Insights January 2023 edition Digital

INDIA’S

Dear Friends:

India’s obsession with energy can be well understood by the simple fact that we are currently entirely reliant on imported oil and gas and indigenous coal, all high emitters of greenhouse gases. How long can we go on like this, and what are our options? This critical subject we have analysed with some of the best experts in the business.

Cryptos remains a particularly important field for Synergia and was the subject of an intense debate by a panel of experts. The deductions that emerged are outlined in this issue. Continuing with technology, we do an in-depth analysis of the latest rage, ChatGBT and review the threats to Indian space assets, which makes them critical infrastructure meriting the highest level of cyber security.

In our geopolitical scan, we have traced the roots of our African connections and tried to discern the trajectory of our future relations with its challenges and opportunities. The ongoing turmoil in Peru, an important country in Latin America, seems to have no end and this spells trouble for democracy in the entire region. We have tried to give a balanced view of what ails this beautiful yet restive nation. Closer to home, the growing US-China rivalry impacts the middle powers of Asia-Japan, Australia, South

Korea, and India. How do these countries strategise to overcome the collateral damage from this ‘game of thrones.’ The Egyptian President was the chief guest at this year’s Republic Day celebrations, underscoring a revitalisation of this historic postindependence partnership. We give our insights on the issue.

In our focus on nuclear arms limitation, we look at the recent statement emanating from Seoul, which hints at the acquisition of a nuclear deterrent in response to Pyongyang’s mad race towards a nuclear winter.

We are proud to inform our readers how Synergia Foundation has been proved right once again in our assessment of the mRNA vaccines released with such fanfare in the west by some of the biggest pharma companies.

Our in-house medical expert examines the issue. We end with our assessment of what 2023 has in store for the world in terms of geopolitical events.

We hope our esteemed readers will continue supporting us as we strive to further evidencebased research on strategic issues with global resonance.

Sincerely yours

Maj. Gen. Ajay Sah Chief Information Officer

Greetings from the Synergia Foundation!

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SYNERGIA FORECASTING ON COVID-19 MRNA VACCINES TURNS TRUE!

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SYNERGIA’S PREDICTION ON VACCINE POTENCY & INTRANASAL APPLICATION VALIDATED

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INDIA’S ENERGY DILEMMA

India confronts the uphill task of maintaining its strategic autonomy and environmental responsibility in the face of an increasingly worsening energy crisis.

CHALLENGES FOR THE WORLD IN 2023

We analyse the important challenges likely to manifest and be addressed by the world at large this year.

FTX: ASSET TRACING & RECOVERY

The FTX collapse has exposed the challenges posed in asset tracing and recovery once such schemes end up in a ditch.

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CYBERPROOFING INDIA’S SPACE ASSETS

A cyberattack is not an indivisible threat — it can take many shapes and hues, and have disparate entry points, veiled actors and have debilitating effects when launched by an adversary.

AFRICA

BEYOND THE HARAMBEE FACTOR

India has to compete with major powers like China and US to earn a place in the African marketplace.

THE ENERGY CONUNDRUM

India must balance out its net zero emission goals with the aspirations of its billions.

CIRCULAR ECONOMY FOR CLIMATE SECURITY

Government subsidy will be the most important factor in making a circular economy work towards a greener planet.

A GLOBAL FINANCIAL TSUNAMI?

The U.S. federal debt ceiling has rung alarm bells in the global financial order. Who are the winners and losers?

POST-PANDEMIC MULTILATERALISM

Has the pandemic and multiple global crises renewed the impetus for multilateralism?

CAUGHT IN THE MIDDLE!

It’s a High-TechHigh- Stake game of brinkmanship between Beijing and Washington, with Asian Middle Powers becoming its unwitting victims!

AFRICA LATIN AMERICA

RENEWING HISTORICAL BONDS

Egyptian President Sisi as the chief guest at India’s 2023 Republic Day celebrations could be the harbinger of a rejuvenated strategic partnership anchored on historical ties.

PERU’S CYCLE OF INSTABILITY

Peru’s ongoing political turmoil is symptomatic of more than just electoral distress linked as they are to a deep-rooted social alienation

SOUTH KOREA - DO OR DO NOT?

The spectre of South Korea going nuclear could turn security equations on their head in the prosperous but volatile East Asia.

EAST ASIA TECHNOLOGY

OMNIPRESENT AI

ChatGPT has truly opened pandora’s box for the uses and limitations of an AIpowered world.

INDIA’S ENERGY DILEMMA

India is perhaps the first major economy in human history to try to achieve three energy goals simultaneously-one, to end energy poverty and provide affordable energy access to over a billion people, second to do this while exercising “planetary responsibility with an accelerated transition to cleaner energy and decarbonisation and, third, to do it while maximising energy self-sufficiency, and being cognizant of energy security.

No other large country has had to do all three simultaneously. The experience of China, the USA, Europe, Russia etc. with their massive contribution to global emissions, pollution, exploitation of other people’s resources, energy wars etc., is another story, following a totally different script.

HISTORICAL CONTEXT

Energy self-reliance, or at least taking the first recourse to domestically available resources, has been the aim since our first PM assumed office. He oversaw the stepping up of hydropower on a massive scale and laid the foundation for nuclear energy. In the first 3-4 decades after independence, India expanded coal production, built an oil industry, started on gas, and created the Ministry of New and Renewable Energy. We were oil importers, but in an era of slow economic growth, energy demand also grew relatively slowly, and we learnt to

Energy Poverty is a critical component of India’s energy crisis and is not often spoken about. It is estimated that in the whole world, there are 1.3 billion people who rely on basic biomass-wood, crop wastes, charcoal, dung etc. for cooking to stay alive; about 250 million are in India (the number can go up to 300 to 400 million -when kerosene/LPG costs go up).

live with constant energy problems (‘load shedding’ became part of our everyday language!). There were some anxieties about oil product supplies during the 1971 war, but apparently not enough to start a new energy policy. (Refineries run by American companies in India were nationalised after the war, though)

India was hit hard by the oil price crises of the 1970s. It went through austerity and an Emergency, and constant worries about escalating prices and trade deficits, till the Bombay High oilfield provided some relief in the early 1980s. However, we did not actually face a crisis till 1990 when economic growth accelerated faster than the energy supply for many years. The financial crisis of 1991 began with an oil crisis.From my vantage point heading the Indian Embassy in Iran in the first few months after Saddam Hussein occupied Kuwait, I was witness to the panic in Delhi over oil supplies, not just prices, as the prospect of war briefly closed shipping out of the Gulf. The 1991 financial crisis started with an energy crisis.

India confronts the uphill task of maintaining its strategic autonomy and environmental responsibility in the face of an increasingly worsening energy crisis.

The article is based on the talk by Mr Ranjan Mathai and the ensuing discusions held during the Synergia Breakfast Series 4 on India’s Energy Dilemma.

The 1990s thus highlighted the importance of energy for a now fast-growing Indian economy. Some reforms were initiated- private sector coal production, oil and gas sector reforms, beginnings on wind and solar power, and plans for scaling up hydropower and nuclear energy etc. Energy efficiency was emphasised, and from 1990 onwards, the energy intensity of economic growth was reduced, and Energy Efficiency became an industry, or service, on its own.

2003-2009 were boom years for the economy. This was the era when the Indo-U.S. nuclear accord was signed, and India and the rest of BRICS were supposed to initiate a new world order by 2020. For us, that era ended with the global economic crisis, oil price inflation and domestic scandals- including, significantly the intensely political one over coal production. This was also a period when global attention to climate change increased western pressure on India to conform to a new set of rules on carbon emissions relating to energy and industry; made by western rule-makers- which we argued back and forth.

And then the issues we analyse here took their present shape- economic growth, climate and planetary responsibility, strategic autonomy and energy sufficiency, making up the Quad of India’s dilemmas.

ENERGY POVERTY

Energy Poverty is a critical component of India’s energy crisis and is not often spoken about. It is estimated that in the whole world, there are 1.3 billion people who rely on basic biomass-wood, crop wastes, charcoal, dung etc. for cooking or just to stay alive; about 250 million are in India (the number can go up to 300 to 400 million -when kerosene/LPG costs go up).

With 18 per cent of the world’s population, India consumes only 6 per cent of global primary energy. Targeted economic growth will raise this to at least 11 per cent by 2040, i.e., doubling India’s share of global consumption even while the rest of the world is also growing.

India will perhaps have the world’s largest population by the end of this year and will be 3rd largest economy by 2030. But our national economic growth target is to become a developed nation by 2047, which is something else. This goal requires many prerequisites like modern agriculture with less human load, a shift to manufacturing -possibly as a global hub and greater exports, advanced service sectors beyond IT, quality and

affordable healthcare & education, modern infrastructure and efficient logistics- which translate into “Energy, Energy, Energy”, just as Lenin summarised the ambitious economic plans of the USSR in its early days as “Elektrifitzia, elektrifitzia!”

Adequacy of energy means that domestic energy production and use must expand more rapidly and with greater reliance on domestic resources than ever in our history. Simply put, Indians must use every available commercial energy source. This is necessary both in the domestic and the global contexts; the energy scene will become ever more challenging, with access to resources being a primary challenge in the context of both domestic and foreign policies.

The global context shifts from globalisation and offshoring of economies towards increased competition or conflict and a concomitant shift towards self-reliance and “friendshoring”. And energy is now a weapon of competition and perhaps war.

So, the domestic context has to change if we want Strategic Autonomy; or, more simply, to retain our independence of action based on national priorities.

GREEN ENERGY

On Climate Change, India has ceased to be on the defensive and has sought to be a leader. Under PM Modi and with industry and public leadership of civil society organisations, India has embarked on a truly worldclass expansion of green energy, signing on to the Paris Accords, setting Nationally Determined Contributions (NDCs) targets and creating the International Solar Alliance (ISA) etc.

First, the target for Renewable Energy (RE) was raised to 175 GW from 100GW (The current total power capacity is 360-400 GW). From 175 GW earlier, PM has now raised the target to 500 GW by 2030 – out of a likely total of 820 GW. This means almost tripling present production of RE, which today stands at 165 GW. (Solar 59, Wind 41, Hydro 50, Biomass/co-generation 10). The PM also committed India to achieve Net Zero Emissions (NZE) by 2070 and raised India’s ambition to be among the leaders of the Green Transition.

India can marry the self-sufficiency target to achieving Net Zero Emissions (NZE) by 2070 by speeding up solar (including solar thermal), wind power, and nuclear and natural gas. (Both of the latter must be included in clean, if not technically green, energy.) It will also

of

RANJAN MATHAI Former Foreign Secretary of India.

India confronts the uphill task of maintaining its strategic autonomy and environmental responsibility in the face

an increasingly worsening energy crisis.

need Energy Storage Systems (ESS), Electric Vehicle (EV) infrastructure, Hydrogen and synthetic fuels (including from biomass) for transport and the chemical industries.

These are massive opportunities for manufacturing industries of the future. But they will require massive investments, which is recognised, as well as newer and more affordable technologies, which is less recognised. And they will create new dependencies not only on items like solar panels, heliostats, and electrolysers but also critical minerals, metals for catalysts, rare earths, minor metals like tellurium, cadmium etc., which, if at all recognised, are not talked about.

The solar industry – basically solar Photovoltaics (mainly crystalline PVs-for power plants, and some solar thin film PVs), solar rooftop plants, etc.- has grown fast and can be considered a success story of scale and affordability.

India now has solar parks producing 2500 MW(2.5 GW) each, among the largest in the world. But the constraint is that the plants are based on imports of modules/panels etc., and the industry is now facing difficulties in the switch to self-reliance.

India is now learning that the constantly repeated story of the decline in solar electricity prices owes as much to Chinese mass production as to technological ad vancement.

Plentiful sunshine makes solar an obvious option for India. To be self-sus taining, the solar industry needs vertical integration like China-starting from processing polysilicon to making modules and panels and setting up the power plants using more Indian equipment. There is also a greater need for R&D on new materials like perovskites which can increase the efficiency of the solar conversion of panels etc. India can learn from the experience of Morocco, Spain etc in establishing large solar thermal plants (500MW) using concentrated heat/steam to drive turbines.

The Wind sector in India can grow, with a theoretical capacity of 300GW. Realistic capacity is a fraction of that because of space limitations, wind speed in suitable onshore locations, efficiency of turbines, and intermittency.

The industry needs domestic investment in materials for giant wind blades suitable for both onshore and offshore wind, as well as turbines and permanent magnets for high efficiency. Energy Storage Systems (ESS-mostly battery storage) are needed to deal with the problem of intermittency of solar and wind power. The issue has received policy attention, but the challenge undertaken by the National Mission for ESS is massive- to increase from 1 GWH capacity in 2019 to 33 GWH by 2032.

EVS

Transport is a major source of pollution in addition to carbon emissions. Ensuring a switchover from petrol/diesel to EVs is therefore vital for a sustainable Green Option. A few figures will illustrate the size of the challenge ahead of us. India has 1.3 million EVs, which is great, but we have 270 million vehicles of all types, i.e., penetration is less than 1 per cent if all forms of transport are considered. In the two-wheeler segment, EVs are now 5 per cent of new purchases, but our EV targets for 2030 are: 2/3 wheelers -70 per cent, buses -40 per cent, and cars -30 per cent.

According to one calculation, this level of penetration with current battery technology will require 500,000 charging stations; today there are approximately 2500 charging stations! And 65,000 petrol stations have been set up over the last seven decades. Looks like another long road ahead.

Growth of the 2/3-wheeler EV industry has been very rapid, but batteries are imported from China. We have a long way to go to build the necessary EV infrastructure, but this is one area where Govt-industry partnership is beginning to show results. But the battery story takes us from batteries to battery materials, i.e. critical minerals

INTERLINKAGES WITH CRITICAL MINERALS

Critical minerals are essential for converting solar and wind energy into usable electricity because of their electronic, optical or magnetic properties.

China currently dominates the global market for the mining, processing and manufacturing industries of critical mineral industries needed for future energy requirements. (In the Solar energy sector, China’s manufacturing has grown from about 1-2 per cent of world capacity in 2000 to almost 80 per cent today; similarly, China dominates the production of EV batteries). The reason is that these processes, from mine to final product, are not just technically complex but dirty, polluting and energy intensive.

So, the world was, until now, happy to leave the dirty work to China; it is now waking up to a new risk as geopolitical tensions grow. India, in particular, cannot afford to be complacent about its dependence on China. Replacing dependence on the Gulf for oil, with dependence on China for newer energy requirements, is a national security hazard: whether it is for rare earths, products made from rare earth like permanent magnets, solar modules/panels, and even polysilicon etc. Vertical integration is needed to guarantee security and friendly foreign supply chains such as the ones initiated with Australia.

In 2019, a joint venture company namely Khanij Bidesh India Ltd. (KABIL) was set up with the participation of three Central Public Sector Enterprises, Na-

tional Aluminium Company Ltd (NALCO), Hindustan Copper Ltd (HCL) and Mineral Exploration Company Ltd (MECL). The objective of constituting KABIL was to ensure a consistent supply of critical and strategic minerals to the Indian domestic market. Apart from making some desultory efforts in Latin America, KABIL has not achieved anything significant.

Exploration, mining, refining and processing of critical minerals in India are essential for the green transition. There are many critical minerals in which 3-4 countries dominate world output. OPEC’s monopoly or cartel will look weak compared to what a critical mineral monopoly could be.

Some minerals like rare earths have uses in defence, telecom etc., in addition to energy, and a supply squeeze would mean an economic and security crisis-not just an energy crisis, which is why President Trump regenerated the U.S. Strategic Mineral Stockpile in 2017.

Does the earth have enough of some minerals like platinum if a transition on the scale now envisaged takes place? (The OECD says production of the platinum group of minerals must increase by 150 times!) Perhaps there are technological alternatives to the minerals, but right now, whether research has viable answers is not available in the public domain. Most tech alternatives take years to pass the ‘Valley of Death’ before commercialisation; a process which could take decades.

HYDROGEN

Hydrogen can be a real game changer among green energies with its uses for heat in industry, fuel cells for

transport etc. In addition to the Govt’s National Green Hydrogen Mission, the private sector has ambitious plans to make India a world champion in Hydrogen production and affordability. But there are serious technical challenges before Hydrogen can be scaled up.

Green hydrogen producers find Proton Exchange (PEM) tech more suited to the intermittent green electricity supply, even though it uses costly, scarce metals like platinum, compared to the cheaper Alkaline Electrolysis technology. So, switching to grey or blue or green Hydrogen on a mass scale may need more R&D. This will not be easy to scale up quickly. A partnership with Japan would be useful.

Hydrogen is also explosive and needs to be handled with care. Risks should be recognised upfront, which is not seen in the media coverage.

BIOMASS /WASTE TO ENERGY

The use of ethanol for adding to petroleum is being actively promoted. But caution would be advised as using grains or sugar to extract ethanol is a food diversion at a time of hunger and is wasteful of water in a water-poor country. Using crop residues for biofuels or waste-to-energy is a better solution.

Still, it requires more advanced enzymes than are currently available or new gasification technology (like high-temperature plasma gasification-already being used- but must be made affordable). Otherwise, we will face more ‘NIMBY’ protests over waste-burning plants than at present. Work has just started on methanol, which is great, and like the waste-to- energy, it can solve

GRID MANAGEMENT

Grid management will be another real challenge once green energies take up a bigger share of electricity generation. It is universally recognised as a key, and ongoing challenge, which brings to fore the issue of baseload management and the continuing role of fossil fuels in meeting India’s requirements for at least three decades more -till 2047 or beyond.

HYDRO AND NUCLEAR OPTIONS

Hydropower capacity has grown from 2.5 GW at independence to over 50 GW today. But there is a huge social cost behind the success story. And maybe environmental costs too, which are yet to be calculated- but we have seen disasters in fragile Himalayan ecosystems. So, we will continue on this route, but we must move ahead cautiously on large hydro projects involving storage systems.

Nuclear power grew from 0 in 1947 to around 7000 MW in 2020. We can be proud of the creation of a Vertically Integrated full cycle created by Indian scientists/ engineers; and their advanced level of R&D for taking India on an independent path.

But more recently, despite promises after Indo-U.S. nuclear accord, growth has been slow because of cost factors, public apprehensions and problems created by our liability law. It may be recalled that in 2005 it was hoped to reach 20,000 MW by 2020.

Today Small Modular Reactors are being presented as the future. India has built nuclear plants with units producing 225 MW each, so the plans for making smaller plants of 100- 200 MW should be no big deal. The Modular element could be a game changer introducing time and cost efficiencies, and India should seek out partners who are implementing such models.

It must be stressed that nuclear is an optimal solution for reliable, large-scale, baseload electrical capacity in a post-coal era, as the French experience from 1970 to 2020 has shown. (And shows up the hypocrisy of the German ban on nuclear, as they bought French nuclear-generated electricity!)

India needs to step up its indigenous 700 MW reactors and find a publicly acceptable way to go beyond the great achievements of Indo-Russian collaboration and start planned projects with France and the USA. This will, however, require the import of enriched uranium, which can create dependencies; it may be noted that today everyone in the world is looking around for alternatives to Russia for nuclear fuel; India does not want to go down that path a few decades later!

Hence strategic autonomy requires going back to the long-term vision of Dr Bhabha’s three stages: First Pressurised Heavy Water Reactor (PHWR), second Fast Breeder Reactor (FBR) and third, the Thorium based

KUMAR NAIK, IAS

Additional chief secretary at the Energy Department, Govt of Karnataka

One of the important routes is to produce largescale hydrogen and export it by ship. So, if that were to happen, we need to have a green source of energy and transmission of this green source of energy to the place where the hydrogen is being produced, and mostly it would be along the coast.

Advanced Heavy Water Reactor (AHWRs).

Suppose we can get to stage 3 and use our vast domestic thorium reserves. In that case, we would have solved two energy challenges- energy availability and access, self-reliance and security! Affordability remains to be tested and requires speeding up the thorium programme. (there are also new Thorium-based reactors like the Molten Salt Thorium SMRs being built).

Fusion energy is for the distant future. India has only has a small experimental programme, but it has been included in ITER (the International Thermonuclear Experimental Reactor), which plans to set up an operational magnetic fusion plant by 2035. As the Indian Ambassador in Paris I was privileged to interact with Indian teams setting up the facility in Cadarache, in southern France.

FUTURE OF FOSSIL FUELS

Transitioning to Green may take 2-3 decades but ending the energy poverty of Indians cannot be delayed that long. Which means we have to increase energy output from fossil fuels now! Even with increased electrification and energy generated from renewables, our accelerating growth in energy use will increase coal, oil and gas requirements very substantively for at least the next 2-3 decades.

Coal is well known as the most polluting fossil fuel. But coal is the foundation of our power system, and any coal shortage will cause an economic crisis in the short term. India must invest massively in clean coal technologies. We also must find socially acceptable ways of mining enough coal in India rather than resorting to imports, as we have done, ever since political controversies and judicial intervention have slowed down the domestic coal mining industry over the last decade.

More emphasis has to be given to natural gas as the bridge fuel for reaching Green goals by 2040. (The U.S. lowered its emissions and passed on to China the Gold Medal of becoming No1 polluter of the world because it began the shale gas revolution from 2006-2015 and gas replaced coal).

The problem of lack of support for the exploration and production (E&P) of natural gas must be overcome, and

a maximum possible increase in domestic gas production achieved. That alone can make gas more affordable and become the solution to increased access to LPG, CNG, city gas, cleaner electricity, and lower subsidies for fertilisers and food.

Oil is the economy’s lifeblood for all modes of transport, pharmaceuticals, chemicals for everyday life, petrol/heavy fuel, oil/aviation fuel for the defence forces and national security. (Green activists have not yet got viable alternative feedstock for paracetamol!).

And we should never forget that diesel generators are the standby for all electrical shortages/emergencies in India and literally keep us alive.

(It is estimated that private users have put 90 GW of diesel generators in place- almost equal to solar and wind power capacity combined). Studies by the International Energy Agency (IEA) in 2020 showed that even in best-case scenarios for energy transition, in 2040, India will consume even more oil than the 5 million barrels per day that we presently use.

Should we risk continuing to be over 85 per cent dependent on foreign crude oil suppliers for our defence needs when facing two enemies on our borders? What if another crisis leaves the Hormuz Straits closed for even a few weeks?

The current oil market turmoil in India reflects our failure to produce more oil since production peaked in 2010-11. The present Government started with the luxury of low oil prices from mid-2014 when prices crashedand much of its economic agenda was achieved by continuous petroleum tax increases, which now cannot be reversed without causing a serious fiscal crisis - close to 25 per cent of indirect taxes are from petroleum.

The oil import bill will now soar higher than the $130 billion of last year, and there will be an increased trade deficit (Current Account Deficit is reaching a high of 4.6 per cent of GDP) and pressure on the rupee.

Other countries are lecturing us about buying Russian oil, and remember, the entire world will soon depend on a handful of suppliers if the Greens stop investments in the West, and by International Oil Companies elsewhere in the world.

Strategic autonomy as a goal will need a step up in the domestic production of crude oil. We must also expand our strategic reserves to at least three months’ requirements from the present three weeks.

The domestic oil and gas production sector face critical challenges of extraordinary taxation (e.g., service tax on royalty) and regulation. Strangely, importing oil is easy from the standpoint of regulatory controls and tax burden, but producing oil in the country is full of rules and taxes! Why this persists leads to questions difficult to answer; but the relentless decline in domestic oil production over the last 10 years points to abject failure of government policy.

ROLE OF PUBLIC LEADERSHIP

Public leadership of energy cannot- in the 21st century – be left to political leadership. The Govt obviously has the first role- to provide laws, regulations etc., to make India a developed nation with adequate energy as the sine qua non.

While India has made the Green Option the primary goal with new vigour, we must remember we are in 2-3 decades of transition and must get energy from every source. And civil society, including Think Tanks like Synergia, have a role in getting public support for the

RENEWABLE ENERGY INVESTMENT SINCE FY2019/20

compromises necessary for energy production and distribution, access and affordability. The industry has a greater responsibility; to implement best-in-class practices for minimising environmental impact and making local communities’ stakeholders.

The E&P of natural resources- whether lithium for green batteries or oil- must start with an “end of mine” plan, which requires producers to work ahead on reducing the environmental impact of their operations and restoration of the mined areas. But mining cannot remain a synonym for quasi-criminal activity in popular perception.

CONCLUSION

The world has to act on the belated recognition that saving the planet through the Green Option can work ONLY based on climate equity and justice in sharing the remaining carbon space left for the planet before 2050. The latest IPCC report still leaves India way behind (20-25 per cent of the West’s GDP/energy consumption per capita) to keep the planet at 1.5C higher than pre-industrial levels.

The Indian Prime Minister has promoted the concept of LIFE- Lifestyle for Environment as the principle for the world to live attuned to the environment: But I think we have to be blunter- who created the mess we find ourselves in? And how do we end our poverty? Our insistence on Common but Differentiated Responsibilities goes back a long way- reread the script of PM Mrs Indira Gandhi at the very first UN/International Conference on the Human Environment -1972 Stockholm. ( She was one of only two Heads of State/Govt who cared enough to attend; the other was Sweden’s PM- the host!).

It is from there that economic/social development was deemed a co-equal pillar of the Human Environment and poverty deemed one of the worst forms of pollution-albeit not of carbon emissions.

Can we implement drastic energy reform at home and get a new global compact on technology and resource management for a new Green Era? This is a saga that is still unfolding. But for India it is important to recall Barack Obama’s words: “A nation that can’t control its energy sources can’t control its future”.

EXCLUSIVE CONVERSATION WITH MAURICE GOURDAULT -MONTAGE

SMALL MODULAR REACTORS (SMRS) AS THE WAY FORWARD?

Considering the necessity of increasing power generation and handling the climate change issue with more nuclear power in the energy mix, the SMR appears to be the “smart” and “small” solution. It represents a turning point for the nuclear sector. Being amongst the few countries which have been running nuclear power plants for decades, India has proved its skills in the field of engineering. It already has all the capabilities to manage the whole industrial process of building big nuclear plants mastering all the liabilities. This is to be seen in building six EPR plants of 1100 MW each in Jaitapur (Maharashtra) in cooperation with French EDF following the “make in India” concept. These six plants will cover the power requirements of about 70 million people.

Now the SMR with a production capacity from about 30 MW up to 300 MW represents the next step on which many countries are trying to develop a prototype. If the development costs are still high, waste treatment is less, and building delays are shorter. So far, only two countries have commissioned SMRs with their technology - Russia with a floating SMR and China. Some other countries like the U.S. with the Japanese Hitachi, France, the UK, Romania and Canada are developing their own projects. India, as the Government has announced it, is in the capacity to build its own SMR in the future. As for every country, it is a matter of in-

FUTURE OF FUSION ENERGY IN PRACTICAL TERMS

Fusion has been a dream for the last 50 years. During the cold war, the U.S. and Russia were allocating significant amounts to the development of fusion. The main advantage is that this way of generating power is completely clean, with no carbon emissions or nuclear waste. Indeed, the U.S. has recently achieved an important step forward: a research laboratory has announced that the produced energy was more than the energy consumed during the experiment.

But nuclear fusion is a long quest. It will still take many years to replicate what is seen as the equivalent of solar energy. With ITER as the international venture based in the south of France and using a civil nuclear research Tokamak reactor, one carries out peaceful cooperation gathering 35 countries, including the U.S., India, China, Japan, and Russia. ITER, by its size, has been compared to the Apollo project. The first plasma pro duction should take place in 2030.

Then a second research reactor will be needed before production. The reality is that some more years will be needed and that one is still far from commercial

MAURICE GOURDAULT-MONTAGNE

Former adviser to President Jacques Chirac and Principle Coordinator for the Nuclear deal with India

dustrial competitiveness and a technological challenge.

ON MAINTAINING STRATEGIC AUTONOMY IN ENERGY SECURITY

We are in a new age of great competition by superpowers. The Russian invasion of Ukraine pushed the world into the first truly global energy crisis: 1973 was only an Oil Shock, but now Oil, Gas, Coal, and electricity prices are skyrocketing unprecedentedly. Governments’ commitment towards carbon neutrality does complicate the situation.

Security of energy supply basically rises in diversification. The lowest-hanging fruit is energy efficiency and conservation. Then comes diversifying energy sources with diversified origins and transportation methods. Countries are taking different approaches due to their different resource availabilities. Many countries enhance energy security by accelerating decarbonisation using indigenous renewable energy sources. Governments’ active intervention under the name of green industrial policies is replacing liberal and open market-based trade systems.

There are Winners and Losers. EU will be a winner if the REPowerEU plan succeeds and Carbon Border Adjustment Measures be enforced. The U.S. will be a winner. Fatih Birol said that Inflation Reduction Act is the single most important energy and climate action by any country since the Paris Accord in 2015. China is trying to be a Renewable Superpower as a major player in the supply chain of the low carbon economy. Saudi Arabia may avoid stranded-assetization of oil and gas if it invests in CCUS and blue Hydrogen. ASEAN needs an af- fordable and sustainable transition with LNG, H2 and CCS. Rus- sia seems least prepared for the climate shock. West - ern Sanctions on technolo - gy, self-withdrawal of invest- ment, expanding military expenditures, and increasing brain drain may hurt its ability to adapt. India can be a winner if enough investment happens

to extend the use of solar and Hydrogen.

For Japan, probably the most important but difficult test to be a winner may be if nuclear power gets public trust back. PM Kishida’s chairmanship at G7 Hiroshima summit may trigger retaliation by Putin to stop the LNG supply from Sakhalin. Can Japan restart nuclear reactors before the summit? Who knows.

HYDROGEN FOR THE GREEN FUTURE?

In the race for decarbonisation, Clean Hydrogen will be a solution for hard-to-abate sectors in emerging economies where heavy industrial infrastructure is still young relative to developed countries. To make this game-change, we need to scale up the demand and cost reduction for clean Hydrogen. Japan started importing Liquid Natural Gas (LNG) 50 years ago from Alaska and, since then, commoditising LNG and enabling its golden age. Japan is trying to do the same for Hydrogen by introducing three ways of transporting Hydrogen: Liquified Hydrogen, MCH (Methylcyclohexane) and Ammonia. We don’t know which method prevails, but ammonia seems to lead the race with JERA’s co-firing clean ammonia at its coal thermal power plant. This can be a model for Asian countries that continue to use coal or gas-firing power plants for now.

With its huge potential for solar power,, India may have a different option. Solar electricity has become cheaper and generates affordable Hydrogen by large-scale electrolysis, then transported to industries through a dedicated pipeline. The distance of transportation by pipeline is much shorter than oversea transportation by liquified Hydrogen or MCH; thus, the cost would be affordable. Clean Hydrogen can be used to generate electric power as peak load electricity and as a backup for volatile solar or wind, low carbon transportation by commercial FCV fleet and clean fuel for heat in heavy industries. To make this happen in a timely manner, government intervention in deploying the hydrogen market with carbon pricing is essential. Investment by private sectors would happen only when government signals provide certainty of future prices. Predictability by direct deployment policy becomes more essential than R&D support measures.

NOBUO TANAKA Executive Director of the International Energy Agency

ON NUCLEAR POWERED ELECTRICITY GENERATION

Nuclear power development in India is a part of our autonomous approach to developing self-reliant capability in all aspects of nuclear technology to meet national needs. While India remains a champion of total universal non-discriminatory nuclear disarmament, India had to develop and deploy a credible minimum nuclear deterrent to deal with her national security fol-

lowing a well-recognised responsible approach. Naturally, there have been international barriers and embargos on India regarding nuclear technology. Despite teh hurdles, India has been very successful in developing and deploying an indigenous comprehensive nuclear power programme. Today a nuclear capacity of 6780 MWe is operational. Another 6700 MWe capacity is under construction, and a further 9000 MWe capacity addition has been sanctioned for which the work is already in progress. With this, India can expect to reach a nuclear

GENERATING CAPACITY OF 22,480 MWE BY 2031 .

Indigenous Pressurised Heavy Water Reactors, which form the mainstay of our nuclear power programme, have a track record of globally being among the best performers and with significantly lower capital outlay. Thus the 700 MWe Indian PHWR must continue to be the workhorse for rapid large nuclear capacity addition in India. We must develop strategies for doing so by bringing in additional implementation vehicles (NTPC in addition to NPCIL, for example), better policy support and access to low-cost finance. This effort should be supplemented by additional capacity being established through international civil nuclear cooperation.

Globally, there is a significant interest in deploying Small Modular Reactors (SMRs) given their better suitability where capacity addition needs are mar ginal. Their competitiveness depends on an econo my of high production volume, which may become a reality given large integrated demand globally to address the net zero target. However, such a demand would take time to pick up. Further manufacture of nuclear power plants in India would remain much cheaper than such manufacture being done in advanced economies.

Talking about the Indian scene, our energy needs to support a quality of life comparable to the best in the world, which would need us to create energy access to around 28,000 TWh/yr of clean energy. All renewable energy forms put together are unlikely to be able to meet this need. We thus require very large nuclear capacity additions in India. Thus, the large indigenous systems are essential, and as stated above, our 700 MWe PHWR should be the main product to reach our nuclear capacity addition needs. However, we do expect a large number of old coal plants to retire in the near future. In view of the criticality of available sites and readily available infrastructure (transmission, water, rail etc.), indigenously built SMRs (for example, by BARC and NTPC) that can be accommodated at such sites (meeting all safety requirements) can offer a good marginal capacity addition solution.

Given India’s considerable experience building and running the world’s cheapest and best-performing nuclear reactors amenable to rapid indigenisation, India can certainly become a world leader in contributing to the rapid clean energy transition the world is looking for. Leveraging Thorium-HALEU fuel (for example, ANEEL fuel developed by CCTE) in PHWR can make Indian PHWR even more attractive for this purpose, creating a win-win situation for India and the world.

ON FUSION ENERGY

While the renewed interest in nuclear that we see presently is driven by the need to realise the transition to clean energy at the earliest, the energy needs of humanity would grow even beyond the world, reaching net zero and would continue in perpetuity. Sustainability in this context would necessitate access to the vast energy potential of nuclear energy (both fission and fusion). While fission-based nuclear power technology has matured to the level of supplying large-scale commercial electricity, and its potential can be further enhanced through the use of thorium in addition to uranium, fusion energy is the next frontier humankind is working on.

This is a complex technology development at the proof-of-concept stage for both magnetic and inertial confinement strategies. Large outlays are involved, including through collective international efforts. There are recent success stories in demonstrating net fusion energy release with both strategies. The challenge of sustained net energy release continuously and its conversion to electricity or other usable energy forms, as well as demonstrating a fusion power plant, are the next frontiers to be crossed.

Talking specifically in the context of the ITER project in which India is partnering with the international community, one expects to test the first plasma in 2025 and full fusion in 2035. Building a Demo plant may take another 10-15 years, which could be expected to open the doors for commercial fusion power. The long gestation period over which the fusion technology development (both magnetic as well as inertial) is taking place has also seen concurrent improvements in the component technologies involved (better superconducting materials, higher magnetic field etc.). As a result, new concepts are being proposed which appear more attractive. One will have to wait and see the practical implementation of fusion technology, which will certainly be realised one day. Our Institute of Plasma Technology has been pursuing the development of plasma and fusion technologies as-along with BARC and other laboratories and Industries in the country, the ITER India project based at IPR has made significant in-kind contributions to the ITER project. Participation of Indians in ITER is expected to create access to larger system-level intellectual property across the entire ITER project on which India can build the fusion technology further.

ANIL KAKODKAR

Chancellor, Homi Bhabha National Institute, Chairman, Rajiv Gandhi Science & Technology Commission, Former Chairman, Atomic Energy Commission.

CHALLENGES FOR THE WORLD IN 2023

We analyse the important challenges likely to manifest and be addressed by the world at large this year.

The Year 2023 is likely to be remembered as one when the world emerged from the COVID-19 Pandemic. It may also be remembered as the watershed year for a new multi-polar world, profound changes to the world order and reforms to the global economy.

CHALLENGE 1: THE FUTURE OF DATA

In the last few years, there have been many reported cases of data-theft (including Facebook, Syniverse, Microsoft, Amazon and Twitter). Some governments have introduced Data Privacy Laws (like GDPR- General Data Protection Regulation, for UK and EU), and others, like India, are in the process of making suitable national laws. However, this approach to data-theft suffers from two serious shortcomings.

Firstly, little has been achieved to retrieve the stolen data, which continues to be sold on the Dark Web and Deep Web, for a price.

Secondly, stolen data in cyber space, like international crime, operates in trans-national spaces that have very limited national jurisdiction. At this juncture, national data-protection laws appear to be ‘too little too late’; and, in a sense, tantamount to locking the stable doors after the horse has bolted. The global response to data theft has, indeed, been inadequate.

We live in an increasingly connected world, where despite challenges, knowledge is becoming free, and people across borders are interconnected and communicating. People’s power has never been stronger in human history.

Q. What will happen if this inadequate approach continues?

TWO DEVELOPMENTS COULD TAKE PLACE, AS UNDER: -

(a) The Conventional Response: Secure the Future. Many security professionals believe if we cannot retrieve lost data, let us at least secure future data. Quantum & Block-Chain technologies have the potential to secure data from further theft. These technologies will certainly be adopted by progressive governments and companies.

(b)The Social Response: Adapt to the New Normal. Unlike the current & older generation, the younger generation is socially less concerned about privacy. Mankind could become more tolerant to Data-Visibility while continuing to be concerned about Data-Security. Data-Visibility is akin to showing off one’s fancy house and luxury car in cyber space.

Security professionals may prudently warn that

Maj. Gen. Moni Chandi is the CSO at Synergia Foundation & a former Inspector General of the elite National Security Guard.

such showing-off may unnecessarily draw attention from criminals & thieves. However, the mere act of showing-off neither justifies data theft nor excuses security agencies, who continue to be responsible for preventing data theft, which remains a crime across all nations.

Assessment: In 2023, progressive companies will work towards securing personal data through new technologies of quantum and block-chain technologies. National laws are likely to continue to remain inadequate in protecting the global commons from data-theft. Society is likely to become more tolerant towards data-visibility while continuing to demand more effective measures against cyber-crime.

CHALLENGE 2: GLOBAL SEMI-CONDUCTOR (GSC) INDUSTRY

Q. What are the Geo-Political imperatives for the GSC Industry?

Geo-Politics of Manufacture. In 2022, the US contribution to the GSC Industry was 12% by revenue, while that of the PRC’s was a healthy 25%. More importantly, 75% of the manufacturing was in enterprise-driven economies (China, Taiwan & South Korea). Notably, one Taiwan Company TSMC (Taiwan Semi-Conductor Manufacturing Company), produces an astonishing 90% of the most advanced semi-conductors.

Technology Transformation. TSMC is the world leader in producing semiconductors in wafer sizes of 7nm. Further, at their production plants (in Taiwan, Shanghai, Nanjing and one even in the US) production in 5nm sizes began in 2020, and 3nm was expected to begin in 2022. The plan for a shift to 2nm wafer size is planned for 2025.

Assessment: TSMC continues to hold the leading edge in the GSC Industry, and it is unlikely that any competitor (Samsung or Intel) will be able to catch up in the near future. TSMC’s largest trading partners include the PRC, US, EU and Japan. This global strategic dependence on TSMC has made Taiwan a dangerous flash point. The potential for conflict in the South China Sea was evident during US Speaker Nancy Pelosi’s visit to Taipei in August 2022.

Q. What are the Focus Areas for R&D in the GSC Industry?

The trend is towards smaller wafers sizes, from 10nm to 7nm to 5nm to 3nm and now onwards towards 2nm sizes, are being planned. VLSI (Very-Large-Scale-Integration) is the process of integrating billions of transistors onto a single chip to create integrated circuits (IC).

Initially (in the 70s), VLSI had applications in the manufacture of computers, mobile phones and automobiles. However, it now has applications in machine learning, AI, robotics and 5G communications, amongst

other leading sectors.

Q. What are the Prospects for the GSC Industry?

US Policy. During the period 1980-90, the US was the leading manufacturer of semi-conductor chips (37%), which fuelled the computer and TV revolutions. However, since then, US contribution has declined to just 12% by revenue.

US semi-conductor dependence on enterprise-driven economies was exposed during the Pandemic. The US Government has initiated strong measures to overcome this challenge. In 2022, the US Congress passed the Chips & Science Act, providing US$ 280B in funding, to boost domestic research & manufacturing in the US.

Immediate Future. Gartner (28 Nov 2022) points out that the market is polarised between consumer-driven economies (US & Western Economies) and Enterprise-driven economies (China, Taiwan, Korea).

The polarisation, aggravated by the Pandemic’s after-shocks of global inflation & higher interest rates, may hold back the GSC Industry’s growth in 2023. However, in 2023 strategic developments in both technology & policy may impact long-term prospects in this strategic sector.

Long-term Prospects. New tech developments are making chips smaller and more powerful. Tiny chips powering modern electronics are literally shifting the boundaries between the possible & impossible. Modern chips are so powerful that they can house 100B transistors on a single wafer. Chips are being touted as the ‘New Oil’ in a future market.

Q. What are the Strategic Threats & Opportunities in the GSC Industry?

Threats & Opportunities to the GSC Industry stem from the dependence of consumer-driven economies (US, Western Economies) on enterprise-driven economies (PRC, Taiwan, Korea).

Supply chain vulnerabilities in the GSC Industry are a national security threat which needs to be addressed by nations. It is NOT easy to create alternatives to TSMC; high entry barriers to include technology threshold, finance capital, and tech-manpower, are some of the challenges.

Assessment: Strategic Threats & Opportunities. Three geopolitical scenarios, that could play out in 2023 are as follows: -

(a) Will the PRC take control of TSMC?

(b) What will the US do if the PRC does take con-

trol of TSMC?

(c) What alternatives do the consumer-driven economies have to TSMC?

References. Paul Raj, Professor Emeritus Stanford University; Michael A Peter, Semi Conducts, Geopolitics & Tech Rivalry, 31 Aug 2022; Semi-Conductor Association of the US (SIA), State of US Semi-Conductor Industry in 2022; Gartner Forecasts, Worldwide semi-conductor Revenue Growth Decline to 3.6% in 2023

CHALLENGE 3: TRYST FOR GLOBAL SUPREMACY

The PRC, is already the largest economy in the world, by PPP calculations. In 2023, as the PRC emerges from a late surge of the COVID Pandemic and its disastrous ‘Zero Covid’ Policy, the Chinese Economy is likely to recover and resume its dominance over the World Economy.

China’s Belt & Road Initiative (BRI), its grand strategic initiative to gain acceptance in the world order, has suffered serious setbacks because of the pandemic and its association with unreliable political regimes (Pakistan & Myanmar).

Assessment: The PRC is currently the only country with resources to pursue transnational infrastructure projects on the scale of the BRI. When they revive the BRI in 2023, will the PRC be open to dealing with more stable political regimes? India has legitimate concerns about the CPEC (China-Pakistan Economic Corridor) being constructed in the disputed territories of J&K without Indian approval.

Q. Will 2023 provide an opportunity for India and the PRC to resolve the historical border issue, as a prelim inary step towards more inclusive participation by India, in BRI proj ects?

CHALLENGE 4: FUTURE OF THE PETRO-DOLLAR

The US Dollar moved away from the Gold Standard, by US Presidential ordnance, in 1971. By removing the standard, the Federal Reserve of the US, became free to create a new currency. Theoret ically, this should lead to monetary inflation; but in this case, the impact of potential inflation was absorbed by increasing global demand for the Green Back.

Further, International demand for the US Dollar was consolidated when it became the currency for the most traded item in world markets, Brent Crude Oil.

The US dollar is a national currency, unregulated by a world reserve bank or any other similar mechanism and yet it has remained the world’s premium reserve

currency for almost seven decades.

Many economists have warned about the strategic vulnerability of the US dollar. In 2022, Saudi Arabia and Russia were the top two exporters of oil in the world. While the largest importers remain the EU, the PRC and India.

Assessment: There is growing realisation in the global Oil & Gas Industry about the strategic vulnerability of the US dollar. Will the creation of alternatives to the Petro-dollar diminish its role as an international currency? Ironically, would that benefit otherwise bankrupt nations like Venezuela, Iran, Sri Lanka and Lebanon, which are dependent, excessively on the US dollar?

Q.

currency that could finally end the inflationary monetary policy the world has witnessed since President Richard Nixon placed his signature on the Presidential Ordnance in 1971?

CHALLENGE 5: RUSSO-UKRAINE WAR

Later this month (February 2023), the Russo-Ukraine war will enter its 2nd year. Despite daily dosages of the senseless violence in the media, the belligerents seem NO closer to a ceasefire than they were a year ago. What prevents Presidents Volodymyr Zelensky and Vladimir Putin from seeking resolution through dialogue rather than on the battlefield?

Georges Clemenceau, the 20th-century former PM of France, famously said, “War is too important a matter to be left to Generals”. Obviously, in the Russo-Ukraine War, there are strategic considerations by other players that prevent the principal belligerents from negotiating a cease-fire. Who might those other players be? What are those considerations that are more important than the tragedy of Ukraine?

Assessment. There are two possible strategic reasons for the continuation of the Russo-Ukraine war. Firstly, the Russian Oil & Gas Industry and its key role in the revival of Russia’s geo-political power. The second is the need to sustain NATO as a key customer for the US Military Industrial as-complex.

Has the creation of new Russian markets in India and the PRC pre-empted the EU threat to reduce dependence on Russian products? Will the US succeed in reviving NATO and creating a new Cold War between the EU and Russia? The answers to both these questions should play out in 2023 and will also be determined from electoral results in the EU.

CHALLENGE 6: TECH DISRUPTORS

The breathtaking pace of technological change should continue to amaze us in 2023. Life-changing breakthroughs in diverse fields are taking place every

Are there realistic prospects for a stable world

day. Here are four tech transformations that could see a practical application in 2023.

(a) 5-G & Its Applications. The advent of 5-G should see radical improvement in the speed of the Internet and the quality of video experiences. It should also see the market availability of Virtual Reality (VR) and Augmented Reality (AR) products. These products are likely to make individuals more productive and reinforce the ‘work-from-home’ culture in modern society.

(b) Humanoid Robotics. AI and machine learning have already made a quantum breakthrough in human conversation with products like Amazon Echo and Siri.

Another group of engineers have made humanoid forms capable of lip movements, facial expressions and common body-language expressions (yawning, astonishment, surprise, happiness). In 2023, we can hope to see applications of humanoids in the fields of hospitality, education and health care.

(c) 3-D Printing. 3-D Printers are already available on the market and can be used for building models and prototypes. Newer varieties of prototypes are being used for making final products, like shoes, furniture, replications of sculptures, jewellery and toys. 3-D Printing is also being used by professionals, like artists, archaeologists and the Armed Forces.

(d) Automation in Transportation. While there have been delays in introducing automation in driving, we could hope to see its advent in 2023.

Other Challenges. Some other challenges in 2023 are the likely continuation of recession in the EU, manifestations of the COVID-19 Pandemic and the revival of crypto-currencies as an alternative to govern-

ment-controlled fiat currencies.

THE WORLD HAS CHANGED!

Eighty years ago, two remarkable men (Franklin Delano Roosevelt, the only US President to win four terms of office and Cordell Hull, the longest serving US Secretary of State), in the aftermath of the 2nd World War, envisioned the Liberal World Order.

That order promoted democracy in the world and encouraged global governance through multilateralism. It also rendered unconditional support for the independence of nations from colonial rule, the elimination of the abhorrent policy of apartheid and support for human rights. Unfortunately, the Liberal World Order has passed into history.

In today’s world, there appear to be no visible rewards for international statesmanship in democracies. The new generation of leaders is focused more on national interests in the narrow context of winning elections.

At this juncture, more than ever before, we need leaders inspired to leave their footprints in history and make the world a better place.

On the other hand, we live in an increasingly connected world, where despite challenges, knowledge is becoming free, and people across borders are interconnected and communicating. People’s power has never been stronger in human history.

With the failure of multilateralism, transnational spaces remain a concern for our common future. Hopefully, People’s Power and the powers of Technology, could bring the positive changes we need as early as 2023.

FTX: ASSET TRACING & RECOVERY

On December 18th last year, the prestigious Washington Post led with a story on the collapse of cryptos. “Crypto Winter has come. And it’s looking more like an ice age,” screamed its headline. This succinctly summed up the current sentiments about cryptos after the shocking collapse of the Futures Exchange, better known as FTX.

For more than a year, the crypto market had boomed with a rush amidst especially young upcoming people to invest in cryptos. Crypto companies promised untold wealth overnight and were being heavily subscribed for brand promotion even by sporting brands.

Then later, in 2022, the bubble burst. Prices crashed, and investors fled. The biggest blow was struck when the U.S. Department of Justice (DoJ) filed charges against the founder of FTX, Sam Bankman-Fried, on multiple grounds, including fraud and election funding violations.

THE RISE OF CRYPTO

At its core, cryptocurrencies were formulated as a decentralised digital currency that would one day make banks redundant. The digital assets work on a blockchain mechanism, allowing the currencies to be part of an immutable record of all transactions. The use of blockchain technology has proved to help promote dig-

Many governments around the world have been suspicious of cryptocurrencies. But despite these suspicions, governments have been forced to allow crypto trading due to its popularity and revenue generation.

ital artworks and platforms like the metaverse.

Cryptos essentially run on complex mathematic equations on a decentralised network of computers. The exchange establishes value without the benefit of a central bank, owner, or sovereign nation.

Normally when retail investors are confronted with the word crypto, they shy away from the jargon-laden conversation waiting to come. The mysterious software programme became well-known for two main reasonsits high returns and volatility.

Everyone from blue-collar workers to private banks wanted to invest in cryptocurrencies though they did not necessarily know how it worked or what it did. This spurred the growing popularity of various cryptocurrencies, like Bitcoin, Ethereum, Dogecoin, and Monero, even while financial experts raised concerns over their decentralised nature.

FTX was symptomatic of the rapid rise of cryptos, swiftly amassing investments valued at $32 billion by projecting an image of rock-sold legitimacy attracting hard-boiled venture capital firms and the common man

The FTX collapse has exposed the challenges posed in asset tracing and recovery once such schemes end up in a ditch. RESEARCH TEAM

on the street. As per U.S. agencies, it was nothing but a massive Ponzi scheme! Not surprisingly, the new CEO of FTX is a veteran bankruptcy lawyer who has now been tasked with recovering assets of millions of customers and creditors.

While advocates of cryptos defended digital currencies, calling FTX an aberration and asking not to tar all cryptos with the same brush, the fact is that the very decentralised nature of cryptos has become its biggest vulnerability.

Now the focus has turned to bring out legislation which can prevent another FTX from happening. More importantly, there is a need to be able to trace out the assets and enforce their recovery so that the investors and creditors get their investments back.

MS SHOBANA IYER Commercial Barrister

A NIGHTMARE FOR REGULATIONS

“Crypto assets are a digital representation of value or contractual rights that use digital distributed ledger technology and can be transferred, stored and traded electronically. Crypto assets fall into different categories like exchange tokens and pure cryptocurrency like Bitcoin, where there is no utility except for providing the means of exchange.

Then there are e-money tokens that meet the definition of electronic money. There are digital payment instruments that store a value that can be reduced at par value at any time and offers holders a direct claim on the issues.

Then there are utility tokens that have a function which will be built into the utility token. For example, the utility token may enable a token holder to access the service or a product such as an online storage or digital marketing space,” says Shobana Iyer.

These unique characteristics, intangible cryptographic authentication and the use of decentralised digital transaction ledgers, make regulation extremely difficult. In addition, a variety of tokens rapidly growing in the crypto landscape exhibit properties of commodities and electronic payments, making their classification heavily contested as to whether they should even be regulated.

To add to the complexity is the transnational reach of crypto assets requiring greater cooperation between national and international regulatory bodies. And then, we have a real concern regarding identifying controls and responsibilities, particularly when we use the blockchain,”

UK’s Financial Conduct Authority (FCA), a financial regulatory body outside the Government, has ruled that crypto assets such as trading on the FTX platform

would not be covered in the existing framework.

This is in tune with the warning on crypto assets released by the European banking authority that informed consumers that they risked losing their assets if they traded through these decentralised exchange platforms and could have little hope for recovery of their assets.

SHREYAS JAYASIMHA Aarna Law (India), Simha Law (Singapore), Member Fraudnet

THE IMPACT OF FTX COLLAPSE

The FTX fiasco will invariably have a long-lasting impact on the crypto world for two main reasons. The first and foremost reason is the opaque structures governing the trading platforms. Any private entity must regularly conduct internal audits and release audit reports to its investors.

In the case of FTX, there were little to no internal audit reports presented to clients and investors. No one raised any concerns since the platform was making record-breaking profits year after year. Once the balance sheet of Alameda Research was released, FTX investors did not know how it would affect FTX since they had access to limited data.

Like other major financial meltdowns like the Lehman Brothers crash in September 2008, most decisions were made recklessly by one or a few people assuming their play would not be exposed.

In the case of FTX, Bankman had the power to transfer resources between two of his firms without any oversight or barriers. He used FTX tokens to fund his side project, hoping that Alameda would eventually become profitable, but this backfired when the balance sheet was released.

The second important reason would be the role of the Government. Many governments around the world have been suspicious of cryptocurrencies. But despite these suspicions, governments have been forced to allow crypto trading due to its popularity and revenue generation.

With the FTX crash, this will change. Governments will take a more proactive role in monitoring crypto exchanges and bring new legislations that could force them to periodically reveal their internal audits to investors.

But once governments start interfering with the functioning of these exchanges, they would eventually become more institutionalised. Any form of institutionalisation goes against the core values of cryptocurrencies created to make a decentralised system. The downfall of FTX has created a conundrum for the crypto world that is challenging to resolve.

SURAJ SREENATH, Cofounder of Platter Finance

Why we Need Cryptos?

Probably crypto today is at a very early stage, comparable to automobiles when they were invented. Before automobiles came into the picture, the commute used to take place on horses, and there was no problem with ‘Drunken Driving’; very few accidents occurred, and there were no breakdowns.

Hence one may ask, was there a need to invent automobiles? However, once automobiles started coming out in larger numbers, the problems they created were solved systematically over the years, including the registration of vehicles and the issue of driving licences to operate them.

The last big revolution in the financial ecosystem was probably in the 15th century when the Double Entry accounting system was invented in Italy. The Meducci bank was the first bank to adopt a double-entry accounting system.

Today’s crypto brings to the table is an immutable ledger for the first time in history. I want to stress the word immutable here because this has never happened before. The ledger is not only immutable but also decentralised as it is a distributed ledger, a public ledger. So, for a regulator, this should be great news.

For the first time, it is public and is distributed with multiple copies of it and is accessible to anybody and everybody. The oversight need not be done only by the regulator; anybody can do the oversight.

And for the first time, it brings out accountability. A interested common man can participate in any kind of due diligence over any asset. Having said that, if you ask me how Terra-LUNA happened, how do you wipe out millions of dollars in one year? So how does it work?

There are two kinds of businesses today. One is access to crypto assets like FTX and Indian companies like WazirX, which we call centralised exchangers. Then there is a second set of businesses that uses crypto as an asset class to follow every other ideology that fundamentally uses blockchain.

Now some businesses or companies will say how we can truly adopt an ideology of non-custodial asset solutions. What happened with FTX was because of the custody of assets or who had control of the ledger. The whole crypto movement is hinged on no centralised entity, be it the Government or any other entity, because anybody who has control over the ledgers can modify the ledgers as they need.

Regulating them will be much harder because regulators can only see what you want them to see. Once

you have a public ledger and a distributed ledger, it can not only be validated by the common man, but more importantly, it can be validated by the court.

If you see the advances in technology over the last 25 years, every problem is tackled by technology. Look at any industry and say how technology revolutionised that industry.

Technology has done nothing to finance. So today, we stand in a unique position where we are given an opportunity for technology to revolutionise finance by taking us out of the suppressive economy we have been facing for the last 20 years.

Be it Amazon or Youtube, anybody who has made money was a true entrepreneur who could be creative. Now, there is an equal opportunity for everyone who can access any asset class today. Entrepreneurship works with freedom, allowing people to be creative. And that’s the opportunity we are looking at if we can ease the economy and say that we didn’t give entrepreneurs the freedom to operate.

Assets Recovery

It is important to understand that crypto trading platforms and digital assets have a purpose, a benign purpose- to diversify options for investment, to buy, to sell, to trade and to receive a loan.

There are implications in a widespread multi-jurisdictional case while trying to retrieve the assets that have been lost. The first act is mapping the entities and the commercial aspects and activity of each entity to classify them and understand where the assets were directed to and what the initial purpose of the assets was.

This is a figure that comes out of the filing and the first declarations from the CEO, which are in the file. The different activities include block file loans, NFT’s gaming, capital markets, derivatives, etc. The different aspects would be classified according to themes and topics, which is the most challenging part of the recovery process.

Then a team of professionals who specialise in security assets locally are called to start the tracing exercise. These experts must be well versed in the investigation side and the legal aspects of tracing back how the transactions have taken place.

That is why you would put in place cyber security experts. In sum, one would first seek out the value of the assets and then see the most efficient approach to recover them.

EMANUEL CALLEJAS Partner at Carrillo & Asociados

HÉCTOR SBERT, Ph.D., Partner at Law firm, ECIJA, Member of ICC FraudNet for Spain

Legal Assets Tracing & Recovery Tools

It is interesting to compare the asset tracing tools in different parts of the world, especially comparing the common and civil law approaches.

In the common law approach, asset tracing and recovery are based on civil actions, especially in cross-border insolvencies like the one we see with FTX. Spain is a civil law jurisdiction country and a member of the EU, and we normally use criminal proceedings to deal with this kind of fraud.

Criminal proceedings in continental jurisdictions have a much wider scope than in common law jurisdictions and civil law jurisdictions. Victims of fraud have legal standings to start private prosecutions in criminal cases against fraudsters.

That is generally not the case in civil law jurisdictions where victims of fraud do not have this kind of legal standing. But this is one of the basic distinctions in the criminal fraud case against Sam Bankman-Fried in the United States; it has not been initiated by the victims but by the Department of Justice.

The FTX case is very complex; one does not know if it’s a simple Ponzi scheme or the cause of fraudulent mismanagement.

One sees many Ponzi schemes/pyramid schemes on the internet, inviting people to invest in cryptocurrency. Some bitcoins promise an amazing return, so people start with small investments and receive monthly recurring payments. The word spreads, and it attracts a lot of investors.

However, there are actually no returns behind these schemes; it’s just that customers are paid with the money the new investors coming into the platform are providing. This has been seen with some crypto assets, specifically utility tokens linked to Ethereum-based blockchains.

One specific case is called the Quailian case; the Quailian platform allowed customers to invest in the master node of an Ethereum- based blockchain. A node is a computer that is locked into an Ethereum-based blockchain, and a master node is a supercomputer that provides services to the rest of the nodes, basically validating transactions over that blockchain.

Think of a supercomputer that provides services and gets paid for the services. The trick is that since it’s an Ethereum blockchain, it follows the proof of stake standard.

To become a master node, you have to prove that you have enough stake in the platform, meaning that you have bought an enormous amount of Ethereum-based tokens with which this blockchain runs. So the trick here is to get a pool of investors to invest in this master node.

With thousands of people investing thousands of dollars, the scheme can become a master node controlling mini-nodes in the blockchain. In the case of the Quailian Scam, many investors put their money till, all of a sudden, they stopped receiving payments.

The funny part is that the defendant of the scheme said that this was not a scam but an investment that went wrong- there were just not enough nodes! Mr Bankman-Fried of FTX is also saying the same thing in his defence.

This is uncharted territory; the kind of legal arguments defending the scheme is new. Sam Bankman Fried has become a blogger; while under criminal prosecution, he has the right to remain silent, but he has chosen to start a blog.

And in this blog, he is trying to convince everyone that everything is perfect and fantastic; I am sorry you lost your money, and I am sorry I was a bad manager, but there is no fraud here. Just a case of bad luck!

In terms of asset tracing tools, the same tools are used in a criminal proceeding in continental European jurisdiction- disclosure orders or freezing orders that we see in common law civil proceedings. So, a huge array of tools are at your disposal, including the support of the police.

In most continental jurisdictions, police departments are opening specialised sections devoted to prosecuting technology-based crimes. In Spain, such sections are efficient and competent, and there is great support from the police hierarchy to trace the assets.

Another challenge is the cross-border nature of these frauds. In the EU, there is very strong cooperation between courts, criminal courts, police departments etc.

Once we move out of the EU, like in this case of crypto scams, you never know how much to rely on mutual legal assistance treaties that may or may not exist with the jurisdiction of interest. Judicial cooperation may not be easy.

The possibility of obtaining actual results is quite a challenge regarding asset tracing and recovery. It is rare in continental jurisdictions to have insolvency proceedings opened against this kind of exchange or platforms because we follow the EU law, which gives jurisdiction to insolvency only when the platform, the crypto platform, has its centre of main interest in the local jurisdiction.

CYBERPROOFING INDIA’S SPACE ASSETS

A cyberattack is not an indivisible threat — it can take many shapes and hues, and have disparate entry points, veiled actors and have debilitating effects when launched by an adversary.

Space systems often face ambushes from various attack vectors, including orbital, kinetic and electronic warfare, but they are equally vulnerable to digital threats.

Cyberattacks can occur across multiple theatres — affecting space assets, communications links and ground operations — within a space system architecture and are often overlooked while building a larger narrative of cyberthreats, including those targeting critical infrastructure (CI).

Satellites are more prone to risk than often perceived. The National Institute of Standards and Technology defines a cyberattack, via cyberspace, as one that targets an enterprise by destroying or administering a computing infrastructure in a hostile manner, or by undermining the integrity of data or pilfering proprietary information.

The rapid progression of knowledge around space technologies has attenuated the construct of “security by obscurity” for space systems. Satellites have become more digitized and digitally piloted, thereby expanding the surface area of incursion. The adversary can use a variety of modi operandi to disrupt, disable, destroy

Critical infrastructures increasingly depend on position, velocity and timing services provided by satellite-based navigation and augmentation systems, some foreign-owned.

or maliciously control satellites or their ground-based systems. These attacks range from “script kiddie” attacks, mainly by individuals on the ground, to nation-state-level attacks, including supply-chain incsions or space-based attacks.

As space systems grow in complexity, they are often perceived as a “black box” of poorly understood but interconnected space-cyber issues. This view is problematic because digital threats are relatively cheap to advance compared to other anti-satellite (ASAT) technologies. Additionally, cyberattacks can target an entire constellation of satellites.

CYBERTHREATS TO SATELLITES

Like other high-tech systems, space systems are entirely based on information systems and networks, not only during their design and manufacture, but also from launch until the space vehicle is finally abandoned in space and allowed to burn out.

Its core systems, such as telemetry links to ground

Tobby Simon is the Founder and President of the Synergia Foundation and a member of the Trilateral Commission.

This article was first published by GCIG, Canada

stations, channels for data transmission and onboard controls, are all extremely vulnerable to malicious acts designed to deny, degrade or disrupt their operations. Deflection of a hacked satellite from its orbit could potentially be disastrous. Hostile cyber activities could take various forms: spoofing sensor data; tampering with sensor systems to make them generate false responses; jamming command links; sending malware into the software controlling spy or communications satellites in orbit; and even denial of service attacks for ransomware. For satellites, loss of mission data (a severe event in the case of military surveillance satellites in times of war), decreased lifespan in orbit, loss of positive control of space platforms and so forth could potentially affect the outcome of such attacks.

In apparent recognition of these threats, the US government released its “Memorandum on Space Policy Directive-5: Cybersecurity Principles for Space Systems” in 2020 (The White House 2020). The SPD-5, as it is known, has designated space as CI and given it the same priority for a cybersecurity shield as other CIs.

INDIA’S SPACE PROGRAM

India’s space program was conceived in 1962 and actioned in 1969 with the founding of the Indian Space Research Organisation (ISRO). The Indian government institut ed the Space Commission of India (the Space Commission) and the Depart ment of Space (DoS) in mid-1972 and brought the ISRO under the manage ment of the DoS in September 1972. India launched its first satellite in 1975.

India’s space program has been adapt ing to changing paradigms in the security environment in Asia. It dedicated its first military satellite, GSAT-7 (Chhina 2022), to the Indian Navy in August 2013; this move was intend ed to enhance space-based maritime communications and has improved India’s maritime security capabilities. The GSAT-7 replaced the British Inmarsat, long used by mariners for satellite communications.

In August 2015, India operationalized its second military satellite, the GSAT-6, which provided secure communication channels to the military. The military’s communications have been further reinforced through GSAT-7A, launched in 2018. Another achievement of the ISRO has been the electromagnetic intelligence-gathering satellite, launched in 2019, which can intercept enemy radars.

Because of the vast maritime domain for which it is responsible, the Indian Navy has been investing heavily in space-based assets. In 2012, it operationalized the Communications, Space and Network Centric Operations to oversee and manage its space-based capability. The Indian Navy aims to move from a “platform-centric navy” to a “network-enabled” force.

As an overall coordinator among the three services,

the Defence Space Agency (DSA) was established in 2018 as a core around which a possible Indian Aerospace Command could be ultimately built.

INDIAN POLICY AND REGULATORY FRAMEWORK

India is part of most existing treaties dealing with space exploration and usage as a maturing space power. These treaties include: the Outer Space Treaty, signed in 1967 and ratified in 1982; the Convention on International Liability for Damage Caused by Space Objects, recognized in 1979; the Agreement on the Rescue of Astronauts, the Return of Astronauts and the Return of Objects Launched into Outer Space, endorsed in 1979; and the Convention on Registration of Objects Launched into Outer Space, agreed to in 1982.

The primacy accorded to the space domain can be gauged by the fact that the Indian space program falls directly under the Prime Minister’s Office and is managed through the Space Commission and the DoS.

The Space Commission, charged with policy formulation, is, in turn, implemented by the DoS. The ISRO is the lead agency in space research and develop-

The Indian space program’s aim is to “harness, sustain and augment space technology for national development, while pursuing space science research and planetary exploration.” Fishermen in coastal parts of the country use the Indian National Centre for Ocean Information Services to determine areas ideal for fishing. The ISRO started its telemedicine program5 in 2001 to ensure medical access in remote regions of the

Three policy doctrines govern space regulations. The Remote Sensing Data Policy, revised in 2011, lays down the ground rules for distributing and using satellite remote sensing data by private users, both from Indian and foreign space platforms. The National Frequency Allocation Plan of 2018 is based on the International Telecommunication Union’s Radio Regulations (2016 edition). India formulated its satellite communications policy in 1997.

INDIAN SPACE INFRASTRUCTURE

Over the years, India has developed end-to-end capabilities in the space domain and posited itself among the world’s leading spacefaring nations. Established in 1958, the Defence Research and Development Organisation (DRDO) is responsible for designing, developing and producing state-of-the-art weapon systems. The DRDO successfully executed the homegrown Integrated Guided Missile Development Programme (IGMDP), which pivoted India into the nuclear club.

The DoS, which manages the ISRO (established in

1969), spearheaded India’s leap into space. The Indian military space programs, except for the IGMDP, are also supervised by the DoS.

The Defence Space Research Organisation (DSRO) is tasked with researching space warfare (Raghuvanshi 2019). The research products are shared with India’s newest space agency, the DSA, for developing counterstrategy and space-borne military systems (Negi 2021a). It currently has several military satellites in its arsenal and is also supervising the ballistic missile program in coordination with the DRDO (Raghuvanshi 2005).

The Indian National Space Promotion and Authorisation Centre (IN-SPACe) was established in 2020 as part of India’s pursuit of atmanirbhar (self-reliance). IN-SPACe is an independent nodal agency under the DoS, allowing space activities and usage of DoS-owned facilities by non-government private entities.

Critical infrastructures increasingly depend on position, velocity and timing services provided by satellite-based navigation and augmentation systems, some foreign-owned. These would also be vulnerable to cyberattack and malware.

Accordingly, the DoS has established a robust and reliable navigation system called NavIC (Navigation with Indian Constellation) (Chan 2021; Negi 2021b) and an augmentation system called GAGAN (GPS Aided GEO Augmented Navigation) (Press Information Bureau 2020). This system’s vulnerability, unless cyber hardened, needs no elaboration.

PROTECTING INDIAN SPACE ASSETS

With its aggressive pursuit of space weaponization, China will morph space into another arena to challenge India. China can also direct its advanced cyber capabilities at Indian space assets to deny New Delhi critical data acquired or received by its satellites and conduct

kinetic attacks to destroy them.

Two important facets of India’s national security space narrative are the growing buildout of China’s space infrastructure and Pakistan’s missile capability, with tactical implications for India’s border areas.

First, China’s substantial intelligence, surveillance and reconnaissance (ISR) capacity in its border conflicts with India in the Ladakh region (Express Web Desk 2022) to the west and Arunachal Pradesh to the east has meant a growing justification within India to advance its ISR capabilities and augment its command and control (C2).

Mindful that the Line of Actual Control (LAC) between China and India is located in the higher Himalayas and challenging to monitor with human intelligence, the development of an “eye in the sky” or satellite surveillance adds to strategic forecasting and mapping capabilities of any intrusions in the contested areas.

In May 2020, deploying such satellite-based support, China’s People’s Liberation Army crossed over to the Galwan River valley on the Indian side of the LAC, resulting in an India-China border skirmish and the deaths of 20 Indian soldiers and an undisclosed number of Chinese soldiers (Singh 2020).

The second major subcomponent for developing India’s national security space infrastructure is the altercation between India and Pakistan across the Line of Control in Kashmir and cross-border terrorism, an ongoing attribute of the disputed border between the two countries. Pakistan’s growing missile capacity and the Kashmir dispute imply the need for India to develop its satellite-based ISR and strength.

These are not idle postulations as, in the recent past, China-based cyber operations have supposedly targeted India’s energy and transportation sectors. Chinese

hackers targeted power grids in northern India over the last several months, including in March 2022, as reported by Secureworks, a US-based private cybersecurity firm.

The company said the seven targeted State Load Despatch Centres (SLDCs) were “in proximity to the disputed India-China border in Ladakh” (The Defense Post 2022).

Using a malware family called ShadowPad, an advanced modular remote access trojan, Chinese hackers targeted SLDCs in northern Indian states, as reported by Recorded Future (2022), a Massachusetts-based cybersecurity firm that specializes in collecting, processing, analyzing and disseminating threat intelligence.

In addition, the DoS conducted the ISRO space situational assessment in 2021 and published it in March 2022. Growing threats of space objects, including orbital debris colliding with operational space assets, have become a perennial problem for outer space’s safe and sustainable use.

These threats restrict unhindered access to space and prompt all space actors to take appropriate measures to mitigate them.

Over the years, India has been upping its organizational structure to deal with cyberthreats. The National Cyber Coordination Centre, under the Ministry of Electronics and Information Technology, generates situational awareness of existing and potential cybersecurity threats. The centre enables timely information sharing for individual entities’ proactive, preventive and protective actions.

The Indian Computer Emergency Response Team is the nodal agency within the Ministry of Electronics and Information Technology that deals with cybersecurity threats such as hacking and phishing.

While the latest National Cyber Security Strategy conceptualized by the Data Security Council of India does not mention space infrastructure, it does recognize the importance of cyber diplomacy.

MILITARY SPACE CAPACITY

India’s DRDO has advocated for hypersonic launch vehicles, small intercontinental ballistic missiles and ASAT capability with the capacity to strike targets in both low-Earth orbit and geosynchronous orbit (Peri 2021).

Since 2000, India has invested in its military space capacity, significantly expending on developing high-resolution satellites for tactical military operations and generating ISR. A significant surveillance failure during the Kargil War in 1999 occurred when Indian intelligence failed to intercept Pakistani intrusion into Kargil (Bajoria 2008). The Technology Experiment Satellite, launched in 2001, was India’s first military application satellite.

In 2004, India established the National Technical Research Organisation to monitor ISR and unmanned aerial vehicles. India has about 15 military application satellites, with the GSAT-7 dedicated to the Indian Air Force but shared with the Indian Army. The need for higher-resolution imagery, especially along the disputed China-India border, has become a priority.

The geopolitical aspect of China’s enhanced military and counterspace capacities is influencing India’s strategic decision making. The contribution of satellites to space situational awareness, ISR and C2 led to India’s decision to establish a Space Security Coordination Group in 2010, chaired by its national security adviser, and, in 2019, the DSA and a centre dedicated to the development of military space capacities within the DRDO (Associated Press 2019).

The ISRO will build the Indian Navy’s communication satellite, GSAT-7R, at a cost of US$225 million, with an expected launch date in 2023. Such dedicated satellites for India’s defence forces enable communication between their warships, drones, aircraft and ground units.

In March 2019, India tested an ASAT weapon, as part of Mission Shakti (DRDO 2019), against the Microsat-R target, executing the test to minimize long-lasting debris. The RAND report on Responsible Space Behavior for the New Space Era: Preserving the Province of Humanity stated that “in March 2019, an Indian ASAT test generated approximately 400 fragments that will decay in weeks or perhaps a few months because the target was orbiting at less than 300 km.

As of the end of 2019, less than 20 pieces of the debris created from the Indian ASAT test earlier that year remained on orbit” (McClintock et al. 2021, 17–18).

CONCLUSION

India’s space program rests on three pivots: nationalism, entrepreneurship and national security. Space accomplishments demonstrate India’s prowess as a technological power and add to its prestige on the global stage. The critical role that space plays in nuclear command, control and communication; military C2; global positioning systems; positioning, navigation and timing; and ISR is a vital driver for India to invest in its space program.

As a progressive space power with higher aspirations, India must strategize and, more importantly, implement a comprehensive, unified and systematic policy that protects space assets from kinetic attacks and cyberwarfare.

Traditional cybersecurity measures designed for terrestrial systems, such as perimeter defence, access control and accountability, are outdated to counter these new threats. Instead, a comprehensive and evolving cybersecurity strategy with global collaboration that strengthens all systems used to launch and operate satellites will be critical going forward.

BEYOND THE HARAMBEE FACTOR

India has to compete with major powers like China and US to earn a place in the African marketplace.

The world is changing, and the relations between states, as between individuals, have become transactional. Today no one wants a relationship based only on legacy bonds, and the same is true for India’s evolving connections with Africa. In contemporary times, while Indian and African independence leaders may have shared common aspirations and beliefs and learnt from each other’s experiences, the modern generation is well over the past and looks forward to a more substantial basis for mutual interactions.

So, while during most of the 20th century, the rallying cry for India- African partnership may have been “Harambe” (meaning pulling together, partnership and a spirit of cooperation in Swahili), the Harambee Factor may no longer count as a binding block between India and its partners in Africa. This is even more relevant when major powers like China, the U.S. and the EU continue to court the continent which promises the most growth in times to come. Sadly, any Indian intercourse in the African context gets hyphenated with China; this must be overcome, and India should endeavour to carve out its own niche in the African landscape.

THE LEGACY APPROACH IN SKILL DEVELOPMENT

Traditionally the Indian model of cooperation in Af-

The Indian private sector has been active in Africa to energise trade with India. Since 2002, when the Focus Africa Programme was launched, India’s trade with Africa has ballooned from $5 billion to nearly $89 billion today, making India amongst the top 5 trading partners, despite there being no major trade concession agreement.

rica has rested upon three pillars- trade, private sector investment and skill development/ capacity building. Interestingly, this goes back centuries because if you visit Lalibela in Ethiopia, its 11the century rock-hewn churches have swastika symbols at the base, apparently carved by Indian master masons who left their signature behind! Another outstanding feature of the past was the Indian contribution to African human resources development. Emperor Halie Selassie has been quoted as saying that “India is the model which I wish to follow.” This would explain many Indian teachers, largely from Goa and Kerala, who were invited to teach in Ethiopian schools and colleges during the 1950s and later.

India also has a role in developing the professional military education of African militaries, a tradition that continues to date. Impressed by the performance of the Indian military in UN peacekeeping missions overseas, especially in Congo, where the Indian military contingent stood out for its professionalism and willingness to sacrifice, many newly independent African nations invited India to develop their military training insti-

This article is based on the 142nd Synergia Forum based on the book ‘The Harambee Factor’ by Gurjit Singh

tutions while hundreds of African officer cadets were trained in Indian military academies. The Ethiopian Military Academy at Harare was the first to be opened with Indian help in 1958. Later, Indian Military Training Teams were deployed in Sudan, Ghana, Botswana, Nigeria, Tanzania, Zambia, Lesotho, Libya and Seychelles. This strengthened the view in Africa that India was a benign and non-interfering partner, a sentiment that, to an extent, survives to date. Not surprisingly, Ambassador Gurjit Singh quotes a French Speaking commissioner of the African Union (AU) saying, “China does more whereas India does better.”

Alongside the Military Training Teams (IMTs), India created the Indian Technical & Economic Cooperation (ITEC) programme in 1964, when India was widely recognised as the leader of the Non-Aligned Movement (NAM). The ITEC has endured and remains the most recognised Indian brand in Africa, prompting some young African parliamentarians visiting India to remark, “China builds our parliaments, and India builds our minds!” The idea of ITEC has today matured into Skill Development and Capacity Building

CAPACITY BUILDING

In 2004, President Kalam gave the idea of the Pan African e-network, which was partnered with the AU across 47 countries. This was considered the largest spread of an Indian Project, facilitating telemedicine and Tele-education.Around the same period, as the Indian economy grew, India floated the Indian Development and Economic Assistance Scheme, under which

The problems for Indian investors in Africa are the “high cost of local financing, high cost of insurance, local banks in retreat, high credit risk and not enough DPRs.” These can be overcome by the following: -

MEA shouldn’t put grant funds into its projects but rather set up revolving funds for consulting companies. Once the consulting companies go to Africa and create their DPR’s, they can return the consulting money to revolving funds. Give the companies a 5–10year frame and fund it every year.

Secondly, give Lines of Credit to regional banks in Africa and to solid African banks, as there are no more Indian banks in Africa. From the interest from corpus, subsidise the lending to dian Investors who are coming Africa so that they get local financing at lower costs. This way, you are working on both the private sector and the local banking sector of Africa, which in turn will promote trade, invest-

concessional loans were provided to African nations. Since many African countries were reluctant to knock on the doors of their erstwhile colonial masters, India afforded an acceptable source of loans as also Indian built machinery and technology that could adapt better to African conditions. The ubiquitous TATA truck and bus indicate this Indian acceptance in developing nations of Africa.

India was the first country to create a model of a three-tier partnership-Bilateral, Regional and the African Union. This model followed the limited summit model, which consisted of 15 countries. In 2015, during the India-Africa summit, the whole of Africa was invited. The main objectives of these summits have been to build institutions, a malady that has ailed Africa for generations.

This included the expansion of ITEC, under which scholarships were extended, and over 100 training institutions were targeted to be built, some at the regional level and a few at Pan-Africa level. Unfortunately, due to the conflict situation prevailing in large parts of Africa, especially in Central Africa, only 35 could be actually created. The Indian diplomatic presence has vastly increased, with 18 new embassies coming up. These embassies can be used to ensure the complete utilisation of ITEC vacancies, scholarships and to launch development cooperation projects.

An important role that Indian Embassies are playing is to secure India’s energy needs by investing in upcoming oil fields in remote areas of Africa. Indian national

ment etc.. Thirdly, promote the Rupee trade and lending to Africa. That is giving Lines of Credits in Rupees which may even increase the value of rupee in the international market.”

The Government shouldn’t do business but rather support private sector investment. We can work through Impact Investments and achieve SDG’ through them. MEA is following a trilateral model with Germany with projects in Cameroon, Ghana, Malawi, and many more capacity-building projects.

With the UK, we have Impact investment funds in which India and UK have contributed equally. For the huge projects, the India- EU connectivity partnership or the ‘Build Back Better world’ should come into the picture as we can deliver projects more cost-effectively and are better accepted in Africa.

Trilateral cooperation is beginning to work because G7 countries have realised that the Indian model is more accepted in Africa, and coming with us saves them money and gets them a better project.

AMBASSADOR GURJIT SINGH

Former Ambassador India to Germany, Ethiopia ASEAN and the African Union

oil companies such as the Oil and Natural Gas Corporation Videsh Limited (ONGC) have invested equity assets in South Sudan, Ivory Coast, Libya, Egypt, Nigeria, Nigeria – Sao Tome and Principe Joint Development Area, and Gabon.

The Indian private sector has been active in Africa to energise trade with India. Since 2002, when the Focus Africa Programme was launched, India’s trade with Africa has ballooned from $5 billion to nearly $89 billion today, making India amongst the top 5 trading partners, despite there being no major trade concession agreement. India has offered a Duty-free Tariff preference scheme (DFTP), a WTO-compliant scheme for African LDC export to India to increase the cross-investment.Says Ambassador Gurjit Singh about Indian private investment in Africa, “Indian FDI was never a Government policy due to the hesitancy for exporting the capital. But Indians have been crowding certain parts of Africa since the periods of license raj which only increased over time. It is extremely difficult to study Investment flows. As

I served in Africa from 1979-82. That was a long time ago, and I must say that we had a lot of things going even at that time. I found that a group of our engineers from RITES were sent in to redo the Ghana railways. In fact, the first thing that they did was print the tickets. When I arrived in Ghana, Ghana used to import British Leyland buses and some other buses from Germany at a hundred thousand dollars each. We managed to provide them with Tata Buses at 33,000 dollars each, and they managed to get 400 buses from India. By the time I left, generic word for a bus had become “TATA”. (Those days, if they had missed their bus, they would say I missed my TATA). it was a hardfought battle. In the New York Times, there was a photograph of

per RBI records, it is 32 billion, largely from SMEs. The data of the African Investment Commissions shows it is approximately close to 120 billion, Whereas the Foreign Trade Investment Index says it is 75 billion. That is mainly because they study the flow of Indian-owned companies. It is not the loans but FDI which is more coveted.”

THE FUTURE OF INDIA-AFRICA PARTNERSHIP

While all interactions with Africa must have government and institutional backing, trade must be allowed to take off on its own; investments should go the private sector route with the government in a supporting role. In a 2008 World Bank Study done by Harry Broadman titled, “Africa’s Silk Road-China and India’s Economic Frontiers,” it is stated that among all of Africa’s population, Indians are the most respected, as they transfer the most technology and create maximum employment through domestic and regional markets in Africa.

me with Ghana’s Transport minister Harry Sawyer. How a third-world country managed to overcome competition between the British and Germany? When the Buses became known, they put out a story that these buses were old models of Mercedes Benz; they are repainting them and sending them to Ghana because they think we are not intelligent people. When I was asked about this, my answer was to come and check it for yourself. So, the transport minister personally visited India and inspected the site of manufacturing. He couldn’t believe the way the buses were made and the quality testing of buses. ITEC is a great thing we have done. Sadly, those who come to India suffer a great deal of racial discrimination. Surprisingly that’s not the case in China. Chinese seem less colour conscious.

AMBASSADOR PASCAL ALAN NAZARETH

Former Indian High Commissioner to Ghana and Ambassador to Egypt and Mexico

Even as early as 2008, loans were given for all the wrong reasons, and in fact, in one particular case, I had to oppose giving the loan even though I was under a great deal of pressure. It was in Sudan, a war-torn area, and they wanted to set up a sugar factory. It was very upsetting to see that. On the one hand, we have countries, where there are viable projects and loans were not given, whereas these loans were given to undeserving countries/individuals.

Many times, Indians with a very dubious reputation are operating and have smudged the name of India in Africa. Later when there is a scandal, the local press will always lead with the question in any investment seminar, “How can we be sure that the incident will not be

repeated?’ It becomes very difficult to build up your national reputation after that.

When I was in South Africa, one of the problems I faced was that Indians thought that I belonged to them. And I had to tell them that they were not Indians but South Africans. All South Africans-Black, white and Indian – were equal in my eyes. I cannot accept that only Indians should be favoured over other races. I may not have been popular with Indian Africans there, but I made an impression on the African communities, particularly black communities.

AMBASSADOR LATHA REDDY

Former Deputy NSA Govt of India

FORECASTING ON COVID-19 MRNA VACCINES TURNS TRUE!

Synergia Foundation had cautioned about the risk of using mRNA technology in early 2020, before the launch of the two leading mRNA vaccines in the western hemisphere.

We at Synergia Foundation cautioned about the risk of using mRNA technology in early 2020, before the launch of the two leading mRNA vaccines in the western hemisphere. Nevertheless, nearly two to three years and billions of doses later, the adverse reactions are being recognized in multiple studies.

Vaccines are indispensable tools in disease prevention, and the global health milestones attained by immunization are phenomenal. However, with the evolution of transformative manufacturing technology, newer platforms are being tried and fast-tracked during pandemics or outbreaks.

Though vaccines have become safer and more effective, the advent of mRNA technology heralds a new era in vaccine science. Meanwhile, the long-term consequences of mass vaccinations are increasingly observed through pharmacovigilance in countries where COVID-19 vaccines have been based on mRNA technology. Currently, there are two classes of mRNA vaccines, the monovalent one (based on the Wuhan strain) and the bivalent one (based on the Wuhan and Omicron strain).

We at Synergia Foundation cautioned about the risk of using mRNA technology in early 2020, before the launch of the two leading mRNA vaccines in the western hemisphere. Nevertheless, nearly two to three years and billions of doses later, the adverse reactions are being recognized in multiple studies.

There are some simple reasons why mRNA technology is less predictable; the mRNA vaccines generate vaccine antigens that are systemically distributed, unlike conventional vaccines. This can lead to unforeseen consequences.

Let us look at a well-known adverse reaction, myocarditis, or heart inflammation post-mRNA vaccination. The vaccine antigen, like the viral S protein, can induce adverse reactions through inflammation. Higher levels of free circulating S protein are often detected in the blood of people who develop myocarditis after

mRNA vaccination. An increase in the inflammation of the heart also makes it prone to sudden cardiac events. Myocarditis is one of the few adverse reactions observed post-mRNA vaccination; however, it remains well-documented. The mRNA technology has opened the way for mass vaccination during pandemics. A plethora of candidate vaccines for HIV, EBV, and other viral diseases have been possible due to mRNA technology.

However, we need safer approaches while designing a tool for mass utilization. Traditional subunit vaccines, inactivated whole virion vaccines, etc., have proven safe and effective. Though there is a lot of promise with mRNA technology, the adverse reactions, population-level consequences, and the phenomenal cost of production cannot be overlooked.

In medicine and science, the solution to a problem should not be more precarious than the problem itself. This dictum applies well to the case of mRNA vaccines; though they appear futuristic and promising, the serious adverse reactions cannot be ignored.

At the same time, when safer alternatives are available, it would be prudent to choose them instead. Newer certainly doesn’t mean better; in the COVID crisis, we have found older drugs and molecules work much better than newer ones.

We at Synergia Foundation were able to predict the repertoire of adverse events for a new biological, like an mRNA vaccine. As we translate the novel findings of cutting-edge research into public health practice, we need to approach it with caution. In science, the negative consequences of any new technology affect the population the most. It would be a scientific and social imperative to mitigate it at every possible stage.

PREDICTION ON VACCINE POTENCY & INTRANASAL APPLICATION VALIDATED

Synergia Foundation was first to evaluate the COVID-19 vaccines’ response metric and challenged the claimed-90 percent protective efficacy of Covid vaccine (Oxford/AstraZeneca).

Since the advent of the COVID pandemic in 2019, we have been forecasting that the nasal vaccine capable of producing ‘sterilizing immunity’ is the most effective disease control tool.

The Synergia Foundation in collaboration with Oxford University’s Blavatnik School of Government organized a round table on the “Global Race for COVID-19 Vaccines” in November 2020. Distinguished speakers included Suerie Moon- Research Director, Harvard Global Health Institute, John Arne Rottingen – CEO of the Research Council of Norway, Jo Wolff -Professor of Values and the Public Policy University of Oxford, Prof.K. VijayRaghavan-Principal Scientific Adviser Govt of India, Gifty Immanuel Chief Medical Officer, Synergia and Tobby Simon-President Synergia Foundation. The key objective of the roundtable was to Chart an international roadmap for the production and delivery of COVID-19 vaccines.

The Synergia foundation has been consistently advocating the need for modest claims on vaccine metrics, efficacy, and protection. This is to ensure that Governments and Citizens around the globe are not misguided about a vaccine based on claims by corporations and institutes.

At the round table, Synergia’s Dr. Immanuel opined that “monitoring for long-term reactions against vaccination will need to continue and efficacy rates for existing candidate vaccines – reported to be up to 95,97 percent in the case of mRNA vaccines – may not fare so well after a period of months”.

He further added that the Hepatitis B vaccine currently has an efficacy rate of around 80 percent, while influenza is more like 60 percent. That could ensure booster jabs are needed year after year, leading the virus to mutate as “the moment you put viruses under selection pressure, it is bound to show some resistance”. Similarly, Tobby Simon, founder and president of the foundation stated that “there is a need to understand

that efficacy claims can drop over a period and claims of 90 percent and above are unreliable. A rushed decision could have dangerous repercussions”. Following the deliberations, Global vaccine makers and researchers insisted to state a modest figure of the efficacy numbers.

19 Nov, 2020 10:46 PM

Covid 19 coronavirus: Virus ‘will fight back’ against vaccination, expert warns following Oxford University, AstraZeneca results

An infectious diseases expert has warned the “virus will fight back” against efforts to secure a Covid-19 vaccination, ensuring that having proven protection against the disease is not the end of the story.

Dr Gifty Immanuel, an infectious disease specialist from Bangalore, India, said while the incredible cooperation to secure viable vaccine candidates in under 12 months is “heartwarming” there are “certain pitfalls” ahead that cannot be overlooked.

INTRANASAL VACCINE

Dr Immanuel raised the issue of the recent mink cull in Denmark after the animal was found to create a much more potent strain of the virus, saying this kind of zoonotic event could not be ruled out again and “could completely destroy” what the world had been working to achieve.

Since the advent of the COVID pandemic in 2019, we have been forecasting that the nasal vaccine capable of producing ‘sterilizing immunity’ is the most effective disease control tool. Intranasal immunization is excellent for mass immunization, it is needless and is easy to administer without a steep learning curve.

It stimulates mucosal and systemic immunity, better protecting against respiratory pathogens. It produces the antibody IgA less produced in the IM vaccine. The intranasal technology produces a higher quantum of IgA, IgG, and IgM- all three antibodies. This can result in the prevention of transmission between people, eventually resulting in the eradication of the disease.

At an event entitled The Global Race for Covid-19 Vaccines, infectious disease specialist Gifty Immanuel warned of the dangers. A specialist in infectious diseases said the global battle for a Covid vaccine could be lost if the virus mutates.

THE ENERGY CONUNDRUM

India must balance out its net zero emission goals with the aspirations of its billions.

Widely dubbed as the ‘COP of Implementation’, the recently held 27th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP27) witnessed, among other nations, India’s submission of its Long-Term Low Emissions Growth Strategy. This was particularly significant in the context of the Prime Minister Office’s announcement of the nation’s pledge to achieve net zero emissions by 2070.

One of the most fundamental aspects of the document was the plan for scaling up green hydrogen production at a swift pace in a bid to further the de-carbonisation of India’s transition to clean energy.

BANKING ON RENEWABLES?

As the world’s fifth-largest economy with the second-largest population base (the largest by the end of 2023), India’s hunger for energy is only surpassed by that of China in the Indo-Pacific. As the nation of 1.3 billion strives to meet the demands of the burgeoning upward mobility of its population, there are stark contradictions in its ostensibly ambitious goalposts for achieving net zero emissions and the challenge to make its population prosperous.

A Harvard University study has claimed that renewable energy such as wind and solar can be effectively harnessed to defenestrate India’s overwhelming current reliance on coal-seventy per cent of the country’s

Other weapons in the green arsenal of India include increased use of biofuels like ethanol blended in petrol (20 per cent by 2025), deeper EV penetration and using green hydrogen in the transport segment. More importantly, there is a significant shift towards mass public transport for moving freight and passengers.

electricity requirements are currently met by coal. Renewables can fulfil as much as 80 per cent of India’s energy demands by 2040 if the right steps are taken today. The study further claims that such a change would reduce India’s carbon emissions by a whopping 80 per cent.

The salient aspects of India’s Long-Term Low Emission Development Strategy include making the country a green hydrogen hub. This would entail the rapid expansion of green hydrogen production and increasing electrolyser manufacturing capacity in the country. In addition, a three-fold increase in nuclear capacity by 2032 is planned.

CHANGING END-USE PATTERNS

Other weapons in the green arsenal of India include increased use of biofuels like ethanol blended in petrol (20 per cent by 2025), deeper EV penetration and using green hydrogen in the transport segment. More importantly, there is a significant shift towards mass public transport for moving freight and passengers. Billions are being expended in creating expensive metro train

networks in all major cities to reduce traffic and carbon emissions. Future sustainable and climate-resilient urban development will be driven by smart city initiatives, integrated planning of cities for mainstreaming adaptation and enhancing energy and resource efficiency, effective green building codes and rapid developments in innovative solid and liquid waste management.

PITFALLS AND THEIR SOLUTIONS

The resultant quandary lies herein- India cannot afford to abandon a major fuel source like coal and oil to meet its people’s energy and electricity needs, not yet, at the very least. And so, the question that requires further exploration is the short-term and long-term strategies to be deployed in ushering a faster switch to renewable energy, the sources of which, particularly wind and solar, are generously endowed in the nation.

In addition to solar and wind power, the Indian government’s National Hydrogen Mission has finally materialised into a palpable financial engagement, with the Union Cabinet having declared an outlay to the tune of INR 19,744 crore as of January 4. This by itself is a very encouraging move. The recent COP27 commitments outlined by India have certainly played a crucial role in pushing the wheel forward in operationalising key policy decisions made previously. However, the dilemma of a sustained and rapid transition to cleaner energy continues to persist in light of India’s rising subsidies for fossil fuels.

In 2022, the country’s subsidies for fossil fuels such as gas, coal, and oil were deemed to be nearly nine times higher than subsidies for renewable energy as well as electric vehicles. These subsidies have taken the form of price regulation, financial incentives, as well as direct subsidies. They only highlight the need for a change in these subsidies’ direction to channel them increasingly towards renewable energy sources to realise the nations’ international and national obligations and targets. Even so, the discourse in India and several countries in the Global South remains focussed on creating

a ‘loss and damage fund’ largely sustained by the Global North. This is an acrimonious demand and more so when the rich nations face an energy crisis, recession and historically high cost of living.

Therefore, the agreement that has emerged in COP27 for the creation of such a loss and damage fund is the best news heard on the climate front for a long time. This, along with the reiteration that countries responsible for the highest carbon emissions, will compensate vulnerable countries reeling under the impacts of climate change most acutely.

In the Indian context, a painful fact is that while India remains a major carbon-emitting country, it is also one that is amongst the most severely affected by climate change. Therefore, a push to transition to clean energy at the required scale of mitigation necessitates that funding streams from multilateral organisations such as the World Bank and the IMF are fortified for implementation to occur synergistically and comprehensively.

Assessment

India must ensure that the industry’s drive towards low-carbon development transitions should not impact energy security, energy access and employment. The transition must be seamless, equitable and carefully calibrated.

The transition to green energy will not be cheap and entail the high cost of developing and adapting new technologies, creating new infrastructure and other transaction costs. To meet these costs, amounting to trillions of dollars by a conservative estimate, India will have to turn to climate financing by international investors and global multilateral institutions against the stiff competition by other aspiring nations.

CIRCULAR ECONOMY FOR CLIMATE SECURITY

Hyosung’s business portfolio today covers many industries, including textiles, energy, chemicals and industrial materials. However, Hyosung’s roots go back to making nylon and polyester yarns since the 1960s and 70s. Based on this technology, the applications have expanded into tire cords, carpets, films, airbags, and seat belts, to name just a few. As a result, most of the recycling program at Hyosung revolves around reusing pre-consumer and post-consumer nylon and polyester.

In terms of mechanical recycling, Hyosung produces most of its nylon and polyester products using pre-consumer waste. With post-consumer waste, it makes mechanically recycled polyester products. Chemical recycling is much more difficult because, unlike mechanical recycling, which uses uncontaminated “clean” waste, chemical recycling breaks down and filters out the “dirty” waste to obtain the original raw material.

RECYCLED FIBRES

Today, there are many technologies for recycling that are available in the market. But are they selling well? Unfortunately, the answer is no. At least not as fast as we would like them to, because the demand is not out there yet. Among Hyosung’s recycled products, one item that sells very well is the recycled PET yarn called “Regen”, an abbreviation for re-generated fibre.

So, in the end, recycled products are already readily available, but if consumers and end-product makers do not choose to buy these products, our transition into a circular economy will not be achieved as fast as we would like.

However, its supply is restricted by the amount of PET bottle waste that can be sourced in the market. Apparel brands use Regen to market their polyester clothing line as 100 per cent recycled because the increased costs are minimal compared to the benefits they get from increased brand recognition. Regen costs 15 to 20 per cent more than non-recycled yarn, but if you consider the fact that raw materials only account for only around 20 per cent of total clothing manufacturing costs, the effect is minimal.

There are other products like recycled spandex. They have been available for the last 3 to 4 years, but the demand is very small. This is because spandex fibre only accounts for 10 per cent of the fibres used to make clothing. Apparel brands can’t market their products as eco-friendly with such little use, so they are not incentivised to change their use of spandex fibre to recycled spandex. So, in the end, recycled products are already readily available, but if consumers and end-product makers do not choose to buy these products, our transition into a circular economy will not be achieved as fast as we would like. Accordingly, policymakers worldwide must devise schemes such as subsidy and incentive plans so that consumers and end-product producers

Government subsidy will be the most important factor in making a circular economy work towards a greener planet.

Hyosung Yim, Vice President, Corporate Strategy Centre, Hyosung Corporation

choose eco-friendly products.

HYDROGEN IN THE CIRCULAR ECONOMY

Another area of a circular economy that Hyosung takes part in is the use of hydrogen by-product that is generated in the process of making polypropylene, the material that is used to make thermoplastics such as pipes and protective films. Around 13,000 tons of hydrogen gas are generated every year. Hyosung is building a plant in a 50:50 joint venture with Linde of Germany to liquefy this gas and inject it back into the economy as a fuel for hydrogen cars via liquid hydrogen refuelling stations that are being built across Korea.

All hydrogen consumed today in Korea is supplied in the form of gas. However, without a vast network of dedicated pipelines for hydrogen, liquid hydrogen is more economical to transport than hydrogen gas. This is because the density of liquid hydrogen is only 1/800 of hydrogen gas. So, you can transport 13 times more liquid than gas. Yes, it does cost more because you must add a process for the liquefaction and maintain it at -253 , but the cost savings in transportation offset and provide higher returns than selling hydrogen gas. A sector that requires more hydrogen is commercial trucking and buses, which in future could be expanded to include trains and the aviation industry also.

Hyosung’s approach to hydrogen is integrating the value chain to enhance effi ciencies and costs. For example, we produce our nylon and PET chips to make various downstream products, including yarns, tire cords and other industrial materials. Such a comprehensive approach is especially critical for businesses like hydrogen because it reduces the risk of finding downstream customers to offtake your electricity and hydrogen.

MAKING HYDROGEN AFFORDABLE

We know how to make hydrogen, we know how to transport them, and we know how to make the applications for hydrogen. But the problem is, can we do it economically? The technological challenges lie in finding cheaper and more efficient ways to make and use hydrogen. Government subsidy will be the most important factor in making hydrogen affordable.

Hydrogen is an expensive fuel to make and supply. The basic rationale behind the economics of hydrogen is that it will become cheaper to produce as more and more electrolysers are supplied to the market to drive down their manufacturing costs. According to Bloomberg New Energy Finance, the price of green hydrogen in Korea is expected to drop from $7.85 in 2022 to $2.47 in 2030 and $1.43 by 2050.

The worrying fact is that the demand for hydrogen is not growing as fast as we would like it to. We already see deviations from initial government plans to deploy hydrogen demand. In the case of Korea, the government wanted to have 65,000 hydrogen cars running in the streets by the end of this year. But as of the end of

October, the number is only 27,870, or 43 per cent of the government’s plan.So, why is this? The government will subsidise consumers to buy hydrogen cars. In Korea, a hydrogen Hyundai Nexo SUV would cost about $57,000. The government subsidises 46 per cent of the car, allowing consumers to buy it at around $31,000, about the price of a comparable mid-sized Hyundai Sante Fe SUV. Hydrogen fuel prices are kept low at a de facto fixed price of $7.00 per kilogram. In terms of mileage, this equates to 9.5 cents per kilometre for hydrogen cars, compared to 10.6 cents for diesel and 11.0 cents for gasoline.

But consumers complain that there are not enough hydrogen refuelling stations out there for them to access. Hydrogen suppliers complain there aren’t enough hydrogen vehicles to make their businesses viable. So, this becomes a classic dilemma of “which comes first – the chicken or the egg?” For hydrogen suppliers, the average loss incurred by hydrogen refuelling stations for passenger vehicles in Korea was about $76,000. The government compensated around 61 per cent of the losses.

However, actual losses covered were only around 40 per cent when you factor in the 50 per cent of the facilities costs that the government did not subsidise. So, until hydrogen demand becomes sufficiently large and prices cheap, only enough government subsidies can keep hydrogen affordable for consumers and producers to make and supply. You do not need to lower the temperature of hydrogen to -273 to transport it through pipelines in the gaseous form.

You have to lower it to that temperature when you want to liquefy hydrogen so that you can transport more of it in a tank lorry. If you have a vast network of pipelines in a country dedicated to transporting hydrogen, you don’t need to liquefy it. But if you don’t, liquid hydrogen is the next best answer to transporting mass amounts of hydrogen through tank containers. Sort of a bridge technology before you set up a whole vast network of pipelines.

The key lies in making hydrogen cheap to produce so that people and industries will use it as an alternative to fossil fuels. But to do that, you have to create and sustain demand for hydrogen so that it can be produced at a large scale to bring down the costs. Remember, the whole idea behind the price of green hydrogen falling to around $1.00/kg levels by 2050 lies mainly in the assumption that electrolyser capital costs fall dramatically over the period as more electrolysers are manufactured to serve hydrogen demand. But how will more electrolysers be manufactured if you don’t have and expand the demand for hydrogen? Sadly, the reality is that the demand for hydrogen as of now is very low. This is because hydrogen is not a cheap fuel over existing fossil fuels. Like renewable energy, the only way we can generate and expand its demand in the initial stages until it becomes cheap enough is by providing incentives through government subsidies to compete with fossil fuels.

A GLOBAL FINANCIAL TSUNAMI?

The U.S. federal debt ceiling has rung alarm bells in the global financial order. Who are the winners and losers?

As the pivot of the global economy since the end of World War II, upheavals in the U.S. have global implications, with no country able to avoid its negative impacts.

This is hardly surprising, for the U.S. accounts for almost a quarter of the global GDP, one-fifth of the global FDI and more than a third of stock market capitalisation.

As an export destination, the U.S. acts as a receptor for one-fifth of countries worldwide. The U.S. dollar is the dominant currency in global trade and financial transactions. Changes in U.S. monetary policy impact investor sentiment and play a major role in driving global financing conditions.

In the same vein, the U.S. is also not immune to disruptions affecting other economies; growing interconnectedness due to globalisation has ensured this.

The U.S. economy is equally dependent on the growth of the global economy as its giant multinational companies have a worldwide footprint and a presence in every continent.

A LOOMING DEBT CRISIS?

The U.S. hit its debt ceiling in January this year, an event which should concern the global financial order

The current debt has grown due to a range of tax cuts, government funding of wars and a drop in revenues as a result of the 2007-09 financial crises and the COVID-19 pandemic.

as it impacts its stability. A U.S. default has immediate impacts and could have catastrophic effects on both domestic and global economies.

This crisis comes when most countries expect a slowdown in economic growth, with smaller countries like Sri Lanka and Pakistan barely afloat.

The debt ceiling or the debt limit is the amount of money the U.S. Treasury can borrow in the form of securities, including bills and savings bonds, to finance existing federal operations.

Over the past two decades, the U.S. has already touched or come close to the debt limits 20 times owing to a range of factors, including higher spending or tax cuts and lower revenues during various economic crises.

In the past, Congress has undertaken a variety of steps to deal with the situation; it has either increased the debt limit to allow for increased federal borrowing or temporarily suspended the debt limit seven times since 2013.

The current debt has grown due to a range of tax

RESEARCH TEAM

SYNERGIA FOUNDATION

cuts, government funding of wars and a drop in revenues as a result of the 2007-09 financial crises and the COVID-19 pandemic. Both these events, the financial crisis and the pandemic, led to monetary and fiscal responses, including slashing interest rates to near zero and stimulus spending to revive the economy.

A combination of these measures has invariably increased the gap between fiscal spending and revenues.

Treasury Secretary Janet Yellen told Congressional leaders that the government had already begun taking “extraordinary steps” to manage cash reserves effectively, which would last until June 5, thereby delaying the default until then.

PLAYING POLITICS

There is a political dimension to this economic quicksand as well. The Senate is controlled by the ruling Democrats, while the House of Representatives is held by the Republicans, who have leveraged the debt ceiling issue as a political bargain, demanding cuts on “irresponsible spending”.

A deadlock on this issue would impact investor, and consumer confidence and a spending cut by the government would spiral the economy faster into a recession.

If the U.S. government is unable to meet some of the critical expenses, such as payment to bondholders, it could wind up in default.

This has been cast as a scenario which would cause irreparable damage to the U.S. economy, lead to investor loss of confidence and impact global financial stability resulting in a potential global financial crisis.

The dollar dominates the world’s foreign currency reserves. In case of a default by the U.S., the dollar’s value would strengthen against other countries, creating ripple effects in other parts of the world.

We witnessed the same phenomenon some months back when the Federal Reserve raised interest rates. Even robust economies like China, the second biggest economy after the U.S., would not escape the negative impacts of such an event.

U.S. economists assure the global audience that a U.S. default is highly improbable. Congress will, in all likelihood, reach a deal under which the debt ceiling is raised now in exchange for promises spending cuts later.

A similar scenario was played out in 2011, and this is the outcome that Senate Minority Leader Mitch McCo nnell has forecast.

The U.S. government still has plenty of options to prevent a default, from account ing management to ignoring the debt ceil ing altogether. This could take place on the

grounds that it violates the U.S. Constitution’s requirement for timely repayment of all federal debts.

CAN CHINA REPLACE THE U.S.?

A possible global economic meltdown will have many losers, and China will be part of the pile. However, China may not be as badly hit as most other countries because it runs a closed-off financial system that relies mainly on domestic savings and is protected from the swings in global financial instability by capital controls.

In 2008-09, the loss of trade finance and collapse in global demand sent China’s exports plummeting by nearly 20 per cent, and more than 20 million workers lost their jobs, but the behemoth recovered in no time.

The Chinese government plans long-term for all economic pitfalls and would have contingency measures ready to stave off any such catastrophe. It started a massive debt-financed economic stimulus program a decade and a half earlier.

Then, the debt level, at 140 per cent of GDP, was relatively low, and it still had significant needs for infrastructure and housing. However, that option is not so easily navigable today as debt has soared to nearly 300 per cent of GDP, and infrastructure and housing are seriously overbuilt.

The other big question analysts have been asking is if China could create a substitute system built around the yuan, also called the “renminbi.” In case the U.S. defaults.

The possibility seems remote despite Chinese efforts since 2008-09 to internationalise the renminbi. China’s efforts towards transitioning to a global currency have focused on liberalising its control of the yuan.

It has opened yuan trading centres in London and Frankfurt, but obviously, there have not been many takers. The U.S. dollar still dominates global official central bank reserves by a whopping 60 per cent compared to the renminbi, which accounts for just 2.8 per cent.

China’s government bond market is clearly not big, liquid, or integrated enough with the rest of the world to substitute for U.S. Treasury.

China has failed to internationalise the renminbi and remains relatively insulated from global financial shocks. The government still controls the routing of

From the Chinese perspective, this level of insulation is good. If economic conditions worsen in China, it will not be easy for Chinese citizens to take their money out and park it abroad.

And by regulating the inflow of funds into China, Beijing reduces the risk of global financial panic. But

this degree of control obviously scares foreign investment in the currency as an alternative to the U.S. dollar.

In a symbiotic relationship with the U.S., China’s demand for Treasurys helps keep U.S. interest rates low. It allows the U.S. Treasury to borrow more at low rates.

It allows Congress to increase the federal spending that spurs U.S. economic growth. Owning U.S. Treasury notes helps China’s economy grow. Demand for dollar-denominated bonds raises the dollar value compared to the yuan.

This boosts demand for Chinese exports as they become cheaper, increasing sales and generating positive cash flows. China is the largest foreign holder of U.S. debt, which may give it some political leverage.

The U.S. Treasurys market remains an indispensable part of the global financial system since the United States can take on financial risks that no other country—even one as big as China—can and manage safely.

There is, perhaps, unfortunately, no alternative. There have been articles in the media about the “China threat”, but this does seem more like a cliché’ than a reality.

Assessment

The global financial order cannot ignore the implications of a U.S. debt default, and unsurprisingly, this has led to a great deal of nervousness in markets globally. The jury is still out on how serious the threat is. Undoubtedly, a default could have major repercussions on domestic and global markets. Therefore, it remains an uneasy calm as analysts examine the options available to the U.S. government.

The two major economies, the U.S. and China, are being pitted against one another in this global economic battle for supremacy. The likelihood of transforming towards a new financial system propped up by the Chinese currency still seems unlikely.

It seems unlikely that there could be a shift away from the U.S.-dominated financial market towards China in the near future. It is more important that American politicians solve the domestic debt problem as soon as possible and avoid negative spill overs instead of working to hype up the “China threat” theory.

POST-PANDEMIC MULTILATERALISM

Has the pandemic and multiple global crises renewed the impetus for multilateralism? RESEARCH TEAM

SYNERGIA FOUNDATION

Billy Vincent’s song “Trouble Never Comes Alone” could well have been written to describe 2022, which saw a host of misfortunes joining forces to batter humanity. From the pandemic to climate change to rising debt to food crisis and all compounded by the war in Ukraine, and possibly the nightmare is still far from over!

These multiple crises put the spotlight on fixing the right priorities to channelize resources most effectively, mitigating the multiple shocks and socio-economic aftermath of these crises and their ongoing consequences.

Consequently, the question uppermost in mind is what are the longer-term goals which can foster a renewed cooperative world order and vigilant global governance systems to manage ongoing and future crises?

MULTILATERALISM IN REGRESSION?

The past few decades of global integration and expansion through multinational organisations have only resulted in limited success. The United Nations has proven ineffective in security crises, having compromised its core values by neglecting to address human rights abuses.

What has clearly emerged is that large multilateral organisations have become ponderous and unwieldy,

Globalisation appears to be on the back foot, with international trade assuming the mantle of regional or bilateral arrangements and alliances. Even emerging free trade areas (FTA) are confined to geographical boundaries, with outsiders being kept out.

incapable of taking hard decisions. In a nutshell, they appear to have outlived their usefulness unless they re-create themselves. Even a highly successful bloc like the EU, which many European nations, including Turkey, aspire to join, saw BREXIT, sowing the seeds for future dissension.

It is estimated that since 2008, a slowdown in the global integration of trade, markets and finance point towards a period of “slowbalisation” or even “deglobalisation.” Trade conflicts between China and the U.S. and the effects of the Covid-19 Pandemic on global value chains have exposed and accelerated these shifts.

Multilateral mechanisms have largely failed, like the Doha Development Agenda of the World Trade Organization (WTO). These have revealed structural inefficiencies and the unrealistic nature of goals, which aim to control trade on a global scale and reach consensus among more than 160 states with different and sometimes irreconcilable interests. Overall, multilateral frameworks have not achieved their overambitious goals despite the continuous expansion of their bureaucratic structures.

Globalisation appears to be on the back foot, with international trade assuming the mantle of regional or bilateral arrangements and alliances. Even emerging free trade areas (FTA) are confined to geographical boundaries, with outsiders being kept out.

The African Continental Free Trade Area came into force in 2021 and became the largest trade area in the world. One year later, the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between 15 Asian-Pacific countries, came into force.

Bilateral negotiations are already giving way to more pragmatic modes of cooperation. The U.S. is no longer the lone superpower. It faces competition from China (and Russia before the latter went into Ukraine), who have expanded their influence while openly defying the principles of the international liberal order. These powers employ soft and hard power to promote alternative political and economic models.

The UN is an obvious example of the limitations and failures of multilateralism and the challenge confront ing a liberal international order. Its size is often held responsible for its inability to manage geopolitical competition and ideological struggles. While the U.S. has been lim iting its contributions to the UN since President Donald Trump’s president ship, China has rapidly increased its share and has become the sec ond-largest donor in 2019.

Several Chinese nationals or ap pointees are at the helm of UN spe cialised agencies. This, of course, has implications for the organisation’s ability to challenge Chinese ambitions and any in fringements on the core principles and goals of the UN on fundamental issues such as human rights. The conflict in Ukraine, in turn, has exposed fault lines in European security that most multilateral actors had failed to acknowledge.

As the world struggles with globalisation and conflict resolution, what is the role of international organisations and multilateral bodies? Many sweeping changes are occurring, and transformation seems inevitable for grand multilateral organisations.

Russia’s aggression in Ukraine has proved that much more effort is required to sustain liberal principles. Analysts predict that multilateralism’s future depends on two events, the outcome of the war in Ukraine and the leadership in the U.S.

HEALTH DIPLOMACY TO BOOST MULTILATERALISM?

The Pandemic created challenges for global governance but also an opportunity to strengthen the push for strong and independent international institutions.

The global health sector has become vulnerable ow-

ing to the threatened availability, accessibility, affordability, and delivery of medical services. In this atmosphere of heightened risk, globalisation adds another dimension since the vulnerability of any country could create a crisis worldwide. In short, it implies that no one is safe until everyone is safe. The Pandemic could catalyse greater cooperation in the global response to medical emergencies through global health diplomacy (GHD).

Several regional and intergovernmental political forums, such as G7, G20, and the EU, have illustrated this coordinated effort during the Pandemic. This is called “club diplomacy”, where heads of state and governments’ membership are limited, with rotating presidencies like G7 and G20 Summits. These groups made several declarations acknowledging the collaborative response to the situation.

Several initiatives, such as COVAX, aim for worldwide access to the COVID vaccine, a joint initiative by GAVI Vaccine Alliance and WHO with an initial goal to provide two billion doses of vaccines worldwide in 2021. A laudable effort which ultimately collapsed in the face of ‘vaccine nationalism’, it can act as a template for the

Even before the outbreak of the Pandemic, other areas, such as- climate change, Australian bushfires, economic tradeoffs and protectionism- pushed for reforming multilateralism. COVID-19 has been the perfect opportunity to strengthen the case for multilateralism, given how individual nation-states have been completely overwhelmed and unable to respond resiliently to the gravity of the problem.

SHIFTING POWER POLES

The 21st century has witnessed a significant change in the power balance, demonstrating that a unipolar world would no longer be viable. As power shifts East, there is bound to be a degree of resistance in the West. Ultimately, regional poles could lead to the diffusion of power equations which could deal with issues regionally vis a vis globally.

Advocates for multilateralism refer to the Pandemic as an inflexion point which underscored safeguarding the interest of the larger global community rather than narrow national interests, especially in the context of pandemics, climate change, international terrorism and cybercrimes, to name a few. The world will be at peace only if there is equitable growth and justice for all and not merely the prosperity of the privileged few.

However, the so-called ‘sovereignty trap’ overshadows the global cooperative effort. For most sovereign nation-states, health is a national responsibility, as the determinants of health are markers for national pros-

perity and power.

The health sector is also a source of immense wealth as pharmaceuticals, surgical processes, and devices, developed at great cost, bring vast returns to their innovators. Few rich nations would like to sacrifice this perennial source of revenue at the altar of global governance.

Multilateralism’s transformation cannot depend solely on regional and global institutions. Analysts predict that it will require efforts by a network of devoted scientists and other groups.

Historically, philanthropic groups have taken this approach by engaging in global surveillance innovations. Examples include the Coalition for Epidemic Preparedness Innovation (CEPI) and some vaccine companies stimulating a distributed multilateral and speedy production of vaccines.

EUROPEAN COMMISSION

The crisis in Ukraine has also presented an opportunity for us to come together. The EU is not an international organization. It is a grouping of states who have decided to work together – to achieve peace and have an impact on the rest of the world to smoothen geopolitical tensions and find solutions to global problems.

OECD

We have a series of challenges – some structural and long-term while others are more immediate. What all these problems have in common is that a better coordinated global approach would help us address these issues better. Climate change is the biggest problem

which brings us all together.

UNCTAD

The Black Sea Grain Initiative is an excellent example of how dialogue and cooperation made it possible to release grain from Ukraine even during a war. So, negotiation and international solidarity should persevere.

Assessment

The COVID 19 pandemic is just a forerunner of possible worse pandemics that humankind may have to confront, hopefully not too soon. This, along with other crises like vanishing biodiversity, climate disasters, and armed conflicts, intersects at a point to give them a global dimension. Therefore, how can these be defeated unless we adopt a global approach?

Needless to say, the guiding force of the new global agenda should be a renewed commitment to global solidarity and sustainable development. The world must organize on a whole-of-society basis nationally and collaborate internationally.

There is a need to revamp the processes that rule multilateral organisations like the World Bank. Most importantly, these organisations must shift focus from direct lending to mitigating global risks so as to generate private capital and revitalize global savings into meaningful development finance.

CAUGHT IN THE MIDDLE!

It’s a High-Tech- High- Stake game of brinkmanship between Beijing and Washington, with Asian Middle Powers becoming its unwitting victims!

As Washington tightens the screws on China’s tech supply lines to throttle its race towards technology parity, if not superiority, the ripple effects spread far and wide with surprising outcomes.

Many major economic powers of Asia find themselves at an inflexion point, caught as they are in the crossfire and unable to outrightly align themselves to one side or the other. Overnight, they must carve out their sovereign tech strategy to continue to thrive economically while avoiding getting snared in a competition that is increasingly becoming nasty.

THE ASIAN TECH BATTLEFIELD

China and the U.S. are shifting into high gear as they manoeuvre to get the better of each other in a rivalry focused on high-value high-tech segment. This global industry promises the most lucrative payback in terms of profits and geopolitical influence. It encompasses cutting-edge technology like AI, Quantum Computing and Virtual Reality/ Augmented Reality, Robotics, Hypersonic propulsion, and a host of other emerging technologies.

Prosperous Asian middle powers, who have since the end of the cold war enjoyed profitable bilateral trade, economic and geopolitical relations with both competitors, are forced to choose sides.

It is Hobson’s Choice, as whatever they pick, they

Primarily, the Asian Middle Powers will seek to reduce their dependence on imported tech IPRs to counter economic coercion, thus ensuring self-sufficiency in core technologies and critical materials that feed their exports.

will end up losing more than what they stand to gain. Unless they are proactive in coming up with new economic statecraft that will enable them to enhance their trade, investment and industrial growth despite an environment of widespread economic and technological sanctions being imposed by the two big players, they face grim prospects.

Both China and the U.S. are making it amply clear that nations must be either with them or will be considered against them- there are going to be no neutrals in this fight! They are coming out with economic restrictions and outright sanctions in case a manipulation of technological sales is detected that is viewed against the interests of one of the warring parties.

Even smaller, less significant Asian states are not immune, as the trade restrictions and the ban on technology transfer extend to all without exception.

Middle Powers like Japan, South Korea and Australia are the worst impacted by this ‘US-China tech war trap.’

IMPLICATIONS FOR THE LIBERAL ORDER

In a scenario where the liberal economic order was taken for granted for almost five decades with no-

Maj. Gen. Ajay. Sah SM, VSM (Retd), is the CIO at Synergia Foundation, with experience in conflict resolution, peacekeeping and counterterrorism.

holds-barred trade and investment, the introduction of economic threats and bullying would be a new paradigm; it would be an anathema for globalisation. But when the two strongest engines of globalisation abandon the open global market-based economics, lesser nations have little choice but to fall in line.

Of course, other nations can pin their hopes on multilateral organisations and try to make them independent of the overwhelming influence exerted upon these institutions by the U.S. and China over the years due to their large contributions to their operating costs. A larger number of nations must share the costs if they wish these forums to be independent and truly multilateral.

A new generation Uruguay Round of negotiations is required to find a path through the minefield of U.S. China rivalry. This will ensure that other countries can continue to trade without getting involved in the bitter contest that is only getting more intense with each passing day.

The WTO could be used as a negotiating platform to arrive at accords encompassing a larger number of countries regarding investments and IPRs, and include very specific strategic industries so that the bystanders are not left out in the cold from the rivalry.

This would encourage the cre ation of multiple poles of tech excellence centred around emerging economic and tech powers in Asia, Latin America and Eu rope to diffuse the excessive influence exerted today by the U.S. and China. However, domestic and regional political compulsions are making the creation of such coalitions difficult, if not impossible.

Countries like India are facing the dilemma of joining region-based economic blocs. The most influential grouping is China-sponsored Regional Comprehensive Economic Partnership (RCEP).

India has refused to join RCEP as it is suspicious of Chinese intentions. India sees the RCEP as a notso-subtle subterfuge to expand a captive market for Chinese goods without China making any worthwhile concessions to open its market for goods and services, which are the forte of countries like India.

A rival to the RCEP is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a successor to the Trans-Pacific Partnership and a mega-regional bloc that even China is trying to join, so far unsuccessfully. Considering the very high standards demanded by CPTPP in terms of investments, financial services, IPR, environmental issues and labour laws, it is unlikely the group will accept China.

To match the RCEP, the U.S. launched the Indo-Pacific Economic Framework for Prosperity (IPEF) in 2022, which already has twelve members. Under IPEF, the U.S. is trying to get together its Indo-Pacific allies

on sectors like e-commerce, data management, supply chain resilience, climate control measures and curbing cybercrimes.

The emerging trade and tech barriers threaten to change the region’s geopolitics. This is visible when every aggressive Chinese move on the economic or technological front is being branded as a national security threat by the U.S. and its European allies. Asian middle powers face the dire predicament of being linked with security externalities due to their trade ties with China, especially if it involves hi-tech with U.S. or European IPR.

Multilateralism, however, is now expanding towards security-related blocs rather than the economy. The most visible examples in the Indo-Pacific are the Five Eyes (U.S., UK, Canada, Australia and New Zealand) created for intelligence sharing and the Quad (U.S., Japan, India and Australia) that has strong security underpinnings camouflaged under cover of humanitarian assistance, cyber security and pandemics.

During the Cold War, many countries could prosper without throwing their lot with either of the parties by what is called ‘hedging’. However, as the U.S. -China rivalry intensifies, as most experts portend, Asian countries will find it exceedingly difficult to hedge, or in other words, ‘run with hare while hunting with the hounds!’

AVOIDING THE TRAP

Primarily, the Asian Middle Powers will seek to reduce their dependence on imported tech IPRs to counter economic coercion, thus ensuring self-sufficiency in core technologies and critical materials that feed their exports. Japan, South Korea and Taiwan, which are excessively dependent upon China-based supply chains, are now trying to diversify to other Southeast Asian nations and even India.

Critical components like semiconductors have become the currency for geopolitical influence, even though there was such a glut in this industry for a long time that only a few countries risked vast investments in them. Today, the trend is changing, and big and small industrial powers are onshoring their semiconductor investments.

The US CHIPS Act of 2022 is a prime example that other countries, including India, are trying to follow. Japan released a new semiconductor strategy in 2021, setting the goals for tech innovations and a stable supply chain incorporating Taiwan and Europe but bypassing China and South Korea, its historical enemy.

Japan is also investing in Asian countries that it considers reliable trading partners, to subsidise the expansion of their domestic manufacturing capacity that

could replace Chinese manufacturing hubs. Countries that stand to benefit are Vietnam, Indonesia, Malaysia and even India and Bangladesh. Under pressure from the U.S. and China, their major trading partners, South Korea and Taiwan are now seeking other bilateral/ multilateral trade agreements, including tech cooperation, to maintain their high revenues from external trade.

COUNTRY WISE STRATEGIES

India finds itself in a peculiar situation; to remain competitive in its external trade, it relies entirely on the more affordable Chinese supply chain, and it would take years to develop alternative sources. It has tried to diversify its supply chains while simultaneously creating fresh alignments with other major regional and extra-regional powers like Japan, Australia, Vietnam and Singapore.

Concurrently, it is aggressively trying to reduce the Chinese economic influence on its domestic market while at the same time investing heavily in developing its technological capacity with partners like the U.S., Israel, France and Denmark.

The flagship of this initiative is the Production Linked Incentive (PLI) scheme that focuses on 14 key industries like auto, speciality metals, electronics, batteries, pharma, EVs and drones.

Even more eye-catching has been its $10 billion drive towards creating an indigenous semiconductor manufacturing industry. Having rejected the lucrative Chinese 5G technology transfer option, India has created its own 5G ecosystem.

However, decoupling is not so easy for a country like South Korea. In 2017 when it opted for the U.S. Terminal High-Altitude Area Defence (THAAD) anti-missile system, it suffered a loss of almost $17 billion from the Chinese cancellation of orders in a subtle form of economic coercion.

The recent ban by the U.S. on high-tech items to China, which are based on American IPRs, creates a new set of problems for Seoul, whose most exports to China involve a significant part of American technology.

But South Korea knows it occupies a key position in the high-tech supply chain, especially in sectors like lithium batteries, semiconductors and EVs, which it can leverage to extract concessions from both contesting parties.

South Korean majors like Samsung, SK and Hyundai are investing substantially in the U.S. to shore up American efforts to onshore critical high-tech manufacturing.

Diversification is a key component of South Korea’s economic statecraft- Vietnam has become its third-largest trading partner after China and the U.S.! Without annoying China by exiting Chinese supply chains, it has undertaken various measures to make its supply chains resilient.

South Korea is aware of the strength of its manufacturing base, and it knows that to secure its competitiveness in the upcoming global competition, it must ensure such high standards in the quality of materials, parts and equipment that its potential customer will have no option but to buy Korean. The increasing popularity of South Korean automobiles in a price-sensitive car market like India, where American majors like Ford and GM collapsed, reflects this policy.

Japan got a rude wake-up call in 2010 when suddenly China imposed a ban on rare earth exports consequent to a clash between a Chinese fishing trawler and the Japanese Coast Guard near the disputed Senkaku Islands. With the Chinese weaponising interdependence, Tokyo realised the urgent need for diversification.

The Japanese Ministry of Economy, Trade and Industry immediately identified critical items in supply chains that increased import dependence and looked for their substitutes, either locally or regionally.

The Japanese government was shocked to learn that in value terms, out of a total of 5000 imported items, almost 1200, i.e., 23 per cent, had greater than 50 per cent Chinese dependency! This was much higher than that of even the U.S. and Germany, two major trading partners of China.

The government has put into motion an action plan to support Japanese companies in diversifying and strengthening supply chains by relocating foreign production to Japan and creating alternate supply chains through friendly and dependable ASEAN member countries.

CONCLUSION

While China’s role as an export and manufacturing giant may diminish in the near future, it would be too early to write off Chinese capacity to grow or prevent its predicted rise to global primacy.

The country has immense potential and industrial depth with a huge domestic market to meet the slack from its exports. As mentioned earlier, it is not economically feasible to divert all supply chains away from China, as India is learning to its geopolitical cost without incurring a high cost in investments and time.

In sectors catering to non-security linked products, Chinese exports would remain the most attractive to even its harshest critics. Therefore, a total decoupling may never happen as it is too exorbitant and time-consuming to relocate the entire supply chain to another geography. However, ‘friend shoring’ and beefing up existing supply chains with reliable partners in like-minded, politically safe countries would occur.

Most importantly, excluding Beijing from the production and marketing of critical materials and technology would be difficult and unreasonable. In fact, a highly protectionist strategy may backfire by forcing China to achieve self-sufficiency in a much shorter time span

RENEWING HISTORICAL BONDS

India and Egypt, both ancient civilizations, continue to play a significant role in their respective regional spheres, located as they are in geo-strategically important areas.

Egypt is not only an acknowledged leader of the Arab world but is also an important link between the Arab and the African bloc and the rest of the global community. India, which aspires to play an increasingly larger role beyond its immediate neighbourhood, would do well to renew its historical partnership with Egypt. Towards this goal, the presence of President Sisi as the Chief Guest for India’s 74th Republic Day celebrations is significant.

HISTORICAL LINKAGES

President Sisi and Prime Minister Modi have the advantage of building upon a relationship which has a very enriching past. Emperor Ashoka’s edicts talk of linkages with the ancient kingdom of Egypt under Ptolemy II.

In modern times, Mahatma Gandhi and Saad Zaghloul (Egyptian revolutionary and statesman, leader of Egypt’s nationalist Wafd Party that led a civil disobedience campaign with the goal of achieving independence for Egypt from British rule} shared common goals on the independence of their respective countries. This relationship was a foundation for the close friendship between Prime Minister Jawahar Lal Nehru and Pres-

It is a matter of record that the former General, who came to power in Egypt through a bloodless coup, was instrumental in reigniting Indo-Egyptian relations. Only in 2016, when President Sisi came to India on his first visit, IndoEgyptian relations again began to get attention.

ident Gamal Abdel Nasser, culminating in the 1955 Indo-Egypt Friendship Treaty. Both leaders were the guiding luminaries of the Non-Aligned Movement as it struggled through the 1960s in a world split by a raging cold war.

Like Nehru, Nasser was a striking personality who came to power in 1952 when the Free Officers Movement overthrew the pro-Western Egyptian monarchy. His most significant act was when in 1956, he nationalized the Suez Canal Company in a bold move. A British-French conglomerate owned and operated the Suez Canal at a great profit since its completion in 1869.

The seizure of the Suez Canal prompted an air and sea invasion of the principal ports controlling the Canal by a joint Anglo-French expeditionary force later joined by the Israelis.

A Soviet threat brought the ill-planned invasion to a halt, unable to confront the growing might of the USSR. The fact that the Eisenhower administration also pub-

Egyptian President Sisi as the chief guest at India’s 2023 Republic Day celebrations could be the harbinger of a rejuvenated strategic partnership anchored on historical ties.

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licly condemned the invasion forced the British and the French to accept the UN-sponsored ceasefire and withdraw despite making military gains on the ground.

The geopolitical victory over the Suez Canal undoubtedly boosted President Nasser’s recognition as a global player. Nasser was seeking to base Egypt’s foreign policy on the tenets of Arab nationalism. But for this, he needed the support of other Third World countries, and he found this within the framework of NAM and especially with countries like India.

President Nasser of Egypt and Prime Minister Nehru of India, along with other leaders like Josip Broz Tito of Yugoslavia and Sukarno of Indonesia, were the prime movers in promoting the concept of non-alignment during the Cold War.

Thus began the golden period of India emerging as a star campaigner for the Arab cause, especially for the displaced Palestinians. This was to last well into the 1990s until real politics and India’s growing confidence took it closer to the West and Israel.

Another area of commonality between India and Egypt until 1973 was that both were dependent on the Soviet Union for the supply of their weapons. This led both these countries to see the Soviet Union as the lesser of the two evils among the superpowers.

After the Yom Kippur war, Egypt gradually shifted towards the U.S. to meet its military requirements. Following the 1979 Camp David Accords, Egypt even left the Arab camp when it established full relations with Israel in return for lands it had lost during previous wars.

India’s geopolitical trajectory though similar, has taken a slightly different route. India continued to maintain a close relationship with the Soviet Union right till the end of the Cold War. India’s relations with Egypt remained frozen under Anwar Sadat’s successor Hosni Mubarak.

In 2011 during the Arab Spring, Hosni Mubarak was overthrown by a popular revolution in Egypt. A series of administrations followed him, and their relatively short and turbulent tenures were not conducive for India to deepening its relations with Egypt.

REVITALISING INDO-EGYPT RELATIONS

It is a matter of record that the former General, who came to power in Egypt through a bloodless coup, was instrumental in reigniting Indo-Egyptian relations. Only in 2016, when President Sisi came to India on his first visit, Indo-Egyptian relations again began to get attention. He sought to revitalize the relationship between the two countries on several levels, including political, economic, cultural and social.

He encouraged India to increase its trade and investment in Egypt, especially focusing on the New Suez Canal Project. He also focused on greater cooperation with India in the fight against the extremist ideology

promoted by ISIS, solving the Palestinian issue and strengthening the NAM framework to enhance greater south-south cooperation.

During the current visit of President Sisi, the relationship between the two countries was officially upgraded to the level of “strategic partnership”. The partnership offers gains for both sides, especially in terms of security, as both are deeply impacted by terrorism and unsettled borders, demanding a considerable defence expenditure. In addition, India has to offer soft power like IT, cyber security, cultural exchanges, educational exchanges and broadcasting.

Trade remains a strong incentive as both countries struggle to improve their people’s lot. Last year the bilateral trade reached a high of $7.26 billion, with both sides contributing an almost equal share in exports.

Indian companies have invested around $ 3 billion in the Egyptian economy and there is considerable scope for further enhancement, especially in the field of chemicals, energy, textile, garments, agriculture and retail. Both sides aim to reach $12 billion in mutual trade in the next five years.

However, challenges remain in the further blossoming of Indo-Egyptian engagement. First, the Egyptians are reaching out to the Pakistanis to curb the influence that the Muslim Brotherhood has in Pakistan.

Pakistan is also making overtures to Egypt in bilateral military cooperation. Chinese investment is very important for the infrastructure-led development model being pursued by Egypt. India must take these factors into consideration when dealing with Egypt.

Assessment

India and Egypt are natural partners. This is because they had a previous historical relationship in the past on which they could build upon. Keeping current realities in mind where bilateral relationships are likely the basis of most trading partnerships, both sides need to give a fresh impetus to their relationship. Egypt will benefit from increased Indian investment in its economy. India will benefit from having the most populous Arab country as a friend and a potential bridge for its goods into the Middle East and Africa.

For India, Egypt is the gateway to the wider African continent and the Arab World, which are of critical importance to India as it aspires to extend its economic and geopolitical reach beyond its immediate neighbourhood. Egypt has deftly manoeuvred its relations with its Islamic brethren and its arch-enemy Israel and the U.S., leveraging its geographical location, a skill that India needs to learn and develop in its outreach to the world.

PERU’S CYCLE OF INSTABILITY

Peru’s ongoing political turmoil is symptomatic of more than just electoral distress linked as they are to a deep-rooted social alienation

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Democracy in Latin America has always been threatened, and the trend continues. The region is a complex mix of democratic processes wherein many countries face challenges to their democratic aspirations. Still, some countries are successfully keeping democracy alive at home.

The pendulum of democratic rooting swings between an occasional populist leader with genuine democratic but socialist or left-wing leanings and extreme right-wing leaders with authoritarian inclination. State institutions like the security organs, press, judiciary and the executive consistently get infiltrated and, at times, remain at best mute witnesses, or worst-active participants, in the weakening or dismantling of democratic processes. Political polarisation, economic instability, and a trust deficit in government institutions have contributed to this distress.

In this milieu, Peru is no exception. Its experiments with democracy have been a mixed bag, perhaps owing to its complex socio-ethnic past. Peru is home to several socioeconomic groups with distinct ethnicity suffering from the legacy of its colonial past. The country continues to groan under a class hierarchy with those of lighter skin (typically of European heritage) usually belonging to the upper socioeconomic classes. This has invariably meant that darker skin or indigenous heritage is economically and socially disadvantaged.

The current wave of violent antigovernment protests, which sparked when interim President Dina Boluarte took office last month, reflects the historical divide in Peru between the rural, mostly indigenous poor and the ruling urban elites concentrated in the capital, Lima.

A SOCIETY IN CONFLICT

A deep political divide marks Peru. Wealth is concentrated among a significant minority - those of European descent. These dominate the government and industry sectors, while those from a mixed racial background, commonly referred to as ‘mestizos’ and indigenous population, get pushed to the margins.

Peru is no stranger to conflict. The stark class differences were bound to result in a class struggle. Peru’s independence from Spain did not result in immediate transformation for Peruvian Campesinos or peasants who continued to toil as indentured labourers on plantations owned by elites until 1969. A series of bloody battles followed between leftist insurgents, state security forces, and paramilitary groups.

It is believed that when Che Guevara was despatched to Latin America by his partner Fidel Castro to light the flame of revolution, his focus was on Peru. The initial objective of Che Guevara was to strengthen the guerrilla struggle in Peru led by the Peruvian ELN in the

Ayacucho department. The idea to develop the Bolivian guerrilla war emerged after the defeat of the Peruvian ELN in December 1965 and ultimately Che died in a failed resurrection in Bolivia.

The internal conflicts of the 1980s and ’90s were marked by indigenous villagers carrying coffins through the streets and human rights groups decrying excessive government force. The commodities boom in the early 2000s did not see the easing of extreme poverty in many rural villages, which frequently lack access to basic sanitation, paved roads, schools, and hospitals.

The current wave of violent anti-government protests, which sparked when interim President Dina Boluarte took office last month, reflects the historical divide in Peru between the rural, mostly Indigenous poor and the ruling urban elites concentrated in the capital, Lima.

The lack of Indigenous representation in national politics is part of the problem. Unlike neighbouring Bolivia, where former President Evo Morales passed a constitution that empowered Indigenous groups and introduced quotas for Indigenous representation in Congress, in Peru, decision-makers are disproportionately part of the country’s white and mestizo elite. Inhabitants of Southern Andean regions tend to prefer anti-establishment politicians promising big changes.

Mr Pedro Castillo, the disposed and now jailed President, promised to remedy historical injustices with a new constitution and heavy spending on health and education. Instead, his 16 months in office were marked by corruption scandals, political and managerial missteps, and growing polarization. Typically, he blamed his troubles on Lima elites, many of whom tried to overturn the results of his election with unfounded claims of voter fraud.

Mr Pedro Castillo still has strong support from the rural and indigenous communities who view him as the

victim of racist elites who don’t want to share power with him – and by extension, them.

The current unrest falls along historic rural-urban rifts – pointing to a yearning for political inclusion. Now, they are agitating for President Boluarte’s resignation, the closure of Congress, new general elections, and a new constitution.

“We feel we’re hated by those who govern Peru,” says Lucas Pari, a representative of the National Union of Aymara Communities, which supports the protests. “That hatred was always there, but now people are getting organized to demand respect for our fundamental rights to life, to equality, and to our identity.”

DEMOCRATIC OVERTURN

Democracy has largely helped only a small elite in Peru — the powerful political class, the rich and corporate executives who have accumulated power and wealth while providing few benefits to the vast majority. Despite a significant sized population base that speaks Quechua, Aymara and other Amerindian languages, no major indigenous-based political party has risen to political prominence in Peru. Since the times of Fujimori, all Presidents have been centre-rightists, including Toledo (2001-2006) and Humala (2011-2016), who ran on moderate leftist platforms but, once in power, switched to centrist economic and social policies. Most Presidents, including the above-named, have been investigated for corruption from time to time, and some, like Fujimori, have served jail time.

Sadly, the ousted President, Pedro Castillo, who promised a breakthrough, did not fare any better while in power. His presidency was marked by controversy and political turmoil. In November last year, the Peruvian Congress voted to remove him from office following a no-confidence vote. The move came after a series of protests, strikes, and allegations of corruption and

abuse of power.

Castillo’s working-class background was unprecedented in Peruvian politics, and his election in June 2021 against Fujimori’s daughter, Keiko, raised hopes that he would run an administration focused on improving the lives of the poor. His manifesto aimed to support poor Peruvians who the country’s stellar economic growth had left behind since the beginning of the century.

His time in office was not without turmoil, and his political career seemed to run from one crisis to the next. He reshuffled his cabinet multiple times and faced three impeachment attempts over corruption charges. He now stands abandoned by nearly all of his allies and even his lawyer!

Castillo doesn’t have much support abroad either. The U.S. embassy in Lima condemned Castillo’s move stating in a tweet, “The United States emphatically urges President Castillo to reverse his attempt to close Congress and allow democratic institutions in Peru to work according to the constitution.”

Mexico’s President, Andrés Manuel López Obrador, called for “democratic stability for the benefit of the people”. In a string of tweets, the leftist leader said that an atmosphere of “confrontation and hostility” had led Castillo to take decisions that ultimately served his opponents and led to his removal from office.

Castillo had attempted to change the constitution, which detractors claimed showed his disregard for the independence of the judiciary and separation of powers. His government had also been accused of violations with respect to human rights and political repression.

A period of instability in Peruvian politics seems to extend with Castillo’s departure. Boluarte is the country’s fifth president in just over two years and will govern with a Congress that is even less popular than Castillo.

A DEEPER MALAISE

The current unrest is symptomatic of more than anger over who runs the country. Peru’s young democracy seems to have failed its indigenous community, as demonstrated by protesters saying it has failed to address a yawning gap between the rich and the poor and between Lima and the country’s rural areas.

More broadly, the crisis in Peru reflects an erosion of trust in democracies across Latin America, fuelled by states that “violate citizens’ rights, fail to provide security and quality public services, and are captured by powerful interests,” according to a new essay in The Journal of Democracy.

Ms Boluarte ran on Mr Castillo’s ticket last year and was elected vice president. But she rejected her former boss’s attempt to rule by decree, calling it an authoritarian power grab, and promptly changed sides to replace her boss. In response to the recent protests, she

has called on legislators to move up new elections and urged unity in response to protesters’ demands. Boluarte’s critics now call her a weak president working at the behest of a self-interested, out-of-touch legislature. Protestors had earlier demanded Mr Castillo’s reinstatement or new elections as quickly as possible. Their demands now embrace a broader vision encompassing a new constitution and even, as one sign put it, “to refound a new nation.”

GLOBAL PARALLELS

What is saving many Latin American democracies from “outright death,” according to Steve Levitsky, a leading expert on democracy at Harvard University, is that a viable alternative — like Hugo Chávez’s authoritarian socialism in Venezuela — has yet to emerge.Democracy has witnessed many global challenges over the past decade, and Peru cannot be singled out for strife and political turmoil. Even in the doyen of western liberal democracy, the U.S. – ex-president Trump’s reign and ultimate downfall amidst charges of rigged election results and refusal to quit office- left traces of cynicism.

Challenges to the integrity of the electoral process, and threats of violence from extremist groups have created a climate of uncertainty about the election and its aftermath, with worrisome implications for the longterm health of American democracy.

This weakening of trust is no longer unique to the U.S. and is referred to as ‘democratic backsliding’, a process which raises many questions about the durability of the institution. A similar concern has played out in other countries, from Viktor Orban’s Hungary to Jair Bolsonaro’s Brazil.

Assessment

Peru’s current crisis reflects its deeply divided social fabric marked by the alienation of its indigenous people. Former president Castillo exemplified this discontent, and his removal from office has therefore triggered violence and protests.

More broadly, the crisis in Peru reflects an erosion of trust in democracies across Latin America. Nation states have failed to protect citizens’ rights or provide security and quality public services. Power reflects powerful personal interests, and marginalized communities have remained at the periphery of economic growth and progress.

Clearly, while Peru has given rise to many noteworthy political movements, it has failed to build enduring political institutions to carry forward these noble ideas. This is mainly because economic power is so diffused, with neither side having the weight to enforce its philosophy, hence the reigning confusion.

SOUTH KOREA - DO OR DO NOT?

The spectre of South Korea going nuclear could turn security equations on their head in the prosperous but volatile East Asia.

The perennial debate that rocks the Republic of Korea (ROK) politics from time to time was triggered again in January. President Yoon Suk Yeol, during a meeting with his foreign and defence ministries, is reported to have raised the issue of going nuclear if the North Korean threat of nukes continues to grow at the current sizzling pace.

While creating a totally home-grown nuclear arsenal may take time, as it will have to be started from scratch, the option of deploying American nukes on the peninsula is a viable option, although fraught with political risks. The President’s remark could be a delicate but deft diplomatic message. It conveys the essence while camouflaging the growing criticism within the country against the reliability and infallibility of the American military shield, including its strategic component, to protect the ROK. It will be recollected that all U.S. nuclear weapons were removed from South Korea in 1991 as part of American efforts towards global arms and cost reduction in the afterglow of its ‘victory’ in the Cold War.

SOUTH KOREA- A HOBSON’S CHOICE

It is a matter of record that the ROK ratified the Nuclear Non-proliferation Treaty as far back as 1975, some say under the unrelenting pressure exerted by the U.S. In 1974, U.S. intelligence agencies were reporting the

For decades, Seoul refused to consider a nuclear deterrent feeling confident with the nuclear umbrella extended by Washington. So, what has changed now?

existence of a robust South Korean nuclear weapons programme. Considering the technological advancements the country had made in the last two decades since the cessation of hostilities with its Northern neighbour, it was assumed that the programme would quickly fructify into a credible nuclear deterrence. As per details available in the public domain, the South Koreans were looking at a plutonium-based weapon programme for which they negotiated with the Canadians for the heavy-water CANDU reactors in 1972.

Then came the 1974 Indian nuclear test, which is alleged to have used plutonium from the CANDU reactors, and Canada imposed stringent safeguards on its exported heavy-water reactors. It agreed to sell CANDU reactors to ROK only after the latter had ratified the NPT. There was pressure also building in the U.S. with a 1975 Congressional resolution demanding a ban on any international financing to South Korea for reactor construction that would enable its quest for nukes.

On the other hand, the Democratic People’s Republic of Korea (DPRK) or North Korea signed the NPT only in 1985. Later in 1991, both Koreas signed a joint declaration agreeing not to “test, manufacture, produce, possess, store, deploy or use nuclear weapons.” That this agreement was not worth the paper it was written upon became clear a decade and a half later when

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DPRK walked out of the NPT regime by conducting six nuclear tests in quick succession starting in 2006. Since early 2022, U.S. and western intelligence agencies have warned of an imminent seventh nuclear test, perhaps of a much more powerful thermonuclear device.

TAKING THE PLUNGE?

For years, the U.S. and the ROK have continued with the false belief that, ultimately, due to immense economic pressure, North Korea will denuclearise. This is a chimaera because unless the Kim Jong Un regime collapses or implodes, DPRK is unlikely to hand over its nukes to the UN in a gesture of goodwill. Writing for the New York Times, Jeffery Lewis has claimed that it was about time for the U.S. to accept North Korea as a full-fledged nuclear power, whose weapons threaten the U.S. and its closest East Asian allies-Japan and ROK. If this is a fact, can Seoul be faulted for desiring the only effective antidote to a nuclear threat for their embattled nation- an indigenous nuclear deterrent?

No one understands the complexity of the nuclear dimension on the Korean peninsula more than the South Koreans themselves. Evidently, the signing of the NPT did not deter the ROK from its quest for nuclear weapons, as its nuclear weapons programme was not formally suspended till the end of 1976. Even then, the ROK scientific community continued with its efforts to procure reactors from France and other suppliers. Today with its current level of technological advancement, an indigenous effort can be only a matter of time once a decision is made.

Seoul has been indicting that to start with, it may opt for tactical nukes, which will either be direct purchases from its ally or indigenously developed by its highly advanced military-industrial complex, already churning out sophisticated world-class artillery guns, armoured fighting vehicles, fighter jets and warships. “We can have our own nuclear weapons pretty quickly, given our scientific and technological capabilities,” said Mr Yoon. In this approach, Mr Yoon has the backing of his conservative People Power Party and an increasing number of supporters who daily witness North Korea’s rapidly expanding nuclear capability and a will to use it as a warfighting tool.

However, the entire country is not supporting an allout nuclearization of their prosperous country. It would divert a considerable part of its revenue and technological effort towards a non-productive enterprise- something that will require consistent investment but may never get used. A more affordable option would be to invite the U.S. to redeploy its nuclear weapons on the peninsula to reduce the response time to any North Korean nuclear misadventure. Towards this end, the deployment of nuclear-capable B1 bombers during the recent US-South Korean military drills could be indicative.

CHANGING THE SECURITY PARADIGM?

Seoul can scarcely be blamed for being hypersensi-

tive to the threat of a nuclear misstep by Kim Jong Un. The ‘Supreme Leader’ is inordinately proud of his nuclear-tipped missiles and loses no opportunity to posture aggressively with them. Isolated and shunned by the international community, starved of trade and even essential items for the daily sustenance of his people, the strong man incites fear in his neighbours, including Japan, by threatening an irrational recourse to these immensely powerful weapons. It is a nightmare for the region and the entire world, with Seoul in its centre. Many analysts call his blusters as bluffing to cow down the west into making concessions but for the South Koreans, staring down the nuclear barrel, it is as real a threat as it could ever get.

For decades, Seoul refused to consider a nuclear deterrent feeling confident with the nuclear umbrella extended by Washington. So, what has changed now?

The U.S. still has a considerable military presence in the peninsula with over 28000 troops stationed in military bases and more available through the speedy despatch by air and through fast-moving Carrier Strike Groups stationed in the Pacific around the clock. South Korean military analysts feel that the American presence is too small to stop the 1.28 million strong North Korean military backed by another 600,000 reservists from rolling down the 38th parallel, especially once a few well-placed nukes have put out of action allied command and control centres and a few carrier groups heading for the Korean Peninsula. Some South Koreans also ask, “ Would Washington risk San Francisco for Seoul in the event of a nuclear exchange?”

Assessment

That Seoul’s fears are well founded is vindicated by the 2022 American Nuclear Posture Review, which notes the ‘deterrence dilemmas’ posed by the North Korean nuclear threat.

On the other hand, President Yoon Suk Yeol could be playing a game of Chinese Checkers by prompting Big Brother China to clamp down on Kim Jong Un’s nuclear ambitions. China would be wary of further nuclearization of its immediate neighbourhood as there is a real chance that with South Korea’s nuclearization, Japan may not be far behind if the North Korean genie refuses to return to the bottle.

Rejecting NPT entails its own set of problems for South Korea, with its economy still not recovered from the aftereffects of the pandemic, the Ukrainian war triggered energy crisis and the Damocles Sword hanging over its exports due to the sharpening US-China cold war. Surely going nuclear may also attract a host of sanctions globally which the country may not be well placed at this juncture to deal with.

OMNIPRESENT AI

ChatGPT has truly opened pandora’s box for the uses and limitations of an AI-powered world.

Given the exponential growth of Artificial Intelligence (AI) over the past few decades, AI and its related applications have become part of daily life in ways we could never have dreamt of only a few decades ago. Robotics and AI have changed our life processes beyond measure.

AI is a wide-ranging branch of computer science which involves building smart machines capable of performing tasks that typically require human intelligence. It is an interdisciplinary science with multiple approaches covering machine learning and deep learning.

There are numerous and growing uses of AI in our everyday lives ranging from voice assistants to entertainment streaming apps to smart input keyboards and `navigation and facial recognition technologies. The list is simply endless, yet it has become quite difficult to keep pace with these innovations and the potential disruption they can cause!

The latest technological breakthrough has occurred with ChatGPT (Generative Pre-Trained Transformer), which is an AI-powered chatbot launched in November 2022 by OpenAI. This can comprehend and generate natural language or human text.

The tool is built on large amounts of text data and uses an algorithm known as Transformer to learn how to generate text similar to human conversation.

DEMYSTIFYING CHATGPT

In terms of technological impact on humankind,

ChatGPT is being compared with electricity! Hailed as the “smartest chatbot ever made”, ChatGPT reportedly can generate human-like text responses to prompts.

Its uses are spread across a wide range of applications, such as customer service, generating responses to questions in online forums, or even creating personalised content for social media posts. It is smart enough to admit its mistakes, challenge false premises, and refuse unsuitable requests. In addition, the ChatGPT can also answer follow-up questions.

ChatGPT can be used to create content, such as articles, blog posts and entire books. They can help with customer service, quickly and accurately responding to queries. The programme has immediate insights for research, providing insights into consumer behaviour and preferences.

According to OpenAI, its provider, it already had one million users in Dec last year. What’s unique about ChatGPT is how easily accessible, free, and fast it is. The service also has other features, which allow translation and writing in English, Chinese, Spanish and French. This could potentially help scientists publish in a second language, enhancing the reach of their work.

A primary ethical concern is a risk of ChatGPT being used to spread misinformation. Because it is designed to generate responses that sound humanlike, it can be difficult for people to distinguish between machine-generated responses and those that come from a real person.

RESEARCH TEAM

SYNERGIA FOUNDATION

However, there are limitations to even the genius of ChatGPT. Some critics have pointed out that while the chatbot gives answers which are grammatically correct and read well, these lack context and substance. ChatGPT’s knowledge is restricted to global events that occurred before 2021.

It has been observed that the chatbot displays clear racial and sexist biases, which remains a problem with almost all AI models. There is potential for bias in the generated code, as the training data used to create the code generator may contain biases that are reflected in the generated code.

There are more serious allegations as well, such as malicious and dangerous coding. ChatGPT can produce phishing emails, although it is set up to reject requests to write phishing emails or malicious code.

There is a larger effect on the employment scene as the program has the immediate potential to curtail jobs. The glaring concern is that using code generators could lead to the loss of jobs for human programmers or even BPOs, which have immensely benefited devel oping countries like India.

For academics, the immediate chokepoint is plagiarism. While academic plagiarism is not new, ChatGPT has altered how AI is utilised to produce original writ ing.

It is difficult to identify plagia rised information as a result. Writ ten assignments in universities imme diately fall under suspicion as teachers and academicians struggle with fraud and plagiarism.

This has already found a voice in China, not held in very high esteem for its disregard for IPRs, in an article in the China Science Daily which expressed concern for its impact on the quality of higher education. Questions have been raised asking whether the use of AI text generators should be treated differently from existing rules on plagiarism.

In the U.S., concerns have been raised about what chatbots will do to students’ critical thinking and problem-solving skills, which is already on the decline thanks to modern devices.

However, there is a silver lining, too; it is being debated if, in its future version, AI tools could even develop capabilities for original academic research replacing human scientists and researchers!

A DARKER SIDE

The excitement over ChatGPT comes with a dark side, including concerns over security and the ability of

cybercriminals to use the chatbot for their means.

Scientists are worried that AI writing software could distort the outcome of scientific research by making it lethal to humankind rather than uplifting it, like electricity. “Any technology, if misused, could be dangerous,” says Catherine Gao from Northwestern University.

A major concern with ChatGPT is the potential automation to industrialise the creation and personalisation of malicious web pages, highly targeted phishing campaigns, and social engineering-reliant scams.

Check Point Research has documented several instances of threat actors deploying much more sophisticated phishing emails written with the help of the chatbot. Other threat actors are using the technology to create malware. But the success of these cybercriminal experiments remains to be seen.

A primary ethical concern is a risk of ChatGPT being used to spread misinformation. Because it is designed to generate responses that sound human-like, it can be difficult for people to distinguish between machine-generated responses and those that come from a real person.

Even worse, if a chatbot is trained on biased or outdated data, it may produce responses that reflect that bias, potentially leading to the spread of misinformation that can cause serious societal fragmentations or produce responses that are discriminatory or offensive to certain societal groups or perpetuating

Another ethical issue is the potential for ChatGPT to be used to impersonate individuals.

ChatGPT can be trained on a particular person’s writing style and language patterns, thus creating a chatbot that act like that person’s clone. Its misuse is unlimited- from financial fraud to manipulation of organisations and widespread political machinations.

RISK MANAGEMENT AND WAY FORWARD

“Many organisations are not prepared for how this is going to change the threat landscape. You have to fight AI with AI, and organisations can look for cloud security that also uses generative AI and AI augmentation technology,” advises Patrick Harr, CEO of security firm SlashNext.

Using these technologies to predict millions of new variants of the threats that might enter the organisation is the only way to counteract these attacks to close the security gap and vulnerabilities created by this dangerous trend.

AI has, of course, existed long before the release of ChatGPT, and these were already disrupting the cyber-

security industry. The research firm Gartner expects industry leaders to significantly increase spending on information security, estimated at $187 billion this year.

The threat of attacks based on systems utilising this technology has necessitated that ‘responsible AI’ will become a strong component of all personnel hired for AI development and training work.

This will cover how attackers can quickly adapt developments such as ChatGPT. An understanding of the intersection of AI and cybersecurity will become critical.

As regards plagiarism in the education field using ChatGPT, the CEO of OpenAI, the owner of ChatGPT, has assured that his company would experiment with watermarking technologies and other techniques to label content generated by ChatGPT as a possible deterrent for plagiarism.

ChatGPT is expected to undergo more technical changes to improve its ability to understand and respond to context, such as maintaining a conversation on a specific topic or understanding the tone and intent of a message.

Its knowledge base will expand with time, and so will its ability to generate more accurate and informative responses. Language abilities will also likely improve to respond to different languages and dialects. Interactive capabilities are expected to enhance to handle multiple tasks and engage in more complex conversations

One way to address ethical concerns is to ensure that chat GPT is transparent about its capabilities and limitations. It has been suggested that chatbots could be programmed to include a disclaimer indicating that they are not human and that the response provided

could be inaccurate.

In addition, the use of ChatGPT in customer service contexts, for e.g. could be more open to ensure that people are aware that they are interacting with a machine and not a real person.

Assessment

The widespread use of new disruptive technologies has necessitated that tech companies reinforce their AI and cybersecurity skills. The new skill set requires developing safer code as new applications are created and countering what threat actors are deploying using these same tools.

AI is here to stay, and ChatGPT is a reality. Its impact on sectors such as education, research and healthcare has raised several red flags and can no longer be ignored or treated as a technical problem requiring a technical fix. A real solution goes far beyond and may include legislation and international agreements.

It is clear that avoiding this technological innovation is not an option. The tool itself is expected to innovate further, and tech pros must ensure that their organisations invest in training to keep abreast with the security challenges it throws up. It is also important to continue to monitor and assess the ethical implications of ChatGPT as it continues to evolve and be integrated into more aspects of our lives.

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