The Connectere brings forward the mind’s eye and panoramic view of the young writing enthusiasts on various topics

Month: August 2020 Page 1 of 7

The First Forum

The First Forum – Edition 61

The First Forum is an initiative that focuses on covering the latest happenings in a brief format. This is in lieu of the importance of knowledge about current happenings in this fast-changing world.
In the Sixty First Edition of The First Forum we would be covering the following topics:
1. Politics
2. Science and Technology
3. Business
4. Economics
5. Finance

(By Mehak Gupta, Nikunj Gulati, and Kanika Meena)

Welfare Capitalism

Welfare Capitalism

How can we take care of economic development and worker’s rights at the same time? Well, welfare capitalism is considered a leading idea and one of the possible solutions to deal with worker’s rights and economic development. It is an important yet controversial phase of today’s economic policies. Primarily, welfare capitalism is explained as a business-favored policy where the private sector is more effective in providing social welfare programs than the federal government.
Characterized by a concern for the welfare of various social groupings, practiced usually through social-security programs, collective bargaining agreements, state industrial codes and other guarantees against insecurity; Companies providing these services have a two-fold interest in mind. Firstly, companies act in a paternalistic manner wherein they give employees what managers think is best suited for them. Secondly, the companies perceive that providing workers with some benefits can help them stop receiving complaints about larger structural issues such as unsafe conditions and long hours.

Winner's Curse

What is the Winner’s Curse?

Imagine you own one of the world’s biggest offshore drilling companies. You fly to Texas, USA to take part in an auction with 2 other bidder companies, courting the drilling rights for an oil field in that state. After accounting for all drilling-related costs and potential revenue streams, the intrinsic value of the drilling rights comes to $10 million. . The other two companies bid $12 million and $18 million, while you win the auction with your bid offering $22 million. But have you really won? Not really if you think. You ended up paying 120% more than what that oil field was really worth. But here’s the catch. Even if you were 100% sure that your bidding price is too high, you would still have done nothing about it, as the highest bid always wins the auction, no matter how overpriced the bid may be. This paradoxical phenomenon, popularly known as the winner’s curse has been playing the cards in the world of auctions and negotiations for long now.

Paul Milgrom of Stanford University, a leading auction scholar, in his book Putting Auction Theory precisely refers to the winners curse as a selection bias that arises because a bidder tends to win more often when his value estimate is too high than when it is too low. The occurrence of this phenomenon is widely observed not only in the auctions of low priced value whose bidders are perceived to be amateurs but also in high valued auctions where even the big companies fall prey.

The term winners curse was originally coined when a group of companies were bidding for offshore oil drilling rights in the Gulf of Mexico. The early 1970s witnessed a large number of US oiling companies collapsing shortly after winning the auctioned drilling rights in several places in the USA, eventually leading to bankruptcy of some. Turns out the true value of the drilling rights was much less than what the geologists and the economists hired by these companies had estimated.

Image source: Google images

But what really triggers this curse? The human brain works in a pretty competitive way and the reason can be probed at the very core of cognitive science. Is emotional friction or cognitive psychology pulling the strings here? I’d say both! Let’s discuss why cognitive first: In a typical auction, the participants would try to assess the value of the item on auction accurately to the best of their capacity. The value of the initial bid submitted by the participants would depend on the level of competition. Fiercer the completion, closer the bids would be to the value determined by the participant. This is because the higher the number of bidders in the auction, the higher chances that someone will outbid you develops. A large number of bidders allow us to safely suppose that the average of the independent assessed values of the item on auction would be quite close to the true value of the item. This means that the winner of the auction has offered to pay more than the average bid and ultimately way more than the true value. In other words, the participants will simply fail to realize that in order to submit a winning bid, they valuing the auctioned item way higher than everyone else and hence most likely overvalue it in respect of it’s true value.

The emotional aspect leading to the winners curse is driven largely by auction fever; an uncontrollable desire to win the auction.  In 2005, the NFL (National Football League) auctioned off the rights to broadcast Monday Night Football.  ESPN won the auction offering to pay 1.1 billion dollars for the broadcasting rights over eight years, almost twice than what ABC was previously paying. Whether ESPN saw potential cash inflows that other bidder didn’t or it simply ended up overpaying, winner’s curse did affect this auction.

Some other causes like incomplete information, rumors and subjective factors that have a strong influence on the bidder can also be attributed to the gap between auctioned and intrinsic values. Incomplete information or as economics knows it, asymmetric information is one of the two reasons why the winner’s curse is often called a trap, the other being that your gains are entirely dependent upon other persons acceptance which is most likely to occur in situation favorable to the seller and unfavorable to the bidder. Asymmetric information would give rise to lemon problem-a problems that arise regarding the value of an investment due to unequal amount of information possessed by the seller and buyer. The bids for an item on auction about which the bidder knows little often heightens uncertainty and decreases the return from the transaction dramatically for the bidder.

Winner’s curse is a comprehensive phenomenon in itself. It can happen in any market where auctions take place. In the investing world, it commonly applies to initial public offerings (IPOs). When a company first steps into the market to raise funds through issue of shares, insiders like promoters, family, early investors- angel capitalist, venture capitalist etc are selling their stakes to the public. They have in depth knowledge about the company and its operations, managements, growth potential amongst other key areas of performance. They have an accurate idea about the intrinsic value of the shares. The potential shareholders on the other hand may or may not be completely informed about the company; resultantly they’re unable to estimate the intrinsic value of the shares. The uniformed investors usually fall prey to winner’s curse as they tend to subscribe to every IPO in comparison to informed investors who only buy new shares if the issue price is less than the fair value.

Winners curse also occurs when the bidders underestimate the magnitude of the adjustment necessary to compensate for the presence of other bidders. This is what exactly happens in the M&A market. If you think of an acquisition as a result of an auction, by now you probably will understand why acquirers tend to overpay. The winning bid routinely overestimates the benefits that are to accrue due to competitive pressure. One has to look at the projected ‘synergistic benefits’ at the time of benefits and the actual results a couple of years down the line. The acquirers often fail to take into consideration (which they really should!) the “anti synergies” that are bound emerge on meshing the two firms together. The losses and the costs incurred in order to achieve some real synergies that may exist, often takes a toll on the profits of the company and ultimately shareholders are the one who are at the receiving end of the winner’s curse.

An important question to ponder is that does the winner’s curse exist in all auctions?  Well, no. Many auctions are immune from the winner’s curse. An interesting example is auctions where bidders have an independent private value for the item on sale i.e. the prize has an intrinsic value that is different to each customer and not of a common value to everyone. An eBay auction is the ideal example. The $15 Iron man’s action figure up for an auction sale on eBay has a different value to each customer. It may be worth $100 to one and not more than $5 to another. The values are completely individual and dependent one’s own preferences. In order to avoid overpaying in such auctions, all you need to do is set a maximum bid less than your individual estimation of worth. The winner most likely gets the item at a price below his individual value and the winner’s curse should never happen.

Auctions pervade our markets. All of them! In order to avoid becoming the next victim of the winner’s curse, one must analyze if the asset on auction possesses an element of common value, if so bid with caution! One must also evaluate their financial ability and do a cost benefit analysis before placing each bid. The key lies in the answer to the question, is it really worth it?

Written By- Neha Haldia

Neha Haldia is a 3nd year, B.com Hons. student at SRCC.

podcasts

The Connectere Podcast #54: Retail 4.0 & The Jio Mart

The Connectere podcast is an initiative to bring forth innovative ideas and opinions of the youth forward via the digital medium. Tune in to this episode of the podcast where Aashi takes you through the rising Retail 4.0 and upcoming business model JioMart.

Bravo explosion

Scientific disaster – Castle Bravo Explosion

A team of researchers from Columbia University has found that the Marshall Islands are becoming habitable except Bikini Atolls. The radiation there remains 184 mrem/year. This is after 66 years of Castle Bravo explosion test. More study needs to be conducted regarding the Island in terms of food it can grow and drinkable water, before any talk of rehabilitation can start.

During 1946-58, the US undertook an ambitious project of producing powerful nuclear devices. They detonated around 67 nuclear devices. Castle Bravo explosion was the first of the thermonuclear bombs of the series of “Operation Castle”. It was one of the biggest nuclear tests of that time, 1000 times larger in effect than the bombs dropped on Hiroshima and Nagasaki. The experiment of Castle Bravo, however, did not go according to the plan. There were some miscalculations which led to devastating impacts.

Let’s look at the story of Castle Bravo explosion in detail.

How did it all start?

The Marshall Islands lie between Hawaii and Australia in the Pacific Ocean, above the equator. It is a two-chain, low lying artificial Island. It was initially controlled by Germany during World War-I; the power was later seized and maintained by the Japanese. During World War-II, after the bombs were dropped on Japan (in 1945), the US military took over the Islands.

Due to its remote location, scarce population and stable weather, it became an ideal site for the US to test its nuclear weapon. The natives of the Island were regularly moved by the military to nearby Islands to prevent them from falling under the radiation zones. Their initial tests killed a huge number of land and marine animals. The islands where the people were usually shifted did not have enough food to sustain its “temporary population”. After 1947, operations in Pacific Proving Ground shifted from the US military to US civilians under the newly formed Atomic Energy Commission. This led to a new cloud of secrecy in their future plans.

The era of the Cold War started, leading to an arms race between the US and Russia. Many series of tests for powerful weapons started taking place like Operation Sandstone, Operation Ivy, Operation Greenhouse, and Operation Castle (The first bomb that was tested under the Operation Castle series was ‘Castle Bravo’). The secrecy of the project was a major reason that it led to a disastrous impact. That’s how it all began.

What went wrong with Castle Bravo?

On 1st March 1954, at 6:45 AM, as soon as the nuclear explosion took place the scientists knew something had gone wrong. The blast was overwhelming creating a fireball that was rising at 1000 feet per second. The explosion created a mushroom cloud 130,000 feet above the sea level, leaving a crater on the ocean floor of about 6,500 feet diameter and depth of about 250 feet. It was the US’s most powerful nuclear weapon at the time but also most disastrous. Some witnesses even said that the light was so powerful that they could see the shadows of the bones of other men through their flesh. The shockwaves destroyed buildings outside the area predicted and almost knocked off the surveillance aircraft. People in the forward observation bunker felt that their bases had been completely eroded off and that they might have flung somewhere else.

The impact of the explosion was 15 megatons of TNT while the prediction was about 6 megatons, which is about 2.5 times more. This was due to the use of lithium-7 isotope as fuel, relating to which the designers of the device (Los Alamos National Laboratory) had made an error in calculating the yield. The use of the fuel led to some unforeseen reactions leading to high radioactive contamination of the Island Bikini Atolls and the area east of it.

The aftermath of the explosion:

The explosion may not have gotten international coverage if the Japanese fishing ship named “Lucky Dragon 5” with 23 crew members wasn’t caught in the contamination zone. A surviving crew member described the blast as “It felt like our bodies were being burned by a blowtorch”. One of the members died with radiation sickness due to the contaminated tuna which was bought by them was circulated in the fish market of Japan. This incident created a strain in the relations between Japan and the US. Finally, some compensation was provided by the US to the surviving crew members and the news of Bravo explosion became huge.

The Marshall Islanders were taken as a test subject of the US study called “Project 4.1” to know the effects of radiation on humans without their consent. None of the people knew what kind of drugs they were given and what for they were being studied. 55% of the Marshallese suffers from thyroid cancer or blood poisoning. The women exposed to radiation gave birth to deformed babies- some with anomaly large heads or translucent skin. Most of them died within a few days. The Islanders who were relocated had trouble finding livelihoods as they were not proficient in English and they continue to demand adequate compensation for their land and health and for the sake of justice.

Conclusion

Castle Bravo was not the last test conducted on the island even after its large scale impact. It’s been 66 years since the explosion took place, however, the islands are still contaminated beyond the safe level for the Marshallese to return. One of the Bikini representatives, Tomaki Juda said in a press conference in 2014 for the 60th anniversary of the Castle Bravo, “We are sadly more akin to the Children of Israel when they left Egypt and wandered through the desert for 40 years, we left Bikini and have wandered through the ocean for 32 years and we will never return to our Promised Land.” Science has progressed by leaps and bounds but living in a world where arm race has only intensified and a full-blown nuclear war is a possibility, one might wonder- at what cost?

Spill

Scientific Disaster – Deepwater Horizon Spill

Oil is insoluble in water but it can still cause a ton of adverse effects on marine life and sea creatures if spilt in water. There have been many incidents where oil barrels have spilled into the sea, the reason could be either human error or an unfortunate accident, but the Deepwater Horizon oil spill was the largest one in history.

weekly analysis

The Weekly Analysis – Edition 24

There are two aspects to the news- knowing the headline and understanding the intricacies of it. We at The Connectere focus on both. While The First Forum edition gives a brief about the headlines, The Weekly Analysis Edition is meant to educate the reader on what do various news mean and what are their intricacies. This initiative is meant to educate the reader on how to understand the important news. In the Twenty Fourth Edition we are covering the following news:

1. Supreme Court junks plea to postpone JEE, NEET & other entrance exams.
2. Row over the takeover of Thiruvananthapuram airport by Adani Group
3. The difference of opinion in Indian National Congress over leadership
4. Mali’s Military Coup following months of unrest
5. Congress alleges ruling party bias by Facebook following WSJ report
6. Sanctions by Pakistan on 88 terrorists fearing getting blacklisted

 

supreme court

Supreme Court junks plea to postpone JEE, NEET & other entrance exams

The Supreme Court, on the similar lines of Union Government has refused to entertain a petition by students to postpone the National Eligibility cum Entrance Test (NEET) and Joint Entrance Examination (JEE) citing COVID-19 after recording the exam authorities assurance that all necessary precautions would be taken to keep safe the candidates who run into lakhs. The judgement given in this case has been vividly upheld for the conducting of other entrance exams as well such as Common Law Admission Test (CLAT) and MHCET.
The SC hearing on JEE Main and NEET had two pleas of different views regarding the postponement. While one petition was demanding the further postponement of JEE Main and NEET exam, the other was requesting no more delay in the entrance examination. Both parties were heard at the apex court and decision regarding JEE Main and NEET postponement was taken. Justice Arun Mishra headed the SC bench and Advocate Alakh Alok Srivastava was representing the students and parents who had filed for the JEE Main and NEET postponement.
The Supreme Court’s point of view of “Life should go on ”, as quoted in its judgment as well, was warmly welcomed by a substantial set of parents and applicants as the Court took cognizance of the academic burden and pressure on the students. On the other hand, All India Students Association observed a hunger strike protesting against conducting all kinds of entrance exams amidst pandemic.
While the Union Government stands firm in support of the apex court’s orders, ensuring it’s trust in the guarantee of safety precautions being taken to conduct the exam, much heat has been drawn from other political parties. Many politicians have openly voiced their protest against conducting exams on a large scale during a pandemic. Much debate is also being centered around the overseas students, stuck abroad, who also have applied for given exams.
Almost 7 lakh applicants are set to appear for JEE, 17 lakh applicants for NEET, and thousands of others for other entrance exams. The authorities have a great responsibility to conduct these exams safely. As of now the exams are set to be conducted on their respective dates and students have already received admit cards however there is still a possibility that further course of action may change.

Row over the takeover of Thiruvananthapuram airport by Adani Group

A political slugfest has erupted between the Centre and the Kerala state government over the privatization of Thiruvananthapuram airport in Kerala. The Centre has decided to lease out the operation, management and development of the airport to Adani Enterprises for a period of 50 years — a move being vehemently opposed by the state government.
The airport is being handed over to Adani Enterprises as the Centre had decided to lease out six airports in the country for their infrastructural development and AAI’s revenue enhancement on the lines of airports in Delhi, Bengaluru and Mumbai etc. These airports being leased are that of Thiruvananthapuram, Ahmedabad, Jaipur, Lucknow, Mangaluru and Guwahati  through public-private partnership (PPP) to Adani Enterprises last year after the company emerged the highest bidder in a global competitive bidding process. Adani Enterprises outbid eight other companies in the process, including GMR Airports, Kerala State Industrial Development Corporation (KSIDC), Cochin International Airport Ltd and Zurich Airport, to win the rights to manage the six of these airports in February 2019.
Kerala government’s reservations date back to 2003, when it requested the Centre to include the state government whenever a decision to induct the private sector for managing the Thiruvananthapuram airport was taken. The Centre, at the time, assured the state that it would be consulted during the privatisation process. Thus shortly after the Union Cabinet approved leasing out the airport to Adani, Chief Minister Pinarayi Vijayan wrote to Prime Minister Narendra Modi, saying the Centre’s “unilateral decision” was against the wishes of the people of the state, and that “it will be difficult” for the state government to offer co-operation for implementation of the decision. Kerala also said its claim to manage the Thiruvananthapuram airport was rejected by the Centre even after it offered to match Adani’s bid.
After the Union Cabinet’s go-ahead to lease the airport out to Adani, an all-party meeting of the state opposed the Centre’s decision and sought revocation of privatisation of the Thiruvananthapuram airport to Adani.
Further, a petition was filed in the Kerala High Court last year, which was dismissed in December following which a special leave petition was filed in the Supreme Court. While both the High Court and the apex court did not grant a stay on the privatisation process. The Supreme Court remitted the matter back to the HC, which is yet to give its final decision.
The Centre has said the Union Cabinet’s approval was subject to the outcome of the writ petition. It also said that if the petitioners succeed and the outcome of litigation leads to annulment or cancellation of the bidding process, then Adani will hand over the possession of the airport back to AAI, which will be entitled to refund of the amount paid and additional investments made in the assets.

 

The difference of opinion in Indian National Congress over leadership

Twenty-three senior leaders of the Congress, including five former Chief Ministers, several members of the Congress Working Committee, sitting MPs, and former Union Ministers, had recently written to party chief Sonia Gandhi, calling for sweeping changes at every level. The letter had acknowledged that the youth of the country have unequivocally chosen Narendra Modi over the Congress, and underlined that the erosion of the party’s support base, and the loss of the confidence of the youth are matters of serious concern.
The letter, which is believed to have been sent a fortnight ago, amounts in effect, to a stinging indictment of the party’s current leadership.
The Significance of the letter written by the 23 leaders is that the letter is in many ways a pushback – and criticism of the present leadership. Leaders, both young and old, have flagged their concerns over a range of issues – from the uncertainty over the leadership and drift in the party to the delay in organisational appointments and the absence of free and frank discussions within the organisation. Congress leaders said the letter is in many ways a call for putting in place better systems in the party. Many of these leaders also said that it was about time that someone belled the cat.
Reacting to the move, initially Sonia Gandhi had offered to step down as interim president following a letter by more than 20 leaders demanding an “active, full-time and visible” president however by the end of the meeting she went with the support of majority others and was reinstated as the party chief until further notice for next 6 months. Former president Rahul Gandhi also launched a sharp attack against the signatories, questioning their timing, loyalty as well as the fact they went public with their grievances. He also rued the fact that the letter – seeking sweeping changes to the party organisation and elections to the CWC was written when Sonia Gandhi was in hospital and the party was battling a political crisis in Rajasthan.
Though a large section of the leaders backed Sonia Gandhi at the even-hour virtual meeting of the Congress’ highest decision making body to discuss the pivotal leadership issue, the fault lines were clear and appeared to deepen at some points as the day progressed.

 

Mali’s Military Coup following months of unrest

On 18th August 2020, Mali, a West-African country witnessed yet another military coup by rebel military leaders forcing President Ibrahim Boubacar Keita to resign from his position. This comes after months of large scale protests and anti-government rallies against corruption, disputed parliamentary elections and poor security in the country.
Despite being amongst the first to have a proper democratic government in the West-African region after its independence in 1960, Mali witnessed a military coup in 2012. Following the military coup of 2012, Mr. Keita came to power with a landslide victory having over 78% vote share in 2013. He emphasized and focused on zero tolerance for corruption and positive changes but Malians started viewing him with mistrust due to lack of steps and results. He was re-elected for a second turn in 2018, but many argue of an electoral fraud behind his victory. Political tension began ever since his 2018 victory. But protests escalated when the “June 5 Movement” led by the opposition coalition began, demanding the resignation of Mr. Keita over April 2020 parliamentary elections. The opposition protested against economic stagnation, president’s mishandling of crisis post-2012, brutal Islamist insurgency since 2012 in North Mali and argued the legitimacy of the elections after the constitutional court decided to overturn the results of 31 seats in favour of Keita’s party making it the largest bloc. The conflict between ethnic groups has resulted in the death of more than 500 civilians and 100 soldiers in 2020 itself.
Keita refused to step down despite the movement. Hence, the military came into action and forced Mr. Keita to resign vowing to conduct fresh elections similar to 2012-13 in a reasonable period. The soldiers of the coup who call themselves the National Committee for Salvation of the People announced the developments on state television. As soon as the news of Keita’s departure was announced, thousands took to streets of the capital to celebrate. However, Mali’s West-African neighbors threatened sanctions and border closures against the coup leaders.  UN Secretary-General Antonio Guterres demanded the immediate release of both Mr. Keita and the Prime Minister. French President Emmanuel Macron was amongst the first to condemn the mutiny.  The U.S., China and the African Union have condemned the developments in Mali as well. The coup leaders have said that MINUSMA (UN Peacekeeping Force to stabilize the area), France’s Barkhane force, the G5 Sahel remain their partners.
Recent talks between a delegation of West African envoys and Military officers on resolving the political situation to return to civilian rule have ended without a deal. After several sessions, they have agreed upon several agreements but not on all issues. The mediation team from the regional bloc ECOWAS (Economic Community of West African States) will now report to regional heads of state on the progress, said Colonel Wague. The West African leaders want President Keita to return to power but envoys from ECOWAS have failed to convince the military leaders who say that Keita resigned in his free will and has no aim of returning to power.

Congress alleges ruling party bias by Facebook following WSJ report

The Congress party recently alleged that the Bharatiya Janata Party (BJP) and RSS, controls Facebook in India. They have also demanded a high-level enquiry alleging favorable treatment to the BJP on election-related issues by the social media giant. This comes after a Wall Street Journal (WSJ) report which alleges that Facebook is appeasing ruling parties in several countries by overlooking hate speeches from party leaders to secure its business and stay in a win-win situation.
The Wall Street Journal report that is based on interviews with unnamed insider employees said that company’s top lobbying Indian executive, Ankhi Das, intervened in the review process and opposed applying the company’s hate-speech rules on BJP’s Raja Singh over post targeting the Muslim Communities as traitors and at least three other Hindu nationalists for business prospects. Congress General Secretary, KC Venugopal, has written to Facebook’s CEO Mark Zuckerberg alleging this bias by executives. “Your company may be a willing participant in thwarting the very rights and values that our founding leaders sacrificed their lives for”, Venugopal said in the letter. The party has asked Facebook to make public all instances of hate speech since 2014 and also proposed a new team for India operations during the inquiry period. A similar policy of appeasing the ruling party by Facebook has been observed in Germany, Singapore and Vietnam as well.
Rahul Gandhi responded with a tweet stating that fake news and hatred is being spread by the ruling party to which Union IT minister Ravi Shankar Prasad gave sharp response reminding him of the opposition party’s alliance with Cambridge Analytica. India is Facebook’s biggest market with over 340 million users as of 2020, and its US$ 5.7 Billion investment in Reliance Jio are cited as business prospects behind the allegations of favoritism to ruling party. However, Facebook India Vice President and Managing Director Ajit Mohan said that the company is against bias and denounces hate and bigotry in all forms. He stressed that Facebook has been an open and transparent platform for all to express their views. He said that the platform has removed and will keep on removing content that violates their community standards.
Facebook employees around the world are raising questions on adequate procedures and content regulation in India. According to Reuters, an open letter has been written by 11 employees to the leadership, which demands that the company denounce anti-Muslim bigotry and ensure consistency. “The Muslim community at Facebook would like to hear from Facebook leadership”, said the letter. In a recent development, the Congress party has formed a panel of at least four individuals informally to look into the matter. The panel comprises of 4 young lawyers who will be gathering information for deciding their next course of action.

Sanctions by Pakistan on 88 terrorists fearing getting blacklisted

In an attempt to avoid getting blacklisted by Paris based global terror financing watchdog- Financial Action Task Force (FATF), Pakistan on 18th August 2020 imposed sanctions on 88 new terrorists in compliance with the list issued by UNSC. Sanctions include assets freeze, the prohibition of transit via Pakistan, no procurement of weapons, and no direct transfer of funds. Much to the surprise, the list contains names and whereabouts of India’s most wanted terrorist Dawood Ibrahim whose presence in their country has always been denied by Pakistan. Apart from Dawood, the list includes Lashkar-e-Toiba chief Hafiz Saeed, Jaish-e-Mohammad chief Masood Azhar, 26/11 accused Zaki-ur-Rahman Lakhvi. Dawood’s details include his three Karachi based addresses along with his passport numbers of 9 Indian and 5 Pakistan passports.
FATF, which is an intergovernmental organization founded in 1989 by the G-7 countries for combating money laundering and terror financing had put Pakistan in its Grey List in June 2018. The countries in the Grey List face economic loss to which the Pakistani Foreign Minister has openly agreed. According to some estimates, Pakistan loses US$ 10 Billion annually as it is a part of the FATF Grey List. Pakistan had therefore been asked to implement a plan of action by the end of 2019. However, Pakistan had failed to check the flow of money to terror groups. Following this, it was given a final warning in February 2020 to complete the action points by June which got extended to September in light of the coronavirus pandemic.
Pakistan has borrowed US$ 30 Billion loans in the past two financial years of which US$ 13 Billion has been borrowed in 2020 itself. Recent strain with Saudi Arabia where the Kingdom immediately demanded US$ 1 Billion from its earlier loan of US$ 3 Billion and suspended the US$ 3.2 Billion Deferred Oil Payment option is a major economic setback for Pakistan. In such a scenario, falling in the blacklist which includes only Iran and North Korea will turn out to be a severe blow for the already struggling Pakistani Economy. International sanctions and major restrictions on imports and exports are bound to follow. Therefore, Pakistan eagerly needs a way out of the FATF Grey List which is reflected from its recent steps.
The FATF required Pakistan to comply with 27 action points of which Pakistan has complied with 14. On August 6, Pakistan submitted its first draft report to the joint group of FATF showing adherence to the remaining 13 action points. Pakistan would be sharing its final updated version of the progress report in the first week of September. The unimplemented 13 conditions include curbing terror financing, enforcement of the laws against forbidden organizations, and improving the legal systems. However, sources believe that this step by Pakistan to include Dawood will not be of much significance as he has not been put on Pakistan’s National Terror List – the National Counter Terrorism Authority.

 

 

 

 

Minamata Disease

Scientific disaster – Minamata Disease

We all have been quite familiar with the toxic effects of mercury. The inhalation of mercury vapour can cause severe harm to our nervous, digestive and immune systems, lungs and kidneys, to the extent of being fatal. Dermal exposure to mercury may cause corrosion to skin, eyes and gastrointestinal tract. However, such a situation which required much more research, caused much more panic, was given the name of Minamata Disease. To be explained very briefly, this disease causes neurological degradation, due to organic mercury poisoning.

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