Editorial 1 : Putin & Xi
Introduction: The 43rd meeting between the Russian President, Vladimir Putin, and the Chinese leader, Xi Jinping, last week in Beijing underlines the growing anti-Western convergence of strategic interests between two of the world’s longest serving leaders. The deepening relation is causing uneasiness among Delhi’s strategy makers.
Putin and Xi: Strengthening Russo-Chinese Relations in the 21st Century
- Since he took charge of Russia in 2000, Putin has made a sustained effort to boost ties with China even as he explored a modus vivendi with the West.
- At the turn of the 2000s, a rising China was celebrating its special ties to the United States and Europe but found it useful to develop strong ties with Russia.
- Since his ascent to the top in Beijing, Xi Jinping has challenged the US primacy in Asia and doubled down on a strong partnership with Russia.
- As their contradictions with the US began to deepen over the last decade, both Putin and Xi have elevated their bilateral collaboration into a comprehensive strategic partnership. On the eve of his invasion of Ukraine in February 2022, Putin travelled to Beijing to proclaim an “alliance without limits”.
The Sino-Russia bonhomie surprised the world
- Putin and Xi have surprised the Western observers who had been arguing that Russia and China can’t get too close to each other given the range of their competing regional geopolitical interests and the intensity of their stakes in economic engagement with the West.
- Yet, Putin and Xi have shown that they can put their divergences aside in building a new axis rooted in their shared interest in challenging the West.
- The latest summit has highlighted their efforts at political coordination and mutual support on their respective national priorities — Ukraine for Russia and Taiwan for China.
Sino-Russian partnership to Counter US led World order
- Putin and Xi also denounced the US interventions in Europe and its effort to build new coalitions like the Quadrilateral Forum (in which India is a member along with Australia, Japan and the US).
- Putin and Xi also underlined their commitment to build a “multipolar world”.
- They reaffirmed their ambition to counter American hegemony over the domain of international finance.
- If America has been pressing China to limit its cooperation with Russia, the usually wooden Xi thumbed his nose against Washington with a rare hug to Putin.
Reevaluating India's Strategic Assumptions: The Moscow-Beijing Alliance and its Implications for Delhi
- Delhi, like many Western chancelleries, had been betting on the thesis that Moscow and Beijing would not collaborate beyond a point.
- In a corollary to this thesis, Delhi has been hoping that Putin will not ignore India’s concerns in drawing too close to a China that has emerged as India’s principal external challenge.
- The time has come for Delhi to reexamine its Russia thesis and its corollary.
- Moscow today is more dependent than ever before on Beijing, especially since Putin burned its bridges with the West in invading Ukraine.
- There is no doubt that China is the senior partner in the relationship with Russia.
- Delhi has strong reasons to worry that Putin’s support for China’s positions in the Indo-Pacific, would undermine India’s effort to build a ‘multipolar Asia’ and magnify India’s security vulnerabilities in relation to China.
Conclusion: As Russia and China solidify their alliance, India faces heightened security vulnerabilities and must reconsider its strategies to effectively navigate the evolving power dynamics in Asia. A proactive and nuanced approach is essential for India to safeguard its interests in a rapidly changing world order.
Editorial 2 : House is the key
Introduction: Here is a Hindi proverb, “Chhoti chabi bada tala khol sakti hai” (a small key can open a big lock). This may hold some lessons when it comes to big-picture thinking on a particular reform agenda that has recently captured policymakers’ attention: Transforming India’s manufacturing sector.
India's Economic and Manufacturing Ambitions
- Economic Growth Target:
- Aim to grow India’s economy to $10 trillion by 2035.
- Increase manufacturing’s share of GDP from 15% to 25%.
- Employment Goals:
- Enhance employment elasticity of growth (more jobs per unit of output).
- Achieve a four-fold growth in manufacturing.
- Government Initiatives:
- Utilize post-Covid opportunities presented by China's situation.
- Implement Production Linked Incentives (PLIs).
- Promote the "Make in India" initiative.
- Focus on key sectors like electronics and semiconductors.
India's Manufacturing Push and Workforce Empowerment
- Pre-Election Government Initiative:
- Ministries prepared 100-day plans for swift action post-election.
- States are actively attracting large-scale manufacturers (Foxconn, Micron, Tata).
- Industrial Development:
- Focus on industries like assembly and packaging in Sriperumbudur.
- Development of an Electric Vehicle hub in Hosur.
- Emergence of mega factories across India, with several already established.
- Labour Considerations:
- Importance of the workforce as the third factor of production (labour).
- The need to address the challenges faced by factory workers.
- Worker Empowerment Strategies:
- Provision of safe, on-premises or factory-adjacent accommodation.
- Housing solutions for managers, supervisors, and entry-level workers.
- Potential benefits: improved skilling, productivity, and reduced attrition.
Addressing Workers' Accommodation in Indian Manufacturing
- Women-Centric Factories:
- Josh Foulger advocates for women-only or women-majority factories to empower workers and women.
- Apple commits to building 78,000 units for assembly workers through Foxconn in India.
- Current Workforce Challenges:
- Most factories source workers from ad hoc accommodations in cities and peripheral areas.
- Workers face long commutes (about two hours each way), costing over Rs 5,000 per worker per month. (In Bengaluru)
- Long commutes lead to exhausted workers, affecting productivity.
- International Examples:
- China: In situ housing for workers, such as Foxconn’s Guangzhou factory with dormitories for over 300,000 workers.
- Although, Large-scale housing has challenges, particularly noted during Covid.
- South Korea: Stringent labour laws and worker-friendly policies might be more suitable for India (being a democracy like South Korea).
- Historical and Contemporary Lessons from India:
- Public Sector: Bhilai steel plant with housing and community infrastructure.
- Private Sector: Tata Steel Jamshedpur with integrated worker accommodations.
- The central idea remains the same: addressing workers' accommodation is crucial for large-scale manufacturing growth.
- Key Takeaway:
- Ensuring proper housing for workers is both a practical and moral imperative to boost India's manufacturing sector effectively.
Policy Implications of Adding Workers’ Accommodation to Manufacturing Framework
- Land Allotment Adjustments:
- Extend land allotment to include workers’ accommodation.
- Adjust industrial land allocation regulations at the state level.
- Flexible operating arrangements: state government, company-run, or specialized institutions managing housing assets.
- Example: Growth in the student housing market due to attractive unit economics.
- Union Government Role:
- Provide tax incentives like GST reduction and fiscal incentives for investments in workers’ accommodation.
- Tag construction finance for workers’ housing as a priority sector.
- Collaborative financing through the National Investment and Infrastructure Fund (NIIF) for credible projects.
- Private Sector Leadership:
- Establish top-notch workers’ accommodation driven by economic benefits:
- Reduced transportation expenses.
- Increased productivity and training capabilities.
- Reduced workforce attrition.
- Lower carbon footprint.
- Triangular Leadership:
- Collaboration between the Centre, state governments, and private sector firms.
- Incorporate workers’ accommodation in the new government's 100-day plan as a key strategy to unlock India’s manufacturing potential.
Conclusion: The worker housing is the key to unlocking India’s manufacturing ambitions. Triangular leadership between the Centre, state and the private sector firms can help deliver on this important agenda. Economic factors will steer this enlightened self-interest.