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PERSPECTIVE

THE HINDU THURSDAY, JUNE 2, 2016

WORLD VIEW

One glass of milk at a time

Asia has witnessed remarkable growth in its production
and consumption of milk and dairy products in recent
years and this trend is almost certain to continue.
Indeed, the Asia-Pacific region has overtaken Europe as
the worlds largest milk producer, with India alone proKUNDHAVI ducing one in every five glasses of milk.
This increased consumption of dairy products in Asia
KADIRESAN
and the Pacific is playing a vital role in improving child nutrition and boosting the livelihoods of smallholder farmers across the region as the latter are the source of production for the vast
amount of milk and dairy products that we consume.
By the end of 2015, the Asia-Pacific region as a whole had achieved the
Millennium Development Goal to reduce hunger and undernutrition by
half in the past quarter century. Clearly, the increased consumption of dairy
products in the region is one factor which has contributed to the overall
success in improving nutrition, particularly among children.
During a recent visit to Bangladesh, I learned about a successful school
milk pilot scheme implemented by the Food and Agriculture Organisation
(FAO) and how it had made a difference in the overall well-being of the children who had received 200 ml of milk each school day.
School milk programmes
Other countries in the region, such as Thailand, have long-running national school milk programmes which have served as useful models in other countries. China, India, Japan and Vietnam also have experience with
school milk programmes at various levels.
Milk is rich in minerals like calcium, magnesium and zinc, among others.
The wide range of vitamins and amino
acids present in milk are important buildCollaborations with the
ing blocks for cells, bones, and muscles.
dairy sector for milk
So as we work towards a world of zero
and dairy processes
hunger, milk and dairy products will continue to be among the important foods to
has to become more
help address undernutrition. With 490
productive
million people still undernourished in the
Asia-Pacific region, we must intensify our efforts and collaboration with
the dairy sector for milk and dairy processes to become even more coordinated and productive.
And there is a clear business case to do so.
Between 1980 and 2013, milk production in the Asia-Pacific region grew
at a rate of almost 4.5 per cent per annum against the global average of 1.5
per cent. By 2013, milk production in the Asia-Pacific region had reached
290 million tonnes 38 per cent of global production or more than a
third of all milk produced in the world.
In fact, dairy is among the top three commodities produced in the AsiaPacific region in terms of gross value worth more than U.S. $110 billion annually. During the next decade, it is expected that global production of milk
will increase by more than 120 million tonnes and two-thirds of this increase will come from the Asia-Pacific region.
The FAO is working with stakeholders in the dairy sector on a Strategic
Development Framework in Asia and developing an action plan for implementation and improved collaboration among countries in the region as
development of the dairy sector progresses. Value chains will need to improve and we will also need to see improvements in productivity and competitiveness while introducing ways to reduce negative environmental impacts, because with increasing scarcity of, and competition for, natural
resources, the sector must produce more efficiently and sustainably.
It is expected that the private sector will play an increasingly important
role in attracting private investment. But at the same time, we must ensure
that millions of smallholder farmers scattered across the region, including
millions of women who contribute to this growing dairy sector, are treated
fairly and that everyone involved is properly rewarded for their efforts. Improving the ability of smallholders to organise themselves and attain greater bargaining power in the market place must be a core element of our
work as we move forward.
This week we observed World Milk Day in recognition of the importance
of milk. So lets all raise a glass of milk as a toast to the people who produce
and bring us one of the worlds most healthy, nutritious, natural drinks.
Kundhavi Kadiresan is Assistant Director-General and Regional Representative for Asia and the
Pacific of the FAO.

The promise of open arms

Germanys economy needs immigrants to counter an ageing demographic. This could be the
deciding factor driving the countrys integration policy
G. SAMPATH

A Turk running a Doner kebab outlet in

Germany is a cultural stereotype. But
for the casual visitor walking the streets
of Berlin or Hamburg, the stereotype
leaps into life a visual comment on
Germanys mixed record in integration.
In April, German Chancellor Angela
Merkel announced a new law on refugee integration. The draft bill makes
learning German and attending job
training courses compulsory for refugees. Not doing so would attract penalties in the form of benefit cuts.
The bill has provoked contrasting reactions. The government is projecting it
as a historic legislation that will
streamline the integration process. But
activists involved in refugee integration
are unhappy. They say the penal provisions send out the signal that it is the
refugees who are uninterested in integration. It betrays a blame the victim
mentality that gives fodder to far-right
parties such as the Alternative for Deutschland (AfD).
In 2015 alone, 1.1 million refugees entered Germany. Around 4,76,000 asylum applications were registered in the
country in 2015 more than all the other EU countries combined. It is expected to receive 8,00,000 asylum applications this year.
Getting refugee integration right
All this means two things. First, the
manner in which the Merkel administration addresses the refugee situation
will impact how the issue plays out politically at the European level. German
politicians and bureaucrats privately
expressed fears about the refugee influx
toppling the European project, and that
seems to be one big reason why Germany is keen to get refugee integration
right. For instance, the recent move by
Hungary, Croatia, and Austria to tighten
border controls to check the flow of refugees has threatened to set the clock
back on freedom of movement within
the Schengen zone something neither the German economy nor the EU
can afford at this point.
Second, in Europe, Germany has the
best track record on the security front.
There have been Islamist terror attacks
in Madrid, London, Paris, and, most re-

STRUGGLING: Angela Merkel is under attack for doing too much for the refugees, and
for not doing enough. The German Chancellor is seen talking to children in a
refugee camp in Gaziantep on the Turkish-Syrian border. PHOTO: AFP
cently, in Brussels, but none on German
soil. This impressive record is linked to
Germanys relative success in integration of migrant minorities as compared with, say, Belgium, which has recently been dubbed a top exporter of
jihadists to Syria.
This does not mean that Germanys
immigrant population of 16 million
(one-fifth of the total population of 80
million) is properly integrated. The
Turks, who comprise the largest immigrant group, numbering 1.5 million,
score consistently below ethnic Germans on most socio-economic indicators, including education and income
levels. But on the positive side, the German government seems to be aware of
this, and is trying to make amends.
The inflow of refugees is not a new
problem for Germany. What is new, perhaps, is the volume of the recent arrivals, and the under-preparedness of the
countrys political class towards the
inevitable.
Walking a tightrope
Now, in the spring of 2016, the heady
days of Wilkommenskultur (welcoming culture) seem a distant memory.
The anti-refugee party AfD has made an
electoral comeback. Stuttgart and Berlin have witnessed competing demonstrations by both xenophobic and prorefugee protestors. With Germany getting polarised between the two camps,

A steady source of optimism

has been the 60 per cent or
so of ordinary Germans who
are still committed to human
rights and democracy
Ms. Merkel is under attack from both
sides for doing too much for the refugees, and for not doing enough.
But the astute politician that she is,
the German Chancellor has tried to cater to both. The deal being brokered with
Turkey is a strong signal to the angry
right and the worried centre that
the days of Wilkommenskultur are over.
At the same time, the new draft integration bill is a bid to assure the pro-refugee constituency that she is committed
to refugee welfare and that the mistakes
of the past will not be repeated.
Germanys refugee integration process rests on three pillars: one, weeding
out economic migrants from those fleeing persecution, and sending the former
back home; two, ensuring refugees
learn the German language and German values; and three, ensuring those
granted asylum/residence in Germany
possess the skills necessary to be integrated into the labour market this is
the logic behind the compulsory attendance of job training courses.
Apart from these measures, German
municipal authorities have aimed to

Bit of a bumpy ride

U.S. continues to place India, along with
China and Russia, on a priority watch
list for IPR violations, and thus would
not like to foreclose opportunities for
challenging Indias IP laws internationally. Indias recently unveiled IPR policy
has cut no ice with the U.S.
Fourth, the major difference between
the two models is on the issue of investor state dispute settlement (ISDS) provisions. ISDS provision in BITs allows
foreign investors to directly bring
claims against the host state under international law, without the approval of
the investors home state. The Indian
model BIT, unlike the U.S. model, mandatorily requires foreign investors to litigate in domestic courts for five years
before pursuing a claim under international law. This is not at all an attractive
proposition for U.S. companies in India
because of the overstretched Indian judicial system where more than three
crore cases are pending. One is unsure
to what extent the Commercial Courts
Act, 2015, aimed at speedy resolution of
commercial disputes, will be able to restore investor confidence in the Indian
judicial system.

PRABHASH RANJAN
(dated June 2, 1966)

Madhya Pradesh Government

sources to-day [June 1] confirmed
reports that the Collector of
Bastar had been asked to go on
two months leave and the
Superintendent of Police
transferred. The sources said no
more changes were contemplated
for the present in the District
administration. Earlier reports
from Jagdalpur said the
Government move to bring about
changes in the local
administration was motivated by
its desire to meet the opposition
demand for the transfer of
officials who were connected with
the Jagdalpur firing one way or
the other.

Russia proposes ban

on military use of the
moon
The Soviet Union yesterday
[May 31] proposed consideration
by the forthcoming United
Nations General Assembly
session of the question of banning
the use of the moon and other
celestial bodies for military
purposes.
The request for the inclusion of

the item on the agenda of the

session was made by the Soviet
Foreign Minister, Mr. Andrei
Gromyko, in a letter to the U.N.
Secretary General, U Thant. The
Soviet U.N. delegation chief, Mr.
Nikolai Federenko, told a Press
conference yesterday [May 31]
that while the Soviet Union and
the other space power, the United
States, might perhaps be near one
another over peace in celestial
bodies, they were separated as far
as ever over peace on earth.
Mr. Gromyko, in his letter,
called for a treaty to prevent any
country claiming sovereignty
over the moon. The treaty might
be based on these principles, the
letter said: (1) The moon and
other celestial bodies should be
free for exploration and use by all
States without any discrimination;
(2) They should be used by all
States for peaceful purposes only;
(3) The exploration and use of the
moon and other celestial bodies
should be carried out for the
benefit of all mankind. Mr. Arthur
Goldberg, the United States
delegate, welcomed the Soviet
proposal. Mr. Goldberg expressed
his satisfaction that the U.S.S.R.
had shown a positive interest in
such a treaty, proposed recently
by President Johnson.

CORRECTIONS AND CLARIFICATIONS

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A bilateral investment treaty between India and the U.S. looks difficult in the present
circumstances unless either of the two sides blinks

FROM THE ARCHIVES

Changes in Bastar
set-up

disperse refugee housing and shelters

across neighbourhoods so as to prevent
the formation of ghettoes. But they have
had to contend with resistance and even
law suits from citizens opposed to construction of refugee shelters in their
neighbourhood. Also, there is a cultural
fear, fuelled by the right, of a creeping
Islamic take over of Europe that is particularly pronounced in eastern
Germany.
Other challenges have emerged from
the social matrix of the refugees themselves for instance, sexual violence
against women and minors in refugee
shelters. That Germany doesnt have
the manpower to process the volume of
paperwork of asylum-seekers also
means that refugee youth are forced to
remain in camps for several months,
just waiting. This is a recipe for frustration that could be tapped by radical
elements.
Amid all this, a steady source of optimism and energy has been the 60 per
cent or so of ordinary Germans who are
still committed to the official values that
Europe claims to stand for: human
rights and democracy. It is they who
turn up on the streets to counter every
anti-refugee rally by PEGIDA (Patriotic
Europeans Against the Islamisation of
the West (Occident)), or AfD with a
pro-refugee one; serve as volunteers at
refugee shelters; and hold the German
state to its constitutional mandate,
which requires it to treat every asylumseeker with dignity.
At any rate, the German economy
desperately needs immigrants to counter an ageing demographic. This practical consideration could even trump humanitarian concerns as the deciding
factor driving integration policy, for
there really is no other way to address
the looming labour shortage facing Germany. Germany needs its immigrants to
be doing much more than making doner
kebabs it needs them in its banks, its
government offices, universities, and IT
companies.
Given that many of these factors are
common to the rest of EU as well, it
wont be surprising if Germany leads by
example, and perhaps prevails upon
other EU nations to accept their quota
of refugees. To be sure, thats an ideal
scenario. But given the German aptitude for persistence and pragmatism, it
is not an impossible one.

When Prime Minister Narendra Modi

visits the U.S. this month, one of his
high-agenda items will be the bilateral
investment treaty (BIT) between the
two countries. BITs impose obligations
under international law on host states
to protect foreign investment from the
other state. Preparations for this are already reportedly underway, with senior
U.S. officials having met the Finance
Ministry officials. India and the U.S.
started negotiating a BIT in 2009. However, these negotiations lost steam because both countries were busy updating their model BITs. The U.S. adopted
one in 2012 replacing the 2004 model.
India adopted a new model BIT in 2015
as a reaction to foreign corporations suing the country under different BITs,
and perhaps with the objective to immunise itself from claims of foreign corporations under international law. Paradoxically, the Indian model BIT came at
a time when Prime Minister Modi was
busy convincing the U.S. and other foreign corporations to Make in India.
Negotiating a BIT
The moribund BIT negotiations between the two sides got a fresh lease of
life during President Barack Obamas
visit to India last year. The India-U.S.
joint declaration of January 25, 2015 recognised the significance of moving forward on high-standard BIT negotiations, which would help in creating a
predictable investment climate and
boost bilateral investment flows. Mr.
Modi, during his U.S. visit in September
2015, again emphasised that working towards negotiating a BIT is integral to
the two sides developing stronger bilateral economic cooperation.
A balanced BIT that protects foreign
investment without unduly compromising the host states right to regulate
will benefit both India and the U.S. It
will send a positive signal to U.S. investors who are concerned about legal certainty in India. It will also protect Indian
investment in the U.S. According to a
2015 report prepared by the Confederation of Indian Industry (CII) and Grant
Thornton, 100 Indian companies such
as Tata, Wipro, Cipla, Tech Mahindra
and Infosys have invested more than
$15.3 billion in the U.S.
However, there is a yawning gap between the two sides on core foreign investment protection standards, as re-

PARADOX: The Indian model BIT came at a time when Prime Minister Modi was
convincing the U.S. and other foreign corporations to Make in India. A Make in
India logo in New Delhi. PHOTO: P.V. SIVAKUMAR

A balanced BIT that protects

foreign investment without
unduly compromising the host
states right to regulate will
benefit both India and the U.S.
flected in their respective model BITs,
which makes BIT negotiations really
difficult. Let us look at some of these differences.
First, the U.S. model BIT contains a
Most Favoured Nation (MFN) provision a cornerstone of non-discrimination in international economic relations which is missing in the Indian
model. It will be very difficult for India
to convince the U.S. to have a BIT without a MFN provision. From the U.S.s
perspective, this would mean that
American businesses would have no
remedy under international law, if the
latter were discriminated against in India. The same argument would apply
for Indian investment in the U.S.
Second, the Indian model completely
excludes taxation from the purview of
the BIT a direct response to Vodafone and Cairn Energy bringing BIT
claims against India for imposing taxes
retrospectively. However, in the U.S.
model, foreign investors can assert

claims that taxation measures, such as

confiscatory taxation, involve an expropriation of foreign investment. Given
Indias recent record in administering
its taxation laws that has made foreign
investors jittery, it will be quite difficult
for it to convince the U.S. to agree to
completely exclude taxation from the
BIT.
Third, the Indian model completely
excludes issuance of compulsory licenses (CLs) and revocation of intellectual property rights (IPR) from its purview. On the other hand, the U.S. model
BIT excludes issuance of CLs and revocation of IPR only from the purview of
the expropriation provision. In other
words, while the foreign companies, including pharmaceutical companies,
cannot challenge issuance of CLs and
revocation of IPR as expropriation, they
can surely challenge it as violation of
other BIT provisions such as fair and
equitable treatment (FET) a pretty
stretchable investment protection provision that has often been abused by foreign corporations. Complete exclusion
of issuance of CLs and revocation of IPR
from the purview of the BIT might not
be acceptable to the U.S. for two reasons: first, it would not allow U.S. companies to sue India directly for issuance
of CLs or revocation of IPR; second, the

Global economic situation

The issue of BIT negotiations cannot
be quarantined from the larger economic issues between the two countries, especially the trade battle at the World
Trade Organisation. The U.S. continues
to accuse India for stalling the trade
talks at WTO, which India vehemently
counters. Also, India and the U.S. have
been involved in a spate of trade disputes at the WTO. In 2015, India lost the
case on ban of poultry imports to the
U.S. at the WTO. Currently, India and
the U.S. are holding consultations at the
WTO to resolve Indias complaint over
increased visa fees by the U.S. This
comes immediately after India lost the
solar panel case to the U.S. in the WTO.
This, in turn, perhaps prompted the
government to inform Parliament that
India plans to file as many as 16 disputes
against the U.S. in the WTO challenging
the U.S.s renewable energy programmes.
All these developments might have
soured the environment for healthy bilateral economic engagement, which
could impact BIT negotiations. Consequently, notwithstanding the top leadership expressing commitment, a BIT
looks difficult in the present circumstances unless one of the sides blinks.
Will India blink first?
Prabhash Ranjan is an Assistant Professor of Law at
the South Asian University, New Delhi. The views
expressed here are personal.
ND-ND