Hindu Editorial Analysis 2nd January 2018 by Dailygkaffairs talks about opportunity for India & China to emerge as a bigger economies than USA & rest of the world and contradictions over triple talaq bill and Cryptocurrency Bitcoin
THE MONEY TRAIL :-
- The Finance Ministry’s warning to potential investors in bitcoin and other crypto-currencies has come because only few have enough information about bitcoins.
- The price of bitcoin, not only shot up by well over 1000% over the course of the last year but also fluctuated wildly.
- One of the main reasons for this volatility is speculation and the entry into the market of a large number of people lured by the prospect of quick and easy profits.
- The government’s caution comes on top of three warnings issued by the Reserve Bank of India since 2013.
Lack of Information on Bitcoin to Users :-
- Most new users know close to nothing of the technology, or how to verify the genuineness of a particular cryptocurrency.
- A number of investors, daunted by the high price of bitcoin, have put their money into less well-established and often spurious cryptocurrencies.
- Even some private crypto-currency operators in India have gone on record saying that as many as 90% of the currencies are scams.
Steps taken by Different Countries Government and Tech Companies :-
The use value of cryptocurrencies — both as a medium of exchange and as a store of value — is still being explored.
- Global tech firms such as IBM are developing their own crypto-currency platforms to speed up cross-border transactions in a secure and transparent manner.
- South Korea, where bitcoin became a craze, recently proposed legislation to either heavily regulate exchanges or ban them.
- In the U.S, in November, a court ordered a popular crypto-currency platform to hand over information related to 14,000 accounts to the Internal Revenue Service, undermining the anonymity the digital currencies offer.
Need to differentiate between Crypto-currencies and block-chain :-
India must be careful to differentiate between cryptocurrencies and the blockchain technology they are based on.
- Crypto-currencies may or may not emerge as a useful tool, especially since the government may not want to encourage the proliferation of anonymous, non-fiat currencies as its anti-black money fight intensifies.
- Blockchains, basically digital ledgers of financial transactions that are immutable and instantly updated across the world, are worth looking at as aids to ease doing business. They have the potential to greatly streamline payment mechanisms and make them transparent.
- As Ajay Tyagi, Chairman of the Securities and Exchange Board of India, said, blockchain technology is useful and should not as yet have regulatory oversight.
SEIZE THE ASIAN CENTURY :-
- In Last month of 2017, a ministerial meeting of the WTO in Buenos Aires, Argentina ended in a whimper with the U.S. leading a general apathy towards free trade and globalisation.
- Perhaps 2017 will be remembered as the year when the liberal economic consensus on free markets and globalisation was finally buried in its homelands, the U.S. and U.K.
Three decades of success :-
- Consider the view from emerging economies. No other period in human history has seen as many people lifted out of absolute poverty as in the three decades since the mid-1980s. That is largely because the world’s two most populous nations, China and India, made rapid strides in terms of economic growth in this period.
- China, which embraced openness and internal reform has been the bigger beneficiary. Whereas, India, with its limited openness and gradual internal reform process, registered lower growth than China but higher growth rates than any other point in its history.
- The fact is that more than half a billion people have been lifted out of poverty in a single generation by the very forces of globalisation & free markets.
- The role of Wall Street and global finance in bringing disrepute to the system is well known. That is what precipitated the 2008 financial crisis which sowed the seeds for a backlash against free trade and open markets.
- But curiously, politics has chosen to target free trade and free (only relatively) movement of labour, soft targets compared to the powerful world of finance. There is a grave danger for both emerging economies and advanced economies with this form of backlash.
- In the advanced economies, it is convenient to blame free trade for job losses in manufacturing, without commenting on the huge benefits such trade has brought for consumers who are clearly better off as a result of cheaper products and services.
- Any sustained backlash against free trade and immigration will ultimately hurt the economic and geo-political interests of the U.S. and the U.K.
- For countries like India and several other emerging and developing economies, a closed world means missed opportunities and a longer journey out of poverty for those who continue to remain poor.
Need of reforms Within :-
However, before batting for openness abroad, emerging economies need to put their houses in order. For many emerging economies, particularly China and India, the backlash against free markets is likely to stem from a free market system at home that has been vitiated by crony capitalism.
- In India, the battle against graft has to be accompanied by an attempt to improve state capacity, because there are certain critical functions which only the state can perform.
- Reform at home must be accompanied by a willingness to open up to the rest of the world.
Comparison between China And India on policies :-
- China has been aggressive about exports and about attracting foreign investment but has been more protectionist about imports (particularly services and agricultural goods) and its state-owned enterprises.
- India has never quite embraced an export-oriented development strategy. Somehow the point that the domestic market is large enough has won the argument even when it is apparent that the global market is several times that size. Just the global market for merchandise trade is $18 trillion, almost nine times the size of India’s total GDP.
Need of Reforms in India to achieve something :-
- India needs to capture a much larger share of that market than its present 1.6% share.
- India also needs to capture a greater share of foreign investment.
- But for that to happen, it needs to give up its traditionally defensive posture on trade in particular because China’s wages rise and it reorients its economic strategy from primarily an export-led growth to a more consumption-driven economy.
India and China hold the key to the emerging global political economy :-
- Joining the U.S. and other advanced economies in closing up will only lead to slower growth for India & China.
- India and China, as the two fastest growing major economies needs to engage with each other and with other willing partner nations, particularly in the East Asia and the Pacific region (including advanced economies like Japan and Australia), to maintain openness and embrace globalisation.
- The Regional Comprehensive Economic Partnership (RCEP) is one forum where this engagement can happen.
- India can engage on free trade and free investment in other groups like the BBIN (Bangladesh, Bhutan, India, Nepal) and BIMSTEC (Bangladesh, India, Myanmar, Sri Lanka, Nepal, Thailand, Bhutan) and via these groups with the entire ASEAN region.
Conclusion:- The scenario is set for an Asian century. But for it to materialise India, China and the rest of the region need to look beyond rivalry and defensiveness to explore the possibilities of economic integration as the West, so dominant for the last two hundred years, marginalises and isolates itself.
UNSEEMLY HASTE : ON TRIPLE TALAQ BILL :-
- On December 28, the Lok Sabha passed the ‘triple talaq’ Bill — the Muslim Women (Protection of Rights on Marriage) Bill.
- The legislation was mooted in the aftermath of the Supreme Court’s judgment in August declaring that the practice of instant triple talaq was not constitutionally protected and would have no legal effect.
These developments come across as a classic example of collaboration the between the branches of government. The Supreme Court made a decision, the government conceptualised a Bill to reinforce the court’s decision, and Parliament is now in the process of enacting that Bill into law. However, this narrative collapses when the issue is considered more closely, as the Bill is at odds with the very judgement that it purports to reinforce.
Contradictions over bill :-
The purpose of the court’s judgment was disarmingly simple: to deprive talaq-e-biddat of recognition in the eyes of the law but several critics have contradictions over this Bill which was passed in Lok Sabha :-
- Although, The Bill confirms that pronouncements of triple talaq are void, it goes further by criminalising the utterance of triple talaq.
- A victim of triple talaq, the Bill says, is entitled to a subsistence allowance and custody of minor children. These provisions belong to a Bill that regulates divorce, not marriage. A victim of triple talaq remains married to her husband. As a wife (rather than an ex-wife), she should be entitled to far more than mere subsistence. The question of custody does not arise where the couple remains married.
- Another contradiction on Bill is the criminalisation of triple talaq with a penalty of imprisonment of up to three years because Supreme Court’s already gave it’s judgement on that Muslim men lacked the power to divorce their wives through triple talaq. This Bill accentuates it once again and puts men at the centre of legislative policy, by triggering a number of legal consequences upon the utterance of those words.
Conclusion :- Overall, the Supreme Court’s judgement is misplaced. A further round of litigation seems inevitable if this Bill were to be enacted, and there is an even chance that the court may decide that a law criminalising the use of three words violates the right to equality under the Constitution. The moral of the story is not everything that is arbitrary or unlawful is, or in this case should be, criminal.