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Indian Budget 2016: Focus on state elections

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For India, wasting huge resources on joint cricket exercises, cricket matches are more important than the government budgets that are approached with usual ease.

Even while a budget is being presented in the parliament, in fact, the ministers and MPs are worried more about India’s chances for more cricket matches to “improve ranking” and bogus records by mutual consents. This explains how much the cricket mafia controls Indian government and mindset.

Even as Indian and Pakistani cricket teams were seemingly making joint efforts in Bangladesh to reach the final to let India shine eventually in T20 as part of so-called Asia cup, played in the night (5 teams are allowed to play: 4 South Asian teams India, Bangladesh, Pakistan, Sri Lanka and hopeless UAE), Indian Finance Minister Arun Jaitley presented the BJP government’s Union Budget 2016 on February 29 morning, making it appear to be pro-poor.

For India cricket match is as good as budget making and the Indian finance minister Jaitley was earlier an important BCC boss. Indian FM Jaitley, pitching now for economic growth, hailed the Indian economy’s big strides.

The Modi government unveiled a fire-fighting budget that seeks to win back support among rural voters for Modi’s government and sustain growth against a grim global backdrop – all without borrowing more. Jaitley claims India’s growth has accelerated to 7.6% in 2015-16 notwithstanding contraction of global exports. He said India’s growth is extraordinarily high. “Our external situation is robust, CAD has declined to $14.4 billion this year, will be 1.4% of GDP at the end of fiscal. CPI inflation has also come down to 5.5% from 9.4% in the last three years”.

Jaitley described his three priorities as: strengthening India’s firewalls by ensuring macroeconomic stability and prudent fiscal management; driving growth through domestic demand; and reforms to boost economic opportunity. Key areas of policy focus would be farming, social reforms, infrastructure and recapitalizing India’s banking system

With state elections coming on their way this year, the Modi government feels the state governments take all credits for schemes and mega projects launched by central government and it is eager to pitch for full credit for its programs and the budget would stress that all major projects in states are in fact BJP government’s.

Arun Jaitley’s third budget marked a strategic shift by addressing rural distress in a country of 1.3 billion, where two-fifths of families rely on farming and are reeling from two years of drought. Jaitley reeled off a list of $16 billion in measures targeted at the countryside, including spending on a job creation scheme, farmers’ welfare and building of rural roads. He also targeted a total of $130 billion in credit to farmers.

Jaitley laid out plans to electrify all Indian villages by 1 May 2018 and allocated Rs 8,500 crore for rural electrification in fiscal 2017. As in every year, the agriculture credit target has been increased to Rs 9 lakh crore from Rs 8.5 lakh crore. It offered a fine blueprint of several small steps to lift India’s villages and encourage small entrepreneurs but failed to impress on NDA-government’s big challenge of taking ahead the reforms process and aggressive infrastructure spending needed to lift the economy to a high growth path. At the same time it hiked public investment in India’s woeful infrastructure by 22.5 percent, while taking further steps to revive corporate investment that Modi needs to create new jobs for India’s burgeoning workforce.

Jaitley called Asia’s third-largest economy a bright spot in a gloomy global landscape, and reiterated a false forecast that it would grow by 7.6 percent in the fiscal year that is drawing to a close. But, despite hefty commitments on rural welfare and health, Jaitley managed to stick to his fiscal deficit target of 3.5 percent of gross domestic product for the 2016/17 fiscal. Rural demand is weak, private investment is dead in the water and, of course, we have a banking crisis

Jaitley said the government wanted to ensure that the benefits of growth are more widely shared among India’s 1.3 billion people and he unveiled pro-poor budget to placate voters, pledges reforms Finance Minister Arun Jaitley unveiled a budget for the poor, announcing new rural aid and health programmes in a strategy shift that could boost his ruling Bharatiya Janata Party (BJP) in coming state elections.

Apparently, the Modi government has spared the common man, has not added more burdens on common masses in the budget. More taxes would certainly have meant popular crisis. At first glance, Budget 2016 is naturally more a Modi budget, than a statement of purpose from Jaitley. Packed with several small-steps initiatives but lacking major bold steps to undertake much needed reforms.

India holds several state elections this year, including in Tamil Nadu and West Bengal, with the country’s most populous state, Uttar Pradesh, going to the polls in 2017. A strong showing will be vital to Modi’s chances of a second term. Despite commanding a large majority in parliament’s lower house, Modi’s government has failed to pass several key measures since sweeping to power almost two years ago, raising doubts over the impact of its reform agenda.

After BJP’s losses in Delhi and Bihar elections, govt put emphasis on social sector, farmers and rural India. The themes– poor, farmers and women–which had been gaining accent in Modi’s speeches in recent months, resounded in the budget, blunting the blitzkrieg of the Congress led by its vice-president Rahul Gandhi calling the NDA a “suit-boot ki sarkar”.

The Union Budget 2016 bore PM Modi’s imprint rather than that of his finance minister, Arun Jaitley. Among budget highlights, FM Jaitley announced 1% excise duty to be levied on all articles of jewellery except silver. This means silver prices are going to remain unchanged. Government will increase ATMs, micro-ATMs in post offices in next three years. Government announced deduction for rent paid to be raised to Rs 60,000 to Rs 20,000 to benefit those living in rented houses. People who don’t have any houses of their own or don’t get house compensation from employers get rebate of Rs 24,000 per annum. Ceiling of tax rebate for taxpayers with up to Rs 5 lakh annual income to be raised to Rs 5000 from Rs 2000 currently; Daily working hours and weekly hours for employees of malls and small shops will be regulated. For first time home buyers will be levied for loans up to Rs 35 lakh for property not exceeding Rs 50 lakh.

The major highlight of the budget was Jaitley’s big push on agriculture and rural India. For rural development he announced a package of Rs 87,765 crore in fiscal year 2017 as against Rs 79,526 crore. That apart, Jaitley announced a subsidy scheme for BPL families for cooking gas and said the government targets to double the income of farmers by 2020 and Rs 2,000 crore for new LPG connections. Jaitley allocated Rs 35,984 crore for the farming sector, Rs 86,500 crore on irrigation for five years, and Rs 15,000 crore interest for agricultural loans.

Jaitley promised that there “won’t be compromise” on the spending side, announcing a 11 percent increase to Rs 19.78 lakh crore in fiscal 2017 from Rs 17.77 lakh crore BE year before. Of this, plan expenditure is up by 15 percent to Rs 5.5 lakh crore and non-plan expenditure increased by 9 percent to Rs 14.28 lakh crore. But the government lowered its spending on the infrastructure segment. For fiscal year 2017, Jaitley allocated Rs 55,000 crore for roads and highways.

The Economic Survey announced on a week ago, ahead of the budget, spelled out the first priority for Jaitley to deal with in the budget — ensure that growth momentum is on. This is because the current environment is fraught with risks, which threaten all the engines of India’s growth. For fiscal year 2017, Jaitley announced a fiscal deficit target of 3.5 percent and for the fiscal year 2016, the fiscal deficit target has been met at 3.9 percent. This news could make the rating agencies, investors and the RBI happier since there was immense pressure on the government to stick to the fiscal consolidation roadmap.

The BJP government has set a disinvestment target of Rs 56,500 crore for fiscal year 2017 as against Rs 69,500 crore for fiscal year 2016. Of this Rs 56,500 crore, Rs 36,000 crore is through the sale of stake in state-run companies and the rest through strategic sales. In the last year, as against the target of Rs 69,500 core, the government managed to raise only Rs 18,421 crore (from sale of stake in six PSUs) on account of lukewarm market conditions.

For fiscal year 2017, Jaitley announced a capital infusion of Rs 25,000 for government-banks, which was part of the Rs 70,000 crore announced for five years last year

However, Finance minister Jaitley has failed so far to get hold of the root of the problems that has engulfed India’s Rs 95 trillion banking industry. Jaitley’s banking sector strategy fell short of what was needed to revive state-run banks. The bad loan crisis in the banking sector has severely constrained the ability of the banks to fund long-gestation infrastructure projects.

Modi’s change of course seeks to prevent a repeat of the fate of the Vajpayee government led by his nationalist Bharatiya Janata Party (BJP), whose relentless optimism – summed up by its “India Shining” slogan – grated with voters who dispatched it after one term in 2004.

The spending package marks a radical shift from Prime Minister Narendra Modi’s initial focus on investing in infrastructure in a bid to kick-start private-sector investment that remains weak. Making a strategic turn in its priorities from industry to the under-privileged, the political message was lucid. The BJP, which faced humiliating defeats in the Bihar and Delhi, underlined the budget’s emphasis on social sector, farmers, rural India and poor.

The Opposition rejected the budget, dubbing it as a political budget which has nothing to give impetus to three engines of growth– agriculture, private investment and exports.

The shift in the government’s economic script was forseeable. Modi has held four farmers rallies across the country over the past month even as he has been underlining the need to focus on “antyodaya”, the last man in the queue.

In his third budget, Jaitley described the country’s 120 million farmers as the “backbone of the country’s food security” and promised to double their income in five years. He also said government would increase spending on the National Rural Employment Guarantee Scheme (MNREGA), a scheme brought by the UPA regime offering 100 days of employment to villagers. He announced providing BPL families with LPG connections with subsidy, an echo of the Prime Minister’s concern about women whose eyes watered while cooking on chullahs. Announcing government’s commitment towards rural electrification, he assured 100 per cent village electrification by May, 2018.

Besides fiscal consolidation, the focus of the budget has been on infrastructure, which has even been acknowledged by the Opposition. The total outlay on the infrastructure is Rs2, 21,246 crore. For building or renting houses, there are tax benefits and for the first time home buyer the deduction for interest paid on home loan has been raised by Rs50, 000 a year.

Former finance minister P Chidambaram refuted the government’s claim that the budget was pro-farmer. “The crucial signal in agriculture sector is the price. Last year, I think the farmers were cheated.. I would have expected that the price signal is given clearly to the farmers. Immediately it is the prices signal that enthuse the farmers. One of the reasons for acute distress in rural India is that the farmers are not getting fair and remunerative prices for their produce,” he said. CPM general secretary Sitaram Yechury said the budget will “create greater economic inequalities, reduced purchasing power, was not growth oriented and appeased international capital more than meeting people’s requirements.”

The 2016 budget, a big test for Jaitley, was a tough balancing act between the fiscal consolidation and much-needed spending to revive growth in the economy, especially in the face of rising investor-pessimism on the rise, which has risked Modi’s task of reviving the economy. Jaitley committed to the fiscal consolidation path, but failed to impress by setting aside enough funds to push ahead the infrastructure growth and address the banking sector woes.

Observation

In the past, the delays in project implementations in India have resulted in huge cost-over runs to companies. The corporate sector will eagerly look for measures that can ease their burden, especially in the infrastructure projects.

One should note that Jaitley’s big task remains making sure the engines of economic growth aren’t failing. This year, the increase in infra spending is merely Rs 30,000 crore as against Rs 70,000 crore last year, which isn’t so encouraging at this stage of economic growth.

There are certainly ifs and buts in budgets presented by governments with a lot of predictions and lies. The parliamentarians, even while debating the budgets, are enjoying their stay in the Houses. How much of what is said in the budget would be implemented by Modi government remains to be seen.

Meanwhile one can understand why Sri Lanka and Bangladesh and even Pakistan as powers also want to serve India? How come all these big powers like UK and Australia are scared of India. Has India paid huge sums as FDI to these countries to boycott the WC t20?

At times Bangladesh plays bit seriously well, defeating both Sri Lanka and Pakistan and reaching the finals to face “mighty cricket India”. Will BD sustain the tempo against India or collapse for whatever reason?

No one knows it for sure. Big secrecy? Most cricketers today are on the payrolls of India’s some of richest IPL bosses and possibly of BCCI for their “dedicated” services in honour of India, making it shine perpetually on the field.

For India, like its neighbors Pakistan and Sri Lanka, cricket is perhaps more profitable business than foreign trade these countries conduct. Mafias make huge money both from black and white from cricket. Lankan cricketers, who cannot but play in IPL as their duty, appear to consider Indian currency too valuable.

No matter how the budget is prepared and presented in the parliament, mafias and middlemen continue to thrive.

The budget would be forgotten by the government and people sooner than later, but not the cricket matches, because budget does not enjoy the importance the cricket does. Budget or no budget, India can go on but without cricket dramas it appears India simply cannot exist. One can’t say so sure about other countries if they are also so innocently emotional….

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South Asia

Pakistan PM’s Saudi affair likely to backfire

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Pakistan’s relations with Saudi Arabia flourished during the previous government headed by Nawaz Sharif, primarily due to his personal business interests in the Kingdom and friendly association with members of the Saudi royal family. Despite the criticism at home, Sharif never missed an opportunity to eulogize the Saudi rulers and support their wrongs.

During Sharif’s tenure as Prime Minister, while Pakistan’s ‘love affair’ with Riyadh blossomed, relations with Tehran plummeted. When the ambitious gas pipeline project was shelved by the Sharif government in 2015 under the Saudi pressure, some experts couldn’t resist the temptation of reading the obituary of Iran-Pakistan friendship. It seemed game over.

But the political transition in Islamabad this year rekindled hopes of a new foreign policy taking shape in Islamabad under the populist premier Imran Khan.

In his victory speech, Khan made it categorically clear that he would like to strengthen ties with allies in the Middle East, including Iran and Saudi Arabia. During his first meeting with the Iranian envoy to Islamabad, Khan reiterated his desire to bolster ties with Tehran and revive important projects that had been put on the backburner by the previous political dispensation, including the gas pipeline.

Experts termed it a “significant shift” in Pakistan’s foreign policy as his predecessor was seen overtly inclined towards stronger Pakistan-Saudi relations than Pakistan-Iran relations. Writing in The New Arab, Dr. Fazzur Rahman Siddiqui, a fellow at Indian Council of World Affairs, said with the exit of Nawaz Sharif, Saudi Arabia had lost a reliable ally who never concealed his affection for the Gulf states in general, and Saudi Arabia in particular “for both personal and strategic reasons.”

It was widely believed that Khan’s approach will be different from Sharif and he will not yield to covert pressures from Washington or Riyadh. At least that is what appeared.
When Khan embarked on his first foreign trip to Saudi Arabia, keeping alive the tradition set by his predecessors, he sought to underscore that Riyadh will remain a priority for Pakistan’s foreign policy. Pertinently, it was President Hasan Rouhani of Iran, not King Salman of Saudi Arabia, who first extended an invitation to him.

But the faith in his leadership or his vision for ‘Naya Pakistan’ (new Pakistan) was not yet dented. The massive army of his followers on Twitter ensured that the public opinion, or at least the opinion of netizens, was firmly in favor of his leadership and policies.

As the country’s fiscal deficit inflated to 6.6 percent of gross domestic product (GDP) in the 2017-2018 financial year, Khan panicked. He boarded the plane to Riyadh again, this time to seek funds. To woo the Saudi rulers, Khan said Riyadh had “always stood with Pakistan in difficult times and the Pakistani government and its people highly acknowledge it.”
Speculation had been put to rest. Khan was walking in the footsteps of his predecessor.

Following his second visit to Riyadh, Saudi regime announced $6 billion in financial support to Islamabad. It corresponded with the international outrage over the cold-blooded murder of Saudi journalist Jamal Khashoggi. Even as many world leaders boycotted a Saudi investment conference, the so-called ‘Davos in the desert’, over Khashoggi’s death, Khan attended the event.

On asked why he attended the conference when many other world leaders had turned down the invitation, Khan said Pakistan was “desperate” for Saudi loans to shore up the flailing economy.

“Unless we get loans from friendly countries or the IMF, we actually won’t have in another two or three months enough foreign exchange to service our debts or to pay for our imports. So we’re desperate at the moment,” he was quoted saying by the Middle East Eye.

Khan conceded that his immediate foreign policy priority was maintaining good relations with Saudi Arabia despite unprecedented outrage over Khashoggi’s murder by Saudi officials or the outcry over Saudi’s horrendous war crimes in Yemen.

Pakistan, which had previously maintained a neutral stance on Yemen war, might now be forced to support the Saudi onslaught there, some observers fear. If Khan can ignore a reprehensible crime like the killing of Khashoggi because of Saudi petrodollars, it can be expected that he will support the Saudi war crimes in Yemen also, although he has so far resisted doing that.

While Khan has adopted a strong and unwavering stance against the US, he seems to have succumbed to the temptation of being subservient to the Saudi Kingdom, for funds. That is where he risks losing the goodwill he has earned back in Pakistan and in the international community.

At a time when the world is saying ‘no’ to Saudi Arabia, Khan is part of a tiny minority that is going against the tide. This approach will only isolate Pakistan and it has isolated Riyadh and Washington.

Being subservient to Saudi interests also means that Khan will be forced to toe his predecessor’s line on Iran. If that happens, Islamabad will again be forced to shelve the gas pipeline project, which is being described as critical to Pakistan’s energy requirements.

Khan is walking a tightrope. Wisdom lies in taking informed decisions in the best interests of Pakistan keeping in view long-term goals. In the cricketing terminology, the cricketer-turned-prime minister could do well by playing the forward defensive shot rather than the mistimed stroke in the air.

First published in our partner MNA

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Pakistan a peace loving nation

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Muslims when meeting each other greet “Peace be upon you”. Islam is the religion of Peace and Love, Islamophobia is the creation of a few minds only. There is no doubt that there exists few criminals in every society, every religion, and every country, but such exceptions, may not be used to blame the whole nation, religion or country. Since its independence Pakistan has been promoting peace and stability around the world. Pakistan’s Peace-keeping missions have been playing important roles around the world to maintain peace in troubled areas. We are major contributor to Peace-Keeping Force and have been part of almost all of UN Peace-Missions, during the history of 7 decades. Pakistan is supportive of any efforts by any nation towards promotion or maintenance of peace.

Recently, UNGA’s Disarmament Committee adopted Pakistan’s resolutions with an overwhelming support, in New York on 9th November 2018. Three resolutions proposed by Pakistan were adopted by the UN General Assembly’s First Committee with an overwhelming support. The whole world supported Pakistan’s resolution while India was the only country to oppose them.

In fact, the resolutions highlight the importance of regional approaches to disarmament, which complement global disarmament efforts and stress the need to promote confidence building measures for enhancing regional and international peace and security. The resolution on conventional arms control was adopted by a large majority of 179 countries. India was the sole country to vote against the resolution.

Earlier, a big victory for Pakistan came, on November 1stwhen the Committee also adopted Pakistan’s resolution on assuring non-nuclear weapon states against the use or threat of use of nuclear weapons by 122 votes. The First Committee of the UN General Assembly which meets annually deals with disarmament, global challenges, and threats to peace that affect the international community and is mandated to seek solutions to global security challenges by considering all disarmament and international security matters within the scope of the UN Charter. Pakistan’s role in disarmament was admired and non-proliferation of uranium. We strongly condemn biological and chemical weapons and strictly adhere to UN decisions.

Pakistan is a responsible country and always exploring the opportunities of peace. Pakistan has always initiated the peace process with India and sincerely tried best to resolve all issues with India, including Jammu and Kashmir, by a peaceful dialogue. Pakistan respects UN, Respect UN mandate, Respect UN Charter, and wants others to do the same. It believes in diplomacy, and there is precedence that some of the more complicated issues around the world, has been resolved by diplomacy, then why not Pakistan-India issues be resolved by dialogue too.

We support the supremacy of UN and all nations must respect the UN. We always stand with the oppressed and raise voice for the victims. Our struggle for justice and righteousness is always admired. We keep on struggling for global peace and be part of any peace process around the world.

The Indian opposition to Pakistani resolution and persistent refusal to leave Kashmir has exposed the true Indian face. The recent International Amnesty report on Human Right violation in Kashmir was a big blow to India. Indian atrocities against its own minorities and lower caste Hindus is condemned widely. Indian opposition to the UN resolution on Palestine is also an example of India’s international position.

It is time that serious notice is taken by the UN, International Community and all conscious individuals to stand up for International Peace, Justice and Human Rights.  We all should keep on struggling for a better world for our next generation. We should be united for “Peace, Stability and Prosperity” for humanity globally.

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The Making of Modern Maldives: A Look at Maumoon Gayoom

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Authors: Srimal Fernando and Pooja Singh

Former Maldivian President Maumoon Gayoom occupies an important place in Maldivian political history largely because he guided this equatorial island nation to unprecedented levels of economic growth and also through tough times when democracy was challenged. Gayoom has a national as well as international reputation that made his name familiar to the rest of the South Asian countries. It was after his return from Nigeria’s Ahmadu Bello University as a lecturer, Gayoom commenced his political journey as a close aid of prime minister Ahmed Zaki in mid-70’s and later as a cabinet minister under Ibrahim Nasir. Gayoom’s leadership embarked on a more reformist approach in the first two terms during his presidency. He was able to take credit for the rise of the tourism sector and an increase in the fish productivity. In Male, as well as in the rest of the Maldivian islands, building of small fisheries harbors were accelerated under the rapid development programs initiated under his presidency. When one looks at the Maldivian foreign policy, Maumoon was credited as one of the key founders of the South Asian Association for Regional Cooperation (SAARC) in 1985. Hence, he raised global awareness on climate change on the international arena. In this context, especially the awareness on small island nations facing rise in sea water levels which affects the livelihood of the islanders was a key theme which brought international attention. On the development side, the Hulhulemale reclamation project and the upgrading of roads and other infrastructure initiatives that he implemented are highly credited for by the Maldivians. In fact, the people’s president who visits the islands regularly was named as “A Man for All Islands” by the famous author in his book about Gayoom’s biography.

Early in his administration, former president introduced socio-economic experiments in reawakening the islands. His administration accelerated the economic growth in the twenty Atolls from Northern Haa Atoll to Southern Seenu Atoll instilling a degree of optimism and enthusiasm among the Maldivians. Yet another economic achievement in the tourism sector was the increase of luxury resorts from two in 1978 to hundred by 2008. Gayoom’s career is most relevant due to his performance and for changing the country’s political system to a multi-party democratic system where the power is vested on the citizens.

Another milestone during his tenure was to expand the average income of Maldivians from US$ 377 in 1978 to US$3,654 in 2008. However, towards the end of his presidency, the first signs of irreconcilable difficulties with the Maldivian opposition led by Mohamed Nasheed, the leader of Maldivian Democratic Party (MDP) started emerging in 2000. The Maldivian pro-democracy movement started in Male in 2003 and then moved to other Islands. As a result, Maldives adopted a multi-party political system and in 2008. In the same year the presidential campaign came to a climax where in the second phase of the presidential elections, the confident president had felt a constant sense of uncertainty since most of the opposition presidential candidates supported Mohamed Nasheed, the leader of the Maldivian Democratic Party. Gayoom lost the election and Nasheed the opposition leader assumed presidency.  The courageous former president Gayoom transferred the presidential powers to the newly elected president smoothly.

In fact, the reformist former president Gayoom formed the Dhivehi Rayyithunge Party and later, he was one of the key founders of the Progressive Party of Maldives (PPM) where his half-brother, Yameen Abdul Gayoom shared powers within the party. Hence, Qasim Ibrahim, a former finance minister under Nasheed’s government and also close confidant of president Gayoom led the Jumhooree Party (JP) which combined with PPM in 2013 presidential elections.

Unfortunately, in 2012 the overthrow of president Nasheed one of New Delhi’s closest allies in South Asia shocked the diplomatic circles on both sides of Asia as well as in the west. It took more than five years for Gayoom’s PPM party under the presidency of Yameen to return to power. However, due to widespread corruption and authoritative rules under Yameen’s presidency, many of the opposition party members such as former Maldivian president Nasheed, Jumhooree Party leader Qasim Ibrahim and many other political leaders who opposed the undemocratic rule were prisoned through unlawful means.

During the darkest period of the Maldivian politics from 2017 to September 2018, the lone voice of the public opposition belonged to a few opposition leaders such as, Maumoon Abdul Gayoom, Ibrahim Mohamed Solih cannot be forgotten. In the same period, former president Gayoom, Nasheed and several opposition members created a united opposition to unseat president Yameen and his majority party rule through democratic non-violent means. One of the major reasons for this change by Gayoom in Yameen’s leadership was the widespread corruption and the authoritative rule. Finally, president Yameen prisoned former president Gayoom and his son, Faris Maumoon. This was one of the main reasons where large number of Gayoom supporters broke away from PPM led by president Yameen. This reason influenced the 23rd September 2018 presidential elections where opposition common candidate Ibrahim Solih saw a massive victory margin against president Yameen.

One could argue that, Gayoom, the president who guided Maldives to economic prosperity was the same charismatic leader who guided the South Asian Island nation towards democratic maturity. Maumoon Gayoom has been the most unpredictable political influencer in the modern political making of Maldives.

*Pooja Singh, a scholar of Masters in Diplomacy, Law, Business at Jindal School of International Affairs, India.

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