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Tag Archives: populism
India hikes spending, shuns ‘outright populism’ in last pre-election budget
NEW DELHI, Feb 1 (Reuters) – India announced on Wednesday one of its biggest ever increases in capital spending for the next fiscal year to create jobs but targeted a narrower fiscal deficit in its last full budget ahead of a parliamentary election due in 2024.
Prime Minister Narendra Modi’s party has been under pressure to create jobs in the populous country where many have struggled to find employment, although the economy is now one of the world’s fastest-growing.
“After a subdued period of the pandemic, private investments are growing again,” Finance Minister Nirmala Sitharaman said as she presented the 2023/24 budget in parliament.
“The budget makes the need once again to ramp up the virtuous cycle of investment and job creation. Capital investment is being increased steeply for the third year in a row by 33% to 10 trillion rupees.”
The capital spending increase to about $122.3 billion, which would amount to 3.3% of gross domestic product (GDP), will be the biggest such jump after an increase of more than 37% between 2020/21 and 2021/22.
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Total spending will rise 7.5% to 45.03 trillion rupees ($549.51 billion) in the next fiscal year starting on April 1.
Sitharaman said the government would target a fiscal deficit of 5.9% of GDP for 2023/24 compared with 6.4% for the current fiscal year and slightly lower than a Reuters poll of 6%. The aim is to lower the deficit to 4.5% by 2025/26.
STEADY ‘MACRO BOAT’
Brokerage Nomura said the budget “prudently pushes for growth, without rocking the macro boat”.
“In the event, the government has presented a good budget. It has pushed for growth via public capex and continued on the path towards fiscal consolidation, without offering much in terms of outright populism.”
Capital Economics said the “absence of a fiscal blowout”, a recent drop in inflation and signs of moderating growth could convince India’s central bank to slow the pace of rate hikes next week.
It said there was still a chance of fiscal slippage as campaigning kicks off for the election, in which Modi is widely projected to win a third straight term.
The finance ministry’s annual Economic Survey, released on Tuesday, forecast the economy could grow 6% to 6.8% next fiscal year, down from 7% projected for the current year, while warning about the impact of cooling global demand on exports.
Sitharaman said India’s economy was “on the right track, and despite a time of challenges, heading towards a bright future”.
Her deficit plan will be aided by a 28% cut in subsidies on food, fertiliser and petroleum for the next fiscal year at 3.75 trillion rupees. The government cut spending on a key rural jobs guarantee programme to 600 billion rupees – the smallest in more than five years – from 894 billion rupees for this fiscal year.
The government’s gross market borrowing is estimated to rise about 9% to 15.43 trillion rupees next fiscal year.
CONSTRAINTS
Moody’s Investors Service said the narrower fiscal deficit projection pointed to the government’s commitment to longer-term fiscal sustainability, but that a “high debt burden and weak debt affordability remain key constraints that offset India’s fundamental strengths”.
Among other moves to stimulate consumption, the surcharge on annual income above 50 million rupees was cut to 25% from 37%.
Indian shares reversed earlier gains to close lower on Wednesday, led by a fall in insurance companies after the budget proposed to limit tax exemptions for insurance proceeds, while Adani Group shares tumbled again as it struggles to repel concerns raised by a U.S. short seller.
Since taking office in 2014, Modi has ramped up capital spending including on roads and energy, while wooing investors through lower tax rates and labour reforms, and offering subsidies to poor households to clinch their political support.
A lack of jobs for young people, and meagre wages for those who do find work, has been one of the main criticisms of Modi.
Sitharaman also said the government was allocating 350 billion rupees for energy transition, as Modi focuses on green hydrogen and other cleaner fuels to meet India’s climate goals.
($1 = 81.7725 Indian rupees)
Reporting by Shubham Batra, Nikunj Ohri, Shivangi Acharya, Sarita Singh, Nigam Prusty, Manoj Kumar, Rupam Jain and Indian bureaux; Writing by Krishna N. Das; Editing by Kim Coghill, Jacqueline Wong and Gareth Jones
Our Standards: The Thomson Reuters Trust Principles.
Why Turkey changed its name: populism, polls and a bird
“The main reason why Turkey is changing its name is to eliminate the association with the bird,” said Sinan Ulgen, Chairman of Istanbul-based think-tank EDAM. “But also, the term is used in colloquial language to denote failure.”
International organizations are now obliged to use the new name, but it won’t happen overnight for the broader public, Ulgen told CNN. “It will likely take many years for the broader international public to switch from Turkey to Turkiye.”
This isn’t the first time the nation has tried to change its name, he said. A similar attempt was made in the mid-1980s under Prime Minister Turgut Ozal but it never gained as much traction, he said.
There may be political motivations behind the move as Turks return to the polls next June amid a biting economic crisis.
This is “another strategy deployed by the Turkish government to reach out to the nationalist voters in a crucial year for Turkish politics,” said Francesco Siccardi, senior program manager at the Carnegie Europe think tank.
The timing of the name change is “crucial” to next year’s elections, he said. “The decision on the name change was announced last December, when President Erdogan was trailing in all opinion polls and the country was navigating one of the worst economic crises of the last 20 years.”
Erdogan’s position in the polls has dropped significantly over the years. Polls from late last year show support for the ruling AK party at around 31-33% according to Reuters, down from 42.6% during the 2018 parliamentary elections.
Ulgen however said the name change was more of a rebranding strategy to boost the country’s international standing rather than a pre-election stunt.
Turkey’s foreign trade deficit climbed 98.5% year-on-year to $6.11 billion in April, Reuters reported, citing the Turkish Statistical Institute. Annual inflation jumped to 73.5% last month, a 22-year high.
Analysts say that at times of crisis, the president tends to resort to populist moves to deflect attention from problems at home. The economic turmoil, having already brought people into the streets, has been a headache for the government.
“The new name will both distract the domestic audience from more concrete, pressing problems and offer President Erdogan another argument for his case for a stronger, more traditional Turkey,” said Siccardi.
In another populist move in 2020, Erdogan issued a decree to convert Istanbul’s historic Byzantine Hagia Sofia Museum into a mosque.
“In the absence of concrete policies to handle the country’s economic and political problems, Erdogan seeks salvation in populist identity politics,” Political analyst Seren Korkmaz wrote of the move at the time. “He boosts Turkish nationalism and Islamism and targets opposition figures.”
The new name also holds symbolic value, having been adopted in 1923 after the new nation emerged from the ashes of WWI. Its adoption globally would “cement Erdogan’s place in Turkish history next to the republic’s founding father Mustafa Kemal Ataturk,” said Siccardi.
The digest
White House says Biden’s view of Saudi Arabia as a ‘pariah’ unchanged ahead of possible trip
White House Press Secretary Karine Jean-Pierre said Wednesday that US President Joe Biden’s position on Saudi Arabia “still stands,” responding to a reporter’s question on whether the president considers the kingdom to be a “pariah” due to its alleged complicity in the killing of dissident Saudi journalist Jamal Khashoggi in 2018.
- Background: As a presidential candidate, Biden vowed to turn the kingdom into a “pariah” and make it “pay the price” for Khashoggi’s killing. Upon taking office, he refrained from direct contact with Saudi Arabia’s de facto ruler Crown Prince Mohammed bin Salman (MBS), choosing instead to interact with his father, King Salman.
- Why it matters: The reiteration of Biden’s position comes amid reports that the president is planning a trip to the kingdom. MBS, who runs day to day affairs of the kingdom, has rebuffed US calls to raise oil production to tame inflation. Jean-Pierre said she had no presidential trips to preview. The White House on Thursday however took the rare step of recognizing the role played by MBS in extending a ceasefire in Yemen.
Lebanese spy chief plans visit to Syria over missing US reporter
Lebanon’s intelligence chief Major General Abbas Ibrahim said he will visit Syria to resume negotiations for the release of American journalist Austin Tice, who went missing a decade ago. The jumpstart in negotiations comes after a request from US officials.
- Background: Austin Tice was a freelance journalist and a former US Marine. He disappeared while reporting in Syria in 2012. Ibrahim said that in past talks with Damascus on Tice, Syria had raised demands related to the withdrawal of US forces, a resumption of diplomatic relations, and the lifting of some US sanctions. Negotiations stopped at the end of former President Donald Trump’s term.
- Why it matters: Washington said last year it would not normalize or upgrade relations with Syria because of what it describes as atrocities it inflicted on its people. Biden, who met Tice’s parents last month, needs a foreign policy win, especially after his botched withdrawal from Afghanistan. Biden’s overall approval rating stood at 41% last month, according to a CNN poll.
Israel tells UN nuclear watchdog it will take action against Iran if diplomacy fails
Israel will take action to block Iran’s nuclear program if diplomacy fails, Israeli Prime Minister Naftali Bennett told the International Atomic Energy Agency (IAEA) Director General Raphael Grossi on Friday. “Prime Minister Bennett made it clear that while Israel prefers diplomacy in order to deny Iran the possibility of developing nuclear weapons, it reserves the right to self-defense and to action against Iran in order to block its nuclear program should the international community not succeed in the relevant time frame,” a statement from Bennett’s office said.
- Background: Iran has increased its enriched uranium stockpile and is yet to provide answers for unexplained nuclear activities at three undeclared sites, according to two reports dated May 30 from the IAEA obtained by CNN. The only additional explanation offered by Iran at one of the suspected nuclear sites was “the possibility of an act of sabotage by a third party to contaminate the area. However, Iran has not provided any evidence to support this explanation,” the report stated.
- Why it matters: Grossi’s snap visit to Tel Aviv comes ahead of the IAEA’s board of governors meeting in Vienna on Monday, where the US, UK, France, and Germany are set to seek a resolution focused on the need for Iran to fully cooperate with the UN nuclear watchdog. The draft resolution will be in response to two reports obtained by CNN and given to IAEA member states on May 30, stating that Iran has yet to provide answers for unexplained nuclear activities at three undeclared sites.
Around the region
When Iranian actress Zar Amir Ebrahimi fled her country in 2006 due to a leaked tape, she thought her career was over. But on Saturday she became the first Iranian to win the best actress award at the prestigious Cannes Film Festival.
Ebrahimi rose to fame in her native Iran, but the crowning moment of her career at Cannes came while she was in exile, for a movie that was shot in Jordan.
Directed by Iran-born Ali Abbasi, “Holy Spider” is based on the true story of a serial killer in the holy city of Mashad, Iran. It follows a journalist, Rahimi, as she covers the hunt for a construction worker who was a suspect in the murder of 16 sex workers.
Winning the award “was just like a dream,” she told CNN’s Becky Anderson on Thursday.
The movie touches on the topic of patriarchy, which Rahimi hopes will send “a message of courage, a message of hope, for not only women, but men and women all around the world.”
The win has thrust her back into the limelight in Iran and has caused a backlash. The actress told CNN that she has received around 200 threats. “The problem is that they didn’t even watch this movie, and they are judging this movie, just from a trailer,” she said, attributing the reaction to the lack of freedom of expression in Iran.
Ebrahimi fled Iran for France in 2006 after a “private video” of hers leaked, fearing arrest and lashings from judicial authorities, she said. She had to start her career afresh “in a country where I knew no one.”
“I had to run away from my country, from my home. I left my friends and family behind,” she told CNN. But she refused to let the scandal mar her career. “From exactly the day after that scandal happened to me, I just talked about cinema, I just thought that I am alive, and I need to work. And you know, I will be alive because I have cinema, because I love my work, because I love life.”
Ebrahimi said her next film will be shot in Australia. She has no plans to return to her homeland.
By Mohammed Abdelbary
What’s trending
Kuwait: #American_Embassy
A tweet to mark Pride Month by the US embassy in Kuwait has started a firestorm on social media, prompting the Gulf nation to summon a US diplomat.
“All human beings should be treated with respect and dignity and should be able to live without fear no matter who they are or whom they love,” the embassy tweeted, in English and Arabic, on Thursday with an image of a pride flag. “@POTUS is a champion for the human rights of #LGBTQI persons. #Pride2022 #YouAreIncluded,” it said, referring to the US president.
The US embassies in Saudi Arabia, Bahrain and the UAE posted similar tweets.
The Kuwaiti embassy late on Thursday summoned the US charge d’affaires on the back of the embassy’s “pro-gay rights post,” the state-run Kuwait News Agency reported. It called on the embassy to “respect the country’s laws and regulations in force in the State of Kuwait and the obligation not to publish such tweets.”
Homosexuality is illegal in Kuwait and same-sex sexual activity is criminalized under the country’s penal code.
Kuwaiti lawmaker Abdul Aziz Al Saqobi accused the embassy of “trying to impose an agenda that is contrary to common sense and the values” of the country.
Rights activist Anwar Al Rasheed said he was shocked not by the embassy’s tweet but by the protest from the Kuwaiti government, which he said “believes it is defending virtue in the name of God.”
“It’s as if our country is not full of moral and financial corruption … and our society is angelic whose innocence the government seeks to protect,” he said to his more than 112,000 followers.