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Warming ties: Israel thanks India for abstaining on UNHRC vote

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New Delhi: Israel on Saturday thanked India for not voting on an “anti-Israel bashing” UNHRC resolution, which sources said was a result of Tel Aviv’s sustained talks with the Indian leadership over the past year.

Israeli envoy to India Daniel Carmon tweeted his appreciation. “We appreciate votes by members of @UN_HRC, including #India, who did not support yet another anti Israel bashing resolution. We thank them.”

On Friday, India abstained on a United Nations Human Rights Council (UNHRC) resolution condemning Israel over a UN report into the alleged war crimes committed during the 2014 Gaza conflict – marking a significant change in India’s stance.

But India also stated that “there is no change in New Delhi’s long-standing position on support to the Palestinian cause”.

Forty-one of the 47 UNHRC council members voted in favour of the resolution, including the eight sitting EU members: France, Germany, Britain, Ireland, the Netherlands, Portugal, Latvia and Estonia.

Only the US voted against the resolution.

India, Kenya, Ethiopia, Paraguay and Macedonia abstained.

Israel has been in touch with the leaders of the five countries that abstained since last July, when India had voted against Israel in the UNHRC.

Officials in Prime Minister Benjamin Netanyahu’s office have said that Netanyahu had himself spoken with the leaders of India, Kenya and Ethiopia over the past few days, Israeli media reported.

However, according to sources, Israel began the effort from last July itself.

Israel feels the UNHRC vote on the violence in the Gaza Strip was “politicized” and “unbalanced”. According to Israel, the resolution does not take into account the 5,000 rockets fired into its territory by Hamas.

The upcoming UNHRC vote was also taken up by Israeli Defence Minister Moshe Ya’alon when he visited India and held talks with Prime Minister Narendra Modi, External Affairs Minister Sushma Swaraj and other officials.

“The UNHRC vote has been in discussions for a while with India,” a source told IANS.

Israel conveyed to India that it understands India’s concerns about fighting terror as it is also experiencing terrorism, and both are united on the issue of combating the menace.

Iraeli daily Haaretz, reflecting the appreciation of India’s stand, said: “The fact that India abstained reflects a significant policy change by Delhi; traditionally, India voted in favour of all anti-Israel resolutions in UN institutions. Friday’s abstention was another sign of warming ties between India and Israel since the election of Prime Minister Narendra Modi in 2014.”

Congress MP Shashi Tharoor, who is also the chairman of the Parliamentary Standing Committee on External Affairs, told IANS: “My understanding of the MEA position is that it is our normal practice to abstain when a resolution invokes the International Criminal Court (ICC), and that in this case too, that was done.

“In other words, MEA says the abstention had nothing to do with the merits of the resolution and does not reflect a changed stand on the Israel-Palestine question. Personally I will take MEA’s word for it while stressing that India’s consistent and moral position on the substantive issue must not be diluted. There is a national consensus on Palestine which I would urge the government to continue to respect.”

Ministry of external affairs spokesperson Vikas Swarup on Friday said that India’s reason for abstention in the resolution A/HRC/29/L.35 was the reference to the ICC.

“India is not a signatory to the Rome Statute establishing the ICC.

“In the past also, whenever a Human Rights Council resolution made a direct reference to the ICC, as happened in the Resolutions on Syria and North Korea, our general approach had been to abstain.”

“We have followed the same principle in our voting on today’s Resolution,” he said.

Prime Minister Modi is to visit Israel this year — in the first-ever prime ministerial visit. Sushma Swaraj is also to visit Israel this year, while Home Minister Rajnath Singh visited Tel Aviv earlier this year — marking warming in bilateral ties.

An independent UN commission of inquiry on Monday released its report on Operation ‘Protective Edge’, finding evidence that both Israel and Hamas committed war crimes during the war in the Gaza Strip last summer and calling the devastation caused in the Palestinian territory “unprecedented”.

The members of the commission, which was appointed by the UNHRC, hinted in their report that the upper levels of the Israeli political echelon were responsible for the policies that led to some of the war crimes.

(IANS)

 

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India Grapples with Credit Issues

While the framework utilised by the rating agencies that has led to a delay in ratings relaying the correct credit information to market participants

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India, Credit, Issues
Recent news whereby credit downgrades have just preceded defaults by Non-Banking Financial Companies (NBFCs) is a case in point. Pixabay

As India grapples with credit issues, one of the primary factors that needs analysis is the broken transmission mechanism that relays credit quality to market participants. In common parlance, the transmission mechanism that provides information regarding the credit quality of the borrower to the lenders is unable to do so efficiently. Recent news whereby credit downgrades have just preceded defaults by Non-Banking Financial Companies (NBFCs) is a case in point.

While the framework utilised by the rating agencies that has led to a delay in ratings relaying the correct credit information to market participants is partially to blame for the inefficacious credit transmission mechanism, issues around rating agencies are only part of the problem. For sure, rating agency regulations must be improved, but we must also realise that “credit market frameworks” are much more than ratings.

We must realise that credit ratings have limitations in terms of predicting credit cycle ups and downs. This phenomenon isn’t limited to just India but is a global feature. The inability of the credit rating mechanism to adequately price in and predict the credit cycle implies that a multi-pronged approach is needed to ensure that the credit quality transmission mechanism works effectively. Essentially, India needs to develop other features of the credit market that will assist market participants in gauging credit quality, thereby reducing the risk of a “jump-to-default” scenario we have witnessed repeatedly over the last 12 months.

Indian policymakers need to start working on a framework that will allow a liquid and deep secondary market to develop in credit products. Credit products here refers to the entire universe of lending, including bonds, loans and other instruments. Market pricing of products and risk and therefore increased participation by investors will help in “price discovery” of the credit quality. Constant pricing of credit risk and the concomitant information and structure that entails will imply that lenders will have a better information set with which to make informed credit decisions.

India, Credit, Issues
As India grapples with credit issues, one of the primary factors that needs analysis is the broken transmission mechanism that relays credit quality to market participants. In common parlance, the transmission mechanism that provides information regarding the credit quality of the borrower. Pixabay

A market that allows for secondary liquidity, albeit even small amounts to start with, will also incentivise borrowers to manage their credit profile better. More importantly, a secondary market for credit instruments will go a long way towards avoiding the bunching of credit as it happens in today’s market. A credit market has a cycle, and without the existence of a robust secondary market, in expansionary credit cycles, poor quality credit gets excessive access to capital. On the contrary, once the credit cycle contracts credit access for all businesses is diminished to a great extent.

We must work towards breaking the above trend that has plagued the Indian economy significantly. A secondary market for credit instruments will incentivise both lenders and borrowers to behave in a way such that the entire available pool of credit goes towards the most optimal usage.

Policymakers also need to start utilising vehicles similar to Real Estate Investment Trusts (REITs) or Infrastructure Investment Trusts (InvITs) to allow for the pooling of credit instruments. While debt mutual funds exist in the market, the aim of the new “credit pooling vehicles” will be to enable institutional investors to access credit instruments across the spectrum, and not just limited to certain corporate bonds. Access to vehicles that allow for greater liquidity and transparency will go a long way in increasing the capital availability and investor participation in Indian credit markets.

As India looks to boost economic growth, it is essential to realise the credit interlinkages in the economy. To boost exports, a primary aim in India, credit access will be a vital component, if not the most important. If credit is constrained by inefficiencies in the credit information transmission mechanism and therefore leads to inefficient lending in the real estate sector, then it is essential to realise that not only is the real estate sector severely affected but so are other areas such as exports. Primarily, an improved credit framework will lead to both higher availability of capital and credit availability at more affordable rates.

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Credit markets, like all businesses, will move in cycles. Indian policymakers must aim to start building on the blocks that will allow credit downturns to be less severe and shorter. The ability to provide the market access to better information and investment structures will go a long way in improving credit pricing, and thereby credit access. (IANS)