Editorial 1 : A swing in the Maldives
Introduction: The international evolution of the Maldives has long been framed in terms of the entrenched geopolitical rivalry between India and China. The new president of Maldives, Mohamed Muizzu, has muddied that framework by choosing Turkey as his first foreign destination.
What does this move of Maldives signify?
- It underlines the recent pattern of significant swings in foreign policy with every change of government.
- Smaller states of the Subcontinent are becoming attractive geopolitical targets not only for the US, China and Russia but also for middle powers like Turkey.
- Muizzu’s visit is also a reminder of Turkey’s growing strategic footprint in the Subcontinent and rising geopolitical friction between Delhi and Ankara.
Changes that India needs to learn about the geopolitics of the subcontinent
- First is the recognition of the growing political agency of the elites, even in the smallest of our neighbours.
- Contrary to the popular narrative, the small states in the Subcontinent are not mere “pawns” in the great power rivalries, including those between Delhi and Beijing.
- If Abdulla Yameen, the president of Maldives from 2013-18, ostentatiously played the China card against Delhi, his successor, Ibrahim Solih, swung the other way with his “India first” policy.
- Muizzu rode the campaign of “India Out” to claim power in the last general elections held in September. He is signalling the determination to increase Male’s political distance from Delhi.
- The external powers can now be seen as the “pawns” in the internal squabbles of the small states.
- A second change in the regional environment is the fact that rising middle powers can now match the major powers in their ability to deliver favours to the local elites.
- Over the last decade, Iran, Qatar, Turkey, Saudi Arabia, and the United Arab Emirates have all demonstrated the will and capability to act as external patrons — political, economic and military — to competing political factions in various states located in Africa, the Middle East and the Indian Ocean.
- Third, Turkey remains an underestimated power in the Indian strategic discourse despite its growing assertiveness in our extended neighbourhood, including Africa, the Mediterranean, the Caucasus, Central Asia and the Subcontinent.
- Erdogan has leveraged Turkey’s multiple identities to pursue his expansive geopolitical ambitions.
- Turkey is a founding member of the NATO alliance and straddles a critical location at the crossroads of Europe, Asia and the Middle East.
- It is a critical regional power in the Middle East, a self-proclaimed champion of Islamic and Turkic causes across Eurasia, and a dominant military power in the Black Sea and the Caucasus.
The significance of Turkey in India’s strategic calculation
- Turkey’s considerable goodwill for the Indian national movement in the first half of the 20th century was transferred mainly to Pakistan after the Partition and Independence in 1947.
- Since then, Ankara and Delhi have struggled to build a productive political relationship.
- Matters have become a little more complicated under Recep Tayyip Erdogan, who has dominated Turkey’s political landscape for the last two decades.
- He has intensified Turkey’s diplomatic and political support for Islamabad on Kashmir.
- Even as he turned the traditional partnership with Pakistan into a trilateral alliance with Azerbaijan, Erdogan has sought to raise Turkey’s profile in Afghanistan and Bangladesh.
- Getting Muizzu to travel to Ankara on his first foreign visit underlines the success of Turkey’s foray into the island states of the Indian Ocean.
- This is not a diplomatic bolt out of the blue. Last year, the Turkish foreign minister made the first-ever visit to Sri Lanka and the Maldives and laid the basis for deeper engagement.
- Turkey has now stepped in to seize the strategic possibilities opened by Muizzu’s plan to turn Maldives away from India.
- Erdogan rolled out the red carpet in Ankara for Muizzu, accompanied by his foreign, trade, defence ministers and other senior officials.
- Turkey’s ambition to draw the Maldives into its Islamic orbit figured prominently in the visit.
- Besides a bilateral trade agreement that was signed in their presence, Muizzu and Erdogan have reportedly discussed a range of other areas of cooperation, including defence.
- Turkey, with its flourishing arms industry, is well-placed to deliver significant military assistance to the Maldives as Muizzu pushes to end defence cooperation with India.
Way forward for India
- While near-term setbacks for India in the Maldives seem inevitable, Delhi must necessarily remain patient in engaging with the critical neighbour. India’s long-term bet in the Maldives must focus on four elements.
- One is the importance of India’s geographic proximity to the Maldives. This is unlikely to change despite the frequent shifts in the Maldives’ foreign policy.
- Second, India needs more and not less engagement with the domestic politics of the Maldives.
- Third, India must work with its like-minded partners in the Gulf to prevent any potential destabilisation of the Maldives by Turkey.
- Finally, as Turkey advances into the Maldives, Delhi can’t adopt a defensive strategy limited to South Asia.
Conclusion: Smaller states in the region have gone from being ‘pawns’ in fights between India and China, to using the big powers as ‘pawns’ in internal politics. Delhi must tread cautiously, engage with internal politics in the country, manage Ankara.
Editorial 2 : Combating fraud
Introduction: Since its launch in 2016, the Unified Payments Interface has transformed the payments landscape in the country.
What is UPI?
- The Unified Payments Interface (UPI) is a real-time payment system developed by National Payments Corporation of India (NPCI) that facilitates inter-bank transactions.
- It was launched in 2016 and has since become the most popular payment method in India.
- UPI is a single mobile application that can be used to send or receive money, make payments for goods and services, and transfer money between bank accounts.
The magnitude of digital transactions
- The pace of its adoption has been staggering - in October, 11.4 billion transactions worth Rs 17.15 lakh crore were routed through this system - driven in part by the increase in smartphone usage and access to cheaper mobile internet services.
- As a significant share of the peer-to-merchants and peer-to-peer transactions routed through this payments architecture are of less than Rs 2,000, it shows how widely this payments system is being used.
The consistent rise in digital frauds
- Accompanying the surge in digital transactions, has also been a sharp rise in digital/financial frauds.
- As per the Reserve Bank of India’s annual report, in 2022-23, 6,659 digital frauds (card/internet) were reported amounting to Rs 276 crore.
- This is up from 3,596 fraudulent transactions worth Rs 155 crore reported in the year before.
Government’s efforts to curb digital frauds
- To curb the growing incidence of such online frauds, the government is now planning to introduce some measures.
- The government is contemplating introducing a minimum time threshold for transactions occurring for the first time between two individuals beyond a prescribed amount.
- This could entail a four-hour window for transactions above Rs 2,000.
- This could create friction in payments — as per data from NPCI, in October, 22.5 per cent of peer-to-peer transactions were above Rs 2,000.
- Government officials, though, view this as warranted for alleviating cyber security concerns.
- After all, reports have suggested that the fraudsters employ a range of techniques, some quite sophisticated, such as phishing, malware, fake identity frauds and SIM cloning to cheat individuals.
- In some cases individuals have even been tricked into providing account details or downloading fraudulent apps, which indicates that the frauds have become even more technologically innovative.
World is struggling with digital frauds
- As per a report by TransUnion, across the world, 4.6 per cent of all customers’ digital transactions were “suspected to be fraudulent”.
- The report added that the “total volume of such suspected digital fraud attempts has increased dramatically.”
How the problem of digital fraud can be tackles?
- This issue needs to be tackled at multiple levels.
- One, it requires that players in the payments ecosystem regularly upgrade not only their IT infrastructure but their protocols as well in order to plug the gaps and minimise the vulnerabilities.
- Two, as fraudsters tend to prey on the individuals’ lack of awareness, improving consumer awareness, educating them about the newer methods of frauds is of critical importance.
Conclusion: On Tuesday, finance ministry officials met to discuss the growing incidence of digital payment frauds and financial crimes and the steps needed to counter them. A careful balance needs to be struck between minimising the risk of digital frauds and ensuring minimal frictions in the payments system.