GS-II: Dam Safety Bill 2019

Context

Opposition MPs in the Lok Sabha have expressed deep reservations about the Centre’s decision to introduce the Dam Safety Bill, 2019, asserting that the legislation, which is ostensibly aimed at providing uniform safety measures across the country, would undermine the powers of State governments since water is a State subject.

Concerns

• The bill is too focused on structural safety and not on operational safety.
• There is inadequate compensation to the people affected by dams.
• There is need for an independent regulator as well as for a precise definition of stakeholders.
• Many states say it encroaches upon the sovereignty of States to manage their dams, and violates the principles of federalism enshrined in the Constitution.

Significance

• The Bill will help all the States and Union Territories of India to adopt uniform dam safety procedures which shall ensure the safety of dams and safeguard benefits from such dams. This shall also help in safeguarding human life, livestock and property.
• It addresses all issues concerning dam safety including regular inspection of dams, Emergency Action Plan, comprehensive dam safety review, adequate repair and maintenance funds for dam safety, and Instrumentation and Safety Manuals.

Need

1. Over the last fifty years, India has invested substantially in dams and related infrastructures and ranks third after USA and China in the number of large dams. 5254 large dams are in operation in the country currently and another 447 are under construction. The Central Water Commission, through the National Committee on Dam Safety (NCDS), Central Dam Safety Organization (CDSO) and State Dam Safety Organizations (SDSO) has been making constant endeavours in this direction, but these organizations do not have any statutory powers and are only advisory in nature.
2. This can be a matter of concern, especially since about 75 per cent of the large dams in India are more than 25 years old and about 164 dams are more than 100 years old. A badly maintained, unsafe dam can be a hazard to human life, flora and fauna, public and private assets and the environment.

GS-II: The Yuan’s devaluation has made investors nervous

CONTEXT

Chinese yuan broke the seven-to-one parity against the dollar for the first time since 2008. China deliberately devalued the Chinese currency after the latest tariff threats issued by US.

Why China did do this?

1. Economic reasons

1. China’s weakening manufacturing competitiveness is likely to strengthen with yuan-priced goods and services getting cheaper across supply chains in East Asia, parts of Africa, etc.
2. It is likely to widen China’s trade surplus with the US in the immediate short run.
3. It will also help China expand trade margins within its own region, especially with Vietnam, Thailand, Indonesia, etc.

2. Political Reasons

1. The US’ own strategic engagement in Asia has weakened under Trump, who questioned the “value of US alliances with Japan and South Korea
2. Japanese imposed trade restrictions on South Korea. China and Russia staged their first joint aerial patrols in the region, causing South Koreans to react militarily.
3. China-US friction has offered significant economic and political leverage to smaller emerging nations like Vietnam and Indonesia within their respective regional spaces.

Problems

1. Risk not only for those trading in the US and Chinese currencies or their stocks but also for capital flows between emerging markets
2. China, around 2015-16, tried something similar by letting the yuan depreciate; it led to a stock market crash in China, and billions of its dollar reserves disappeared in just a few days.
3. That devaluation saw led to a massive capital flight from China, further weakening its external position.
4. The debt denominated in foreign currencies has increased for global companies and developing nations across the world and may be vulnerable to a currency shock if the “currency war” continues.
5. Most foreign investors switched to the safety of gold or other currencies like the yen.
6. China’s weakening of its currency to hurt US economic interests for political gains will only make other Asian countries more vulnerable to a political crisis that could quickly escalate to a financial crisis

GS-II: What India has to offer in the Gulf

Context

Narendra Modi’s visit to the United Arab Emirates and Bahrain underlines India’s continuing commitment to relations with the Gulf region.

Gulf region – a new approach to India

• Gulf Kingdoms are eager to develop an independent relationship with India, independent of their relationship with Pakistan. Modi is being honored with the Zayed Medal, the highest civilian honor in the Emirates.
• Some Gulf countries have expanded counter-terror cooperation with India, extending support to India in the conflict over Jammu and Kashmir. They have sought to open the OIC platform for India despite Pakistan’s objections.
• Gulf kingdoms have begun to address many of the long-standing Indian concerns with respect to the Indian diaspora and expatriate labor.
• Gulf has begun to see India as a major economic partner. Saudi decision to pick up a 2% stake in the oil business of Reliance Industries Limited and UAE’s support for the construction of India’s Strategic Petroleum Reserve are two examples of deepening energy interdependence.

Challenges

1. Regional political turbulence – Paying greater attention to the domestic dynamics in the different kingdoms. A new trend has been the effort to promote moderate Islam in the region.

• UAE has been at the forefront of this effort.
• In Saudi Arabia, Crown Prince has taken some small but significant steps to liberalize the economy and society.
• India should offer strong public support for the reform agenda in the region.

1. India must reciprocate the strategic economic cooperation ranging from energy and digital innovation to arms production and space technology. China has moved quickly to elevate its economic and commercial profile in the region.
2. Expanding security cooperation: The highly vulnerable Gulf has long depended upon Britain and the US to protect themselves from threats. Trump’s talk on downsizing America’s role in the Gulf is encouraging the region to diversify its security partnerships. India must have a proactive strategy for defense cooperation in the region.
3. India’s instinct was to avoid getting drawn into the conflicts. But it can’t be a permanent Indian security strategy in the Gulf. India must vision itself contributing to the regional security in whatever manner it can.