Geopolitics without geoeconomics, a fool’s errand
Context:
Over the past few years, New Delhi has managed to emerge as a major pivot of the global Indo-Pacific grand strategic imagination, avoided the temptations to militarise/securitise the Quad (Australia, Japan, India and the United States), and has ensured that the Association of Southeast Asian Nations (ASEAN) states do not feel uneasy by the ever-increasing balance of power articulations in the Indo-Pacific.
Indo-Pacific (IP) Region:
The term ‘Indo-Pacific’ has gained currency as a new construct in recent times. The Indo-Pacific provides a geographic and strategic expanse, with the two oceans being linked together by the ten ASEAN countries.
Significance of Indo-Pacific region for India:
- Strategic significance: Indio-Pacific is a multipolar region, contributing more than half of the world’s GDP and population. A stable, secure and prosperous Indo-Pacific Region is an important pillar of India’s strategic partnership with the other countries especially USA.
- Mineral Resources: Maritime territories have also emerged as depositories of vital resources ranging from fish stocks to minerals and offshore oil and gas.48 The South China Sea, for instance, is estimated to hold some 10 per cent of the global catch of fish as well as 11 billion barrels of oil and 190 trillion cubic feet (tcf) of gas.
- Economic Growth: According to a report of the Asian Development Bank (ADB), countries in the Indo-Pacific produce over 60% of global GDP, making the region the largest single contributor to global growth.
- Commerce: The region consists of many of the world’s vital choke points for global commerce, including the Straits of Malacca which is very critical for the growth of world economy. The Indo-Pacific region also stands at the intersection of international trade, with around 32.2 million barrels of crude oil pass through annually and 40% of global exports come from the region.
- Maritime Trade: Pacific islands are strategically significant from New Delhi’s point of view as they sit astride important sea lines of communication through which important maritime trade is conducted.
Chinese threat and increasing presence:
- The Chinese regime claims that it has historical ownership over nearly the entire region, which gives it the right to manufacture islands, declare defensive perimeters around its artificial islands, and to chase ships from other nations out of the South China Sea. The International Court of Arbitration at Hague rejected this claim in 2016 but China rejects the authority of PCA, Hague.
- China’s increasingly active presence in the Indian Ocean region as well as its efforts to expand geopolitical reach in Asia and beyond by the use of trade and military Demand rule based order to secure India’s interests and free trade. In the present time, the control of sea lanes and ports would be the game.
- Security in the region is must through dialogue to ensure a common rules-based order, freedom of navigation and unimpeded commerce in accordance with international law. India supports a rules-based, balanced, and stable trade environment in the Indo- Pacific region.
What New Delhi is missing:
- And yet, New Delhi’s vision for the Indo-Pacific appears half-baked. Policymakers in New Delhi today do not appear to appreciate the inescapable linkages between geopolitics and geoeconomics. Even as contemporary great power behaviour has moved beyond the classical geopolitical imageries, thereby emphasising geoeconomics as the foundation of geopolitics, New Delhi continues to be stuck in the old binaries.
- China’s share in global trade today is 15% and India accounts for 2%.
- India’s decision to take to the Indo-Pacific and Quad in a big way while unwilling to join two of the region’s key multilateral trading agreements goes to show that geoeconomics and geopolitics are imagined and pursued parallelly in New Delhi, not as complimenting each other.
- The most recent example is India’s refusal to join the trade pillar of the Indo-Pacific Economic Framework (IPEF) while deciding to join the three other pillars of the IPEF — supply chains, tax and anti-corruption, and clean energy.
- India’s move to stay out of IPEF, a U.S.-sponsored soft trade arrangement at best, comes two years after India walked out of the negotiations on the Regional Comprehensive Economic Partnership (RCEP) which came to effect earlier this year. Both the agreements lay at the heart of the Indo-Pacific and could potentially shape the economic character of the broader Indo-Pacific region.
- India concluded an FTA with the United Arab Emirates earlier this year, signed Early Harvest Agreements with Australia and the United Kingdom, and several more agreements are being negotiated. However, by not becoming a part of the IPEF and RCEP, and signing FTAs with individual states, New Delhi has made it clear that it favours bilateral agreements, and is not keen on multilateral, plurilateral and even soft agreements such as the IPEF.
A regressive step, China factor
- There are several reasons why New Delhi’s decision to stay out of various regional trading agreements is a regressive policy decision. For one, the absence of the world’s fifth largest economy from various regional trading platforms will invariably boost China’s geo-economic hegemony in Asia.
- Given the growing fear in India about the negative implications of China-India trade, it is important to have a nuanced view of this. For one, the fear in India of China dominating the Indian market is not entirely unreasonable. And yet, the only viable option to deal with such a challenge is to prepare for and face the challenge, even if it means incurring costs in the short term, so as to eventually overcome the challenge.
- The reality is that despite the military stand-off on the Line of Actual Control (LAC), India-China trade has only increased in the past year. Therefore, if it is not possible for India to avoid trading with China; it is better for India to deal with the issue sooner rather than later . U.S. is trying to economically decouple from China, and to create forums without China on board, the IPEF being one such example. But India must not shy away from trading with China as part of multilateral arrangements while at the same time joining arrangements which have no Chinese presence.
- For India, it would be hard to integrate itself into the regional and global supply chains without being a part of important regional multilateral trading agreements.
- The optimism that many of the foreign investments and businesses in China would relocate to India after COVID-19, did not materialise. Most of them went to countries such as Vietnam thereby highlighting the fact that we need to get our house in order; joining some of these multilateral trading arrangements will force us to do precisely that.
- Fourth, if India is indeed serious about its maritime grand strategy, which cannot be solely military in nature, it needs to get the states in the region to create economic stakes in India (something China has done cleverly and consistently) and vice-versa. More so, without creating economic stakes with the states of the region, India’s ‘Act East’ policy will revert to its earlier avatar — ‘Look East’.
Way forward:
- New Delhi should rethink its geo-economic choices if it is serious about enhancing its geopolitical influence in the region. Given that India has not closed the door on the trade pillar of the IPEF, we have an opportunity to rethink our position.
- India should also rethink its decision not to join the RCEP and seek to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) from which the U.S. walked out and China is seeking to join.
- India should also proactively lobby to become a part of the Minerals Security Partnership, the U.S.-led 11-member grouping to secure supply chains of critical minerals.
Conclusion:
If indeed, India seeks to be a part of the Asian century and its economic growth story in particular, it must let go of its historical hesitations and phobias regarding multilateral trading arrangements. To that extent, the current policy of pursuing geopolitical ends without geoeconomic ballast is ill-thought out.
The gender pay gap, hard truths and actions needed
Context:
Yesterday was the third International Equal Pay Day 2022 — the day falls on September 18 — we examine the extent of progress made towards closing the gender pay gap and reaffirming our collective commitment to the effective and accelerated realisation of the principle ‘equal pay for work of equal value’.
| Gender gap is the difference between women and men as reflected in social, political, intellectual, cultural, or economic attainments or attitudes.Gender pay gap is the difference between the amounts of money paid to women and men, often for doing the same work |
Impact of the pandemic
- This becomes all the more important in the present context, given the disproportionate effect of the COVID-19 pandemic on women workers in terms of job and income losses. Full and productive economic growth requires a human-centred recovery from the pandemic, which will be made possible by improving women’s employment outcomes and reducing the gender pay gap.
- The impact has been uneven, with women being among the worst affected in terms of their income security — partly due to their representation in sectors hard hit by COVID-19, combined with the gendered division of family responsibilities. Many women reverted to full-time care of children and the elderly during the pandemic, foregoing their livelihoods to do so.
A wider pay gap
- This is attested by the International Labour Organization (ILO’s) “Global Wage Report 2020–21” which suggests the crisis inflicted massive downward pressure on wages and disproportionately affected women’s total wages compared to men. This greater wage reduction for women means that the pre-existing gender pay gap has widened.
- Despite notable progress in closing the gender pay gap over time in India, the gap remains high by international standards. Indian women earned, on an average, 48% less compared to their male counterparts in 1993-94. Since then, the gap declined to 28% in 2018-19 as in the labour force survey (PLFS) data of the National Sample Survey Office (NSSO).
- The pandemic reversed decades of progress as preliminary estimates from the Periodic Labour Force Survey (PLFS) 2020-21 show an increase in the gap by 7% between 2018-19 and 2020-21. The data further suggests that faster decline in female wages during the pandemic contributed to this decline, compared to a faster growth in male wages, which requires urgent policy attention.
Discrimination as factor
- While individual characteristics such as education, skills or experience explain part of the gender pay gap, a large part of the gender pay gap can still be attributed purely to discrimination based on one’s gender or sex.
- Gender-based discriminatory practices include:
- lower wages paid to women for work of equal value;
- undervaluation of women’s work in highly feminised occupations and enterprises,
- motherhood pay gap — lower wages for mothers compared to non-mothers.
- At the international level, the United Nations has put the challenge of closing various forms of gender inequality at the heart of its actions. The ILO has enshrined ‘equal pay for work of equal value’ in its Constitution and the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW) provides an international legal framework for realising gender equality and addressing the intersecting forms of discrimination and vulnerabilities among women and girls.
Steps taken by India
- Minimum Wages Act in 1948
- Equal Remuneration Act in 1976.
- Four labour codes including Code on Wages, 2019
- Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005
- Maternity Benefit Act of 1961 and its amendments
- Evidence shows that MGNREGS benefited rural women workers and helped reduce the gender pay gap, directly, by raising the pay levels of women workers who participated in the programme, and indirectly, benefits accrued to women involved in agricultural occupations through higher earnings, as MGNREGA contributed to the rapid rise in overall rural and agricultural wages in the country.
- In 2017, the Government amended the Maternity Benefit Act of 1961, which increased the ‘maternity leave with pay protection’ from 12 weeks to 26 weeks for all women working in establishments employing 10 or more workers. This is expected to reduce the motherhood pay gap among mothers in the median and high-end wage earners working in the formal economy.
- Apart from enabling legislations, efforts are being made through the Skill India Mission to equip women with market-relevant skills to bridge the learning-to-livelihood gap and the gender pay gap.
- While the gender pay gap is slowly narrowing, at the current rate of progress it will take more than 70 years to close it completely. Accelerated and bold action is needed to prevent a widening of the gender pay gap and closing the existing gap.
- One of the targets of the UN Sustainable Development Goal (SDG) target 8 is “achieving full and productive employment and decent work for all women and men, including for young people and persons with disabilities and equal pay for work of equal value” by 2030.
- In support of this Goal, the Equal Pay International Coalition (EPIC), was launched in 2017 as a multi-stakeholder initiative led by the ILO, UN Women and the Organisation for Economic Co-operation and Development (OECD) that seeks to achieve equal pay for women and men everywhere.
Conclusion :
Equal pay for work of equal value is necessary to close the gender pay gap. Closing the gender pay gap is key to achieving social justice for working women, as well as economic growth for the nation as a whole.
