In Focus by The Hindu

Josep Borell, the European Union’s High Representative for Foreign Affairs and Security Policy, has triggered a controversy by saying that Europe was a garden and “most of the rest of the world” was a jungle. He warned in a speech at the European Diplomatic Academy on the 13th of October, that the “jungle could invade the garden”.

He continued, “The gardeners should take care of it, but they will not protect the garden by building walls. A nice small garden surrounded by high walls in order to prevent the jungle from coming in is not going to be a solution. Because the jungle has a strong growth capacity, and the wall will never be high enough in order to protect the garden. The gardeners have to go to the jungle. Europeans have to be much more engaged with the rest of the world. Otherwise, the rest of the world will invade us, by different ways and means.”

So what does this speech mean for the rest of the world? Does it signal a formal end to globalisation and integration? Does it reflect the true state of the world? Are these rare candid remarks from a serving European bureaucrat? 

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The RBI issued directions earlier this week to Indian banks on the provisions they ought to make against loans, if the entities to which they have lent funds in foreign currency have not hedged against risk of changes in the exchange rate. After all, if an Indian company had borrowed one dollar a year ago, and has to close the loan now, it would have to shell out more rupees today to close one dollar’s worth of debt, than when it received the loan. 

Today, ratings agency CARE Edge Chief Economist Rajani Sinha joins us to share her views on what the trigger for the Reserve Bank's move is. 

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 The mid-day meal scheme is considered to be one of the government's most successful initiatives. For thousands of children across the nation, this scheme guarantees that they get at least one meal a day. While this has led to increased school attendance, data and social audits reveal that the food being served is sometimes unhygienic, cold, contaminated, or nutritionally inadequate. Consequently, issues like food poisoning, are seeing a spike. 

In this episode, The Hindu speaks with experts on the benefits of the mid-day meals scheme, what they've seen on the ground and how to effectively implement feedback mechanisms. 

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Chinese President and general secretary of China’s Communist Party, Xi Jinping, is all set to shred the two-term rule for the country’s top leader in the post Deng Xiaoping era. Xi will be the first leader in decades who is expected to hang for an unprecedented third term at the upcoming 20th Congress of the Communist Party.  

So, what does this mean for China and its internal and external policies? Will we see a harder Chinese approach towards its own people and to the rest of the world? And, how has the continuing zero COVID policy changed China? 

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On October 6, India abstained from voting on a draft decision at the United National Human Rights Council that called for a debate on the “situation of human rights in the Xinjiang Uyghur Region” in China. By a narrow majority of 19 to 17, China and its allies ensured the defeat of a Western bloc of nations that were seeking a debate on the state of the Uyghur Muslim minority in China. 

The very next day, the spokesman of the External Affairs Ministry in New Delhi hoped that the “relevant party” would address the situation in Xinjiang “objectively and properly.” 

So, should India have voted for the draft decision on the situation in Xinjiang, especially since China has resisted efforts to sanction terrorists responsible for anti-India operations in the 1267 sanctions committee at the U.N., rather than abstaining? 

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If the Covid-19 pandemic turned our world upside down, Russia’s invasion of Ukraine has added to the global economic gloom. We thought it apt to now take a quick snapshot of major economies undergoing stress and of places where policy action is going against the grain. We also wanted to take a peek into nations that are doing rather well, when the rest of the world is surrounded by uncertainty. We chose to review the US’s interest actions, the UK’s fiscal and currency woes, Turkey’s unbridled inflation and counterintuitive interest rate moves, the blossoming of Vietnam’s economy in a world full of economic stagnation, with Indonesia close on its heels and insistence by Japan’s central bank that it won’t raise rates given that it has the lowest inflation rate among major economies.

Rohit Azad, who teaches economics at JNU, shares his views with us on these global trends.

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Fifth generation telecom technology, or 5G, has been in the news lately. Spectrum that was recently auctioned to telecom firms for providing 5G services fetched the government about Rs. 1.5 lakh crore. Airtel has already unveiled services in 8 cities. Jio promises to follow suit by Deepavali this year, even as it targets pan India availability by December 2023. 

Meanwhile, C-DoT or the Centre for Development of Telematics has developed India’s own 5G core. What does this mean to the local industry? Is it compatible with other global equipment providers? Will it help save on foreign exchange outgo? 

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 India’s foreign exchange reserves are lower by about $100 bn from a year ago. The rupee has also depreciated; it has seen a decline of more than 7% since the start of the financial year in April. Though the Reserve Bank has dipped into the reserves to help stem volatility in the rupee, that is not the only reason that the observed value of reserves has declined. Changes in valuation, given the dollar strengthening brutally against other currencies too have also contributed.

How does this work? And what implications do all these changes have for the Reserve Bank’s action path going forward?

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On September 13, 2022, India and China disengaged from a fifth friction point in Eastern Ladakh along the Line of Actual Control (LAC). Both sides have now established five buffer zones since tensions began in April 2020, but the LAC crisis is far from over. In this episode, Manoj Joshi, Distinguished Fellow at the Observer Reservation Foundation and author of “Understanding the India China Border”, explains where things stand on the border, where both countries go from here as they look to rebuild shattered trust, and what may have driven China’s recent actions on the LAC that have upended decades of peace.

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The rupee weakened past 81 against the dollar for the first time ever last week. The RBI’s intervention in the forex market to help stem the volatility by selling dollars has meant that our forex reserves have fallen about $94 billion over the course of about 12 months to about $545 billion in mid September. How much lower can we afford to let our reserves go? Is there a ‘correct’ level for the rupee? Where does the interest rate as a policy tool figure in all of this? 

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