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“Voluntary Commitments” To The Six-Nation Nuclear Deal: Iran

Despite the havoc on the Iranian economy, U.N. officials have certified Tehran's compliance with the nuclear deal.

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Iran
In this photo released by the official website of the office of the Iranian Presidency, President Hassan Rouhani speaks during a ceremony commemorating "National Day of Nuclear Technology," in Tehran, Iran, April 9, 2019. VOA

Iran is giving up some “voluntary commitments” to the six-nation nuclear deal, but is not pulling out of the deal, Foreign Minister Mohammad Zarif says.

Iranian state media quote Zarif as saying Iran is making the move because “the European Union and others … did not have the power to resist U.S. pressure.”

Zarif did not specify what he means.

But a newspaper tied to the hardline Revolutionary Guard says Wednesday’s announcement would “ignite the matchstick for burning the deal.”

U.S.
The U.S. announced last week it would no longer waive sanctions against countries that buy Iranian oil — another blow to Iran. VOA

President Hassan Rouhani will send letters to Britain, China, France, Germany, and Russia outlining exactly which parts of the deal he is abandoning.

Breaches Nuclear Deal, French Official Says

He also plans to make a speech Wednesday.

His remarks will come exactly one year after President Donald Trump pulled the U.S. out of the agreement, calling it one of the worst deals ever put together.

A French official cautions Iran against making any moves that would compel Europe and others to reimpose sanctions.

“Depending on what is in the statement from Tehran, at this stage what we’re expecting is a collective European reaction. But as we do not yet know exactly what will be in it, we are preparing for different eventualities,” the official said Tuesday.

The U.S. reimposed sanctions on Iran when Trump tore up the deal. The sanctions have had a devastating effect on what was already a weak Iranian economy. The sanctions relief from the five other signatories has brought little help.

U.S.
Iranian state media quote Zarif as saying Iran is making the move because “the European Union and others … did not have the power to resist U.S. pressure.” VOA

Also Read: NATO Remarks on Turkey’s Plans To Purchase Russian Air-Defense Missile Systems

Despite the havoc on the Iranian economy, U.N. officials have certified Tehran’s compliance with the nuclear deal.

But Iranian newspapers have reported the country could revive some of the nuclear activities it halted under the agreement. (VOA)

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Performance of Chinese Economy ‘Noteworthy’ in Last Four Decades and Holds Key Lessons for India

Over the nineteenth century, the two countries had been following the opposite trajectory

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Chinese, Economy, India
In fact, China was at a disadvantage on some aspects of development. Pixabay

China celebrated the 70th anniversary of becoming a communist republic with much fanfare. Back in October 1949, when China was adopting the communist model of societal organisation, India was framing its constitution. Less than four months later, India was a democratic republic. The two nations in their current identities were, thus, born out of the ashes of the colonial world around the same time but adopted a contrasting system of economic and social development. After seventy years, the two nations stand at very different levels of development in terms of their economic, military and technological progress. China’s prowess on these fronts is incomparable to that of India.

China’s rise is quite extraordinary from the Indian viewpoint as the two nations were at par with each other in 1950. In fact, China was at a disadvantage on some aspects of development. Over the nineteenth century, the two countries had been following the opposite trajectory. As per Maddison estimates, India’s per capita income grew from $533 in 1820 to $673 in 1913 (in 1990 dollars). During the same period, China’s per capita income declined from $600 to $552. In the first half of the twentieth century, the per capita incomes of both nations declined. Between 1913 and 1950, India’s per capita income declined from $673 to $619 while China’s per capita income declined from $552 to $439. Thus, in 1950 when India became a republic, it was ahead of China in economic terms.

Even as recently as 1978, the per capita GDP of China was $979, and India was $966. The excesses of Mao’s rule that culminated in the disastrous programmes of the Great Leap Forward and the Cultural Revolution kept economic progress of China subdued in the first three decades. However, all that changed with the coming of Deng Xiaoping in 1978. As a result, China’s per capita income today is about 4.6 times than that of India. Despite all the demerits of the authoritarian rule in China, the performance of the Chinese economy in just the last four decades is noteworthy and holds key lessons for India as well.

The first, and probably the most important thing that China did well right from the start was its focus on human development. Even under Mao, China’s emphasis on education for all and the healthcare facilities provided by its communes helped the country perform well on human development. While the human development index (HDI) was introduced in 1990, its long run calculations have been provided by Nicholas Crafts. The HDI numbers for China and India are, thus, available for 1950 and 1973. While both the countries had almost similar HDI scores in 1950 (0.163 and 0.160 respectively), Chinaa¿s score was markedly higher in 1973 (0.407 against India’s 0.289).

Chinese, Economy, India
China’s rise is quite extraordinary from the Indian viewpoint as the two nations were at par with each other in 1950. Pixabay

So, the improvement in human development poised the society perfectly for the reforms that would be imposed under Deng’s China. The development of a vast pool of human capital primed the economy for economic reforms and, therefore, allowed the country to maximise its gains form it. On the other hand, education and health have always been an area for concern for India. By the time India began undertaking economic reforms in the early 1980s, India’s health and education levels were still poor. An average Indian died at the age of 54 in 1980 while merely 43.6 percent of its population was literate. By comparison, life expectancy in China was 64 years and its literacy rate was 66 percent around the same time.

The second key difference was the focus on the type of industries by the two countries. China focussed on industries that were more labour-intensive leveraging on its pool of cheap labour. Industries like textile, light engineering and electronics received higher investment. China also introduced special economic zones (SEZs) as early as 1980, which pushed manufacturing growth and setting up of export-oriented industries. India, on the other hand, focused more on heavy industries that were capital-intensive and employed less labour. Moreover, the policy focus on attracting foreign investment through instruments like SEZ came much later. As a result, by 1998 China had FDI investments of $183 per capita as per Maddison estimates and India was merely at $14.

As India hardly pushed for labour-intensive manufacturing growth, the sector never picked up and the country became a services-led economy. China, on the other hand, became the manufacturing powerhouse of the world. A similar edge is being created by Bangladesh in recent times. The export-industries that are moving out of China due to rise in labour costs and the trade war with the United States are being effectively captured by countries like Bangladesh. The country has eclipsed India’s growth rate since 2017 and has become the fastest-growing country in South Asia. Most of its growth is being led by its manufacturing sector, which implies that the country will be able to create high employment for its citizens and improve their standard of living at a higher and more equitable rate than India; exactly what China has achieved over the last four decades.

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Thus, India has a lot to learn from the development trajectories of its neighbours. The focus on health and education parameters for long-term growth and market-oriented policies in the short term has been an effective strategy for Asian countries. Perhaps it is time that India does the same. (IANS)