RUSSIA’S VACCINE FOR CORONA AND HOW OTHER COUNTRIES WILL BE ABLE TO GET THE VACCINE

13.1 million cases of COVID19 and 573K death worldwide, right now everyone is fighting against virus scientist and pharmaceuticals are working hard to find a cure for this pandemic they are working for late, under the pressure of controlling this infectious disease. Recently in news and social sites it was viral that Russia has become the first country to complete the testing of COVID19 on the human being and according to reports, the medication is found effective.

Chief researcher and the head of clinical research on medication at Sechenov University – Elena Smolyarchuk said to the TASS news agency of Russia that “the research has been completed and it proves that the vaccine is safe. The volunteers are safe and will be discharged on 15th and 20th July” after so much of research and out of 100 vaccines this vaccine became first to be tested on the human being and also it is been claimed that for 2 years this vaccine will help people to fight against corona not only this it builds the immune system and helps immune to fight against the virus

When we will be able to get this vaccine in the market?

Right now there is no such announcement being made regarding the marketing of vaccines for other countries also few more trials are left regarding the vaccine.

It is quite clear if the vaccine will pass all the tests then maybe before launching the vaccine into the market Russia would help to cure the people of their country from corona, as everybody first thinks of their family and natives it is normal human nature and as we all know right now everybody is facing the economic problem and right now there is a problem of money as due COVID 19  every country has been spending large amount of money in the treatment and taking care of their people and this vaccine may become a way of earning for Russia and after treating there patient they might be launching the vaccine for the other countries. Right now there is no announcement regarding entering this vaccine in the commercial product stage. Also according to WHO (World Health Organization) right now there are 21 vaccines under the key trail. Everybody is trying their best to find the cure of pandemic everyday cases are increasing rapidly and so we all have to take care of our love once and also protect ourselves from COVID 19.

HOW ACCURATE IS RUSSIA’S CLAIM TO BE THE WORLD’S FIRST COVID-19 VACCINE?

Since the coronavirus outbreak has taken place, an abundance of fake or partially true news is spreading across social media even within a minute. Some prefer to believe them and without checking any authenticity they keep sharing vigorously. News of the developing coronavirus vaccine has now become a daily occurrence. However, this time which name has come up is a little different from the other countries, is Russia. COVAXIN, a coronavirus vaccine is developed by India, completed pre-clinical trials, and sanctioned for human trials, while Russia Sechenov University completes human trials on the world’s first coronavirus vaccine.

The university started its clinical trials of the COVID-19 vaccine developed by Russia’s Gamaleya Institute of Epidemiology and Microbiology in mid-June.

“Sechenov University has completed the test on volunteers of the world’s first vaccine against coronavirus,” Vadim Tarasov, director of the Institute of Translational Medicine and Biotechnology said.

The vaccine is being produced by the Gamaleya Scientific Research Institute of Epidemiology and Microbiology in partnership with the Russian Defence Ministry. Sechenov University conducted human trials.

As per the Centres for Disease Control and Prevention (CDC), there are three phases in the development of a vaccine. In Phase- I small groups of volunteers receive a trial vaccine. In phase II, the vaccine is given to those who have features (age, physical health) similar to those for whom the new vaccine is developed. In Phase III, the vaccine is given to thousands of volunteers and is sent for safety and efficacy testing. According to TASS, the Russian Defence Ministry stated, “an in-ward treatment of the first group of volunteers, who were tested for the safety and tolerability of the vaccine, will end on 15th July.

“On Monday, 13th July, the second group of volunteers, who are tested for the efficiency and immunogenicity of the vaccine, will be injected with the second component of the vaccine against the coronavirus, ” the ministry added.

TASS also reported that both the first and second groups were forming a better immune response after the injections of the vaccine.

There are over 150 candidate vaccines for the coronavirus being developed globally. Nearly half of these are still stuck in pre-clinical stages. About 15 vaccines are in phase- I trials and around 10 are in phase- II. Rest which is very few are in phase- III trials. Several rounds of regulatory and administrative approvals are required even after the successful completion of phase-III.

Russia is currently working on eight vaccines, according to Sputnik but 10 vaccines have been listed according to clinical trials website. Many Indian pharma companies like Zydus already completed their pre-clinical and moving forward to clinical trials. COVAXIN, developed from Bharat Biotech in Hyderabad was also approved for human trials.

Scientists from all across the world are working laboriously to make virus-free earth. Though there has been a vast modification in the medical arena over previous times, the development of a vaccine takes several years and coronavirus vaccine is not an exception. But we should keep in our mind COVID-19 is temporary like another pandemic.

Hence, we can expect a refined world shortly after this epidemic is over.

– Saswati Chattopadhyay

South China Sea:- A rectified view of “global turmoil”

By Shubham Yadav

The South China Sea is a global flashpoint, with many parties directly and indirectly involved, the dispute is far from over. Earlier it might have been a dispute of territorial and water regions but now it stands symbolic to global domination, hence no one wishes to step back. Every move, stand, and strategy now have serious implications. The South China Sea is part of the pacific ocean, encompassing an area of about 35,00,000 square kilometers positioned below the South East Asian region; this sea falls as EEZ if undisputed for many nations and has the potential to boost economic conditions.

  • WHY SO IMPORTANT Approximately 3.37 trillion U.S. dollar trade passes from this region, if china establishes its complete dominance over this region it potential can affect the global trade system and ultimately the global economy. Also, this region has a vast amount of natural resources such as petroleum and a huge amount of fish catch.

Another reason for its significance is that any biased resolve of this dispute will destabilize the complete South East Asia which will not only impact the Trade sector but also travel, space, and sea exploration.

  • History of this region

History of this region remains dubious because of different claims by different nations and the attached evidence because the evidence tells a tale entirely contradicting claims of other nations. Some notable ones are Japan claim that during world war when Japan used these islands as bases these were completely out of occupation. Japan after World War II abandoned these Islands thereafter starting turmoil among the regional parties with claims. China due to its power stature is now in possession of these islands.

  • Parties Involved & Claims
  • China is the most prominent party involved in this dispute it claims complete control over the Island groups and entire sea region. China issued a map in 1947 detailing its claim, but its claims fall flat as there were no coordinates assigned to its claim.
  • Vietnam has its claims settled over 75% of the island region especially Spratly and Paracels Island with evidence of active ruling in the 17th and 18th Centuries. Vietnam was involved in two physical clashes in 1974 and 1988 with China over this territory and suffered major losses of life and prestige.
  • The Philippines is another major claimant in the area. It invokes its proximity to the Spratly Islands as the main basis of its claim for part of the grouping.
  • Malaysia and Brunei claim territory that they say is within their EEZ (economic exclusion zones), as defined by the United Nations Convention on the Law of the Sea.
  • Brunei does not claim any area on the disputed islands.
  • Malaysia claims some islands in the Spratlys.
  • America is not a direct party in this dispute but as it has assumed the role of guardian of the world and for its vested interest in the free flow of trade it emerges as biggest opposition to China.

India

India too isn’t a direct party but it has reasons to act seriously in this matter

1. 55% of International Indian trade (Goods and Services) passes through the Strait of Malacca. Free navigation will be objected as soon as this territory is in complete control of China.

2. To rise as an International superpower India to wants to weigh in International matters of Global concern, being a regional power South China sea is the biggest opportunity for India.

3. Policies of china have always been Anti-Indian such as their stands on Kashmir, CAA, and Indian entry in G8.

4. India has vested interest in Vietnam as India is responsible for petroleum extraction and if Vietnam fails to settle its claim India will lose a chunk of its benefits.

Recent Outbreak

America in wake of its scheme to pressurize China on every front keeps increasing its presence in the South China Sea on the name of free navigation.

Recently America placed the USS Ronald Reagan and the USS Nimitz Aircraft carriers in South China. This move is likely to be consequential and we are yet to grasp of its aftermaths

This world is not going to see an end to this conflict real soon as this war is now not only of Territory, it most certainly is a conflict of prestige and ego.

The 1991 Economic Crisis: A blast from the past

The Indian economy has been one of the largest economic contributors to the world from 1 AD as revealed pieces of evidence. According to History, India contributed to around 35 to 40% of world GDP. Post-British rule marked a combination of protectionist, import-substitution, Fabian socialist, along with social-democratic policies that dominated the Indian economy. The economy of that time was characterised by extensive regulation, protectionism, public ownership of large monopolies, pervasive corruption and slow growth. Economic liberalization in 1991 moved the country towards a market-based economy. India by 2008 established itself as one of the world’s faster-growing economies making a mark in the world economic arena.

The Indian economy has traversed a long path to reach where it is today, good or bad. To understand how and when it reached a position of extreme significance in the world economic arena, it is important to know how it has begun in the first place. A run-through is hence significant to understand how the Indian economy is what it is today:

  • Ancient and medieval eras         

A permanent settlement, Indus Valley Civilisation, flourished between 2800 BC and 1800 BC. History has shown the existence of trade between this civilization and many others. Moreover, maritime trade is believed to be carried out copiously between South India and Southeast and West Asia from the 14th century AD. The Malabar and Coromandel Coasts is assumed to be sites of important trading centres from as early as the 1st century BC. They were supposedly used for ‘import and export’ and ‘transit points’ between the Mediterranean region and Southeast Asia. Several scholars opined that trading between India and West Asia along with Eastern Europe was active between the 14th and 18th centuries. In addition to this, the Saurashtra and Bengal coasts played an important role. The Gangetic plains and the Indus valley housed several centres of commerce carried by water. Trade via land was mostly carried out via the Khyber Pass connecting the Punjab region with Afghanistan and moved ahead to the Middle East and Central Asia. Although coins were prevalent, barter was widespread. It has been suggested that villages in that time paid a portion of their agricultural produce as revenue to the rulers, while their craftsmen received a part of the crops at harvest time for their services.

  • Mughal era

This era (1526-1793) saw unprecedented growth and prosperity of the Indian economy up until the 18th century. A well-known economist, Sean Harkin, estimated that China and India, consecutively, may have accounted for “60 to 70% of world GDP in the 17th century”. The economy of this time functioned on an elaborate system of coined currency, land revenue and trade. Under the Mughals, there was an existence of a well-developed internal trade network. At that point, India had almost 64% of its workforce in the primary sector (including agriculture) and 36% of the workforce also in the secondary and tertiary sectors which were much higher than in Europe. The industrial manufacturing economy thrived under the Mughal Empire with India producing about 25% of the world’s industrial output up until 1750. The late 17th century to the early 18th century Mughal India accounted for 95% of British imports and 40% of Dutch imports.

  • British era         

The beginning of the 19th century saw major changes in taxation and agricultural policies, which tended to promote commercialisation of agriculture with a focus on trade, resulting in decreased production of “food crops, mass impoverishment and destitution of farmers.” This was due to east India Company’s expansion which led to numerous famines. The economic policies of the British Raj caused a severe decline in the economic output of the nation and gave impetus to mass unemployment. However, after the removal of international restrictions by the ‘Charter of 1813’ trade expanded substantially with steady growth. India’s share of the world economy, however, declined from 24.4% in 1700 down to 4.2% in 1950.  Its share in the sphere of global industrial output declined from 25% in 1750 down to 2% in 1900.  The British East India Company had compelled open the large Indian market to open up to British goods, which could be sold in markets without tariffs or duties. On the other hand, local Indian producers were heavily taxed leading to a serious economic crisis. However, the end of colonial rule revealed that India inherited an economy that was one of the ‘poorest’ in the developing world. 

  • Pre-liberalisation period

The economic policy of India post-independence was influenced mostly by the colonial experience. Domestic policy during this period was all about protectionism, with a strong emphasis on import substitution industrialisation, economic interventionism, public sector run by the government, business regulation, and central planning. Trade and foreign investment policies were relatively liberal during this period. Jawaharlal Nehru, the first prime minister of India, along with a famous statistician Prasanta Chandra Mahalanobis, formulated the economic policy during the initial years of the country. The expectation was that there would be rapid development of heavy industry in both the public and private sector. The policy of concentrating on capital and technology-intensive heavy industry and abating manual, low-skill cottage industries was criticised by economist Milton Friedman as he thought that such a move “would waste capital and labour, and retard the development of small manufacturers.”

The post-liberalization period has been a very contentious one. Two crises during 1991 led to a major issue regarding the balance of payments (BOP). Firstly it was the collapse of USSR and secondly the Gulf War. India found itself the possibility of defaulting on its loans. In order to cope up with this, India asked for $1.8 billion bailout loan from the International Monetary Fund (IMF). Moreover, in response to this, Narasimha Rao government, including Finance Minister Manmohan Singh, initiated reforms. The reforms reduced tariffs, interest rates, ended various public monopolies, allowed automatic approval of the foreign direct investment. Growth rates of 9% were experienced from 2003 to 2007 which moderated after the global financial crisis in 2008. Goldman Sachs in 2003 predicted that GDP of India would overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by 2035, “making it the third-largest economy of the world, behind the US and China.” India entered a period of reduced growth by 2012 which slowed to 5.6%. Economic recovery started in 2013–14 when the GDP growth rate accelerated to 6.4%. The growth continued through 2014–15 and 2015–16 with rates of 7.5% and 8.0% respectively. For the first time since 1990, India grew faster than China which registered 6.9% growth in 2015. The growth rate reduced to 7.1% and 6.6% in 2016–17 and 2017–18 respectively partly because of the disruptive effects of demonetization or ‘note bandi’ and the Goods and Services Tax (GST). However, as the main concern of this article is to re-visit the 1991 BOP crisis, the black spot on the economic development of the nation, in the next section let us discuss how this event unfolded and what the reaction truly was.

How did the Balance of Payment crisis genuinely transpire?

India was facing a Balance of Payments (BOP) crisis by the end of 1980s which resulted from borrowing and high expenditure of the nation. The Current Account Deficit which was 3.5% at the time also massively weakened the economy and the ability to finance the deficit. The main causes that fueled this crisis were almost all related to the borrowing of capital from abroad. The nation’s foreign exchange reserves at that point were pegged at USD 1.2 billion which depleted to half by June. This amount was scarcely adequate to cover 3 weeks of “essential” imports. India’s exchange rate was subjected to a severe adjustment by mid-1991. This event led to a slide in the value of the rupee. The authorities further slowed the “decline in value by expending international reserves”. The exchange rate, however, was disparaged by July against major foreign currencies. The immediate response of the Government of India at that point was to obtain a loan of around USD 2 billion from International Monetary Fund (IMF) by pawning 67 tons of gold reserves of India as the collateral for the loan. Several media outlets informed that at that time Reserve Bank of India (RBI) airlifted 47 tons of gold to the Bank of England and 20 tons of gold to the Union Bank of Switzerland to secure a loan of USD 600 million. These initiatives promoted economic reform process under the then government and cope up with the acute economic crisis India was facing.

According to the IMF, in a research paper regarding the 1991 shock, two external sources were major causes of the disruption of the Indian economy. Firstly, the events in the Middle East during 1990 which caused an increase in the world oil prices gave rise to the crisis.  IMF statistics reveal that “the value of petroleum imports increased by $2 billion to $5.7 billion as a result of both the spike in world prices associated with the Middle East crisis and a surge in oil import volume, as domestic crude oil production was impaired by supply difficulties. In comparison, non-oil imports rose by only 5% in value (1% in volume terms). The rise in oil imports led to a sharp deterioration in the trading account, worsened further by a partial loss of export markets (as the Middle East crisis disturbed conditions in the Soviet Union, one of India’s key trading partners).” Moreover, the Gulf crisis also deteriorated the situation of the workers’ “remittances, as well as an additional burden on repatriating and rehabilitating non-resident Indians from the affected zones.” Secondly, the slow-paced growth of important trading partners of the economy also led to the worsening of the current account. The vulnerable situation of the export markets with the declining growth of the world which has been pegged at a rate of approximately 4% in 1988 to 2% in 1991 was another reason that led to the massive decline of Indian economy. An Economic Survey of the years of 1991-92 it has been stated that the immediate cause of the loss of reserves beginning in September 1990 was a sharp rise in the imports of oil and petroleum products (from an average of $ 287 million in June-August 1990, petroleum products imports rose sharply to $671 million in 6 months). This accounted for rise in trade deficit from an average of $356 million per month in June-August 1990 to $677 million per month in the following 6 months.

In addition to shocks from external factors that had given rise to this issue, there was the prevalence of internal factors that coupled with these resulted into what we know today as the ‘Balance of Payment crisis of 1991. The prevalent political uncertainty peaked in 1990 and 1991. A wide array of articles recognized that post-1989 elections, the then ruling party refused to form a coalition government. However, following this, the Janata Dal formed a coalition government which became entangled in caste and religious matters. Moreover, this government fell immediately after a coerced resignation by V. P. Singh in December 1990. A “caretaker” government was set up until new elections had been scheduled which were held on May 1991. India’s crisis was also due to low investor confidence. Finance in the commercial sector became really tough as businesses became reluctant regarding rolling out loans. Moreover, various researches have unearthed that the “previously strong inflows on nonresident Indian deposits shifted to net outflows. Pieces of evidence in regards to the economy put forward the fact that ‘current account deficits” played a vital role in this crisis. Nevertheless, the method Granger and Gonzalo employing “joint information from the error correction model” determined that Indian rupee was overvalued at the time of crisis in 1991 making it be one of the major reasons that unfurled this economic crisis.

So, how did India come out of this acute crisis?            

One of the leading media outlets of India, the Economic Times, has asserted that several policies initiated during P. V. Narasimha Rao government acted as the main force that strategically assisted the derailed economy of the nation. Talking about the issue, it explained that 4 major economic reforms deserve our attention. They are:

  1. Fiscal Correction: Export subsidies were either put an end to or trimmed to a large extent.
  2. Trade Policy Reforms: This reform eased license appropriation and several regulations regarding trade. 20% devaluation of Rupee was done to make exports competitive.
  3. Industrial Policy Reforms: This move freed industries from “Licensing and Inspector Raj”. The industrial sector was made competitive and domestic supply chains were smoothened.
  4. Public Sector Reforms: This sector was given more “operational freedom”.

A major shift in the war chest by 2020

The picture changed drastically with the passage of more than 20 years. India emerged as the 5th largest ‘Foreign Exchange Reserve’ holder across the globe. Financial Express explained that the foreign reserves surpassed $500 billion for the first time ever. The principal economic advisor to Ministry of Finance, Sanjeev Sanyal, wrote in a tweet, “As I have been saying in recent weeks, demand suppression (such as lockdown) would push the INR to appreciate after an initial capital outflow”. Moreover, Sanyal opined that “Now, as we open the economy to remove demand suppression, and push up credit growth, we will both revive imports and foreign capital inflows”. $2 billion stored in FDI, FII and inflows by the corporate sector moved Indian Rupee to 75-mark against the USD. “RBI’s dollar-buying intervention in significant quantum fulfils its twin objective of not allowing the pair to get strengthened past 75.00 mark in order to support the country’s sagging exports as well as a strong forex kitty allows the bank to intervene in the market to cap any slide in rupee devaluations in offshore and onshore,” Amit Pabari, managing director, CR Forex Advisors, told Financial Express Online. Forex reserves are usually resources available to the government in the form of gold, Special Drawing Rights (SDRs), Foreign Currency Assets (FCA). “During the reporting week, reserves held in gold declined by $329 million and stood at $32.352 billion. Similarly, special drawing rights of the IMF (SDRs) fell by $10 million to $1.4 billion and the central bank’s reserve position in the IMF stood at $4.2 billion, with a fall of $120 million during the period” stated Financial Express in one of their reports.  

The efflux of Indian Foreign Exchange reserves is of utmost importance to India as when it faces any financial crisis these reserves are that one thing the country can fall back on as explained by The Indian Express. The reserves have risen drastically from an appallingly poor situation of $5.8 billion in 1991. “RBI has likely prevented any sharp depreciation in the currency yesterday by booking profit on the dollars bought at lower levels. Therefore, it is likely that rupee will trade in the range of 75.00-76.20 levels due to RBI’s intervention on both the sides,” Amit Pabari of CR Forex Advisors said. Nonetheless, irrespective of the bulge of Indian Foreign Reserve, the 1991 economic crisis will always compel people, not only Indian but also around the globe, to take a walk down the memory lane and re-conceptualize whatever happened back then. Several emergent issues regarding the economic sphere in India have posed as the question if history is repeating itself. The current economic scenario as a result of the ongoing pandemic can be to some extent compared with that gloomy time and has also resulted in massive anxiety around the globe with the realization that there might be a rise of severe worldwide financial crisis. In this case, Indian Government has been trying to come up with policies to maintain the economic equilibrium in order to avert such a situation in the nation, but it is believed by a number of policymakers and experts in the field that India will recover in this sphere, maybe slowly, but steadily.

                                                                                                                                          By Sagarika Mukhopadhyay

BIGGEST MANUFACTURER OF WORLD: CHINA

Whenever we go to the market and if we observe more than 50% of products have label and tags on which it is written: “MADE IN CHINA”. Due to which many buyer and seller might wonder ‘though china is a communist country’ still it is the world’s biggest manufacturer. Many of the product of china is similar to the US and other countries still most of the people buy Chinese product because of its lower price.

During the time famine which was faced by the Chinese in 1958-1961, they lost their economy and crisis took place at that time but as the time passes they rebuild themselves and today they are Biggest Manufacturer of the world

China is known to be “the world’s factory” because of the following reasons:

  • Low wages

During late 20 century, people were divided into 2 category urban and rural but as time changes they started internal migration many rural people came to the urban city for the work as we all know China is the most populated country in the world that’s why the supply of worker is more for working on low wages then the demand of worker this help china in production of goods as if the wages will be low then price of the product will be low.

Also, they don’t believe in the law of child labour but this law seems to be changing and also they have increased their minimum wages.

According to 2020 report, minimum hours cost in shanghai is 22 Yuan which is $3.16 her and if we consider of the month then it is 2480 Yuan which is around $355 and on the other hand in Shenzhen, the monthly wages is 2200 Yuan which is $315 and hourly it is considered as 20.3 Yuan ($2.91). Since the wages are low therefore the price of product decrease

And if we talk about the western country their main focus is on minimum wage value and child labour. This makes a difference in the price of the same kind of product.

  • LOWER COMPLIANCE

In certain countries mainly western are very strict and concern about their rules and guidelines regarding child labour, minimum wage rates, labour laws etc. but at the same time if we talk about china they don’t have any such strict rule regarding child labour or worker’s laws most of the industries don’t follow any such rules.

Child labour in industries of china has long shifted and also they are not provided with any compensation insurance not only this many companies follow the policy to pay wages once a year to the workers. This is the way to keep the workers form quitting before the year ends.

Nowadays workers are standing for their rights and government are now quite concerned about workers rights however, slowly and gradually these laws are taking place in industries regarding child labour, environmental protection and minimum wages.

  • BUSINESS ENVIRONMENT

China is involved in trading from many years during AD 1371-1433 china exchange goods; culture and religion with other countries like South Asia and the Middle East through the silk route

After that, as time passes on of the most famous person from Ming Dynasty called captain Zheng took 7 trips to establish trading contact with countries like- Africa, India, Arabia and South East Asia through the Sea route. So, it is quite clear from this that China has a large history of trading with other countries and for this, they need network supplier, customer, component manufacturer, distributor, government agencies. This is good for the business and china has all such link which helps them to grow their work worldwide.

  • TAX AND DUTIES

In 1985 china came up the policy to rebate the export tax and also they abolish the system of double tax on export goods which means zero% of VAT (value-added tax)  which means they enjoyed the rebate policy and VAT exemption also this help to lower down the price of their goods this policy also attract the investor and companies produce low-cost goods.

  • CURRENCY

Most of the time China is a summons for artificially depreciating the value of Yuan which provide them to export similar kinds of goods produced by their competitor country U.S.

China always takes care of rising in Yuan they buy the dollar and sell Yuan.

In late 2005 according to one report, the value of Yuan was 30% against the dollar after that in 2017 the value raises to 8% against the dollar

Although in 2018 trend got to change and Yuan got depreciate against Dollar, in the beginning, the US adds the tariffs to china goods but then on 8th August 2019 central bank of china lower the Yuan to 7.0205 per Dollar this allow china to export their good with a lower price of the product but also this results in Trade war between China and US.

  • CONCLUSION

With the help of cheap labour and less compliance and business environment help china to become “largest manufacturer of the world” but also at the same time artificially depreciating the value of Yuan result in a trade war between both US and China because of the lower price we able to see most of the product in the market with the label ‘Made In China.’