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Analysis

India should tap EU, East Asia to overcome ‘late convergence stall’

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GDP Data

The usual brouhaha around the Budget strips the Economic Survey of the attention it deserves. The Survey document, especially since Arvind Subramanian has taken over as the Chief Economic Advisor, has consistently pushed the envelope on economic thinking, providing exciting new insights for the Indian economy. The latest one, released three days before the Budget, introduced a new phrase into economic jargon: The “late convergence stall”. It is a phenomenon that the Survey fears might affect the growth process of the developing world.

The basic argument is this. Economic convergence, which is the process of low-income countries catching up with richer ones in standards of living, has been taking place over the last few decades at an accelerated pace; something which economists like to call “convergence with a vengeance”. To be precise, countries were on a divergence path before 1997, a period of convergence from 1998 till the financial crisis in 2008 and an era of accelerated convergence post-crisis.

However, with changing global economic scenarios, it might be more and more difficult for developing countries to narrow the gap. In other words, the economies that have been rapidly climbing up the economic ladder might face a “late convergence stall”.

The threat of a convergence stall might result from the development of four challenges that were non-existent during the formative stages of the developed world. The first and the most crucial one is the end of rapid globalisation that benefitted the East Asian economies and even China. High levels of export growth rates of these countries have been drivers of their economic growth stories.

Developing nations that are late to the global scene cannot expect to achieve such export levels in the current inward-looking shifts in trade policy, especially across the developed world.

Subramanian always remains careful in stating that it is the era of “hyper-globalisation” (or rapid globalisation) which has come to an end, and not globalisation per se. However, globalisation, if defined as a period when trade among nations is growing faster than the global GDP growth, can be seen to be growing rapidly from 1950 till a few years after the economic crisis of 2008. During this period, growth in trade was close to five per cent while growth in world GDP was close to four per cent.

After 2010, growth in world trade levels has fallen below GDP growth, marking an era of de-globalisation (3.5 per cent economic growth against global trade growth of 2 per cent). Therefore, even though the Survey takes a conservative approach in claiming that globalisation has come to an end, the data shows that the world is, in fact, de-globalising.

It can be the case such low levels of trade might not hold once the world economic growth is running in full throttle, but the fact of the matter remains that the developing world cannot reap the same gains that were received in the later part of the 20th century. This could bring about the historical divergence that world economies had experienced throughout much of modern economic history. This trend was famously evidenced by Harvard’s Lant Pritchett in his paper “Divergence, Big Time” in which he showed that between 1870 and 1990, the richest and poorest countries have shown considerable divergence between their per capita incomes. Therefore, the convergence has only been a recent phenomenon. It would not be a surprise if it returned.

To make matters worse, other avenues of economic development that had been open earlier are also closing down. While industrial expansion was the most effective means of achieving economic successes for poor economies in the past, high productivity has implied that economies in current times reach the pinnacle of industrial employment much earlier on their growth path.

Turkish economist Dani Rodrik, also from Harvard, calls this “premature deindustrialisation” and shows how most of the developing world is affected by it. Therefore, resources which earlier used to shift from the low-productivity informal sector to high-productivity jobs, now usually shift to sectors that are only marginally more productive. The economic gains from a shift of labour across sectors are thus not derived to an extent that was true for the countries that are now high up on the income spectrum.

The case for a slowing down of convergence or divergence is, therefore, quite strong. The developing world needs to be prepared for any such restoration of the past economic trend. The advent of automation and similar technological innovations will further accentuate the problem because the richer countries will be more capable of deploying them for production on a mass scale. It is comforting to realise that the Indian government is well aware of the threat in advance, but it remains to be seen if this awareness is followed up with appropriate policy action.

The Economic Survey gets it right in recommending rapid improvements in human capital to sustain growth at current levels, but takes a defeatist approach in suggesting that India can do very little about diminishing globalisation. On the contrary, there remains immense scope for the country to play an enabling role in further integration of the global economic order. If the US is currently a lost cause, there remain other large markets like the EU and East Asia where India can further the cause of higher trade openness.

(Amit Kapoor is chair, Institute for Competitiveness, India. The views expressed are personal. He can be contacted at [email protected] and tweets @kautiliya. Chirag Yadav, researcher at Institute for Competitiveness has contributed to the article)

Analysis

YouTube testing new video recommendation format: Report

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San Francisco, Jan 16 : Google-owned video sharing platform YouTube is testing a new video recommendation format that displays blue bubbles on the screen with relevant keywords and related topic suggestions, facilitating easier browsing, media reported.

“The screenshots obtained show these blue bubbles just underneath the video player showing more specific video recommendations,” The Verge reported on Tuesday.

The video-sharing platform is currently testing the feature with some users on its main desktop page as well as on the mobile app.

For sometime now users have been complaining that the videos recommended on the side on YouTube’s interface often have little to do with the current video, making recommendations a point of contention for the platform.

“It’s unclear if the videos that populate from the new recommendation bubbles will face similar algorithmic issues that YouTube’s recommendation feed currently suffers,” the report added.

There has not been any word from YouTube as of now on the working of these blue bubbles and whether or not they will roll out the test feature to a bigger group in the coming months.

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Analysis

2002 Gujarat riots: Judge P.B. Desai ignored evidence, says activist Harsh Mander

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Harsh Mander

New Delhi, Jan 9 : Special SIT court judge P.B. Desai “ignored evidence” that former Congress MP Ehsan Jafri, who was killed in a mob attack in Ahmedabad’s Gulberg Housing Society during the 2002 riots, did all that was possible within his power to protect Muslims from the “rage of the mob” and instead echoed the position of then Chief Minister Narendra Modi that his killing was only a “reaction” to his “action” of shooting at the mob, says human rights activist Harsh Mander.

He says that “the learned judge”, who retired in December 2017, overlooked statements by surviving witnesses that Jafri made repeated desperate calls to senior police officers and other persons in authority, “including allegedly Chief Minister Modi”, pleading that security forces be sent to “disperse the crowd” and rescue those “against whom the mob had laid a powerful siege”.

Mander, who quit the IAS in Gujarat in the wake of the riots, makes these observations in his just released book, “Partitions of the Heart: Unmaking the Idea of India”, published by Penguin.

The 66-year-old activist, who works with survivors of mass violence and hunger as well as homeless persons and street children, goes on to quote the late journalist Kuldip Nayar to establish that Jafri had desperately telephoned him, “begging him to contact someone in authority to send in the police or the Army to rescue them”.

Mander says Nayar rang up the Union Home Ministry to convey to it the seriousness of the situation. The Home Ministry said it was in touch with the state government and was “watching” the situation. Jafri called again, pleading with Nayar to do something as the mob was threatening to lynch him.

In the chapter titled “Whatever happened in Gulberg Society?”, Mander contends that Jafri did everything within his power to protect “those who believed that his influence would shield them from the rage of the mob”. Mander says Jafri begged the mob to “take his life instead” and in a show of valour went out “to plead and negotiate” with the angry crowd.

“When he realised that no one in authority would come in for their protection, he also did pick up his licensed firearm and shoot at the crowd…,” Mander notes, describing it as the “final vain bid” on behalf of Jafri to protect the Muslims in the line of fire.

The author notes that in describing Jafri’s final resort to firing as an illegitimate action, the judge only echoed the position taken repeatedly by Modi, who had given an interview to a newspaper in which he had said that it was Jafri who had first fired at the mob.

“He forgot to say what a citizen is expected to do when a menacing mob, which has already slaughtered many, approaches him and the police has deliberately not responded to his pleas,” says Mander.

He says that it was as if even when under attack and surrounded by an armed mob warning to slaughter them, “and with acid bombs and burning rags flung at them”, a good Muslim victim should do nothing except plead, and this would ensure their safety.

Ehsan Jafri’s wife Zakia Jafri, according to Mander, was firmly convinced that her husband was killed because of a conspiracy that went right to the top of the state administration, beginning with Modi. The author notes that the court, in its judgement running into more than 1,300 pages, disagreed.

“It did indict 11 people for the murder but they were just foot soldiers,” observed Mander.

He further says that the story the survivors told the judge over prolonged hearings was consistent but Judge Desai was convinced that there was “no conspiracy behind the slaughter” and that the administration did all it could to control it.

“Jafri, by the judge’s reckoning, and that of Modi, was responsible for his own slaughter,” he laments.

Mander also argues in the book that recurring episodes of communal violence in Ahmedabad had altered the city’s demography, dividing it into Hindu and Muslim areas and Gulberg was among the last remaining “Muslim” settlements in the “Hindu” section of the city.

He says that Desai also disregarded the evidence in the conversations secretly taped by Tehelka reporters, mentioning that superior courts, according to Desai himself, have ruled that while a person cannot be convicted exclusively based on the evidence collected in such “sting operations”, such evidence is certainly “admissible as corroborative proof”.

“But he chose to disregard this evidence, not because there was proof that these video recordings were in any way doctored or false but simply because the Special Investigative Team (SIT) appointed by the Supreme Court of India chose to ignore this evidence,” says Mander.

According to Mander, the Tehelka recordings “certainly supported the theory that there was indeed a plan to collect, incite and arm the mob to undertake the gruesome slaughter”.

The SIT was headed by R.K. Raghavan, today Ambassador to Cyprus. Mander contends in the book that just because the investigators did not pursue Tehelka recordings in greater depth, Desai concluded that the “recordings cannot be relied upon as trustworthy of substantial evidence and establish any conspiracy herein”.

In the book, Mander takes stock of whether India has upheld the values it had set out to achieve and offers painful, unsparing insight into the contours of violence. The book is now available both online and in bookstores.

(Saket Suman can be contacted at [email protected])

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Analysis

Number of suicides highest in Army amongst three services

In the Air Force, the number of suspected suicides was 21 in 2017 and 19 in 2016. For the Navy, these numbers were 5 and 6 for 2017 and 2016, respectively.

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Ajit Doval

New Delhi, Jan 7 : The number of defence personnel committing suicide was highest in the Army amongst the three services in the last three years, data shows.

In 2018 alone, as many as 80 Army personnel are believed to have committed suicide. This number is 16 for Air Force and 08 for the Navy, Minister of State (MoS) for Defence Subhash Bhamre told the Rajya Sabha in a written reply on Monday.

In 2017, the number of Army men who are suspected to have committed suicide was 75, while in 2016 this number was 104.

In the Air Force, the number of suspected suicides was 21 in 2017 and 19 in 2016. For the Navy, these numbers were 5 and 6 for 2017 and 2016, respectively.

In his reply, the Minister said that various steps have been taken by the armed forces to create healthy environment for their officers and other ranks.

“Some of the steps include provision of better facilities such as clothing, food, married accommodation, travel facilities, schooling, recreation etc and periodic welfare meetings, promoting yoga and meditation as a tool for stress management, and training and deployment of psychological counsellors,” the reply read.

It said mental health awareness is provided during pre-induction training.

Besides, institutionalisation of projects “MILAP” and “SAHYOG” by the Army in Northern and Eastern Commands to reduce stress among troops has been done.

A helpline has also been established by the Army and the Air Force to provide professional counselling.

IANS

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