The Hindu Editorial Analysis- 14 February 2024

1. India-UAE relations are bound by traditional credibility and trust

Topic: GS2 – International Relations – Bilateral Relations
Important for UPSC: Provides insights into regional dynamics and global relations by examining India-UAE diplomatic ties, economic cooperation, and strategic importance.

Context

● During PM Modi’s visit to the UAE, the article emphasizes the important personal relationship between him and UAE President Sheikh Mohamed bin Zayed, focusing on diplomatic ties, economic collaborations, and regional concerns.

Deep Personal Relationship:

• There is a trusting and credible personal rapport between President Sheikh Mohamed bin Zayed of the United Arab Emirates and Prime Minister Narendra Modi.
• departure from transactional diplomacy by stressing ongoing communication and strategic goals.

Key Visits and Interactions:

• PM Modi is currently on his third visit to the UAE in eight months, demonstrating the two countries’ vibrant relationship.
• Various interactions, including bilateral visits, COP28, G-20 Summit, and Vibrant Gujarat Global Summit.

Temple Inauguration and Cultural Ties:

• The visit’s unusual timing coincided with the religious calendar for the opening of a large Hindu temple in Abu Dhabi.
• In order to meet the religious and spiritual needs of the sizable Hindu community in the UAE, PM Modi requested land in 2015.
• 3.5 million Indians live in the UAE, and there is excitement surrounding the major “Ahlan Modi” event.

Strategic Diplomacy and Global Presence:

• The prime minister’s honorary role at the 11th World Government Summit, which is centered on “Shaping Future Governments,” in Dubai
• a stage on which India can voice opinions to a powerful international audience.
• Strengthening India’s economic ties and global presence.

Economic Initiatives and Agreements:

• Bharat Mart was established to increase Indian MSMEs’ exports and provide facilities in the Jebel Ali Free Zone Area of Dubai.
• Through the Comprehensive Economic Partnership Agreement (CEPA), India and the UAE are now trading partners, with the UAE being India’s third-largest trading partner.
• Combining CEPA and Bharat Mart could increase India’s exports of manufactured goods while lowering transaction costs.

Other Major Achievements:

• Initiation of the master’s program in energy transition and sustainability by the Indian Institute of Technology Delhi in Abu Dhabi.
• UAE’s growing investments will rank as India’s fourth-largest source of FDI in 2022–2023.
• The 14-year agreement between the Abu Dhabi National Oil Company and Indian Oil Corporation to purchase liquefied natural gas is necessary for India’s energy security.
• Advancement in the sensitive defense cooperation discussions.

Regional Security Concerns:

• Discussions about the worsening circumstances in the region, such as the hostilities in Gaza and the Houthi attacks on ships in the Red Sea.
• Possible threats to India’s economic expansion, highlighting the necessity of cooperation with regional nations like Egypt, Saudi Arabia, and the United Arab Emirates.

Conclusion:

• To sum up, the visit by Prime Minister Narendra Modi to the United Arab Emirates is indicative of the strong personal bond that has developed between him and Sheikh Mohamed bin Zayed.
• Beyond ceremonial events, the visit highlights economic collaborations, strategic partnerships, and joint efforts to address regional challenges, enhancing India-UAE ties.

PYQ: What is the impact of the I2U2 (India, Israel, UAE, and USA) grouping on India’s global political standing? (UPSC GS-2 2022 CSE (M)) (10 m / 150 words)

Practice Question:  Talk about the complex dynamics of relations between India and the United Arab Emirates, focusing on the importance of regional partnerships, economic cooperation, and individual diplomacy. (10 m / 150 words)

2. The reasons behind India’s need for extensive industrialisation

Topic: GS3 – Indian economy – Changes in industrial policy and their effects on industrial growth.
Crucial to UPSC’s efforts to assess sociocultural influences on industrialization and offer novel solutions to India’s economic problems.

Context

● The essay addresses India’s economic difficulties in the wake of COVID-19, emphasizing past industrial stagnation, suggesting high-skill services-led growth, and criticizing potential pitfalls and cultural barriers to advancement.

Introduction: The Economic Landscape Post-COVID-19

• The global economic landscape has undergone significant shifts in the aftermath of the COVID-19 pandemic.
• A retreat from globalization is evident, and nations are embracing industrial policy and state-led economic interventions.
• The European Green Deal, the US Inflation Reduction Act, and India’s Atmanirbhar Bharat are a few notable examples.
• While India has sustained growth post-pandemic, it faces challenges like premature deindustrialization and a skewed distribution of economic benefits.

India’s Historical Industrial Stagnation

• Throughout its 75-year history, India has struggled with industrialization; aside from the “Dream Run” of 2003–2008, manufacturing has continuously contributed less than 20% to output and employment.
• Even though labor-intensive industrialization was promised by economic reforms in 1991, the real world is still stagnant.
• India is facing a critical moment as a result of growing unemployment, stagnating industrial investment, and an increasing trade deficit driven by imports.

Rajan and Lamba’s Unconventional Perspective

• In “Breaking the Mould: Reimagining India’s Economic Future,” Rohit Lamba and Raghuram Rajan suggest a different approach to growth than the conventional manufacturing-led model.
• Rather, they support high-skill, services-driven growth that is fueled by IT.

Potential Pitfalls of Services-Led Growth

• Insufficient Work Elasticity: The growth driven by services has insufficient work elasticity. Labor leaving agriculture cannot be absorbed by the service sector as well as it could be by the manufacturing sector. Moreover, it exacerbates inequality by requiring a highly skilled workforce.
• Concerns about Inequality: Workers in the service sector make significantly more money relative to those without a college degree, especially when it comes to their wages. When compared to growth driven by manufacturing, this results in increased inequality.
• Education Inequalities: Mass school education has been neglected as a result of early investments in higher education. Due to this, there is an uneven distribution of human capital, with first-generation graduates from small towns and rural areas being favored over the traditional elite.

Culturally Rooted Diagnosis for Industrial Stagnation

• Lack of Mass Education: Industrialization has been hampered by the lack of mass education, which is related to cultural factors. According to Joel Mokyr, the advancement of practical knowledge is essential for both economic growth and technological advancement.
• Undervaluation of Vocational Skills: In Indian culture, there is a dearth of respect for vocations critical to manufacturing, like welding and electrical work, which inhibits natural innovation. Even though they are more expensive, vocational skills are undervalued.
• Caste system and social division: Class divisions stemming from India’s caste system are reflected in both new and old fault lines in education and economic opportunities. These discrepancies are made worse by the substandard state-run universities and schools.

Conclusion: The Need for Deep Industrialization

• Rather than depending only on the service sector, deep industrialization is advocated as a solution to India’s economic problems.
• Building the foundations of a more robust and equitable society is identified as requiring mass education, a revaluation of labor, and an emphasis on inclusive economic growth.

PYQ: An increase in the manufacturing sector’s GDP share is necessary for faster economic growth, especially for MSMEs. Comment on the government’s current policies in this area. (150 words, 10 seconds) (CSE (M) GS-3 2023) UPSC

Practice Question: Taking into account the importance of non-traditional approaches and sociocultural variables, how can India overcome its long history of industrial stagnation and achieve inclusive growth? Talk about it. (10 m / 150 words)