Tag: Rajan

  • Can China broker peace in Ukraine? Don’t rule it out | Rajan Menon and Daniel R DePetris

    Can China broker peace in Ukraine? Don’t rule it out | Rajan Menon and Daniel R DePetris

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    Rajan Menon Circular panelist byline.
    Rajan Menon
    Dan DePetris Circular panelist byline.
    Daniel R DePetris

    Xi Jinping’s phone call with Volodymyr Zelenskiy was a long time coming, but it should not have come as a surprise. Beijing is on everyone’s shortlist when it comes to prospective peacemakers in Ukraine. The French president, Emmanuel Macron, is no exception. “I know I can count on you to bring back Russia to reason and everyone back to the negotiating table,” Macron told the Chinese leader during their meeting in Beijing this month.

    Though Xi replied that he would call the Ukrainian president, he was in no rush. He has no illusions about the difficulty of serving as mediator in a war where Ukraine and Russia are in diametrically opposing positions. Yet China’s recent success in bringing about the normalisation of relations between Iran and Saudi Arabia may entice him to help engineer a diplomatic solution to the biggest war fought in Europe since 1945. But what would that solution look like?

    The Chinese have repeatedly stressed, most explicitly in the 12-point peace proposal they released on the one-year anniversary of the war, that peace in Ukraine can be restored only through negotiations that “ultimately reach a comprehensive ceasefire”. Despite conventional wisdom, Beijing was not advocating a ceasefire that would freeze the current battle lines as new borders (an arrangement that would leave large swathes of Ukrainian territory in Russian hands), but rather the beginning of a political process that would “ultimately” lead to a permanent cessation of the fighting. Moreover, the proposal said nothing about the territorial terms of a settlement and indeed stressed the need for both sides to show restraint – a formulation repeated in China’s readout of Xi’s conversation with Zelenskiy. Most importantly, it stressed the need to respect the “sovereignty, independence and territorial integrity of all countries, regardless of whether they were weak or strong, rich or poor”.

    The phraseology is pertinent: China is meticulous about its diplomatic language, especially in public statements. Beijing certainly wants to preserve its “no limits friendship” with Moscow, but has been careful not to adopt a stance so favourable to Russia that Ukraine would be unwilling to accept China as a mediator.

    Xi doubtless realises by now that Russia cannot achieve its territorial objectives – which, at minimum, are to partition Ukraine – by winning the war militarily, and that the fighting can only end through an agreement based on mutual compromise by the two parties. As important as Russia is for Beijing, Xi also wants to protect Chinese economic interests in Ukraine over the long term: China remains Ukraine’s largest foreign trading partner and has ploughed money into major infrastructure projects, including the modernisation of Mykolaiv port and the construction of a new subway line in Kyiv.

    The US and some of its European allies will probably dismiss Xi’s overtures to Zelenskiy as yet another stunt to obscure Beijing’s political and economic support for Putin during the war – for instance by importing Russian crude oil, which reached a 33-month high in March, and refusing to support UN resolutions condemning Russia’s invasion. This, in part, explains Washington’s rejection of Beijing’s 12-point plan.

    Yet China’s careful moves to position itself as the broker of a diplomatic settlement in Ukraine ought not to be dismissed summarily. Xi would not have wasted time having a long conversation with Zelenskiy to no end. Nor would the Chinese have announced their readiness to send “a special representative for Eurasian affairs to Ukraine and other countries” purely as a public relations gambit. China also would not go to such lengths if it didn’t have support from Russia and Ukraine for a diplomatic initiative. Tellingly, Zelenskiy was quick to characterise his call with Xi as “meaningful” and positive, and the Russian foreign ministry commended Xi for his “readiness to strive to establish” a diplomatic track.

    We should be under no illusions: while China may be interested in jump-starting a negotiating process between Kyiv and Moscow, reaching an agreement that ends the war will not happen quickly, and it may even be unattainable. Xi can read the battlefield and the positions of the combatants as well as anyone, and he understands the blunt reality that there will be more, not less, war over the short term. The Ukrainian military is in the closing stages of preparing for a major counteroffensive against Russian positions in the south and east. The US and its Nato allies continue to coordinate efforts to ensure that Kyiv possesses the weaponry – including tanks, infantry fighting vehicles, mine-clearing equipment and air defence systems – required for a successful campaign. The Russian military has spent months solidifying its defensive positions in the roughly 20% of Ukraine it controls, even as the Wagner mercenary group tries to capture Bakhmut after an eight-month slog. Neither Ukraine nor Russia will therefore rush to the bargaining table any time soon. And even if they do eventually sit down for talks, efforts at mediation could prove to be a fool’s errand given how far part Russia and Ukraine are on the minimal terms for a deal.

    Still, Xi’s call with Zelenskiy, and Kyiv and Moscow’s positive reaction to it, might at least stimulate creative thinking about ways to end the war. Without that, the death and destruction will drag on indefinitely.

    • Rajan Menon is the director of the grand strategy programme at Defense Priorities, a professor emeritus at the Colin Powell School for Civic and Global Leadership at the City College of New York, and co-author of Conflict in Ukraine: The Unwinding of the Post-Cold War Order

    • Daniel R DePetris is a fellow at Defense Priorities and a syndicated foreign affairs columnist for the Chicago Tribune and Newsweek

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    ( With inputs from : www.theguardian.com )

  • India is ‘dangerously close’ to Hindu rate of growth: Raghuram Rajan

    India is ‘dangerously close’ to Hindu rate of growth: Raghuram Rajan

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    New Delhi; Sounding a note of caution, former Reserve Bank Governor Raghuram Rajan has said that India is “dangerously close” to the Hindu rate of growth in view of subdued private sector investment, high interest rates and slowing global growth.

    Rajan said that sequential slowdown in the quarterly growth, as revealed by the latest estimate of national income released by the National Statistical Office (NSO) last month, was worrying.

    Hindu rate of growth is a term describing low Indian economic growth rates from the 1950s to the 1980s, which averaged around 4 per cent. The term was coined by Raj Krishna, an Indian economist, in 1978 to describe the slow growth.

    The Gross Domestic Product (GDP) in the third quarter (October-December) of the current fiscal slowed to 4.4 per cent from 6.3 per cent in the second quarter (July-September) and 13.2 per cent in the first quarter (April-June).

    The growth in the third quarter of the previous financial year was 5.2 per cent.

    “Of course, the optimists will point to the upward revisions in past GDP numbers, but I am worried about the sequential slowdown. With the private sector unwilling to invest, the RBI still hiking rates, and global growth likely to slow later in the year, I am not sure where we find additional growth momentum,” Rajan said in an email interview to PTI.

    Recently, Chief Economic Advisor V Anantha Nageswaran had attributed the subdued quarterly growth to the upward revision of estimates of national income for the past years.

    The key question is what Indian growth will be in fiscal 2023-24, Rajan said, adding “I am worried that earlier we would be lucky if we hit 5 per cent growth. The latest October-December Indian GDP numbers (4.4 per cent on year ago and 1 per cent relative to the previous quarter) suggest slowing growth from the heady numbers in the first half of the year.

    “My fears were not misplaced. The RBI projects an even lower 4.2 per cent for the last quarter of this fiscal. At this point, the average annual growth of the October-December quarter relative to the similar pre-pandemic quarter 3 years ago is 3.7 per cent.

    “This is dangerously close to our old Hindu rate of growth! We must do better.”

    The government, he said, was doing its bit on infrastructure investment but its manufacturing thrust is yet to pay dividends.

    The bright spot is services, he said, adding “it seems less central to government efforts.”

    On a query regarding the production-linked incentive (PLI) scheme, Rajan said any scheme in which the government pours money will create jobs and any scheme which elevates tariffs on output while offering bonuses for final units produced in India will create production in India, and exports.

    “A sensible evaluation would ask how many jobs are being created and at what price per job. By the government’s own statistics, 15 per cent of the proposed investment has come in but only 3 per cent of the predicted jobs have been created. This does not sound like success, at least not yet,” Rajan said.

    Furthermore, even if the scheme fully meets the government’s expectations over the next few years, it will create only 0.6 crore jobs, a small dent in the jobs India needs over the same period, the former RBI Governor said.

    “Similarly, government spokespersons point to the rise in cell phone exports as evidence that the scheme is working. But if we are subsidising every cell phone that is exported, this is an obvious outcome. The key question is how much value added is done in India. It turns (out to be) very little so far,” he said.

    Rajan said cell phone parts imports have also gone up, so net exports in the cell phone sector, the relevant measure that no one in government talks about, is pretty much where it was when the scheme started.

    “Except, we have also spent money on subsidies. Foxconn just announced a big factory to produce parts but they have been saying they will invest for a long time. I think we need a lot more evidence before celebrating the success of the PLI scheme,” he said.

    Currently, Rajan is the Katherine Dusak Miller Distinguished Service Professor of Finance at The University of Chicago Booth School of Business.

    He further said the most developed economies of the world are largely service economies, so you can be a large economy without a large presence in manufacturing.

    “Services do not just account for the majority of our unicorns, services can also provide a lot of semi-skilled jobs in construction, transport, tourism, retail, and hospitality.

    “So let us not deride service jobs indeed while the fraction of manufacturing jobs has stagnated in India, services have absorbed the exodus from agriculture.

    “We need to work on both manufacturing and services to create the jobs we need, and fortunately, many of the inputs both (services and manufacturing) need schooling, skilling…,” he said.

    On what measures the government should take to improve oversight of private family companies to address worries after the Hindenburg allegations on Adani Group, Rajan said: “I don’t think the issue is of more oversight over private companies”.

    The issue is of reducing non-transparent links between government and business, and of letting, indeed encouraging, regulators do their job, he said.

    “Why has SEBI not yet got to the bottom of the ownership of those Mauritius funds which have been holding and trading Adani stock? Does it need help from the investigative agencies?,” Rajan wondered.

    Adani group has been under severe pressure since the US short-seller Hindenburg Research on January 24, accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as “malicious”, “baseless” and a “calculated attack on India”.

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    ( With inputs from www.siasat.com )