Relation between INDIA and South America in the present context !!

After the BRICS summit on 15 July in Fortaleza, the Brazilians had organized a meeting for the BRICS leaders with the Presidents of South America on 16 July in Brasilia. This is an imaginative idea by the Brazilians to bridge their regional leadership with their BRICS alliance.

It was perhaps the first time that an Indian Prime Minister will get an opportunity to meet South American leaders together. In the last two decades, South American leaders have started pursuing a more autonomous and assertive foreign policy with a strong belief in a multipolar world and multilateralism

They have freed themselves from the stigma of being called the "backyard of United States." This is evident from their success in thwarting the US proposal to form a hemispheric Free Trade Area of the Americas. They have preferred to become collectively strong through UNASUR (South American Union). In this context, the South American leaders, will welcome Modi's proactive role in global affairs and will look forward to working with India.

What makes INDIA special for the South 

American Region ?

• South America is emerging as a contributor to India's energy and food security. Venezuela, Brazil, Ecuador and Colombia have started supplying crude oil regularly.While there is growing gap between India's domestic production and demand, South America has the potential to increase its oil production and exports in the future.

• India has been importing more than a billion dollars' worth of soy and sunflower oil from Brazil and Argentina annually. It has also been importing over 2 billion dollars' worth minerals (copper is the main item) from South America which has rich mineral resources.

• On the other hand, the South American political and business leaders view India as a new, large and growing market for their exports. Conscious of the perils of overdependence on China, they are keen to diversify and cultivate India as a trade partner. 

• Argentina learnt this lesson when China imposed a ban on imports of Argentine soy oil in 2010 to express their displeasure with Argentina on some other issue. Argentina, the world's largest exporter of soy oil, was shocked since China was till then the largest importer of Argentine soy oil. Argentina was relieved and grateful when India came to its rescue by doubling its imports of soy oil in that difficult year. 

• The South American governments and consumers are happy with Indian pharmaceutical companies which have helped them to reduce their cost of health care with low-cost generic medicines.

• The South Americans also appreciate the fact that the Indian IT companies in the region provide jobs and training for their young people.

• In Bolivia, Jindal Steel & Power initiated a $2.3 billion investment in the iron ore mine El Mutún, the biggest foreign direct investment project in Bolivian history, and the biggest of any Indian company in Latin America.

• In 2002, TCS, the largest Indian IT company, established a Global Delivery Center in Montevideo that put Uruguay on the global IT map. TCS employs 900 Uruguayans and is one of the largest and most valued employers in the country. Meanwhile, the Brazilian giant Embraer has sold planes in India, and Chile’s exports to India increased tenfold to $2.2 billion from 2003 to 2007. The two Indian IT companies operating in Chile—TCS and Evalueserve—employ more than 2,000 people.

• In total, some 35,000 Latin Americans work for Indian companies in the region today—more than half in IT, business process outsourcing and knowledge process outsourcing.

What should India do to furthur make the relationship strong ? 

• As South America is emerging as a significant trade partner, India should deepen and widen the Preferential Trade Agreement with Chile and Mercosur and consider upgrading them to FTAs and also sign FTAs with Colombia and Peru, the second and third largest destinations of India's exports to South America.

• India should increase Lines of Credit to South American countries and sign the Double Taxation Avoidance Agreements with major countries to facilitate investment and trade.

Apart from ECONOMICS ?

• In the early twentieth century, Bengali poet Rabindranath Tagore’s verses influenced Chilean poet Pablo Neruda. 

• Argentine cultural impresario Victoria Ocampo took the Indian writer under her wing, hosting him for two months in Buenos Aires in 1924–1925 and publishing his work in her magazine Sur. 

• Mexican writer Octavio Paz, who was posted to New Delhi as a young diplomat in the 1950s and returned as an ambassador in the 1960s, was impressed by the depth and breadth of Indian civilization. In the 1990s, he even published a memoir of his time there, Vislumbres de la India.

• Neruda visited India four times. In Madras, he was impressed by Indian women and their saris, wrapped “around the body with supernatural grace, covering them in a single flame as shining silk.” But he had a falling out with Prime Minister Jawaharlal Nehru, who in 1951 left him waiting for a long time before receiving him, and penned one of his darkest and most ominous poems, “India 1951.”

Miscellaneous !!!

ITEC programme:

The Indian Technical and Economic Cooperation (ITEC) Programme was started by Indian Government as a bilateral programme of assistance. Various scholarships are given to students from South America under ITEC to incorporate their youth with latest technical knowledge & help in nation building.

"BRICS" - a growing FASCINATION - or a mere ACRONYM ?

The start of a journey named "BRICS" !!

• The first formal summit meeting of the BRIC grouping was held in Yekaterinburg, Russia, in June 2009 with South Africa joining the group in December 2010, changing the nomenclature from BRIC to BRICS. 

• The Yekaterinburg summit called for “a more democratic and just multipolar world order based on the rule of international law, equality, mutual respect, cooperation, coordinated action and collective decision-making of all States.” 

Why was there a need for a BRICS and its RELEVANCE  ?

• Since then the joint statements of the various BRICS summits have been repeatedly underscoring the need for a realignment of the post-World War II global order based on the untrammelled supremacy of the US. 
• With the US under the Obama administration appearing preoccupied with internal troubles and the Eurozone mired in a debilitating economic crisis, a vacuum is increasingly being felt in the international system. 
• This presents an ideal opportunity for the BRICS to finally emerge as major global players. Plans are underway for some joint projects.

The need of a DEVELOPMENT BANK 

• The 2012 New Delhi summit resulted in a proposal to create a joint BRICS development bank that would finance investments in developing nations, and last year’s summit in Durban led to conclusion of negotiations for setting up this bank. 

• This year’s summit  saw the formal launch of this bank, which will be the first bricks-and-mortar institution to be set up by the BRICS grouping. 

• Though it will initially be too small to rival the World Bank or the International Monetary Fund in terms of size and importance, it is aimed at challenging the extant global institutional fabric. 

• The bank, to be controlled by Brazil, Russia, India, China and South Africa, started with capital of $100bn. (with itz HQ in Shanghai ,China and the first CEO- President position to India as a "CONSOLATION PRIZE").

But where lies the bone  of Contention which stops 

from BRICS to become a SUCCESS STORY ???

• The structural disparity between China and the rest of the BRICS members remains the core issue. 
• China’s rise has been so fast and so spectacular that others are still trying to catch up. 
• The dominance of China makes the very idea of a coordinated BRICS response to the changing global balance of power something of a non-starter. 

• The Chinese economy is now not only the second largest in the world but also larger than the economies of all the BRICS together. 

• The overweening presence of China makes the other members nervous, leading them to hedge their bets by investing in alternative alliances and partnerships even as China’s rapid accretion of economic and political power adds to its own challenges that has made it difficult for it to make friends. 

• Given the leverage that China enjoys in BRICS, it should not come as a surprise that Beijing has suggested that IBSA – the grouping of democracies, comprising India, Brazil and South Africa – be shut down in favour of BRICS.

• China’s manipulation of its currency has resulted in significant problems for the manufacturing sectors of other emerging powers. India, Brazil and South Africa have all expressed their disenchantment with Beijing’s economic policies at various times. 
• Chinese exports have decimated a number of industries in Brazil, South Africa and India with New Delhi even imposing anti-dumping duties on a range of Chinese goods. 
• China’s dominance of the intra-South trade remains overwhelming with other emerging powers struggling to get a share of the pie. This, in turn, has stoked economic nationalism. 
• Beijing's refusal to let the yuan appreciate has resulted in significant problems for the manufacturing industries of India, Brazil and South Africa. 
• Central bankers from Brazil and India these countries spoke against the undervalued yuan in 2009 and 2010, but to little effect.
• The dominance of China makes most of the goals articulated by the BRICS States wobbly. 

The entire point behind making BRICS getting lost !!

• The point of this coalition was always to show that the balance of power is shifting to emerging countries, away from the West’s historical dominance. 

• But a multipolar world isn’t the same as China just trying to tilt the balance of power toward itself. 

• New Delhi has done well to resist strongly Chinese attempts to contribute more than its share to the proposed BRICS bank, leading to greater control and influence of Beijing over its affairs. India had  insisted that the five nations invest equal capital — $10 billion each — to create a $50 billion corpus (before the Summit).

Moral of the Story !!

• The growing fascination with BRICS is partly an offshoot of the discussion on the emerging so-called ‘post-American’ world, where many commentators argue that multipolarity is likely to be the norm.
• The narrative surrounding the rise of BRICS is as exaggerated as that of the decline of the US. 
• The tectonic plates of global politics are certainly shifting, but their movements are not yet predictable. 
• As a result, BRICS "may"  remain an artificial construct, merely an acronym coined by an investment banking analyst, for quite some time to come.

Floating Solar Power Technology and India !

• A floating solar power plant is the one where solar panels are installed on a platform floating over water bodies. 
• India has already started to build 10 megawatt solar plants on top of several canals, and is planning to build a solar power station on large stretches of water in Kerala.
• The floating solar power technology was developed by India’s Renewable Energy College. 
• India will install a 50 megawatt solar power plant on a 1.27 million square metre floating platform by the end of the year.

"The ecology of the water body is not likely to be affected much and it will also reduce evaporation, thus helping preserve water levels during extreme summer. Solar panels installed on land face reduction of yield as the ground heats up. When such panels are installed on a floating platform, the heating problem is solved to a great extent."

Moral of the Story !!

• Although, a floating solar power plant is good news and opens new avenues for the solar power sector, it is not as if we can cover the ocean with solar panels. 
• Hence, for a vast country like India, solar power plants need to be developed on land, water bodies and on rooftops. 
• With more solar power plants, there will be less dependence on coal and electricity production will not harm the environment. E
• Every household/State will have power in the future despite unavailability of coal. Electricity will be cheaper, not to mention a more robust economy.

 Do u knw ?

India Plans World’s Largest Floating Solar Power Project (50 MW)

·       India’s leading hydro power generator National Hydro Power Corporation (NHPC) is planning to set up a 50 MW solar photovoltaic project over the water bodies in the southern state of Kerala. Renewable Energy College will provide assistance to the company for implementing the project.

• The project is similar to Japan’s largest offshore solar power plant, which was launched late last year. The 70MW Kagoshima Nanatsujima Mega Solar Power Plant was designed as part of a move towards clean energy following the 2011 Fukushima disaster, and is located in Japan’s Kagoshima Prefecture of islands.

Asian Infrastructure Investment Bank (AIIB) and oppurtunities for INDIA

Asian Infrastructure Investment Bank

• The Asian Infrastructure Investment Bank (AIIB) is an international financial institution proposed by China. 
• AIIB is regarded as a rival for the IMF, the World Bank and the Asian Development Bank (ADB) which the AIIB says are dominated by developed countries like the USA and Japan.

Progress ?

• The first news reports about the AIIB appeared in October 2013.
• In June 2014 China proposed doubling the registered capital of the bank from 50bn USD to 100bn USD and invited India to participate in the founding the bank while Japan shows reluctance to join it . 
• As of the summer of 2014 the founding process is still underway.

Can AIIB innovate?

• For sure, Asia needs more than the ADB. The multilateral body’s President Takehiko Nakao admitted that while the ADB’s project lending approvals are growing at US$13bn a year, Asia-Pacific requires an aggregate US$800bn in annual spending on new infrastructure. 

• On a global scale, the importance of existing multilaterals has also proven insufficient; according to OECD data, total global donor flows (both through ODA and the private sector) had grown dramatically to US$510bn in 2010 but then tapered off to US$474bn in 2012. 

• Meanwhile, high savings-to-GDP rates and the recent low interest rate environment have failed to stimulate large scale infrastructure build-ups in Asian giants such as India and Indonesia.

• The fund is sizable to ADB which runs $165 billion capital

What India should BARGAIN for if it JOINS it ?

• India and China can increase their economic and political network
• India must ask for a full time membership in the Shanghai Cooperation Organisation (SCO) ...right now it has a observor status
• China and Russia have signed a $400 billion gas pipeline deal recently ...India must ask for its extension into INDIA.

Conclusion !!

AIIB can be set up in a manner in which it is run professionally, can dissociate itself from global geopolitics, and both compete and cooperate simultaneously with existing heavyweights in the region, the outcome could be a positive one for Asia’s catch-up developing economies.

SMART CITIES - An Overview !!

Smart City: 

• There is no definition of Smart city as such. However, it can be presumed that these cities would mobilize the Information and Communication to deliver better services, reduce the carbon foot print, create a sustainable environment, provide better job opportunities and living conditions. 

Given the fact that the existing cities, which accommodate a bulk of the population, waste a lot of resources and are energy-inefficient, Smart city is a concept where life is technologically driven with efficient use of energy and resources. For example, if you have forgotten to turn off a light in your house and you are in train to your workplace which is 40km away, you can still switch it off remotely. This is called smart grid technology.

• With the age of smart phone gripping our lives already, it is good time for governments and stakeholders to create the digital city life. 
• Accordingly, this flagship project of the Government of INDIA  to build 100 smart cities, have received a firm financial allocation of Rs. 7, 060 crore also FDI norms have been relaxed to attract investors to build them. 
• With assistance from Singapore, the first city coming under this project is Gujarat International Financial Tec (GIFT) City.

Strengths and Oppurtunities !

• Smart cities project in India is very significant as, these cities promise number of direct and indirect jobs. 
• In smart cities, Solid waste will be sucked out from homes and offices through pipelines leading directly to a waste processing plant helping manage everyday chores. 
• Being environmentally friendly, smart cities use sustainable materials for building facilities. 
• These cities would reduce energy consumption and offer convenient transport service.

Concerns !!

1. The Government has allocated Rs 7000 crore in this budget which is around Rs 70 crore per city, this is definitely not enough. It is good only if its like a initial token amount to kick start the project and later more funds will be arranged (which may happen in next budget ! ).

2. The smart cities will be developed on the outskirts of the existing cities. Its possible that instead of easing the burden on the existing one it can become a barricaded area between rich and poor.If the existing cities will be ignored then smart city project would turn out to be an expensive real estate meant to serve a few.

3. The Land development is a state subject and states active enthusiastic participation is necessary. This can only happen when the center can arrange enough funds for them.

MORAL of the STORY !!

The Smart cities will definitely help India to join the urbanization race, where at present we are lagging and by 2050 we would be least urbanised country in the world at the present rate. However, its important to ensure its equitable and inclusive nature.The thought is progressive as we need to overhaul urban governance and infrastructure, both physical and digital.