News 1: OECD flags global recession risk on energy, inflation crisis
Background
Global economic growth is slowing in the wake of Russia’s invasion of Ukraine, as energy and inflation crisis risk snowballing into recession in major economies.
While global growth this year was still expected at 3%, it is now projected to slow to 2.2% in 2023, according to Organization for Economic Cooperation and Development (OECD).
OECD
- Established: 1961
- Headquarters: Paris
- Members: 38 countries (India is not a member of OECD)
- The majority of OECD members are high-income economies with a very high Human Development Index (HDI) and are regarded as developed countries.
- OECD is an official UN Observer
Base Erosion Profit Shifting (BEPS)
Base erosion and profit shifting (BEPS) refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax.
Developing countries rely highly on corporate income tax and hence suffer more due to BEPS.
Recession
Recession is a slowdown or a massive contraction in economic activities. A significant fall in spending generally leads to a recession.
“a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.”
Main drivers of recession
A sudden economic shock: In the 1970s, OPEC doubled the oil prices without warning in India, causing an economic crisis. The coronavirus outbreak, which shut down economies worldwide, is a more recent example of a sudden economic shock.
Excessive debt: When individuals or businesses take on too much debt, the cost of servicing the debt can grow to the point where they can’t pay their bills. Growing debt defaults and bankruptcies then capsize the economy. The housing bubble that led to the Great Recession is a prime example of excessive debt causing a recession.
Asset bubbles: Investors can become too optimistic during a strong economy. Former Fed Chair Alan Greenspan famously referred to this tendency as “irrational exuberance,” in describing the outsized gains in the stock market in the late 1990s. Irrational exuberance inflates stock market or real estate bubbles—and when the bubbles burst, panic selling can crash the market, causing a recession.
Too much inflation: Inflation is the steady, upward trend in prices over time. Inflation isn’t a bad thing per se, but excessive inflation is a dangerous phenomenon. Central banks control inflation by raising interest rates, and higher interest rates depress economic activity. Out-of-control inflation was an ongoing problem in the U.S. in the 1970s. To break the cycle, the Federal Reserve rapidly raised interest rates, which caused a recession.
Too much deflation: Deflation is when prices decline over time, which causes wages to contract, which further depresses prices. When a deflationary feedback loop gets out of hand, people and business stop spending, which undermines the economy. Central banks and economists have few tools to fix the underlying problems that cause deflation. Japan’s struggles with deflation throughout most of the 1990s caused a severe recession.
Technological change: In the 19th century, there were waves of labor-saving technological improvements. The Industrial Revolution made entire professions obsolete, sparking recessions and hard times. Today, some economists worry that AI and robots could cause recessions by eliminating whole categories of jobs.
Recession vs Depression
Recessions and depressions have similar causes, but the overall impact of a depression is worse. There are greater job losses, higher unemployment and steeper declines in GDP.
Most of all, a depression lasts longer—years, not months—and it takes more time for the economy to recover. Routine recessions can cause the GDP to decline 2%, while severe ones might set an economy back 5%, according to the IMF.
News 2: A push for the semiconductor industry
Background
In a bid to make India’s $10 billion chip-making initiative more attractive to investors, the Centre on September 21, approved changes to the scheme for the development of a semiconductor and display manufacturing ecosystem.
What are semiconductors?
A semiconductor has an electric conductivity of more than insulator but less than of conductor. The ability to conduct electricity goes up as the temperature rises.
The basic component of a semiconductor chip is a sliver of silicon, which is etched with billions of microscopic transistors, forming patterns to control the flow of current while following different computational instructions.
How big is the industry?
- Semiconductors are the thumbnail-sized building blocks of almost every modern electronic device from smartphones to connected devices on the Internet of Things (IoT). They help give computational power to devices. The global semiconductor industry is currently valued at $500-$600 billion.
- The chip-making industry is a highly concentrated one, with the big players being Taiwan, South Korea and the U.S. among others. In fact, 90% of 5nm (nanometre) chips are mass-produced in Taiwan, by the Taiwan Semiconductor Manufacturing Company (TSMC).
- Therefore, the global chip shortage, U.S.-China tensions over Taiwan, and the supply chain blockages owing to the Russia-Ukraine conflict have led major economies to enter the chip-making sector with a renewed push.
- For example, the U.S. announcement of $52.7 billion in government funding for the CHIPS and Science Act and the EU’s Chips Act that will mobilise €43 billion for public and private investments.
What are the changes to India’s chip-making scheme?
- In December 2021, India announced its’ roughly $10 billion dollar production-linked incentive (PLI) scheme to encourage semiconductor and display manufacturing in the country.
- It also announced fiscal support for a design-linked initiative (DLI) scheme to drive global and domestic investment related to design software, IP rights etc.
- According to the Electronics and IT Ministry, semiconductor demand in India would increase to $70-$80 billion by 2026 with the growing demand for digital devices and electronic products.
- So far, Vedanta and Taiwanese chipmaker Foxconn have signed an MoU to set up a ₹1,54,000 crore semiconductor plant in Gujarat.
- Two other projects have also been announced — a $3 billion plant in Karnataka by the International consortium ISMC and a $3.5 billion plant in Tamil Nadu by Singapore’s IGSS Ventures.
- The modified scheme also emphasized the production of the 45nm chip, which is fairly less time-consuming and economical in terms of production.
Challenges
- While the scheme is an encouraging move, chip production is a resource-intensive and expensive process.
- While the new scheme provides equal funding for all steps of the process, the outlay of the scheme remains $10 billion. Notably, just the setting up of one semiconductor fab requires an investment of anywhere between $3 and $7 billion.
- Analysts are concerned that not much of the current scheme outlay would be left to support other elements including display fabs, packaging and testing facilities, and chip design centers.
- They also argue that the initial funding should focus on areas like design and R&D, for which India already has an established talent pool.
- Chip-making also requires gallons of ultrapure water in a single day, which experts say, could be a task for the government to provide to factories, compounded also by the drought conditions which often prevail in large parts of the country.
News 3: NavIC System (Navigation with Indian Constellation)
Background
The Union government is pushing tech giants to make smartphones compatible with its home-grown navigation system within months, worrying the likes of Samsung, Xiaomi and Apple who fear elevated costs and disruptions as the move requires hardware changes.
NavIC (Navigation with Indian Constellation)
- The govt. wants to reduce dependence on foreign navigation systems, such as U.S. Global Positioning System (GPS), and use ingrown NavIC system which provides more accurate domestic navigation, and its use would benefit the economy.
- Operational since 2018, NavIC’s uptake is minimal; it is mandated in public vehicle location trackers.
- IRNSS is an independent regional navigation satellite system being developed by India. It is designed to provide accurate position information service to users in India as well as the region extending up to 1500 km from its boundary, which is its primary service area.
- The system currently consists of a constellation of seven satellites, with two additional satellites on ground as stand-by.
- IRNSS will provide two types of services, namely, Standard Positioning Service (SPS) which is provided to all the users and Restricted Service (RS), which is an encrypted service provided only to the authorized users.
- The IRNSS System is expected to provide a position accuracy of better than 20m in the primary service area.
Some applications of IRNSS are
- Terrestrial, Aerial and Marine Navigation
- Disaster Management
- Vehicle tracking and fleet management
- Integration with mobile phones
- Precise Timing
- Mapping and Geodetic data capture
- Terrestrial navigation aid for hikers and travelers
- Visual and voice navigation for drivers
News 4: NASA is about to crash into asteroid
Background
NASA’s Double Asteroid Redirection Test Spacecraft (DART) is set to collide with Dimorphos, a small asteroid that is the moon of a larger space rock, Didymos. These two near earth objects do not pose an immediate threat to our world.
Why is NASA crashing into an asteroid?
Blowing up an asteroid generally would not be a good thing to do. Rather, the mission is a proof-of-principle demonstration that hitting an oncoming asteroid with a projectile can nudge it into a different orbit. For a dangerous incoming asteroid, the nudge could be enough to change the trajectory from a direct hit to a near miss.
Double Asteroid Redirection Test (DART)
- The objective of the mission is to test a planetary defense to near earth objects.
- DART will be the first demonstration of the kinetic impactor technique to change the motion of an asteroid in space. It is a suicide mission, and the spacecraft will be completely destroyed.
- It also carries about 10 kg of xenon which will be used to demonstrate the agency’s new thrusters called NASA Evolutionary Xenon Thruster–Commercial (NEXT-C) in space.
- NEXT-C gridded ion thruster system provides a combination of performance and spacecraft integration capabilities that make it uniquely suited for deep space robotic missions.
- The spacecraft carries a high-resolution imager called Didymos Reconnaissance and Asteroid Camera for Optical Navigation (DRACO). Images from DRACO will be sent to Earth in real-time and will help study the impact site and surface of Dimorphos (the target asteroid).
- DART will also carry a small satellite or CubeSat named LICIACube (Light Italian CubeSat for Imaging of Asteroids). LICIACube is expected to capture images of the impact and the impact crater formed as a result of the collision.
Other important news
World Tourism Day
- September 27 was chosen to celebrate World Tourism Day
- Theme: Rethinking Tourism
- Host country: Indonesia
Port of Odesa:
- The Port of Odesa or Odesa Sea Port, located near Odesa, is the largest Ukrainian seaport and one of the largest ports in the Black Sea basin.
- The Port of Odesa is a major freight and passenger transportation hub of Ukraine
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On March 31, the World Economic Forum (WEF) released its annual Gender Gap Report 2021. The Global Gender Gap report is an annual report released by the WEF. The gender gap is the difference between women and men as reflected in social, political, intellectual, cultural, or economic attainments or attitudes. The gap between men and women across health, education, politics, and economics widened for the first time since records began in 2006.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]No need to remember all the data, only pick out few important ones to use in your answers.
The Global gender gap index aims to measure this gap in four key areas : health, education, economics, and politics. It surveys economies to measure gender disparity by collating and analyzing data that fall under four indices : economic participation and opportunity, educational attainment, health and survival, and political empowerment.
The 2021 Global Gender Gap Index benchmarks 156 countries on their progress towards gender parity. The index aims to serve as a compass to track progress on relative gaps between women and men in health, education, economy, and politics.
Although no country has achieved full gender parity, the top two countries (Iceland and Finland) have closed at least 85% of their gap, and the remaining seven countries (Lithuania, Namibia, New Zealand, Norway, Sweden, Rwanda, and Ireland) have closed at least 80% of their gap. Geographically, the global top 10 continues to be dominated by Nordic countries, with —Iceland, Norway, Finland, and Sweden—in the top five.
The top 10 is completed by one country from Asia Pacific (New Zealand 4th), two Sub-Saharan countries (Namibia, 6th and Rwanda, 7th, one country from Eastern Europe (the new entrant to the top 10, Lithuania, 8th), and another two Western European countries (Ireland, 9th, and Switzerland, 10th, another country in the top-10 for the first time).There is a relatively equitable distribution of available income, resources, and opportunities for men and women in these countries. The tremendous gender gaps are identified primarily in the Middle East, Africa, and South Asia.
Here, we can discuss the overall global gender gap scores across the index’s four main components : Economic Participation and Opportunity, Educational Attainment, Health and Survival, and Political Empowerment.
The indicators of the four main components are
(1) Economic Participation and Opportunity:
o Labour force participation rate,
o wage equality for similar work,
o estimated earned income,
o Legislators, senior officials, and managers,
o Professional and technical workers.
(2) Educational Attainment:
o Literacy rate (%)
o Enrollment in primary education (%)
o Enrollment in secondary education (%)
o Enrollment in tertiary education (%).
(3) Health and Survival:
o Sex ratio at birth (%)
o Healthy life expectancy (years).
(4) Political Empowerment:
o Women in Parliament (%)
o Women in Ministerial positions (%)
o Years with a female head of State (last 50 years)
o The share of tenure years.
The objective is to shed light on which factors are driving the overall average decline in the global gender gap score. The analysis results show that this year’s decline is mainly caused by a reversal in performance on the Political Empowerment gap.
Global Trends and Outcomes:
– Globally, this year, i.e., 2021, the average distance completed to gender parity gap is 68% (This means that the remaining gender gap to close stands at 32%) a step back compared to 2020 (-0.6 percentage points). These figures are mainly driven by a decline in the performance of large countries. On its current trajectory, it will now take 135.6 years to close the gender gap worldwide.
– The gender gap in Political Empowerment remains the largest of the four gaps tracked, with only 22% closed to date, having further widened since the 2020 edition of the report by 2.4 percentage points. Across the 156 countries covered by the index, women represent only 26.1% of some 35,500 Parliament seats and 22.6% of over 3,400 Ministers worldwide. In 81 countries, there has never been a woman head of State as of January 15, 2021. At the current rate of progress, the World Economic Forum estimates that it will take 145.5 years to attain gender parity in politics.
– The gender gap in Economic Participation and Opportunity remains the second-largest of the four key gaps tracked by the index. According to this year’s index results, 58% of this gap has been closed so far. The gap has seen marginal improvement since the 2020 edition of the report, and as a result, we estimate that it will take another 267.6 years to close.
– Gender gaps in Educational Attainment and Health and Survival are nearly closed. In Educational Attainment, 95% of this gender gap has been closed globally, with 37 countries already attaining gender parity. However, the ‘last mile’ of progress is proceeding slowly. The index estimates that it will take another 14.2 years to close this gap on its current trajectory completely.
In Health and Survival, 96% of this gender gap has been closed, registering a marginal decline since last year (not due to COVID-19), and the time to close this gap remains undefined. For both education and health, while progress is higher than economy and politics in the global data, there are important future implications of disruptions due to the pandemic and continued variations in quality across income, geography, race, and ethnicity.
India-Specific Findings:
India had slipped 28 spots to rank 140 out of the 156 countries covered. The pandemic causing a disproportionate impact on women jeopardizes rolling back the little progress made in the last decades-forcing more women to drop off the workforce and leaving them vulnerable to domestic violence.
India’s poor performance on the Global Gender Gap report card hints at a serious wake-up call and learning lessons from the Nordic region for the Government and policy makers.
Within the 156 countries covered, women hold only 26 percent of Parliamentary seats and 22 percent of Ministerial positions. India, in some ways, reflects this widening gap, where the number of Ministers declined from 23.1 percent in 2019 to 9.1 percent in 2021. The number of women in Parliament stands low at 14.4 percent. In India, the gender gap has widened to 62.5 %, down from 66.8% the previous year.
It is mainly due to women’s inadequate representation in politics, technical and leadership roles, a decrease in women’s labor force participation rate, poor healthcare, lagging female to male literacy ratio, and income inequality.
The gap is the widest on the political empowerment dimension, with economic participation and opportunity being next in line. However, the gap on educational attainment and health and survival has been practically bridged.
India is the third-worst performer among South Asian countries, with Pakistan and Afghanistan trailing and Bangladesh being at the top. The report states that the country fared the worst in political empowerment, regressing from 23.9% to 9.1%.
Its ranking on the health and survival dimension is among the five worst performers. The economic participation and opportunity gap saw a decline of 3% compared to 2020, while India’s educational attainment front is in the 114th position.
India has deteriorated to 51st place from 18th place in 2020 on political empowerment. Still, it has slipped to 155th position from 150th position in 2020 on health and survival, 151st place in economic participation and opportunity from 149th place, and 114th place for educational attainment from 112th.
In 2020 reports, among the 153 countries studied, India is the only country where the economic gender gap of 64.6% is larger than the political gender gap of 58.9%. In 2021 report, among the 156 countries, the economic gender gap of India is 67.4%, 3.8% gender gap in education, 6.3% gap in health and survival, and 72.4% gender gap in political empowerment. In health and survival, the gender gap of the sex ratio at birth is above 9.1%, and healthy life expectancy is almost the same.
Discrimination against women has also been reflected in Health and Survival subindex statistics. With 93.7% of this gap closed to date, India ranks among the bottom five countries in this subindex. The wide sex ratio at birth gaps is due to the high incidence of gender-based sex-selective practices. Besides, more than one in four women has faced intimate violence in her lifetime.The gender gap in the literacy rate is above 20.1%.
Yet, gender gaps persist in literacy : one-third of women are illiterate (34.2%) than 17.6% of men. In political empowerment, globally, women in Parliament is at 128th position and gender gap of 83.2%, and 90% gap in a Ministerial position. The gap in wages equality for similar work is above 51.8%. On health and survival, four large countries Pakistan, India, Vietnam, and China, fare poorly, with millions of women there not getting the same access to health as men.
The pandemic has only slowed down in its tracks the progress India was making towards achieving gender parity. The country urgently needs to focus on “health and survival,” which points towards a skewed sex ratio because of the high incidence of gender-based sex-selective practices and women’s economic participation. Women’s labour force participation rate and the share of women in technical roles declined in 2020, reducing the estimated earned income of women, one-fifth of men.
Learning from the Nordic region, noteworthy participation of women in politics, institutions, and public life is the catalyst for transformational change. Women need to be equal participants in the labour force to pioneer the societal changes the world needs in this integral period of transition.
Every effort must be directed towards achieving gender parallelism by facilitating women in leadership and decision-making positions. Social protection programmes should be gender-responsive and account for the differential needs of women and girls. Research and scientific literature also provide unequivocal evidence that countries led by women are dealing with the pandemic more effectively than many others.
Gendered inequality, thereby, is a global concern. India should focus on targeted policies and earmarked public and private investments in care and equalized access. Women are not ready to wait for another century for equality. It’s time India accelerates its efforts and fight for an inclusive, equal, global recovery.
India will not fully develop unless both women and men are equally supported to reach their full potential. There are risks, violations, and vulnerabilities women face just because they are women. Most of these risks are directly linked to women’s economic, political, social, and cultural disadvantages in their daily lives. It becomes acute during crises and disasters.
With the prevalence of gender discrimination, and social norms and practices, women become exposed to the possibility of child marriage, teenage pregnancy, child domestic work, poor education and health, sexual abuse, exploitation, and violence. Many of these manifestations will not change unless women are valued more.
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]2021 WEF Global Gender Gap report, which confirmed its 2016 finding of a decline in worldwide progress towards gender parity.
Over 2.8 billion women are legally restricted from having the same choice of jobs as men. As many as 104 countries still have laws preventing women from working in specific jobs, 59 countries have no laws on sexual harassment in the workplace, and it is astonishing that a handful of countries still allow husbands to legally stop their wives from working.
Globally, women’s participation in the labour force is estimated at 63% (as against 94% of men who participate), but India’s is at a dismal 25% or so currently. Most women are in informal and vulnerable employment—domestic help, agriculture, etc—and are always paid less than men.
Recent reports from Assam suggest that women workers in plantations are paid much less than men and never promoted to supervisory roles. The gender wage gap is about 24% globally, and women have lost far more jobs than men during lockdowns.
The problem of gender disparity is compounded by hurdles put up by governments, society and businesses: unequal access to social security schemes, banking services, education, digital services and so on, even as a glass ceiling has kept leadership roles out of women’s reach.
Yes, many governments and businesses had been working on parity before the pandemic struck. But the global gender gap, defined by differences reflected in the social, political, intellectual, cultural and economic attainments or attitudes of men and women, will not narrow in the near future without all major stakeholders working together on a clear agenda—that of economic growth by inclusion.
The WEF report estimates 135 years to close the gap at our current rate of progress based on four pillars: educational attainment, health, economic participation and political empowerment.
India has slipped from rank 112 to 140 in a single year, confirming how hard women were hit by the pandemic. Pakistan and Afghanistan are the only two Asian countries that fared worse.
Here are a few things we must do:
One, frame policies for equal-opportunity employment. Use technology and artificial intelligence to eliminate biases of gender, caste, etc, and select candidates at all levels on merit. Numerous surveys indicate that women in general have a better chance of landing jobs if their gender is not known to recruiters.
Two, foster a culture of gender sensitivity. Take a review of current policies and move from gender-neutral to gender-sensitive. Encourage and insist on diversity and inclusion at all levels, and promote more women internally to leadership roles. Demolish silos to let women grab potential opportunities in hitherto male-dominant roles. Work-from-home has taught us how efficiently women can manage flex-timings and productivity.
Three, deploy corporate social responsibility (CSR) funds for the education and skilling of women and girls at the bottom of the pyramid. CSR allocations to toilet building, the PM-Cares fund and firms’ own trusts could be re-channelled for this.
Four, get more women into research and development (R&D) roles. A study of over 4,000 companies found that more women in R&D jobs resulted in radical innovation. It appears women score far higher than men in championing change. If you seek growth from affordable products and services for low-income groups, women often have the best ideas.
Five, break barriers to allow progress. Cultural and structural issues must be fixed. Unconscious biases and discrimination are rampant even in highly-esteemed organizations. Establish fair and transparent human resource policies.
Six, get involved in local communities to engage them. As Michael Porter said, it is not possible for businesses to sustain long-term shareholder value without ensuring the welfare of the communities they exist in. It is in the best interest of enterprises to engage with local communities to understand and work towards lowering cultural and other barriers in society. It will also help connect with potential customers, employees and special interest groups driving the gender-equity agenda and achieve better diversity.