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Two years of Kashmir unrest, political void and a sinking economy – Al Jazeera English

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Srinagar, Indian-administered Kashmir – Two years after the Modi administration stripped Indian-administered Kashmir of its limited autonomy, political activity in the disputed region is in a deep freeze, businesses are struggling, while people’s rights are being suppressed through stringent laws.

On this day two years ago, India’s Hindu-nationalist government led by Prime Minister Narendra Modi scrapped the region’s special status guaranteed by India’s constitution decades ago and turned the country’s only Muslim-majority state into a federally controlled territory.

The move included the removal of a ban on permanent settlement of non-Kashmiris in the region, a step that locals fear is aimed at bringing demographic changes in the region.

The right-wing Bharatiya Janata Party (BJP) government claimed the changes would result in a better development of the region and boost its economy.

But experts and political analysts say the situation has only deteriorated in the last two years.

Political void

The last state elections in Indian-administered Kashmir were held in 2015, when a regional pro-India party, the People’s Democratic Party (PDP), allied with the BJP to form the government.

The region has a group of political parties considered loyal to New Delhi. They contest regional and national elections, which are boycotted by the region’s separatist groups, who demand either a merger with neighbouring Pakistan or an independent nation.

In 2018, the BJP withdrew its support to the PDP, toppling the government and putting the state under the direct rule of New Delhi.

The next year, as the Modi government scrapped Articles 370 and 35A which granted Indian-administered Kashmir its autonomy, dozens of politicians from the region, including three former chief ministers belonging to pro-India parties, were arrested. Some of them continue to be in jails.

Meanwhile, the region was split into two federally controlled territories – Jammu and Kashmir, and Ladakh – and no legislative elections have been announced so far.

Between November to December last year, multi-phase local elections were held in the region to elect 280 district development councillors. Analysts said the polls were an attempt by New Delhi to show “normalcy” in the disputed Himalayan region, also claimed by Pakistan.

While the elected members of the district development councils have no powers to legislate or amend laws, many of them have been since confined to hotel rooms in different places and barred from visiting their constituencies due to “security threats”.

Many elected councillors, angry over the government’s treatment, have threatened to resign.

The region’s pro-India politicians say the government’s controversial decisions “have damaged the very bond of our relationship with the union of India”.

“There is no political space left for anyone,” Mohammed Yousuf Tarigami, a former minister and four-time legislator from the Communist Party of India-Marxist (CPM), told Al Jazeera.

Tarigami is convener and spokesman of the People’s Alliance of Gupkar Declaration (PAGD), a coalition of six parties demanding the restoration of the region’s autonomy and statehood.

He said a fallout of the BJP government’s 2019 decision has been “a process of throttling  of democracy and democratic rights, which have resulted in a forced silence” in the region.

“Unconscionable suppression of civil and democratic rights continues unabated. Indiscriminate arrests and harassment of all sections of our people, including government employees, on different pretexts continues.”

There are reports that the federal government has made future elections subservient to what is called delimitation, which means redrawing the region’s assembly constituencies. Residents fear the BJP aims to increase seats in the southern Jammu area of the region in order to reduce the representation of the Kashmir valley in the state assembly.

Suppression of civil rights

A 78-page report, titled Two Years of Lockdown: Human rights in Jammu and Kashmir, released by an Indian civil society group, Human Rights Forum Jammu and Kashmir, on Wednesday concluded that the security situation in the Himalayan region has worsened.

The report referred to rising cases of human rights violations including the crackdown on dissent, arrest of activists and use of draconian laws against journalists for doing their jobs.

“Indeed, new methods that endanger civilian security, political freedoms, government service, and media independence have been added. There appears to be little accountability for violations by the union government and security forces,” it said.

Indian security forces at the site of a rebel attack in Srinagar [File: Farooq Khan/EPA]

The report said close to 1,000 people are still in prison, including minors and elected legislators, some under stringent laws such as the Unlawful Activities (Prevention) Act or UAPA.

Data from India’s National Crime Records Bureau shows 921 cases were registered in the region between 2014-2019, 500 of which were recorded in 2018 and 2019.

Lawyer and activist Habeel Iqbal told Al Jazeera that in the last two years, UAPA has been used in Indian-administered Kashmir as a “tool for tightening control over its population”.

“Apparently, it is done in the name of security concerns but the real motive seems to be political. People are detained for months without trial and the courts are being used to legitimise the police excesses and arbitrariness,” he said.

Soon after its 2019 decision, the BJP government closed down six semi-autonomous commissions in the region, including the State Human Rights Commission, Commission for Protection and Women and Child Rights, and Commission for Persons with Disabilities.

At the time of its closure, the region’s rights panel had at least 8,000 pending cases of torture , enforced disappearances, extrajudicial killings and rapes. Thousands of families have been left without any hope for justice due to the closures.

Nearly a year after these commissions were shut, India’s National Investigation Agency (NIA) raided the offices and residences of two top rights activists in the region: Parveena Ahanger, the head of the Association of Parents of Disappeared Persons, and Khurram Parvez, a member of the Jammu and Kashmir Coalition of Civil Society (JKCCS).

After the raids, human rights activism in the region has been completely throttled.

JKCCS chairman Parvez Imroz told Al Jazeera that in the past two years, rights violations by India’s security forces have become more brazen in the restive region.

“[…] Because along with political impunity, they now enjoy moral impunity,” he said, adding that the “neutralisation of civil society and human rights groups” is against the UN’s Universal Declaration of Human Rights.

“Depriving people of their daily rights, using threats and intimidation to silence people … Whatever little agitation and protest victims used to have that space has been choked.”

A Kashmiri villager stands on the debris of a house destroyed in a gunfight in Pulwama, Indian-administered Kashmir [File: Dar Yasin/AP]

No end to violence

One of the arguments the BJP government had made while enforcing its 2019 decision was that the move will reduce the armed rebellion against the Indian rule in the region, which started more than 30 years ago.

But the records tell another story.

A local official, on condition of anonymity, told Al Jazeera that in the first seven months of 2021, at least 80 local youths have joined the rebellion. In 2020, 163 had joined, he said.

Last month, at least 31 armed rebels were killed in more than a dozen gun battles, with the trend showing there is no end to violence in the region.

Civilian fatalities have also risen. While 32 civilians were killed during protests or security operations last year, at least 19 civilians lost their lives in the first six months of 2021, report by a local civil society group says.

Yashwant Sinha, the former federal minister and member of Human Rights Forum Jammu and Kashmir, told Al Jazeera there is a lot of resentment among people because of what happened two years ago.

“The trust deficit has deepened. It is a sullen silence,” he said after his visit to the region last week.

“To tell you the truth, normalcy has not returned to the Kashmir valley. The fact that there is no stone-throwing in the streets and there are no demonstrations does not mean normalcy has returned.”

Fears of dispossession

After it tightened its grip over the region militarily, the federal government also introduced a series of policy decisions and abolished many historic land laws, which protected the land rights of the region’s natives for decades.

New Delhi on Tuesday released a 76-page document, Jammu and Kashmir: Marching to a new tune, highlighting the “achievements” of the government since August 5, 2019.

In the document, the government said it has issued four million domicile certificates issued to people to settle in Indian-administered Kashmir, including 55,931 certificates given to Hindu and Sikh refugees who came to the region in 1947 when the subcontinent was partitioned to form India and Pakistan.

The document further said that nearly 3,000 similar certificates were issued to members of the marginalised Valmiki community, who work as sanitation workers, and to hundreds of Gurkhas brought to Kashmir from Nepal. Until August 5, 2019, these individuals were not recognised as citizens of the erstwhile state.

However, the document is silent on the number of domicile certificates given to people from other Indian states, a silence that is heightening anxiety in the Muslim-majority region about New Delhi trying to alter its demography.

Besides, New Delhi has also thrown open other gates for the outsiders to settle in the region. Jobs earlier reserved for permanent residents of the region are now open to domicile certificate holders.

Moreover, in another disturbing trend, at least 11 government employees have been terminated from their jobs for “being a threat to the state”.

Local political analyst Sheikh Showkat Hussain told Al Jazeera the moves have created a fear of dispossession and loss of rights over jobs and land

“All the apprehensions people had about the status quo have proved true,” he said.

“They were apprehensive that if the status quo continues, they will be outnumbered by those who come from Indian states and they will be dispossessed of their land and identity. All of this has come true.”

Politician Tarigami said people of the region are “being ripped apart into smaller units, ripped off their jobs and rights over the natural resources that are theirs”.

Sinking economy

Perhaps the worst impact of the 2019 decision has been on the region’s economy, which traders and industrialists say has collapsed, with thousands of job losses and rising unemployment.

Sheikh Ashiq, the president of Kashmir Chamber of Commerce and Industry told Al Jazeera that  the region’s economy has suffered losses worth $7bn in two years of consecutive lockdowns, first due to the scrapping of the special status and later due to the coronavirus pandemic.

“When we were hoping to revive the trade after the 2019 lockdown, COVID-19 hit the region. We conveyed to the government the need for comprehensive support to revive the businesses,” Ashiq told Al Jazeera.

Ashiq said at least 500,000 Kashmiris have lost their jobs since 2019, including nearly 60,000 employed in the flagship tourism and horticulture sectors.

With the existing economy of the region on the verge of collapse, local businesses are not hopeful of new investments in the region.

“The businesses who have already invested their blood and money should be saved first,” said Ashiq.

Siddiq Wahid, the former vice-chancellor of the Islamic University of Science and Technology in the region, said New Delhi’s decisions have put even the BJP government “in a difficult position” by creating more trouble spots.

“It has worsened for Delhi,” he told Al Jazeera. “Now, it (government) has four trouble spots to control. The Jammu area feels economically deprived due to land rights that have been taken away from them. Ladakh is another spot as they are not happy with New Delhi because they were promised a union territory with powers of local authority which has not happened.”

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Rising Energy Poses Big Inflationary Threat To U.S. Economy – Forbes

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Fears about inflation are rampant in Europe where natural gas and power shortages are colliding with the onset of winter to drive energy prices to record-breaking levels. Mix in the effects of supply chain bottlenecks caused by the global pandemic and you have a dangerous cocktail of rising prices and falling purchasing power of must-have energy products. 

And while the situation in the United States is not as bad, consumers and investors can’t afford to be complacent. Wall Street traders are watching what’s happening in Europe and anticipating inflation will continue to rise on these shores, too. 

Concerns about the most recent Consumer Price Index (CPI) report put the jitters in traders that knocked the wind out of the sails of the stocks market. The year-over-year CPI rose 5.3 percent over its level last August and the core CPI is up 4 percent over the same period. That’s a slight decrease from where they were in July, but it’s still double the 2 percent inflation rate targeted by the Federal Reserve.   

U.S. consumer prices increased at their slowest pace in six months in August, however those figures ignore the volatile food and energy components of the market. Consumers don’t have the luxury of ignoring rising prices for energy commodities like crude oil, natural gas, gasoline, and diesel. The cost of energy impacts prices throughout the supply chain – from production to transportation – and those extra costs ultimately filter down to the consumer at the end of the line. 

Benchmark Brent crude oil now trades above $75 a barrel, or more than 45 percent above where it started the year, and analysts warn that a tightening oil market could prompt further gains. 

Average U.S. retail gasoline prices are some 50 percent higher than a year ago at $3.19 a gallon, and with crude feedstock costs rising and some refineries still constrained after Hurricane Ida, they could also move higher. 

The situation is most alarming in natural gas, which many consumers rely on to power and heat their homes. At over $5 per million Btu, benchmark Henry Hub natural gas prices are more than twice as high as a year ago, at an annualized rate equal to a $109 billion increase to consumers. The Energy Information Administration (EIA) reports that working natural gas stocks are 17 percent lower than a year ago and 7 percent below the five-year average. 

Gas shortages in Europe and Asia are drawing more U.S. gas abroad as exports of liquefied natural gas (LNG), exacerbating market tightness here despite America’s vast gas reserves. The EIA says that natural gas exports are up 41 percent from a year ago.

The consultancy S&P Global Platts calculates that Henry Hub prices would have to increase to $10 per million Btu to provide incentive to U.S. producers to fulfill domestic natural gas demand rather supply the export market. At those price levels, which the United States experienced in 2008, would cause demand destruction in the manufacturing sector. Many manufacturers that consume large quantities of natural gas can no longer compete in the market at those prices, which results in a loss of jobs.

Low gas inventories and rising prices are a concern because the United States should now be building stocks for the winter when the heating season creates peak demand. The market is now in what’s known as a “shoulder season” when demand is structurally lower because the market is in between robust summer cooling demand and peak winter heating demand. 

Instead, American consumers could be facing an uncomfortable winter if natural gas prices spike at the same time as crude oil and refined products push higher while the economy continues to recover from the pandemic. 

It’s a dangerous prospect, particularly for lower income families who are hurt most by rising energy prices. A 50-cent-a-gallon increase in retail gasoline prices may not dent the wallet of wealthier consumers, but it can be incredibly painful for those with lower or fixed incomes. 

And there’s another side to inflation in energy that can squeeze consumers. Investors use commodity markets to hedge their inflation risk, meaning they buy oil and gas futures contracts to hedge against the risk of consumer prices rising across the board. This speculative buying can drive up the price of the underlying commodity for consumers.  

The Biden administration is understandably worried about rising energy prices but its attempts to blame the oil and gas industry are off base and show a lack of understanding of energy markets. 

President Biden recently suggested that something was amiss with gasoline prices and that the White House would examine the practices of market players for speculation. But what the White House will find is merely the forces of supply and demand at work. 

Gasoline and diesel demand has returned to pre-pandemic rates in the U.S., as well as in the critical markets of Europe and China. U.S. refiners are working to supply customers both at home and abroad through exports, but Ida temporarily disrupted that effort, and roughly 25 percent of crude and natural gas production from the U.S. Gulf of Mexico were shut for about two weeks after the storm made landfall. 

Ida is likely to have long ripple effects on the market for refined products, with some experts estimating at least 30 million barrels of diesel, gasoline, jet fuel and others will go unproduced due to the storm’s impact on refineries.

Typically, higher energy commodity prices would call for greater supply from producers. But these are not ordinary times. Intense environmental, social and governance (ESG) demands on producers have prompted most to stop investing aggressively in growth. 

While investors are largely to blame, the Biden administration has also sullied the investment climate for U.S. oil and gas producers with policies aimed at curtailing fossil fuel production to combat climate change.

The decision by Biden to cancel the Keystone XL pipeline project and attempt to halt leasing on federal lands and waters sends a stark message to the industry and its investors.

Democrats’ proposed $3.5 trillion budget reconciliation — which is more than twice the combined budgets of all 50 states — would only exacerbate the inflationary pressures that are already raising prices for American families. 

The bill includes several climate initiatives that would punish U.S. oil and gas producers, including a fee on methane emissions and higher taxes and royalties. These higher costs would ultimately be passed on to consumers. 

U.S. energy expenditures totaled $1.2 trillion in 2019 and clocked in at a per capita rate of $3,728. This accounted for about 6 percent of gross domestic product, so rising energy prices could have a brutal effect on the economy while it continues its fragile recovery from the pandemic. 

Lawmakers should look hard at Europe’s energy crisis before closing the door on the U.S. oil and gas industry, because we could be next unless pragmatism prevails.

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Global economy will suffer as long as rich countries don't help vaccinate poor ones, OECD warns – CBC.ca

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A leading international economic watchdog urged developed countries to put more effort into providing low-income countries with coronavirus vaccines in order to ensure that the global recovery from the pandemic is more even.

In its latest assessment of the state of the global economy, the Paris-based Organization for Economic Cooperation and Development said Tuesday that the global recovery from the shock of the pandemic is faster than it anticipated a year ago. Though the global economy has more than recouped the 3.4 per cent output lost in 2020, it cautioned that the recovery is “uneven.”

The OECD, which monitors and advises its 38 member countries, modestly downgraded its growth forecast for this year to 5.7 per cent from 5.8 per cent previously. For 2022, the OECD raised its forecast to 4.5 per cent from 4.4 per cent.

Among developed countries, the OECD said the U.S. economy is set to grow this year by 0.9 percentage points less than it anticipated in May, though at a still-healthy 6 per cent, while the 19-country eurozone is bouncing back by a full percentage point more than previously thought at 5.3 per cent. It left its China growth unchanged at 8.5 per cent.

Canada’s economy is forecast to expand by 5.4 per cent this year, the group said. That’s down from 6.1 before.

Vaccine inequality

In its report, the OECD said greater international effort should be put in to provide low-income countries with the resources they need to vaccinate their populations, both for their own and global benefits.

“Ensuring the recovery is sustained and widespread requires action on a number of fronts — from effective vaccination programs across all countries to concerted public investment strategies to build for the future,” said OECD Secretary-General Mathias Cormann.

Developed countries are being urged by a number of bodies, including the World Health Organization, to share excess vaccines with poor countries who have yet to immunize their people instead of using them to provide booster shots.

Last week, for example, the British government recommended that booster shots be offered to everyone over 50, health care workers, people with underlying health conditions and those who live with people whose immune systems are compromised. Others, including the U.S., are set to follow suit in offering booster shots to certain sections of their population.

The richer nations of the world have already committed to donate hundreds of millions of jabs to poorer countries via the COVAX scheme.

The OECD also urged developed countries not to be too hasty in withdrawing the “extraordinary support” they provided their economies at the outset of the pandemic as the outlook remains uncertain and employment levels in many parts of the world have not yet recovered fully to pre-pandemic levels.

It also said current inflationary pressures in the world economy arising from the reopening of economies should start to fade from next year.

The rapid pick-up in demand this year has led to a sharp rise in key commodities such as oil and metals, as well as food. The disruption to supply chains caused by the pandemic has added to cost pressures, while shipping costs have increased sharply.

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Can Industrial Policy Save The American Economy? – Forbes

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As the US continues struggling with Covid-19 and economic recovery, debate is growing about the revival of “industrial policy”—government -led efforts to favor certain industries over others, in contradiction to market fundamentalist approaches.  An important new forum in the Boston Review takes on these issues and is well worth your attention.  For our future prosperity, these issues are more important than just arguing about deficits and taxes. (Disclosure:  I’ve coauthored a piece in the forum.)  

In the battle over President Biden’s economic proposals, most commentary focuses on whether the price tag of over $3.5 trillion is too large. How much should be paid for?  Which taxes should go up or down?  Senator Joe Manchin (D-WV), the key Democratic vote for Senate passage of the Biden plan recently called it “the largest single spending bill in history with no regard to rising inflation, crippling debt or the inevitability of future crises.”

But there’s a second debate hidden behind these budget numbers—how and whether government should deliberately foster some industries and withdraw support from others.  Although simple introductory economics textbooks say government intervention is always “second best” to markets, in the real world government is constantly favoring some industries over others.

So the debate is really about what type of industrial policy we are going to have, not whether it exists.  The Review’s forum centers on an excellent piece by economist Marianna Mazzucato and colleagues—“Industrial Policy’s Comeback.”  They flatly (and correctly) say “market fundamentalism has failed to improve economic and social conditions,” calling for “a mission-oriented approach to the economy that embraces an active role for government in spurring growth and innovation.” 

Mazzucato is one of our best thinkers on the complex relationships between government and the private sector.  Her 2013 landmark book, The Entrepreneurial State: Debunking Public vs. Private Sector Myths showed how government investment undergirded the tech revolution, with Apple and other firms adapting technology developed and paid for by the government, often through military spending.

Economists have long known that industrial policy is central to modern economies.  In 2008, Harvard’s Dani Rodrik asked readers to imagine “a set of policy interventions targeted on a loosely-defined set of market imperfections…implemented by bureaucrats…and overseen by politicians” while subject to “rent-seeking by powerful groups and lobbies.”  

Yikes!  Rodrik says those sound like good reasons that “governments should stay away from industrial policy.”  But he then turns the tables, saying he’s not describing industrial policy.  Rather, those complicated conditions hold for “long-standing areas of government intervention such as education, health, social insurance, and macroeconomic stabilization.” And no one thinks we should stop those policies just because they are complicated and sometimes contentious.

So complexity, political debate, attempts to capture benefits at the costs of general prosperity, and addressing critical problems possessing lots of uncertainty characterize all modern social and economic policy.  Hence Mazzucato’s emphasis on developing clear “missions” for industrial policy, with government setting overall directions and goals while avoiding “excessively top-down planning by an overbearing state.”

There’s a lot of deep thinking and clear argument in the Boston Review forum, from a wide range of viewpoints, and I won’t try to summarize it all here.  Read the forum (and buy the new book the Review is publishing on this topic.)

My contribution to the forum, co-authored with my colleague (and spouse) Teresa Ghilarducci, emphasizes the central role workers and labor unions must play in any successful industrial policy.  We hearken back to the great economist John Kenneth Galbraith, who after World War II focused on how the large firms needed to foster innovation and growth could be kept from purely self-interested behavior.

Galbraith’s answer was in the title of his 1952 book—American Capitalism:  The Concept of Countervailing Power.  Without government and union countervailing power, “private decisions could and presumably would lead to the unhampered exploitation of the public.”

Ghilarducci and I argue that successful industrial policy “promotes unionization and shared economic returns,” not just technical innovation where the gains are captured by a narrow slice of wealthy tech and finance owners.  And the politics of industrial policy mean it won’t be enacted without union and popular support.

So as you follow the twists and turns of Biden’s economic plan, where the cable news and commentary are dominated by spending, taxes, and deficits, spare a thought for what that money will be spent on.  Senator Manchin correctly warns about “the inevitability of future crises,” but those aren’t mainly budgetary issues. They are structural problems that need industrial policy solutions.

Our economy faces a short and long-term crisis of innovation, climate change, and racial, gender, and economic inequality.  Industrial policy is critical to building a long-term, sustainable, and equitable prosperity.  I commend the Boston Review forum and book to you as a way to understand this critical issue.

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