Economy

There is no official response from the United States so far on the $ 400 billion Comprehensive Economic Cooperation Plan for 25 years between China and Iran.

But analysts say that this step will prove to be an important 'game changer' not only for the region but in the global economic system.

There is uneasiness in Pakistan over the fact that now China is turning to Iran. But Pakistan's diplomats and analysts, who have a keen eye on the issue, have categorically dismissed this suspicion.

He says that the recent China and Iran Economic Cooperation Agreement will not be an alternative to the China Pakistan Economic Corridor (CPEC), but will strengthen it.

Iran's helplessness and China's need

According to experts, Tehran has tried to make itself a powerful country for the new global situation by collaborating with China on long-term economic, infrastructure construction and security issues.

But while doing so, on the one hand Iran may face new sanctions from the US, on the other hand this agreement can save it from the continuous sanctions of the US.

The long-standing US sanctions on Iran have brought it so close to China. This is why Iran has agreed to sell oil to China at a lower price than global rates. So that its oil sales can continue uninterrupted and the national treasury can get a reliable source of income.

Experts say that the documents of the agreement have not been revealed yet. But the information that has been received suggests that Iran's fragile economy can help bring economic stability to $ 400 billion projects over the next 25 years.

In return, China will be able to purchase oil, gas and petro-chemical products from Iran at a discounted rate. In addition, China will also invest in Iran's financial, transportation and telecommunications sectors.

Under this agreement, for the first time in Iran's history, the two countries will collaborate in state, security and military matters through joint training exercises, weapons modernization and joint intelligence.

According to the agreement reached between the two countries, five thousand soldiers of the People's Liberation Army of China will also be stationed in Iran. But keep in mind that there are also protests in Iran, in which former President of Iran Ahmadinejad is at the forefront.

It is also speculated that perhaps Iran may be an ideal candidate to adopt China's new digital currency, the E-RMB, which has weakened the power to ignore and approve the dollar.

Remember that Iran is not currently connected to the global financial and banking system SWIFT and is not dealing with Iran.

CPEC - Plus

According to Senator Mushahid Hussain Syed, President of the Pakistan-China Institute, the Iran-China strategic agreement is a good step for the region and also positive for Pakistan's interests, as it will strengthen regional economic cooperation, centered on Pakistan.

Mushahid Hussain hoped that it would help strengthen Gwadar Port's role in bringing stability to Balochistan and promoting regional cooperation with China, Afghanistan, Iran and Central Asian countries.

He further stated that it was unfortunate that India did not renew the IPI (Iran-Pakistan-India Pipeline) due to US pressure (when David Mulford was the US Ambassador to India on January 25, 2006). Instead opted for a nuclear deal with the US. India had removed the then minister Mani Shankar Aiyar who was a supporter of IPI.

Rejecting uneasiness about CPEC in Pakistan, Mushahid Hussain said that the Iran-China agreement would make CPEC more meaningful. Because both of these agreements are not for competition or rivalry, but both are aimed at strategic cooperation with China.

'Preparing to compete with world power'

Says India's famous defense analyst Praveen Sahni, "I think it would be wrong to see this agreement in the context of regional tensions in the Persian Gulf." China has always avoided supporting or opposing anyone in the Iran-Saudi rivalry. The main reason for China's increasing presence in the Persian Gulf is its economic affairs.''

He says that China and Saudi Arabia also signed major economic deals a year ago. But this new agreement of China with Iran reveals another important point. That is, instead of singlehanding Tehran, US sanctions have pushed it even further into China's camp. Therefore, the importance of this agreement is not only important for the region, but it also appears to be preparing to compete with the world power.

Says Praveen Sahni, "More details of the agreement are not currently available, so it cannot be compared to CPEC." Nevertheless, the major difference is that the basic interests of both the parties are connected. China needs oil, which it will get from Iran at cheaper rates.''

"In return, Iran wants to invest in its economic, oil production, infrastructure and trade, which China will provide," says Praveen Sahni. There is economic cooperation in China-Iran relations, which is not the case with China and Pakistan. What kind of role will this difference play, at the moment nothing can be said about it.''

According to him, "Iran has the resources that China desperately needs, that is, hydrocarbons." Pakistan has no such wealth. Therefore, in terms of economic matters, relations between Pakistan and China are very different from relations between China and Iran.''

According to Praveen Sahni, however, there has been much discussion on whether the corridor based on Pakistan, Iran, Central Asia will lead to economic development and improvement in the region.

Says Praveen Sahni, "It may be a long-term plan, but there is no possibility of its benefits in the short term. Iran and Pakistan do not manufacture industrial products that Central Asian countries import, nor do Pakistan and Iran are major markets for Central Asian exports.''

He said that there is such infrastructure from China to Central Asia as well as Europe, due to which there is a network of roads and railways. He says that "it is difficult to see how the new routes of China, Pakistan and Iran, will be able to be an alternative to these old paths".

Praveen further said that the project of building Chabahar port of Iran was initiated by India because India had to use Afghanistan's mineral resources and make them better by utilizing Iran's industrial capacity.

Clearly, given the ground situation in Afghanistan, it was like a 'distant drumming'. Afghanistan's economy is not large enough for India to build a major road or railway infrastructure for the India-Afghanistan trade corridor through Iran.

He further said that Pakistan has tried its best to stay away from Iran-Saudi confrontation in the Persian Gulf and so has India.

Says Praveen, "Both sides have economic interests in this confrontation, but at the same time, there are internal issues related to this confrontation. Therefore, it is becoming more and more difficult to maintain a balance between all the sides over time. Especially when the United States decides in the next few years that it needs to increase further pressure on Iran. I don't think there is any other option than to maintain a realistic balance.''

'America pushes Pakistan and Iran towards China'

Iqbal Ahmed Khan, former Pakistan ambassador and professor of diplomacy and international relations at Lahore University of Management Sciences, says China's investment plan with Iran is part of its $ 8 trillion BRI projects, one of which is CPEC.

According to former Ambassador Iqbal Ahmed Khan, it is not correct to compare China's investment in Iran to CPEC. Because both of these are Chinese investments and both will be helpful to each other and the three countries will benefit from it.

He says, "Both China and Iran are friends of Pakistan, so Pakistan wants the project to succeed."

Iqbal Ahmed Khan further said that China's investment in Iran is not at the cost of Pakistan, so it should not be considered "zero-sum game".

On the question whether Pakistan and China will be able to bear the burden of US sanctions on Iran. Iqbal Ahmed Khan said that the main reason for China's investment in Pakistan and Iran is, in fact, the sanctions imposed by the US or attempts to ignore these countries.

He says, "Both Pakistan and Iran have been sidelined by the US, due to which we had to look for another way. Pakistan decided to make the most of its political and geographical location. On one side is China and on the other side is Iran. However, if Pakistan is a friend of China, it does not mean that Pakistan is hostile to America, but China has asked Pakistan to improve its relations with both America and India many times. However, America should also realize this.

Iqbal Ahmed Khan said that Pakistan will gladly cooperate with Iran, but Pakistan will also try to make Iran like it a member of Shanghai Cooperation Council.

"China's cooperation with Iran will directly benefit Pakistan," he says. Oil from Iran, which currently reaches China after covering 13 thousand miles. He will reach China by a safe passage of 150 miles through Pakistan.''

He said that China's investments in Pakistan, Iran, Turkey and other Asian countries and its investment in economic and trade infrastructure, from the Atlantic Ocean to the regions of the Indian Ocean and the Pacific Ocean, are tangible signs of shifting the world's power.

Pakistan and Iran have an important role in this process of global change. There is also the role of US sanctions in this process of change, which is pushing these countries to the other side.''

'Iran Agreement and CPEC are natural partners'

Fatima Raza, a global affairs specialist at the Institute of Strategic Studies Islamabad, says that although the energy and infrastructure features in both projects are similar, the interests of the parties involved are different in many ways.

However, Fatima Raza said that the China-Iran agreement is a natural partnership agreement between the two countries, which could also further expand the prospects of CPEC.

Fatima Raza further said that for each party, comparing the two presents a different picture. "Both these projects provide an extraordinary opportunity for Pakistan to succeed, as it becomes a natural route for Iranian oil to reach China."

Fatima Raza said, "For China, it means a project like CPEC, which seeks to consolidate the impact of its expansion in the region, which will create trouble for US interests in the region."

Fatima Raza says the deal will help Iran meet its financial needs, which it desperately needs.

Fatima Raza said, "Both deals reinforce each other in their nature rather than being competitive, but its success depends on the parties utilizing their full potential."

'Impact on overall geo-political balance of Gulf and region'

Osama al-Sharif, an analyst at Arab News, wrote that the 25-year comprehensive strategic partnership agreement between China and Iran would have a long-term impact on the overall geopolitical-political balance of the Gulf and region.

The agreement has been signed at a time when relations between Beijing and Washington are very tense.

The deal gave Tehran a strong position on Iran's nuclear deal with the West, renegotiation and efforts to expand it.

According to Osama al-Sharif, the agreement would provide China with the opportunity to deploy 5 thousand security and military personnel on Iranian soil, which would prove to be a regional game changer.

Prior to China, Tehran signed a 10-year cooperation agreement with Moscow in 2001, particularly in the nuclear sector, which has since been extended twice.

He wrote that two years ago I joined a naval exercise with Iran, Russia and China. This new agreement will allow China to set up bases in the Gulf region as well as in Central Asia.

In return, Iran will get China's technology and invest in its poor infrastructure.

The Chinese government has been strengthening its economic ties with other Gulf countries for years.

Beijing has signed cooperation agreements with the United Arab Emirates and Kuwait and has good relations with Saudi Arabia.

Osama al-Sharif wrote, "The new agreement will increase the sense of danger in the capitals of the Arab countries of the Gulf." Because these countries see Iran as a major source of instability and its alliance with Beijing will further strengthen the line between Tehran and Qom.''

Also, according to Osama al-Sharif, Israel will also feel uneasy about China's move. Both Russia and China, who signed Iran's nuclear deal, supported Tehran's side and openly violated US sanctions.

Tension between USA and China increased

Alex Lantier, an analyst with the World Socialist Organization, writes that the terms of the Iran-China agreement have not been disclosed. But these signatures came at a time when the US refused to lift the restrictions imposed by former President Donald Trump. At the same time, the differences between China and the United States came to the fore in the conference to be held in Alaska of China and America.

Speaking to the press before the summit began, US Secretary of State Anthony Blinken said that China should accept Washington's "international order based on the rule" or else it would "have a more rigid and unstable world." Will have to face it.''

In Tehran, Chinese Foreign Minister Wang Yi said in response to a question that "relations between our two countries have now reached a strategic level and China is trying to promote wider relations with the Islamic Republic of Iran.''

The signing of the roadmap for strategic cooperation between the two countries shows that Beijing will enhance relations to the highest level.

China resistance

According to the Chinese government news agency Global Times, the Chinese foreign minister told Iranian officials that "China will dominate domination and opposition to hooliganism, along with protecting international justice, as well as international norms with the people of Iran and other countries."

The agreement was first discussed in 2016 between Iran's Supreme Leader Syed Ali Khamenei and Chinese President Xi Jinping.

To deepen economic ties with the Middle East, China also offered Iran to cooperate in development with its BRI program.

The Tehran Times quoted Iran's Ambassador to China Mohammad Keshavarz Zadeh as saying that the agreement "clarifies the potential for cooperation between Iran and China, particularly in the fields of technology, industry, transportation and energy." The firms have built mass transit systems, railways and other important infrastructure in Iran.

In December 2020, amid speculation about the signing of the deal, Peter Berkowitz, director of the policy planning staff of the US State Department, condemned it.

He told the newspaper Al Arabia that if this agreement was reached, it would be bad news for the "free world". Iran sows the seeds of terrorism, death and destruction throughout the region. Empowering this country of the People's Republic of China will further increase the risk.

Despite launching a large-scale vaccination campaign to fight the corona epidemic, India's GDP for the year 2021 is expected to remain below the level of 2019.

The United Nations Economic and Social Commission for Asia Pacific (UNESCAP) has released a report on Tuesday, 30 March 2021.

This report stated that GDP and investment had slowed down even before the onset of the corona epidemic in India.

According to the report, economic constraints were at their peak in the second quarter of 2020 (April to June 2020) due to the complete lockdown imposed to prevent the spread of the corona epidemic.

The economy began to return to moderation after the lockdown was relaxed, but the economy slowed down in the fourth quarter, with an annualized economic growth forecast of near zero.

According to the report of the United Nations Economic and Social Commission for the Asia Pacific region, India's economic growth rate is estimated to be seven percent in 2021-22, while in the previous year i.e. 2020-21, due to the corona epidemic and its impact. It is expected to fall by more than 7.7 percent.

The jam has opened in Egypt's Suez Canal. After a lot of effort, the huge ship stuck there for a week could be removed from the path.

With the help of tug boats and dredgers, the 400-meter (1,300 ft) long 'Ever Given' ship was evacuated.

Hundreds of ships are waiting to pass through this canal connecting the Mediterranean Sea to the Red Sea.

It is one of the busiest trade routes in the world.

Peter Berbersky, CEO of Boskalis, the company that helped remove the ship, said, "The Ever Given re-floated on Monday, March 29, 2021 at 15:05 local time. After which it was possible to reopen the route to the Suez Canal.''

Egyptian officials say it will take up to three days for all ships stranded due to the jam, but experts believe the impact on global shipping may take weeks or even months.

How was the ship finally evacuated?

On the morning of Tuesday, March 23, 2021, it was a difficult challenge for the rescue teams to evacuate the two-million-tonne vessel stuck amidst strong winds and sand storm.

The SMIT, an expert team in the evacuation of such vessels, arranged for 13 tug boats. Tug boats are small but powerful boats that can pull large ships from one place to another.

Dredgers were also called. Who dug out 30,000 cubic meters of mud and sand from under the ends of the ship.

When this did not happen, it was also thought that some cargo would have to be unloaded to lighten the ship. It was feared that some 18,000 containers may have to be removed.

But the high waves helped the tug boat and the dredger in their work, and on the morning of Monday, March 29, 2021, the stern (the ship's rear) was evacuated, then the massive ship stuck diagonally could be straightened to a great extent. A few hours later, Bo (the front of the ship) also escaped and the Ever Given was in a floating position, that is, it was completely evacuated.

The ship was then pulled to Great Bitter Lake, which lies between the two halves of the canal on the north side of the shipwreck. Safety check of the ship will be carried out here.

What happened next?

A Marine source told Reuters on Monday, March 29, 2021
In the evening, the ships were heading south towards the Red Sea, while the leath agencies that served the canal said that the ships had started to come out of the Great Bitter Lake.

Some ships have already left the area. They decided to take an alternative, longer route around the southern tip of Africa.

These cargoes will definitely take more time to reach. When they arrive at the port, they may also get jammed there. The schedule of the ships coming in the next few days may also be disturbed.

According to a report by BBC Business Correspondent Theo Leggat, this may increase the cost of shipping goods to Europe.

Shipping group Marsk said, "Clearly, it will be investigated, because it has made a big impact and I think there will be some debate over what exactly happened there."

Mursk said, "What can we do so that it will never happen again?" It will be necessary for the Egyptian administration to see that the ships are always going out of the canal without any problem, because it is in their own interest.''

Great success

BBC Arabic correspondent Sally Nabil present at the port of Suez

The eviction of the Ever Given ship is considered a big success. Some experts have previously warned that it may take weeks to get the ship out. But high waves as well as specialist equipment helped in the rescue operation.

Now the administration has to deal with another challenge - jam. The head of the Suez Canal Authority said that they would be allowed to leave the first of the hundreds of ships stuck in the jam that would come first. However, some ships may be given priority due to cargo loaded on the ship.

The impact on global trade put the administration under tremendous pressure on the jam. For Egypt, this canal is not just a question of national pride, but it also strengthens the economy.

A few days ago I asked Osama Rabi, the head of the Suez Canal Authority, whether he was worried that some shipping companies would avoid sending such large ships through the canal in the future. In response to this, he said that there is no alternative to the Suez Canal, according to him that this route reaches it quickly and is safe. So here it is not only about time, but also about security.

What will happen to the ship now?

According to the managers of the ship's technical maintenance company, the ship will now undergo a thorough investigation in Great Bitter Lake.

Managers said that no pollution or cargo damage has been detected and preliminary investigations have revealed that there was no mechanical or engine failure behind the shipwreck.

It is reported that all 25 crew members of the Indian crew on board are safe. "Their hard work and tireless professionalism are being praised," say the managers.

There are many types of things in the ship, and it is believed that this item is worth billions of dollars.

A horrific fire broke out on Monday, March 29, 2021 at the Balonagan Refinery, one of Indonesia's largest oil refineries. Relief and rescue teams have to work hard to control the fire. This refinery in West Java province is owned by the state-run oil company, Pertemina.

According to local time the fire erupted around midnight around 12:45. The cause of the fire has not been known yet.

According to media reports, at least five people were injured in this fire. As a precaution, around 950 people have been evacuated from their homes and sent to safe places. Although some people are said to be missing.

TV footage and video posted on social media has also seen flames and smoke swings rising above the refinery on the morning of Monday, March 29, 2021.

News agency Reuters quoted a local media organization Metro TV as referring to a person. The man said, "We first felt a strong smell of oil like tearing the nose." After that we heard the sound of flames.''

According to the Regional Disaster Management Agency, five people have been hospitalized for treatment after being seriously injured and 15 with minor burns.

Catastrophic accident

BBC News Indonesia correspondent Jeromei Veeravan said, "The Balonagan Refinery is one of Indonesia's largest refineries. Its importance is because it supplies fuel and petrochemicals to the Greater Jakarta region.''

According to him, the question of how much this firefight will affect the factories along with the plastics and chemical business is arising. However, refinery owner Pertemina has told the people that the oil supply system is unaffected and it continues as before.

On the other hand, many people are asking how can such a disastrous event happen in a government refinery?

Kurtubi, a politician and a member of the Energy Affairs Commission of the House of Representatives, said in a TV interview that the Balonagan refinery operating since 1994 is relatively new compared to the other refineries at Partemina. He has demanded that the distance from the residential areas of all the oil refineries of the country be ascertained.

According to Jerome Veeravan, there is a demand for an in-depth investigation into the incident on social media. One person has asked, "Was there a tampering in the refinery or was it an accident?" Others are asking whether the standard operating procedure (SOP) was followed in the refinery. At the same time someone wrote, "The person who has a role in this case should be taken to court."

A BBC correspondent has reported that people living near the refinery, following safety standards during the Corona era, have been evacuated from their homes and sent to different camps as a precautionary measure.

Veeravan quoted Pertemina as saying that the cause of the fire has not been ascertained but the incident occurred during heavy rains and lightning.

No effect on oil supply

At a press conference on Monday, March 29, 2021, the company stated that the fire had not damaged the refinery's processing capabilities, so operations could return to normal within the next five days.

Reuters was quoted by Pertemina CEO Nikki Vidyavati as saying that the fire was on refinery tanks. This has not caused any damage to the processing plant. The company said that it is closing its refinery and the flow of oil is being controlled to prevent this fire from spreading further.

The Balonagan Refinery is 225 kilometers east of Indonesia's capital, Jakarta. Located in 340 hectares, the refinery has a processing capacity of 1,25,000 barrels per day.

According to officials, the container ship stranded in the Suez Canal has been removed from shore. The ship was stranded in the Suez Canal from 23 March 2021.

According to the Suez Canal Authority, the direction of the 400 meter long 'Ever Given' ship has been corrected by 80%.

Accordingly, the work of removing the boat will be resumed from Monday.

The 'Ever Given' disrupted one of the world's busiest trade routes, causing the rest of the ship to return and lead to lengthy traffic.

After this success in the rescue of the stranded ship, hope is raised that the jam on the canal may open in a few hours. Nearly $ 9.6 billion worth of goods originates from this waterway every day.

According to the news agency Reuters, tugboats have been used to remove the ship.

According to the Suez Canal Authority, the ship's rear, which was previously four meters from the coast, is now 102 meters. The authority said that efforts have now begun to make the ship in a fully floatable condition.

According to officials, the work of removing the ship will start at 11:30 pm local time after the waves arise.

When the ship is removed, 367 ships waiting there will find their way. Suez Canal Authority (SCA) chairman Osama Rabi told Egypt's Extra News on Sunday, 28 March 2021, that they included a number of cargo ships, oil tankers and ships carrying ANG or LPG gas.

The 400-meter-long Avar Given ship was caught diagonally in the Suez Canal on Tuesday, 23 March 2021 amid strong winds. Because of this, there was a situation of traffic jams on this shortest ship route between Europe and Asia.

After failing for several days to evacuate the ship, on Sunday, March 28, 2021, the Canal Administration began preparations to remove about 20,000 containers from the ship to reduce the weight.

There are reports that a cargo vessel stranded in the Suez Canal has been evacuated.

The video posted on social media on Monday, March 29, 2021 can be seen that the passage of the canal is open due to the rear end of the Ever Given ship.

At the same time, news agency Reuters has written that according to InchCap Shipping Services, this huge ship stuck in the Suez Canal for about a week has now started to float again and work is going on to make it in a running condition.

Inchcap, which provides global maritime services, said on Twitter, "The ship started to float again at 4.30 am local time and is now in full operation.

The ship-tracking service vessel finder has changed the status of the ship on its website and has now written that the ship is on the way.

The 400-meter-long Avar Given ship was caught diagonally in the Suez Canal on Tuesday, 23 March 2021 amid strong winds. Because of this, there was a situation of traffic jams on this shortest ship route between Europe and Asia.

At least 369 ships were waiting for the canal to open. Suez Canal Authority (SCA) chairman Osama Rabi told Egyptian Extra News on Sunday, 28 March 2021, that there were several cargo ships, oil tankers and ships carrying ANG or LPG gas.

Egyptian Lath Agencies, which provide transit services in Suez, tweeted that the ship has been partially re-floated, pending official confirmation from the Suez Canal Authority.

At the same time, according to Reuters, the price of crude oil has come down after the news of the ship started to float again.

The Suez Canal Authority had earlier said in one of its statements that the work of towing the ship has been resumed. On Sunday, 28 March 2021, teams trying to evacuate had speeded up their work.

After a long effort through tugboats and dredgers, a great success has been achieved in getting the ship out.

After failing to evacuate the ship for several days, on Sunday, March 28, 2021, the Canal Administration began preparations to remove about 20,000 containers from the ship to lose weight.

Experts had previously told the BBC that special equipment had to be used in such operations, such as a crane that would have to reach up to 60 meters (200 ft), which could take weeks.

The Suez Canal, known as the backbone of world trade, is one of the main sea crossings in the world. This makes up 12% of the world's total merchandise.

In such a situation, after the cargo ship going from China to the Netherlands got stuck on the morning of Tuesday, 23 March 2021, it is expected to have a serious impact on the business of the world.

This cargo ship has blocked the way for the rest of the ships.

Niels Madsen, vice president of products and operations at Denmark's consultancy firm C-Intelligence, predicts that if this ship is stuck for 48 hours, the already serious condition will slowly deteriorate.

He told the news agency Reuters that if this happens for three to five days, then it will start to have a very bad effect on world trade. The most common is the possibility of inflation rising due to the halt of movement of goods.

Why is the Suez Canal so important?

1) An important link to unite east and west

The Suez Canal is a 193 km long canal located in Egypt that connects the Mediterranean Sea to the Red Sea. It is the shortest sea link between Asia and Europe. This waterway crosses the Svez isthmus (Strait) in Egypt. This canal consists of three natural lakes.

The importance of this canal, active since 1869, is that ships to the eastern and western parts of the world first used to sail on the southern tip of Africa via the Cape of Good Hope. But after the construction of this waterway, ships began to sail through this part of West Asia to Europe and Asia.

According to the World Maritime Transport Council, the ship connecting Asia and Europe has to cover a distance of nine thousand kilometers after the construction of this canal. This is 43 percent of the total distance.

2) daily value of 9.5 billion

According to consultancy firm Lloyds List, on Wednesday, 24 March 2021, 40 cargo ships and 24 tankers were stranded waiting to cross the canal.

Dry products such as grain, cement are loaded on these vessels. At the same time, petroleum products are filled in tankers.

Eight ships carrying livestock and water tankers are also stranded, according to the news agency Bloomberg.

Given the condition of the Suez Canal and its importance, it is called one of the few 'choke points' of the earth. Therefore, the US Energy Agency considers the Suez Canal to be essential for global energy security and the supply of all types of goods.

According to an estimate, about 19 thousand vessels from the Suez Canal carry 120 million tonnes of cargo every year. The Lloyds List believes that $ 9.5 billion worth of freight ships pass through this canal every day. Of these, about $ 5 billion goes to the west and $ 4.5 billion goes to the east.

3) Very important for supply chain

Experts say that this channel is very important for the supply of goods in the world. So its blocking can have serious consequences.

C Intelligence analyst Lars Jensen says the first problem may be in port congestion.

He said, "If we assume that all the ships are full. So in terms of 55 thousand TEUs (capacity measuring unit of container), within two days, a total of 110 thousand TEUs of goods going from Asia to Europe will be trapped. And as soon as the jam is over, all these ships will arrive at the European ports simultaneously, so that the load there will also reach the peak. ''

Jensen estimates that within a week we will have to see tremendous pressure on European ports. In his opinion, due to this problem, the supply and price of every goods sold in the shops is feared to be affected.

4) Risk of rising inflation

Salvatore Mercogliano, a marine affairs expert and history professor at Campbell University in North Carolina in the US, believes that the problem could have serious repercussions on world trade.

In a conversation with the BBC, he said, "With the closure of the canal, cargo ships and oil tankers are unable to deliver food, fuel and finished goods to Europe." Due to this, no goods are being sent from Europe to the far east.''

BBC economic correspondent Theo Legatt said, "The Suez Canal is critical to the transportation of petroleum and liquid natural gas, as fuel is transported from the Middle East to Europe."

Lloyds List Intelligence reported that 5,163 tankers had passed through the canal last year. Due to this, about two million barrels of oil were transported every day.

According to the US EIA, the Suez Canal and the Sumed Pipeline (from Alexandria in the Mediterranean Sea to the Suez Bay) carry nine percent of the total oil traded by the sea and eight percent of the liquid natural gas.

Given the importance of the canal and the current problem, on Wednesday, March 24, 2021, oil prices increased by more than six percent. However, it declined on Thursday, 25 March 2021.

ING Bank believes that if this blockage is prolonged, it is more likely that buyers will have to turn to the cash market to secure oil supplies from elsewhere.

The containers must also decide whether to wait for it to be emptied or go through the 'Cape of Good Hope'. According to ING Bank, freight will be delayed if either of the two options are chosen.

In the opinion of experts, the real effect of the existing problem will be revealed only with time.

"The problem will probably be weak and short-lived," Bionar Tonhaugen of the Ristad cabinet told news agency AFP. But if this obstruction continues for a long time, then it will increase inflation. This effect will last for a long time.''

Effect on other goods

"There are millions of dollars worth of goods on other ships," Ian Woods, a London-based lawyer for Clyde & Co's maritime affairs, told NBC. If the canal is not normalized quickly, the ships will go by other routes. This means more time and more cost. And this will ultimately be recovered from the consumers only.''

Leggett, a BBC expert, said it was a nightmare.

He said, "This has shown what can go wrong when new generation big ships like the Ever Given pass through the narrow canal."

However, parts of the canal were widened in 2015 as part of the modernization plan. Yet it is very difficult to navigate. Not only this, more serious accidents are expected in the future.

In India, Union Finance Minister Nirmala Sitharaman presented the General Budget for the year 2021-22 on Monday, 01 February 2021. The health budget was increased by 137%. A proposed allocation of Rs 2,23,846 crore was made for the health budget. FDI limit in insurance companies will be increased from 49% to 74%. Life Insurance Corporation of India IPO will come in the year 2021-22. People 75 years and above will be exempted from filing income tax returns.

Self-sufficient packages increase the pace of structural reforms: Nirmala Sitharaman

India's Union Finance Minister Nirmala Sitharaman has said that "PMGKY, the three self-sufficient packages and subsequent announcements made by the government to support the most sensitive sections, were in themselves like five mini budgets." Self-sufficient packages increased our pace of structural reforms ''.

India is giving COVID-19 security cover to more than 100 countries: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman while talking on COVID vaccine has said that the Government of India is providing relief to not only the citizens of India but also people of 100 other countries from COVID 19.

He said, "India currently has two vaccines available with the help of which Indian citizens have been started to provide security cover." With this, more than a hundred countries have also been given protection from COVID-19. It is a relief to know that two other vaccines are going to be available soon.''

New general budget rests on six pillars: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that "the budget of 2021-22 rests on 6 pillars". The first pillar is health and welfare, the second - physical and financial capital and infrastructure, the third - inclusive growth for aspirational India, communicating innovation in human capital, fifth - innovation, research and development, sixth pillar - minimum government and maximum governance.''

Water life mission to be launched: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman said in her budget speech that "Jal Jeevan Mission (Urban) will be launched, its objective is to provide universal water supply to 2.86 crore domestic tap connections in 4,378 urban local bodies".

64,180 crores to be spent on self-sufficient healthy India scheme: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said in her speech, "A new scheme of the Center will be launched the Prime Minister's Self-Reliant Healthy India Scheme, which will cost about 64,180 crores in 6 years."

25 thousand crores to be spent on road construction in West Bengal: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has announced in her budget speech that 675 km of highway will be constructed in West Bengal at a cost of Rs 25000 crore.

2.23 lakh crore rupees to be spent on health sector: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that in the year 2021-22, health and family welfare will cost 2,23,846 crore.

In addition, he has said that "in the year 2021-22, Corona has provided Rs 35,000 crore for the vaccine. He is committed to provide funds if needed even further.

Disinvestment of State Governments Undertaking will be allowed: Nirmala Sitharaman

Nirmala Sitharaman said that "The deposit insurance cover was increased from 1 lakh to 5 lakh. For this I will propose to amend the law of 1961. This will benefit the depositors of those banks which are under stress.''

"2217 crore was allocated to combat air pollution."

1,10,055 crore has been proposed for the Railways. National Rail Plan 2030 is ready. It has a focus on Make in India. The Western and Eastern Freight Corridor will be ready by June 2022.

"There is an additional provision of 1,18,101 crore for the Ministry of Road Transport".

Several announcements were made under the self-reliance scheme. The government has allowed this policy. This will pave the way for disinvestment in PSUs. The policy to be implemented in this direction is given in this budget. State governments will also be allowed to disinvest in their ventures.''

LIC IPO to come in 2021-22: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that "Life Insurance Corporation's IPO will be brought in the year 2021-22, for which we are making necessary amendments in this session".

FDI in insurance companies to be increased from 49% to 74%: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman said in her budget speech that a provision has been made to increase FDI in insurance companies from 49% to 74%.

He has also said that one crore more beneficiaries will be included in the Ujjwala scheme.

Government continues to double farmers' income: Nirmala Sitharaman

The government is set to double farmers' income by 2022.

63 thousand crores was spent on the purchase of paddy in 2013-14, which has been increased to 1 lakh 45 thousand crores. This year, this figure can reach 72 thousand crores. 1.2 crore farmers benefited from it last year, 1.5 crore farmers have benefited from it this year.

The government spent Rs 33,000 crore on wheat in 2013-14. 63 thousand crores in 2019 and now it has increased to 75 thousand crores rupees. 43 lakh farmers have benefited from this in 2020-21.

In the case of pulses, Rs 236 crore was paid in 2013-14. This amount had increased to Rs 8,285 crore in 2019-20 and now in 2020-21 this amount has reached Rs 10,530 crore, which is 40 times more than in 2013-14.

The amount received by cotton farmers has increased significantly. It has now increased to Rs 25,974 crore (as on 27 January 2021) from 90 crore in 2013-14. Its details are given in Annex IV.

To provide adequate loans to farmers, we have increased the target of agricultural credit to Rs 16.5 lakh crore in the financial year 2022. Our focus is to provide more credit in the field of animal husbandry, dairy and fisheries.

Hundred new military schools to be opened in India: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that hundred new Sainik Schools will be opened in India with private sector partnership. With this, a Central University will be opened in Ladakh.

The Ujjwala scheme benefiting 8 crore families will continue. 1 crore more people will be benefited. In the City Gas Distribution Network, we will add 100 more districts in the next three years. The gas pipeline project will be extended to Jammu and Kashmir.

A new framework will be prepared in the energy sector: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that a framework will be prepared in the energy sector in which consumers will be given the option to choose from more than one supplier company.

Hydrogen energy mission to begin: Nirmala Sitharaman

The Union Finance Minister has announced that it is proposed to start a Hydrogen Energy Mission in the year 2021-22, under which hydrogen can be generated from green power sources.

7 textile parks to be set up in three years: Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman has said that the Mega Investment Textiles Park Scheme should be launched in addition to the PLI scheme to make the textile industry globally competitive. With this, 7 textile parks will be set up over a period of 3 years.

Revised Custom Duty from 01 October 2021: Nirmala Sitharaman

GST has been four years. Several measures have been taken to make it easier. Monthly payments, inputs, pre-filled GSTNs, increased capacity, tax evaders are being caught by the system of AI, a lot of recovery in a few months.

As the President of the Council, I assure that it will be made more convenient. We have made many changes in the custom duty regime.

The utility of 80 schemes that were overhauled have been removed. Exempt exemptions over 400 will be reviewed. Revised Custom Duty will be introduced from 1 October 2021.

Some important proposals of Nirmala Sitharaman in Budget-2021

The electronic, mobile industry has grown very rapidly within the country. Some discounts are being eliminated. Some of its parts will be brought under the tax net.

The rise in iron and steel prices has caused hardship to many sectors. I declare concessions in many duties. Concessions on some steel and ADD and CBD are being eliminated.

Fabric related proposal: BCD is being reduced to 5% on nylon chip, nylon fiber. In this, the system related to chemicals is also being improved.

Gold and Silver: Gold and silver prices have increased significantly in the country. The government is going to reduce its duty.

Capital Equipment in Auto Part: Concession on Tunnel Boring Machine is being abolished. Several steps are being taken to promote MSMEs.

The recent report of an internal working group constituted by the Reserve Bank of India in India remains a matter of discussion.

This Internal Working Group (IWG) was formed to review the existing ownership guidelines and corporate structure for private sector banks in India.

The recommendations of this Working Group remain a cause for discussion as it suggested that after necessary amendments in the Banking Regulation Act, 1949, large corporate / industrial houses may be allowed as promoters of banks.

This means that large corporate houses like Adani, Ambani, Tata, Piramal and Bajaj can take a license for the bank and if they are found suitable, they can also open a bank.

It cannot be argued that the Indian banking system is very weak.

The report of the Internal Working Group states, "At the time of India's independence in 1947, commercial banks (many of these banks were under the control of business houses) were lagging behind in meeting social objectives. Therefore, the Government of India nationalized 14 large commercial banks in 1969 and 6 in 1980.

"However, with the introduction of economic reforms in the early nineties, the role of private banks has become increasingly accepted."

The report also considers the fact that "the Indian banking sector has grown significantly in the last few years but the total balance sheet of banks in India is still less than 70 per cent of GDP, which is equivalent to the global counterparts." Much less than that for a bank-dominated financial system. '

This means that Indian banks are struggling to meet the growing demand for finance of a developing economy.

Currently State Bank of India is the only bank in India that is a part of the top 100 banks in the world. The report states that private sector banks are outpacing public sector banks as they are more efficient, profitable and risk takers.

According to the report, "Public sector banks are continuously losing market share in the hands of private banks, this process has accelerated in the last five years."

There is no doubt that if India wants to become a five trillion dollar economy, it will have to grow its banking sector and IWG's suggestions are mostly related to this.

But, former RBI Governor Raghuram Rajan and former Deputy Governor Viral Acharya have raised the problem arising out of it. Raghuram Rajan has shared a post about it on his LinkedIn account.

In this three-page post, he has said that allowing corporate houses to enter the banking sector is explosive.

He has also questioned the timing of these recommendations.

Rajan and Acharya said in a joint post, "Have we come to know of anything that allows us to disregard all precautions before allowing industrial houses into banking?" We will not argue. In fact, on the contrary, today it is even more important that the tried and tested boundaries of corporate participation in banking be maintained. ''

Rajan and Acharya say that if allowed to do so, the economic power will be reduced to the hands of a few corporates.

These corporates themselves also need financing and in such a situation, they will easily withdraw money from their own banks. It would be very difficult to question them. This will lead to a bad debt situation.

Rajan and Acharya wrote, "The history of such linked debts has been extremely disastrous. When the borrower is the owner of the bank, how will the bank be able to give the loan properly? Even an independent and committed regulator with access to information around the world is difficult to monitor everywhere to prevent bad debt distribution. Information on loan performance is rarely timely or accurate. Yes Bank managed to hide its weak credit risks for a long time.

He also said that the regulator can also come under heavy political pressure due to these entities.

Rajan and Acharya said, "In addition, highly indebted and politically connected business houses will have the ability to force more licenses. This will further increase the importance of money power in our politics. ''

Both have agreed that India needs more banks because the amount of money deposited for GDP is very low i.e. how much capacity does the country have to pay its liabilities?

He has emphasized that "RBI has allowed the first industrial houses to come in with the payment banks." These banks can tie up with other banks to provide retail loans (such as personal loans, credit cards and mortgage). ''

They have said that when we already have these options, then why do we need to give license to industrial houses to open a full bank? Why now? That too at a time when we are trying to learn a lesson from the failure of ILFS and Yes Bank?

Apart from the timing and intentions of this recommendation, both have suggested that handing over poorly performing public sector banks to corporates would be extremely silly.

Giving these public banks to corporates means that we will hand over bad administration of these existing banks to disputed ownership of corporates.

International ratings agency S&P Global Ratings has also voiced concern about these recommendations. The agency said "internal conflicts of interest, potential conflicts of interest, centralization of economic power and financial stability are potential risks in allowing corporates to open banks."

There is no doubt that India needs finance to grow and public sector banks are not able to do so.

The government is already facing major challenges due to the corona virus epidemic. In such a situation, large industrial houses having financial capacity can meet the lack of money in India. But how safe is it to allow these corporates to own banks completely, the question remains to be answered by the RBI.

RBI has invited to express its views on the committee's report which can be submitted by 15 January 2021.

On 15 November 2020, 15 countries in the Asia-Pacific Ocean region, including China, signed the world's largest trade treaty in Hanoi, Vietnam.

Countries that have joined this trade treaty account for about one-third of the global economy.

The Regional Comprehensive Economic Partnership, or RCEP, has ten countries in Southeast Asia. Apart from these, South Korea, China, Japan, Australia and New Zealand have also joined it.

The US is not involved in this trade-treaty and China is leading it, so most economic analysts see it as a growing influence of China in the region.

This treaty is being said to be bigger than the European Union and the US-Mexico-Canada trade agreement.

Previously, the US was also involved in a trade treaty called the Trans-Pacific Partnership (TPP), but in 2017, shortly after becoming president, Donald Trump had moved the US out of the treaty.

The deal then included 12 countries in the region that also had the support of former US President Barack Obama as they viewed the trade treaty as a response to Chinese-domination.

The negotiations on the RCEP were also underway for the last eight years, which were finally signed on 15 November 2020.

The countries involved in this treaty believe that this will help in improving the situation like the Great Depression caused by the corona virus epidemic.

On this occasion, Vietnam's Prime Minister Nun-Xuan-Fook, describing it as the foundation of the future, said, "Today the RCEP agreement was signed, it is a matter of pride, it is a big step that ASEAN countries are playing a central role in it, And together with the fellow countries, they have established a new relationship that will become stronger in the future. As these countries move towards progress, so will its effect on all countries of the region. ''

According to this new trade treaty, RCEP will abolish customs duties on a variety of goods within the next twenty years. This would include intellectual property, telecommunications, financial services, e-commerce and business services. However, regulations like which country a product originated in may have some effect but in countries that are part of the treaty, there is already agreement on free-trade among many countries.

With this trade treaty, China's influence in the region has deepened.

India not included in RCEP

India is not a part of this treaty. India was also involved in the RCEP at the time of bargaining, but India was separated from it last year. The Government of India had then said that this would lead to a flood of cheap Chinese goods in the country and it would be difficult for small scale manufacturing traders in India to deliver goods at a price that would increase their troubles.

But on 15 November 2020, ASEAN countries who joined the treaty said that 'the gates will remain open for India, if in future India can join RCEP'.

The question arises that what can be the effect on India not being part of this trade group? To understand this, BBC correspondent Faisal Mohammed Ali spoke to India-China business affairs expert Santosh Pai.

He said, "RCEP has a membership of 15 countries. About 30 percent of the world's construction industry is from these countries. In such a situation, such free-trade agreements are very important for India, because India can explore many new possibilities of trade through them. ''

"Like India is inviting many countries to come and invest in the construction industry, so they also attract such agreements, but if India is not in it, then it becomes a question that they should come to India How to get promoted? "

"The second thing is that the buying capacity of consumers in India is increasing, but compared to the international level, it is still very low. If a foreign company has to come and manufacture in India, then also to export it Much care has to be taken because it is consumed in the domestic market of India, it seems a bit difficult. "

At one time India, along with countries like Japan and Australia, wanted to reduce dependence on China. But now those countries are involved in it and India is different from it. What is the reason for this?

To this Santosh Pai said, "How much India can reduce 'dependence on China', it will not be seen in six-seven months, but in five years, it will show its full effect. Only then will know how much India has Seriously it did. The rest of the countries have been trying to reduce their dependence on China for many years, and that is why these countries do not want to stay out of the RCEP because they know that by staying inside it 'Can better reduce dependence on China'. "

He said, "Apart from China, there are many strong countries in RCEP which have excellent work in many fields (like electronics and automobiles). But India's problem is that till last year, India was trying a lot to increase sugar trade more and more. How to increase more and attract Chinese investment more and more?''

India had a target of $ 100 billion in terms of trade with China. But in the last six months, the situation has changed completely due to political reasons. Now the Indian government has started a self-reliance campaign which aims to reduce trade with China and limit Chinese investment as well.

In the end, Pai said, "Even if the 'self-reliance campaign' was taken seriously, it would take years to get its effect. So it would be too early to say anything now.''