The Envoy Shorts: Roundup of 2017

Focus Area – South America; Focus Country – Peru

Peru is considered to be one of the stable economies of Latin America, with an overall positive outlook. It is speculated by the financial community that it will be ahead of other South American countries such as Brazil and Argentina which face inflation and are struggling with the issue of unemployment. However, it is extremely dependent on mining exports and has a humongous infrastructure deficit of around 69 billion USD. Many civilians were targeted by the security forces when they were protesting against mining projects and large-scale infrastructural developments in the recent years. However, the number of people injured or killed as a result of this has reduced over 2016 and 2017.

The newly elected President, Pedro Pablo Kuczynski, aims to spend heavily on infrastructure and public health. He wants to ensure an increase in foreign direct investment (FDI) so that the country can match the boom observed during the mid-2000s. According to The Business Year, there is an estimated 10 billion USD in FDI stock in the mining sector currently, representing 13% of all FDI in the country. Peru is also aiming to boost trade ties with several countries and stimulate economic growth in the overall slow Latin America. Perhaps, it can serve as the flag-bearer of economic opportunities under the new leadership.

For an overview of The Envoy’s coverage of World Affairs, please visit http://www.theenvoy.in/world/

The Envoy Shorts: Roundup of 2017

Focus Area – South America; Focus Country – Peru

Mario Vargas Llosa is one of the most prominent writers from Latin America who also won the Nobel Prize in Literature in the year 2010. Llosa’s novels, essays and other writings have helped the readers understand the social and political landscape of Latin America during his time. His childhood shaped his opinions about life and he grew up to be one of the most vocal critics of the government when he was able to draw parallels between his authoritarian father and the dictatorial system. While his father sent him to Leoncio Prado Military Academy to stifle his literary ambitions, he not only rebelled against his father, but also ended up marrying his maternal uncle’s sister-in-law Julia Urquidi, who was eleven years older than him and divorced. He drew upon these experiences to write his novel, Aunt Julia and the Scriptwriter (which was later adapted as a feature film in 1990).

In the latest novel, ‘The Neighbourhood’ (2018), Llosa explores the story of an influential industrialist, Enrique, who lives a colourful life. A series of salacious pictures end up putting him in the spot and after the mysterious murder of the editor of the magazine (which published his pictures), Rolando Garro, he becomes the prime suspect. While Llosa’s new book is nowhere close to the books which placed him the Nobel laureate league, it is an audacious book from an 81-year old writer.

For more about the Literary Corner, please visit http://www.theenvoy.in/Literary-Corner/

The Envoy Shorts: Roundup of 2017

Focus Area – South America; Focus Country – Venezuela

Venezuela’s multifold crisis has shocked the international community and as it grapples with several issues such as hyperinflation, food shortages, and increased crime and poverty, there is a need to understand the reasons behind one of the worst economic crises that the world has come to know. Venezuela was an extremely prosperous country which earned massive economic growth from oil exports, especially under former President Hugo Chavez. However, when the oil prices came crashing down, the huge subsidies, in the form of various social programmes such as food security, became unsustainable.

The plummeting oil prices also shrank the spending capacity of the government. As it was left with less foreign currency, the acute problem relating to shortage of food and medicinal supplies raised its ugly head. Rampant inflation affected the people of Venezuela and they took to the streets to express their dissatisfaction with the government led by Nicolás Maduro. About 100 deaths have already taken place in association with these protests. Many people are fleeing the country in search of survival and better economic opportunities. The government has come down heavily on critics and independent media with the prosecution of several political opponents and crackdown on protest activities (by security forces). The international community should try to come up with concrete solutions to prevent further escalation of the multi-faceted crisis in Venezuela.

For an overview of The Envoy’s coverage of World Affairs, please visit http://www.theenvoy.in/world/

The Envoy Shorts: Roundup of 2017

Focus Area – Africa; Focus Country – South Sudan

2017 saw another year of civil conflict in South Sudan, with several abusive counter-insurgency operations carried out by the government in Upper Nile, Bahr al Ghazal, and the Equatorias. Freedom of speech and expression continue to be stifled, with restrictions on media and independent opinions. Many people perceived to be opposing the government’s actions have been unlawfully detained, as per a recent Human Rights Watch report. With thousands of people internally displaced, seeking refuge in neighbouring countries, and seeking assistance from the United Nations (UN), the future of South Sudan’s people remains bleak.

The war had begun as a political conflict between President Salva Kiir and the then Vice President Riek Machar in December 2013. Despite the 2015 peace agreement between the warring sides, human rights violations have been rampant and lack of accountability persists for potential war crimes and crimes against humanity. The UN has described South Sudan as one of the most dangerous places for aid workers with almost 83 deaths since 2013. Famine had gripped certain conflict-affected areas in the former Unity and Upper Nile and both sides prevented humanitarian aid to such places wherein the supplies were looted and valuables were stolen. As the progress on the hybrid court has been slow, justice for the people of South Sudan seems elusive. An active role of the international community assumes great importance in this setting.

For an overview of The Envoy’s coverage of human rights issues, please visit http://www.theenvoy.in/human-rights

The Envoy Shorts: Roundup of 2017

Focus Area – Africa; Focus Country – South Sudan

South Sudan became a new nation in 2011 following a peaceful secession from Sudan through a referendum. While South Sudan has vast reserves of natural resources, most of it is untapped. It is one of the most oil-dependent economies in the world with oil accounting for the bulk of its exports and 60 percent of its GDP. Economic growth has been challenged by the sharp drop in oil prices and the volatile political climate in the country. The civil conflict has taken a massive toll on the economic prospects of South Sudan, with about 2 million people internally displaced, more than 1.8 million people fleeing to neighbourhood countries, and about 213,000 seeking shelter from the United Nations (UN).

The long civil war has left the country will extremely underdeveloped infrastructure and inadequate human capital. Development had been side-lined due to the ongoing humanitarian and social crises. The government capacity to formulate and implement effective policies has been limited, but there is hope that it will change soon. Even though the country has a strong young population, there is huge gender disparity in terms of education and literacy. South Sudan is one country where human development is at its worst in the world. This situation needs to improve soon.

For an overview of The Envoy’s coverage of World Affairs, please visit http://www.theenvoy.in/world/

 

 

The Indian Economy and Need for Structural Reforms

Demonetization and GST

The Indian economy has definitely taken a hit due to demonetization and Goods and Services Tax (GST). However, the two widely discussed reasons are not solely responsible for the slowdown in the economy. India is one of the most rapidly advancing developing countries with a projected growth rate of 7 %. However, it hit a rock-bottom 5.7 % in the first quarter of the current fiscal year. The current Finance Minister, Arun Jaitley, has maintained a positive outlook saying that, “India’s economy is facing a few challenges that are predictably transient. Some people, out of a lack of understanding or for a politically colourable motive, are terming this transient period an economic crisis”. On the other hand, former Finance Minister, Yashwant Sinha, has criticised the current government for apparently poorly-conceived economic policies, saying that, “I shall be failing in my national duty if I did not speak up even now against the mess the finance minister has made of the economy”, while adding that “demonetization has proved to be an unmitigated economic disaster, a badly conceived and poorly implemented GST has played havoc with businesses and sunk many of them, and countless millions have lost their jobs with hardly any new opportunities coming the way of the new entrants to the labor market.”

The three major problems

What are the other reasons for the slow pace of the Indian economy? According to Ravi Aron, a professor of information systems at Johns Hopkins Carey Business School, a lack of long-lasting structural reforms in the banking sector, state-owned enterprises and the labour market has contributed to the current state of economic affairs. Most of the state-owned banks are burdened with non-performing assets, while the state-owned enterprises have locked-up capital. However, despite being ripe for sale or recapitalization, privatisation has eluded them. The third and the most pressing problem is that of unemployment. With a lack of adequate investments and want of improvement in the construction, real estate, agriculture and allied sectors, employment in both urban and rural areas is a serious problem. The organized sector employs only 10 % of the population while the remaining 90 % is employed in the unorganized sector. However, the people working in the unorganized sector do not have access to most benefits, pensions, or salary growth tied to inflation. Even though it is difficult to determine the impact of the unorganized sector on the economy (as the unorganized sector data is not captured in quarterly GDP estimates), a sharp fall in the micro-finance sector could be an indicator of a slowdown in this sector.

Conclusion

According to The Envoy, the problems facing the Indian economy did not appear magically over the last few years. They have built up over the last few decades with the actions of the previous governments having a bearing on the current financial scenario. While it is best to adopt an optimistic outlook, one should acknowledge the deep-rooted issues which have to be addressed urgently. Effective reforms concerning the banking sector, state-owned enterprises, and labour market are the need of the hour.

For an overview of The Envoy’s coverage of Indian affairs, please visit http://www.theenvoy.in/india/