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THE HINDU: War and possible peace in Syria
The
agreement reached in Munich by major world powers, including the United States
and Russia, to work towards a cessation of hostilities in Syria within a week
is the most constructive step yet to find a political solution to the country’s
civil war.
For years, the world looked away when Syria was transformed into a
geopolitical battlefield where several countries were involved, either directly
or through their proxies, to maximise their interests. The war has nearly
destroyed the country, triggering an unprecedented humanitarian crisis. A
report released last week by the Syrian Centre for Policy Research paints a
picture graver than what even the UN had estimated. About 470,000 people have
been killed and 1.9 million injured since the crisis began in March 2011.
Nearly 45 per cent of the population has been displaced, while life expectancy
has dropped from 70 to 55.4 in five years. That a civil war in a small nation
of about 23 million people was allowed to get this catastrophic, itself points
to the failures of the international system.
The
positive development in the Munich agreement is that both Russia and the U.S.
have strongly come out for a cessation of hostilities. Russia is directly
backing the regime of President Bashar al-Assad, while the U.S. and its allies,
Saudi Arabia and Turkey, support the anti-regime rebels. To be sure, both blocs
have different solutions to offer for the crisis. While the Russians want the
regime to be sustained, with or without Mr. Assad, the Americans and their
allies want Mr. Assad to go. Still, there is some common ground. Both
Washington and Moscow are fighting the Islamic State. Despite its military
intervention in favour of the Assad regime, Russia is consistently pushing for
an eventual political solution. The U.S. has over the years mellowed its
hardline stand. Though it still calls for Mr. Assad’s ouster, it doesn’t say
when he should go. This common ground opens the possibilities for a ceasefire,
which, if it is put in place successfully, could set the stage for serious
negotiations. But even the implementation of a ceasefire faces serious
challenges. Since the Russian intervention, the regime forces have made
substantial advances on the ground. The weakening of rebel positions has upset
their regional backers. Saudi Arabia and Turkey have announced they are
considering sending ground troops to Syria. If they do that, Russia would be
forced to expand their involvement, which would dangerously escalate the
crisis. Another key question is whether President Assad, already emboldened by
the military advances made, would be ready to make concessions. In an interview
last week he vowed to retake the whole of the country by force. But after the
near-total destruction of Syria, it is delusional to think of a military
solution. If the U.S. and Russia are committed to the Munich agreement, they
should put serious pressure on their allies and bring them to the table. That’s
the only way forward for Syria.
ces·sa·tion
The fact or
process of ending or being brought to an end.
hos·til·i·ty
Hostile
behavior; unfriendliness or opposition.
grav·er
A burin or
other engraving tool.
cat·a·stroph·ic
Involving or
causing sudden great damage or suffering.
e·ven·tu·al
Occurring at
the end of or as a result of a series of events; final; ultimate.
troop
A group of
soldiers, especially a cavalry unit commanded by a captain, or an airborne
unit.
es·ca·late
Increase
rapidly.
em·bold·en
Give (someone)
the courage or confidence to do something or to behave in a certain way.
de·struc·tion
The action or
process of causing so much damage to something that it no longer exists or
cannot be repaired.
delusional
Suffering from
or characterized by delusions
INDIAN
EXPRESS: Abu Dhabi calling
The United Arab
Emirates (UAE) have turned into India’s gateway to West Asia, focusing New
Delhi’s attention on an important region long neglected by Indian foreign
policy, which now appears to be acquiring the geoeconomic and strategic
priority it deserves. Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed Al
Nahyan’s visit last week built on the achievements of Prime Minister Narendra Modi’s trip to the UAE
last August — the first by an Indian PM in over three decades, which had
demonstrated India’s break from the past and recognition of the changed
dynamics of the Middle East. The region’s altered security and
politico-economic reality, not least because of threats like the Islamic State (IS) or the
falling price of oil, necessitates new partnerships.
Although bilateral
trade fell from its $73 billion peak in 2013 to $59bn in 2014-15, the UAE —
which accounts for about 9 per cent of India’s crude imports — remains India’s
third-largest trading partner and second-largest export destination, and has
pledged to invest $75bn in India. Its $800bn sovereign wealth fund is a large
resource pool from which investments can be made in infrastructure development
in India — progress on these lines can be seen in Abu Dhabi’s interest in
Indian highway projects. The joint production of defence equipment under the
Make in India programme is another important area of focus. Mohamed bin Zayed’s
visit also saw agreements, among other things, on cyberspace and cybercrime
cooperation, space research, as well as collaboration on renewable energy. The
MoU on currency swap between the RBI and Central Bank of UAE should ease
bilateral financial transactions.
A significant aspect
of bilateral ties today is the closer convergence on security and
counter-terrorism. Notwithstanding a security agreement in place since 2011,
progress on counter-terror and maritime security had been slow. But with the
rise of the IS, the UAE took a strong stand against terror — and has, till
date, deported about a dozen Indian citizens suspected of IS links. While
enhanced security cooperation also ties in partly with the affairs of India’s
2.6 million large diaspora in the UAE, their problems had traditionally not
received attention in Delhi. India’s six million workers in the Gulf contribute
$50bn in annual remittances, but their work and living conditions need urgent
redress. The PM had directly reached out to this community on his trip. Now,
closer all-round bilateral cooperation should help address their concerns.
gate·way
An opening that
can be closed by a gate.
al·ter
Change or cause
to change in character or composition, typically in a comparatively small but
significant way.
con·ver·gence
The process or
state of converging.
not·with·stand·ing
In spite of.
mar·i·time
Connected with
the sea, especially in relation to seafaring commercial or military activity.
de·port
Expel (a
foreigner) from a country, typically on the grounds of illegal status or for
having committed a crime.
en·hance
Intensify,
increase, or further improve the quality, value, or extent of.
di·as·po·ra
Jews living
outside Israel.
re·dress
Remedy or set
right (an undesirable or unfair situation).
BUSINESS STANDARD: Disquieting decline
in India Inc's sales, profit
A review of 2,561 companies that have released resultsfor the third quarter
(Q3) of 2015-16 makes for depressing reading. Net sales are down, profits after tax are down, and operating profits
are flat. Taking all the companies together, net sales have dropped by 4.4 per
cent year-on year (y-o-y) while total income has dropped by 0.1 per cent y-o-y.
Operating profits (profits before interest, depreciation, amortisation and
taxes, or PBDIT) have grown just 0.9 per cent. Net profits (Profits After Tax
or PAT) have shrunk 1.7 per cent. These results are computed upon a low base.
Net profits in the corresponding quarter last year for the same sample fell by
11.4 per cent y-o-y, while sales grew only 1.5 per cent. So the slowdown is
more disquieting. Raw material costs have dropped by 18.9 per cent, while power
and fuel costs are down by 5.7 per cent. However, employee costs are up 9.2 per
cent. Operating
margins (PBDIT to sales) have deteriorated a little, standing at 22
per cent y-o-y for Q3, versus 22.5 per cent y-o-y for Q2, 2015-16.
Excluding the financial sector and oil & gas, the database contains 2,100 companies with lacklustre results. Net sales for the 2,100-sample ex-energy and ex-financials have expanded 0.7 per cent - the slowest growth in three years. The sharp drop in crude oil pulled down sales even more for the whole sample. PBDIT is up just 1.7 per cent for the 2,100 sample. Net profit after tax is up 3.3 per cent for the 2,100-sample. The overall drawdown in net profits is due to the financial sector which has seen PAT fall by an extraordinary 40 per cent - mainly because PSU banks have been impacted by higher provisioning for their non-performing assets. Power, information technology services, pharmaceuticals and automobiles were the biggest contributor to corporate profitability and growth during the quarter. The worst laggards were those in metals, mining, construction, infrastructure and capital goods sectors.
Looking at the sample of 2,100, some other points stand out. Employee costs are up by 8.6 per cent for the 2,100 companies, and up by 9.2 per cent for the entire sample. The labour market is tightening all round. Interest costs have risen by four per cent - a lower growth rate than the past three years. But it may still indicate a stressed credit cycle, given that net sales are flat and other costs are down. Operating margins are at 14.3 per cent for the 2,100 companies. Depreciation as well as amortisation is low at 4.9 per cent. This is in line with trends of single-digit depreciation for the last four quarters and it indicates persistently low investment. Interest coverage ratios (ICR) or the ratios of operating profits to interest costs were flat in Q3. The ICR for these 2,100 firms was at 4.2 - down from an averaged 4.4 across the four quarters of 2014-15.
While there was no apparent deterioration in results outside the financial sector, a combination of sales stagnation and flat margins is evident. Investment remains down. The Budget will have to grapple with the twin imperatives of raising investment and reviving demand.
Excluding the financial sector and oil & gas, the database contains 2,100 companies with lacklustre results. Net sales for the 2,100-sample ex-energy and ex-financials have expanded 0.7 per cent - the slowest growth in three years. The sharp drop in crude oil pulled down sales even more for the whole sample. PBDIT is up just 1.7 per cent for the 2,100 sample. Net profit after tax is up 3.3 per cent for the 2,100-sample. The overall drawdown in net profits is due to the financial sector which has seen PAT fall by an extraordinary 40 per cent - mainly because PSU banks have been impacted by higher provisioning for their non-performing assets. Power, information technology services, pharmaceuticals and automobiles were the biggest contributor to corporate profitability and growth during the quarter. The worst laggards were those in metals, mining, construction, infrastructure and capital goods sectors.
Looking at the sample of 2,100, some other points stand out. Employee costs are up by 8.6 per cent for the 2,100 companies, and up by 9.2 per cent for the entire sample. The labour market is tightening all round. Interest costs have risen by four per cent - a lower growth rate than the past three years. But it may still indicate a stressed credit cycle, given that net sales are flat and other costs are down. Operating margins are at 14.3 per cent for the 2,100 companies. Depreciation as well as amortisation is low at 4.9 per cent. This is in line with trends of single-digit depreciation for the last four quarters and it indicates persistently low investment. Interest coverage ratios (ICR) or the ratios of operating profits to interest costs were flat in Q3. The ICR for these 2,100 firms was at 4.2 - down from an averaged 4.4 across the four quarters of 2014-15.
While there was no apparent deterioration in results outside the financial sector, a combination of sales stagnation and flat margins is evident. Investment remains down. The Budget will have to grapple with the twin imperatives of raising investment and reviving demand.
de·press
Make (someone)
feel utterly dispirited or dejected.
dis·qui·et·ing
Inducing
feelings of anxiety or worry.
de·te·ri·o·rate
Become
progressively worse.
lack·lus·ter
Lacking in
vitality, force, or conviction; uninspired or uninspiring.
draw·down
A reduction in
the size or presence of a military force.
lag·gard
A person who
makes slow progress and falls behind others.
amortisation
Amortization:
the reduction of the value of an asset by prorating its cost over a period of
years
ap·par·ent
Clearly visible
or understood; obvious.
stagnation
A state of
inactivity (in business or art etc); "economic growth of less than 1% per
year is considered to be economic stagnation"
grap·ple
Engage in a
close fight or struggle without weapons; wrestle.
im·per·a·tive
An essential or
urgent thing.
re·vive
Restore to life
or consciousness.
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