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

Author: Ishika Goel Page 1 of 2

Currently pursing Economic honours at SRCC, Ishika has a knack for trying out unconventional things. Inquisitive about anything and everything, she endeavours to explore diverse lines of knowledge. A keen and a zealous learner, she lets curiosity guide her through life.

negative beta

Negative Beta stocks

When researching stocks for investment, stock analysts are always looking at what’s known as beta values, in order to measure the risk associated with the stocks. Beta measures the volatility of a stock compared with the volatility of the market as a whole i.e. it shows how often a stock’s price appears to fluctuate up and down with regard to other stocks. A high beta means that the stock price is more sensitive to market news and information and will move faster than a low beta stock. In general, high beta means high volatility or risk, but also offers the possibility of high returns if the stock turns out to be a good investment. 

SAARC

Lesser importance of SAARC

The South Asian Association of Regional Cooperation (SAARC) has come under serious scrutiny in the last few years. Even after more than three decades of its existence, SAARC’s performance has been less than satisfactory, and its role in strengthening regional cooperation is being questioned.

SAARC is a regional organization that gives its participants a platform to interact. It is a wholly indigenous project not introduced by an outside power and this makes the regional forum free of foreign interference. Unlike the European Union and the ASEAN which were formulated as US-aided, localized resistances to outside hegemons like Russia and China, SAARC came into being out of a genuine need for regional integration.

SAARC is one of the major regional organizations operating today. It occupies a land area greater than the EU and ASEAN, and in terms of GDP, it stands second to the EU. It also enjoys superiority in terms of the population over the two. Although it has a large source of human capital, it is marred by high levels of illiteracy, poverty, and unemployment. 

SAARC has eight member countries: Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. While the organisation was intended to enhance regional cooperation in South Asia, from its very inception, member countries treated it with suspicion and mistrust.

SAARC was first envisioned in the late 1970s by Gen. Ziaur Rahman, the military dictator of Bangladesh. Initially, India was apprehensive about SAARC because it perceived the grouping to be an attempt by its smaller neighbours to unite against it. The Cold War politics of the time too contributed to India’s anxiety. India had a close relationship with the Soviet Union, and it considered Ziaur Rahman to be aligned with the West. It was, therefore, suspicious that SAARC could be an American mechanism to counter Soviet influence in the region. It feared that the association might lead to Asia’s own Cold War, creating a pro-Soviet and an anti-Soviet rift. This would have played against India’s interest since it had close strategic ties with the Soviet Union. However, eventually,   India agreed to join SAARC due to the interest expressed by the neighbouring countries.

Reasons for concerns about the relevance of SAARC :

SAARC is aimed at promoting the welfare of the people; accelerating economic growth, social progress and culture development; and strengthening collective self-reliance. While SAARC has established itself as a regional forum, it has failed to attain its objectives. Numerous agreements have been signed and institutional mechanisms established under SAARC, but they have not been adequately implemented. The South Asia Free Trade Agreement (SAFTA) is often highlighted as a prominent outcome of SAARC, but that, too, is yet to be implemented. Despite SAFTA coming into effect as early as 2006, the intra-regional trade continues to be at a meagre 5%. 

In the many failures of SAARC, lack of trust among the member countries has been the most significant factor between India and Pakistan. In recent times, Pakistan’s non-cooperation has stalled some major initiatives under SAARC. For example, at the 18th SAARC summit in Kathmandu in 2014, initiatives such as the SAARC–Motor Vehicle Agreement (MVA)—crucial for harnessing regional connectivity across South Asia—could be not signed due to Pakistan’s dithering. SAARC faced another setback after the 19th summit scheduled to be held in Pakistan in 2016 was suspended for an indefinite period after the September 18, 2016 attack on the military base in Uri.

It can be asserted that much of the SAARC’s failures are rooted in a variety of reasons which are listed below:

Enmity between its two Largest States

The biggest obstacle to a functional SAARC is perhaps the rivalry between India and Pakistan, often stunting its growth and development. The long lingering Kashmir dispute has become a great obstacle in its path to progress as complications arising from Indo-Pak tensions tend to harm the organization. 

Fear of Indian Domination 

The asymmetry between India and other member countries in terms of geography, economy, military strength and influence in the global arena make the smaller countries apprehensive. They perceive India as “Big Brother” and fear that it might use the SAARC to pursue hegemony in the region. The smaller neighbouring countries, therefore, have been reluctant to implement various agreements under SAARC.

Role of External Powers, especially China

Some developed nations are always interrupting the SAARC nations. Especially China and America are responsible for the relationship between India and Pakistan. The increasing presence of China in the region and reservations of India with China has created roadblocks.

Unresolved Border and Maritime Issues

SAARC does not have any arrangement for resolving disputes or mediating conflicts. Disputes among the member countries often hamper consensus building, thus slowing down the decision-making process. SAARC’s inability in this regard has been detrimental to its growth. For example – long pending issues between members like fishermen issue between India and Sri Lanka, Teesta water sharing between India and Bangladesh, lack of direct access to Afghanistan to other members except Pakistan have restricted in arriving at common ground for regional integration and also resulted in increased mistrust among the members.

Rising Bilateralism

Given SAARC’s failures, member countries have turned to bilateralism, which in turn has adversely affected the organisation. Bilateralism is an easier option since it calls for dealings between only two countries, whereas SAARC, at a regional level, requires one country to deal with seven countries. Thus, bilateralism decreases the countries’ dependence on SAARC to achieve their objectives, making them less interested in pursuing initiatives at a regional level.

Civilizations Clash

Professor Samuel Huntington has mentioned in his book “The Clash of Civilizations” that SAARC has been a failure because according to him the countries belonging to organizations like the EU belong to the same culture but SAARC countries are those whose cultures are different. India and Pakistan are enemies of each other, they fight on minor things, and then how can these two countries support each other in one organization. No country in the region is having any feeling of belongingness with the other state.

Apart from these SAARC also faces a shortage of resources, and countries have been reluctant to increase their contributions. Almost every member is facing numerous internal crisis like Tamils issue in Sri Lanka, Constitutional crisis in Nepal, religious fundamentalism in Pakistan and Bangladesh, Terrorism and instability in Afghanistan has made these nations inward-looking with not much enthusiasm to achieve collaboration in the subcontinent.

Way Forward for SAARC :

The failure of SAARC to nurture cooperation in South Asia has pushed regional players to search for an alternative. After SAARC, BBIN(Bangladesh, Bhutan, India, Nepal), BIMSTEC(the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation), BCIM(Bangladesh, China, India and Myanmar Economic Corridor) has also been initiated. Recently, BIMSTEC has gained more favour as an alternative to SAARC to deliver on connectivity, development, and counter-terrorism efforts because every nation is on board here. However, this does not make SAARC and BIMSTEC alternatives. SAARC is a purely regional organisation, whereas BIMSTEC is interregional and connects both South Asia and ASEAN. SAARC and BIMSTEC complement each other in terms of functions and goals. BIMSTEC provides SAARC countries with a unique opportunity to connect with ASEAN. Therefore, it is vital for the region that the organisation is strengthened. Whatever the flaws of the SAARC so far may be, it is the only platform where the local leaders meet and discuss issues of a region containing 1.7 billion people. It is up to the SAARC leaders to work together for a developed, peaceful and prosperous South Asia.

employment

Impact of Technology on Employment

Buzzwords such as industry 4.0, artificial intelligence, industrial automation, machine learning, etc. have been buzzing around in industries and across geographies for some time now. Advancements in technology have undoubtedly impacted the amount, the way and the conditions of all workplaces. While these technologies have been known for changing lives for good and making work processes simpler for us, prediction of loss of jobs due to human replacement is also expected. Though technology has brought the world closer, it has also increased the distance between unskilled labor and the availability of jobs for them. However, for those who think advancement of technology is only destroying jobs need to consider the fact that technology has simultaneously created new jobs for people who were keeping pace with it.

FRBM Act

FRBM Act 2003

Whenever the Union Budget of India is presented, the term FRBM is seen in the news. You may see headlines like ‘FRBM targets are missed’ or ‘FRBM targets are met’. What exactly is FRBM? What is the significance of FRBM for Indian economy?

Satyam

Corporate Accounting fraud: Satyam Computers Ltd.

The scandal of Satyam Computers has been widely regarded as the debacle of the Indian Financial System. Satyam’s case has been labelled as “India’s Enron” by the Indian media (Enron was a US-based company which was inflicted with a similar accounting fraud). It is the biggest ever corporate scandal in India amounting to more than Rs.7, 000 crores and is seen as India’s Most Colossal Financial Fraud. The fraud comprehensively exposed the potholes that existed in the corporate governance of India. Ironically, Satyam means “truth” in Sanskrit.

Zombie Firms

What are Zombie firms?

The governments’ response to the pandemic-inspired economic collapse has unleashed yet another economic problem – “Zombie firms”. The Central banks have acted quickly to make money as cheap as possible by making it both plentiful and accessible to support companies through the pandemic downturn. The remedy provided by the Central banks, however, has a sting in its tail. As policymakers make effort to fight the impact of coronavirus upon the economy through job retention schemes and other support measures the concern is that economic recovery will be held back by a troubling rise in the number of debt-laden companies shuffling across a corporate twilight state: a whole generation of zombies. So, what do you think, will this ‘zombification’ of the economy cause the next recession?

afghanistan

INDIA – AFGHANISTAN RELATIONS

Recently India managed the fallout from its deadly clash with China—the first border skirmish since 1975 involving troop fatalities —this incident necessitates India to take a step back and assess its broader regional situation. New Delhi would realize that its problems are by no means limited to Beijing: India’s relations with most of its neighbours have worsened. Things could so easily have been different. In the year 2014, shortly after Prime Minister Narendra Modi was elected to office, he invited his counterparts from Afghanistan, Bangladesh, Bhutan, the Maldives, Nepal, Pakistan, and Sri Lanka—members of the South Asian Association for Regional Cooperation (SAARC)—to his inauguration. It was a brilliant move in public diplomacy, as no previous prime minister had made such a grand gesture. It was also in accord with his Bharatiya Janata Party’s campaign manifesto, which had promised to improve ties with India’s neighbours.

Cold war

A new US-China cold war?

Relations between the United States and China plunged to a nadir in recent weeks. The Trump administration threatened to “cut off the whole relationship” with Beijing over the coronavirus pandemic, which originated in Wuhan, China. President Trump had earlier called the coronavirus “Chinese virus” and threatened to seek compensation from China for the damages caused by the outbreak to the U.S. economy. Barely a day passes without some tit-for-tat exchange of barbs, accusations, or actions designed to make life difficult for the other country or to trumpet the superiority of their respective political systems. Seeing all this, one must wonder, if the U.S. and China are sliding into a new cold war?

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