Sree Iyer: Namaskar, today is May 26th, Wednesday, 2021, and Welcome to Daily Global Insights with Sri and Sree, Episode 171. We have a lot to cover and shall jump straight to US News. Sridharji, before I do that. Welcome to PGurus Channel. As always, it is a pleasure to have your thoughts, sir.
Sridhar Chityala: Good morning. Welcome to all of you for yet another morning broadcast. Thank you, sir. And I look forward to another exciting day.
Sree Iyer: Yes and in US News, Florida becomes 23rd State to End $300 Unemployment Benefit Boost to improve Business Hiring. So, now, this is becoming more and more of a pattern. Let’s hope that this brings normalcy to the economy. Your thoughts, sir.
Sridhar Chityala: Well, I think the Republican states would lead the effort. 23rd state is a reflection of the growing momentum and swing towards the specific model. And as you rightly point out the economies have opened up the numbers tell the story of low unemployment rates and people getting back to work.
Sree Iyer: GOP leaders accused Biden and the Fed of pursuing “Woke” agenda as inflation looms. We’ve been saying this, again and again, inflation is a real danger now. So now the GOP leaders are perhaps taking the high ground, your thoughts.
Sridhar Chityala: Well, they are making the statement, the word, the first time they’ve used the Woke agenda. Now, if you listen to Fed very carefully, Jerome Powell, he said that he is looking at the Labour card, which is, you know, unemployment rates coming down at the deeper sections and then you the same sentiment is echoed by the treasury. So what they’re saying is that it should come as a GOP is saying, is it should come as a natural outcome. It’s not something that you pursue as an adventure, as an activist type of an agenda and assume that the economics will work. So, they have defined for the first time that the FED is pursuing with Biden, the Woke agenda and that only can be a disaster.
Sree Iyer: House GOP leaders call on House Democratic leaders to commence investigation into the CCP virus. Are they coming on there own will or they coming in kicking and screaming, sir, they’re coming kicking and screaming?
Sridhar Chityala: They are coming kicking and screaming. There is now a growing chorus that as more and more evidence gets either leaked out or observed and as people see the virus spreading all around the world. There is a growing fear that the investigation reports have not been conclusive and the evidence has not been presented for debate and the appropriate action.
Sree Iyer: It gets better covid-19 origin Descend suppressed by intelligence Community House GOP, report finds. And at this is a very significant moment, you know, the NIA said, this thing, I guess, sometime back. I am not 100% Sure about the date and timing and There were also I think we covered this in DGI where we said that those who were expressing doubts, their voices, were suppressed, isn’t it, Sir?
Sridhar Chityala: Those who found that there’s enough to go after and do investigation plus collaboration between the PLA and the Wuhan lab, including the scientists who are caught in the United States who appear to have been collaborating, and were on a retainership fees. The exact nature of the research is not known, perhaps the research was not disruptive. But nevertheless, they were part of the research program and all this evidence came out almost from October, November, December last year, but somehow the members of certain segments of the individual suppress it. Now, that’s coming out loud and clear.
Sree Iyer: Ann Wagner says WHO should not be the entity investigating China on COVID. Now, this is an interesting development. Rep Wenstrup says Biden reluctance on China is “Not Fair” to Mankind. So, now the pressure is like drip by drip, you know, beginning to build upon Biden saying, look, what are you shielding here? Why are you shielding here? That’s how I see it. Your thoughts.
Sridhar Chityala: Exactly same. The reason we have covered so extensively in the US is a chorus that is growing from House, GOP to House Democrats. Then, the House GOP republican committee asking the report to be released. Then, Senators and House Representatives by turn coming out and making a statement that why is Biden silent? Especially when the virus is pervasive. And on top of that, we have already covered yesterday, Fauci, and Gottlieb making a statement, well, this may not have originated as an organic virus, but it seems to be from something not normal.
Sree Iyer: Well, Fauci is playing defence. He is saying that there was a modest collaboration with Wuhan scientist, especially in studying Bat viruses. And he says that the capital was not allocated to gain any functional advantage. How can you make that statement? Once you give the money to them, how do you know it, where it was used?
Sridhar Chityala: Well, you know, I think it’s very interesting that such a statement has been made. Today, when Fauci comes up and says, yes, we have involved our department of virology and in a pandemic, studies were collaborating. But of course, we didn’t allocate Capital. You know, for the sake of, you know, gaining any advantage. But we are involved. That is very striking today in concert with a sequence of events that was unfolding yesterday. And then, of course, the day before yesterday, these two people making statements around it and for him to State this just you know, there’s no smoke without fire.
Sree Iyer: Terrell says that Biden and left played the race card and lied about George Floyd death. BLM and Antifa have used it to advocate anti-cop agenda. So Terrell statement is very strong how many facts and realism is it based on Sir?
Sridhar Chityala: Terrell is a civil rights lawyer and he has been very vocal about it. The fact on the first anniversary again they’re trying to make it big, you know, death is you have to control any time of activity that results in the death of a person. You basically mould for it and you are compassionate towards the people in the family because we respect the loss of life. But to just politically and opportunistic seize and try to derive advantage is not something that’s acceptable. So Simon is basically saying they are just taking this into a spin and using it for their political purposes. It is the same thing with Antifa and BLM. They’ve been using this as a vehicle. There have been certain incidents and including a shooting around George Floyd Square yesterday last night. So all these points to some kind of political disruption, which is not warranted, you know, when you are trying to get behind this.
Sree Iyer: Let’s move on to Indian News, Indo-American dialogue continues with Dr Jaishankar in the US Capitol. India attracts the highest foreign direct investment of 82 billion in the fiscal year 2021, the second one is now China, which means India has essentially pushed China out as the favourite destination for the United States which’s very significant.
Sridhar Chityala: It is very significant. Once upon a time, China used to get close to 100 billion dollars of FDI annually. For almost a decade, they got this Capital which helped them to push their economy and create this Behemoth reserve of about 2.5-3 trillion. So when you take India now slowly inching its way towards that 75 plus billion. Some of us who, you know, socializing or you have used the word advocating, the growth of the Indian economy to be a 5 or 10 trillion dollars or a 30 trillion dollars economy, which is the desired goal. Then, we said that India must have an FDI investment coming in, and that should be in the range of about 75 billion on a consistent basis to about, you know, 10 to 12 years. So, India will then have the infrastructure capital for it to produce a GDP multiplier. So, we have definitely breached the 75 billion mark, Now, India needs to sustain it for a period of time to achieve the economic Advantage. And we saw that again also in the Indian Capital markets, reaching the 3 trillion mark, which is equal to the GDP of India, today.
Sree Iyer: Indian government plants stimulus for sectors affected by Covid-19, second wave. I think the details are still awaited, whatever little that you can share with us a please feel free because MSM in India is not going to cover this.
Sridhar Chityala: The sectors that are focusing on are tourism, which has been badly affected. They’re also focusing on Hospitality, which has been badly affected because of the shutdowns. They’re focusing on the MSME segment of the industry which is a small business that’s been badly affected. They are also focusing on the health care services sector which requires Capital because the whole Healthcare Services is being re-toned. So I think that the loans that are being granted, I think I don’t know the number. The number seems to be something like 50,000 crores is being set aside where the banks will lend against that at very concessional rates. So, these health care’s services can come up. These are the initial sectors on the horizon, probably more will come up but it’s a good deal very similar to the infrastructure plan that you’re attempting here in the United States, as a stimulus to give you a boost to the economy.
Sree Iyer: The United Kingdom gets the ball rolling for Free Trade Agreement with India. So this is the much famous trip that, you know, Boris Johnson or BoJo were supposed to make and it has not I think now they are doing everything we have video plus is MEA going to be stopping over in London on his way back.
Sridhar Chityala: I don’t think he is. He was in London and you know he has achieved the goal. I am sure that the objectives are met so now go BoJo and Modo we’ll meet by virtual Summit and you know they would meet in person very soon and get the agenda going. I think they are experimenting with already some agricultural exporters going from one of the states. So this 12-week consultation is to identify the areas and then determine what’s the right approach to go. Obviously, Defense is one of the areas. Manufacturing is one of the area’s, Alternative Energy could be one of the areas. So, clearly, Britain needs an anchor player and a large Market which better than, you know, India for them.
Sree Iyer: India and Israel sign Three Year work program to train Farmers and modernize Agriculture. Israel we know has been able to rock miracles because they is inherited desert and even able to not only produce enough water for themselves, but now they are a water surplus nation and this is, I think also a very good step in the right direction, sir.
Sridhar Chityala: Yes, I think drip irrigation is something that they have done very well and India has experimented in a number of areas, then, of course, desalination is another area. And the other thing is the purification because of the lot of fungus as well as the plants you know which makes the rivers and lakes, you know, non-potable as well as unfit for irrigation purposes. There’s been a lot of effort around the purification or cleansing of the lakes and rivers. So this particular program is called as they’re establishing centres of excellence around 12 States, they’ll identify 29 locations where they will establish the centres of excellence. Working very closely with villagers and you know teaching them the appropriate methods by which the irrigation system and the agricultural farming can be improved for better productivity.
Sree Iyer: India, and Oman signed 2 key defence pacts on maritime security and military cooperation. India is really busy this week, sir.
Sridhar Chityala: India has been busy this week and I think we are also advocating quite deliberate reasons that there has been a lot of adverse press in India around the whole concept of ‘India doesn’t have partners and partnerships and India must look outwards’ etc. What they may be implying is surrender India to China, and surrender India to Pakistan. That may be the agenda of some of these publications around the country. India has enormous partnerships with a number of people around the region and a number of people very much outside the region. Oman is very significant. It’s a long-standing partner and it’s a partner with whom India has had a strategic relationship for a period of time. This defence is very important because it gives them the passage and gateway into both the Indian Ocean, as well as into the African continent. When you say there is maritime as well as there is a defence, defence is from a deterrence point of view. So any of the naval ships that pass through that region, can dock for maintenance and other kinds of activities. And then, of course, from the trade point of view, they also can be a logistical support point, as they move into East and South Africa.
Sree Iyer: The government is going to directly procure from Pfizer and Moderna. Panacea Biotech and RDIF launch the production of Sputnik 5, so these are significant developments. There is no surprise that the companies like Pfizer and Moderna don’t want to deal with state governments, sir, because they don’t have a very good track record of working with global corporations, isn’t it?
Sridhar Chityala: Moderna and Pfizer have followed a consistent pattern for two reasons. One is around the insurance indemnity that they are pursuing. Number two, they want to have a single point of accountability for procurement. They don’t want to have any issue in managing logistics, distribution, and dealing with multiple parties in a given country. So, they go to a government, they do a central procurement and the own point-to-point accountability rests with one person. Then it becomes the country’s responsibility to manage the logistics of distribution and all kinds of issues. So I think it’s a very good move. my suggestion to a number of viewers is, if you roll back and play three-four sessions or one week of sessions of DGI, we can probably itemize close to at least 20 to 30 different initiatives, which India is embarking on in managing this covid on a long-term basis by both from a procurement point of view as well as from distribution, and managing the needs of 1.39 billion people.
Sree Iyer: Nasal vaccines could be the game-changer in India, but it is unlikely before 2022. Again, we touched upon this in our previous episodes, haven’t we?
Sridhar Chityala: Today, the WHO for the first time has come out in issued a statement that, you know, this very famous Dr Swaminathan’s daughter Dr Soumya Swaminathan has issued a statement saying these nasal swabs could be the game changer and that the initial results were very positive and it’s conceivable that it won’t happen in 2021, possibly in 2022.
Sree Iyer: Netanyahu, in front of Blinken, tells the US should stay away from the Iran nuclear deal, Blinken US commitment for the security of Israel. So there is some interesting play going on. He’s in Israel, he’s talking about Israel and Palestine, but Netanyahu didn’t feel too bad about dragging Iran in here.
Sridhar Chityala: He feels that there is a cusp. Up until the day before yesterday Iran was playing Hardball and was indicating that it will cut off the satellite image access to the IAEA so no inspections could take place. So Netanyahu has inherent suspicions. 2-3 days ago in the Iran-Syria border, another terrorist or leader of importance was taken down by the IDF who was considered as a huge security threat to Israel and engaged in types of activities. So you’re finding here, Benjamin Netanyahu, and some of his cabinet ministers taking a pole position, just because you bargained and pushed us for a ceasefire, don’t take it for granted, we exercise the right. So to that extent, Blinken is saying, your security is important to us. But in the meanwhile, we are doing the other stuff and also want to bring Iran to the table.
Sree Iyer: Iran and IAEA extend monitoring deal, averting a crisis in nuclear talks. Looks like everything is hunky-dory again, sir.
Sridhar Chityala: I think Iran and Palestine and some of these countries around that are fulcrum points, now know how to play the game and they are playing the game. And it’s very well known that Biden and Blinken want to have an alternate strategy, I don’t know about Blinken but certainly Biden, whether he is being egged on? I don’t know. They have reneged on the West Asia peace deal or Abrahamic accord as they call it. They’ve reneged on it and they basically say there’s nothing great and they’re redoing this which is effectively Obama policy. Doing this nuclear deal with Iran and constantly persuading, egging them and bringing on is nothing but to justify that the Obama transaction was a great transaction. Notwithstanding the fact that Iran has flouted every rule and every norm. And violating the norms China and Iran struck a deal overcoming the issue around trade sanctions. So if somebody thinks in Obama’s world that Iran is going to be normalized, then he is sadly mistaken. And of course, progressives within the Democratic party are also providing impetus to some of these activities.
Sree Iyer: White House says Biden and Putin will be holding their first summit on the 16th of June in Geneva. I think we also mentioned this a few days ago. So this is now going to take shape, isn’t it?
Sridhar Chityala: The date is announced. The location is announced. Yes, June 16 and Geneva, not in Brussels or London or other places, not in Russia, but it’s taking place in Geneva. Biden has issued a press statement where he said, we have to meet, we have to talk and, we have to work the process. So, therefore, we can’t be isolating ourselves and taking adventurous approaches, and we need to sit and talk to Mr Vladimir so that at least in that part of the world and the rest of the world know that we are not a hostile partner but somebody with whom we can work with. I think that’s the objective of the Putin-Biden agenda.
Sree Iyer: EU leaders agree to donate 100 million doses of vaccines and China expands influence on Africa by building facilities, and Western Nations counter, the move. So, we now see, vaccine diplomacy being picked up by other countries also such as the EU and China is trying to do something. And we also see that Taiwan continues to suffer from the trifecta of drought, power outages and covid virus. Well, I’m putting all these things in perspective, sir. Just, give us a bird’s view on where you think these things will lead to? Where is the EU directing their vaccines? Are they going to come to India, some other countries, how are they’re doing it? and what is China up to? And Taiwan of course is now in a hard spot.
Sridhar Chityala: I think, first and foremost, we must dispel this theory, that India needs vaccines. India is doing a deal with Pfizer, with Moderna, with Johnson & Johnson, with Eli Lilly plus expansion of its own AstraZeneca covid program, plus the Bharat Biotech expansion, plus the new work with DRDO. I think India is going to have plenty of vaccines coming out in the next three to four months. Already, there is enough vaccine supply which I didn’t mention as a news item. There are enough vaccines available, I am told until the next tranche of vaccines come. It’s the mishandling in some of the states that are creating the problem.
To answer your specific question, 100 million is going towards many Asian and African countries, which are very badly in need. The penetration levels of the vaccination that is taking place in those countries is less than 2%, 3%, including Japan. Japan is very adversely impacted by access to vaccines.
As far as Africa is concerned, it is more of a geopolitical play. We have touched on this but it is being reaffirmed that the infrastructure is being expanded by China to seize control. Now I have not included, but there are three to four generals from the African countries who are formally trained in the PLA academy in warfare. These are the people who are expected to say, rah, rah, rah, to China, should any of the issues come up? So clearly China sees Africa as a strategic vantage point and it clearly is expanding the footprint.
To the final point on Taiwan, just like India, seems to have the same issues that India is going through, cyber attacks on the infrastructure plus a sudden spurt in covid cases. If you recall, we had mentioned that there were some pirate boats which came into, at least 20-30 pirate boats that came in and docked and they were given entry as those who were escaping the communist oppression in China. Yesterday, we heard Mr Mani talk about how the advocacy and the propagation of this potential biowarfare can occur in terms of transmission of this disease. So now suddenly when you look at Taiwan, which was 0% is now having spurt in the covid cases. It seems too coincidental but the cyber attacks and this spurt in cases in concert with all the stuff that’s going on in Taiwan is a cause for concern for the world community.
Sree Iyer: Burma’s Aung Suu Kyi makes her first court appearance since the coup and I think we will move on to Markets, sir, with your permission. Markets drop on sluggish consumer confidence data on inflation despite the FED position which has been one of a doubt, isn’t it?
Sridhar Chityala: Well I think that position is that inflation is high but we can take care of the inflation as the economy begins to settle down. Whether that holds true or not, we don’t know, time will tell. But clearly holding the interest rates at the current level is causing concern for a number of people. To the credit of the Fed and the treasury, the tenure rates did drop below 1.6% today. Notwithstanding the fact that there is a fear in the markets.
Sree Iyer: With that, we bring our Daily Global Insights to an end. We will be back tomorrow bright and early. Thanks for joining, do join our membership program, do subscribe to our Channel and Sridharji, we will be back again tomorrow, bright and early. Sir, Thank you and Namaskar
Sridhar Chityala: Thank you. Namaskar.
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