Universal Basic Income for India: Renaissance for a 500-year-old idea

Despite multiple concerns, the time for UBI is now. But, to prevent it from being just a paper tiger, much needs to be done for its effective implementation.
 
The idea of auniversal basic income (UBI) gaining traction in India is not novel. The notion gained currency in 16th century, when Thomas Moore advocated it in his novel
“Utopia.” Moore essentially applied the concept of basic income, for the sharing of wealth generated from the passing of public lands to private ownership. The concept of UBI thus,emerged from a philosophy of fostering social justice and equal opportunity. This found favour with both left-leaning thinkers such as John Kenneth Galbraith and those from the right such as Milton Friedman.
 
As with the conceptualisation of various political and economic notions, the basic approach behind UBI differs across developed and developing economies, like India. In the developed countries, UBI is seen as being complementary to the existing architecture of public services and social security nets. However, in India, the idea has been mooted as a substitute for the provision of an existing public service delivery.
 
While an overarching logic of instituting UBI in the west primarily stemmed from the aspect of being future-ready in a world swept by technological changes, including automation, the Indian case is strikingly different. Here, the essential argument in favour of an UBI is that it will help beneficiaries directly withoutthe occurrence of leakages, associated with subsidized schemes.
 
How doe UBI work?
 
To answer this adequately, the concept of UBI must be understood. UBI essentially relates to an idea that a regular periodic cash payment is to be delivered unconditionally to all citizens on an individual basis, extracted from the public funds, irrespective of the requirement of or willingness to work.
 
Typically, UBI would entail thatother subsidies and allowances are subsumed, in order to free up resources for the amount to be discharged to the citizens periodically. In this sense, the idea of UBI is essentially to move towards cash transfers in place of in-kind transfers.
 
The proponents of UBI have claimed its feasibility, especially during the Economic Survey of 2016-17, wherein it was asserted that UBI could work, if pegged at relatively low levels. Yet, a number that is too low will not hold the test of time, given factors like inflation etc.Thus, there exist multiple concerns related to the implementation of the income guarantee scheme.
 
One major argument cited by critics is the effectiveness of targeting. A glaring example includes the gross misallocation of resources under schemes like the PDS (Public Distribution System) and MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act). For instance, the Economic Survey points (2016-17) points out that an exclusion error from 2011-12 led to 40% of the population being excluded from the PDS, while the corresponding figure for the MGNREGA stood at 65%. Such exclusions are a product of inadequate capacity, bureaucratic efficiency and corruption, wherein the overall benefits of the developmental expenditure failed to reach the intended beneficiaries.
 
Another potent concern is the potential impact of UBI on the employment prospects of the citizens. To this end, the Finnish experiment producesan interesting insight. A UBI trial was introduced in 2017-18, with a random sample of 2000 participants who received an unemployment benefit. However, the benefits provided to the participants became a disincentive for the recipients, who would have otherwise been forced to go out and find gainful employment.

Action for India
 
Despite serious concerns, the idea of UBI should not be discarded straightaway. This is simply because UBI presents a social cushion to individuals to address obstacles like frequent income shocks, job losses and other periodic challenges that could overwhelm individuals, without a cover. Of course, certain measures need to be taken to ensure its effective implementation.
 
With any social welfare program, as observed earlier, a major concern lies with regards to the targeting mechanism – inclusion errors and exclusion errors. Inclusion errors result when undeserving people have access to the scheme owing to poor implementation and false data. Exclusion errors means the deserving are excluded from receiving benefits owing to systemic deficiencies.
 
While many economists have opined that UBI be provided to 20 % of the poor families (seen in the case with Nyay), a more plausible way is to rely on the methodology of the exclusion criteria. In other words, in a country like India where we are grappling with multiple poverty lines, where the causes of deprivation vary, the tool to target 20% of the poverty pyramid could fail. Instead, a simpler methodology for the scheme is simply to make it universal, like employing an automatic exclusion criterion (Socio-Economic Caste Census data), as has been done with the case of ensuring food security.
 
Further, critics have also suggested that merely providing an UBI could lead to labour market distortions, as reflected in the Finnish trial case. However, the Indian labour market depicts a different story. With a steady fall in employment generated in India’s organized sector and doubts looming over the overall aspect of job creation, the UBI could actually work like a magic bullet. In sense, the transfer of some sort of basic income could atleast ensure that citizens enjoy a basic standard of living.
 
To sum up, while a global consensus is yet to be out on UBI, there is a growing appetite for it in India, within political and economic circles. The political fervor around UBI given the election season notwithstanding, there is a long way to go before it can be implemented successfully through structural solutions and resource redistribution. Yet, invoking Victor Hugo’s words “no force on earth can stop an idea whose time has come” so perhaps, the time for UBI is now.
 
India Outbound
April 30, 2019
 
 

source https://indiaoutbound.org/universal-basic-income-for-india-renaissance-for-a-500-year-old-idea/

India needs to prepare for life without Iranian oil

The oil market is in ferment once again. The latest US assault in the form of ending Iran oil waivers granted to India and seven other countries comes into full force from May 2nd. This implies that countries who until now were able to buy Iranian oil without facing any form of US sanctions might face US strictures if they do so.
 
Oil has perennially been an issue hotly contested in global geopolitics. Trump administration’s policies related to Venezuela and Iran reflect this. By imposing unilateral sanctions on these two countries, the policies have not only affected unfriendly exporters like Iran, but also friendly importers, including India.
 
For starters, the decision comes at a time where the price of the Indian crude basket is rising and the country is in the middle of the largest election in the world. On Monday, brent crude touched a price of $71.84 abarrel. This poses a two-pronged problem for the refiners; where refiners not only have to scramble to find alternatives to Iranian oil, but also deal with the resulting volatility in international crude prices.
 
To emphasize on the importance of Iranian exports to India, two points could be considered in the context. First, of the 220.4 million tons of crude oil imported by India in 2017-18 , Iranian exports constituted 10 % of the oil imports. Secondly, the other big concern is that other crude suppliers such as Saudi Arabia, Kuwait, and Nigeria do not offer an attractive pricing options such as Iran, which includes a 60-day credit line, free insurance and shipping.
 
The table below depicts the top 10 countries importing crude oil to India during 2018.
 

Export countries	Oil exported	Growth (% since 2014)
Iraq	$23 billion	43.7
Saudi Arabia	$21.2 billion	-19.6
Iran	$13 billion	36.7
Nigeria	$9.6 billion	-35.4
United Arab Emirates	$8.9 billion	-23.8
Venezuela	$7.4 billion	-43.4
Kuwait	$5.7 billion	-55.9
Mexico	$3.7 billion	35.5
Angola	$ 3.4 billion	-37.2
United States of America	$2.8	0

Crude Oil Imports By Countries; Data sourced from International Trade Centre (Trade map)
 
Further, Iran holds significance not just due to economic considerations, but also because it is an important partner for India, geopolitically. For instance, the access Iran provides to India in Central Asia and Afghanistan has both political and economic advantages. The Chabahar port is a classic example.
 
However, it would do India good to worktowards diversifying its basket of supplier base and also invest in increasing its domestic sources of energy supplies to shield against the perennially volatile oil market. One way to do that would be to open up the renewable energy sector for more investments that will help in curtailing the dependence on oil from the global market and help in meeting the country’s domestic needs.
 
India Outbound
April 29, 2019

 
 

source https://indiaoutbound.org/india-needs-to-prepare-for-life-without-iranian-oil/

The 2019 Global Food Policy Report

The International Food Policy Research Institute (IFPRI) released the 2019 Global Food Policy Report (GFPR). The report asserts that 2018 was an unpredictable and dismal year of food and nutrition, due to events and trends impacting global political stability and international development.
 
Increasing trends in global undernourishment, for the third time in a row, have been coupled with the growth in the impact of conflict and climate change in the obstructed progress towards the SDGs. High levels of poverty and dependence on rainfed agriculture lead to increased vulnerability of rural residents in across Africa and countries like India, to adverse climate change impacts.
 
Escalation of conflict and insecurity were the main drivers of food insecurity for 74 million people in 18 countries in 2017 (primarily in Africa and the Middle East). Other examples include the collapse of the Venezuelan economy and civil war in Sudan that resulted in acute shortages in food supplies and increased vulnerabilities to malnutrition-related health impacts and mortality.
 
The issues of food and nutrition security remained at the periphery across high-level meetings like the World Economic Forum and the UN General Assembly. However, the international development community has rallied support for Goal 2 (Zero Hunger) of the SDGs.
 
The shift in political attention, away from rural areas has contributed to the persistence of poverty, hunger and malnutrition, due to limited rural opportunities, poor access to basic services and worsening environmental degradation. Yet, there exists a glimmer of optimism, as new technologies and economic opportunities expand the body of knowledge and evidence to reduce poverty and malnutrition.
 
For the world to achieve the Sustainable Development Goals (SDGs) by 2030, a fundamental transformation of the global food and agricultural system and the rural regions is imperative. Rural revitalization is the linchpin of this transformation. This entails stimulation of economic growth in rural areas by addressing the persistent crises in those regions and tackling the emergent challenges that are hampering the achievement of the SDGs.
 
This implies the implementation of policies and investments in rural areas to enable the creation of employment opportunities in the agriculture and non-farm sections. This must be supported with improved provision of basic services (infrastructure, water, education etc.) Incentives must be provided to restore and improve rural ecosystems and environments as well.
 
According to the report, women will play a central role in enabling rural change. In order to ensure that the rural institutions and governance are supporting real and sustainable improvements in the lives of rural people, it is essential that access to resources, skills and political voice becomes more equitable. The European experience with rural revitalization programs can guide and inform similar efforts across developing countries.
 
In 2019, the nutrition scenario will not be any simpler, as global economic growth is projected to slow down over the next two years. This economic slowdown will be accompanied by a tightening of monetary policies and risks in global trade flows. Rise in borrowing rates might dampen investments in poor countries. Setbacks or negligible growth in per capita GDP has been projected for the Middle East, Latin America, the Caribbean and large parts of Africa. All these are likely to contribute to uncertainty in livelihoods and food security, for both, producers and consumers.
 
Any stagnation in the improvement of the nutritional status of women and children will irreversibly impact future generations. The expected growth in the demand for dairy, sugar and vegetable oils reflects a rising demand for processed foods. The growth in global sugar production reached record levels in 2017-18, thereby contributing to the rising rates of obesity, driven by rising incomes and increased intake of high-calorie, low-nutrient “convenience foods.”
 
These negative trends are bound to impact the already-neglected rural areas the most. Slowdowns in national economic growth entails negative impacts of employment levels and absorption of growing populations into the rural labour supply. Yet, strong political will and public/private investment is crucial for reversing the trends and addressing the roadblocks encountered in 2018, to gather the momentum required to achieve Goal 2 and eliminate hunger and malnutrition globally.
 
Thus, the GFPR unequivocally posits that focusing on the needs of the rural regions provides one of the most practical ways of achieving the SDGs and addressing multiple persistent and growing challenges. Revitalization represents a systemic approach to address the issues of poverty, malnutrition and food insecurity through the recognition of intrinsic links amongst sectors comprising the global food system.
 
Rural revitalization also provides an opportunity to leverage some of the successes of 2018, vis-à-vis mild improvements in malnutrition trends and renewed commitment to curb hunger. This includes an upsurge in using entrepreneurship, new technologies, and public–private partnerships to solve development challenges. According to the report, “rural revitalization is timely, achievable, and, most important, critical to ending hunger and malnutrition in just over a decade.”
 
India Outbound
April 26, 2019
 
 

source https://indiaoutbound.org/the-2019-global-food-policy-report/

Impact of global warming on global inequality

The Proceedings of the National Academy of Science published a study, that highlights the exacerbation in global economic inequality due to global warming. It builds on previous studies. In 2015, Nature, the journal, had published a report that projected a decline of 75% by 2100, in the average income of the poorest incomes, in contrast to a world without anthropogenic warming, while the richest countries experienced some gains in income. According to a 2018 report by the Intergovernmental Panel on Climate Change (IPCC), the UN’s climate science body, if global temperatures risemore than 1.5°C by the end of the 21st century, the poorer countries are likely to face critical challenges, which include the destruction of entire communities and millions of premature deaths.
 
In order to determine the impact of global warming on the recent evolution of inequality, the study combines counterfactual historical temperature trajectories from a suite of global climate models with extensively replicated empirical evidence of the relationship between historical temperature fluctuations and economic growth. A combination of these have allowed the researchers to generate probabilistic country-level estimates of the influence of anthropogenic climate on historical economic output as well as economic inequality between countries.
 
There has been 17-31% reduction in per capita GDP amongst the poorest four deciles of the population-weighted country-level per capita GDP distribution. This has yielded a ∼25% increase in population-weighted between-country inequality over the past half century. Even though there has been a decrease in between-country inequality, there is a ∼90% possibility that this has been slowed down due to global warming. This implies that the per capita GDP of the poor countries is lower today than it would have been, if global warming had not taken place.
 
The primary factor driving this trend is the parabolic relationship between annual economic growth and temperature. Over decades, there has been a robust, substantial and disparate accumulation of declines in economic output due to anthropogenic warming. Long-term warming has increased growth across cool countries (rich and temperate countries) and decreased growth across warm countries. This is because they either lack the resources to protect against climate change or tend to reside in warmer regions, wherein additional warming would be detrimental to health and productivity.
 
For example, in Norway, warming shifts the country-mean temperature closer to the empirical optimum that results in cumulative economic benefits. However, in India, warming shifts the country-mean temperature further from the empirical optimum that results in cumulative economic losses. The per capita GDP in Bangladesh was 12% lower in the two decades before 2010. In Sub-Saharan African countries like Sudan, Burkina Faso and Niger, climate change has driven GDP per capita more than 20% lower that it would have been.
 
This entails that while poor countries have not received an equal share of the benefits of fossil fuel use, they have also been significantly harmed by the warming caused due to the energy consumption of the wealthy countries. Thus, in consistence with the strong spatial correlation between GDP and temperature, there also exists a positive relationship between the current GDP, per capita cumulative emissions and impact from historical warming. An expansion over longer periods indicates the full impact of warming since the Industrial Revolution as being greater than the impact calculated in the past half century.
 
The study bases its quantification of the impact of global warming on economic inequality and relies on country-level relationships between temperature and economic growth. The study focuses on country-level data because wide availability (in both space and time) allows the use of empirical relationships to quantify how historical temperature changes have affected economic outcomes around the world. Studying the impact of climate change on the evolution of within-country inequality will require strong assumptions about how within-country income distributions respond to aggregate shocks at the country level or comprehensive subnational data on incomes (currently unavailable for most countries).
 
For instance, between 1961-2020, all 18 countries with historical cumulative emissions less than 10 ton CO2 per capita have suffered negative economic impacts, with a median impact of −27% (relative to a world without anthropogenic forcing). Similarly, 36 countries with historical emissions between 10-100 ton CO2 per capita, 34 (94%) have suffered negative economic impacts, with a median impact of −24%. In contrast, 19 countries whose historical emissions exceed 300 ton CO2 per capita, 14 (74%) have benefited from global warming, with a median benefit across those 14 countries of +13%.
 
The impact of increasing urbanisation and economic development in reducing the temperature sensitivity of economies has been implicitly included in the estimated impact of temperature on growth in GDP and inequality. However, an explicit quantification of the roles of such moderating influences will be an important avenue for future research, to critically understand how future climate change will impact the level and distribution of global income.
 
Trade is another factor that has possibly influenced the impacts of global warming on population-weighted inequality. For instance, a large chunk of the reduction in historical inequality during the period of study has been a result of unprecedented growth in East Asian incomes, particularly China, due to critical trading relationships with high-income countries.
 
There exists widespread disagreement regarding the nature and causes of observed inequality trends. Any attempt at quantifying climactic influence on these trends will have implications beyond the design and adaptation of climate risk management measures. This quantification is critical to understand the costs and benefits of global warming, especially on the fundamentals of economic production across sectors. Inequality in the impacts of climate change raises pertinent issues of international justice as well.
 
The study concludes by asserting that an understanding of the causes of economic inequality is critical for achieving equitable economic development. The results of the study indicate that low-carbon energy sources have the potential to provide a substantial secondary development benefit, in addition to the primary benefits of increased energy access.
 
India Outbound
April 25, 2019
 
 

source https://indiaoutbound.org/impact-of-global-warming-on-global-inequality/

Increasing thermal vulnerability of marine species due to global warming

Nature, the international journal of science, published a study on April 24, 2019 titled “Greater vulnerability to warming of marine versus terrestrial ectotherms.” This is the first study that draws comparisons between the impacts of higher temperatures in the oceans and on lands,for a range of cold-blooded wildlife, from fish and mollusks to lizards and dragonflies.
 
2018 became the hottest year for oceans as they continue to absorb the heat trapped in the atmosphere due to carbon dioxide pollution. Since ocean-dwelling species have fewer ways of seeking refuge from the global warming, they are disappearing from their natural habitats at twice the rate than the land-dwelling ones.
 
According to Malin Pinsky, an ecologist and evolutionary biologist at Rutgers University, who led the research, “marine animals live in an environment that, historically, hasn’t changed temperature all that much. It’s a bit like ocean animals are driving a narrow mountain road with temperature cliffs on either side.”
 
For the purposes of the study, the scientists calculated “thermal safety margins” for 88 marine and 318 terrestrial species. The aim was to determine how much warming can they tolerate and how much exposure do they already have to those heat thresholds. Marine ectotherms experience hourly body temperatures closer to their upper thermal limits. This occurs in terrestrial ectotherms only if they do not have access to thermal refugia.
 
The margins of safety are the slimmest near the equator for ocean dwellers and near the mid-latitudes for those on land. This is not a direct prediction of population decline. However, the thermal safety margin provides an index of the physiological stress caused to marine species due to the global warming.
 
Across the marine and terrestrial realms, different processes exacerbate thermal vulnerability. Thus, in the marine realm, higher sensitivities to warming and faster rates of colonization can result in faster and frequent extirpations as well as species turnover. In contrast, in the terrestrial realm, species are more vulnerable to loss of access to thermal refugia. Thus, the critical factors causing loss of species on land are habitat fragmentation and changes in land use.
 
The study has established that for many species, the current levels of heat is already excessive. So, more than half of the marine species had disappeared from their historical territory, at the warm edges of the ranges. The contention here is that even though the narrow safety margins for the tropical marine animals, averages to about 10 degrees Celsius, the populations actually become extent long before experiencing warming to that degree.
 
A boost in warming by even half- or one-degree can create impediments and devastating impacts vis-à-vis searching for food, reproducing etc. In such a situation, some species successfully migrate to new territories, but others, like sea anemones and coral, cannot move and simply become extinct. In this context, the study provides hard data to reiterate the long-standing assumption that marine systems are more vulnerable to climate warming.
 
Multiple measures can limit the destruction being caused to ocean habitats and address the loss of marine species. These include: curbing greenhouse gas emissions, eliminating overfishing, rebuilding populations that have been overfished, establishing networks of marine protected areas as stepping stones for species to move to higher latitudes etc.
 
Thus, the report lays emphasis on the fact that an understanding of which species and ecosystems will be most severely impacted by warming, with the advancement of climate change, is crucial for guiding conservation and management. This implies that it is important to measure temperature changes but also determine their impact on marine and land-based animals. It provides yet another wake-up call for the dire need to protect natural environments for the temperature buffer that they provide for wildlife in an increasingly warming world.
 
India Outbound
April 24, 2019

 

source https://indiaoutbound.org/increasing-thermal-vulnerability-of-marine-species-due-to-global-warming/

An Overview of IMF’s World Economic Outlook: April 2019

The International Monetary Fund has released the World Economic Outlook 2019 that highlights the tapering economic activity in the latter half of 2018, after strong economic growth in 2017 and early 2018. This has been attributed to a confluence of factors that have affected major economies across the world. Some of these factors include:
 

• Decline of economic growth in China following a combination of regulatory changes to curb shadow banking and increase in trade tensions with the US
• Loss of more momentum than expected in European economies due to weakening of consumer and business confidence
• Disruption of car production in Germany due to the introduction of new emission standards
• Falling investments in Italy due to widening of sovereign spreads
• Softening of external demand, especially from Asia
• Natural disasters in Japan

 
Thus, trade tensions increasingly impacted business confidence in 2018, as financial market sentiments worsened, with a tightening of financial conditions for emerging markets. The advanced economies weighed on global demand in the latter part of 2018.
 
Due to these developments, the IMF has projected that the global growth will slow down from 3.6% in 2018 to 3.3% in 2019, before increasing up to 3.6% in 2020. Thus, the current forecast envisages that global growth will level off in the first half of 2019 and firm up again after that.
 
The projected pickup in late 2019 will be predicated on an ongoing buildup of policy stimulus in China, recent improvements in global financial market sentiment, waning of temporary drags on growth in the euro area and gradual stabilization of conditions in stressed emerging market economies, including Turkey and Argentina.
 
Improvements in the momentum for emerging markets and developing economies are projected to continue into 2020, despite the macroeconomic distress that certain economies are currently facing. On the other hand, the economic activity in advanced economies will slow down as the impact of US fiscal stimulus fades.
 
After 2020, IMF expects global growth to plateau at about 3.6%, sustained by increases in the relative sizes of economies, like those of India and China, projected to have a comparatively robust economic growth. Factors like tepid labour productivity growth and slowed expansion of labour force amidst an ageing population will possibly drag the economic growth of the advanced economies lower than the projected horizon.
 
Such an outlook is further complicated by a combination of structural bottlenecks, slower advanced economic growth, higher debt and tightened financial conditions, civil strife and subdued commodity prices in certain regions like Latin America, the Middle-East, Pakistan and North Africa, with medium-term prospects.
 
The balance of risks to the outlook remains on the downside, even if trade differences are resolved quickly and business confidence/investor sentiment strengthens. Further escalations in trade tensions and associated policy uncertainty could weaken the economic growth further. A sharp deterioration in market sentiment will imply portfolio allocations away from risk assets, wider spreads over safe haven securities and generally tighter financial conditions, especially for vulnerable economies.
 
The possible triggers for such situations are: a no-deal Brexit withdrawal of the UK, persistently weak economic data pointing persistently to a protracted global growth slowdown, prolonged fiscal uncertainty and elevated yields in Italy. Coupled with deep recessionary trends, these could have adverse spillovers across European economies. Other key risks contributing to a tightening of financial conditions and lowering of global potential output include rapid reassessment my markets of the monetary policy stance in the US or rising inequalities due to political discord or even climate change.
 
Certain policy priorities are crucial in order to prevent any impairments to economic activity, amidst waning global growth momentum and limited policy space to combat downturns. The macroeconomic and financial policies must aim to prevent further decelerations, especially in cases where the output could fall below the potential, thereby facilitating the withdrawal of a soft landing of policy support.
 
At the national level, inflation must remain on track and inflation expectations should be anchored. Fiscal policies must manage trade-offs between supporting demand and ensuring public debt remains sustainable. In cases wherein, fiscal consolidation and containment of monetary policies is required, the pace must be calibrated to secure stability and protection of vulnerable groups, while avoiding any damage to near-term growth.
 
In the scenario that current slowdown becomes more severe and protracted than expected, macroeconomic policies need to become more accommodative, particularly if output remains below the potential and financial stability is not at risk. Across all economies, actions must be taken to boost the potential growth in output, improve inclusivity and strengthen resilience. At the multilateral level, countries must accord priority to cooperatively resolving trade agreements, without resorting to distortionary barriers that could further destabilize a global economy that is already slowing down.
 
India Outbound
April 23, 2019
 
 

source https://indiaoutbound.org/an-overview-of-imfs-world-economic-outlook-april-2019/

Scope of IMF’s World Economic Outlook: April 2019

The International Monetary Fund has released the World Economic Outlook 2019 that highlights the tapering economic activity in the latter half of 2018, after strong economic growth in 2017 and early 2018. The report covers the following aspects:
 

1. Global prospects and policies: There have been decelerations in global economic expansionary trends in the latter half of 2018, post a broad-based upswing in cyclical economic growth that lasted for almost two years. Economic activity softened amidst an increase in trade tensions and tariff hikes between the US and China due to a tightening of financial conditions and higher policy uncertainty that plague many economies. Against this global backdrop, a confluence of country-specific and economic sector-specific factors have further reduced the global economic momentum. Global economic growth peaked and remained strong at almost 4% in 2017 but dropped to 3.8% in the first half of 2018 and fell to 3.2% in the latter part of 2018.
2. Rise and macroeconomic effects of corporate market power: the report assesses the level of increase in and associated macroeconomic implications of corporate market power. A broad analysis of cross-country firm-level patterns highlights three takeaways:
   • The price markups over marginal costs of firms up to 8% since 2000, indicate a moderate increase in market power across advanced economies but not emerging market economies
   • The increase in market power, while fairly widespread across advanced economies and industries, has remained concentrated amongst a small fraction of the more dynamic, productive and innovative firms
   • While the overall macroeconomic implications have remained modest so far, any further increase in the market power of the already-powerful firms will weaken investment, deter innovation, reduce labour income shares and make it tougher to stabilize output via monetary policies
3. Potential threat to a driver of investment i.e. the price of capital goods: In the past three decades, the prices of capital goods like machinery and equipment have fallen drastically, in comparison to the prices of other goods in the advanced and emerging markets as well as developing economies. However, rising trade tensions, hampered pace of trade integration and sluggish productivity growth could threaten this potential driver of investment. In this context, the report documents key patterns in the prices of capital goods, its drivers as well as its impact on real investment rates.
4. Drivers of bilateral trade and tariff spillovers: The increasing presence of large bilateral trade balances has raised concerns regarding asymmetric obstacles, which might distort the international trade system. The report examines the drivers of bilateral trade balances, while distinguishing between the roles of macroeconomic factors, the international division of labor and bilateral tariffs. It also examines how tariffs impact the organisation of production within andacross countries and consequently affect productivity, outputand employment.

 
In a nutshell, what the report is saying is that economic growth in 2019 will be weaker for about 70% of the global economy (in terms of value, not 70% of the countries), in relation to 2018. This has been a dramatic shift because one year ago many economies were accelerating. Thus, the governments and policy-makers must achieve a delicate balance in terms of taking appropriate actions vis-à-vis prevalent downside risks. This recognition that the global economy is going through a delicate change must be bolstered via multinational cooperation.
 
India Outbound
April 22, 2019
 
 

source https://indiaoutbound.org/scope-of-imfs-world-economic-outlook-april-2019/

Inadequate zinc intake in India

A new study, titled “Inadequate zinc intake in India: past, present, future,” released by the Harvard TH Chan School of Public Health, aimed to assess the historical prevalence of inadequate zinc intake and estimate the future prevalence attributable to rising levels of carbon dioxide. The study used seven household food consumption surveys between 1983-2012, to calculate the total dietary zinc, phytate and absorbable zinc intakes. These were also used to assess the prevalence of the historical inadequacy in the zinc intake. This was followed by a modeling of the added nutritional effect of elevated CO2on zinc intake.
 
In the past few decades, India has made significant strides in the reduction of nutritional deficiencies and improvement across several dietary indicators, but, in the case of micronutrients like zinc, the situation related to micronutrient deficiency has been worsening. Higher levels of carbon dioxide only add to this burden. Projected to rise to 550 ppm in the coming decades, CO2levels could reduce the zinc content in many staple crops.
 
According to the study, the prevalence of inadequate absorbable zinc intake has risen from 17.1% in 1983 to 24.6% in 2011-2012, with an additional 82 million people consuming inadequate quantities of zinc, in comparison to 1983. This increase in adequacy can be attributed to a relatively constant zinc intake in a changing demographic, which has become increasingly insufficient to meet the growing zinc requirements of an ageing population.
 
If carbon dioxide levels reach 550pm by 2050, the prevalence of inadequate zinc intake will potentially accelerate by another 3.9 percentage points, corresponding to an addition of 65 million people with inadequate zinc intake. This is because carbon dioxide impacts the zinc content in crops, thereby affecting human consumption.
 
The study posits that incidences of zinc deficiency have been rising in India for decades now, causing millions of people to become newly zinc-deficient. The study attributes this to a change in dietary preferences from traditional course cereals like jowar to white rice. This trend is especially concentrated in the southern and north-eastern regions of the country (Andhra Pradesh, Kerala, Tamil Nadu, Meghalaya and Manipur), since rice, poor in zinc, constitutes the staple diet in those regions.
 
According to the study, “rice is poor in [the presence of] zinc, causing higher rates of zinc inadequacy in diets that rely heavily upon it. Overall urban populations, and wealthier urban groups in particular, showed higher rates of inadequate intake as well, due to a higher proportion of nutrient-poor fats and sugars in the diet.”
 
Inadequate zinc intake causes grave health challenges by impacting the functioning of the whole body and the immune systems. Zinc deficiency could lead to low insulin, high blood pressure, irritability, depression, slurred speech, generalized hair loss and dry skin. In young children, it can cause a stunted rate of growth, loss in appetite as well as increased vulnerability to diseases like diarrhea, malaria and pneumonia.
 
Diagnostic tests of the levels of zinc in blood or urine might not give definitive results, due to the presence of low levels of zinc in the body cells.
 
For diagnosis of zinc deficiency, the comprehensive medical history of the person must be taken into consideration. Insufficient calorie intake or dietary diversity may possibly be an underlying cause of zinc deficiency. Zinc supplements may be recommended as a remedial measure. Foods that contain zinc include baked beans, beef, yoghurt, oatmeal, fruits, vegetables, milk and fortified breakfast cereals.
 
According to the study, national grain fortification programmes, bio-fortified crops, overall increase in dietary diversity as well as reduced carbon emissions to hamper this increasing trend of zinc deficiency. Another recommendation made by the study includes the initiation of measures by the government to guide people to make the right food choices, as a long-term solution to the ongoing and persistent problem of inadequate zinc intake.
 
India Outbound
April 17, 2019
 
 

source https://indiaoutbound.org/inadequate-zinc-intake-in-india/

"The CSIS Global Health Policy Centre released a primer in March 2019, highlighting nutrition policy as the untapped path to global health, economic growth and human security...." #nutrition #CSIS #GlobalHealthPolicy https://t.co/RSUX5VO1Uc

"The CSIS Global Health Policy Centre released a primer in March 2019, highlighting nutrition policy as the untapped path to global health, economic growth and human security...."#nutrition #CSIS #GlobalHealthPolicyhttps://t.co/RSUX5VO1Uc

— India Outbound (@india_outbound) April 22, 2019

from Twitter : https://twitter.com/india_outbound

The changing tastes and preferences for Chinese products and consumption patterns of Indian consumers, have led to a shift in the terms of trade with China, in favour of India. #chinatrade #exports https://t.co/bT3NPvrjYF

The changing tastes and preferences for Chinese products and consumption patterns of Indian consumers, have led to a shift in the terms of trade with China, in favour of India. #chinatrade #exports https://t.co/bT3NPvrjYF

— India Outbound (@india_outbound) April 22, 2019

from Twitter : https://twitter.com/india_outbound

The new realities of global society are an ideal scenario for India’s rapprochement with the Latin American region at the dawn of this new twenty-first century. #trade #southamerica #latinamerica #exports #imports https://t.co/2Mmond7Sk1

The new realities of global society are an ideal scenario for India’s rapprochement with the Latin American region at the dawn of this new twenty-first century. #trade #southamerica #latinamerica #exports #importshttps://t.co/2Mmond7Sk1

— India Outbound (@india_outbound) April 22, 2019

from Twitter : https://twitter.com/india_outbound

Once upon a time, India was a major influence in Africa, given the support accorded to the African freedom struggle. However, since the 1990s, the popularity of India has dwindled in Africa. #tradeafrica #exportsafrica https://t.co/niL2ZrLazl

Once upon a time, India was a major influence in Africa, given the support accorded to the African freedom struggle. However, since the 1990s, the popularity of India has dwindled in Africa. #tradeafrica #exportsafricahttps://t.co/niL2ZrLazl

— India Outbound (@india_outbound) April 22, 2019

from Twitter : https://twitter.com/india_outbound

Burgeoning microplastic pollution

Nature Geoscience, a scientific journal, has published a new study according to which microplastics have been discovered in a remote geographical area, in the French Pyrenees mountains. The study posits that these microplastic particles have travelled through the atmosphere and been blown by the wind, into the once-upon-a-time pristine region. This discovery illustrates the “hidden risks” that plastics pose.
 
Recent action by the government, private sector or civil society remains focused upon avoiding the littering of plastic in the environment. This has mainly been driven by the concerns for wildlife and the unsightly dumping of waste on beaches. The use of plastic bags has been reduced in many parts of the world and projects are underway about gathering up the floating plastic waste in oceans. However, the pollution caused by invisible plastic particles is invisible.
 
These micro/nano plastics are smaller than 5mm and are sourced from deliberately manufactured products, such as scrubbing materials in cleaning and cosmetic products. Secondary sources such breaking down of tyres, washing machines etc. also contribute to microplastic pollution. While people are becoming increasingly aware of their presence, there is little information about the magnitude in terms of how much is out there, how it behaves in the environment and implications for animal and human well-being.
 
New studies are increasingly being released, which indicate the magnitude of the plastic pollution in every environmental system that is investigated. For example, in the UK, record-breaking quantities have been found in river sediments. A study from Paris revealed the presence of plastic fibres in the air and wastewater. This contamination is unsurprising in polluted urban environments, but was unexpected in a place considered as clean, pristine and uninhabitated as the Pyrenees (straddling France and Spain), on a scale comparable to any major city. A survey in UK revealed that microplastics were found inside every marine mammal that was studied. Their presence have been detected in food and drinking water, in livers of fish as well as in the human food chain.
 
The researchers at the meteorological station of Bernadouze, located at an altitude of over 1,500 metres, had been collecting samples of atmospheric “fallout” over a five-month period in 2017-18. They used two monitoring devices to independently measure the particle concentrations of microplastics. They found many traces of airborne plastic, in the form of fibres, films and tiny fragments. While the scientists could identify the type of plastic, they could not ascertain the exact source or the distance they had travelled via wind, snow and rain, due to the absence of any local sources of plastic pollution. An analysis of the air flow patterns revealed that the particles had travelled at least a 100 kms.
 
This discovery lends credence to the fact that microplastics can move between environmental sub-systems in apparently innocuous ways, which release the particles in the atmosphere, allowing them to float across massive distances. This makes microplastics atmospheric pollutants. Unfortunately, these pose risks that are not fully understood yet, since they are not unreactive. Aside from the risks of inadvertent inhalation or ingestion of large volumes of microplastics, there are other hidden risks as well. The microplastics have relatively large surface areas and potentially provide sites for surface reactions. They can also act as rafts for organic pollution.
 
The main challenge is that these infinitesimal particles cannot be easily removed from the environment once exposed. Instead, their escape into the environment must be prevented in the first place, by addressing the problem at the source, to mitigate damage. Thus, there is an urgent need to determine the possible health effects and dangers of microplastics on people and the ecosystems. This must be accompanied by a consolidation of existing efforts to monitor and reduce human reliance on plastic and thereby stem the flow of plastic pollution from all corners of the world.
 
India Outbound
April 17, 2019

 
 

source https://indiaoutbound.org/burgeoning-microplastic-pollution/

Indian partnerships in Africa

In an attempt to counter the deep inroads made by China in the African continent since 2004-05, India is all set to join hands with the United Arab Emirates (UAE) and Japan, for the implementation of two projects in Africa. In partnership with Japan, India will build a cancer hospital in Kenya. In Ethiopia, India will partner up for the establishment of an information and communication technology (ICT) centre with UAE.
 
Once upon a time, India was a major influence in Africa, given the support accorded to the African freedom struggle. However, since the 1990s, the popularity of India has dwindled in Africa. For the last one decade, India has been striving to reshape its relations with Africa, through numerous high-level official visits and participation in international summits.
 
According to estimates by the American Enterprise Institute (AEI), a Washington-based think tank, Chinese investments in Africa have been valued at more than $220 billion between 2005 and 2018. Other major destinations for Chinese investments include Nigeria, Angola, Kenya, Ethiopia, Zambia and South Africa. Ethiopia has especially become a big focal point for Chinese investments.
 
Indian expertise in skilling and manpower, supported by the financial resources and technical expertise available in Japan and UAE has the potential to build projects in Africa, making it a mutually beneficial partnership on all fronts, especially as Japan and UAE leverage the political goodwill that India enjoys in Africa.
 
The G-to-G project of building a health care centre, possibly a cancer hospital, in Kenya with Japan is an example of North-South cooperation in Africa. This is an exemplification of their mutual agreement to cooperate in the areas of human development, capacity-building, healthcare, water, sanitation, livelihood, digital etc. for the extension of health, education and other services.
 
Ethiopia is the highest recipient of concessional loans from India, outside South Asia. Also, UAE enjoys political goodwill there for its role in mediating between Eritrea and Ethiopia. Thus, with Indian and UAE ties warming up, beyond finance and energy, and the UAE seeking opportunities of investment in Indian infrastructure, both countries will sign an MoU (memorandum of understanding) to set up projects in third countries like Africa, starting with Ethiopia. This is the first instance of a South-South Government-to-Government (G-to-G) bilateral cooperation for a specific project in Africa.
 
India Outbound
April 16, 2019

 
 

source https://indiaoutbound.org/indian-partnerships-in-africa/

Possibilities of a new way forward for Indo-Latino relations

Despite the colonial past and cultural affinity with the West Indies, Indira Gandhi’s hasty visit to eight South American countries in 1969, and political flirtations with Cuba and Mexico during the Cold War, relations between India and Latin America and the Caribbean were cordial but limited for most of the 20th century.Cordial as diplomats from both sides coincided across multilateral platforms in a bipolar system in which they were second-class guests. Limited in terms of geographical distance, language barrier and mutual absence in history classes and textbooks at schools.
 
However, the new realities of global society are an ideal scenario for India’s rapprochement with the Latin American region at the dawn of this new twenty-first century. A multi-polar and interdependent system in which democracy and free market economy prevail, opens up endless opportunities for both regions to embark on a beneficial and long-term collaboration. But where can we start building this new relationship? What should be the foundations of this new agenda?
 
One of the pillars is the thematic diversification. In the last twenty years, a growing economic exchange between both regions has emerged. This economic relationship revolves around two specific areas: (i) foreign direct investment, mainly by Indian private companies in the Latin region such as Mahindra Tech, Bajaj, CIPLA, TELCO, UPL, among others (ii) trade where in India exports capital goods such as motorcycles, automobiles, pharmaceuticals and information technology, while Latin America exports raw materials that include mainly oil, fuels and metals.
 
Although economic exchange has benefited both parties, there seems to exist an asymmetrical relationship between both partners, since Latin America ends up being a tax haven for Indian investment and a raw materials supplier, primarily of oil.
 
It is therefore essential to diversify the topics on the agenda, moving beyond investment and trade.Both blocks can exchange knowledge, experiences and human resources on a wide range of issues. For instance, due to the higher level of human development compared to its peers in the developing world, Latin America can share some expertise on issues such as poverty alleviation, universal provision of high-quality health and education as well as infrastructure and public services development. In turn, India’s progress on issues such as entrepreneurship, pharmaceutical sovereignty, IT development, renewable energy and teaching English as a foreign language can be very beneficial for Latin America and the Caribbean.
 
Similarly, it is worth adding other issues of engagement to the agenda that enable a better understanding of both sides: promotion of tourism, the flexibilization of migration policies, scientific and educational exchange as well as dissemination of arts and culture.
 
However, this thematic diversification entails new forms of interaction; and the diversification of mechanisms is hence, another cornerstone of this new partnership. Traditionally, both regions have interwoven in official political platforms: either multilateral fora led by industrialized countries or a limited number of high-level state visits and bilateral cooperation agreements in recent years. These are no more than mere handshakes and political declarations.
 
However, it is necessary to promote new collaboration mechanisms, far more technical, transcending the political sphere and in tune with thematic diversification.South-South cooperation, triangular cooperation, brain circulation and scientific/educational collaboration play a leading role in this regard. These mechanisms bring civil society stakeholders, identify common issues, share experiences on new platforms, and provide solutions to local problems in similar contexts.
 
Cultural diplomacy deserves particular consideration, as it is beneficial to bring our societies closer and gain knowledge through their cultural, artistic and historical expressions of each other.Overcoming Western culture stereotypes such as Latin American drug traffickers, footballers and slaves, as well as Indian barefoot children, snake charmers, fakirs and untouchables is a task of paramount importance in building this new partnership.
 
In short, India, Latin America and the Caribbean can explore new prospects to forge a closer relationship in this new millennium. Without a doubt, topic and scheme diversification are both fundamental drivers in this new scheme of interaction between both sides.The emergence of a revamped Indo-Latin relationship can go beyond the limited economic cooperation and cordial political interaction, full of good intentions but with a total ignorance of their peoples.
 
Juan Hernandez
April 15, 2019

 

source https://indiaoutbound.org/possibilities-of-a-new-way-forward-for-indo-latino-relations/

Recommendations of the 2019 Asia Pacific AI Readiness Index

This article outlines the key recommendations of the Asia Pacific AI Readiness Index. Part 1 of the article provided an overview of the report, in terms of the rankings, the criteria used and overall trends observed. Part 2 detailed the key findings of the report.
 

1. Preparation of AI talent: There are only 300,000 AI engineers, researchers and practitioners worldwide, when several millions of them will be needed over the next two decades.
   • Adapt educational institutions and what they teach:Singapore has introduced coding to primary and secondary school curricula. AI-specific initiatives need to be developed around more abstract facets of AI i.e. role of ethics in computer science, influence of biases in society and databases and importance of data quality in technologies. For use across all complex AI applications, AI curricula must move beyond a purely technical focus, to include perspectives from history, sociology, ethics, philosophy etc.
   • Use AI to make education better: Big data and analytics can help improve teaching and learning experiences by capturing data on student demographics, school attributes, individual trajectories etc. for resource allocation, policy adjustments and improving workflows.
   • Support upskilling and lifelong learning schemes: The effectiveness of AI policies depends upon the capitalization of AI-specific advanced skills and knowledge to develop and maintain complex systems and technologies. It is estimated that 14% of the workforce is likely to make a transition to new occupational categories.
   • Build a diverse and representative workforce: New and transformative AI technologies must effectively address the needs and expectations of diverse populations. Thus, the creators must also be diverse i.e. people of all backgrounds must produce the technological innovations. Increasing diversity also has the advantage of increasing the pool of AI-skilled talent in the long run.
2. Build trust in AI:Privacy and security are central to the development and deployment of AI technologies. Thus, algorithms must be understandable, transparent and trustworthy, with accountability of the organisations using them, to avoid errors and breaches. How can consumers and businesses be reconciled with the idea of letting machines influence important aspects of their lives?
   • Adherence to privacy principles and practices: “Privacy by Design” comprises numerous technical, organizational and security measures at each stage of developing data-dependent products, systems and operations. Conducting regular privacy impact assessments can identify and mitigate security risks before actual processing of personal data.
   • Making transparency a key feature of AI products and services: The complexity of digital products and services entails complex uses of data. Thus, systems must be transparent in terms of not only how, but why a decision on an action was reached. This will allow consumers to better understand how AI systems work and affect them.
   • Controlling data collection and usage: Data anonymization refers to the deletion or pseudonymization of personal data to make it irreversibly untraceable and unreproducible, thereby, allowing AI systems to use data without divulging private information and minimizing risks of breaches or accidental disclosures. Data limitation policies force organisations to limit the use of personal data for the purpose it was originally collected for. Data minimization reduces the amount of data collected and processed by establishing at the onset what data is relevant for a specific purpose.
   • Enable ethics in AI: For AI to grow and deliver on its promises, AI must be developed, implemented and monitored following the highest ethical standards. Policy-makers and professionals must ensure that fairness and diversity is built into the datasets because AI algorithms are only as good as the data they are fed to learn, in making recommendations and predictions.
   • Using AI to strengthen cybersecurity: AI can improve existing detection and response capabilities and create new preventative defence protocols. It allows the identification of threats sooner by sifting through large volumes of data and evaluate patterns faster. It can also help streamline complex, manual or time-consuming processes.
3. Shape AI ecosystems: Governments drive the adoption of AI. The public sector can influence the expansion of AI technologies across investment and procurement schemes, education, labour, migration policies etc. Government-led initiatives must enable the growth of the AI value chain. How can governments effectively foster dynamic, sustainable and innovative AI ecosystems?
   • Make data open and available: AI technologies require a secure and steady diet of reliable data to learn and function. Major data gaps in relation to the existence of fragmented data or collected data that has not been analysed, must be fixed by making non-sensitive data freely available for access and use by everyone. This approach can help the implementation of innovative solutions to truly address societal needs and expectations.
   • Facilitate cross-border flows and regional cooperation: Data flows across multiple jurisdictions must be secured with the consistent cooperation between governments as people, devices and platforms remain constantly connected beyond geographical borders.
   • Set an example by using AI in government organisations: Modernizing and improving the public sector can eliminate administrative processes, support overburdened institutions, optimize resource allocations and prevent crime. AI adoption by the government cannot follow the same historical arc of technological adoption i.e. at a pace and scale lesser than the private sector.
   • Create specific rules to enable ethical and humane uses of AI: Many economies have created new roles within specialized government agencies to design unprecedented solutions to unprecedented challenges in a digital era, especially related to the legal, moral and ethical dilemmas/issues created by AI technologies. Governments must be committed to keeping AI safe and ethical for consumers and businesses alike.
   • Use AI for good and teach AI to do good: According to the AI for Good Global Summit, AI must help humanity solve grand challenges by capitalizing upon unprecedented quantities of data generated on health, commerce, communication, migration etc. In collaboration with private sector entities, governments must share AI tools and resources, datasets, knowledge and expertise to address sustainability challenges and help vulnerable populations.

 
India Outbound
April 12, 2019

 
 

source https://indiaoutbound.org/recommendations-of-the-2019-asia-pacific-ai-readiness-index/

Key findings of the 2019 Asia Pacific AI Readiness Index

Salesforce released an American cloud-based software company, has released an Asia Pacific AI Readiness Index. It ranks eight countries in the Asian-Pacific region i.e. India, Hong Kong, Singapore, Thailand, the Philippines, Malaysia and Australia, in terms of their adoption and integration of AI within the lives of the consumers, businesses and governments. Part 1 of the article provides an overview of the report, in terms of the rankings, the criteria used and overall trends observed. This article details the key findings of the report.
 
KEY FINDINGS

1. AI readiness is not a one-size-fits-all process

   AI readiness is not a linear process and is not accessible to all economies in the same manner. Australia, India and Hong Kong have scored the highest in terms of government and business readiness, which reflects that government-driven strategies have focused upon steering the growth of AI through dedicated funds, programs and policies.

   On the other hand, Malaysia, Indonesia, Thailand and the Philippines score the highest in consumer readiness. This reflects a more market-driven approach wherein the maturation of commercial AI products and services are prioritized over any definitive and potentially constraining policy frameworks.

2. Trust and accountability determine wider AI adoption

   Despite high levels of awareness, consumers may not necessarily understand the way in which AI technologies work, thereby hampering their trust in AI technologies. Thus, countries like India, Hong Kong, Singapore and the Philippines score high on consumer awareness, but relatively low on consumer understanding of AI.

   All 8 economies score less than a 7 on 10 in consumer sentiment and less than 8 in consumer willingness to use AI. This tendency is more pronounced in developed economies like Singapore and Hong Kong, wherein their hyper-connectivity potentially makes security lapses more consequential. For consumers, it is vital to have visibility into how AI systems comply with laws related to collection, storage, usage and protection of personal data.

   Thus, the future of AI technologies is dependent on its ethical use, an issue that governments appear to be taking seriously. The G20 has included this in its Future of Work and Education agenda. Singapore recently launched a Proposed Model AI Governance Framework, India’s 2019 budget includes the creation of a National Centre for Artificial Intelligence and Australia’s Human Rights Commission released a paper on AI governance.

3. Governments must drive AI readiness

   Governments play a key role in making AI a national priority. Hence, government readiness comprises two complementary aspects i.e. the extent to which a government supports AI readiness through clear, decisive and consistent public policies and the extent to which a government equips its own organisations with AI capabilities.

 
Thus, three major policy priorities for governments include:

• Development of AI talent and encouragement of ethical use of AI in schools/institutions
• Encouragement of public-private partnerships to make AI a key part of inclusive growth and positive social outcomes
• Establishment of regional policy frameworks to support wider AI development and adoption

 
Economies that have undertaken concrete national strategies devoted to AI or at least, have the foundational principles in place, rank higher in terms of overall levels of readiness. Within the context of public-sector adoption, most governments in the Asian-Pacific region have made institutional strides, by deploying AI technologies within their own organisations, making automation a key tool of productivity for public services or launching multiple initiatives to shape dynamic AI ecosystems.
 
However, the governments’ use of AI is still in stages of infancy and they have to navigate challenges like the need to implement new technologies, hire human resources with requisite skills and the natural risk aversion of bureaucracies.
 
India Outbound
April 11, 2019
 
 

source https://indiaoutbound.org/key-findings-of-the-2019-asia-pacific-ai-readiness-index/

2019 Asia Pacific AI Readiness Index: Overview

Salesforce, an American cloud-based software company, has released an Asia Pacific AI Readiness Index that outlines the benefits and challenges associated with Artificial Intelligence (AI) and evaluates how India, Hong Kong, Singapore, Thailand, the Philippines, Malaysia and Australia fare, relative to each other, in terms of AI readiness. The report also provides practical recommendations for people, businesses and governments to improve their adoption of AI.
 
AI leaders are fast emerging in the APAC region however, in order to truly benefit from AI, the countries must embrace and embed AI technologies into their workflows. This ability translates into multiple forms of “AI readiness.” For consumers, this entails understanding and trusting AI technologies, businesses must be equipped with requisite processes and skills to leverage AI systems and governments must become the catalyst for AI adoption, by ensuring its development in a safe, ethical and sustainable manner.

Since, no exact measurements of AI readiness exist, the Index has used 20 proxy indicators that have been clustered into three dimensions of readiness for:

• Consumers (5 indicators): How consumers perceive, understand and trust AI provides an important assessment of the short- and long-term effectiveness of AI initiatives
• Businesses (7 indicators): How the private sector (start-ups, SMEs and enterprises) are equipped to adopt AI is an important indicator of the ability of businesses to drive and sustain the growth of AI
• Governments (8 indicators): How the public sector (regulators, policy-makers, institutions and organisations) is enabling AI through funds and policy frameworks, in order to make it a driver of growth and economic competitiveness

Thus, the Index is a composite measure of the quality and strength of AI frameworks and ecosystems in these countries. It is a product of qualitative research and quantitative modelling, based on publicly available data from 2018, which assesses the abilities of the consumers, businesses and governments to adopt, deploy and support AI technologies.
 
According to the report, AI adoption is fragmented and uneven in the Asian-Pacific region. While the efforts and commitment of some governments have not yet been reflected in the adoption and usage of AI by consumers and businesses, in others, they are taking the lead and showing the way forward to governments, vis-à-vis innovation and change. In addition to providing in-depth analyses for India, Singapore and Australia, the report provides recommendations for the preparation of AI talent, building trust and shaping ecosystems.
 
The report concludes with the promulgation that working in close partnership with the business, government and technology industry is imperative for APAC leaders to become world leaders in terms of readiness and adoption of AI.
 
Part 2 of the article will elaborate upon the findings and recommendations of the Index in detail.
 
India Outbound
April 10, 2019
 
 

source https://indiaoutbound.org/2019-asia-pacific-ai-readiness-index-overview/

Perceived barriers to global digital trade in 2019

The Office of United States Trade Representative has released a fact sheet, titled, 2019 National Trade Estimate: Key Barriers to Digital Trade. The fact sheet highlights the proliferation in fixed broadband connections globally from one million in 1998 to one billion in 2018, with nearly 4 billion people using the Internet worldwide. This increase in connections has been complemented by a growth in digitally-enabled trade, across industries, with enterprises leveraging digital services, supplying them across borders and streamlining operations to compete globally.
 
The fact sheet also highlights the advantages rendered to small businesses in the form of online platforms, data analytics and cloud computing, which enables them to keep their costs low and scale up quickly without costly investments in infrastructure, and hence, compete on a global level. Within this context, the barriers to digital trade, imposed by governments, threaten this ability of firms to function in a digital economy.
 
According to USTR, barriers that hamper cross-border flow of data and discriminate against foreign digital services are unnecessarily hurting local firms, by preventing them from leveraging the cross-border digital services and facilitating global competitiveness. The USTR aims to achieve strong and binding rules on digital trade across its negotiations. It hopes to use the U.S.-Mexico-Canada Agreement, which is the most comprehensive and advanced set of digital trade rules to be negotiated, as a template for similar rules, to meaningfully reduce digital trade barriers around the world.
 
In this fact sheet, the USTR has identified key barriers to digital trade. In China, it has raised objections to the restrictions on cross-border data flows and data localization requirements under the domestic cyber-security laws for routine transfers of information, including those that fall under the undefined category of “important.” Moreover, China has imposed restrictions on cloud computing that prohibit foreign companies from providing related services to customers in China, unless they partner with a local company and turn over to them their intellectual property, technological know-how and brands to enter the market. China also indulges in web filtering and currently blocks 10 of the top 30 global legitimate websitesand over 10,000 domains.
 
In the European Union, the USTR opposes the imposition of taxes on digital services and claims that these almost exclusively apply to American companies, thereby discriminating against U.S. suppliers in European markets. In 2018, the European Commission had proposed a directive to levy an interim tax on the revenues accrued from digital services (advertising, online market, data) even on companies that are not physically present in the EU. France, the UK, Spain, Italy and Austria are considering similar proposals.
 
In Indonesia, providers of “public services” are required to establish local data storage and disaster recovery centres, with a proposal to expand the data categories subject to the localization requirements. Indonesia is also considering multiple regulations on foreign providers to register with the government, designate permanent local representatives and prioritize local goods and services. In 2018, tariff lines were established for electronic transmission of digital products (apps, videos, music etc.). Although currently set at zero, this has questioned Indonesia’s WTO commitment of not imposing duties on electronic transmissions. Customs reporting requirements can disrupt existing trade, even in the absence of duties.
 
On the basis of a draft data protection law, Kenya’s data localization requirements would entail the local storage of personal data and prohibit/restrict the cross-border processing of certain “sensitive personal data.” According to USTR, this will hamper the development of the Kenyan digital economy and undermine data security, without providing any meaningful benefit to data privacy.
 
Korea has been identified as the only market worldwide that has imposed restrictions on the export of geo-location data. This hampers international suppliers with product services including traffic updates and navigation. Also, even though Korea will expand cloud computing opportunities, it will restrict cross-border use of cloud-computing for financial services.
 
In Nigeria, businesses are required to store all data concerning Nigerian citizens within the country as well as locally host all government data, unless they have been exempted officially. These requirements affect foreign businesses disproportionately since they globally distribute their data storage and processing.
 
According to Russian law, certain electronic data related to its citizens must be processed and stored in Russia. Failure in compliance has led to American companies/service providers and IP addresses being blocked. Saudi Arabia has created market access barriers for ICT services within its 2018 Cloud Computing Regulatory Framework (localisation of certain types of data, increased liability of internet service providers and regulatory imposition on cloud and other ICT service providers to install government filtering software).
 
In Turkey, there are multiple data localization requirements across laws. These include limitations upon transfers of personal data abroad, requirements to maintain information systems within Turkey and a 2018 notification that publicly traded companies must keep their primary and secondary information systems and data in Turkey.
 
In Vietnam, advertisers are required to contract with a local services supplier as a condition of placing advertisements on foreign websites targeting Vietnam. This is burdensome because online advertising market typically functions through automated and real-time auctions for ad space. Moreover, in 2018, Vietnam passed a cybersecurity law that required online service suppliers to store data and establish a local presence in Vietnam. Related regulations might be applied only under certain provisions, however, will still include a wide range of digital services.
 
The USTR has criticized India for the publication of numerous measures in 2018, which relate to the restriction of cross-border data flows and creation of onerous data localisation requirements. One such measure that was implemented requires the suppliers of payment services to store all information related to electronic payments by Indian citizens within India. The USTR views the drafts of the Personal Data Protection law and e-Commerce Policy as potentially undermining the digital economy as a major source of growth in India. These include proposals to regulate cross-border data flow, ban sharing of data of Indian users with businesses and third-party entities outside India, mandates to all e-commerce companies to store data domestically and provision of access to source codes and algorithms to the government.
 
The issues and concerns around data privacy and localisation has been gaining steam for a while now, given that countries seem to be racing towards personalization and growth within an integrated and connected global economy. While countries like the US are advocating for free flow of data across borders, others, like the European Union are keen to strictly protect and preserve the data of their citizens in a digital world, as encapsulated in the General Data Protection Rights.
 
India Outbound
April 9, 2019
 
 

source https://indiaoutbound.org/perceived-barriers-to-global-digital-trade-in-2019/

Decelerating Chinese imports to India

In a press release dated April 6, 2019, the PHD Chamber of Commerce has highlighted that the demand for Chinese products in India is decelerating, despite there being a substantial volume of imports from China lately. India’s import growth from China has shrunk from 24% between April-January 2018 to (-)5% between April-January 2019. During this time, Indian imports from China stood at USD 60 billion.
 
On the other hand, there has been a major breakthrough vis-à-vis exports to China, in the form of a remarkable turnaround by Indian exporters between April to January 2018-19. According to the press release, Indian exports to China grew by 31% in April-January 2019, with an increase in value from USD 10 billion to USD 14 billion approximately.
 
The trade deficit between India and China has also eased from USD 53 billion in April-January 2018 to USD 46 billion in April-January 2019. At present (2018-19), China is the 3rd largest export destination and the largest source of imports for India. Between 2001-02 and 2017-18, the total trade between India and China has witnessed a massive jump from USD 3 billion to USD 90 billion.
 
In April to January 2018-19, the top ten Chinese imports to India comprise 78% of the overall imports from China. Electrical equipment holds the majority share at 30%, followed by mechanical appliances at 19% and organic chemicals at 12%. During the same period, the top ten Indian exports to China comprise 81% of the overall exports to China. Organic chemicals hold the majority of the share at 19.4%, followed by mineral fuels at 19.3% and cotton at 10%.
 
In terms of diversification, the Chinese basket of exports to India is highly concentrated upon certain products, thereby making the situation highly volatile for China, given the higher reliance on select products.However, over the years, intra-industry trade has consistently expanded between both countries. This share has increased from 28% in 2007 to 53% as of 2018-19.
 
Interestingly, India is one of the largest manufacturers of generic pharmaceutical products in the world, with exports of generic drugs to the European Union and the USA. However, India is unable to export to China, given the stringent non-tariff barriers in China.
 
Moreover, the extra barriers imposed on agricultural and processed products must be mitigated in order to boost the trade of agri-products. Another surprising aspect of Indian-Chinese trade is the high trade cost between both countries, despite the fact that they share borders.
 
Despite these factors, the changing tastes and preferences for Chinese products and consumption patterns of Indian consumers, coupled with the growing competitiveness of Indian production capabilities, the terms of trade with China are shifting in favour of India.
 
In the last ten years, China has enhanced its trade footprint in India, but this trend has reversed in April to January 2018-19. Despite the fact that the mounted trade deficit with China is substantial, the volume of trade deficit is expected to ease up in the coming years, given recent trends and the amendments to the Foreign Trade Policy 2015-20.
 
India Outbound
April 8, 2019
 
 

source https://indiaoutbound.org/decelerating-chinese-imports-to-india/

Lancet’s Global Burden of Disease study 2019

The Lancet medical journal released a study on April 3, 2019 titled “ Health effects of dietary risks in 195 countries, 1990–2017: a systematic analysis for the Global Burden of Disease Study 2017” or the Global Burden of Disease study. This study aims to evaluate the consumption of major foods and nutrients across 195 countries and hence, quantify the impact of a suboptimal dietary intake, an important preventable risk factor for non-communicable diseases (NCDs), on mortality and morbidity.
 
The study has collected geographically representative dietary data and estimated the effects of dietary factors on NCD-related mortality as well as the overall impact of poor dietary practices. Using comparative risk assessment, the study estimates the proportion of disease-specific burden, attributable to each dietary risk factor amongst adults aged 25 years and above. The main inputs of analysis included the intake of each dietary factor, the effect size of the dietary factor on disease endpoint and the level of intake associated with the lowest risk of mortality. The study then calculated the number of deaths and disability-adjusted life-years or DALYs attributable to diet for each disease outcome.
 
The study analysed 15 dietary elements i.e. diets low in vegetables, fruits, legumes, nuts and seeds, whole grains, milk, fibre, calcium, seafood omega-3 fatty acids, polyunsaturated fats as well as diets high in red meat, processed meat, sugar-sweetened beverages, trans fatty acids, and sodium. In 2017, the proportion of diet-related deaths was the highest in Uzbekistan and lowest in Israel. Other countries with low incidences of deaths included France, Spain, Japan and Andorra. The UK ranked 23rd, the USA 43rd and China 140th. With 310 deaths per 100,000 people, India is ranked 118th out of 195 countries.
 
According to the study, 11 million deaths and 255 million DALYs were attributable to dietary risk factors in 2011. Globally, the leading dietary risk factors for deaths and DALYs were high intake of sodium (3 million deaths and 70 million DALYs), low intake of whole grains (3 million deaths and 82 million DALYs) and low intake of fruits (2 million deaths and 65 million DALYs). However, the statistical uncertainty of the estimates made has increased, given the fact that the dietary data was acquired from mixed sources and were unavailable for some countries.
 
Poor dietary habits can lead to a wide range of chronic diseases and this study provides a comprehensive picture of the potential impact of suboptimal diets on NCD-related morbidity and mortality. It highlights the urgent need for qualitatively improving diets across countries and aims to inform the implementation of evidence-based dietary interventions, while providing a platform for the evaluation of their impacts on human health on an annual basis. The complexity of dietary behaviours and wide range of influences on diets globally, the improvement of diets worldwide demands an active collaboration between multiple stakeholders across the global food system with specific policies targeting particular sectors.
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India Outbound
April 5, 2019
 
 

source https://indiaoutbound.org/lancets-global-burden-of-disease-study-2019/

India’s digital economic potential

In February 2019, the Government of India’s Ministry of Electronics and Information Technology released a report titled “India’s Trillion-Dollar Digital Economy”, in an attempt to take stock of the massive digital transition that is underway in India and envision a roadmap for the coming years. The report posits that India is poised to create massive economic value, up to $1 trillion, in its digital economy by 2025 as well as empower citizens, with the permeation of new digital applications.This is based on the presumed expansion of a strong foundation of digital infrastructure and expansion of digital access, via the Digital India programme.
 
The Digital India programme was launched in 2015 to transform India into a digitally empowered society, with a knowledge economy. It is aimed to be inclusive, in narrowing the digital divide within the country, so that people across varied socio-economic strata of society can benefit from technological innovations. Currently, the Indian digital economy is generating around $200 billions in economic value.
 
At present, the digital consumer base in India is the second largest in the world and continues to grow at the second-fastest rate, among 17 leading economies, as per the report’s Country Digital Index. The report estimates that roughly half the potential value of $1 trillion by 2025 will come from new digital ecosystems, created across sectors as diverse as agriculture, healthcare, finance, e-governance, jobs etc.

According to the Union Minister for Law & Justice and Electronics & Information technology, Ravi Shankar Prasad, “India has nearly half a billion internet users and their number is rising rapidly in every part of the country. This will create a huge market for a host of digital services, platforms, applications, content, and solutions. Overall, India could potentially see a five-fold increase in economic value from digital transformation by 2025, representing an attractive opportunity for global and local businesses, start-ups, and innovators to invest in emerging technologies (like AI, blockchain, or drones) in ways that are customised to India’s needs.Working with all stakeholders, India can build on the digital dynamism we have already created to deepen, widen, and scale up its digital economy in the coming years, creating huge economic value and empowering millions of people across all walks of life.”
 
The rapid progress in internet infrastructure and usage can lead to accelerated progress across nine priority areas, based on national level scale-up of thirty digital themes. This report lays out a roadmap for Digital India 2.0 by outlining the enablers needed in those strategic areas to serve national priorities – energy, education and healthcare for all etc. and thereby, empower millions of entrepreneurs, workers, small and large businesses and consumers across urban and rural India.

The report also explores the steps required to move from a “business-as-usual” trajectory to create an economic value of $500-600 billion by 2025, towards the full potential of creating an economic value of $1 trillion by 2025. However, in order to capture the potential value of the Indian digital economy, concerted action and extensive collaboration is required between the government and private sector. This entails creating cross-cutting enablers – improvement in ease of operations for digital businesses, flow of capital and open-API ecosystem as well as supporting digital innovations through procurement by the state and strengthening centres of innovation and higher education across emerging technologies like AI.
 
All images and content sourced from press release.
 
India Outbound
April 4, 2019
 
 

source https://indiaoutbound.org/indias-digital-economic-potential/