Daily Prelims Notes 14 March 2024

March 14, 2024
Posted by: OptimizeIAS Team
Category: DPN

Daily Prelims Notes

14 March 2024

Table Of Contents

1. Call for Review of TRIPS Agreement: India’s Joint Statement at WTO

Subject: IR

Section: International organisation

Under 13th Ministerial Conference of the World Trade Organization (WTO) in Abu Dhabi, where the temporary waiver of certain intellectual property rights (TRIPS) for Covid-19 related therapeutics and diagnostics was not extended, India, along with Bangladesh, Colombia, and Egypt, has jointly called for a review of the TRIPS Agreement.

Objective of the Joint Call:

The joint statement calls for a review of the TRIPS Agreement with a focus on the development dimension, technology transfer, and other concerns of developing countries.
This review is intended to build on the lessons learned during the Covid-19 pandemic.

Key Points of the Submission:

First Review under Article 71:
- The joint submission calls upon the Council for TRIPS to undertake its first review under Article 71 on the implementation of the TRIPS Agreement.
Examination of TRIPS and CBD Relationship:
- India and other nations are pursuing the fast-tracking of the examination of the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).
- The goal is to align the TRIPS Agreement with the CBD and create rules that prevent bio-piracy and protect traditional knowledge.

Background on TRIPS Agreement:

The TRIPS Agreement, effective since January 1, 1995, sets out the minimum standards of intellectual rights protection required by each WTO Member.
It provides guidelines for the protection of various forms of intellectual property, including patents.

Continuation of Work after MC13:

While the TRIPS waiver on vaccines was not extended to therapeutics and diagnostics at the WTO MC13, the joint declaration emphasizes the need to continue work in relevant WTO bodies.
The goal is to review and build on the lessons learned and challenges experienced during the Covid-19 pandemic.
This effort aims to develop effective solutions for future pandemics in an expedited manner.

Conclusion:

India and its partner countries are advocating for a comprehensive review of the TRIPS Agreement to address the development concerns of developing nations, ensure fair access to medicines and technology, and protect traditional knowledge. The joint call reflects the ongoing efforts to align international trade rules with global health priorities and the needs of all member countries.

Key Outcomes of WTO’s 13th Ministerial Conference (MC13):

Accessions:
- Endorsed the accession of Comoros and Timor-Leste, bringing WTO membership to 166 countries.
Reform of Deliberative and Negotiating Functions:
- Ministers welcomed efforts to improve WTO Councils, Committees, and Negotiating Groups for efficiency and effectiveness.
Dispute Settlement System:
- Renewed commitment to achieving a fully functional dispute settlement system accessible to all Members by 2024.
E-Commerce:
- Extended the e-commerce moratorium until MC14 or March 31, 2026.
TRIPS Non-Violation and Situation Complaints:
- Extended the moratorium on “non-violation” and “situation” complaints under the TRIPS Agreement.
COVID-19 Related TRIPS Waiver:
- Took note of the lack of consensus on expanding special rules for compulsory licenses to COVID-19 diagnostics and therapeutics.
Special and Differential Treatment:
- Adopted a decision to improve the use of S&D provisions, especially in technical barriers to trade and sanitary measures.
Sustainability Initiatives:
- Worked on initiatives such as Dialogue on Plastics Pollution and Fossil Fuel Subsidy Reform.
Fisheries Subsidies:
- Welcomed progress towards the Agreement on Fisheries Subsidies (AFS) entry into force, with 71 Members ratifying the agreement.

Conclusion:

The WTO faces significant challenges in maintaining its relevance and effectiveness in the global trading system. Key outcomes of MC13, such as agreements on e-commerce, fisheries subsidies, and sustainability initiatives, highlight progress amid complex trade dynamics. India’s concerns, particularly in agriculture, market access, and IPR, reflect the diverse issues member countries navigate.

Necessary reforms, including dispute settlement revitalization, rule updates, and S&D enhancements, are crucial for the WTO to address current trade challenges and promote inclusive, sustainable global trade. As the world economy evolves, the WTO must adapt to remain a central pillar of international trade governance.

Compulsory Licensing (CL) is a legal mechanism that allows governments to grant licenses to third parties to produce, use, or sell a patented product or process without the consent of the patent holder. This is typically done to address certain public interest concerns, such as ensuring access to essential medicines, promoting competition, or addressing market failures.

2. Japan Nears Interest Rate Hike: Financial Markets Gear Up for Transition

Subject: Economy

Section: Monetary Policy

In a dramatic shift in Japan’s financial markets, rising interest rates are looming on the horizon, a phenomenon not seen in decades.

Transition to Rising Interest Rates:

Japanese financial markets are preparing for an imminent rise in interest rates, signaling the end of a long era of monetary policy experimentation.
The Bank of Japan (BOJ) is expected to exit its negative short-term rate policy by June, with a possibility of rates rising to zero as early as next week.

Implications for Financial Instruments:

Government Debt Market:
- Investors are positioning themselves to benefit from selling short-dated government bonds.
- A rise in central bank deposit rates could lead banks to shift capital out of bonds and into cash, impacting the government debt market.
Foreign Exchange Market:
- The market, heavily short on the yen, is adjusting to paying interest, albeit small, on the Japanese currency.
- A reversal in short yen positions has already begun, indicating the market’s response to the changing interest rate scenario.
Equity Market:
- Equity investors have been optimistic, particularly in bank shares, expecting growth in loans and margins.

Market Expectations and Challenges:

Investors and policymakers view higher wages and shifts in corporate attitudes as new factors influencing the interest rate hike.
Longer-term changes in Japan are considered underpriced by markets, with potential for a longer hiking cycle if consumption and wages support each other.

Challenges Ahead:

The transition from unconventional monetary policies will take time and could have long-lasting effects on the economy.
Smaller businesses may face challenges from higher borrowing costs, while crowded bets on bank stocks could see losses.
A potential yen rally could trigger global repercussions, particularly in “carry” trades funded in yen.

Conclusion:

Japan’s journey toward higher interest rates marks a significant shift in its monetary policy landscape. Financial markets are bracing for these changes, with implications for various asset classes and global trading strategies. The move reflects Japan’s efforts to revive its economy and attract investment, but it also poses challenges in unwinding the distortions of prolonged unconventional policies. As markets adjust to this new era, investors will closely monitor developments for potential opportunities and risks.

Zero Interest-Rate Policy (ZIRP):

Zero Interest-Rate Policy (ZIRP) is an unconventional monetary policy tool used by central banks to stimulate economic growth and combat deflation.

In a ZIRP environment, the central bank sets its benchmark interest rate at or near zero percent. The aim is to encourage borrowing, spending, and investment by making the cost of borrowing extremely low.

Stimulating Economic Activity: By lowering interest rates to zero, the central bank seeks to encourage businesses and individuals to borrow money for investments, such as capital expenditures or home purchases. This increased spending can stimulate economic growth.
Boosting Consumer Spending: With lower borrowing costs, consumers may be more inclined to take out loans for big-ticket items like cars and homes. This boosts consumption, which is a key driver of economic activity.
Lowering the Cost of Debt Servicing: For existing borrowers, ZIRP reduces the cost of servicing debt, freeing up funds that can be spent or invested elsewhere.
Fighting Deflation: ZIRP is often used in times of deflationary pressure when prices are falling. By encouraging spending and investment, central banks aim to combat deflation and achieve a modest level of inflation, typically around 2%.
Supporting Asset Prices: Low interest rates can also lead to higher asset prices, such as stocks and real estate, as investors seek better returns than those offered by traditional savings accounts or bonds.

While ZIRP can have positive effects on the economy, there are also potential drawbacks and risks:

Impact on Savers: With interest rates near zero, savers earn minimal returns on their savings accounts, CDs, and other fixed-income investments. This can be challenging for retirees and those relying on interest income.
Asset Bubbles: Persistently low interest rates can lead to excessive risk-taking and asset bubbles, as investors chase higher returns in riskier assets.
Limited Effectiveness: ZIRP may lose its effectiveness over time, especially if it remains in place for an extended period. Central banks may then need to resort to other unconventional monetary policies.
Impact on Banks: Banks’ profitability can be squeezed under ZIRP, as their net interest margins shrink due to lower interest rates on loans.

Negative Interest Rate Policy (NIRP):

Negative Interest Rate Policy (NIRP) takes ZIRP a step further by setting the central bank’s policy rate below zero. In a NIRP environment, banks are effectively charged for holding excess reserves with the central bank, instead of earning interest on those reserves.

Key features of Negative Interest Rate Policy (NIRP) include:

Encouraging Lending and Spending: NIRP aims to incentivize banks to lend money rather than hold excess reserves. By charging banks for deposits, central banks hope to spur lending to businesses and consumers, boosting economic activity.
Pushing Down Market Interest Rates: When the central bank charges negative rates on reserves, it can lead to lower market interest rates on loans and mortgages. This can encourage borrowing and stimulate demand for credit.
Weakening the Currency: Negative rates can also put downward pressure on a country’s currency. When investors earn lower returns on investments denominated in that currency, they may seek higher returns elsewhere, leading to currency depreciation.
Combatting Deflation: Similar to ZIRP, NIRP is used to combat deflationary pressures and stimulate inflation to reach central bank targets.

While NIRP shares some similarities with ZIRP, it introduces additional complexities and potential challenges:

Impact on Bank Profits: NIRP can squeeze bank profits even further than ZIRP, especially if they are unable to pass negative rates on to depositors.
Potential for Disruption in Financial Markets: Negative rates can distort financial markets, leading to unusual behavior such as investors hoarding cash or seeking alternative investments.
Concerns for Savers and Pension Funds: NIRP poses challenges for savers, pension funds, and insurance companies, which struggle to generate positive returns in a low or negative interest rate environment.
Limits to Effectiveness: Like ZIRP, NIRP may face diminishing returns if implemented for an extended period, potentially requiring other policy tools to achieve central bank objectives.

Both ZIRP and NIRP are unconventional monetary policies used during times of economic distress or when traditional tools like adjusting interest rates are no longer effective. They come with benefits in terms of stimulating economic activity but also carry risks and challenges that policymakers must carefully consider.

3. Overcoming theoretical limits on solar cell capacity

Subject: Science and tech

Section: Msc

Photovoltaics and solar cells:

Photovoltaics is a study focusing on the conversion of light energy into electrical energy.
Solar cells, which are key devices in photovoltaics, harness the energy from the Sun, Earth’s primary light and energy source.
Solar cells are comprised of semiconducting materials, such as doped silicon, that facilitate this energy conversion.

How Solar Cells Work:

Sunlight interacting with semiconductor sex cites electrons from a lower-energy valence band to a higher-energy conduction band, leaving behind a “hole” in the valence band.
A hole represents a vacant site with a positive charge due to the absence of an electron.
The transition of electrons and the creation of holes generate electron-hole pairs, essential for creating photocurrent in semiconductors.

The Shockley-Queisser Limit:

It is a theoretical concept that defines the maximum efficiency potential of a solar cell to produce electricity.
Named after Physicists William Shockley (U.S.) and Hans-Joachim Queisser (Germany).
Factors such as transparency loss (~25%) and thermalisation (~30%) limit the maximum efficiency of solar cells.
Modern solar cells convert only about a third of the incident solar energy into electrical energy.

Challenges and Innovations:

Semiconductors struggle to utilize photons with either insufficient energy to overcome the band gap or those with excess energy that merely heats the device.
Efforts to surpass the Shockley-Queisser limit include carrier multiplication (allowing a photon to create multiple electron-hole pairs) and hot carrier extraction (capturing high-energy photons before they convert to heat).
South Korean physicist Young Hee Lee highlights these methods as promising pathways to enhance solar cell efficiency.

Source: TH

4. Warring tribes in Papua New Guinea sign ceasefire deal

Subject: IR

Section: Places in news

Context:

A temporary ceasefire was negotiated in Papua New Guinea to address ongoing revenge killings in the country’s remote highlands.

Background:

The central Enga province has experienced years of tit-for-tat fighting, with a significant escalation in recent months.
The ceasefire involves two main factions, the Yopo Alliance and the Palinau Alliance, which met in the capital, Port Moresby, to finalize a three-month ceasefire agreement.
The agreement mandates both factions to lay down arms and halt all forms of hostility.

Historical Context:

Clashes between highland clans in Papua New Guinea have a centuries-old history. However, the recent violence has been exacerbated by the introduction of mercenaries and automatic weapons, intensifying the cycle of violence.

Papua New Guinea:

Papua New Guinea is a country in Oceania that comprises the eastern half of the island of New Guinea and its offshore islands in Melanesia (a region of the southwestern Pacific Ocean north of Australia).
Officially the Independent State of Papua New Guinea, it shares its only land border with Indonesia to the west and it is directly adjacent to Australia to the south and the Solomon Islands to the east.
Its capital, located along its southeastern coast, is Port Moresby.
The country is the world’s third largest island country, with an area of 462,840 km2 (178,700 sq mi).
Enga Province:
- Enga is one of the provinces in Papua New Guinea (PNG).
- Enga is geographically situated in the northern region of Papua New Guinea and was separated from the adjacent Western Highlands at the time of national independence in 1975.
- The majority ethnic group are Engans.

Source: TH

5. Supreme Court stops Assam’s move to withdraw notification of Pobitora Wildlife Sanctuary

Subject: Environment

Section: Protected Areas in news

Context:

The Supreme Court halted the Assam government’s attempt to withdraw a notification from March 17, 1998, that established the Pobitora wildlife sanctuary, a crucial habitat for one of the largest rhino populations in India.

Concerns Over Sanctuary Declaration:

The government highlighted that the sanctuary’s declaration overlooked the rights of villagers from marginalized communities in Thengabhanga, Murkata, and Mayong, who have lived in the area since before India’s independence.
Following the withdrawal of the 1998 notification, the government formed a committee to assess the rights and claims of forest dwellers and to reconsider the declaration of the Pobitora region as a wildlife sanctuary.
Justice B.R. Gavai emphasized that withdrawing a notification declaring a wildlife sanctuary requires approval from the National Board of Wildlife and noted previous orders against the dereservation of protected areas. The Court found the withdrawal “ex facie illegal.”
Assam’s counsel argued that the withdrawal aimed to correct a past error in land demarcation,not to dismantle the sanctuary.
The justices affirmed the government’s responsibility towards both the sanctuary and the rights of forest dwellers.

Pobitora Wildlife Sanctuary:

Pobitora Wildlife Sanctuary is situated in the flood plains of River Brahmaputra in the district of Morigaon in the state of Assam.
It harbours the highest density of Rhino in the world and the second highest concentration of Rhino in Assam after Kaziranga National Park.
It is often called ‘Mini Kaziranga’ because of the similar landscape and the sizeable population of the one-horned rhino.
Fauna: Leopard, Leopard cat, Fishing cat, Jungle cat, Feral Buffalo, Wild pigs, Chinese pangolins, etc.
Flora: Its maximum consists of the wet savannah of Arundo donax and Saccharum. The remaining area is covered by water bodies.

Source: TH

6. FBR and energy security

Subject: Science and tech

Section: Nuclear energy/science

India’s FBR programme

India’s Fast Breeder Reactor (FBR) program, initiated two decades ago, aims to develop comprehensive nuclear fuel cycle capabilities, including electricity production from uranium in nuclear power reactors.
In 2003, under Prime Minister Atal Bihari Vajpayee, Bharatiya Nabhikiya Vidyut Nigam Ltd (BHAVINI) was established to construct and operate the Prototype Fast Breeder Reactor (PFBR), marking India’s most advanced nuclear reactor project.
Initially projected to complete by September 2010, technological challenges led to delays, with the latest completion target set for October 2022. Upon completion, India will become the second country, following Russia, to have a commercial operating FBR, positioning it ahead of China’s smaller fast breeder program. Programmes in countries such as Japan, France, and the United States were shut down amid safety concerns.

From ‘fertile’ to ‘fissile’

India’s Department of Atomic Energy (DAE) has devised a three-stage power program aimed at harnessing the country’s abundant thorium reserves to generate electricity.
These thorium reserves are located in coastal and inland placer sands across various states, including Kerala, Tamil Nadu, Odisha, Andhra Pradesh, Maharashtra, Gujarat, Jharkhand, and West Bengal. Placer deposits, naturally concentrated by gravity, contain valuable minerals such as thorium (from monazite ore), gold, platinum, titanium, uranium, and rare earth elements.
The vision for this nuclear power program, ensuring energy security, was developed by Dr. Homi J Bhabha and Dr. Vikram Sarabhai.
They recognized the significance of Fast Breeder Reactors (FBRs) which generate more nuclear fuel than they consume by converting fertile isotopes into fissile material.
The program is structured in three stages, focusing on converting ‘fertile’ material into fissile material.
For instance, uranium-238 is converted into plutonium-239 within nuclear reactors, and thorium-bearing monazite is transformed into fissile uranium-233.
India follows a “closed fuel cycle” strategy, reprocessing spent fuel to separate useful isotopes (Pu239 and U233) for further use, which is crucial for multiplying the fissile inventory and eventually leveraging thorium in the program’s third stage.
The FBR plays a vital role in this transition, setting the foundation for the full utilization of thorium resources.

Three stages and FBR

The first stage – the setting up of Pressurised Heavy Water Reactors (PHWRs) and associated fuel cycle facilities — is in progress.
- PHWRs are reactors that use natural uranium as fuel and heavy water (deu-terium oxide) as coolant and moderator.
- Nuclear Power Corporation of India Ltd operates 22 commercial reactors with an installed capacity of 6,780 MWe.
- The programme has been supplemented by construction of imported Light Water Reactors (LWRs) – the first of two units built with Russian collaboration is already generating power.
The second stage involves the setting up of FBRs backed by reprocessing plants and plutonium fabrication plants, primarily to multiply the inventory of fissile material.
The third stage will be based on the Th-U233 cycle.
- For producing U233, obtained by irradiation of thorium in PHWRs and FBRs, an Advanced Heavy Water Reactor (AHWR) is proposed.

The combination of power reactors from all the three stages is expected to ensure long-term energy security for the country.
But the commercial utilisation of thorium on a significant scale can begin only when abundant supplies of either U233 or Pu239 are available.

Way forward hereafter

The Fast Breeder Reactor (FBR) will start its operations using a Uranium-Plutonium Mixed Oxide (MOX) fuel, surrounded by a U238 ‘blanket’ that will produce additional fuel through nuclear transmutation.
The India-US civil nuclear deal has further facilitated the process, allowing India to import uranium for domestic reactors and thereby accelerating the nuclear program.

Source: IE

7. PM launches Pradhan Mantri Samajik Utthanevam Rozgar Adharit Jankalyan (PM-SURAJ) portal

Subject: Schemes

Section: Vulnerable section

Context:

The Ministry of Social Justice and Empowerment launched a nationwide initiative aimed at offering credit support to the marginalized segments of society

More on news:

During the event, PM unveiled the ‘Pradhan Mantri SamajikUtthan and Rozgar AdharitJankalyan’ (PM-SURAJ) national portal online which symbolized the ministry’s dedication in placing the underprivileged at the forefront, towards uplifting the most marginalized sections of society, and supported credit assistance to one lakh entrepreneurs hailing from disadvantaged communities.
Prime Minister Shri Modi personally interacted with beneficiaries from various states who have been benefited under schemes like NAMASTE, VCF-SC,VCF-BC, ASIIM from disadvantaged groups, that includes Scheduled Castes, backward classes, and Safai Mitras.
Ayushman health cards and personal protective equipment (PPE) kits were distributed by the ministry to sewer and septic tank workers (Safai Mitras) under the National Action for Mechanized Sanitation Ecosystem (NAMASTE).
Credit support to 1 lakh entrepreneurs of disadvantaged sections has been sanctioned under PM SURAJ scheme.

About NAMASTE scheme:

NAMASTE scheme to eradicate unsafe sewer and septic-tank cleaning practices introduced by the Ministry of Social Justice and Empowerment.
Main features of the Scheme to be implemented in all ULBs are:-
Identification: NAMASTE envisages identifying the Sewer/Septic Tank Workers (SSWs).
Occupational Training and distribution of PPE Kits to SSWs.
Assistance for Safety Devices to Sanitation Response Units (SRUs).
Extending Health Insurance Scheme Benefits to identified SSWs and their families under the Ayushman Bharat- Pradhan Mantri Jan Arogya Yojana (AB-PMJAY).
Livelihood Assistance: The Action Plan will promote mechanization and enterprise development by providing funding support and subsidy (capital +interest) to the sanitation workers, to procure sanitation related equipment.
IEC Campaign: Massive campaigns would be undertaken jointly by the ULBs & NSKFDC to spread awareness about the interventions of NAMASTE.

8. Panel recommends ban on ‘ferocious dogs’

Subject: Science and tech

Section: Msc

Context:

An expert committee constituted by the Department of Animal Welfare and Husbandry, Ministry of Agriculture, has recommended that certain breeds of “ferocious dogs” be prohibited from being kept as pets.

More in news:

An official letter has gone out from the department to all States listing out these dog breeds as well as instructions to no longer register licenses that permit their sale.
The expert committee was constituted after citizen groups complained of attacks on people, sometimes fatal by these dogs.
The High Court, in December 2023 had said it would decide on the issue “in three months.”

Ferocious Dog breeds:

The breeds include mixed and cross breeds like Pitbull Terrier, Tosa Inu, American Staffordshire Terrier, Fila Brasileiro, Dogo Argentino, American Bulldog, Boerboel, Kangal, Central Asian Shepherd Dog, Caucasian Shepherd Dog, South Mastiffs, Rottweiler, Terrier, Rhodesian Ridgeback, Wolf Dogs, Canario, Akbash dog, Moscow guard dog, Cane corso and dogs commonly classified as Bandog.

9. Meet Devin AI: the world’s ‘first fully autonomous’ AI software engineer

Subject: Science and tech

Section: Awareness in IT and computer

Context:

US-based applied AI lab, Cognition, has introduced what it claims is the world’s first AI software engineer.

More on news:

The makers say that the AI agent, named Devin, has passed practical engineering interviews held by leading AI companies.
It has also completed real jobs posted on Upwork, an US-based freelancing platform, according to Cognition.
A first of its kind, Devin AI has the ability of taking a simple command and turning it into a functioning website or software program, Cognition, backed by the Founders Fund.

What can Devin do?

The AI agent comes with some advanced capabilities in software development, including coding, debugging, problem-solving, etc.
Devin uses machine learning algorithms to constantly learn and improve its performance and adapt according to new challenges.
Devin can build and deploy apps end-to-end and can also train and fine-tune its own AI models.
Devin can plan and execute complex engineering tasks that would require thousands of decisions.
The makers have also endowed the AI software engineer with the ability to proactively collaborate with the user. It reports progress in real-time, is capable of accepting feedback, and works along with the user through design choices as needed.

What about its performance?

On the SWE-Bench benchmark (a benchmark for evaluating large language models on real-world software issues found on GitHub), Devin correctly resolved 13.86 per cent of the issues without any assistance compared with the 1.96 per cent unassisted and 4.80 per cent assisted of the previous state-of-the-art model.
In terms of performance, Devin AI is capable of augmenting efficiency and speed within software development processes by automating repetitive tasks, instantly generating code, expediting project timelines, and cutting down development expenses substantially.
One of the most notable facets of Devin AI is that it is immune to human errors or inconsistencies.
The AI agent is capable of guaranteeing precision and uniformity in coding practices which can lead to the development of superior-quality software products.