medical devices need to be regulated under a separate medical devices-specific law.

•Forum co-ordinator Rajiv Nath said the medical device industry wanted experts from within their industry to be part of the DTAB as special invitees.

•In their release, AIMED noted: “The CDSCO should be strengthened with respect to manpower and infrastructure to regulate all medical devices and should include specialists like dentists and ophthalmologists in the category of experts to be recruited. Also manpower and infrastructure in all States should be strengthened and an advisory may be issued to all the States in this regard.”

•AIMED has also asked the government to stick to the earlier assurance given to the industry by the Ministry in 2016, which included a four-step plan of starting with Medical Devices Rules (MDR), initially experimenting with a few electronic devices under MDR, amending MDR as per experience gained after six months of introduction and simultaneously drafting a Medical Device Patient Safety Bill to be reviewed and passed by Parliament.

•“Also it’s imperative to have a separate law as devices are engineering items and not medicines — an X-Ray machine by no stretch of imagination can be called a drug. So continued attempts to regulate devices as drugs is illogical and incorrect. The Medical Devices Rules has risk proportionate controls correlating to risk classification of devices. Similarly the law and penal provisions need to be risk proportional as you can’t have the same penalty for the manufacturing failure of a spectacle and a contact lens or an intraocular lens,” said Mr. Nath.

πŸ“° India to launch coffee consumption drive

The World Coffee Producers Forum has decided to reach out to the coffee consuming countries around the world.

•India will plan and roll out a coffee consumption campaign on behalf of global coffee growers who suffered huge financial losses on account of falling coffee prices and soaring labour cost.

•The context is that coffee growers around the globe are going paupers and turning poverty stricken. As per International Coffee Organization (ICO), 25 million farmers, including more than 3,00,000 in India, produce coffee in 60 counties. Over 90% of these growers are smallholders and are forced to sell their coffees at a price much below the cost of production. This scenario has led to socio-economic issues. These growers and their families have gone deeper into debts. Many even have abandoned their farms and migrated to cities.

•To bring world coffee producers, including Indian growers, out of this appalling situation, The World Coffee Producers Forum has decided to reach out to the coffee consuming countries around the world.

•As a precursor to this, India, which has a domestic consumption of more than 5 million bags (of 60 kg each) will kick off a five-year coffee consumption campaign in collaboration with top global roasters including Nestle and Starbucks, cafe chains, other stakeholders and the Government of India.

•Anil Kumar Bhandari, president of India Coffee Trust and also chairman of Private Sector Consultative Board of ICO told The Hindu that, a special entity would be formed to execute this country-wide coffee campaign. The plan is to get most of the funding from international roasters while ICO will play a catalyst’s role.

•The campaign will address a population of 450 million, mostly school and college students, in India. Carlos Brando, who ran various coffee projects in more than 50 countries — including Brazil’s famous coffee campaign that significantly pushed up the country’s consumption in 1990 — will be actively involved in the India campaign that will be ready for launch by mid 2020.

‘Demand-supply issue’

•“There is a huge demand-supply imbalance that currently exists in the global coffee markets. That’s the root cause for price fall. Increasing the consumption is the only way to counter this and therefore demand for the commodity in the global markets will increase. This exercise has to begin somewhere and let that be from India,” said Mr. Bhandari.

•The plan was to import excess coffees from Brazil, Colombia and Vietnam, provided the government of India waives off the import duty on coffee which is 105%, he added.

•“It is like catching them young, before students get involved with colas, carbonated sugar drinks or liquors. We have to create a generational change and build a coffee culture. The campaign will be run in consultation with parents, teachers and school/college managements. We will also rope in sugar companies, dairy brands into it,” he added.

•As per ICO, the world drinks 1.5 billion cups of coffee every day and consumers on an average pay $3.1 a cup in the U.S., $4.60 in Shanghai, $6.24 in Copenhagen and $3 to $4 in Bangalore and New Delhi. But unfortunately, not even 5% of this cup price reaches the grower.

πŸ“° India shifts to net steel importer in 2018-19 fiscal

Demand for higher quality steel grows

•India was a net importer of steel during the 2018-19 fiscal year, the first time in three years, as the country lost market share among its traditional steel buyers and imports jumped on demand for higher quality steel domestically.

•The country’s finished steel exports fell by 34% in the fiscal year that ended in March to 6.36 million tonnes, according to preliminary government data given to Reuters. During the same period, finished steel imports rose 4.7% to 7.84 million tonnes.

•India’s exports during the fiscal year declined after rival steelmakers in China, Japan, South Korea and Indonesia, blocked from markets in the United States and Europe by tariffs and other protectionist measures, ate away at the country’s markets in the Middle East and Africa, according to an Indian government official with close knowledge of the matter.

•Imports from the four Asian countries also climbed as they diverted supply into India, the source said.

•Imports of value-added steel, primarily for the auto sector and high-end electrical steel, were the biggest source of imports, the source said.

•“The imports for producing value-added steel for the auto sector is mainly by foreign steelmakers like POSCO,” the source said, declining to be identified.

πŸ“° Will the El Nino factor impact the monsoon?

Why we need to watch out for the weather phenomenon synonymous with the Pacific Ocean, which is generally known to suppress rainfall.

•The story so far: The forecast of a below average monsoon in 2019 on the back of a prospective El Nino that is often associated with less rainfall has come from a private agency, Skymet. Its managing director Jatin Singh says the Pacific Ocean has become strongly warmer than average. Even as things may get clearer after the India Meteorological Department’s forecast, we look into the weather phenomenon called El Nino and its impact on the monsoon.

What is it?

•El Nino is synonymous with the Pacific Ocean that covers as much as one-third of the planet. There is no bigger stage for it to unfold in which the vast ocean and the atmosphere combine perfectly, only to send out associated bad tidings half a world away and even beyond.

•El Nino is a phenomenon in the equatorial Pacific, in which sea-surface temperatures rise over a threshold of +0.5 degree Celsius (and cools by the same margin during alter ego La Nina). These are averaged over five, three-month sessions on a trot across a stretch of water designated as the Nino 3.4 region (see graphic) to arrive at the Oceanic Nino Index (ONI). There are a few other acronyms which one comes across while tracking El Nino. For instance, the Southern Oscillation Index, or SOI, that gives an indication of the development and intensity of El Nino or La Nina. The SOI is calculated on the basis of the atmospheric pressure differences between Tahiti (South Pacific Ocean) and Darwin (Australia), separated by 8,569 km. Sustained positive SOI values are indicative of La Nina conditions while negative values suggest El Nino conditions. Another acronym is the ENSO (El Nino Southern Oscillation) which refers to the oscillation between the El Nino and the La Nina. ENSO shifts irregularly back and forth between El Nino and La NiΓ±a every two to seven years. Each phase triggers predictable disruptions of temperature, precipitation, and winds disrupting large-scale air movements in the tropics, triggering a cascade of global side effects. Under ‘normal’ conditions, though, the west tropical Pacific is warmer than its eastern basin. The warmer area of the ocean is also a source for convection and is associated with cloudiness and rainfall. During El Nino years, the warmth shifts to Central and East Tropical Pacific (Nino 3.4 region), and along with it, cloudiness and rainfall.

How did it come about?

•El Nino was observed as far back as in the late 1800s when South American fishermen noticed the warming up of coastal waters around Christmas. They referred to it as “El Nino” (Spanish for the boy child), since it appeared around Christmas. Sir Gilbert Walker, a British mathematician, discovered the Southern Oscillation (SO), or large-scale changes in sea level pressure across Indonesia and the tropical Pacific. However, he did not recognise that it was linked to changes in the Pacific Ocean or El Nino. It wasn’t until the late 1960s that Norwegian-American meteorologist Jacob Bjerknes and others realised that the changes in the ocean and the atmosphere were connected. This was how the coinage ‘ENSO’ came into existence.

•As already mentioned, El Nino has been found to impact almost half the world triggering droughts in Australia, India, southern Africa and floods in Peru, Ecuador, the United States, the Gulf of Mexico, and the Colorado River basin. If Sir Gilbert found in the 1920s that many global climate variations, including monsoon rains in India, were correlated with the SO, the credit of linking it with El Nino as part of ENSO involving both the ocean and atmosphere, goes to Bjerknes. But it took until the 1980s or later for ‘La Nina’ or even the ‘neutral phase’ (neither El Nino or La Nina) to gain currency.

Why does it matter?

•India has not had a particularly productive monsoon since 2014 (save a tolerable 2017), with weak El Nino events unfolding on either side of the strong 2015-16 El Nino, a trend forecast to continue into this year. This comes on the back of a deficient post-monsoon season last year. After all, the south-west monsoon (June-September) accounts for over 70% of the country’s annual rainfall and irrigates over half of the crop land. The rain-fed kharif crops are heavily dependent on the monsoon and the quantity of rainfall determines agricultural production. Agriculture accounts for around 15% of the GDP and normal rains rejuvenate the farm sector and help the government deal with rural stress. Normal rains can boost sentiments, raise farm production, perk up rural demand, and tame inflation to some extent.

•But what perplexes scientists and researchers is that no direct correlation between the ENSO events and the monsoon has been established yet. From 1950 to 2012, there were 16 La Nina years, with the monsoon rains ending up above or around average nearly every time. El Nino brought in five droughts during this period but on 14 other occasions, monsoon performance ranged from being well below-average, average, or even above-average. To top it all, the 1997-98 El Nino, among the century’s strongest, went on to stand conventional logic on its head; far from heralding a drought, it generated above-average rain. Likewise, 2002 proved to be one of the driest monsoons despite it being a weak to moderate El Nino year. It only helped bust another myth: the strength of an individual El Nino event may not necessarily have its imprint on monsoon performance.

What lies ahead?

•El Nino has been generally known to suppress monsoon rainfall in India while La Nina increases it. El NiΓ±o years tend to be drier than average, but one of the strongest El Nino of the century (1997-98) produced a monsoon season with above-average rainfall for India (see table). Researchers also believe that even the location of the warming in the Pacific may possibly have an influence on the monsoon. Anomalous warming in the Central and East Pacific (Nino 3.4 region) could have a more profound adverse impact on the monsoon than when the warming shifts to the adjoining far east Pacific (Nino 3. region). Current conditions (March, 2019) suggest that the warming is pronounced (+0.98 degree Celsius) in the Nino 3.4 region than the far east Pacific (+0.74 degree Celsius), which could suggest a weaker monsoon this year. Already, a couple of private forecasters as well as a few international agencies have sounded out the possibility. The official forecast from the India Meteorological Department (IMD) is eagerly awaited. Scientists claim there may be other factors that combine with the prevailing Pacific conditions to decide the fate of the monsoon. Progressive heating of the land during April-May-June is one. The extent of the Himalayan/Eurasian snow cover is another. Less snow cover means a warmer subcontinent, which can help to intensify the monsoon circulation and bring more rain. It is worthwhile in this context to recall that north India has had an extended winter earlier this year. Last but not the least is the ‘dipole’ effect nearer home, wherein the Indian Ocean mimics El Nino-La Nina in which the western and eastern basins warm up relative to each other every few years with associated impact on the monsoon. Warming up of the west Indian Ocean boosts a prevailing monsoon, and vice-versa. International and domestic weather agencies expect that this year, the Indian Ocean dipole could be either ‘neutral’ or weakly positive. It remains to be seen how this could reflect in the monsoon’s performance.

πŸ“° Black hole

•Scientists captured the first-ever image of a black hole 54 million light years away. The image shows a ring of fire around a circle of black. At 40 billion km width, astronomers have described it as a ‘monster’. “What we see is larger than our solar system,” said Heino Falcke of Radboud Uni. A network of eight linked telescopes captured the image.

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