Current Affairs (27th February 2021)

Freshwater fish

CONTEXT:

• Nearly a third of all freshwater fish are threatened with extinction, according to a recent report,World’s Forgotten Fishes,published by 16 global conservation organisations.
• Of more than 10,000 species whose conservation status has been assessed by the International Union for Conservation of Nature, 30% are considered at risk of extinction.
• There are more than 18,075 species of freshwater fish, which account for half the world’s fish species and a quarter of all vertebrate species.

IMPACT OF EMPLOYMENT:

• The reportstated that freshwater fish provide main source of protein to 200 million people across Asia, Africa and South America.
• The industry provides jobs and livelihoods to 60 million people, more than half of whom are women.
• In total, jobs in freshwater fisheries account for between 5 and 6 per cent of the global agricultural workforce.

CAUSES BEHIND EXTINCTION:

Conservation groups behind the report, including World Wide Fund for Nature (WWF) and Global Wildlife Conservation, point to a combination of pressures on global freshwater fish populations, including:

• Habitat degradation
• Poorly planned dams
• Releasing wastewater and draining wetlands
• Overfishing
• Pollution
• Introduction of invasive species
• Wildlife crime
• Climate change

WAY AHEAD:

• WWF has called on all governments to back the implementation of a global Emergency Recovery Plan for freshwater biodiversity. This would involve reducing pollution, allowing rivers to flow more naturally, controlling invasive species and ending overfishing, removing obsolete dams and unsustainable sand mining.
• But the solution will require more than just government action. Implementing the new biodiversity agenda also needs to move beyond the realm of conservation.
• Governments must incorporate specific new targets into the United Nations-mandated sustainable development goals for freshwater fishes, which are almost entirely absent from the current 169 SDG indicators despite their obvious links to poverty (SDG1), hunger (SDG2), responsible consumption and production (SDG 12), and life under water (SDG14) and on land (SDG 15).
• Ensuring healthier freshwater ecosystems will only be achieved through collective action involving governments, businesses, investors, non-profits and communities, the report flagged.

India-Pakistan

ABOUT:

1. In a first joint statement issued by the two sides in years, India and Pakistan recently said they have agreed to a “strict observance of all agreements, understandings and cease firing along the Line of Control (LoC) and all other sectors” with effect from the midnight of February 24-25, 2021.
2. The decision was announced after discussions between the Directors General of Military Operations (DGMOs) of both sides over the established hotline.

TOWARDS PEACE:

1. In the interest of achieving mutually beneficial and sustainable peace along the borders, the two DGMOs agreed to address each other’s core issues and concerns which have [the] propensity to disturb peace and lead to violence.
2. It added that they would use existing mechanisms of hotlines and flag meetings to resolve any “misunderstandings”.
3. India desires normal neighbourly relations with Pakistan and has always been committed to addressing issues, if any, in a peaceful bilateral manner.

Aerial mapping of ocean floor

ABOUT:

• The Indian National Centre for Ocean Information Services (INCOIS) is planning to take the help of the National Remote Sensing Centre (NRSC) for aerial mapping of the Andaman and Nicobar Islands and Lakshadweep to get a better picture of the ocean floor, also called ‘bathymetric’ study.

FOR MITIGATING RISKS:

1. NRSC has already done a similar high resolution topographic Airborne Laser Terrain Mapping (ALTM) for the entire coastal areas of the country.
2. Now, it is in the process of integrating the data for a 3D multi-hazard mapping of both the east and west coastline for a more precise picture of the ocean floor.
3. Such a study has become imperative in view of the recent tsunamis of the Indonesian coasts where more than the quake related high waves; damage was due to landslides under the sea beds causing sudden wave surges leading to much damage without giving sufficient time to alert people.
4. The research institute, under the Ministry of Earth Sciences, had also identified ‘gaps’ across the coast of Andhra Pradesh and Odisha for installing more tide gauges for better monitoring of the sea and more accurate prediction of impending disasters like cyclones.
5. These will be in addition to the 36 already in the Bay of Bengal.
6. INCOIS scientists with their counterparts in the Chennai-based National Institute of Ocean Technology and the United States independent scientific agency, Massachusetts-based Woods Hole Oceanographic Institution, have been mining the data recorded by a unique ‘Flux Buoy’ retrieved from the Bay of Bengal off the Kolkota coast recently.

Localisation to 100%

ABOUT:

Union Minister of Road Transport and Highways recently asked automobile manufacturers to increase the localisation of components to 100%, failing which he said the Centre would consider raising basic customs duty on imports.

INCREASING LOCALISATION:

1. The present level of localisation of parts in the Indian auto sector was about 70% and “at any cost, India needs to stop imports of auto components.
2. Union Minister urged both vehicle and auto-component manufacturers to increase localisation of components to the maximum.
3. India is fully competent in all the things. There is a need for Automobile manufacturing companies to take it very seriously otherwise for imports of components India will think in the direction of increasing customs duty on them.
4. Society of Indian Automobile Manufacturers sought government support for localisation of electronic components, especially semiconductors which are currently facing a global shortage, stating it would need huge investments.

Rise in bond yield

ABOUT:

1. Rising yields on government securities or bonds in the United States and India have triggered concern over the negative impact on other asset classes, especially stock markets, and even gold.
2. The yield on 10-year bonds in India moved up from the recent low of 5.76% to 6.20% in line with the rise in US yields.

WHY DO BOND YIELDS RISE?

1. Bond yield is the return an investor gets on that bond or on a particular government security.
2. The major factors affecting the yield is the monetary policy of the Reserve Bank of India, especially the course of interest rates, the fiscal position of the government and its borrowing programme, global markets, economy, and inflation.
3. A fall in interest rates makes bond prices rise, and bond yields fall — and rising interest rates cause bond prices to fall, and bond yields to rise.
4. In short, a rise in bond yields means interest rates in the monetary system have fallen, and the returns for investors (those who invested in bonds and govt securities) have declined.

IMPACT

1. The sudden rise in domestic and global bond yields recently moderated the enthusiasm of equity market participants around the world.
2. A sudden rise in bond yields caused markets to slide, as mass bond selling was witnessed.
3. Bond yields are inversely proportional to equity returns; when bond yields decline, equity markets tend to outperform, and when yields rise, equity market returns tend to falter.
4. Traditionally, when bond yields go up, investors start reallocating investments away from equities and into bonds, as they are much safer.
5. As bond yields rise, the opportunity cost of investing in equities goes up, and equities become less attractive.
6. Also, a rise in bond yields raises the cost of capital for companies, which in turn compresses the valuations of their stocks. That is something that investors see when RBI cuts or raises the repo rate.
7. A cut in the repo rate reduces the cost of borrowing for companies, leading to a rise in share prices, and vice versa.

BORROWING PROGRAMME AND ECONOMY

1. When bond yields rise, the RBI has to offer higher cut-off price/yield to investors during auctions.
2. This means borrowing costs will increase at a time when the government plans to raise Rs 12 lakh crore from the market.
3. However, RBI is expected to stabilise yields through open market operations and operation twists.
4. Besides, as government borrowing costs are used as the benchmark for pricing loans to businesses and consumers, any increase in yields will be transmitted to the real economy.

FOREIGN PORTFOLIO INVESTMENT (FPI) FUNDS

1. Bond yields play a big role in FPI flow.
2. Also, it has been seen that when the bond yield in India goes up, it results in capital outflows from equities and into debt.

WHAT SHOULD INVESTORS KEEP IN MIND?

1. Bond yields move on account of various factors, and investors will have to keep an eye on both domestic and global developments while investing in them.
2. If inflation and interest rates in the economy are key factors that determine yields, they are in turn affected by various other factors such as economic growth, sovereign rating, money supply, government borrowing, global liquidity and geopolitical developments.
3. With the RBI now allowing retail participation in G-Secs, investors need to be watchful of developments before taking a decision.

FATF ‘greylist’

CONTEXT:

• Global money laundering watchdog the Financial Action Task Force (FATF) decided to keep Pakistan on its terrorism financing “grey list”.

ABOUT:

• In its plenary held in October 2020, the FATF had kept Pakistan on the grey list citing its failure to fulfill six out of 27 obligations.
• According to FATF, Islamabad had made progress but was yet to complete its action plan to overcome deficiencies in its combating of money laundering and terrorism financing.
• Islamabad should demonstrate effective implementation of targeted financial sanctions against all 1267 and 1373 designated terrorists.
• Pakistan must demonstrate in taking action against UN-designated terrorists and their associates.
• Pakistan courts must give effective, decisive and proportionate punishment to those involved in terrorism. It also said Pakistan must have an effective system to deal with terror financing.
• Once Pakistan completes three unfulfilled tasks, the FATF will verify and take decision on Islamabad’s present status in June 2021 plenary.

FATF

• Inter-governmental body set up in 1989 to combat money laundering, terror financing and other related threats to the international financial system.
• Currently, it has 39 members. Pakistan has been on the grey list since June 2018.
• Countries that are considered safe haven for supporting terror funding and money laundering are put in the FATF grey list.