AIR Summary and Sansad TV
June 4th Week
The Significance of SAARC Currency Swap Framework
In news
The Reserve Bank of India has put in place a revised framework on currency swap arrangements for countries within the South Asian Association of Regional Cooperation (SAARC) grouping for the time period 2024 to 2027. Under the Framework for 2024-27, a separate INR Swap Window has been introduced with various concessions for swap support in Indian Rupee. The total corpus of the Rupee support is Rs 250 billion (Rs 25,000 crore)
Key Features of the Framework:
Introduction of INR Swap Window
- A dedicated Indian Rupee (INR) swap window has been established under the 2024-27 framework.
- This includes various concessions aimed at providing robust swap support in Indian Rupees.
Total Corpus
- A total corpus of Rs 250 billion has been allocated for rupee support, underscoring India's commitment to regional financial stability.
Continuation of US Dollar/Euro Swap Window
- In addition to the INR swap window, the RBI will continue the US Dollar (USD) and Euro swap arrangements, with an overall corpus of US$ 2 billion to facilitate liquidity support in these currencies.
SAARC Member Countries and Participation
- The currency swap facility is available to all SAARC member countries upon signing bilateral swap agreements with India, as outlined in the RBI's official statement.
Purpose and Operational Scope
- The currency swap facility, initially launched on November 15, 2012, aims to provide immediate funding for short-term foreign exchange liquidity needs and to manage balance of payment crises within the SAARC region.
- It acts as a temporary measure until longer-term financial arrangements are established among member countries.
SAARC:
- Establishment of SAARC:
- The South Asian Association for Regional Cooperation (SAARC) was established on December 8, 1985, in Dhaka, Bangladesh
- It is establsihed to promote regional cooperation and development among its member states: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.
- The organization aims to enhance economic growth, social progress, and cultural development in the South Asian region.
- SAARC's establishment marked a significant step towards fostering mutual understanding, collaboration, and economic integration, addressing common challenges, and improving the quality of life for the people of South Asia
Principles
- The principles of SAARC are as follows:
- Cooperation within the framework of the Association shall be based on respect for the principles of sovereign equality, territorial integrity, political independence, noninterference in the internal affairs of other states and mutual benefit.
- Such cooperation shall not be a substitute for bilateral and multilateral cooperation but shall complement them
- Such cooperation shall not be inconsistent with bilateral and multilateral obligations.
SAARC was established with the following objectives:
- To promote the welfare of the people of South Asia and to improve their quality of life
- To accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potentials
- To promote and strengthen collective self-reliance among the countries of South Asia
- To contribute to mutual trust, understanding and appreciation of one another’s problems
- To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields
- To strengthen cooperation with other developing countries
- To cooperate with international and regional organizations with similar aims and purposes
Area of Co-operation:
- Human Resource Development and Tourism
- Agriculture and Rural Development
- Environment Natural Disaster and Biotechnology
- Economic Trade and Finance
- Social Affairs
- Information and Poverty Alleviation
- Energy Transport Science and Technology
- Education Security and Culture
SAARC Specialized Bodies :
- South Asian University (SAU) – India
- South Asian Regional Standards Organization (SARSO) – Dhaka
- SAARC Development Fund (SDF) – Bhutan
- SAARC Arbitration Council (SARCO) – Pakistan
India's Contribution to SAARC
India, as a founding member of the South Asian Association for Regional Cooperation (SAARC), plays a crucial role in fostering regional cooperation and development. Through various initiatives and active participation, India aims to achieve closer collaboration in diverse areas.
Hosting SAARC Summits
India has hosted three out of the eighteen SAARC Summits so far:
- Second Summit: Bengaluru, November 1986
- Eighth Summit: New Delhi, May 1995
- Fourteenth Summit: New Delhi, April 2007
Enhancing Bilateral and Regional Engagement
India has strengthened its engagement with SAARC countries through both bilateral initiatives and SAARC frameworks:
- Trade and Connectivity: Increased efforts to enhance trade and connectivity links via land, air, and sea, aimed at accelerating regional integration and fostering people-to-people contacts.
- Peaceful Cooperation: Continuous efforts to build peaceful cooperative ties with Pakistan to address outstanding issues through peaceful bilateral dialogue.
Trade Agreements
India has signed 13 Regional Trade Agreements (RTAs) and Free Trade Agreements (FTAs) with SAARC countries as of July 20, 2022, to boost trade relations and economic integration in the region.
Technological Advances
India is committed to sharing the benefits of technological advancements with neighboring countries:
- National Knowledge Network (NKN): Extended to Sri Lanka, Bangladesh, and Bhutan. The extension to Bhutan was inaugurated in August 2019.
- South Asian Satellite (SAS): Launched in May 2017 from Sriharikota, with demonstration terminals installed in Bhutan, Maldives, Afghanistan, Nepal, Bangladesh, and Sri Lanka.
Currency Swap Arrangement
- In January 2019, the Union Cabinet approved the amendment to the ‘Framework on Currency Swap Arrangement for SAARC Member Countries,’ incorporating a ‘Standby Swap’ amounting to USD 400 million within the overall facility of USD 2 billion.
Disaster Management
- India hosts the Interim Unit of the SAARC Disaster Management Center (IU) at the Gujarat Institute of Disaster Management (GIDM), Gandhinagar, operational since November 2016.
- It provides policy advice, technical support, capacity building services, and training for disaster risk management in the SAARC region.
South Asian University (SAU)
- India is home to the South Asian University (SAU), established through an Inter-Governmental Agreement at the 14th SAARC Summit in April 2008.
- SAU offers world-class educational facilities and professional faculty to students and researchers from SAARC countries.
Issues in the Working of SAARC
1. Political Issues
1.1. Inter-State Conflicts
- India-Pakistan Relations: Long-standing conflicts, particularly over Kashmir, significantly impact the functioning of SAARC.
- Internal Political Instability: Frequent changes in government and political instability in member states (e.g., Nepal, Sri Lanka) disrupt continuity in SAARC policies and initiatives.
1.2. Lack of Political Will
- Leadership and Commitment: Inconsistent political commitment from member states to prioritize SAARC over bilateral issues.
- Regional Dominance: Perceptions of India's dominance and reluctance by smaller states to support initiatives that could enhance India’s influence.
2. Economic Issues
2.1. Trade Barriers
- Tariff and Non-Tariff Barriers: High tariffs and non-tariff barriers among member states impede trade.
- Poor Trade Infrastructure: Inadequate infrastructure for trade facilitation, including poor connectivity and inefficient border controls.
2.2. Economic Disparities
- Developmental Imbalances: Significant economic disparities among member states create challenges in forming cohesive economic policies.
- Resource Allocation: Inequitable distribution of resources and financial contributions among member states.
3. Institutional Issues
3.1. Structural Weaknesses
- Inefficient Secretariat: Limited powers and resources of the SAARC Secretariat to implement and monitor initiatives.
- Bureaucratic Hurdles: Excessive bureaucracy and lack of streamlined processes hinder decision-making.
3.2. Inadequate Implementation
- Poor Follow-Through: Lack of effective implementation mechanisms for agreements and initiatives.
- Monitoring and Evaluation: Insufficient monitoring and evaluation frameworks to assess progress and impact.
4. Security Issues
4.1. Terrorism and Cross-Border Threats
- Counter-Terrorism Coordination: Inadequate cooperation and information sharing among member states on counter-terrorism.
- Transnational Crime: Challenges in addressing cross-border crimes such as human trafficking and smuggling.
4.2. Non-Traditional Security Threats
- Climate Change: Insufficient collaboration on climate change adaptation and mitigation efforts.
- Health Pandemics: Limited regional response mechanisms for health crises like pandemics.
5. Social and Cultural Issues
5.1. People-to-People Connectivity
- Visa Restrictions: Stringent visa policies and lack of efforts to promote cultural exchanges.
- Language Barriers: Linguistic diversity posing challenges in effective communication and collaboration.
5.2. Social Development
- Education and Health: Variability in education and healthcare standards across member states.
- Gender Inequality: Addressing gender disparities and promoting women’s participation in SAARC initiatives.
6. External Influences
6.1. Influence of External Powers
- Geopolitical Interests: External powers, such as China and the USA, influencing SAARC dynamics and priorities.
- Foreign Aid Dependence: Reliance on external aid impacting member states' commitments to SAARC-led initiatives.
6.2. Global Economic Trends
- Economic Globalization: Impact of global economic trends on regional cooperation and trade policies.
- Financial Crises: Vulnerability to global financial crises affecting regional economic stability.
Way Forward for Resolving Issues in SAARC
1. Political Solutions
1.1. Enhancing Political Will
- High-Level Engagement: Regular summits and meetings at the highest political levels to foster trust and commitment.
- Conflict Resolution Mechanisms: Establishing effective mechanisms for peaceful resolution of inter-state conflicts.
1.2. Promoting Inclusivity
- Equal Participation: Ensuring equal participation of all member states in decision-making processes.
- Reducing Dominance: Addressing concerns about regional dominance by fostering a more inclusive and cooperative approach.
2. Economic Solutions
2.1. Trade Facilitation
- Reducing Barriers: Lowering tariffs and non-tariff barriers to enhance intra-regional trade.
- Improving Infrastructure: Investing in trade infrastructure, such as roads, railways, and ports, to facilitate easier and quicker movement of goods.
2.2. Economic Integration
- Regional Economic Initiatives: Promoting regional economic initiatives like a South Asian Free Trade Area (SAFTA) to boost economic integration.
- Addressing Disparities: Implementing programs aimed at reducing economic disparities among member states through targeted development projects.
3. Institutional Solutions
3.1. Strengthening SAARC Secretariat
- Enhanced Powers: Providing the SAARC Secretariat with greater authority and resources to implement and monitor initiatives.
- Capacity Building: Investing in capacity building for the Secretariat and national SAARC cells.
3.2. Improving Implementation
- Effective Monitoring: Establishing robust monitoring and evaluation frameworks to ensure timely implementation of agreements.
- Streamlining Bureaucracy: Reducing bureaucratic hurdles and simplifying processes to speed up decision-making.
4. Security Solutions
4.1. Coordinated Counter-Terrorism
- Information Sharing: Enhancing cooperation and information sharing among member states on counter-terrorism efforts.
- Joint Exercises: Conducting joint training and exercises to improve regional capabilities in counter-terrorism.
4.2. Addressing Non-Traditional Threats
- Climate Action: Developing regional strategies for climate change adaptation and mitigation.
- Health Cooperation: Strengthening regional health systems and establishing frameworks for a coordinated response to pandemics.
5. Social and Cultural Solutions
5.1. Enhancing Connectivity
- Easing Visa Policies: Implementing more relaxed visa policies to promote people-to-people contact.
- Cultural Exchanges: Organizing cultural exchange programs to foster mutual understanding and goodwill.
5.2. Promoting Social Development
- Education Initiatives: Launching regional educational initiatives to improve standards and accessibility.
- Gender Equality Programs: Implementing programs aimed at reducing gender disparities and promoting women's participation in regional activities.
6. Addressing External Influences
6.1. Managing Geopolitical Interests
- Balanced Diplomacy: Engaging in balanced diplomacy to manage the influence of external powers without compromising regional interests.
- Reducing Dependency: Focusing on regional self-reliance to reduce dependency on foreign aid.
6.2. Adapting to Global Trends
- Economic Resilience: Building economic resilience to withstand global financial crises.
- Regional Cooperation: Enhancing regional cooperation to adapt to and benefit from global economic trends.
Conclusion:
SAARC, despite challenges, remains vital for regional cooperation. Addressing political tensions, enhancing economic integration, and tackling security issues are key. By fostering inclusivity and proactive engagement, SAARC can advance regional prosperity and peace in South Asia.
Citations:
Strengthening India-Bangladesh Bilateral Relations
In news
Over the weekend, Delhi welcomed Sheikh Hasina, marking the first state visit by a foreign leader during PM Modi’s third term. Sheikh Hasina's recent presence in Delhi for Modi's swearing-in, along with their frequent meetings totaling 10 times over the past year, highlights the depth of their engagement.
Details:
India and Bangladesh share deep-rooted bonds of history, language, culture, and a multitude of other commonalities. The outstanding nature of bilateral ties is reflected in an all-encompassing partnership based on sovereignty, equality, trust, and understanding. This partnership has evolved as a model for bilateral relations for the entire region and beyond.
Historical Evolution of Bangladesh-India Relations
1. Phase I: The Early Years (1972-1975)
- Context and Cooperation
- Independence Support: India provided unparalleled assistance and humanitarian support during Bangladesh's War of Independence against West Pakistani military rule under the leadership of Bangabandhu Sheikh Mujibur Rahman.
- Geopolitical Considerations: India's support reflected Gandhian and Nehruvian principles, as well as strategic interests.
- Key Developments
- Military Withdrawal: India agreed to withdraw its military troops from Bangladesh at Sheikh Mujib's request.
- Treaties and Agreements: The Treaty of Friendship, Cooperation and Peace (19 March 1972) and the Land Border Agreement (1974) were signed, marking significant diplomatic milestones.
2. Phase II: The Military Dictatorship Era (1975-1990)
- Political Transition
- Coup and Regime Change: The brutal military coup on 15 August 1975 led to the assassination of Sheikh Mujib and his family, ushering in an era of military dictatorship.
- Leadership Changes: General Ziaur Rahman and later General Ershad emphasized different foreign policies, shifting away from India.
- Strained Relations
- Foreign Policy Shifts: General Zia's regime focused on building relations with China, Western, and Islamic countries, leading to mistrust and suspicion towards India.
- Hostility and Mistrust: General Ershad's government continued this trend, portraying India as an imperialistic regional hegemon.
3. Phase III: Democratic Transition and Contemporary Relations (1990-Present)
- Return to Democracy
- Democratic Revival: The ousting of General Ershad in December 1990 marked the revival of democracy in Bangladesh.
- BNP Government (1991-1996): Despite the return to democracy, relations with India did not significantly improve under Begum Khaleda Zia's leadership.
- Improved Bilateral Ties
- Awami League Government (1996-2001): Relations improved dramatically with the signing of the Ganges Water-Sharing Treaty.
- BNP Government (2001-2006): Ties deteriorated again during the BNP's tenure.
- Renewed Momentum (2008-Present): The Awami League under Sheikh Hasina, elected in 2008, rejuvenated bilateral relations, leading to significant cooperation and numerous agreements.
Areas of cooperation
1.Security and Border Management
- Cooperative Measures: Active cooperation on police matters, anti-corruption activities, and combating issues such as illicit drug trafficking, fake currency, and human trafficking.
- Border Management: Focused on border fencing, joint inspection of boundary pillars, joint boundary demarcation, including riverine boundaries.
- Regular Meetings: Regular DG Level talks between Border Guarding Forces and nodal Drugs Control Agencies for better coordination.
2. Defence Cooperation
- Bilateral Exchanges: Significant exchanges between the armed forces, including visits by Chiefs of the Indian and Bangladesh Armed Forces.
- Annual Defence Dialogue: The 5th Annual Defence Dialogue and 4th Tri-Services Talks held in Dhaka reviewed ongoing defence cooperation.
- Muktijoddha Engagements: Annual visits of Muktijoddhas and scholarships distributed to their heirs, along with medical schemes for Muktijoddhas.
3. Connectivity
Railway Connectivity
- Rehabilitation of Rail Links: Six pre-1965 rail links between India and Bangladesh have been rehabilitated.
- Operational Railway Trains: Maitri Express, Bandhan Express, and Mitali Express currently operate between the two countries.
- Lines of Credit: Strengthening Bangladesh's railway infrastructure through India's Lines of Credit Program.
Road and Inland Water Connectivity
- Bus Services: Five bus service routes are operational, connecting Kolkata, Agartala, and Guwahati to Dhaka and Khulna.
- Inland Waterways: The Protocol on Inland Waterways Trade and Transit (PIWTT) facilitates trade and transit between the two countries.
Port Connectivity
- Port Usage Agreement: Operationalized in 2023, allowing India to use Chittagong and Mongla Ports for transit cargo between Northeast and mainland India.
4. Economic and Commercial Relations
- Trade Partnership: Bangladesh is India’s biggest trade partner in South Asia, with bilateral trade reported at USD 14.01 billion in FY 2023-24.
- Startup Cooperation: The India-Bangladesh Startup Bridge inaugurated in March 2021, fostering new areas of commercial cooperation.
5. Power and Energy Cooperation
- Power Import: Bangladesh currently imports 1160 MW of power from India.
- Cross-Border Projects: Operationalization of the Maitree Super Thermal Power Plant and the India-Bangladesh Friendship Pipeline.
6. Development Partnership
- Lines of Credit: India has extended around USD 8 billion in Lines of Credit to Bangladesh for infrastructure development.
- High Impact Community Development Projects: India has funded 77 projects, with another 16 under implementation, totaling over USD 50 million.
- Human Resource Development: Training and scholarships for Bangladeshi officials and students under various programs.
7. Cultural Cooperation
- Cultural Centers: The Indira Gandhi Cultural Centre and the Indian Cultural Centre in Dhaka promote common cultural links.
- Youth Delegation: The revamped Bangladesh Youth Delegation campaign in 2022 attracted talented youth, with a 100-member delegation visiting India in February 2024.
8. Visa Facilitation
- Visa Services: Augmented services across 16 IVAC centers in Bangladesh, with a high demand for Indian medical visas.
- Visa Operations: Indian visas issued in Bangladesh constitute the largest visa operations worldwide in terms of application volume and number of visas processed.
Conflicts Between Bangladesh and India
1. Farakka Barrage Dispute
- Initial Conflict: India began operating the Farakka Barrage in 1975, causing water conflicts.
- Early Agreements: A preliminary agreement in 1972 to share Ganga's water was not respected by India, leading to disputes.
- 1996 Treaty: The Ganga Treaty allocated water between India and Bangladesh, but India often did not comply, causing further issues.
2.Teesta Barrage Dispute
- Barrage Construction: India built a barrage at Gozoldoba, reducing water flow to Bangladesh, severely affecting agriculture.
- Negotiation Attempts: Multiple attempts to negotiate water sharing have failed, including a notable 2013 effort thwarted by internal Indian politics.
3.Strategic Concerns
- External Influence: Bangladesh has sought Chinese support due to unresolved issues, increasing China's influence in the region.
4.Trade Imbalance
- Early Agreements: Trade agreements since 1972 have failed to reduce the trade deficit favorably for Bangladesh.
- Impact of Leadership Changes: Relations fluctuated with changes in political leadership in both countries.
- Persistent Deficit: Despite improved relations under certain administrations, the trade deficit remains a critical issue.
5. Border Killings
- High Fatality Rate: The Bangladesh-India border is marked by significant human rights violations and killings.
- Impact on Relations: These incidents have damaged bilateral relations and raised questions about India's commitment to maintaining friendly ties.
6. Rohingya Issue
- Bangladesh's Burden: Over a million Rohingya refugees in Bangladesh since 2017 have created security concerns.
- Expectations from India: Bangladesh has sought India's support for refugee repatriation but perceives India's assistance as insufficient.
7. Perceptions of Indian Political Elites
- Insensitive Comments: Statements by Indian political leaders have occasionally strained relations by offending Bangladeshi sentiments.
8. Unkempt Promises
- Unresolved Disputes: Long-standing issues like Teesta water sharing remain unresolved, affecting trust.
- Economic Disruptions: Unexpected policy changes, such as the suspension of onion exports, have caused economic strain.
9. External Influences
- Strategic Investments: China has significantly invested in Bangladesh, increasing its influence.
- Defense Cooperation: China's military support to Bangladesh is a concern for India, highlighting the strategic competition in the region.
Way Forward for India-Bangladesh Relations
1. Addressing Teesta River Water Dispute
- Both the Bengal government and the central government should work together to reach a consensus on the Teesta water-sharing issue. This cooperation can set a precedent for resolving other regional water disputes.
2. Enhancing Connectivity
- Coastal Connectivity: Strengthening coastal connectivity can boost trade and economic activities, benefiting both nations.
- Road, Rail, and Inland Waterways: Improving infrastructure in these areas will facilitate smoother transportation of goods and people, enhancing economic integration.
3. Energy Security
- Clean and Green Energy: Collaborating on renewable energy projects can help both countries achieve energy self-sufficiency and address the global energy crisis.
- Energy Sharing Agreements: Formulating agreements for energy sharing and joint ventures in energy projects can ensure a stable energy supply.
4. India-Bangladesh Friendship Pipeline
- Completion and Operationalization: Ensuring the timely completion of this project will facilitate the movement of high-speed diesel from India to Northern Bangladesh, enhancing energy security and economic ties.
- Expanding Pipeline Network: Considering additional pipelines for other energy resources to further strengthen energy cooperation.
5. Strengthening Trade and Economic Ties
- Reducing Trade Imbalance: Both countries should work on policies to reduce the trade imbalance, including tariff reductions and non-tariff barrier removals.
- Joint Economic Ventures: Encouraging joint ventures in manufacturing, technology, and other sectors can create a balanced economic relationship.
6. Security and Border Management
- Human Rights and Border Security: Addressing human rights violations at the border and implementing joint border management protocols can reduce tensions.
- Joint Anti-Terrorism Measures: Collaborating on anti-terrorism efforts and intelligence sharing to ensure regional security.
7. Cultural and People-to-People Ties
- Cultural Exchanges: Promoting cultural exchanges and tourism can strengthen the historical and cultural bonds between the two countries.
- Educational Collaboration: Expanding educational collaborations and student exchange programs can build future leaders who understand and value the bilateral relationship.
8. Role in Global Platforms
- Global South Advocacy: Serving as a voice for the Global South, India can advocate for policies and initiatives that benefit both India and Bangladesh.
Citations:
