Italy joins China’s Economic Silk Road project, Oman allows US military to use its ports
March 25, 2019

Story 1 -Italy, China sign new 'Silk Road' protocol

Italy on March 23, 2019 signed a "non-binding” protocol with China to take part in the nation’s Belt and Road Initiative (BRI), which aims to link China with Europe.

With the move, Italy has become the first G-7 country to sign up for the massive project, which is seen as a new Silk Road that will have trade links stretching from Asia to Europe.  In doing so, Italy has sparked unease in the United States and its European Allies, who have previously expressed concern over China's growing global influence.

Note

The agreement was signed during Chinese President Xi Jinping’s visit to Rome, Italy’s capital. It was signed by Italy’s Deputy Prime Minister Luigi Di Maio and Chairman of China’s National Development Commission, He Lifeng.

Overall, 29 deals amounting to 2.8bn were signed during Chinese President Xi Jinping's visit to Italy. It was agreed that while big Italian gas, energy and engineering firms will be offered entry into the Chinese market, China's Communications and Construction Company will be given access to the port of Trieste to enable links to Central and Eastern Europe. China will also be involved in developing the port of Genoa.

Economic Silk Road: Everything you need to know!

The Belt and Road Initiative (BRI) or the Silk Road Economic Belt and the 21st-century Maritime Silk Road is a development strategy adopted by the Chinese government involving infrastructure development and investments in 152 countries and international organisations in Europe, Asia, Middle East, Latin America and Africa.

The initiative was unveiled by Chinese President Xi Jinping in September and October 2013 during visits to Kazakhstan and Indonesia.

The "Belt" refers to the overland routes for road and rail transportation called the Silk Road Economic Belt, whereas road refers to the sea route corridors or the 21st Century Maritime Silk Road. The Maritime Silk Road initiative was first proposed by Xi Jinping during a speech to the Indonesian Parliament in October 2013.

Until 2016 the initiative was officially known as One Belt and One Road initiative but the official name was changed as China felt that the emphasis on the word "one" will be prone to misinterpretation.

According to China, the initiative is a bid to enhance regional connectivity and embrace a brighter future, while critics of the initiative see it as a push for Chinese dominance in global affairs with a China-centered trading network.

Besides this, the levels of debt owed by African and South Asian nations to China have raised concerns in the West.

How would it benefit Italy?

Despite being one of the world's top 10 largest economies, Italy slipped into recession at the end of 2018 and its national debt levels have been among the highest in the eurozone.

In the midst of this, the new deal with China will open the prospect of new projects for Italian firms, it will also open up the Chinese market for Italian oranges as well as pave way for a partnership between Chinese tourism giant Ctrip with Italian airports.

The deal also promises to enhance the cultural tie-ups between the two nations with China pushing to have several Serie A football matches played in China.

Background

According to critics, China’s ambitious new economic Silk Road is predatory and it overwhelmingly favours China and Chinese companies.

In a show of dissent, Italy’s other Deputy Prime Minister, Matteo Salvini, who heads the right-wing League, was conspicuously absent from all official ceremonies during Chinese President Xi’s visit.

Salvini has notably urged caution about using Chinese telecom giant Huawei's next-generation 5G mobile technology.

In fact, the United States has warned its European allies that Huawei could use its 5G technology as a backdoor for spying, a claim that China has strongly rejected.

Story 2- Oman signs deal to allow US military to use its ports

Oman on March 24, 2019 signed an agreement with the United States, allowing American ships and warplanes to take advantage of its ports and airports.

The framework agreement is aimed at bolstering Oman-US military relations. It was signed between the defence ministries of both the nations.

Key Highlights

• The agreement will allow the US forces to take advantage of the facilities offered at some of Oman’s ports and airports during visits of the US military vessels and aircraft, particularly in the port of Duqm.

• The Duqm port is located in southern Oman on the Arabian Sea and around 500 kilometres from the Strait of Hormuz.

• The Strait of Hormuz is crucial to global energy supplies, with about a third of the world's seaborne oil passing through it every day.

• The narrow waterway is also an international transit route through which American forces routinely pass. It has, in fact, witnessed tense encounters between the American and Iranian forces in the past.

Background

The United States has a number of military bases across the Gulf with the largest in Qatar with about 10,000 troops.

Shiite Iran has repeatedly threatened to block the strait due to tensions with Sunni-ruled Gulf nations, including its main regional rival Saudi Arabia.


Explained- Jet Airways Crisis: Founder Naresh Goyal and his wife Anita Goyal to step down
March 25, 2019

Jet Airways founder and principal promoters Naresh Goyal and his wife Anita Goyal are likely to step down from the board and leave the airline amid the reports of looming financial crisis in the airlines.

Naresh Goyal is presently in London, and may address all 23,000 employees from there. The Jet Airways was founded nearly 25 years ago by the Goyals in 1993.

However, the CEO of Jet Airways, Vinay Dube is expected to stay on to steer the airline carrier out of the current financial crisis.

Etihad’s stake in Jet Airways

The second equity partner in Jet Airways, Etihad, having 24 percent stake, might stay on board for some time now. Etihad's stake will be diluted in the near future too.

Abu Dhabi's Etihad Airways infused USD 600 million for a 24 percent stake in the airline in 2013. The infusion helped Jet in paying off its debt and fight the growing domestic competition.

Previous exits in Jet Airways

The exit of Naresh Goyal and his wife Anita Goyal is not the first exit of a leader from the board of Jet Airways.

Earlier in November 2018, Ranjan Mathai had left Jet Airways board as an Independent Director. Vikram Singh Mehta too had put in his papers.

Anticipated new joiners

As per the media reports, former SBI Managing Director and former Jet Airways board member Srinivasan Vishvanathan might join the airline’s top leadership. Vishvanathan was on the Jet Board as an Independent Director till August 2018 and has served the company for nearly three years.

Lenders may also invite former SBI Chairman and ex CVC Commissioner Janki Ballabh to the Jet Airways Board.

Jet Airways: A defaulter

Indian full-service carrier Jet Airways on January 1, 2019 informed the stock exchanges that it had defaulted on its loan repayments to banks. Soaked in financial losses and debt of over USD 1 billion, the airline is struggling to even pay out salaries to employees.

It has defaulted in making payments to banks, suppliers, lessors and pilots, a situation that forced the airline to ground as many as 40 planes.

Action by Lenders

The lenders consortium may invoke the entire 51 percent stake of Naresh Goyal in the airline, and will look for a new buyer.

On March 31, 2019, the lending banks would classify the account of the Jet as a non-performing asset (NPA), as per the RBI’s Income Recognition and Asset Classification guidelines.

Once a company announces its failure to make payments, lenders are given a total of 180 days from the first day of default to implement a resolution plan for large stressed accounts. If lenders fail to implement the resolution plan, they then refer the firm for insolvency proceedings.

Why ‘Insolvency’ route won’t be easy for Jet Airways?

Though lenders may advice insolvency route, however, it will not be easy for Jet Airways having no prospect of any obvious investor.

On the other hand, if due to non-payment of dues and salaries, lease agreements for planes are cancelled and the employees move to other organizations, the recoveries might be low. Lenders may not find any tangible assets of to attract new buyers under the Insolvency and Bankruptcy Code (IBC), 2016.

This situation will leave the lenders with the only option to operate the airlines themselves for some time and look for a suitable buyer thereafter.

What led to financial crisis at Jet Airways?

Increasing cost of aviation fuel


The airlines operate on the Aviation Turbine Fuel (ATF), the price of which is determined by global players. The increasing cost of the fuel took a heavy toll on Indian airlines, especially on Jet Airways as it operates on international routes as well.

However, the increase in fuel cost could not be dealt with by increasing the cost of passenger tickets due to low-cost model of the planes.

Low-cost model

The low-cost model of Jet Airways’ planes is one of the biggest factors behind rising operational costs of the airline. Though the airline undertook various measures to cover-up the same by offering heavy discounts on flight tickets, it only contributed to increasing costs and losses at the same time.

Decline in operations

Due to the increasing financial losses and inability to pay for fuel and services, Jet Airways had to cancel over 40 flights a week in nine Gulf country routes, thus, leading to reduced flight operations that directly hamper the airline reputation and prominence.


Election Commission advisory to Media
March 25, 2019

The Election Commission of India (ECI) has issued guidelines to media on various issue related to elections like exit polls, publication of results etc.

Guidelines of Election Commission

Section 126A of the Representation of People Act 1951 prohibits the conduct of exit poll and dissemination of its results the hour fixed for the commencement of poll in the first phase and half an hour after the time fixed for the close of poll for the last phase in all the states. The advisory by the election commission states that exit polls can only be telecast after the final phase of polling for the Lok Sabha elections ends on May 19.

The advisory on exit polls is also applicable for Assembly elections in Andhra Pradesh, Arunachal Pradesh, Odisha and Sikkim.

The ECI has asked the TV, radio channels, cable networks, websites and social media platforms to ensure that the contents of programmes telecast during the 48-hour period before the end of polls in each phase do not contain any material, including views or appeals by participants that may be construed as promoting or prejudicing the prospect of any particular party or candidate as per the Section 126 of Representation of People Act 1951.

The advisory warns that any violation by broadcasters will be reported to the News Broadcasting Standards Authority (NBSA) by the Election Commission and will be dealt with by the NBSA under its regulations.

The news broadcasters are advised not to air any final or definite results until they are formally announced by the Election Commission. Further, such results should be carried with a disclaimer that they are “unofficial or incomplete or partial results or projections which should not be taken as final results.

The Election Commission has asked the political parties to not criticise other countries, or make any verbal attack on any community or religion, use defamatory or obscene remarks or incite violence during the broadcast time allocated in public broadcasting agencies.


World Meteorological Day 2019
March 25, 2019

World Meteorological Day 2019 was observed on March 23 with the theme “The Sun, the Earth and the weather”.

The theme recognises the critical role the Earth’s nearest star plays in what transpires on the planet. The energy from the Sun is taken up by all life forms to perform their biological functions. The Solar energy also regulates global climate, which, in turn, influences local weather conditions and the same energy is also absorbed by the oceans which carry it around the planet, creating further conditions for diverse marine life to exist.

World Meteorological Day

World Meteorological Day is observed on March 23rd every year to commemorate the coming into force of the Convention establishing the World Meteorological Organization on 23 March 1950.

The World Meteorological Day showcases the essential contribution of National Meteorological and Hydrological Services to the safety and wellbeing of society and is celebrated with activities around the world.

WMO provides world leadership and expertise for international cooperation in the delivery and use of high-quality, authoritative weather, climate, hydrological and related environmental services by its Members, for the improvement of the well-being of societies of all nations.


 
( Page - 1 of 3221 )