Insights March Edition 2023

LOOKING BEYOND THE CURVE

MARCH 2023 | MONTHLY EDITION SYNERGIA FOUNDATION

MEDIA ENABLED

.

FUTUREPROOFING INDIA EXCLUSIVES FUTUREPROOFING INDIA Page - 03

ENERGY INDEPENDENCE Page - 08

CHINA -THE HONEST BROKER? Page - 11

AFRICA -THE NEXT BIG ONE? Page - 14

THE QUANTUM RACE Page - 17

INSIGHTS is a strategic affairs, foreign policy, science and technology magazine that provides nonpartisan analysis of contemporary issues based on real-time information.

To subscribe, sambratha@synergiagroup.in ; +91 80 4197 1000 https://www.synergiafoundation.org

EDITORIAL Dear Friends: Greetings from the Synergia Foundation!

While there is a sense of optimism ruling over India in general, considering the gloom that has descended over our neighbourhood, it is a cautious optimism tinged with the fear of an imminent economic backslide due to global factors. The recent IMF economic outlook has not done much to restore confidence as it predicts very slow short and medium-term growth. Thankfully, as per IMF, we may have avoided a global recession, at least for the next few months.

With this as a background, we have taken the views of subject matter experts on how to futureproof India. This is a task easier said than done because, in today’s world, futureproofing does not have a single dimension but a plethora of them, including economy, environment, defence, and internal harmony. Examining India’s physical and economic security has little meaning if concurrently we do not look at the headwinds and tailwinds hammering global security.

Some countries, which happily include India, are showing modest growth despite the severe economic challenges. Also, despite all the doomsday predictions, Europe has emerged out of the winter, and its labour market has been surprisingly immune from the economic downturn triggered by the war in Ukraine. This is good news for India as the EU is one of our major trading partners. Energy is a critical segment of India’s economic bouquet, and we take a critical look at how to improve India’s energy security through green measures.

However, the war in Ukraine is turning into

a ‘forever war’, and despite the efforts of China, there are no signs of any cessation of hostilities.

In fact, Russia looks economically unaffected by the sanctions and its efforts to bye pass Western sanctions received a boost when China and Brazil formally agreed to trade in each other’s currency while meeting on the sidelines of the BRICS summit.

But the food situation, especially in the global South, remains critical, and as per our research, it is going to be worse in 2024. We only have to look at what is happening in Pakistan to understand food scarcity clearly.

In the last one year, all the world’s troubles have been dumped on the Ukraine war or indirectly on Russia for initiating it. Does this feeling reign in Russia also, where per Al Jazeera, almost a million youth have fled to neighbouring countries to escape conscription? We look at Mr Putin’s balance sheet after one year of his ‘special military operation’ and if he is called to pay for his adventure, how the funds could be generated.

Our geopolitical scan looks at Africa, which has the potential to become a global engine of growth, and the consequences of China’s brokered peace deal between Iran and Saudi Arabia. Our strategic partner Israel is in serious turmoil, which we hope will resolve soon as it threatens the very democratic fabric of this brave nation.

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

SCAN THE QR CODE TO SUBSCRIBE

SCAN FOR FEEDBACK

EXCLUSIVES GEO-ECONOMICS

GLOBAL ECONOMY: HOPE AMIDST THE GLOOM?

Modest growth amidst severe economic headwinds is signalling resilience.

PAGE 20 GEO-ECONOMICS

DOLLAR IN DOLDRUMS? COVER STORY

PAGE 24

FUTUREPROOFING INDIA

GEO-ECONOMICS

Challenges and opportunities for India in an evolving geopolitical context.

PAGE 03 INDIA

THE LABOUR MARKET PUZZLE Labour markets appear surprisingly immune from the economic downturn, especially in Europe. How long will the bubble last?

PAGE 27 GEO-ECONOMICS

INDIA’S LEAP TOWARDS ENERGY INDEPENDENCE

THE NEXT SHOCK

India is forging an energy independence pathway that may take it to near zero emission by 2047.

PAGE 08

Is the world moving towards a global food shortage by 2024?

PAGE 30

GEO-POLITICS

CHINA -THE HONEST BROKER?

ENVIRONMENT

The China-brokered normalisation of Saudi Iranian diplomatic relations hints at a realignment of geopolitical relations and power centres in West Asia.

ENVIRONMENT

THUMBS UP FOR MARINE DIVERSITY! Protecting global commons has received another nudge with the long-awaited high seas treaty. PAGE 33

PAGE 11 GEO-POLITICS

BUILDING ENERGY SAVINGS

The Department of Energy’s FLEXLAB® at Berkeley Lab is revolutionising building energy efficiency, as a recent visit to the Lab

by Synergia disclosed. PAGE 36

AFRICA -THE NEXT BIG ONE? Africa has the promise to become a global engine of growth provided it gets its house in order.

PAGE 14 TECHNOLOGY

THE QUANTUM RACE

In all its manifestations, Quantum technology will be the holy grail that superpower aspirants will compete for in the coming decade.

PAGE 17

THE WORLD

THE WORLD

ISRAEL: A DEMOCRATIC BACKLASH?

A legislative churning over the powers of an independent judiciary threatens to shred the democratic fabric of Israel.

PAGE 39

UKRAINE: FOOTING THE BILL! Who will pay for the reconstruction of Ukraine once the guns fall silent?

PAGE 43

THE WORLD

UKRAINE: THE RUSSIAN BALANCE SHEET With the Russians well into their second year of the Ukrainian adventure, it is time for a balance sheet appraisal.

PAGE 46 HEALTH CARE

MEDICARE: PLUGGING THE BRAIN DRAIN! Moves to criminalise foreign recruitment of health workers could impact employment opportunities for its educated unemployed but save lives at home.

PAGE 50

FUTUREPROOFING INDIA Challenges and opportunities for India in an evolving geopolitical context.

This article is based on a Synergia Breakfast Series discussion led by Ambassador Pankaj Saran, a former deputy national security adviser

R

ight now, India is, more than ever before, in an era of high complexity. As the country tries to cope with all these complexities, it is finding that it needs cross-domain expertise, people who could look at an issue from an interdisciplinary lens.

Whether it is challenges in the field of politics, economics or technology, information, health, or traditional military affairs, these are all getting interlinked. And this is not a stray one-off kind of change coming about in our security environment, but it is becoming more of a norm.

India experienced the first shock of this game during the 2008 financial crisis, when the finance ministry, central bank and regulators became frontline warriors overnight as the global economy and the financial system teetered on edge.

And same thing happened during the two COVID crises, when doctors, health administrators, or health regulators suddenly found themselves sucked into the geopolitics and the security risks associated with COVID. Therefore, nations are coming to the realisation that you need other skill sets to deal with what the future throws at you.

Words that we were familiar with are fast losing their relevance; globalisation is one such word that we do not

India is now part of not just all the global problems, but also part of most solutions to these problems, and therefore, the responsibility on India to upscale globally is going to be even higher as we go along. hear of much as in the past when it was considered the panacea of all global ills. There is also less mention of phrases like ‘regime change,’ ‘colour revolution,’ etc.

This lingua franca of geopolitics is now changing, and we hear more frequently of ‘supply chains,’ ‘weaponisation of instruments,’ etc., in trade, finance and energy.

INDIA’S FOREIGN POLICY CHALLENGES The current global insecurity can be traced back to the acute rivalry within the P5 of the UNSC, the ‘custodians of the global order’ who were supposed to actually manage international security.

Today, outsiders like India and the other 190 countries are basically bystanders, in the acute confrontation and contestation between these five countries. So, if the core is melting, then what happens to everyone else? And then where do we go? Which is that institution or platform where we can go with the hope of looking at problems that the vast majority of the world faces; it’s a foundational crisis.

The world is heading into a multipolar world with two or three poles which is not yet certain. However, it is reasonably certain that another pole is rising, whose

FUTUREPROOFING INDIA

boundaries are common with India’s. While the world faces a host of crises, a few deserve closer examination. One is the leadership crisis, where the world lacks a leader to guide it, one who can command the confidence of most nations, and one who takes the lead in addressing and resolving global problems and deficits.

The unceasing war in Ukraine is a clear example of this deficiency of global leadership.

Another crisis is one of trust and confidence, and this trust deficit is growing between nations and between leaders. In its presidency of the G20, India will attempt to bring it all back in terms of some kind of consensus. Whether India will succeed or not, we will come to know after one year as India’s tenure ends.

On the economic front, there is volatility and slowdown. There is a move across nations, especially the prosperous Western ones, towards onshoring and greater insularity. This is manifested in the American and Chinese programmes for development in the next two decades and closer home in India’s Atmanirbhar push.

Under the overhang of the European face-off with Russia, we see a hardening of the alliances that were forged during the Cold War, the revival of European unity and NATO in terms of its cohesion, visibility and aggressiveness. This has also been manifested across geographies in the Indo-Pacific.

Two clear groupings are now visible- Russia -China axis is also ramping up its game in the Indo-Pacific region.

In the overall equilibrium of the global situation, there is a heightened search for clients.

But there is a dichotomy- along with the geostrategic confrontation, the other reality is of very significant economic interdependence. This dual-track approach to dealing with other nations is also becoming more visible.

This is clearly visible in the US-China relationship, where the balance between competition and cooperation with China will determine the shape of their relationship and, therefore, the impact on the rest of the world.

Increasingly, the same duality is visible in the Sino-India relationship. The business sector and trade have a certain approach to China while the security apparatus in India has a very different approach. This leads to internal differences of opinion and the challenge of finding a unified policy towards China.

The challenge is how to deal with this new emerging pole-China, which cannot be wished away. The template of the Cold War is no longer applicable. Another quandary confronting Indian policymakers is the nature of the Transatlantic Alliance and European unity. But when you try to disaggregate and go to granular, there

04

are serious problems. China sits on India’s land borders, and the latter has a direct stake in what happens in and to China. The nature of the Chinese policy adopted by the U.S. and its European allies is critical for India’s policy formulation vis a vis China. Decoupling with China, so often spoken of, seems unlikely; a $700 billion trade (between the U.S. and China and an equal amount with Europe) cannot be wished away. Looking from the Chinese lens, there is also a debate going on within China about India. There are different voices in China.

One which looks at India on its merits as a neighbour with the 4000 Kilometre boundary on the Tibet plateau and deal with India as a civilisation etc. But there is another group of people who have, for all practical purposes, written off the idea as an American ally.

While they may not yet consider India as a proxy state of the U.S., but look at India through the U.S. lens. This is yet another challenge that India will have to face in its foreign policy evolutions.

There is also a strategic disconnect between India and the collectivist in Russia and China. India must arrive at some kind of conclusion on its most pre-eminent threat, which requires greater dialogue between India and the West.

India has not and is unlikely to subscribe to any cancelled Russian project as prevalent in the West. While the West will make all deals with Russia illegal in the future, India may not subscribe to that view again. However, dealing with Russia will become more difficult because all declining powers lose their negotiating abilities and become extremely difficult to deal with in a global context.

The power differential between China and Russia is rapidly growing, and with every global crisis, this differential seems to get only bigger. This was visible in 1991, in 2008, in 2021 after COVID, and of course, after the Ukraine war. Today Chinese economy stands at about $80 trillion and going steadily up. The United States faces serious internal divisions and a lack of credible leadership, internally and globally.

For various reasons, today, the expectations of friendship from India among all parties are very high.

For different reasons, the U.S., EU, Russia, and China would like India to be on their side. From an Indian perspective, this is an opportunity to maximise India’s strategic gains and advantages.

INDIA’S OPTIONS India is now part of not just all the global problems, but also part of most solutions to these problems, and therefore, the responsibility on India to upscale globally is going to be even higher as we go along. Increasingly, self-interest will drive the Indian interface with the global community. India is not unique on this account, as almost every other single power in the world is pur-

FUTUREPROOFING INDIA

suing this policy. India will be capitalising upon its market or demographics and the inherent growth impulses of India. This is reflected in the degree of optimism visible in India, which contrasts the situation in Europe, the United States, and Russia.

The problem is that while these are good things for India, we also have very serious internal problems. India must manage the basic issues of internal stability and regional imbalances of employment generation. So, even if it is not a black-and-white picture, on the whole, the gigantic Indian economy is definitely on the move.

Because of this reason, and because of our economic imperatives, in the medium term, there is no question that Indian economic development and technology needs will drive it closer to the integration of the Indian economy with Western supply chains.

Also, the technology path India chooses is again something that is up for debate within the government of India. For example, this was seen in the telecom or the energy sector, where the dilemma was whether to stop all technology imports from China and switch 100 per cent to Western technologies or increasingly develop our own technologies.

In the telecom sector, India has, over the last 2-3 years, put in place the whole concept of a trusted technology source that is largely indigenous, including a 5g solution. Technology decisions, like technology itself, are dynamic and, sector-specific, region-specific.

Take, for example, the military sector, which has, over the last decade, seen a decline in military equipment from Russia. At the same time, the tech relationship may have different elements that may see an upsurge with Russia. All these will be driven by India’s national development goals for the next two decades.

05

ner would want is a hostile Russia. Therefore, if India appears confused in choosing between the West and Russia, it is not accidental but deliberate.

India must, at every stage, look at its options and then make a choice. India has reportedly been invited to join NATO, and at the same time, it hosts the SCO summit, where it is hoped that Presidents Putin and Xi Jinping will attend.

India is also concurrently actively engaged with the U.S., the EU, the BRICS, and the Central Asian region.

India is trying to develop and evolve an Indian way of dealing with the world, not a Western, Chinese, or Russian. There are no precedents to this and no bible to follow. With a population of over 1.4 billion, India must think for itself, and even if mistakes are made, it cannot mortgage its brains to someone else or copy other models of the past or present.

Is India the next China, or is China the next U.S.?

These are theoretical questions as no two countries that are civilisational different can be the same. India is India; it is neither China nor the U.S. Indians, and foreigners must accept this.

What are the determinants of India’s future growth trajectory? India must start with developing its internal strengths, and a good starting point is manufacturing.

The pandemic laid bare the fact that manufacturing is not an old-fashioned word- if you could not make masks, PPE etc. and in huge quantities and quickly, all your technology was no good.

In the medium to long term, India must protect itself from greater financial, trade and investment weaponisation. Besides technology, India has to look at critical resources, materials and new energy forms-all that will determine Indian national power.

Today the discussion in India revolves around natural resources, energy supplies, the Arctic region and Russia’s Far East- in all these, Russia figures prominently because of its geography. With China already pitted against India, the last thing that any Indian policy plan-

Already reforms are taking place in the defence and space sectors which may take time, but at least the process has well and truly begun. There is a greater awareness of what needs to be done in the future to keep up with the rest of the front runners in the world.

I think short of getting into the Security Council, India is today much more visible in all global platforms and coalitions and groupings than we were in the past. And you will see that happening more and more.

So, it is not as if we are holding back waiting for that day when we become Security Council Member, but I think the Ukraine conflict and so on have shown, have proved the Indian point about the bankruptcy of the current Security Council in either trying to anticipate or to prevent or to solve a crisis of this magnitude. If there is any organ in the world today, which has failed

in its duties, it is the UNSC because it is mandated to uphold international security. So, the last place to go for a resolution of this war is the Security Council. The need is to have different stakeholders and to recognize that we are not in 1945. But you will have to work around the Security Council. Ambassador Pankaj Saran on UNSC and the Ukraine war.

PANKAJ SARAN

Former Deputy National Security Adviser of India.

FUTUREPROOFING INDIA

06

EXCLUSIVE CONVERSATIONS Future-proofing is perhaps a little bit more difficult for emerging economies and countries. If you are a superpower, perhaps you can influence even the way the future will go.

educated and well capable of adjusting to the future.

But do remember, a population that is over-scaled or over-educated sometimes finds itself letting itself down.

By focusing on something that will grow because you are focusing on it, you are putting money and resources into something that may not be a reality! No resources are given if it will take 100 years before fructification.

How many people want a plethora of PhDs running around the place? We would like to have people who do normal jobs- electricians, carpenters, or coding, etc.

There is a finite capacity to ingest and take into account super brights who have become super bright due to their education, etc.

Smaller countries, smaller societies, perhaps can do much better future proofing if they look at the environment, look at the obvious and work to be part of that. Secondly, understand who is likely to prey upon them in the sense of countries turning around to find reasons why anyone should come after them.

But if you are an emerging power with a future, you are an object of great interest because you will become a massive market, a mover and shaker, a doer of things.

In our neighbourhood, we have two countries, Pakistan and Bangladesh, which will be among the largest economies and societies in the world, in terms of population within the next few years.

By 2030-40, Pakistan will be among the five largest countries in the world and Bangladesh, just a few notches below that. If globalization remains (and the chances of putting the genie back are very small), these will also be enormous economies.

And therefore, managing these relationships is important, similarly with our northern neighbour, Nepal, which shares a border with China.

On the other hand, many may look at you as a rival, a future threat. So, the challenges are much more for a country like India.

There are few things the country must therefore do.

First, you need resources, which means essentially, putting it very simply, a growing economy.

The second thing is for a large country like India, and given the fact that we have been an independent, modern state only for 75 years, we need to focus the energy of the entire nation, the entire population, the entire society, on growing the economy, and taking ourselves forward inclusively.

Democracy means a degree of competition, fair enough, but it is the best system that we have.

In a broader sense of the term human resource development, you can say education and scaling each of these things is very important.

You have a population that is well-

Managing our relationship with China will not be easy; there is hegemony state competition and competition for leadership in Asia. The next 20-25 years will be crucial, after which three economies will have shot through way ahead of everyone else.

And I am not just talking about population, where India and China are way beyond anyone else. China will be the largest economy, India and the United States, smaller but huge compared to the rest of the world.

Price Waterhouse Coopers analysis done in 2015 estimated China will be about $110 trillion, the United States about $ 70 trillion and India at about $60 trillion.

Education, Human Resources Development, and managing your neighbourhood will be particularly important for India.

And, of course, internationally, we must play this game intelligently and smartly. Remember, if we are going to be at the very top, it’s difficult to take sides, and it’s difficult not to take sides.

So, it becomes a case of broadly managing our environment, which will be challenging.

MANJEEV SINGH PURI

Former Indian Ambassador to Nepal

INDIA’S LEAP TOWARDS ENERGY INDEPENDENCE India is forging an energy independence pathway that may take it to near zero emission by 2047.

This article is based on the recent visit of Ms.Sambratha Shetty, COO of Synergia Foundation, and her discussion at Lawrence Berkeley National Laboratory, CA, USA.

I

ndia has a unique opportunity to leapfrog into a clean energy infrastructure due to the dramatic reduction in clean energy costs, a lag of about $1-2 trillion in energy assets, and the increasing risks in fossil fuel supply and price. The political-economic alignment for the energy transition is happening, which could create a more stable and sustainable economy.

India has the potential to achieve energy independence and near-zero emissions by 2047, the first centenary of its independence, through transport electrification, renewable energy expansion, and green hydrogen implementation in the industry.

CLEAN ENERGY OPPORTUNITIES By harnessing clean energy technologies, India can achieve several key economic objectives economically. The possibility of achieving this has been brought closer to reality by the dramatic reduction in clean energy costs. It can eliminate its burden of oil imports by electrification of its transportation networks. As a fast-growing economy, India’s hunger for energy is insatiable and rapidly expanding.

The only inflation-free way to meet this demand is with renewable energy sources, which, if constructed in scale, could become cost-effective and stable power sources. In line with global thinking and persuasion,

India must go all out in supporting a RE expansion through domestic and foreign investments, specifically targeting solar, wind, and offshore wind resources.

Government agencies must streamline project approval processes enabling single-window approvals and offering incentives to stimulate rapid growth in the renewable energy sector.

India is one of the targeted counties for an immediate reduction/ ultimate elimination of its coal dependence as an energy source. This can be replaced by electrification and, more importantly, by making green hydrogen technology affordable, safe and practical. An added advantage would be that green Hydrogen, produced using renewable energy, can help decarbonise energy-intensive industries like steel, cement, and petrochemicals.

These clean energy opportunities have potential benefits such as cost-effectiveness, energy security, inflation-proofing the energy supply, and maintaining industrial competitiveness in the global market.

Certain factors favour India’s clean energy overreach within a short time. The country has been enjoying a reasonable economic growth rate which has given it a lead time of over a decade to manage a just and equitable transition, provided the initiative is launched without any further delay. This switchover will not impact domestic fossil fuel production, which will contin-

INDIA’S LEAP TOWARDS ENERGY INDEPENDENCE

ue generating revenues until the mid-2030s. New clean energy investments and consumer savings are projected to exceed $ 3 trillion and could generate significant employment for our youth bulge. However, what is critical is a policy ecosystem that makes it mandatory that most of the new assets are clean by incentivising domestic manufacturing.

ENERGY INDEPENDENCE PATHWAY Today’s focus is on India’s three largest energy-consuming sectors: power, transport, and industry. These sectors account for over 80 per cent of India’s energy consumption and energy-related CO2 emissions. India has two options to achieve energy independence: the Reference Scenario and the CLEAN-India (Clean Energy for Aatma-Nirbhar India) scenario.

The Reference Scenario, which is more legacy-based, projects historical and recent trends in clean energy deployment and assumes progress on existing targets and international commitments made by India at the current pace of deployment of clean energy. The reference pathway does not achieve energy independence. That is why the CLEAN pathway is so exciting!

CLEAN -INDIA In contrast, the CLEAN-India scenario is far more ambitious. It relies on expanding renewables in the power sector, electrifying transport, and expanding green hydrogen and electrification in the industrial sector.

In the CLEAN-India scenario, fossil fuel imports are reduced by over 90 per cent, with oil imports decreasing below 30 million tons of oil equivalent (Mtoe) and industrial coking coal imports reducing to below 5 Mtoe.

The reduction in fossil fuel will have to be matched with a massive Renewable Energy Scale-up; End-use electrification and a clean power grid would require a significant increase in renewable energy (RE) capacity. This includes around 500 GW total RE capacity by 2030 and 2700 GW by 2050, with offshore wind resources playing a critical role.

Domestic coal production peaks in the late 2030s, while domestic oil production remains relatively stable until the mid-2040s. By 2047, crude oil imports could be reduced by approximately 90 per cent ($240 billion/year) compared to the Reference case. Cumulative lithium demand in the CLEAN India pathway, which amounts to around 1.9 million tons by 2040 and 3.9 million tons by 2050, could be met by newly discovered lithium resources and recycling.

Obviously, there are clear benefits in the CLEAN India scenario. This includes consumer savings to the tune of $ 2.5 trillion between 2023-2050 as we switch our transport system to electricity. This would also open the clean energy sector as a major job creator.

09

Experts are confident that the impact on fossil fuel tax revenues, a major source of government earnings, will be manageable, thus allowing funds for the transition to clean energy. Assuming the current tax regime continues, the fossil fuel tax revenue is projected to stay at 2020 levels till 2035.

A direct fallout would be a dramatic cut in CO2 emission- up to 90 per cent by 2047. While there may be an emission peak in the early 2030s, it will drop down thereafter to under 500 million tons per year. Just imagine the savings in health care costs when premature deaths due to air pollution are reduced by over 4 million between now and 2047!

The CLEAN -India initiative is hinged upon two key strategies-electrification of the transport sector and Green Hydrogen in the industrial sectors. Electrifying vehicles, particularly heavy-duty vehicles (HDVs) and fleets can significantly reduce emissions in the transport sector.

EVs’ total cost of ownership (TCO) is already lower or comparable with internal combustion engine (ICE) vehicles, and upfront price parity is expected to be achieved by 2030. Electrification and green Hydrogen are crucial strategies for decarbonising energy-intensive industries. Achieving the economic viability of green Hydrogen should be a priority for India, as it can play a significant role in reducing industrial emissions.

THE WAY AHEAD To achieve the CLEAN-India vision, a robust policy ecosystem must be established. To achieve this, the pathway would be expedited by the milestones given in succeeding paragraphs.

India must go all out in supporting a RE expansion through domestic and foreign investments, specifically targeting solar, wind, and offshore wind resources. Government agencies must streamline project approval processes enabling single-window approvals and offering incentives to stimulate rapid growth in the renewable energy sector.

EV adoption is the way ahead, especially in the commercial bulk transport segment. Recently, the commercial vehicle major TATA showcased India’s first commercial electric truck, the Tata Ultra T.7.

The Government must also play its part by implementing policies that promote and reward the switch over to EV through financial incentives, charging infrastructure development, and public awareness campaigns. Prioritise the electrification of heavy-duty vehicles (HDVs) and fleets to maximise emissions reductions.

Green Hydrogen would be the key to future industrial growth. India must invest in research and development for green hydrogen production technologies and support pilot projects to facilitate cost reductions

INDIA’S LEAP TOWARDS ENERGY INDEPENDENCE

10

Source : caglecartoons

and scalability. Encourage collaboration between Government, industry, and academia to accelerate green hydrogen adoption across various industries. Domestic manufacturing must be incentivised for the manufacturing of clean energy technologies, such as electric vehicles, solar panels, wind turbines, and energy storage systems. This would create jobs and ensure that the transition to clean energy is economically sustainable.

The existing grid infrastructure is antiquated in parts and needs to be modernised to support RE-generated power transmissions. Certain sectors, like transport and industrial, would face additional demand, and the grid must be capable of providing a stable and reliable power supply.

As India moves towards energy independence and near-zero emissions, it is crucial to consider the social and economic implications for communities that currently depend on the fossil fuel industry. A just transition framework that includes workforce training and reskilling programs, support for affected communities, and targeted investments in clean energy industries to create new job opportunities would be crucial to success.

Synergia Foundation recommends that Carbon Pricing Mechanisms should play a major role. The Government must introduce carbon pricing mechanisms, such as a carbon tax or cap-and-trade system, to internalise the negative externalities of carbon emissions.

This would create an economic incentive for businesses and industries to transition towards cleaner energy sources.Collaborate with International Partners; engage with international partners to exchange knowl-

edge, technology, and best practices in clean energy development. Leverage global partnerships and initiatives to accelerate India’s energy transition and gain access to technical and financial resources.Public awareness is essential for the successful implementation of green energy sources.

Public awareness campaigns to educate citizens about the benefits of clean energy, electric vehicles, and energy efficiency measures will ensure widespread public participation and support in the energy transition process. All these activities will be ongoing concurrently across sectors and must be consistently monitored to evaluate progress.

There is a need to establish a comprehensive monitoring and evaluation framework to track progress towards energy independence and near-zero emissions targets. Regularly assess the effectiveness of policies and programs, and make data-driven adjustments to ensure India remains on track to achieve its clean energy goals.

CONCLUSION India’s journey towards energy independence and near-zero emissions by 2047 is not only an economic and environmental imperative but also an opportunity to redefine its growth trajectory and enhance the well-being of its citizens.

By embracing clean energy technologies, investing in innovation, and fostering an inclusive and equitable transition, India can chart a path towards a more prosperous, sustainable, and secure future for generations to come.

CHINA -THE HONEST BROKER?

The China-brokered normalisation of Saudi Iranian diplomatic relations hints at a realignment of geopolitical relations and power centres in West Asia.

SYNERGIA FOUNDATION RES E A RCH

T E A M

T

he decision by Saudi Arabia and Iran to reinstate diplomatic relations after seven years of rivalry in West Asia is as surprising as Beijing acting as a broker of this peace agreement. Evidently, the development caught the U.S. by surprise, which has considered the Middle East its turf for decades. China hosted the final negotiations between Riyadh and Tehran in Wuxi City after mediating several rounds of talks in Iraq and Oman in 2021.

More importantly, it makes an emphatic statement on the emergence of Beijing as a principal global player, a role China has diligently worked towards for the past few decades. This is well aligned with Beijing’s stated foreign policy goal of “quasi-mediation diplomacy” which seeks to promote China’s broad diplomatic, commercial and political objectives through consolidating consensus.

The peace agreement involves reviving a security cooperation accord signed in 2001 as well as a 1998 pact dealing with the resumption of trade, investment, and technical, economic, cultural, and scientific ties between the two countries. Additionally, both Saudi Arabia and Iran have agreed to reopen embassies in each other’s countries within two months.

This arrangement has been welcomed by other West Asian countries, the UN and the bulk of the West.

While not mentioning it openly, Washington may con-

Evidently, the U.S. is losing ground to China in different corners of the globe, but it has only itself to blame as it pursues a “de-prioritisation policy,” allowing the war in Ukraine to occupy centre stage in its diplomatic outreach. sider this move as a challenge to its historic domination as well as taking the shine off its much-touted Abraham Accord that saw UAE and Bahrain accepting Israel’s sovereignty, with Saudi Arabia expected to follow suit.

A DEEP-SEATED RIVALRY The traditional Islamic sectarian rivalry between the Saudi Kingdom, a Sunni state and Iran, a Shia country, has translated over the last few decades into a bitter struggle for regional hegemony. Both claim their position as the leaders of their respective sects and have bitterly fought each other through their proxies in Lebanon, Iraq, Syria and, most devastatingly, Yemen.

While relations between Riyadh and Teheran were steadily on the decline, especially after the rise of Iran as a major disrupter in Iraq and Syria, the final break up took place in January 2016, when both shut their diplomatic channels after a Shia cleric and opposition figure Ayatollah Sheikh Baqir al-Nimr was executed by Saudi Arabia. Since then, both became bitter enemies engaging militarily and politically at different levels, regional and international, to overcome each other for their political and religious differences.

CHINA -THE HONEST BROKER?

Outside powers were quick to exploit these differences, especially Israel, which considers a nuclear-powered Iran as the biggest threat to its very existence. Not surprisingly, the ‘Shia Crescent’ spread across the Middle East with its manifestations in Syria, Iraq and Libya. It paved the way for the U.S. and its European allies to use the rift for their own regional interests and to uphold their core strategic goal- ensuring the survival and well-being of Israel and keeping the Russians and the Chinese at bay. The emergence of Russia and its Wagner group in Syria and Libya and now the Chinese brokering the Iran-Saudi deal is indicative of the ground that has been lost by the West.

The rivalry peaked in the senseless civil war in Yemen, where Iran-backed Houthi rebels have taught Saudi and UAE-backed Yemeni government a bitter lesson in a protracted battle of attrition. The culminating point, most embarrassingly for Saudi Arabia, came in 2019 with Houthi drones devastating Saudi oil installations causing losses amounting to billions of dollars.

Now Riyadh has been trying to find a way out of the Yemeni imbroglio without losing face or acceding space to Iran. The ongoing popular Hijab protests in Iran have been another friction point between the two rivals. Saudi Persian language media channels have been instigating the protestors since day one of the protests, invoking a “credible threat of attack” from Iran.

Saudi Arabia is as worried about Iran’s nuclear programme as Israel. This agreement could be a positive development on that account, too, as the improved relationship between Riyadh and Tehran could open a new pathway for talks, with Beijing and Riyadh playing a constructive role.

China’s ability to bring these warring neighbours together and make them re-establish formal diplomatic relations is a credible achievement and hints at its balanced approach of cementing ties with “all players based on common interests” instead of focusing on geopolitical alignment groupings as is usually done by the U.S.

A WIN-WIN SITUATION Regional peace is crucial for Saudi Arabia to realise its “Vision 2030”, which aims to diversify the oil-dependent economy by attracting foreign investment and tourism, thereby transforming it into a global hub for business. This has led to Riyadh’s concerted efforts to end long-standing regional conflicts/rivalries; China could be a big investor in this approach!

For Saudi Arabia, its intervention in Yemen has turned out to be a disaster, with the Houthis putting up a stubborn resistance and carrying the fight into Saudi Arabia, which has suffered direct attacks on its oil and key military facilities from Yemen’s Ansar Allah. The Iran-controlled Ansar Allah is getting stronger by the day, and Crown Prince Muhammad bin Salman is keen to get an honourable exit from the Yemeni morass so that it gives him political space to carry out key reforms in the Kingdom and, more importantly, diversify its

12

economy. For this, he needs a modicum of peace with Iran which, as everyone knows, is the strategic handler of Ansar Allah.

Brutal sanctions by the U.S. and internal tensions have made the current regime in Iran the weakest since the revolution. A need for finding regional allies and for the revival of the nuclear agreement and the linked Joint Comprehensive Plan of Action (JCPOA) has rendered Iran amenable to reconciliation with Saudi Arabia. Saudi Arabia can play a pivotal role in the rehabilitation of Iran amongst the gulf community. Iran – Qatar ties are already on the mend, but it needs greater traction amongst the major Gulf nations, which can exert pressure on the U.S. to relent with the sanctions. As per conspiracy theories going around in the Middle East, the late chief of Republican Guards was on the cusp of working out a reconciliation between Iran and Saudi Arabia when he was liquidated by the U.S. in a missile attack.

In the Shia-Sunni war, it is the Shia that are the underdogs with the most to lose. Their further marginalisation, especially in countries where they are in majority but not in power, is not something Iran would directly or indirectly encourage. The reduction of this sectarian tension is in Iran’s favour, and once both rivals have functional ties, it will strengthen their mutual positions, economically and geopolitically.

Iran and China have grown closer since the western sanctions throttled Iranian trade and commerce.

A “prospective US$ 400 billion trade and military partnership” between China and Iran came to light in Jul 2020, which signposted a strategic geopolitical move which could have significant repercussions in the West and South Asian neighbourhood. The contours of the proposed deal continued to be the topic of debate until the New York Times obtained an 18-page ‘draft copy’.

According to the document, Iran and China were working on a Comprehensive Strategic Partnership of immense economic and military significance. Then China was struck by COVID 19, and nothing much was further heard of the deal.

Iran’s acceptance of China as a credible mediator can be seen as a response to the latter allowing Iran, despite U.S. sanctions, to withdraw a portion of the $20 billion funds that were frozen with Chinese banks.

AT THE COST OF THE U.S.?

Evidently, the U.S. is losing ground to China in different corners of the globe, but it has only itself to blame as it pursues a “de-prioritisation policy,” allowing the war in Ukraine to occupy centre stage in its diplomatic outreach. Also, as American dependence on Middle East oil reduces, the incentive to pursue its interests in the region slackens. However, as a champion of Israel’s security, the U.S. is aware that its Abraham Accord, which aims at securing the Israeli state acceptance and diplomatic recognition from Arab nations, means little as long as Saudi Arabia remains out of its ambit. While the Kingdom remains under the U.S. security umbrella,

CHINA -THE HONEST BROKER?

its ties with Washington have discernibly cooled during President Biden’s presidency, with the Khashoggi affair putting a cloud for a long time. Since accusations of human rights violations have been directly levelled at Crown Prince Mohammed bin Salman, allowing Beijing to play the role of mediator could be a not-so-subtle message by the Crown Prince to the White House.

Taking advantage of USA’s reduced enthusiasm in the region, China has signed multiple strategic cooperation pacts with both Saudi Arabia and Iran. China’s domestic interests are also served by its desire to bring stability in West Asia since it sources more than 40 per cent of its energy from the Gulf, and tension between the two major oil producers potentially threatens its supplies.

This could be a sobering moment for India. Its principal adversary has positioned itself as a geopolitical player in the Gulf region, crucial for India’s economic interests and energy security. This move could also diminish the significance of the I2U2 (Israel-India-UAE-US) or “quad of the middle-east” that the U.S. created as the post-Abrahams Accord security arrangement in the region. India’s strategic partner in the region, Israel, too, should be worried as its understanding of ‘enemy’s enemy is a friend’ may be shaken!

It does appear that both India and U.S were taken by surprise. India will have to stay engaged with the region so that there are no adverse effects on our security and economic interests. We have to intensify our security dialogue and work with the Saudis on their Vision 2030. Working on stable oil imports and facilitating Saudi investments in India’s petrochemical industry would be important. With Iran, we must look beyond their current difficulties and maintain strong political, economic and security ties. Get the Chahbahar port moving, work on gas-related investments, and keep up

13

Assessment It is too early to make a definitive assessment of the success of the Chinese-sponsored reestablishment of diplomatic relations between the two arch-enemies. The enmity is too deeply seated, and a diplomatic deal can hardly change the underlying sectarian tension between Sunnis and the Shias. However, it is a good sign that at least diplomatic channels of communication between the two leading players in the Middle East have now been established.

This raises hope for the long-suffering citizens of Yemen, caught in the power rivalry between the two. If the Yemen war is peacefully terminated thanks to better relations between Riyadh and Tehran, it could augur well for other Shia-Sunni conflict points like Lebanon and Syria.

China has scored a diplomatic coup of a sort for which it deserves all the credit. In a geopolitical landscape where China is often seen as an ogre, ready to gobble up its weaker neighbours, this would do much to enhance its international standing. dialogue on Afghanistan etc. The U.S. concerns are different. They will be looking to preserve their role as the key security provider to Riyadh and the global role of the petrodollar. The U.S. will also need to modulate its hostility towards Iran and get a nuclear accord back in place (perhaps working in tandem with Israel).

RANJAN MATHAI Former Foreign Secretary of India

AFRICA -THE NEXT BIG ONE? Africa has the promise to become a global engine of growth provided it gets its house in order.

he common perception of Africa is a continent awash with miseries-natural and manmade-ranging from famines and deadly fevers and incurable contagions to drugcrazed juveniles chopping limbs in gay abandon while spearheading unending internecine wars.

To add to his deadly cocktail is a growing jihadi influence, turning traditional tribal competitions into a religious war, a jihad. This image would be enough to discourage any potential investor in this vast continent.

The continent has made progress in the digital economy around frontier technologies such as cloud computing, blockchain development; telecommunication which saw 5G smartphone sales surpassing 4G ones for the first time; electric vehicles; financial inclusion through mobile banking; more women joining the tech landscape and cybersecurity as most tech companies increased investments in this sector.

The challenges are huge and many. The region faces economic headwinds, such as the economic slowdown stemming from a general broader and sharper slowdown in global economic growth, tightening global financial conditions, and rising food and energy prices, leading to increases in the cost of living.

job stagnation. A prime example of the problem is Nigeria, the largest economy in Africa, with a very high unemployment rate of 33.3 per cent. The country has been unable to translate its strong growth into poverty reduction and employment creation.

SYNERGIA FOUNDATION RES E A RCH

T E A M

T

There are shockingly poor pockets within the continent where extreme poverty has been exacerbated by the lingering effects of the COVID-19 pandemic, and an additional 15 million people were driven into extreme poverty in Africa in 2022.

THE CHALLENGES Africa is a continent with a demographic bulge dilemma. Its population has quadrupled since 1960 and is projected to double again by 2050 to 3 billion from its current population of 1.4 billion, which has caused

In contrast with the pattern in previous decades for regions such as Southeast Asia and Europe, sub-Saharan Africa’s manufacturing and formal sector has failed to absorb a large part of the available workforce, which holds true even for countries such as Ethiopia or Tanzania, which have had a few industrial successes. This is because Africa’s manufacturing sector has become more capital-intensive to stay up to date with production technology and remain competitive internationally instead of being labour-intensive.

There was an expectation that a rising Chinese mid-

AFRICA -THE NEXT BIG ONE?

dle class would result in manufacturing activities relocating to South Asia and Africa, bolstering economic growth and employment. However, while pushing for protectionist industrial policies, such as the $738bn Inflation Reduction Act of the USA, developed countries are “reshoring” jobs back to the home territory because they no longer need cheap labour from developing countries owing to affordable technology. Hence, there’s a remote chance of foreign capital coming to Africa’s manufacturing sector and creating jobs as it did in East Asia.

On the other hand, with a large portion of the African population being under the age of 25 and secondary school enrolment increasing from 5 per cent in 1971 to 43 per cent in 2018, there is a significant demand for jobs, particularly in the cities where the majority of job seekers who want to look for alternatives to farming, are located.

However, urbanisation in Africa is still at an early stage, meaning that cities are not yet the centres of production they could be. As a result, the informal sector, which lacks access to formal protections, benefits, and job security, remains an essential source of employment, accounting for 80.8 per cent of urban employment, with 95.8 per cent of these being young people. This ‘informalization effect’, which Covid-19 exacerbated, is in tension with efforts by governments to ‘formalise’ the informal sector and expand the reach of national government tax efforts to this segment.

One of the primary challenges in creating jobs in Africa is the productivity bottleneck. Many businesses in the informal sector lack the capital investment needed to become more productive. Increasing productivity is an expensive process that requires capital investment, but businesses in the informal sector are often unattractive to investors because they cannot show any prospects for long-term growth. This creates a vicious cycle in which employment remains in the informal sector, which cannot attract capital, leading to a lack of productivity that can only increase with capital investment.

Foreign direct investment (FDI) in Africa has been on a large scale, but the commercial nature of these investments means that they tend to be concentrated in a few productive firms and sectors, such as construction, mining, telecoms, and financial services. Although these investments have contributed heavily to African countries’ GDP growth, being capital intensive, they have not created significant employment opportunities, or at least not the type of employment that most people in African countries seek. For example, big gas projects like Total and Mozambique’s $20bn investment in offshore gas fields and an LNG facility have had a limited impact on job creation.

To address this challenge, African governments must attract more FDI into more labour-intensive sectors with greater potential for job creation. African governments face sustained fiscal pressure, sluggish economic recovery, and tight global financial conditions

15

that limit their ability to raise the capital needed for spending requirements. While fiscal recovery policies, such as cutting spending and increasing revenues, are essential, they may be in tension with economic recovery policies, such as increasing social security and expanding cash transfers.

Africa’s public debt is also approaching levels last seen in the early 2000s, the debt profile includes the substitution of low-cost, long-term multilateral debt with higher-cost private funds, exacerbated by an appreciating U.S. dollar.

CREATING JOBS To address the job bottleneck in Africa, two solutions have been proposed.

The first is to invest in education to produce more skilled workers who can work in sectors that are attractive for FDI flows. Education is critical in bridging the skills gap that exists in many sectors of the economy as it can create a skilled labour force capable of working in the high-tech industries, such as ICT, that are becoming increasingly important in the global economy as well as provide a more conducive environment for attracting foreign investment.

Moreover, investing in education can help create a culture of entrepreneurship, which is vital for SME development. By equipping young people with the skills, they need to start and run businesses; education can help reduce the risk of business failure and create a more stable environment for entrepreneurs. In this way, education can encourage more people to start businesses and contribute to the growth of the formal sector.

However, investing in education is not easy, especially in a region with limited resources. It requires long-term planning, sustained investment, and coordination between the public and private sectors. African governments must ensure that education policies are aligned with the needs of the labour market and that the curriculum is relevant to the skills required to compete in today’s global economy. This involves shifting focus from traditional literary studies that are commonly taught to quality vocational education in areas like engineering, data science, AI and mathematics.

One promising sector is the digital economy. In recent years, Africa has seen the rise of several “unicorn” enterprises, including Chipper Cash, Andela, OPay, Wave, Flutterwave, Interswitch, Esusu, Jumia, and Fawry, all of which are valued at more than $1 billion. These companies have shown that Africa has the talent, creativity, and entrepreneurial spirit necessary to thrive in the modern economy. To support this growth, African governments must focus on providing more training in areas like data science and computer programming through formal academic programmes and apprenticeships and other forms of hands-on learning.

At the same time, African startups must play a role in shaping the future of the continent’s education systems

AFRICA -THE NEXT BIG ONE?

by partnering with universities and other educational institutions to develop new programmes and curricula that address the needs of the digital ecosystem. Startups like DeepMind are already taking a leadership role in this area, a pan-African “AI for Science” master’s program in partnership with the Cape-Town-based African Institute for Mathematical Sciences that provides full DeepMind Scholarships to forty successful Africa-resident candidates.

The second solution is to promote the development of small and medium-sized enterprises (SMEs), which can become more productive with lower capital investment. Policymakers often neglect SMEs, but they are vital for job creation and economic growth. SMEs account for 80 per cent of the employment in Africa, but they face many challenges, such as access to finance, infrastructure, and skilled workers.

African governments can support the development of SMEs and make them more productive by creating an enabling environment for business growth, such as reducing the cost of doing business, increasing access to credit, improving infrastructure, and providing training, technical assistance, marketing help and education to entrepreneurs. Additionally, governments should promote policies that facilitate trade, including trade agreements with other African countries and the creation of regional markets that can help SMEs to scale up and expand their operations, besides attracting investment and creating more jobs.

Another potential solution to the job bottleneck is encouraging youth entrepreneurship. Youth unemployment is a significant challenge in Africa, with youth unemployment rates exceeding 50 per cent in some countries. Entrepreneurship can offer young people an alternative to formal employment and enable them to create their businesses and job opportunities. Governments can encourage entrepreneurship by creating supportive policies such as tax incentives, business incubators, access to finance and an enabling environment that supports private sector growth. This includes implementing strategies that make starting and running a business easier by reducing bureaucratic hurdles.

While creating jobs in Africa is a significant challenge, it is not impossible. With a concerted effort from governments, private sector actors, and international partners, generating the necessary conditions for sustainable job creation is feasible. Ultimately, the key to addressing the challenges facing Africa’s economies is to focus on concrete long-term strategies that support sustainable, inclusive growth. By investing in education and other public goods necessary for economic development, supporting SMEs, and promoting entrepreneurship, African countries can unlock their vast potential and achieve the economic growth and development they aspire to.

GETTING OUT OF THE DEBT TRAP Several policy options and initiatives can help alleviate the pressures around debt and support economic

16

recovery, such as the 4Rs approach, which includes debt relief, rescheduling, restructuring, and resilience.

While debt relief may be marginal due to the preponderance of private sector creditors, countries like China have already announced their willingness to waive interest-free loans for African countries. Debt rescheduling has also been initiated through the Debt Service Suspension Initiative (DSSI), which has resulted in potential savings of over $13 billion for 38 eligible African countries.

As for debt restructuring, concerns over the slow speed and limited reach of such efforts and their impact on credit ratings and future fund-raising may hinder the process. Resilience is also a crucial aspect, and the integration of climate resilience will be more prominent than in previous debt crises. Innovative initiatives, such as debt-for-climate swaps and the Debt Relief for a Green and Inclusive Recovery Project, offer comprehensive approaches that link large-scale debt write-offs to commitments by debtor countries for policies that enable climate-resilient and green development.

THE PROGNOSIS In the last few years, things have been looking up for Africa, like Shakira’s famous official song for the 2010 FIFA world cup held in South Africa , “Waka Waka- This Time for Africa!” Africa’s GDP growth rates have been at or above global averages over the past several years, with a post COVID-19 recovery growth average of 3.8 per cent in 2022, down from 4.8 per cent in 2021, and is expected to stabilise at 4 per cent over 2023-2024.

Since 2000, Sub-Saharan Africa’s GDP has grown by more than 468 per cent, against a global growth rate of 205 per cent. Nigeria’s GDP grew from $70bn in 2000 to $574bn in 2014, surpassing South Africa and making it Africa’s new economic powerhouse.

Access to capital markets has also increased, with foreign direct investment reaching $72bn in 2021, an increase of nearly 1000 per cent over the $7bn recorded in 2000. Funding within the startup ecosystem was projected to have reached $7bn in 2022, more than double the $3 billion in 2021.

The continent has made progress in the digital economy around frontier technologies such as cloud computing, blockchain development; telecommunication which saw 5G smartphone sales surpassing 4G ones for the first time; electric vehicles; financial inclusion through mobile banking; more women joining the tech landscape and cybersecurity as most tech companies increased investments in this sector.

The number of middle-class Africans has tripled over the past 30 years to over 350 million (34 per cent of the population), driving consumption and prosperity.

Africa today has a few flashpoints of insecurity in the form of civil unrest and military coups, mainly in the Sahel. So, if the Africans get it right, it would definitely be the time for Africa!

THE QUANTUM RACE

In all its manifestations, quantum technology will be the holy grail that superpower aspirants will compete for in the coming decade.

SYNERGIA FOUNDATION RES E A RCH

T E A M

W

hile we are still at the threshold of the quantum revolution but so much is the expectation from this cutting-edge game changer that the competing nations are jostling for advantage, with no holds barred There are several claimants for being the leader-China, the U.S., and in some segments, even Europe and Russia; the truth is that there is so much scope in this technology that some nations are ahead in some respects while others lead in others. For example, it is globally acknowledged that China leads in quantum communications.

In simple terms, “quantum” refers to the idea that all light, matter, and energy are composed of discrete units or quanta. Quantum science examines how nature works at the infinitesimal levels of atoms, protons, and other subatomic particles. The broader quantum revolution encompasses traditional sectors like security, energy, communications, climate change, fintech, and health care.

THE QUANTUM DIVIDE Global leaders, including the United States, China, Russia and UK have invested deeply in quantum research and development. The United States currently houses the world’s largest quantum computer, IBM’s Eagle. U.S. tech giants, including Google, Microsoft and IBM, give the United States a strong lead in quantum computing. The U.S. also leads in equity funding for quantum computing, with 110 deals signed between

The quantum domain in warfare would conceptually provide the military with a sixth dimension to wage warfare when combined with the existing land, sea, air, space, and cyber domains. It also demands specialised command and control arrangements to manage the fundamentally unique nature of the quantum domain.

2016 and 2021. In a series of government-led initiatives, the U.S. Congress passed the National Quantum Initiative Act in 2018 which details a national quantum computing strategy. This set aside $1.2 billion for R&D and created a framework for intra-governmental research coordination. The Department of Energy is deploying $625 million to finance five quantum information research hubs.

The U.S. has also initiated ‘quantum cooperation’ with countries such as Japan, Australia and the UK. There is also a strong emphasis on export controls, protection of intellectual property, and defending ‘national-security-relevant applications’ under the National Science & Technology Council’s National Strategic Overview for Quantum Information Science.

Attracting computing talent and expertise has gained attention from China, the United States, and the UK who have set up competitive national plans. China’s “Thousand Talents Plan” has gained global attention with its massive investments to lure scientists and researchers. The United States and China have further

THE QUANTUM RACE

imposed reciprocal restrictions on domestic companies to limit technological exchange with each other. This has impacted geopolitical dynamics, which shape quantum technology supply chains. With respect to patents, China clearly leads the way, supported by state-driven research on quantum technology.

The Chinese government has committed more than $15bn to quantum computing over the next five years.

Other commitments in quantum technology include a $10bn National Quantum Lab at the University of Science and Technology of China in Hefei. Alibaba is pioneering Chinese quantum research with its $15bn investment in the Academy for Discovery, Adventure, Momentum and Outlook.

China’s focus on technology has resulted in an emphasis on quantum communication networks. Researchers have built a satellite that can send quantum-encrypted messages between distant locations and a terrestrial network between Beijing and Shanghai.

China has also invested in nurturing a close working relationship between government research institutes, universities, and companies like CSIC and CETC. The European Union is not far behind in this tech race and is investing significant resources toward developing quantum technologies in computing, simulation, communication, metrology and sensing.

France, Germany, Australia, Canada, Switzerland, Austria, Israel, Netherlands, India, South Korea, Singapore and Japan are a few other nations that have also established well-defined national plans for quantum technologies.

The geopolitical dimension of this technological leap has gained credence with developments such as Brexit, former President Trump’s economic nationalism, and President Xi’s ‘fortress China’ policy. Events this year, such as Russia’s invasion of Ukraine, China’s stepped-up aggression towards Taiwan, and the volteface of neutral Sweden joining NATO, have further added to international tension.

The United States is home to the world’s largest quantum computer, IBM’s 127-qubit Eagle superconducting processor. This machine is the first system to surpass the 100-qubit barrier, and by the end of 2023, IBM is aiming for quantum supremacy with Quantum Condor, a mega-computer chip that could process over 1,000 qubits. China has also laid a claim to this space with its aim of developing advanced quantum simulators that can outperform classical computers by 2025.

Similar developments are taking place in other countries too. Russia has allocated over $790 million to develop quantum technologies.

Following Russia’s develop-

18

ment of a 5-qubit circuit, Germany made history with its first 27-qubit processor. In June 2021, Germany became the first European country to develop a quantum computer in partnership with IBM and the Fraunhofer Institute in Ehningen.

France supports the European Union’s Digital Compass project to produce its first quantum computer by 2025. The government has announced an investment of €3.5 billion in its tech startup environment.

Regarding bilateral research partnerships, France recently signed a memorandum of understanding with the Netherlands to promote collaboration. In addition, France and the United States are interested in collaborating on quantum information science and artificial intelligence.

In the United Kingdom, ex-Prime Minister Boris Johnson’s declared that the country must “go big on quantum computing,” spurring the government’s steady investment in the National Quantum Computing Centre in Harwell, Oxfordshire. In another effort towards research partnerships, the United States and the United Kingdom signed a joint statement of intent in November 2021 to collaborate on quantum information sciences and technologies (QIST).

QUANTUM WARFARE (QW) QW uses quantum technologies for military applications, which impacts intelligence, security and defence capabilities of all warfare domains. This brings in possibilities for new military strategies, doctrines, scenarios and raises important questions for peace and ethical issues.

The quantum domain in warfare would conceptually provide the military with a sixth dimension to wage warfare when combined with the existing land, sea, air, space, and cyber domains. It also demands specialised command and control arrangements to manage the fundamentally unique nature of the quantum domain.

Quantum technologies have the potential to revolutionise warfare in several ways, although currently, their practical use in warfare is limited. Examples of how quantum technology could be used in warfare include cryptography, sensors, computing, radar and imaging.

Quantum cryptography allows for secure communication channels that are impossible to intercept. This could be a significant advantage for military communications, making it much harder for enemies to spy on or interfere with military communications. On the other hand, quantum computers can perform certain types of calculations much faster than classical computers, which could be useful for breaking encryption codes, simulating

THE QUANTUM RACE

complex systems, and optimising logistics.Quantum sensors could detect enemy’s deep submerged submarines or other stealth vehicles more accurately. These sensors could detect tiny magnetic fields generated by these vehicles, making them much easier to track.

Quantum radar could allow for stealth detection of enemy aircraft. By using quantum entanglement to detect stealth planes, this technology could overcome the limitations of conventional radar, which can be evaded by stealth technology. Quantum imaging could be used for remote sensing, allowing for high-resolution images of enemy targets even in low-light conditions.

As of date, there are no known instances of quantum technology being used in actual warfare. While there have been research and development efforts in several countries to explore the military applications of quantum technology, there have been no reported instances of quantum technology being deployed in an actual military conflict.

However, the potential applications of quantum technology in military contexts have attracted significant interest and investment from several countries, including the United States, China, Russia, and the United Kingdom, among others.

It’s important to emphasise that the military applications of quantum technology are still in the early stages of development, and many technical and practical challenges need to be overcome before these technologies can be effectively deployed in a military context.

Additionally, using quantum technology in military contexts raises many ethical and legal questions, including concerns about privacy, data security, and the potential for an arms race.

Funding for research on developing new technology using quantum physics comes from many different sources, one of the largest being the U.S. military.

Quantum technology (the application of quantum physics into real-life applications) could give the U.S. military a distinct advantage over other countries when it comes to remote navigation, stealth, or intelligence.

Due to its potential implications for defence and security, NATO has identified quantum as one of its key emerging and disruptive technologies. Companies including Honeywell, Northrop Grumman, CETC, Raytheon and Lockheed Martin are leading the defence sector development of quantum technology. The 2018 U.S. National Defence Strategy lists quantum informatics as an important component for investment in ‘the re-emergence of long-term, strategic competition between nations.’

Many governments are increasing their investment in quantum applications in warfare as it promises a first-mover advantage. In the U.S., up to $3bn (€3.07bn) of federal quantum projects are either in operation or planned, including a $1.2bn National Quantum Computing Initiative.

19

INDIA AND ITS IMPERATIVES Quantum technologies can be applied in various areas of importance for India, including secure communications, exploring materials for green technologies and quantum sensing for mapping the impact of climate change. India also needs to establish secure, stable supply chains, create incentives for attracting talent, and work on strategic cooperation agreements with like-minded countries. Synergy within QUAD’s working group on critical and emerging technologies holds meaningful opportunities for India.

The government has stepped up its funding and investment in the quantum space. In 2019, the Union Government declared quantum technology a ‘mission of national importance .’A $1.2 billion National Mission on Quantum Technologies and Applications (NMQTA) was announced in the 2020-21 Union Budget to promote dedicated R&D in quantum technology adoption over five years. The government is funding about 92 per cent of the 100 quantum projects in India, thereby providing deep support to this upcoming area. India has recently announced that its nuclear submarines which are part of its strategic deterrent would be equipped with quantum communications.

There are snags, however, as with any government outlay. The NMQTA is still lined up for approval, with no funds allocated for FY 2022-23. Private sector partners have not been identified, nor has a comprehensive multi-stakeholder network been concretised. A quantum technology ecosystem requires integrated efforts across multiple domains ranging from quantum computing, communications, storage and hardware development. India urgently requires a long-term definitive action plan to integrate research and build a common platform for quantum R&D and quantum-compatible hardware manufacturing.

Assessment Quantum has become a new tool in geopolitics.

As countries race to invest and gain supremacy in this technological battlefield, science and R&D gain centre stage in geopolitics. The application of quantum to the military domains, while still in the early stages, has rung alarm bells as no country wants to be left behind.

However, it is in the application of quantum in weapons technology that all competing nations are fighting for, and this is one of the triggers of the ongoing U.S. -China Tech War. It could only get worse as technology evolves in all its forms.

For India to stay in the game, all legs of the machinery must work together, covering government funding, partnerships for attracting talent and strategic cooperation agreements with like-minded countries. This is a complex puzzle that requires all hands on deck.

GLOBAL ECONOMY: HOPE AMIDST THE GLOOM? Modest growth amidst severe economic headwinds is signalling resilience.

SYNERGIA FOUNDATION RES E A RCH

T E A M

I

t would be an understatement to say that the past 12 months have been anything but good for the global economy. It needs no economist to foretell the impact of a European war gone off the rails, the lingering impact of a pandemic and shrinking food stocks and rising energy costs.

While some countries show some green shoots of recovery, overall, the picture has been rather dismal.

2023 is being looked at as another tough year to tackle economically.

THE OUTLOOK Essentially, the economic landscape could be described as ‘two stories’, both connected yet so different in outlook. While the year had a tumultuous and difficult start, a rebound has been visible as we approach its mid-point, which hopefully shall take us into a brighter 2024.

The global economy has withstood many hurdles over the past year, many of which persist. Fears about global food supplies are high amid continued risks to grain exports from Russia and Ukraine. It is doubtful if Russia will hold up its end of a grain deal that allows the passage of food supplies out of Ukraine ahead of the renewal date in late March. The war is affecting the global economy via higher commodity prices, supply-chain disruptions and Russia’s weaponisation of energy sup-

Global growth estimates pegged at 1.9 per cent this year would still represent a steep slowdown amid major headwinds related to global monetary tightening and the Russia-Ukraine conflict. This situation will persist throughout 2023 (and probably beyond), as there doesn’t seem to be an end to the Ukraine conflict. plies. Global growth estimates pegged at 1.9 per cent this year would still represent a steep slowdown amid major headwinds related to global monetary tightening and the Russia-Ukraine conflict. This situation will persist throughout 2023 (and probably beyond), as there doesn’t seem to be an end to the Ukraine conflict.

The war in Ukraine has impacted commodity prices in particular. Experts believe global commodity prices will continue easing from their 2022 peaks but remain well above pre-war levels. European gas prices are expected to ease gradually in 2023-24 but will remain above 2019 levels, impacting households and businesses. A possible tightening of Western sanctions (for instance, on refined Russian oil) will further fuel price volatility.

Global inflation is expected to ease slightly to 6.3 per cent in 2023 from an estimated 9.2 per cent in 2022. Inflation is expected to lose momentum as global demand softens and commodity prices return from their 2022 peaks. Experts believe that central banks will maintain their aggressive policy stance to control inflation, even

GLOBAL ECONOMY: HOPE AMIDST THE GLOOM?

21

Source : caglecartoons

as global growth slows. Interest rates in most major economies will peak by mid-2023 and are expected to stay on hold until 2024.

Fears about global food supplies remain high owing to continued risks to grain exports from Russia and Ukraine. Russia’s commitment to the grains deal that allows for the safe passage of food supplies from Ukraine remains in doubt. In addition, the loss of Russian supplies of fertiliser will hit the production of agricultural commodities across the world this year.

A recent report from the World Bank indicates that the economic forces that have been driving progress and prosperity for the past 30 years are losing steam.

This is expected to result in a significant decrease in global potential GDP growth between 2022 and 2030, with the rate dropping by around one-third to 2.2 per cent per year compared to the first decade of the 21st century.

Developing economies are also expected to experience a steep decline in growth, dropping from 6 per cent per year between 2000 and 2010 to 4 per cent per year for the rest of the decade. These declines could be even steeper if a global financial crisis or recession were to occur.

“A lost decade could be in the making for the global economy,” said Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics.

This trend can be reversed, and the WB analysis shows that potential GDP growth can be boosted by as much as 0.7 percentage points—to an annual aver-

age rate of 2.9 per cent—if countries adopt sustainable, growth-oriented policies. That would convert an expected slowdown into an acceleration of global potential GDP growth.

THE THREE MOVERS The majority of the global economic weakness is expected to be concentrated in Europe, Latin America, and the U.S., while Asian economies are forecasted to drive most of the global growth in 2023. This is due to ongoing reopening efforts and less intense inflationary pressures compared to other regions.

Despite rapid monetary tightening, inflation persists in several key economies, particularly due to the strength of job markets amid severe labour shortages.

Consequently, monetary policy is likely to remain restrictive for most of 2023, which could hinder economic activity and potentially result in increased unemployment rates in various economies, particularly in Europe and the U.S. The three main economies powering global market trends are Europe, the U.S. and China and each of these presents specific trends. The EU has felt the strongest impact of the war, especially in Germany and central Europe, where energy-intensive industries will struggle to remain competitive.

The UK economy is disproportionately hit by the cost-of-living crisis, given its reliance on private consumption, and it is expected to be one of the few economies in the region to register a full-year contraction in 2023. Europe’s energy crunch could return in 2023/24 if temperatures get colder this year.

GLOBAL ECONOMY: HOPE AMIDST THE GLOOM?

The European industry is expected to face a net loss due to the increase in its already high-cost base. The chemical and fertiliser sectors, which use natural gas as a direct input to their final products, will be the most affected, while other sectors, such as automotive, which use gas for energy, can substitute it with alternative power sources, leading to less lasting scarring.

However, the gas crunch also presents opportunities for firms that can provide effective substitutes for gas in industrial processes, which could drive innovation in the energy and materials sectors.

In the U.S., the economy is expected to experience a steep slowdown in real annual growth, with the pace of consumer spending becoming unsustainable due to high inflation and a steep rise in interest rates.

To bring the economy back into balance, higher interest rates are required, which will temporarily increase unemployment but ultimately lead to stable inflation and sustainable economic growth, creating more jobs in the future.

China is well positioned to benefit from the reopening of its service economy and the boost in global growth, given its pre-existing cost base and scale advantages in metals, chemicals, and solar and wind installations.

China’s economy is projected to grow by 5.2 per cent this year, which will contribute two-fifths of the expansion in the world economy, as per IMF’s forecasts released on January 30th.

A recent study by economists at the Federal Reserve in the U.S. suggests that a policy-induced expansion in China’s GDP of 1 per cent could add about 0.25 per cent to the rest of the world’s GDP after a year or two, indicating that China’s growth can positively impact the global economy.

However, the increase in global growth could lead to inflation, and policymakers may raise interest rates or delay cuts to control it if China’s higher demand adds to price pressures. The reopening of China could also increase inflationary pressure, as per Christine Lagarde, head of the European Central Bank.

China is targeting economic growth of around 5 per cent this year, slightly lower than last year’s goal of around 5.5 per cent. The rebound in China’s economy is also boosting manufacturing in other parts of Asia, with Purchasing Managers’ Index (PMI) in Thailand, Vietnam, and other Southeast Asian countries increasing last month. However, the picture in North Asia was mixed, with Japan’s factory activity declining, while Taiwan’s PMI rebounded but remained below 50.

A FRAGILE RECOVERY Despite some recent signs of improvement, the global economic recovery is expected to remain moderate over the next two years. Downside risks persist,

22

particularly in relation to the war in Ukraine and high trade tensions.

Financial vulnerabilities have also increased, particularly in low-income countries, housing markets, and financial institutions. Although headline inflation has started to decrease, it remains high and may persist for some time.

The global economy has proven to be resilient so far in 2023, despite significant challenges related to the war in Ukraine and global inflation. However, growth is expected to slow to 2 per cent this year due to these headwinds and global monetary tightening.

In 2024, global real GDP growth is expected to pick up to 2.5 per cent, but growth rates in the future are expected to be below the pre-pandemic trend due to ongoing supply-side weaknesses. Inflation may also remain elevated due to expected labour shortages.

The global economic activity started 2023 on a slightly firmer footing and was more resilient than expected in late 2022.

However, the war in Ukraine will keep commodity prices high, particularly oil prices, which may remain above US$80/barrel until 2025 due to China’s reversal of its zero-COVID policy. European gas prices are expected to ease gradually but remain above 2019 levels.

Global inflation is expected to ease slightly in 2023 but will remain high at 6.7 per cent, due to continued supply chain disruptions from the war in Ukraine, high global commodity prices, and the still-strong U.S. dollar. Central banks are expected to maintain an aggressive policy stance to control inflation, even as global growth slows.

The recent decline in energy and food prices is boosting purchasing power for firms and households and is helping to lower headline inflation. The earlier-than-expected re-opening in China is also expected to positively impact global activity. Goods price inflation is declining in most countries, and core inflation continues to be driven by strong service price increases and cost pressures from tight labour markets.

PROGNOSIS The global economy still faces several key risks. The potential for a global recession in the near future cannot be dismissed, as several significant risks loom on the horizon.

These include the ongoing conflict between Russia and Ukraine, social unrest due to high inflation, limited options for emerging nations to mitigate its impact, rising tensions related to Taiwan, financial contagion following the collapse of two U.S. regional banks and the upheaval at Credit Suisse, a potentially new and aggressive strain of COVID-19 that may bypass immunity, and extreme weather conditions that could further exacerbate inflationary pressures.

GLOBAL ECONOMY: HOPE AMIDST THE GLOOM?

If any of these risks materialise, it could lead to a global recession within the next year.

In addition to this economic downturn, experts point to a potential downslide for democracy globally, as evidenced by a swing in support for Russia globally.

According to research conducted by the Economist, two-thirds of the world’s population live in either neutral or pro-Russia countries, particularly in the developing world.

The number of countries condemning Russia has decreased, while the number of neutral countries has risen, representing a surge in 1 per cent of the global population.

Previously Western allied countries, such as Colombia, Turkey, and Qatar, have shifted to a neutral stance to reap economic benefits from both sides. Additionally, more countries have leaned towards Russia, including China and developing nations like South Africa and Mali.

This indicates that Russia and China will continue to target emerging countries, posing challenges to Western democracies and diplomacy. Russia is using non-aligned neutral countries to sow doubt about the impact of sanctions and leverage resentment against

23

former colonial powers. This challenge will likely grow in the coming years, and Western democracies have yet to grasp the full extent of it.

Assessment The year 2023 promises mixed blessings as the downturn experienced in the first half has given way to a rebound expected to last for the second half. Despite the substantial challenges posed by the war in Ukraine and global inflation, the global economy has demonstrated resilience thus far in 2023. Nevertheless, the growth rate is anticipated to decelerate to 2 per cent this year, owing to the impact of these headwinds and the tightening of global monetary policies The economic and political connection is playing up to demonstrate some uneasy trends for 2023.

A democratic backslide is worrying, with countries such as Colombia, Turkey, and Qatar shifting to a neutral stance regarding the aggression in Ukraine. There will be severe challenges for Western democracies and diplomacy as Russia and China throw in their might together.

IMF PREDICTIONS FOR THE GLOBAL ECONOMY. In its six-monthly World Economic Outlook (WEO) published by the IMF on April 11th, it has been assessed that global economic activity is experiencing a broadbased and sharper-than-expected slowdown, with inflation higher than seen in several decades.

The larger picture is not a rosy one, with projected growth remaining low in the short and medium terms.

The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook.

Global growth is forecast to slow from 6.0 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023.

This is the weakest growth profile since 2001, except for the global financial crisis and the acute phase of the COVID-19 pandemic.

The only silver lining was the assurance that most countries would probably avoid a recession this year despite economic and geopolitical concerns. China and India are predicted to account for nearly half of the growth.

In contrast, low-income countries are likely to continue to be afflicted with the double shock of the high cost of loans and declining exports of their commodities.

As per IMF predictions, the global economic growth will be around 3 per cent in 2024, which is a 0.1 per cent drop from its January forecast.

The largest economy, the U.S. is likely to grow by 1.6 per cent this year, an increase of 0.2 per cent from the IMF’s previous forecast. The bad news is that in 2024, it may slow down further to 1.1 per cent.

The IMF expects global inflation to slow to seven per cent this year, down from 8.7 per cent last year, according to the WEO forecasts.

But this may not be universally evident with countries like Pakistan staggering under crippling greater than 35 per cent inflation.

Calming frayed nerves after the collapse of prominent banks like the Silicon Valley Bank, the IMF claimed that the resultant financial instability was arrested by the “forceful actions” of regulators on both sides of the Atlantic.

However, the danger is far from over and central banks and governments must continue strengthening financial stability tools.

Coming as a big relief is the IMF estimation that despite the slowing growth, all advanced economies will be able to ward off recession in 2023 and 2024.

DOLLAR IN DOLDRUMS?

China and Brazil, as BRICS members, agreeing to trade in their sovereign currencies should ring alarm bells in Washington.

SYNERGIA FOUNDATION RE S E A RCH

T E A M

I

n recent years, de-dollarisation has been a popular topic of discussion as nations strive to reduce their reliance on the U.S. dollar as a global reserve currency. In fact, conspiracy theorists go so far as to claim that any country that tries to do away with the dollar immediately becomes a victim of “international conspiracy’ to destabilise it and bring about a regime change.

The BRICS nations, which include Brazil, Russia, India, China, and South Africa, are among the foremost proponents of de-dollarisation. China and Brazil struck an agreement last week to settle trades in each other’s currency. China has replaced the United States as the primary trading partner of resource-rich Brazil over the past 15 years, and this transition may have been inevitable.

However, in the context of recent events, this appears to be another in a series of recent strikes on the dollar’s central position in international trade.

THE MIGHTY DOLLAR The U.S. dollar has dominated global markets for decades, with central banks around the globe holding vast amounts of assets denominated in U.S. dollars.

This has given the United States considerable economic and geopolitical influence, as they can borrow at low-interest rates and print dollars to finance their bud-

Although the initiatives to reduce reliance on the U.S. dollar are still in their infancy, they pose a significant challenge to the U.S. dollar’s dominance. If effective, these initiatives could result in a fundamental shift in the global economic landscape, with other currencies gaining prominence and the U.S. dollar losing its status as the preeminent global reserve currency. get deficits without experiencing inflation.

The dominance of the U.S. dollar has rendered other nations vulnerable and dubious. Fear of the potential consequences of U.S. economic policies, such as sanctions and trade restrictions, which can cause significant disruptions to the economies of countries that rely heavily on the U.S. currency, is one of the primary reasons for de-dollarisation.

NO LONGER THE KING? The shift from dollars to a yuan-real settlement basis in Chinese-Brazilian trade is merely the most recent example of a developing trend. Decades have passed since discussions of a more politically neutral reserve currency began.

However, the severe economic disruptions experienced by Iran and, more recently, Russia as a result of

DOLLAR IN DOLDRUMS?

25

their exclusion from dollar-based trading systems such as SWIFT have prompted numerous nations to consider immediate contingency plans.

Chinese President Xi Jinping, at which Xi Jinping expressed unwavering support for Putin, indicates that this conflict is likely to continue.

India and Malaysia, for instance, have recently begun using the Indian Rupee to resolve certain trades, and there have been reoccurring warnings about Saudi Arabia and other energy exporters abandoning the dollar. China recently conducted a demonstration transaction for natural gas with France that was settled in yuan.

The increasing use of alternative payment systems is another factor that has contributed to the de-dollarisation trend. The Chinese Cross-Border Interbank Payment System (CIPS), which was launched in 2015 to circumvent the traditional dollar-dominated Swift system, is a notable example. CIPS permits direct yuan payments between participating banks and has since been adopted by several nations to conduct commerce without relying on the U.S. dollar.

In addition to the dollar’s use in economic warfare, increasingly erroneous monetary policy regimes are driving various interests away from the greenback. The dollar’s value fluctuated unpredictably as a result of the monetary policy response to the 2008 financial crisis, and the response to the outbreak of COVID was even more frenetic.

The tremendously expansionary response to the pandemic in 2020 was followed by an initially dismissive stance toward the outbreak of inflation, which reached four-decade highs before implementing an aggressive contractionary policy shift that destabilised fragile financial institutions.

The United States’ substantial budget and current account deficits create uncertainty for foreign investors holding dollar-denominated assets.

If investors begin to question the United States’ ability to meet its debt obligations or maintain the dollar’s value, they may decide to reduce their holdings, which could lead to a significant depreciation of the dollar.

GETTING AROUND THE DOLLAR These factors, along with others such as the unpredictability of U.S. monetary policy, have prompted countries such as the BRICS nations to seek alternatives to the U.S. dollar.

One way they are achieving this is by diversifying their foreign exchange reserves by investing in the euro, yen, and yuan, among others. Another strategy is promoting the use of their own currencies in international commerce and investment.

China has actively promoted the use of the yuan in trade with its trading partners, including the Association of Southeast Asian Nations (ASEAN) and Russia.

The ongoing conflict between Russia and Ukraine illustrates the limitations of sanctions as a coercive instrument. Russia continues to bombard Ukraine with missiles despite being prohibited from the international payment system SWIFT and having its $640 billion reserve frozen by the United States.

The recent summit between Russian President Vladimir Putin and

The BRICS nations have also proposed the development of a unified payment system. In 2018, representatives from the BRICS nations met to debate the possibility of establishing a unified payment system that would permit direct transactions between members using their respective currencies.

The proposed system would offer an alternative to the traditional dollar-dominated Swift system and could further reduce the need for U.S. dollars in international trade. With its world’s largest UPI system, India could take the lead.

DE-DOLLARISATION VERSUS DOLLARISATION There are numerous benefits to de-dollarisation.

Enhanced monetary sovereignty is one of the primary benefits of de-dollarisation.

When nations possess significant quantities of U.S. dollars, they are subject to the policies and decisions of the U.S. Federal Reserve. This can expose nations to U.S. monetary policy decisions that may not be in their best interests.

By decreasing their reliance on the U.S. dollar, nations can exert greater control over their monetary policies and reduce their vulnerability to external economic disruptions.

Additionally, de-dollarisation reduces transaction costs. Transactions denominated in U.S. dollars incur currency conversion fees, which can be substantial.

On the other hand, simply substituting the fiat currency of the world’s largest economy with the fiat currency(s) of a smaller economy(s) is unlikely to be a viable replacement strategy.

Due to historical, technological, financial, and ingrained obstacles, moving away from the dollar presents substantial barriers to exit as well as network effects to surmount.

East Timor, Ecuador, El Salvador, the Federated States of Micronesia, the Marshall Islands, Palau, Panama, and Zimbabwe

DOLLAR IN DOLDRUMS?

26

Source : GlobalTimes

use the U.S. dollar as their de facto currency.

In addition, no less than 22 foreign central banks and currency boards have pegged their currencies to the U.S. dollar due to the (relatively) transparent nature of its monetary policy.

And dollars are the least expensive means of gaining access to nominally risk-free U.S. Treasury instruments.

Although these initiatives to reduce reliance on the U.S. dollar are still in their infancy, they pose a significant challenge to the U.S. dollar’s dominance.

If effective, these initiatives could result in a fundamental shift in the global economic landscape, with other currencies gaining prominence and the U.S. dollar losing its status as the preeminent global reserve currency.

THE INDIA VIEW The oil trade has benefited from India’s efforts to lessen its reliance on the U.S. dollar so as to circumvent sanctions imposed on Russia.

Long-term, however, the drive for de-dollarisation is unlikely to make the Indian rupee the world’s reserve currency. Instead, it will likely facilitate the replacement of the dollar with the Chinese yuan.

While it is commendable that India seeks alternatives to the U.S. dollar, it must also consider which side it is on when supporting Chinese and Russian efforts to

establish an alternative global payment system in which the yuan serves as the reserve currency.

In recent decades, India’s alignment with the West, and the United States in particular, has shifted. Any attempt to undermine the US’s global position could be detrimental to India’s interests.

Assessment Despite de-dollarisation’s challenges, it is likely to continue as countries seek to reduce their exposure to U.S. economic and geopolitical risks. The BRICS nations have the economic and political clout to press for alternative payment systems and international financial institutions, putting them in a prime position to lead this trend.

As the world becomes more multipolar, it is likely that the U.S. dollar’s dominance will continue to erode and that alternative currencies and payment systems will play a larger role in global trade and finance.

As China continues to rise, the balance of power is shifting, making it harder for the United States to impose its will on other nations through sanctions.

While India’s efforts to find alternatives to the U.S. dollar are commendable, it must also consider the long-term consequences of its actions and carefully assess whose interests it ultimately serves.

THE LABOUR MARKET PUZZLE

Labour markets appear surprisingly immune from the economic downturn, especially in Europe.

How long will the bubble last?

SYNERGIA FOUNDATION RES E A RCH

T E A M

T

he pandemic-enforced lockdown wrecked the labour market globally, with millions of workers rendered jobless and unemployment figures going through the roof. With the pandemic now on a retreat, a gradual recovery in the labour market is visible.

Significant regional-specific variations mark the current scenario across the globe. While the West wrestles with a tight labour market characterised by record-low levels of unemployment, the story in India’s growing economy is different. It is a mixed bag of layoffs, improved hiring in specific sectors and upskilling patterns.

In keeping with the buoyancy in the global market, analysts have described this honeymoon period as an “employment market”, a term used to describe the period of sustained economic growth and low unemployment that occurred in many Western countries during the 1990s and early 2000s. During this time, countries like the United States, the United Kingdom, and Germany experienced significant economic growth and declining unemployment rates.

NEED MORE JOBS? The western world has overall witnessed a stagnating GDP growth rate. Yet, the labour market has shown no dip as exemplified by America’s labour market, which has been described as “excessively tight”.

India’s job market is giving mixed signals, as per most reports. After a hiring slump in the second half of 2022, there are signs of improved recruitment in 2023, especially in the retail, real estate, BFSI, and automotive sectors. The IT sector is anticipated to pick up in the second half of the year after experiencing muted growth in the first.

The OECD countries reported an unemployment rate of 4.9 per cent in December, the lowest in many decades, with countries like Canada, France and Germany witnessing the highest share of working-age folk in a job.

Even the places synonymous with joblessness of the early 2010s—Greece, Italy, Spain—are doing much better now. This scenario adds up to nothing short of a miracle for Western economies.

Experts label it as an alteration in the labour force as an ageing workforce leaves minimal options for firms resulting in fewer layoffs.

As a result, the unemployment rate barely rises, even in recessions. In Japan, for example, over the past 30 years, the jobless rate has varied by just 3.5 percentage points, compared with 9.5 points in the average rich country. Post the pandemic, firms are in a stronger financial position. This may allow them to withstand

THE LABOUR MARKET PUZZLE

lower revenues today without slashing costs.

Many received help from governments during the COVID era. And in recent years, corporate profits have been hefty. Businesses across the rich world are still sitting on cash piles about a third higher than before the pandemic.

There is a strong relation to the workforce pattern too. The Economist estimates that roughly 1.5 per cent of the labour force, relative to pre-pandemic trends, is currently inactive. In Britain and Italy, the workforce has actually shrunk. Some of the deficit is due to early retirements and an ageing population. In addition, Covid has prompted a reassessment of priorities and has pushed some workers onto the sidelines.

As a result, falling participation has severely impacted firms that now need help to rehire. Employers are seriously reconsidering if it is worth their while to fire workers given the difficulties they face in hiring post-pandemic.

Official estimates in the UK state that about 1.3 million people were unemployed in December 2022, which points to an unemployment rate of 3.7 per cent, lower than at any point since the 1970s. The main reasons for not working depend on age; most of the 2.7 million “inactive” people under 25 are students, as per the Office for National Statistics (ONS), a majority of whom don’t want a job.

For the 3.5 million over-50s out of the job market, illness and early retirement are the leading causes. Among 25- to 49-year-olds, caring responsibilities are the main cause for the 1.1 million people who don’t work (about a million women).

A smaller workforce has implications for the government’s expenditure and revenue base. It means less tax to pay for services like the NHS and more lavish spending on benefits.

This, in turn, has implications for the economy since people on benefits generally have less money to spend on the market than those in work. That can be bad for businesses and how many people these enterprises want to employ. In turn, this can affect the number of jobs available for those who are job hunting.

In the U.S., the labour market is more robust than it has been for more than 50 years, with service-led industries showing the highest share of job growth this year.

There have also been substantial gains in transportation and warehousing, with warehouse employment about 50 per cent higher than in 2019. Analysts have pointed out, however, that higher interest rates will slow demand and start to weigh on the labour market.

U.S. unemployment is currently at a 53-year low; these numbers have been seen before in 1969! Wage growth is slowing in these parts despite meager unemployment numbers. While unemployment fell to 4.4 per cent in January, wage growth too fell below infla-

28

tion by about 1 per cent. This wage growth plateauing has a double impact. While workers will find it tough to match their wages to keep up with inflation, slower wage growth could help prevent inflation from rising and interest rates from rising. Experts such as the Fitch Ratings predict that slowing aggregate demand due to higher interest rates will impact the U.S. labour market, and the 517,000 new jobs created in January will only last for a while.

In the U.S., much like the UK, workforce participation remains below pre-pandemic levels. We have 3 million fewer Americans working today compared to February of 2020.

During the pandemic, more than 120,000 businesses temporarily closed, and over 30 million U.S. workers were unemployed. Since then, after the pandemic effects receded, job openings have steadily increased, while unemployment has slowly declined.

The U.S. Chamber surveyed unemployed workers who lost their jobs during the pandemic on what keeps them from returning to work. The need to care for children and responsibilities at home topped the list with 27 per cent indicating this reason for not returning to work.

Another significant percentage indicated health and managing illness as reasons which kept them away from work. Moreover, concern about COVID-19 impacting them while at work was also a worry. Others indicated they wanted to acquire new skills and education before re-entering the job market.

MIXED SIGNALS FOR INDIA India’s job market is giving mixed signals, as per most reports. After a hiring slump in the second half of 2022, there are signs of improved recruitment in 2023, especially in the retail, real estate, BFSI, and automotive sectors.

The IT sector is anticipated to pick up in the second half of the year after experiencing muted growth in the first. Some industries, such as real estate, retail, tech, and BFSI are already on an upward trajectory despite a slow-growing economy and high inflation.

The global economic scenario has impacted the Indian market, too and has resulted in uncertainty in the job market. The pandemic affected the labour market by resulting in challenges of a short supply of talent and wage wars. Inflated salaries and expectations from 2021 compound this. As a result of global disinvestments in certain sectors, startups saw a 33 per cent increase in attrition.

Large US-based tech firms such as Amazon, Meta, Twitter and Microsoft and even smaller startup companies have responded by trimming their workforce. The economic uncertainty has impacted growth plans for several startups that raised a lot of money during 2021 and now need to lay off people.

THE LABOUR MARKET PUZZLE

29

Source : Paul Fell Cartoons

In 2023, organisations will become more cautious and turn towards data-driven decision-making in their hiring process.

Hiring has also slowed down because of shrinking margins, increasing hiring costs and competitiveness in the industry.

Anticipated trends include increased use of digital media, automation and analytics, reskilling and upskilling of the work force, and focus on diversity, equity and inclusion, leading to demand for talent and consequent hiring.

Experts believe that the impact of the impending recession will be muted on the Indian IT market owing to the sector’s diversity.

Some major tech giants, including Twitter, and Meta Platform, have announced massive job cuts. Large conglomerates such as Microsoft and Snapchat too have fired significant chunks of their workforces. Intel is another organisation aiming to follow the same path, and Amazon and Apple have put a break on hiring. The trend points to the recession cloud which could be looming ahead urging tech giants to shed extra fab.

The IT contribution to India’s employment sector is significant, and it adds up to India’s overall unemployment numbers, which are also on the rise. Labour market metrics deteriorated in October 2022 with a falling labour participation rate and unemployment increase from 6.4 per cent to 7.8 per cent.

The Centre for Monitoring Indian Economy (CMIE) estimates that despite witnessing a decline from 86 million in September to 84.7 million in October, salaried jobs in both months were, in fact, higher than they were during any other month since the pandemic-related lockdowns that hit India in March 2020.

The IT sector is behaving in an over-cautious mode due to fears of a looming recession in the U.S. since India’s dependency on the American market is significant.

Going forward, experts anticipate that businesses will emphasise creating work-life integration cultures, nurturing speciality talent, improving skills, and offering flexible work schedules as short-term opportunities increase. The trends indicate that the market is more tuned towards relevant talents than legacy capabilities.

Experts predict that increasing internal talent mobility will be one of the big trends in hiring for 2023.

Assessment The post-pandemic situation has given rise to some unique conditions across the globe. The advanced markets of the U.S. and UK are witnessing tight labour market marked by low unemployment levels alongside falling workforce participation.

In India, the situation is more complex, where we are witnessing tech giants induced massive job layoffs while specific IT, healthcare and leisure sectors experience a boom. An overall trend of upskilling and business transformation based on talent mobility remains a strong feature of the labour market.

THE NEXT SHOCK Is the world moving towards a global food shortage by 2024?

SYNERGIA FOUNDATION RE S E A RCH

T E A M

T

he World Food Programme (WFP) and The Food and Agricultural Organization (FAO) have raised severe concerns about the rising levels of hunger and starvation worldwide, particularly in the Least Developed Countries.

The 2022 Global Report on Food Crises (GRFC) highlights the remarkably high severity and numbers of people in hunger and starvation in 53 countries primarily driven by conflict, economic shocks after the COVID-19 pandemic and extreme weather conditions.

It has been identified that close to 345.2mn people are projected to be within the food insecure zone, with the number being the highest over this decade, almost double the number forecasted in 2020.

FOOD INFLATION The latest information from the World Bank has shown that domestic price inflation on food cereals remains the highest worldwide between October 2022 and February 2023. Data shows that inflation levels on food prices have reached 5 per cent in 88 per cent of low-and-middle-income countries and 85 per cent of high-income countries.

The earliest warning signs of a global food crisis were seen during the COVID-19 pandemic, which led to several global supply chain disruptions due to lockdowns and the suspension of international logistics transport. The COVID-19 pandemic increased global food insecurity in most countries by reducing incomes and disrupting key supply chains globally. The World

For most LDC countries, organized violence remains the primary driver of acute hunger. Also coming with it is the risk of humanitarian assistance being cut from the United Nations and Red Cross due to shortfalls in funding that can send a further shockwave across the regions in concern.

Bank reports that severely food-insecure people doubled from before the pandemic to about 276 million. By the end of 2022, due to the combined effects of a social and economic fallout after the pandemic, the WFP estimated that the number of those in the hunger zone rose to about 300 million.

THE UKRAINE CATALYST The conflict in Ukraine could be seen as a primary catalyst for the global hyperinflation in food prices in recent times. Ukraine and Russia make up about a third of the world’s global wheat supply, with Ukraine also being a primary export source of sunflower oil, barley, maize, and crop fertilizers. The ongoing conflict has wholly wiped out Ukraine’s production cycles, with no crops being planted. Conscription and population displacement have caused labour shortages in the agricultural industry, with access to fertilizers severely restricted with almost no harvests.

The worst-hit countries in the MENA region directly rely on food imports from Russia and Ukraine. The Russia-Ukraine war came during a negative period for food markets already plagued with overdemand and

THE NEXT SHOCK

31

undersupply due to the COVID-19 pandemic. The WFP reports that 26 million people are expected to face the worst food insecurity crises in decades just in Somalia, Ethiopia, and Kenya. Somalia has been identified as receiving a threat of famine for the third time in ten years, as per WFP Executive Director David Bealey. Moreover, DR Congo, Haiti, Kenya, Sudan, and Syria have been flagged as “very high concern” areas where current food insecurity can become a life-threatening crisis.

million people and damaging about 80 per cent of the country’s crop plantations. In early 2023, a worsening economic condition in Pakistan with mounting government debts, low forex reserves and sky-rocketing inflation rates, along with the wipeout of crop plantations in the summer of 2022, created one of the worst food shortages in the country. Pakistan suffers a net wheat flour deficit of 2.37 million metric tons, the worst in decades.

Despite their limited position in the global economy with only a 2 per cent contribution to world GDP, it is essential to note that Russia and Ukraine are agriculturally the “breadbaskets” of the world as agricultural commodities are heavily concentrated in the region.

This concentration of the agricultural powerhouse can make the global food market more vulnerable to shocks and volatility.

Climate shocks across the world have also caused fertilizer prices to climb, perhaps at a greater rate than food prices. High natural gas prices have made it expensive to produce and export fertilizers leading to reduced supplies in a period of high demand causing an inevitable rise in the price of agricultural exports with a reduction in the quality of a good harvest.

The WFP set a pre-war baseline of about 276 million people suffering from hunger, which was pushed by an additional 47 million after the war broke out between Russia and Ukraine due to food price hyperinflation. The war has inflicted a significant blow on the commodity markets, particularly food and energy prices. This, in turn, had a spill-over effect on global trade, production and consumption that looks to set the costs of these essential commodities at an all-time high until 2024, threatening global food security.

UNCEASING BUSH WARS For most of these countries, organized violence remains the primary driver of acute hunger. Also coming with it is the risk of humanitarian assistance being cut from the United Nations and Red Cross due to shortfalls in funding that can send a further shockwave across the regions in concern.

Conflict is perhaps still one of the most significant drivers of the seismic hunger crises. About 70 per cent of the world’s population that faces hunger lives in areas affected by war. Most countries within the global hunger hotspots have a history of economic and political instability, with ongoing armed conflicts forcing people out of their homes, wiping out their source of income and completely wrecking economies.

The effects of disruption in fertilizer production are being felt as far as Latin America, as many countries in the region, such as Brazil and Chile, are heavily dependent on imports of fertilizers (about 85 per cent). With wheat, maize, rice, and soybean production falling globally, the crisis could turn from a food affordability to a food availability one by 2024.

THE PATH AHEAD TO 2024 Global cooperation between countries and international organizations needs to take steps to reduce the effects of conflict, economic fallout, and climate shocks on food security. Since early 2022, several strategies and plans have been put into place to tackle rising global hunger levels by governments, the WFP, and the FAO in collaboration with private and public contributions.

Establishment of Food Corridors. Establishing a food corridor between countries is a potential way to reduce the shortage of essential food supplies. An example of this strategy is the India-UAE-Israel-U.S. Food Corridor, established in July 2022. The UAE pledged USD 2bn in investments to develop food parks in India that would assist in reducing food shortages due to climatic shocks and economic instability in South Asia.

Climate shocks are another major catalyst for global food supply disruption. Extreme climatic events such as floods, storms and drought have become critical drivers of climate shocks across the globe, particularly in the hunger hotspot countries.

The basic idea is to bring the most critical stakeholders in the agricultural sector to use the latest artificial climate technology to maximize crop yields and promote recycling and conservation of water and energy. This strategy came directly due to fears amidst rising food shortages due to the war in Ukraine focusing on ensuring food and energy security. The establishment of the food security corridor is said to benefit approximately 2 million farmers across South Asia and create about 200,000 additional jobs.

The 2022 GRFC report shows that the Horn of Africa region has witnessed its most extended drought season in forty years, with its fifth failed monsoon in a row. Rising global temperatures, with staggered periods of rainfall, have also deemed many previous agricultural hotspots unfit for production leading to no crop harvests in the season. In contrast, Pakistan suffered its worst monsoon floods in 116 districts, affecting 33

According to the UAE, the project’s basis is to improve food security in South Asia and the MENA region by increasing food exports from India to the Middle East and North Africa regions, moving away from being overly reliant on Russia and Ukraine. The Food Parks are set to be a strategic initiative to increase certainty in the food supply chain and improve production efficiency within agriculture. If successfully implemented,

THE CLIMATE EFFECT

THE NEXT SHOCK

the project could become a blueprint for further international cooperation to protect the agricultural industry from the threat of externalities that can have huge impacts on food security as they do in current times.

Establishment of Global Seed Banks. Global seed banks are a much-less discussed and less well-known potential solution to the impending food shortage crisis. There are about 1000 international seed banks worldwide, with the largest being in Svalbard, hosting nearly 1 million different seed samples from maize, rice, wheat etc.

The Global Resilience Institute has said that these seed banks are an essential tool for ensuring agricultural resilience when the world is faced with climate shock and other disasters. They aim to become an insurance policy for the world’s agricultural sector to overcome challenges from climate change and other externalities.

Global investments in such seed banks could pave the way for increased food security that could be a viable solution during times of extreme threat of famines and hunger.

32

A shift from Commercial Crops to Traditional Crops.

2023 has been declared as the International Year of Millets by the Food and Agricultural Organization, with a major push being given by India. Millets are one of the earliest crops known to have been grown on the earth’s surface, with the property of being resistant to extreme weather conditions and can be quickly produced in adverse weather conditions as well.

Speaking at the Global Millets Conference in Delhi, Indian PM Shri Narendra Modi addressed the need to re-instate the ancient super-crop that once fed the world as a solution to the food security challenges faced by the Global South and the diseases linked to food habits in the Global North.

Moreover, the President of Guyana has allotted 200 acres of land for the exclusive production of millets, which will be an important export crop, in exchange for technological support for enhancing the production of millets from India. In collaboration with relevant international organizations, such government initiatives are key to addressing the impending food security crises.

EXCLUSIVE CONVERSATIONS It is hard to believe that just a few years ago, there were only 80 million people marching to starvation around the world of starvation, not chronic hunger; Then it jumped to 135.

globe.” Unless we negotiate around the table and get free access to food and fertilisers, we will have a food shortage by the end of 2023, or the food prices will be so high as to become unaffordable.

Why men made conflict and climate shocks? And that was before COVID came along, just devastating the supply chains, causing disruptions worldwide, and 135 million goes up to 276 million.

You will have the destabilisation of nations that will result in mass migration, which will cause 1000 times more misery than what we have previously anticipated.

Can it get any worse? It did when the breadbasket of the world-Ukraine- shut down. Now the world faces the longest breadlines, with 350 million people marching to starvation, not knowing where the next meal comes from because Ukraine alone grew enough food to feed 400 million people.

Compounded with the fertiliser and fuel crises, I could go on and on- the world is in serious trouble.

When the Ukraine war started, everybody was focused on the Eastern Front. And I was trying to tell everyone, “Odessa- we must get the ports open.

If we don’t, there will be hell on earth!” I even tweeted President Putin, “Open these ports, or there will be famine across the

For example, the WFP was expected to announce famine in Somalia because there have been four or five back-to-back seasons of drought and the unprecedented absence of rain in the last four decades. The U.S., Germany and other donors stepped up magnificently, and we averted famine. But we have only postponed it.

It is not just Somalia- there are other areas like the Somali region of Ethiopia, the Horn of Africa, parts of Kenya, and then you get into western Africa with droughts.

We are staring at food production going down in Africa while, at the same time, food production reduces in India, Argentina, the U.S. etc. I can go on and on…this is a serious situation.

And who is going to pay the highest price? The poorest of the poor. So if we don’t get ahead of this, we will have mass migration and potentially mass starvation in nations around the world.

DAVID MULDROW BEASLEY former Executive Director of the United Nations World Food Programme.

THUMBS UP FOR MARINE DIVERSITY!

Protecting global commons has received another nudge with the long-awaited high seas treaty.

SYNERGIA FOUNDATION RE S E A RCH

T E A M

O

n March 5th, a jubilant Ambassador Rena Lee of Singapore leading the Intergovernmental Conference on Marine Biodiversity of Areas Beyond National Jurisdiction, better known by its acronym BBNJ, exulted, “Ladies and Gentlemen, the ship has reached the shore.” It marked the culmination of gruelling UN-facilitated talks that started almost a decade back.

Being referred to as the ‘High Seas Treaty’, this legal framework would attract financial contributions to marine conservation and give a degree of protection to marine genetic resources.

“This action is a victory for multilateralism and for global efforts to counter the destructive trends facing ocean health, now and for generations to come,” said UN Secretary-General António Guterres.

The treaty is considered vital to addressing the triple planetary crises of climate change, biodiversity loss and pollution.

A CHALLENGING MILESTONE-30 BY 30!

Climate change and environmental protection have recently received significant attention with global treaties and commitments.

Safeguarding marine biodiversity is a strong compo-

The High Seas Treaty has a demanding target of placing 30 per cent of the seas into protected areas by 2030 in keeping with the mission to safeguard and recuperate marine nature. The pledge will cover almost two-thirds of the ocean outside national boundaries. The treaty will provide a legal framework for establishing vast marine protected areas (MPAs) to protect against the loss of wildlife and share the genetic resources of the high seas. nent of this ecosystem as it plays a critical role in the health and sustainability of our oceans, ecosystems, and human communities. Ocean ecosystems provide half the oxygen we breathe and limit global warming by absorbing a significant portion of the carbon dioxide emitted by human activities. This ecosystem is increasingly threatened by climate change, pollution and overfishing.

A concerted effort by international organisations and environmental groups has finally resulted in an ambitious high-seas treaty to safeguard and conserve marine nature.

The high seas are subject to severe exploitation due to commercial fishing and mining and pollution from chemicals and plastics. The new agreement is “ac-

THUMBS UP FOR MARINE DIVERSITY!

34

knowledging that the ocean is not a limitless resource, and it requires global cooperation to use the ocean sustainably,” Rutgers University biologist Malin Pinsky said.

In a recent assessment of marine species, nearly 10 per cent were found to be at risk of extinction, according to the International Union for Conservation of Nature (IUCN).

After almost 20 years of talks, United Nations member states have finally agreed on a legal framework for parts of the ocean outside national boundaries. This treaty represents the first international commitment to protect the high seas.

Dr Ngozi Oguguah, chief research officer at Nigerian Institute for Oceanography and Marine Research, said: “The two biggest causes [of extinction] are overfishing and pollution.

The previous international agreement on ocean protection was signed in 1982 as the UN Convention on the Law of the Sea. As part of this treaty, the high seas were established as an area comprising international waters where all countries have a right to fish, ship, and research. Regulation of these waters remains limited, with only 1.2 per cent protected.

The High Seas Treaty has a demanding target of placing 30 per cent of the seas into protected areas by 2030 in keeping with the mission to safeguard and recuperate marine nature.

If we have marine protected sanctuaries, most marine resources will have the time to recover.”

Some species have come under more pressure, such as the Abalone species - a type of shellfish and sharks and whales have come under particular pressure due to their high value as seafood and for drugs.

The IUCN estimates that 41 per cent of the threatened species are also affected by extreme events like cyclones caused by climate change.

Minna Epps, head of IUCN’s ocean team, said: “A bit more than a quarter of emitted carbon dioxide is actually being absorbed by the ocean.

The pledge will cover almost two-thirds of the ocean outside national boundaries. The treaty will provide a legal framework for establishing vast marine protected areas (MPAs) to protect against the loss of wildlife and share the genetic resources of the high seas.

That makes the ocean much more acidic, which means that it’s going to be less productive and jeopardise certain species and ecosystems.”

Environmental groups are hopeful it will help reverse marine biodiversity losses and ensure sustainable development.

The high seas treaty has raised several contentious points, including the level of protection in those areas, which was fiercely contested and remains unresolved.

The treaty also necessitated countries to conduct environmental impact assessments of proposed activities on the high seas.

Other points included definitional issues as well as the level of protection accorded in these areas.

According to estimates by Greenpeace, 11 million square km (4.2 million square miles) of the ocean must be protected annually until 2030 to meet the target.

PRESERVING GLOBAL COMMONS The high seas are defined as waters which begin at the border of a country’s exclu- sive economic zones, extending up to 370km (200 nautical miles) from coastlines.

Beyond that point, the seas are under the jurisdiction of no country and are considered a global common.

Thus far, the high seas have not drawn much a t tention other than coasta l waters and a few iconic species, even though they comprise more than 60 per cent of the world’s oceans and nearly half the planet’s surface.

WILL THE TREATY SUCCEED?

Dr Simon Walmsley, chief marine advisor of WWFUK said: “There was debate, particularly around what a marine protected area is. Is it sustainable use or fully protected?”.

It is agreed, though, that irrespective of the form of protection agreed upon, the result would be a restriction on fishing and passage routes of shipping lanes and exploration activities like deep-sea mining.

Another sticky point in the treaty is the arrangements for sharing marine genetic resources, such as biological material, from plants and animals in the ocean.

surge valuable sources.

These materials are used in modern pharmaceuticals and food, leading to a in demand for these marine genetic re-

Other points of dispute include the procedure for

THUMBS UP FOR MARINE DIVERSITY!

creating marine protected areas and the model for environmental impact studies of planned activities on the high seas. Financing for the environment is a perennial thorn and it played up in the high seas’ treaty too! In an attempt to build trust between rich and poor countries, the European Union pledged €40m ($42m) in New York to facilitate the treaty’s ratification and its early implementation.

Developing countries made a strong pledge for a greater share in the “blue economy”, including the transfer of technology.

While the treaty’s signing represents a significant breakthrough, much work must be done before it is legally agreed.

The treaty needs to be formally adopted at a later session, and then it only enters “into force” once enough countries have signed up and legally passed it in their own countries.

Dr Simon Walmsley said: “There is a real delicate balance; if you don’t have enough states, it won’t enter into force. But also need to get the states with enough money to get the impact. We are thinking around 40 states to get the whole thing into force”.

Countries have already registered concerns over the treaty’s final text, with Russia being the first to do so.

Implementation is a crucial step in the efficacy of the treaty.

35

Source : Greenhumour

Marine protected areas should get properly connected since many species are migratory and may travel across unprotected areas where they are at risk.

Assessment In a big thumbs up for protecting marine biodiversity, the high seas treaty shores collective efforts at conserving our seas and the diverse marine life therein. As part of the global drive for environmental protection, a high seas treaty is necessary to protect the high seas’ critical ecosystems and the species that depend on them. The treaty could establish a system of marine protected areas and regulations for human activities, providing a framework for managing the high seas sustainably and responsibly.

Negotiations between countries will be the biggest challenge in implementing the treaty, and the fate of our planet depends on the collective will of independent nation-states. While the treaty is a thumbs up after many years of protracted negotiations, the proof lies in its implementation!

Keen conservationists and environmental groups are vowing to watch its fate closely. Climate change in the sea can be dealt with only by managing the synergies across the other global agreements, such as the Paris Agreement, which aims to protect against potential impacts like deep sea mining.

BUILDING ENERGY SAVINGS

The Department of Energy’s FLEXLAB® at Berkeley Lab is revolutionising building energy efficiency, as a recent visit to the Lab by Synergia disclosed.

T

This article is based on the recent visit of Ms.Sambratha Shetty, COO of Synergia Foundation, and her discussion at Lawrence Berkeley National Laboratory, CA, USA.

he building sector accounts for a significant portion of global energy consumption and greenhouse gas emissions, making it a critical area for reducing our environmental impact.

Energy-efficient building design and operation are essential for achieving this goal. However, this is easier said than done, as it can be challenging to identify the most effective strategies and technologies for reducing energy use while maintaining indoor environmental quality and occupant comfort.

Moreover, changes always involve a spike in costs, especially in the early stages when the supply chains are yet to stabilise.

A principal area of advanced research nowadays is on building energy saving (BES).

THE FLEXLAB® APPROACH Enter FLEXLAB® at the Department of Energy’s (DOE’s) Lawrence Berkeley National Laboratory (Berkeley Lab), a revolutionary research facility transforming how we approach building energy efficiency.

This flexible, adaptable laboratory provides a unique platform for testing and evaluating new technologies

As per World Resources Institute, India’s buildings are silent power guzzlers.

According to the latest annual energy statistics published by the Ministry of Statistics, Planning and Implementation, residential and commercial structures consumed nearly a third (32 per cent) of the country’s total electricity in 2016.

And as Indian cities grow, building energy demand is sure to surge. and strategies for energy-efficient building design and operation. As per its Executive Director, Cindy Regnier, “This is the world’s most advanced integrated building and grid technologies testbed.

It looks at buildings and systems as a whole and discovers opportunities to integrate with renewables and the grid.”

Built using U.S. Department of Energy stimulus funding, FLEXLAB® is a first-of-its-kind facility that allows researchers to simulate a range of real-world building scenarios in a controlled environment.

The Lab’s unique design allows for the easy reconfiguration of spaces and systems, enabling researchers to test and optimise different energy-efficient building configurations and technologies.

The Lab’s modular design is one of its key features,

BUILDING ENERGY SAVINGS

37

ADDITIONAL ELECTRIFICATION IN THE CLEAN PATHWAY

allowing for the rapid reconfiguration of spaces and systems. This makes it possible to test a variety of different building configurations, from office buildings and laboratories to data centres and manufacturing facilities.

The Lab also features state-of-the-art equipment and instrumentation for monitoring energy use and indoor environmental quality, allowing researchers to collect detailed data on building performance and test the effectiveness of new energy-saving technologies and strategies.

One of the most exciting aspects of the Lab is its potential to accelerate the adoption of new energy-efficient building technologies and strategies. By providing a flexible and adaptable platform for testing and evaluating these technologies, the Lab can help to identify the most effective solutions for reducing energy use and greenhouse gas emissions in buildings.

This could significantly impact the building sector, accounting for approximately 40 per cent of global energy consumption and 30 per cent of greenhouse gas emissions.

including advanced lighting systems, high-performance HVAC systems, and energy-efficient building envelopes.

Researchers have also studied the interactions between building systems, such as the impact of lighting and HVAC systems on indoor air quality and occupant comfort.

One example of a technology tested is the use of automated shading systems. These systems use sensors and controls to adjust the amount of daylight entering a building, reducing the need for artificial lighting and minimising heat gain from the sun.

Researchers have tested different shading systems and evaluated their effectiveness in reducing energy use and improving occupant comfort.

Another area of focus is the development of high-performance HVAC systems, such as radiant cooling and heating systems and heat recovery ventilators, which can significantly reduce energy use while improving indoor environmental quality.

The building envelope refers to the outer shell of a building, including walls, windows, roofs, and floors. By optimising the design and construction of the building envelope, it is possible to minimise energy use and improve indoor environmental quality.

CONCEPTS TO CONSTRUCTION The principal source of energy consumption is in the HVAC system (Heating, ventilation, and air conditioning) in most modern buildings.

With time, these have grown in power resulting in the use of various technologies to control the temperature, humidity, and purity of the air in an enclosed space. Modern labs can test a range of innovative energy-efficient technologies and strategies,

figuwalls

Today the effectiveness of energy-efficient building envelopes can now be tested in labs to arrive at a range of different building envelope conrations, such as highly insulated and windows, to determine their effectiveness in reducing energy use and improving occupant comfort.

BUILDING ENERGY SAVINGS

INDIA VIEW As per World Resources Institute, India’s buildings are silent power guzzlers. According to the latest annual energy statistics published by the Ministry of Statistics, Planning and Implementation, residential and commercial structures consumed nearly a third (32 per cent) of the country’s total electricity in 2016. And as Indian cities grow, building energy demand is sure to surge.

The government’s policy agency, Niti Aayog, estimates that energy demand from India’s buildings will increase by more than 800 per cent in 2047 compared to 2012.

Under the current standards, the country will face higher energy costs and skyrocketing consumption for decades. At the same time, air pollution will worsen, adding to the impact of climate change. That is why India needs better building efficiency policies and programs now.

India took an important step forward by launching the revised Energy Conservation Building Code (ECBC) 2017.

Developed by the Ministry of Power and Bureau of Energy Efficiency, the code prescribes energy performance standards for new commercial buildings to reduce energy consumption and promote low-carbon growth.

It sets parameters for builders, designers and architects to integrate renewable energy sources in building design, to achieve a 50 per cent reduction in energy use by 2030.

Building Energy Efficiency Research Initiative (BERI) by the Indian Department of Science and Technology also drives the BES campaign in India.

The focus of the Initiative is to promote R&D activities to improve the energy performance of buildings and cities.

The programme also supports enhancing knowledge and practice to save energy in designing, constructing and operating human habitats. It undertakes research on demand reduction through improved building envelopes, low-energy cooling & heating, social practices of adaptive thermal comfort and post-occupancy evaluation.

Special emphasis is on cooling technology that requires radically less energy to operate, utilises refrigerants with no ozone-depletion potential and with low global warming potential, and has the potential to be cost-effective at scale. However, India must invest in BES lab facilities on the lines of FLEXLAB®.

THE FUTURE IN BUILDING RESEARCH One of the most exciting aspects of emerging build-

38

ing technology is the potential to drive innovation and accelerate the adoption of new energy-efficient building technologies and strategies.

By providing a platform for testing and evaluating these technologies, modern labs can help to identify the most effective solutions for reducing energy use and greenhouse gas emissions in buildings.

The data and insights generated from such labs can inform the development of new building codes, standards, and guidelines, as well as the design and operation of new and existing buildings.

The labs also provide a platform for manufacturers to test and validate new energy-efficient products and technologies.

By working with industry partners, new products and technologies can be created that are effective, reliable, and practical for real-world applications.

Looking to the future, modern labs like the one at Berkley can play a critical role in advancing the transition to a more sustainable built environment.

As the building sector grows and evolves, the need for innovative solutions for reducing energy use and greenhouse gas emissions will only become more pressing.

For the first time, high-technology research tools and processes are being used to revolutionise how we approach building energy efficiency.

The data and insights generated from research facilities can inform the development of new building codes, standards, and guidelines and the design and operation of new and existing buildings.

THE CLEAN INDIA PATHWAY NEARLY ELIMINATES FOSSIL FUEL IMPORTS BY 2047

ISRAEL: A DEMOCRATIC BACKLASH? A legislative churning over the powers of an independent judiciary threatens to shred the democratic fabric of Israel.

This article is based on Synergia’s Exclusive Interview with Nadav Weisman , Partner , MEITAR. Nadav served six years as a military prosecutor in the Judge Advocate General’s Corps of the Israel Defense Forces. Nadav is one of the founding members of the Black Robes Protest group, one of the leading movements in the campaign against Judicial Reform. The protest is for the Override clause, which would allow the Knesset to overturn High Court of Justice rulings.

M

iddle East’s only true democracy is witnessing a spate of protests as citizens fear curtailment of the independence of the judiciary, the sole guarantor of minority rights.

With a majority coalition in power, it was assumed that Israel could look forward to a period of relatively stable political scenario. However, the nature of the coalition, which has a distinct right-wing orientation, has created the very instability it was expected to dispel!

The protests, ongoing since January, have been some of the largest in the country’s history drawing out a wide range of people, including former Prime Ministers and other well-known figures.

At the centre of the impasse lies the ruling coalition’s efforts to curb the judiciary’s powers. Moderates fear, not unjustifiably, this would open the doors to an unchecked majoritarian rule. The unfolding events in Israel are being closely watched in India as both countries have, over the years, grown very strong strategic links.

The current coalition in power seeks to ‘correct’ this by passing regulation that would erode the independence of the judiciary and dramatically alter the country’s power structure. The proposed changes would make it easier for the government to reject the court’s decisions and would give lawmakers and their appointees effective power over the committee of nine individuals that appoints judges. This would essentially give the government complete control over the judiciary (by appointing suitably pliant judges) and make it easier for them to pass convenient laws.

THE WAR WITHIN Spurred by a solid majority by Israeli political standards (64 out of 120), Prime Minister Netanyahu saw a once-in-a-lifetime opportunity to put the judiciary in its place. For the last four years, the courts have been working hard to put Mr Netanyahu behind bars, facing possible conviction and a jail term on three different corruption charges. While there was not a whisper of the proposed legal reforms in their manifesto in the build-up to the elections, after their victory had been sealed, they changed tack and started an intense campaign to rein in the judiciary. The Israeli Right wing

ISRAEL: A DEMOCRATIC BACKLASH?

sees the judiciary as ‘overly activists and a bastion of liberalism that champions Palestinian rights.’

In the absence of a constitution, written or otherwise, the independent judiciary uses the basic laws in Israel to thwart the overbearing moves of a resurgent executive. This has been especially noteworthy in the past when the ruling elites have been found to function beyond the pale of law. The current coalition in power seeks to ‘correct’ this by-passing regulation that would erode the independence of the judiciary and dramatically alter the country’s power structure.

The proposed changes would make it easier for the government to reject the court’s decisions and would give lawmakers and their appointees effective power over the committee of nine individuals that appoints judges.

This would essentially give the government complete control over the judiciary (by appointing suitably pliant judges) and make it easier for them to pass convenient laws.

One of the most concerning aspects of Netanyahu’s government is the rise of Jewish supremacist policies and the increasing power of Israeli settlers.

Many Israelis are concerned that these policies will lead to the annexation of the occupied West Bank and the erasure of Palestinian villages that have lived here for centuries.

Finance Minister Bezalel Smotrich recently called for eradicating a Palestinian village, while National Security Minister Itamar Ben Gvir is a long-time inciter of violence against Palestinians.

Many Israelis are concerned that these extremist ministers will lead the country into an even more dangerous phase of violence and repression.

Centrist Israelis, who have been keeping quiet about Israel’s illegal settlements in the occupied territories, are also now up in arms as they fear this would scare foreign investment.

THE MILITARY’S OBJECTIONS Surprisingly, strong reservations have come from a quarter that liberals would have least expected- the Israeli Defence Forces (IDF) veterans, resulting i n the crisis assuming a strategic di- m e n sion impacting the nation’s se- curity.

At the core of Israel’s dem- o c r a t i c traditions lies the ethos of mil- i t a r y service, including reserved duty, which every Israeli man and woman must perform.

Therefore, the majority of

40

the nation comprises the veteran community.

This powerful segment has made over 20 initiatives to stop Prime Minister Netanyahu’s legal plans. Many active service soldiers have threatened to quit the military as a sign of protest, which some have already done.

Former high-ranking officers, including retired Mossad and Shin Bet chiefs, have pointed out the disunity this step engenders within the defence services.

Even more worryingly, thousands of reservists have announced that they will not report for military service when called as they are engaged in “fighting to save Israeli democracy!”

This was underscored by an announcement on March 19 by nearly 200 reserve pilots who have refused to report for reserve duty.

It must be noted that, unlike most professional air forces, the Israeli Air Force has very few active-duty pilots. The bulk of the fighter pilots, who are obviously more experienced and take on a leadership role in combat, come from the reserves.Unsurprisingly, the Defence Minister, Galant, publicly asked Netanyahu to stop the ‘legal offensive’ and, as per media reports, has threatened to resign.

MINORITY RIGHTS AT RISK? The situation is also complicated by the already abysmal situation for Palestinian citizens of Israel and Palestinians living under occupation in the West Bank.

Israeli settlers who advocate for Jewish supremacist policies now hold powerful ministerial roles and are making moves to annex the occupied West Bank, which has also sparked outrage among the protesters.

The crisis in Israel is not just about the proposals to overhaul the judiciary but is also built on decades of right-wing policies promulgated by Netanyahu.

The crisis is inseparable from the erosion of human rights in the occupied Palestinian territories. Netanyahu and his allies are pursuing a shock doctrine that amounts to crippling the Israeli governance system and a total reordering of the Israeli occupation.

Former Israeli leaders have warned of fascism taking over the country, and their voices are growing louder. The situation in Israel is a crisis for democracy, and the protests show no signs of abating anytime soon.

The issue of Israeli settlements in the West Bank has been a contentious one for many years.

The Israeli government has been building settle-

ISRAEL: A DEMOCRATIC BACKLASH?

41

Source : cartoonstock

ments on Palestinian land in the West Bank since 1967, after the Six-Day War. The international community considers these settlements illegal under international law, as they violate the Fourth Geneva Convention, which prohibits an occupying power from transferring its civilians into the territory it occupies.

The settlements have grown in number and size over the years and now house over 600,000 Israelis.

They are heavily subsidised by the Israeli government and are often located strategically to ensure Israeli control over key areas of the West Bank.

This has made the creation of a viable Palestinian state increasingly difficult, as the settlements have fragmented the West Bank into isolated enclaves.

In recent years, there has been a rise in Jewish extremist groups in Israel who advocate for the expansion of settlements and the imposition of Jewish law on all of Israel and the occupied Palestinian territories.

These groups often espouse racist and supremacist views and have been linked to numerous attacks on Palestinians, including burning Palestinian homes and mosques.

Netanyahu and his allies have courted these groups to shore up their political base and pursued policies that further entrenched the occupation and eroded Palestinian rights.

This includes the passage of a controversial law in 2018 that declared Israel the nation-state of the Jewish people, effectively enshrining discrimination against non-Jewish citizens into law.

INTERNATIONAL REACTIONS The proposed court reform has worried the Biden administration. U.S. backing for a two-state solution to the Israeli-Palestinian conflict has been reaffirmed.

Antony Blinken, the U.S. Secretary of State, has urged the Israeli government to follow the rule of law and democratic norms and to implement court reforms transparently and inclusively.

Israel must protect its citizens, including Palestinians, according to the US. The Indian government has maintained a studied silence over the whole issue. However, a retired Indian Supreme Court judge, Justice L Nageshwara Rao, visited Israel on March 25 to attend the protests against the proposed judicial reforms.

Indian media has quoted him referring to the Indian judicial system, which has been able to function successfully independent of the political leadership and has consistently reviewed the decisions made by the executive.

Justice Nageshwara Rao gave the example of how the Indian Apex Court was able to stop the formation of the National Judicial Appointments Commission.

ISRAEL: A DEMOCRATIC BACKLASH?

42

EXCLUSIVE CONVERSATIONS Since 2019, the state of Israel seems to have lost direction as we passed through one crisis after another. And now we face a constitutional crisis. It is a very complicated situation, and we have to work out of it; it has economic and security implications and social consequences. In a way, we feel we are living in a unique time with the people standing up to it with mass street protests and even riots to change the course of the ruling coalition’s plans. We are in a struggle and do not know how it will end.

The genesis of the current crisis lies in politics. Historically, Israel has, over the years, gravitated from being pro-left Labour Party to slowly moving to the right, right and further right! This rightwards move is being played out in many democracies, including India, and we have to see how we can flip it because these are an oversight. Last few months, the chain of events has been very dynamic. Each week has been different, with the situation changing and evolving in ways that are extremely hard to predict. We are in an unstable situation which is never good for business. For example, last week was the week that the Government intended to pass the new law, but it did not happen.

Then it was said that the minister of defence was going to make a speech about the implications of the new laws to the security and the defence situation of Israel. Then eventually, he decided not to make the speech. But he did make it two days later, and after the speech, the Prime Minister decided to fire the minister of defence. He didn’t dismiss him; he only announced that he would dismiss him because a dismissal must be in writing. As a response to the Prime Minister’s announcement to dismiss the defence minister, the streets in Israel were set alight. The population was out on the streets, spontaneously protesting the proposed dismissal. Then it became clear that the Government was not passing the new laws.

Now the Knesset will be in recess for one month; then, the Government will be busy with the new budget that, under Israeli law, must be passed by May 21st. So at least till that time, I don’t believe there will be any fresh development. At the end of May, we may see fresh negotiations between the coalition government and the opposition, which have been ongoing.

The President is also involved in mediation between the coalition and the opposition, but I am doubtful if these discussions will reach anywhere. If there are no agreements, then the crisis can be prolonged into June and beyond. I have personally been involved in two circles of negotiations.

NADAV WEISMAN

One was in November last when it became apparent that the new Government would pass extreme laws. A group of lawyers started the ‘Protest of Black Robes.’ We were the first to speak about the damage that the new law would cause, and day by day, other groups joined us.

Now this group is quite large, and as the coalition, the opposition and the President negotiate, they consult us.

I am meeting with all political parties- the Labour Party and the Yasha Tea Party. We are a group of over 1500 lawyers and consult the former minister of justice. We are regularly meeting the President of Israel to appraise him of the stance of the Israeli Bar on the proposed new law. We are trying to ensure that Israeli laws remain democratic and preserve the basic elements of the Israeli legal system. It is an intense ongoing process, and I hope it will lead to a good solution.

The whole situation is tied to the country’s politics, which has been changing. Having closely watched the nation’s political scene for the last four to five years, my observation is that all parties are hardening their stance, which is not a good situation. Being professional politicians, they are playing to their gallery and not thinking about the country. The Prime Minister was indicted, and he is undergoing a criminal trial. Most mainstream opposition parties will not cooperate with him because he is indicted. He has no alternative but to cooperate with either ultra-orthodox or ultra-religious parties on the one hand and ultra-right wing on the other- these are the only possible partners for him. So, it is a very bad and shameful government; some ministers are clearly unfit! And, because they are so extreme, I believe they are bound to fall but are making many mistakes that will damage our country. We can only hope that the Government will change. The people are not taking it silently and are active and protesting; after all, it is our only country.

Prime Minister Netanyahu is a very able man, a very talented person, and very experienced. Sadly, the same person is now committing mistakes. Many people ask if he is making the decisions or if his family members are doing it- clearly, his decisions do not make sense, like the one to dismiss the defence minister. Israel has many challenges-security, including defence and economics but we are used to living in a democratic country doing well financially and where our rights are secured. All this is now threatened as the situation is very fragile.

We can no longer count on our democracy, rights, security or even the economic situation- we must fight for it all the time. At the same time, I am also trying to be optimistic. The fact that we are discussing our constitutional elements may give rise to a good development, like eventually Israel having a formal constitution that will strengthen the entire system and ensure the basic rights of all its citizens.

Partner , MEITAR. He is one of the founding members of the Black Robes Protest group, one of the leading movements in the campaign against Judicial Reform.

UKRAINE: FOOTING THE BILL! Who will pay for the reconstruction of Ukraine once the guns fall silent?

SYNERGIA FOUNDATION RES E A RCH

T E A M

A

ccording to estimates, the prolonged conflict between Ukraine and Russia has caused over $650 billion in damages to the Ukrainian economy. Naturally, the West, which has largely been footing the bill of waging war on behalf of an impoverished Ukraine, is now worried about how to muster resources to rebuild Ukraine as and when the war comes to an end.

Not surprisingly, like Kaiser’s Germany after the infamous Treaty of Versailles of 1919, Putin’s Russia is being looked at for making good the damages that a war initiated by Kremlin has caused. To facilitate such an eventuality, the West has already identified substantial Russian assets which can be used as reparations.

While there is universal agreement that Russia should compensate Ukraine for the economic damage it has caused, the question of how to do so remains divisive. Legal obstacles and possible implications must be carefully evaluated when assessing possibilities, such as taking Russian state assets. Yet, solutions such as confiscating oligarch assets or freezing government assets until Moscow pays reparations have been proposed.

In addition, employing existing financial structures such as the IMF might provide Ukraine with prompt assistance. Ultimately, a solution will necessitate a concerted effort by Western allies and a comprehensive evaluation of the potential consequences.

Apparently, the West has done its calculations and feels confident that sufficient funds can be wrinkled out of Russian assets frozen by the West, particularly in the G7 countries. Each of these countries can use national legislation to seize the Russian central bank’s currency reserves parked in their jurisdiction. Estimates indicate that the funds could be as high as $ 400 billion, suspiciously close to the figure put out by the World Bank required for the reconstruction of Ukraine!

THE COST OF WAR In a recently released report by the World Bank, Western experts have put the cost of rebuilding Ukraine at a staggering $ 411, spread over the next decade at least. The urban landscape of Ukraine has been turned into a moonscape with whole blocks converted into a pile of rubble; the cost of clearing the rubble alone has been put at around $ 5 billion! The reports lists 2 million residential premises totally destroyed and one out of five public health institutions damaged. The damage to buildings itself is as high as $ 135 billion, as per the World Bank. The cities especially impacted are Kharkiv, Luhansk, Kherson and Donetsk, all sites of bitter fighting with no holds barred. By a conservative estimate,

UKRAINE: FOOTING THE BILL!

Ukraine’s GDP has been shaved by almost 30 per cent, with almost 5 million refugees (including 2 million school children) in neighbouring countries.

The energy sector attracted the special attention of Russian firepower, which includes energy hubs and the transmission grid.

In the long term, the cost to Ukraine could be immeasurable, running into trillions, if one takes into account the loss of education, job opportunities, and social and family togetherness, which will impact the present and future generations.

It took Japan and Germany to recover fully over nearly two generations, and that too with the generosity of the U.S. and its Marshall Plan.

WHERE WILL THE MONEY COME FROM? Apparently, the West has done its calculations and feels confident that sufficient funds can be wrinkled out of Russian assets frozen by the West, particularly in the G7 countries.

Each of these countries can use national legislation to seize the Russian central bank’s currency reserves parked in their jurisdiction. Estimates indicate that the funds could be as high as $ 400 billion, suspiciously close to the figure put out by the World Bank required for the reconstruction of Ukraine!

The Western allies have frozen a total of $58 billion in assets belonging to sanctioned Russian oligarchs and $300 billion in assets belonging to the Russian government, but the location of only around $100 billion is known.

The confiscation of around $58 billion in blocked oligarch assets, which could then be delivered directly to Ukraine, has been presented as a viable solution.

The REPO Task Force, controlled by Western partner states’ finance and justice ministries, has frozen the $58 billion worth of assets belonging to Russian billionaires.

Furthermore, the seizure of Russian state assets is suggested until Russia agrees to reimburse Ukraine for its losses. State assets may be frozen until Russia agrees to pay; if Moscow fails, they may be seized as collateral.

THE LEGAL MAZE Notwithstanding the difficulty of discovering and taking assets, western legal

experts are con-

44

fident that legal measures exist to seize the assets of sanctioned measures exist to seize the assets of sanctioned Russian oligarchs. Last year in March, the International Court of Justice had ruled by a majority of 13-2 (the dissenters were China and Russia) that Russia ‘shall immediately suspend the military operations that it commenced on 24 February and immediately, completely, and unconditionally withdraw all of its military forces from the territory of Ukraine within its internationally recognized borders’, thus prima facie establishing Russian culpability in initiating the war.

It may be noted that, theoretically, at least, being a member of the P5 does not give Russia immunity from international law.

This was followed by a UN General Assembly resolution in November calling for Russia to pay war reparations to Ukraine. The resolution was co-sponsored by nearly 50 countries and sought the establishment of an international mechanism for compensation for damage, loss, and injury, as well as a register to document evidence and claims.

Recent measures against Russian Oligarchs Konstantin Malofeev and Viktor Vekselberg illustrate that the United States already possesses the legal authorities and methods necessary to seize and transfer the assets of sanctioned oligarchs. REPO member states with the right to seize assets must repeat the same procedures for the remaining $58 billion stashed within their borders.

Yet, there are legal obstacles to taking Russian government assets. Establishing evidence of the involvement of oligarch assets in international money laundering and sanctions violations is a substantial challenge to this idea, which could reduce the total amount of forfeitable cash.

EU member states can only confiscate assets if there is evidence of a specific criminal act, which excludes blocked sovereign assets.

New legislation would be required to seize Russian state assets, needing unanimity among the 27 EU member states, which might lead to internal disagreements and tensions within the EU and the United States.

Former senior U.S. officials claim that the U.S. has legal justification under the 1977 International Emergency Economic Powers Act (IEEPA), a United States federal law authorizing the president to regulate international commerce af-

UKRAINE: FOOTING THE BILL!

ter declaring a national emergency in response to any unusual and extraordinary threat to the United States which has its source in whole or substantial part outside the United States.

But this precedent is no longer applicable because the U.S. is not involved in armed hostilities with Russia, and there is no UNSC Chapter VII Resolution.

Private banks would also be involved in the asset seizure procedure, necessitating additional processes and a new government direction to the private sector.

The confiscation of assets might exacerbate the situation and be perceived as a substantial escalation by third-party nations, thereby accelerating the ‘de-dollarization trend and reducing the future effectiveness of U.S. economic statecraft instruments.

A big concern is that it could lead to internal debates and tensions inside the European Union and the United States at a time when Western unity is essential to confront Russian aggression.

EU member states can only confiscate assets if evidence of a specific criminal act exists. In this case, taking Russian state assets would require new laws and consensus from twenty-seven EU member states, which could be difficult and time-consuming.

The Swiss are naturally worried and voiced their concerns. Their government promptly declared that seizing private Russian assets stored in Swiss banks would violate the Swiss constitution and its international commitments.

While the moral justification for transferring Russian sovereign assets immediately to support Ukraine is compelling, the legal obstacles that may postpone aid delivery for years cannot be ignored.

In the long-term, seizing foreign assets parked in the U.S./ Europe could make these countries unattractive destinations for parking huge foreign reserves, which would derive these western economies of substantial foreign investments.

Furthermore, if the war ends in the next one year, Ukraine will urgently need thousands of billions of dollars for its reconstruction within a short period, while legal hurdles could potentially delay the outflow of reparations by years, if not decades.

This could prevent other central banks from utilizing the dollar as a reserve currency in the future. This could accelerate the previously emerging ‘de-dollarization’ trend and reduce the future effectiveness of U.S. economic statecraft.

OTHER OPTIONS Another possibility is to use existing financial avenues for Ukraine, such as the International Monetary Fund (IMF). In its seventy-seven-year existence,

45

the IMF just authorized a $15 billion loan package for Ukraine, marking its first loan to a country at war.

The loan may be swiftly disbursed and administered due to the established transmission and monitoring systems between the IMF and Ukraine. In addition, Russian government assets might be pledged as collateral for Ukraine’s IMF debts.

It is anticipated that the IMF loan will assist in stabilizing Ukraine’s economy, which has been severely impacted by the conflict with Russia and the annexation of Crimea.

The loan is designed to assist in addressing the country’s problems with rising inflation, a weak currency, and a heavy debt load. In fact, the scale of destruction makes it clear that Ukraine will need a kind of Marshall Plan if it must recover fully with its highways, ports, airports and critical infrastructure restored.

But this will only happen with the pursuit of diplomatic solutions and negotiations for a peaceful end of the crisis.

The ideal would be a diplomatic settlement that results in a ceasefire and the evacuation of the Russian military from Ukraine.

Assessment The dilemma facing the West is that over the last few decades, they have been the magnet for attracting huge hordes of funds by oligarchs and warlords all over the world, giving their banking systems a great deal of liquidity. The powerful private financial institutions would not be happy that to punish the Russians, this golden goose is sacrificed. Herein lies the biggest challenge for western policymakers.

Unless totally defeated and economically rendered at the mercy of the West, Moscow is unlikely to willingly accede to western demands. If regime change takes place if Mr Putin is unable to convince his people, and the oligarchs, that the war made political and economic sense, then the new incumbents of the Kremlin may be better inclined to meet the western demands. A UNSC resolution could have done the trick, but the Russian veto will never allow it, even if Mr Putin is no longer in power.

Theoretically, the West has enough Russian funds at hand to commence the reconstruction work the moment fighting ends in Ukraine. The question is, if these nations have prospered under the rule of law, will their systems allow the transfer of these seized funds by tweaking existing rules and regulations and creating precedents which can be dangerous in the future?

UKRAINE: THE RUSSIAN BALANCE SHEET

With the Russians well into their second year of the Ukrainian adventure, it is time for a balance sheet appraisal.

A

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

year back, when Russian forces were massing on the periphery of Ukraine, and a cowed-down west was grovelling to Putin not to go kinetic, it was reminiscent of a similar moment in 1939.

Then a desperate British Prime Minister, Arthur Neville Chamberlain, returned from the Munich conference clutching a piece of paper on which he had obtained Hitler’s assurance that there would be no war.

With a battle-prepared armed force and the will to use it, Hitler held all the cards.

Similarly, last year in February, Mr Putin appeared to keep all the aces as he postured aggressively in front of the NATO powers.

One year later, where does Russia stand? Was the invasion an ill-judged and catastrophic event that pushed the Russian Federation a decade back and swept away all the gains Mr Putin had made to revive the Russian motherland over his two-decades-long rule? Or despite the current hardships, economic and military, that Mother Russia faces, will the future generations in Russia thank Mr Putin for saving Russia from being swamped over by an aggressive Western coalition led by the U.S. and serviced by the crafty Ukrainians, the erstwhile collaborators of the Nazi occupiers of Russia?

Russia could have taken a lesson from its friend China when in 1979, facing heavy opposition and casualties in Vietnam, the PLA made a sensible retreat into its own borders claiming victory after just four weeks. It may not have sounded compelling to the rest of the world, but at least the damage to Chinese military prowess and economy was not that staggering, as perhaps Russia faces today.

Only time will tell!

PREINVASION RUSSIA The Russian Army had spent an immense amount on modernisation under Mr Putin’s tutelage, and its combat performance in Syria and Libya, and to an extent in the Donbas region of Eastern Ukraine since 2014, gave it an aura of renewed invincibility.

Even the most critical military analysts in the West gave Ukraine a few weeks at best before total capitulation.

Perhaps, Mr Putin was too taken up by all this reflected glory and chose to test the mettle of his new-age Russian Army, despite the inglorious retreat from Kabul in 1989.

In retrospect, it can be said that if Mr Putin had

UKRAINE: THE RUSSIAN BALANCE SHEET

waited for some more time and played his diplomatic cards with a little more patience and a lot more guile, under the overhang of the threat of a massive invasion, he could have extracted significant concessions from Ukraine and the West. If he had turned back his columns of tanks and military equipment lined up threatening Ukraine, he would have convinced the global audience that Western Intelligence was always crying wolf regarding the Russian invasion. But clearly, we are no clairvoyants, and neither is Mr Putin!

Sadly, for Russia is undoubtedly a great country with the most resilient bunch of people inhabiting any corner of the globe, today, the disastrous consequence of Mr Putin’s decision to ‘punish’ Ukraine is clear for anyone to deny.

The visual evidence of hundreds of destroyed Russian armoured vehicles rusting in the Ukrainian countryside, the growing opposition to Mr Putin in Russia with thousands of potential conscripts fleeing their motherland, and the massive economic impact cannot be brushed aside, even by the most ardent of Russia’s friends and admirers.

THE SUNK-COST FALLACY Many experts blame the Sunk-Cost Fallacy for the obdurate stand that Mr Putin continues to defend, even more than a year after the invasion when few of his stated objectives have been achieved and are unlikely to be gained in the near future.

Behavioural Sciences explain the Sunk-Cost fallacy as when individuals or businesses continue a behaviour or endeavour due to previously invested resources (time, money, effort etc.) despite clear indications that it is failing and failing badly. Such behaviour can be related to loss aversion and a status quo bias.

After the capitulation of the German Sixth Army at Stalingrad, Hitler displayed such behaviour in copious amounts once things started turning sour in Russia.

And we know where the inability to cut losses and make peace, even if it meant some loss of face, led for Nazi Germany.

Russia could have taken a lesson from its friend China when in 1979, facing heavy opposition and casualties in Vietnam, the PLA made a sensible retreat into its own borders claiming victory after just four weeks.

It may not have sounded compelling to the rest of the world, but at least the damage to Chinese military prowess and economy was not that staggering, as perhaps Russia faces today.

47

covertly displayed any such inclinations on the scale that we witnessed in the 1940s.

Also, remembering history and claims of ‘greater Russia’ sound archaic and artificial in a world where Europe has shown that sovereign boundaries are no longer necessary for growth and prosperity.

Yes, there were security challenges to Russia, with the NATO inching its military boundaries inexorably around the Russian heartland, and Ukraine has historically been a lynchpin in any encirclement of the Russia.

But clearly, there was no existential threat to Russia’s existence by an “insatiable and determined” collective West which wanted to preserve its “unfettered dominance” and turn Russia into a “colony”.

While to those outside Russia, it may sound unreal, for the Russian national psyche, invoking the images of a Slavic ‘lebensraum’ has traumatic memories from the dark past. Such fears can unite the Russians and invoke the willingness to ‘go unto battle until death or victory’.

Well, while victory may still be elusive, thousands of Russian conscripts have achieved the former, all because of a sunk-cost fallacy that is still refusing to go away.

Apparently, while the Russian media remains restrained, the people have spoken with their feet. Over the past year, as per reports emanating from Turkey, Russians have been entering Turkey in droves on valid visas. Rentals and property prices in Turkey have shot up as these Russians buy property.

Turkish banks enjoy good liquidity in these challenging times as the visitors transfer their savings from a sanctioned Russian banking system and invest in shops and businesses in Turkey. According to Turkish government data, over 150,000 Russians have been granted residence visas last year. As per Al Jazeera news network, over a million Russian youth are seeking sanctuary in neighbouring Kazkhstan in a bid to avoid conscripton. Russia has evidently not learnt anything from its own experiences in Afghanistan or that of the U.S. in its ‘Global war on Terror.”

DID PUTIN GET ANYTHING RIGHT? While the media, especially the ones spawned in the West, is full of Mr Putin’s errors, surely there must be a few areas where the Russian strongman stands vindicated.

From the start, the Russian war objectives were obscure and unconvincing, even perhaps to most Russian people.

He may have misjudged the Western unity and the stoic stubbornness of the Ukrainians, and the felicity of comedian turned President who seems to have outwitted him at every turn, but there are things that the embattled President appears to have got right.

Denazification of a sovereign nation, almost 80 years after World War II, could not be a goal in the 21st Century, especially when the subject has not overtly or

One, and foremost, is the resilience of the Russian economy, which has been painstakingly crafted by Mr Putin himself over his long reign and skilful manage-

UKRAINE: THE RUSSIAN BALANCE SHEET

ment of the resources that this vast nation is naturally endowed with. Economic sanctions were a foregone conclusion even before the first shot of the war was fired, but Mr Putin was supremely confident that his country could ride them out. He has been proven right on this account.

The resource-hungry world has been unmindful of the Western sanctions (which lack the credibility of the United Nations as indeed veto-wielding Russia would never permit the UNSC ever pass such a resolution) in vetting their relentless hunger for Russian gas, oil and other mineral wealth.

India is one such beneficiary. Economic sanctions alone can never force Russia to crumble and concede defeat.

While Mr Putin may have misjudged the character of his enemy, the Ukrainians, he was on the spot in banking upon the domestic support of the Russian people when he decided to take the plunge.

Despite a few minor irritants now and then, the political situation in Russia has remained stable, with the majority going along with his decisions even as the number of body bags arriving home rapidly increases.

Despite reports of young conscripts fleeing to Turkey, he has quickly mobilised and, with almost zero public dissents, thousands of additional conscripts to feed the fronts.

Russian formations have continued to push their combat units into offensive despite shocking causality rates, with even a significant number of generals being killed in action, a rare phenomenon by any account.

Therefore, the morale and fighting spirit has been sustained despite the horrific losses. However, if the war is prolonged, the morale-sapping fatigue that Russian soldiers experienced in Afghanistan and their American counterparts in Vietnam will inevitably appear.

Most importantly, Mr Putin has been able to base his decisions on his correct reading of the opposition led b y the U.S. Narrow national interest would thwart any attempt to galvanise a broad global consensus against the Russian invasion, and this proved correct.

While the U.S. and its closest NATO and non-NATO allies may have predictably closed ranks behind Ukraine, key nations of the global south and some of America’s closest allies, like Saudi Arabia and Israel, refused to toe the line blindly.

So, while Russia has lost the favour of many countries, it is far from being a pariah, as the West would desire.

48

Mr Putin also correctly judged the Western unwillingness to shed blood for the Ukrainian cause-not one country has come forward to send ‘volunteers’ as was seen during the Spanish Civil war in the 1930s.

So, while money and weapons are flowing into Ukraine, at the cost of Western taxpayers facing the worst cost of living crisis of recent times, Ukrainians stand alone to fight and die.

A clear understanding of the asymmetry of interest and motivation of the West is the most significant factor for Russia to continue with the war till a stage is reached where Putin can claim victory.

WHERE HE WENT WRONG Russian losses in terms of lives and destruction of war material have been staggering.

While both warring parties have been secretive about releasing authentic casualty figures of their losses (while they have been generous about the losses allocated to their enemy!), even by conservative estimates, these have been terrible.

Russian losses have risen in 2023 as better equipped and western trained Ukrainian units took to the field.

Ukraine claimed that in February this year, when Russians were persisting with their costly frontal assaults in the East, they lost as many as 800 men per day! U.K. intelligence puts Russian casualties around 200, 000 with over 40000 killed.

The Wagner Group, alleged to use convicts pulled out from prisons on promises of hefty wages and amnesty, has reportedly suffered attrition rates of up to 50 per cent! In conventional military terms, any unit that suffers more than 30 per cent losses is considered hors de combat and pulled out of action for refit and reinforcements.

Considering the approximate 15000 soldiers that died in Afghanistan over the 10-year occupation between 1979 and 1989, the one-year list of causalities in Ukraine is staggering, even by Russian standards measured in the killing fields of World War II and later in the destruction of Grozny during the two Chechen wars.

While the veracity of war crimes is always a matter of debate as the victors always judge them (the Nuremberg Trials and the Tokyo War Crimes trials invoke intense debates even today), and surprisingly there has been not one case lodged against the western coalition in the two decades that they were conducting high-intensity combat operations in Afghanistan and Iraq including civilian damage in drone strikes in non-combatant Pakistan’s tribal

UKRAINE: THE RUSSIAN BALANCE SHEET

areas. Therefore, the convening and judgements meted

by ICC trials are not universally accepted.

As per the E.U. justice commissioner, 65000 alleged war crimes have been committed in Ukraine in the last year, the majority by the Russians.

While these figures may be deliberately promoted, the fact is that the Russian military has been indiscriminate in using firepower, both in rural and urban areas.

49

After all, the Vietnam war continued for almost 20 years, and it took the Soviets a decade to realise that Afghanistan, the graveyard of Empires, was no place to linger.

How history judges Mr Putin’s ‘Special Military Operation’ will depend on whether the current Russian regime can transform its vast commitment to the war into something tangible and viable.

Also, individual units and Wagner mercenaries have committed specific acts of torture and extrajudicial executions, which they have been foolish enough to record on smartphones and then make them viral.

A sizable chunk of the fertile and industry-rich Donbas reverting to Russian ownership in perpetuity could be considered a suitable payoff, especially if it comes with watertight promises that the NATO expansions will not engulf Ukraine.

The so-called- abduction of nearly 6000 Ukrainian children to Russia has been well-publicised and forms the basis of the ICC arrest warrant recently issued against Mr Putin.

To other powerful countries which entertain similar designs, like China for Taiwan, this war presents a kaleidoscope of lessons to absorb at leisure at the cost of Ukrainian and Russian lives.

Whatever the outcome of the war in Ukraine, these black spots will forever taint the national fabric of Russia.

Warfare tends to prove wrong pundits and those who go back into history to extrapolate past lessons to the present day.

THE PROGNOSIS

Who would have imagined an insignificant military power like Ukraine would humble the mighty Russian War Machine? Despite the war in Ukraine and its painful economic impacts worldwide, Russia still has many admirers who see it as a foil to American (and Chinese) hegemony.

Today, no one, including Mr Putin himself, can accurately predict the outcome of this senseless war.

Many theories are being thrown around- an implosion in the Russian power hierarchy and a replacement of the Putin regime, or a long-drawn war of reduced intensity but which, like a meat grinder, would continue to devour lives and treasure for years to come.

While the war has humbled its once proud military, as a nation, it retains the ability to swing back again as one of the poles in an increasingly multipolar world.

MEDICARE: PLUGGING THE BRAIN DRAIN!

Moves to criminalise foreign recruitment of health workers could impact employment opportunities for educated unemployed but save lives at home.

Sambratha Shetty is the Chief Operating Officer at Synergia Foundation.

M

any countries from Asia and the Caribbean are well known for allowing the migration of thousands of healthcare workers to the Global North, thus denying their services to their people.

The Zimbabwean government has proposed a new law that would criminalise the foreign recruitment of health workers. This legislation is intended to deter recruiters from targeting Zimbabwean professionals, as well as to discourage healthcare workers from leaving the country.

This move, aimed at curbing the exodus of skilled workers, has stirred debate on the implications and effectiveness of such a policy. It could have implications for other lesser-developed nations like India and the Philippines, which allow thousands of their nurses to migrate to richer pastures abroad.

PREYING ON THE POOR? In January 2022, the New York Times (NYT), in a comprehensive investigative piece, revealed how “rich countries lure health workers from low-income nations to fight shortages.”

As per the NYT, Canada, the U.S., UK have been “aggressively recruiting” healthcare workers from the Global South to fill the ranks of its healthcare work-

The consequences of the brain drain are far-reaching, and it not only affects the availability of healthcare services but also impacts the quality of care provided.

With fewer experienced professionals, the healthcare system struggles to maintain its capacity to deliver essential services, particularly in rural areas where the shortage is more pronounced. force, which was seriously depleted during the pandemic. Even countries like Germany and Finland, which did not specifically invite foreign healthcare workers to man their public healthcare system in the past, have joined the bandwagon, offering lucrative remuneration and relaxing their normal restrictive immigration policies.

NYT claims that over 1000 nurses are arriving in the U.S. alone each month from Africa, the Philippines and the Caribbean.

Over 10,000 foreign nurses were on the waiting list for visa interviews at U.S. consulates around the world.

In fact, European and North American governments have taken a conscious decision to provide fast-track immigration processing for healthcare workers and relax rules to recognise foreign healthcare qualifications.

UK’s “health and care visa” programme started in 2020 is a typical example.

MEDICARE: PLUGGING THE BRAIN DRAIN!

51

This is despite a 2010 WHO Global Code of Practice on the International Recruitment of Health Personnel to restrict the luring away of healthcare workers from poor African countries.

poor working conditions, and limited resources. These factors have pushed many skilled workers to seek employment in foreign countries, particularly in wealthier nations with more robust healthcare systems.

The code demands that all such migration should be done after mutual consultation between the donor and recipient governments.

A LIFE AND DEATH MATTER

While countries like India, with its plethora of nursing colleges spread across the country, have surplus healthcare workers (most healthcare facilities in the Gulf countries are manned by nursing staff from the subcontinent), smaller countries like the Philippines are facing a shortage at home also. Hence, the pushback

by Zimbabwe is understandable.

Zimbabwe’s healthcare system has been grappling with numerous challenges, including inadequate funding, deteriorating infrastructure, and a shortage of skilled personnel.

A significant factor contributing to this crisis is the emigration of health workers seeking better opportunities abroad.

The Zimbabwean economy has been in decline for several years, and the healthcare sector has not been spared.

Healthcare professionals, including doctors, nurses, and other medical staff, have faced low remuneration,

The consequences of the brain drain are far-reaching, and it not only affects the availability of healthcare services but also impacts the quality of care provided.

With fewer experienced professionals, the healthcare system struggles to maintain its capacity to deliver essential services, particularly in rural areas where the shortage is more pronounced.

The proposed legislation seeks to address the brain drain by imposing strict penalties on those recruiting health professionals for foreign employment.

This includes both local and foreign recruiters, as well as the health workers themselves. The bill stipulates fines, imprisonment, or both for those found guilty of violating the law.

Proponents of the bill argue that preserving Zimbabwe’s skilled workforce and maintaining a functioning healthcare system is necessary.

They contend that foreign recruitment is predatory and exploits the country’s dire economic situation.

By penalising those facilitating the migration of

MEDICARE: PLUGGING THE BRAIN DRAIN!

health professionals, the government aims to reduce the incentives for these workers to leave the country.

Critics, on the other hand, argue that the legislation is a heavy-handed approach that infringes on the rights of healthcare workers to seek better opportunities.

They maintain that the government should instead focus on improving working conditions and remuneration for health professionals within Zimbabwe.

Additionally, critics worry that criminalising foreign recruitment could damage the country’s reputation and discourage foreign investment in the healthcare sector.

The legislation’s potential impact on Zimbabwe’s international relations and the global image is also a concern.

Countries in an increasingly interconnected world rely on international cooperation and partnerships to address shared challenges, including public health issues.

By criminalising the foreign recruitment of health workers, Zimbabwe may risk alienating potential allies and partners, further isolating the country from the global healthcare community.

IMPLICATIONS OF THE BAN The proposed legislation raises several questions regarding its potential effectiveness and implications.

Firstly, while the bill may deter some health workers from seeking foreign employment, it is unlikely to address the underlying factors driving the brain drain.

As long as economic conditions remain poor and healthcare professionals face inadequate remuneration and resources, the temptation to seek better opportunities abroad will persist.

The government may need to invest in the healthcare sector, improve working conditions, and increase remuneration to successfully retain its skilled workforce.

Secondly, the criminalisation of foreign recruitment could inadvertently harm the healthcare system. By discouraging international collaboration and investment, the legislation may limit opportunities for knowledge exchange, capacity building, and the inflow of resources needed to improve healthcare infrastructure.

Furthermore, the bill could potentially isolate the donor country from the global healthcare community, limiting access to critical medical advancements and expertise.

Thirdly, the legislation raises ethical concerns regarding the freedom of healthcare professionals to seek better opportunities.

52

By criminalising foreign recruitment, the government may be infringing on the rights of health workers to pursue their careers and improve their quality of life.

This could lead to further dissatisfaction and resentment among the medical workforce, potentially exacerbating the brain drain.

Moreover, the proposed legislation could create unintended consequences. For instance, health workers may resort to more covert means of seeking foreign employment, such as using personal connections or informal networks, which could make it more difficult for the government to regulate and monitor the migration of professionals.

This could lead to an even more fragmented and less transparent healthcare labour market, further complicating efforts to address the brain drain issue.

In addition, while the bill targets foreign recruitment, it may not address the issue of internal migration.

Healthcare professionals may still choose to leave rural areas for urban centres, where better opportunities and resources are available.

This could exacerbate existing disparities in healthcare access and quality between urban and rural communities, further straining the already struggling healthcare system.

Lastly, the bill’s focus on punitive measures may not be the most effective approach to addressing the brain drain. Instead, the government could explore incentive-based strategies, such as providing scholarships for medical education, offering competitive salaries, and creating opportunities for professional development.

Assessment Criminalising foreign recruitment of health workers as a response to the pressing issue of brain drain may not be the most effective or comprehensive solution. Addressing the root causes of health worker migration, such as poor working conditions, inadequate remuneration, and limited resources, should be a priority for the government.

Investing in the healthcare sector, improving infrastructure, and increasing remuneration could help retain the country’s skilled workforce and ensure a more sustainable and functional healthcare system.

By discouraging international collaboration and investment, a developing country may inadvertently hinder improvements in its own healthcare infrastructure and limit access to critical medical advancements and expertise. In addition, the ethical concerns surrounding the rights of healthcare professionals to seek better opportunities abroad should not be overlooked.

INSIGHTS is a strategic affairs, foreign policy, science and technology magazine that provides nonpartisan analysis of contemporary issues based on real-time information.

To subscribe, sambratha@synergiagroup.in ; +91 80 4197 1000 https://www.synergiafoundation.org

Be Resilient Just like us.

UPCOMING FORUMS: “CUTTING EDGE TECHNOLOGY” NUS-SYNERGIA SINGAPORE

SYNERGIA ROUND TABLE “FUTURE OF PHARMACEUTICAL INNOVATION” (TAILWINDS & HEADWINDS)

SYNERGIA FOUNDATION MARCH 2023 | MONTHLY EDITION

“CYBER & INFORMATION WARFARE” LANPAC-SYNERGIA SYMPOSIUM HONOLULU, HAWAII