The 28th and 29th Association of Southeast Asian Nations (ASEAN) Summit

The 28th and 29th Association of Southeast Asian Nations (ASEAN) Summit was held in Vientiane, Laos from 6th to 8th September 2016. Prime Minister of the Lao PDR H.E. Thongloun Sisoulith was Chairperson of the summit. The theme of the summit was “Turning Vision into Reality for a Dynamic ASEAN Community”. The summit was attended by the leaders of all 10-member nations of ASEAN viz. Indonesia, Malaysia, Philippines, Thailand, Singapore, Brunei Darussalam, Lao PDR (host), , Vietnam, Myanmar and Cambodia. India-ASEAN Prime Minister Narendra Modi had represented India at the ASEAN summit at the 14th ASEAN-India summit. ASEAN-India adopted a document aiming at politically cohesive, economically integrated, socially responsible and people oriented people centered ASEAN-India Community. The document recognizes the vital importance of the planned review of the ASEAN-India Trade in Goods (AITIG) Agreement. It seeks to ensure that the agreement is trade-facilitative and remains relevant to the current global trading practices. The document also emphasizes the importance of maintaining peace, security and stability, unimpeded commerce, freedom of navigation in and overflight above the South China Sea. Prime Minister Narendra Modi expressed deep concern over the rising export of terror in an apparent reference to Pakistan. He also mentioned that export of terror is common security threat to the region and there was need for a coordinated response from the ASEAN member nations to combat it.

IAS reforms: Cleaning rust from the frame

IAS reforms: Cleaning rust from the frame
Big data can provide metrics on officers’ performance in the field to inform promotion and retention decisions
We cannot march through the 21st century with the administrative systems of the 19th century,” Prime Minister Narendra Modi announced in a recent speech delivered at the government think-tank Niti Aayog. The quip served as a welcome acknowledgment that the essential bureaucratic organs of the Indian state are badly out of sync with today’s demands.

The state of the Indian Administrative Service (IAS), the country’s elite civil service cadre, confirms this fact. Of the 3.3 million individuals employed by the public sector, the IAS constitutes a tiny fraction—totaling fewer than 5,000 officers. Yet, because it occupies the very nerve centre of the Indian state, no single bureaucratic entity receives as much scrutiny. While a competent, functional IAS may not be a sufficient condition for improving governance outcomes, it is likely a necessary one.

The charges levied against the bureaucracy, and the IAS more specifically, run the gamut; it is hamstrung by political meddling, governed by outmoded personnel procedures, crippled by a lack of domain expertise, and marked by a mixed record on policy implementation. It is no surprise then that there are opinion columns penned on a daily basis calling for everything from the complete dismantling of the IAS to modest tweaks of its promotion regulations.

Although there is no shortage of opinions related to the IAS, there has been a surprising paucity of hard data on its operations and performance until now. A new body of research, combining unprecedented access to the profiles of IAS officers with granular data on local development outcomes and electoral dynamics, sheds new light on their career trajectories, their impact on development outcomes, and their relationship to politics.

For officers early in their careers, Union Public Service Commission entrance exam scores and demonstrated improvement during the post-entry training period are positively correlated with officers’ perceived effectiveness, as judged by a diverse set of stakeholders, including civil society leaders and politicians. But, while initial characteristics shape career trajectories, they are not deterministic. In the long term, there are rewards for officers who invest in training and specialized skills.

For the first time, we have highly disaggregated data which demonstrates that individual bureaucrats can have strong, direct, and measurable impacts on tangible health, education, and poverty outcomes. But, there is considerable variation on this score. Older officers who enter as part of large cadres and face limited career prospects—given the fixed retirement age—tend to fare worse at improving economic outcomes. In a surprising twist to conventional wisdom, some evidence suggests that officers serving in their home-state are linked to superior service delivery. While local bureaucrats are typically thought to be susceptible to corruption, the presence of strong local accountability mechanisms, such as a strong media presence, can act as a check on malfeasance.

However, political interference poses a constant threat to bureaucratic functioning. Historical data suggests there is a 53% chance that an IAS officer is transferred in any given year. As a result, political loyalty rather than professional qualifications often represents an alternative path to success. However, politics can also work in surprising ways. Where elections are less competitive, some bureaucrats actually appear better motivated to do their job, presumably because there is less uncertainty about who will wield political power in the future. This finding is at odds with the prevailing belief that greater electoral competition incentivizes better bureaucratic performance.

This new literature suggests several areas for reform.

Graphic: Santosh Sharma/Mint
Click here for enlarge
First, there is valuable information that can predict the future effectiveness of civil servants, yet those in charge of making personnel moves rarely utilize these data points. The advent of big data provides a natural opportunity to use metrics on officers’ performance in the field to inform promotion and retention decisions. Seniority, after all, is a blunt instrument for deciding who gets promoted and who does not.

Second, given that older officers entering the bureaucracy are perceived as less effective, reducing the maximum age of entry into the IAS is a relatively easy reform the government could introduce. A much thornier issue is tackling under-performing officers already in the service. Here, the government should consider the proposal that officers deemed unfit for further service at specified career benchmarks be compulsorily retired through a transparent, uniform system of performance review.

Third, the government might contemplate allowing IAS officers to work more closely with their home states. Although India’s founders chafed at the prospect that officers be too closely linked with their state of origin for fear of elite capture, this issue could be revisited for further consideration. There is room for experimentation on this front.

Finally, it is imperative that the Central and state governments institute safeguards to protect against arbitrary, politically motivated transfers and postings of civil servants. Despite judicial prodding, most states have stalled on such moves.

Modi ended his Niti Aayog remarks by declaring that “a transformation of governance cannot happen without a transformation in mindset. A transformation in mindset cannot happen without transformative ideas.” While far from revolutionary, the policy changes suggested by new research on the Indian bureaucracy promise concrete benefits. As current chief economic adviser Arvind Subramanian noted in 2012, there is a race between rot and regeneration in the underlying institutions of the Indian state, and it is far from clear that the latter is winning.

Cabinet approves creation of GST Council and its Secretariat

Cabinet approves creation of GST Council and its Secretariat

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has approved setting up of GST Council and setting up its Secretariat as per the following details:
(a) Creation of the GST Council as per Article 279A of the amended Constitution;
(b) Creation of the GST Council Secretariat, with its office at New Delhi;
(c) Appointment of the Secretary (Revenue) as the Ex-officio Secretary to the GST Council;
(d) Inclusion of the Chairperson, Central Board of Excise and Customs (CBEC), as a permanent invitee (non-voting) to all proceedings of the GST Council;
(e) Create one post of Additional Secretary to the GST Council in the GST Council Secretariat (at the level of Additional Secretary to the Government of India), and four posts of Commissioner in the GST Council Secretariat (at the level of Joint Secretary to the Government of India).
The Cabinet also decided to provide for adequate funds for meeting the recurring and non-recurring expenses of the GST Council Secretariat, the entire cost for which shall be borne by the Central Government. The GST Council Secretariat shall be manned by officers taken on deputation from both the Central and State Governments. The steps required in the direction of implementation of GST are being taken ahead of the schedule so far. The Finance Minister has also decided to call the first meeting of the GST Council on 22nd and 23rdSeptember 2016 in New Delhi.
Background:
The Constitution (One Hundred and Twenty-second Amendment) Bill, 2016, for introduction of Goods and Services tax in the country was accorded assent by the President on 8th September, 2016, and the same has been notified as the Constitution (One Hundred and First Amendment) Act, 2016. As per Article 279A
(1) of the amended Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12thSeptember, 2016 was issued on 10th September, 2016. As per Article 279A of the amended Constitution, the GST Council which will be a joint forum of the Centre and the States, shall consist of the following members: -
a) Union Finance Minister - Chairperson
b) The Union Minister of State,in-charge of Revenue of finance - Member
c) The Minister In-charge of finance ortaxation or any other Minister nominated by each State Government - Members As per Article 279A
(4), the Council will make recommendations to the Union and the States on important issues related to GST, like the goods and services that may be subjected or exempted from GST, model GST Laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters, special provisions for certain States, etc.

establishment of Higher Education Financing Agency for creating capital assets in higher educational institution

Cabinet approves establishment of Higher Education Financing Agency for creating capital assets in higher educational institution

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the creation of the Higher Education Financing Agency (HEFA) to give a major push for creation of high quality infrastructure in premier educational institutions.The HEFA would be jointly promoted by the identified Promoter and the Ministry of Human Resource Development (MHRD) with an authorised capital of Rs.2,000 crore. The Government equity would be Rs.1,000 crore.The HEFA would be formed as a SPV within a PSU Bank/ Government-owned-NBFC (Promoter). It would leverage the equity to raise up to Rs. 20,000 crore for funding projects for infrastructure and development of world class Labs in IITs/IIMs/NITs and such other institutions.The HEFA would also mobilise CSR funds from PSUs/Corporates, which would in turn be released for promoting research and innovation in these institutions on grant basis.The HEFA would finance the civil and lab infrastructure projects through a 10-year loan. The principal portion of the loan will be repaid through the ‘internal accruals’ (earned through the fee receipts, research earnings etc) of the institutions. The Government would service the interest portion through the regular Plan assistance.All the Centrally Funded Higher Educational Institutions would be eligible for joining as members of the HEFA. For joining as members, the Institution should agree to escrow a specific amount from their internal accruals to HEFA for a period of 10 years. This secured future flows would be securitised by the HEFA for mobilising the funds from the market. Each member institution would be eligible for a credit limit as decided by HEFA based on the amount agreed to be escrowed from the internal accruals.

Unicef report, Uprooted: The Growing Crisis for Refugee and Migrant Children,

The findings of the Unicef report, Uprooted: The Growing Crisis for Refugee and Migrant Children, could not be grimmer. Over 50 per cent of the 50 million children who have migrated or been forcibly displaced across borders are said to have fled violence. About one in three children who live outside their country of birth is a refugee. The much smaller ratio of displacement for adults — less than one in 20 according to the UN High Commissioner for Refugees — reveals the starkness of the situation. The UNHCR says that in the decade ending 2015, the number of child refugees almost doubled. Last year, Syria and Afghanistan alone accounted for nearly half the world’s child refugees, highlighting the brutal impact of the war on a segment of society that had little to do with the conflict directly or otherwise and is the most vulnerable. The last decade saw two landmark rulings on the conscription of child soldiers. The first was the 2007 judgment of the UN-backed tribunal for Sierra Leone against three men from a rebel armed group. The other was the conviction of Congolese warlord Thomas Lubanga by the International Criminal Court in 2012.

Against this backdrop, the dramatic rise in school enrolment under a global universal primary education drive, or the halving of infant mortality rates under the Millennium Development Goals, seem like postcards from another universe. The shocking reality of trafficking in boys and girls, conscription by armed groups in conflict zones and exploitation in the sex trade has overshadowed these advances, portending both immediate and long-term danger to whole generations. Paradoxically, the recommendations of the Unicef report are so comprehensive that short of swift and sweeping changes in global policy and practice, they are unlikely to yield tangible results. A case in point is the suggestion that governments should address the root causes of conflict, violence and extreme poverty, and instead divert scarce resources to fulfil more fundamental necessities of life. The spirit underlying this idea is as compelling as the complexities of realpolitik that impede its translation into action. This is evident in respect of the challenge of combating international terrorism by a delineation of its political antecedents. Conversely, the idea to dispense with the detention of children seeking refugee status and to do away with reporting requirements, potentially benefiting 11 million, is a more pragmatic proposal. Prima facie, there is merit in this approach, as governments may be expected to take a more sympathetic view on humanitarian imperatives.

NAM SUMMIT

NAM SUMMIT

This week, for only the second time, India will not be represented by its Prime Minister at a NAM Summit, highlighting the organisation’s challenges and the country’s missed opportunities .

The 17th Summit of the Non-Aligned Movement (NAM) will be held between September 13-18 in Margarita, Venezuela. Heads of government of 120 member states will descend on this Venezuelan island, which sits at the edge of the Caribbean Sea. NAM was formed in 1961, at the initiative of Egypt, India and Yugoslavia. It is telling that of these three, one no longer exists (Yugoslavia), one no longer has the kind of magnetic sway it had in the 1950s and 1960s (Egypt), and the third seems disinclined to favour the idea of non-alignment (India).

Indeed, India will not be represented by its head of government — Prime Minister Narendra Modi — but by its Vice President. Only once before has the Indian Prime Minister not been to the NAM Summit, and that was in 1979 when caretaker Prime Minister Charan Singh did not go to Havana (Cuba). Is NAM now irrelevant, so much so that India’s head of government no longer feels the need to attend its meetings?

From Brijuni to Baku

In July 1956, Egypt’s Gamel Abdel Nasser, India’s Jawaharlal Nehru and Yugoslavia’s Josip Broz Tito met at the island retreat of Brijuni on the Adriatic Sea to discuss the state of the world. The previous year, in Bandung (Indonesia), newly independents states of Africa and Asia gathered to inaugurate a new approach to inter-state relations: non-alignment. Fresh out of the darkness of colonial rule, these new states, they felt, should not be sucked into alignments with the West or the East. These camps would suborn the independence of the new states, drawing them into military obligations and economic entanglements. But sovereign foreign policies could not be sustained by these individual states. They needed to shelter together, to forge an alternative, to fight to build a peaceful world order where the obligations of the UN Charter could be met.

In 1961, Tito hosted the first NAM meeting in Belgrade, where 29 states gathered to lay out this new order. Their bravura was sneered at in Washington, where the government suggested that non-alignment was merely capitulation to the Soviet Union. The Soviets, meanwhile, saw an opportunity in the NAM, where a newly free Cuba, with close ties to the Soviets, had begun to assert its leadership despite its tiny size. NAM announced that it would push for an alternative economic order and that it would campaign against the arms race that had put the fear of nuclear annihilation across the planet. These were halcyon days for NAM, asserting its moral authority against war and poverty.

Over the course of the past 60 years, the NAM has seen an erosion of its authority. The Third World debt crisis of the 1980s crushed the economic ambitions of these NAM states. By the time NAM gathered in Delhi in 1983, it was a shadow of its origins. In NAM they had wished the centuries away, but now, awash in debt, they had to settle for the present. The Soviet Union collapsed, the U.S. bombed Panama and Iraq, and history seemed to end with American ascendency. Proud nations queued up to curry favour with Washington, settle accounts at the International Monetary Fund and begin to sniff their noses at platforms such as NAM.

By the early 1990s, several important powers of NAM began to back away (Argentina left in 1991). Yugoslavia crumbled, with war tearing apart its promise. India went to the IMF and gestured to the U.S. that its days of non-alignment had gradually come to a close. Over the past few years, countries with a more sceptical attitude towards American power have held the mantle of NAM — South Africa (1998), Malaysia (2003), Cuba (2006), Iran (2012) and now Venezuela (Egypt, which presided over NAM from 2009, was convulsed in the Arab Spring during its presidency). NAM oscillated between suspicion of U.S. motives and attempts to regenerate the economic engines of its members. The next president of NAM after Venezuela will be Azerbaijan, which is a newcomer to NAM and one that does not have a presence on the world stage.

Turmoil in Venezuela

Venezuela has been eager to make this NAM summit a success, a showcase for the resilience of its social revolution. Venezuela’s President Nicolas Maduro argues against the view that the ‘NAM has lost its raison d’être upon the end of the Cold War’. Indeed, he suggests, using language that is resonant of the earlier NAM and alien to the Modi government, “we are convinced that neo-colonial dominance can be seen nowadays in both an aggressive and brutal manner”. Mr. Maduro points to the wars of aggression and the deep social and economic inequalities that plague the planet. The emergence of multi-polarity, he stresses, needs to be shaped by the Global South, whose instrument is NAM. Venezuela’s socialist government does indeed face steep challenges. Steve Ellner, who teaches at the Universidad de Oriente, identifies the three issues as “declining oil prices, economic war, and the exchange rate distortions”. The decline in oil prices has certainly struck this oil-exporting state. This crisis has been magnified by an economic war by the business elites in Venezuela who have on several occasions sought to overthrow this government. Poor policy decisions by the government to handle inflation and currency manipulation have further weakened its hand. When Mr. Maduro travelled to Margarita Island, where the summit will be held, a crowd banging pots and pans jeered at him. Mr. Maduro and the socialist movement are fighting to regain the trust of the people against both genuine problems facing the government and exaggerations from the U.S.-backed opposition.

NAM will be one of the largest gatherings in Venezuela in recent years. It is hoped by the government in Caracas that this would help the country by shoring up an alternative bloc to the West. But such an alternative will require a visionary leadership. What should be the contours of the emerging multipolar world? How would the new poles tackle the difficult problem of poverty and joblessness? It is not sufficient to point fingers at the West. An alternative has to be developed. At the 1973 NAM meeting in Algiers, the member states laid out the New International Economic Order (NIEO), a charter for a different way to manage political disagreements and trade across states. The NIEO proposed a new path. It had an electric effect, but it died in the rubble of the debt crisis. A new charter for a 21st century NAM is needed. If the NAM is to be relevant, it needs to develop such a visionary document. NAM

ratification of the Paris Agreement on climate change

The ratification of the Paris Agreement on climate change by the United States and China, which together account for 38 per cent of global greenhouse gas emissions, provides much-needed momentum for the global compact to be in force beyond 2020. As UN Secretary-General Ban Ki-moon has emphasised, 26 countries have already acceded to the accord; to reach the target of 55 per cent emissions, 29 more must come on board. For the U.S., this is a landmark departure from its long-held position of not accepting a binding treaty like the Kyoto Protocol, where emerging economies heavily reliant on fossil fuels have no firm commitments. The Paris Agreement addressed this issue by stipulating voluntary but verifiable emissions reduction goals for all parties, within the principle of common but differentiated responsibilities that underpin the UN Framework Convention on Climate Change. Contrary to the belief that a requirement to cut GHGs will make economies less competitive, a major section of global industry and business has reaffirmed the potential for trillions of dollars in green investments flowing from the ratification of the Paris Agreement by the U.S. and China. This is a clear pointer for India, which is estimated to have the third highest individual country emissions as of 2014.

There are distinct low-carbon pathways that India has outlined in its national plan submitted to the UNFCCC. Among these, the scaling up of renewable energy and non-fossil fuel sources to 40 per cent of installed power production capacity by 2030 is predicated on technology transfer and the availability of Green Climate Fund resources. Not much progress has been made in this area, and Minister of State for Environment Anil Madhav Dave confirmed recently that no contribution had been received from the Fund. Helping India lock in the right technologies in its growth trajectory is important for a global reduction in greenhouse gases. It is important for the U.S. to help accelerate this process in the area of power generation, following up on the assurances given by Secretary of State John Kerry during his recent visit on clean energy finance, technology, solar catalytic funding and help for power grid upgradation. New Delhi can, in parallel, do much more on domestic policy to achieve green and low energy intensive growth — such as taxing fossil fuels, managing emissions from waste better and making low-carbon buildings mandatory. India joined other G20 countries at Hangzhou to commit itself to addressing climate change through domestic policy measures. For that to happen, the Centre must initiate a serious discussion with the States on the national imperatives.