The oil risk — on the rise in international prices
India needs to expedite steps that can help minimise the impact of higher oil prices
As international oil prices head higher, India will have to brace (तैयार करना) itself for the economic risks of expensive energy. Brent crude oil futures were trading at about $70 a barrel on Friday, marking a four-year high and a price increase of close to 6% since the start of the year. The rise in international prices has been particularly sharp given that oil had been selling at below $45 in June. This is a rally of about 55% in a matter of just months. Oil price dynamics have often been explained by changes in the supply outlook influenced by the decisions of major oil producers. Oil trading at $70 should offer some respite (विलम्ब) to traditional oil producers like the OPEC members, which have suffered the onslaught (आक्रमण) of U.S. shale producers. According to the IMF, last year, for instance, Saudi Arabia would break even on its budget with oil at $70. The recent spurt (उछाल) in oil prices, however, seems to be more the result of a weakening of the U.S. dollar than anything else. The dollar has been gradually weakening against major global currencies since the beginning of last year. But the trend was given a new push following comments by U.S. Treasury Secretary Steven Mnuchin in favour of a weak-dollar policy. At Davos this week, Mr. Mnuchin noted that a weaker dollar would be good for American trade. However, given that the U.S. is right in the middle of a monetary tightening cycle, it is unlikely that the dollar will continue to boost oil prices, unless the Federal Reserve slows the projected pace of interest rate increases.
Consumers in India are already beginning to feel the pinch (तकलीफ देना) as petrol and diesel prices have hit multi-year highs. The retail selling price of both petrol and diesel in Delhi, for instance, has risen by close to ₹3 a litre since the beginning of 2018. The rise in domestic fuel prices is on expected lines given the policy of dynamic daily pricing of petrol and diesel adopted by the Centre. But as rising oil prices put pressure on domestic consumers, the government will have to desist (बन्द करना) from resorting to subsidies to ease the pain. It should work towards rationalising taxes on petrol and diesel to bring down retail prices. This will help consumers without imposing an undue burden on the oil marketing companies. An even bigger risk posed by higher oil prices is to the government’s fiscal management. With the fiscal windfall from low oil prices likely to end for now, the government should think for the long term and make crucial tweaks to its hydrocarbon exploration and licensing policy to expedite oil discovery and production. Simultaneously, it must take a leaf from China’s book and actively support Indian energy firms’ bids for overseas oilfields. Self-reliance is ultimately the best hedge (बचाव).
1. Brace: Prepare (someone) for something difficult or unpleasant.
Synonyms: prepare, get ready, make ready, gear up, nerve, steel, galvanize, gird, strengthen, fortify, bolster, buttress
2. Respite: A short period of rest or relief from something difficult or unpleasant.
Synonyms: rest, break, breathing space, interval, intermission, interlude, recess, lull, pause, time out, hiatus, halt, stop, stoppage, cessation, discontinuation, standstill
Antonyms: continuation, blame, employment, punishment, advance, censure
3. Onslaught: A fierce or destructive attack.
Synonyms: assault, attack, offensive, aggression, advance, charge, onrush, rush, storming, sortie, sally, raid, descent, incursion, invasion, foray, push, thrust, drive, blitz, bombardment, barrage, salvo, storm, volley, shower, torrent, broadside
Antonyms: defense, defensive, guard, shield, opposition, resistance
4. Spurt: Gush out in a sudden and forceful stream.
Synonyms: squirt, shoot, spray, fountain, jet, erupt
Antonyms: calm, doldrums, slump
5. feel the pinch: Experience hardship, especially financial.
Synonyms: suffer hardship, have less money, be short of money, be poor, be impoverished, suffer poverty, suffer adversity
6. desist: Stop doing something; cease or abstain.
Synonyms: abstain, refrain, forbear, hold back, keep
Antonyms: carry on, continue, follow through (with), keep up, run on
7. hedge: a physical object that blocks the way
Synonyms: barricade, fence, barrier, wall
Antonyms: door, doorway, entrance, entrance way, entry, entryway, gate, portal
ASEAN rising — on India-Southeast Asia cooperation
India and Southeast Asia need to move beyond summitry to deeper integration
As leaders of the 10 countries of the Association of Southeast Asian Nations gathered in New Delhi this week, India’s ties with ASEAN got a dose of both symbolism and substance. The ASEAN-India Commemorative (स्मरणीय) Summit, followed by their attendance at the Republic Day parade as joint chief guests, underlined the new consensus on the need for Southeast Asia and India to boost cooperation. First, as the demand for goods in Western economies comes down, the region needs to look deeper within to grow markets and increase trade. Second, continuing tensions between the “great powers” — between the U.S. and Russia, or the U.S. and China — are forcing the unaligned (असंरेखित) countries of ASEAN and India to forge a common understanding. China’s moves in particular, both its naval forays (सशक्त प्रयास) in the Indo-Pacific and its Belt and Road Initiative connectivity project, have the potential to change equations in the region. Third, as Singapore’s Prime Minister and the Chairman of ASEAN, Lee Hsien Loong, reminded the world in an editorial, and Prime Minister Narendra Modi said in his speech at the summit, India’s cultural and trade ties with Southeast Asia go back 2,000 years — and with Southeast Asia having come out of the overhang of Cold War divisions, India and ASEAN have a unique opportunity to reap (एकत्र करना) the potential of their geographic proximity. The Delhi Declaration they signed articulated their urgent concerns as ASEAN and India called for measures to deepen security, economic and socio-cultural cooperation, and connectivity. These include joint mechanisms for maritime transport, trade and a “code of conduct” for the South China Sea.
But it must not be forgotten that when ASEAN-India leaders last gathered together in New Delhi in 2012 to mark the 20th anniversary of the dialogue partnership, they had made a similar commitment to trade and maritime security, and several promises are yet to be realised. With trade with ASEAN at $76 billion, India ranks lower than not just the U.S. and China, but also South Korea, Japan and Australia. The Regional Comprehensive Economic Partnership negotiations launched in 2012 have been held up, largely because of Indian concerns over unfettered (मुक्त) access to Chinese goods and ASEAN resistance to movement of Indian services and labour. The other big unfulfilled promise is on connectivity, between ASEAN countries and India, as well as India’s connectivity through its Northeast to Myanmar and beyond. Work on the extension of the India-Myanmar-Thailand Trilateral Highway, the Kaladan multimodal highway, and Tamu-Kalay rail link to Myanmar has lagged (पीछे रह जाना) behind deadlines. Border trade posts and infrastructure in the Northeast need much improvement to attract investment in the region. India and the ASEAN countries have much to gain from each other — but heavy-lifting is required to integrate India into the ASEAN equation. Else, shared history and culture and political leaderships in sync may only yield rousing summitry.
1. Commemorative: Acting as a memorial of an event or person.
Synonyms: memorial, remembrance, celebratory, celebrative
2. Unaligned: Not placed or arranged in a straight line, in parallel, or in correct relative position
Synonyms: non-aligned, unaffiliated, unallied, non-allied, non-participating, uninvolved, non-interventionist
Antonyms: variable, devious, notched, serrate, rough, jagged, variable, disproportionate
3. Forays: A sudden attack or incursion into enemy territory, especially to obtain something; a raid.
Synonyms: raid, attack, assault, incursion, swoop, strike, charge, sortie, sally, rush, onrush, push, thrust, onslaught, offensive, bombardment
Antonyms: abstention, laziness, idleness
4. Reap: Receive (something, especially something beneficial) as a consequence of one’s own or another’s actions.
Synonyms: receive, obtain, get, acquire, secure, bring in, realize, derive, procure
Antonyms: forfeit, fail, plant, surrender, grow, reject, yield
5. Unfettered: Not confined or restricted.
Synonyms: unrestrained, unrestricted, unconstrained, free, unbridled, untrammelled, unchecked, unconfined, unimpeded, unhampered, uncontrolled, unbound, untied, unchained, unshackled, loose
Antonyms: bind, confine, enchain, fetter, restrain
6. Lagged: Showing a delayed effect.