International Organizations

Sri Lanka likely to secure six-year moratorium

Context: Sri Lanka is finalising a debt treatment plan with India and the Paris Club. Sri Lanka is likely to get a moratorium of up to six years as well as a reduced interest rate during the repayment period.

More information from the news:

Official Creditor Committee (OCC): As many as 17 countries that have extended loans to Sri Lanka formed the Committee in 2023 for ease of debt restructuring negotiations. China stayed out of the platform, but has been attending its meetings as an observer.
Sri Lanka defaulted on its nearly $50-billion external debt in 2022. The country has been engaging with its diverse lenders to work out a debt treatment plan that is compatible with its pace of recovery.
Sri Lanka made considerable progress in negotiating a deal with its bilateral creditors, however, the private creditors holding the largest chunk of Sri Lanka’s foreign debt continue to pose a challenge.
IMF assistance:
- Sri Lanka is to receive the next instalment of the International Monetary Fund’s assistance, as part of the $3 billion package it obtained last year, to recover from the unprecedented financial crash in 2022.
- Sri Lanka had an agreement with the Fund on the second review of its four-year Extended Fund Facility (EFF) arrangement.

About Paris Club:

An informal group of officials from major creditor countries.
Find co-ordinated and sustainable solutions to the payment difficulties experienced by debtor countries.
Debtor countries undertake reforms to stabilize and restore macroeconomic and financial situations and therefore, Paris Club provides an appropriate debt treatment.
Provides debt treatments to debtor countries in the form of rescheduling:
- Debt relief by postponement or, in the case of concessional rescheduling, reduction in debt service obligations during a defined period (flow treatment) or as of a set date (stock treatment).
Created gradually from 1956: with first negotiation between Argentina and its public creditors in Paris.
Creditor delegations are generally led by a senior delegate from the Ministry of Finance.
Twenty-two Permanent Members of the Paris Club: Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Ireland, Italy, Japan, Israel, Netherlands, Norway, Russia, South Korea, Spain, Sweden, Switzerland, United Kingdom and the United States.
Observer members:
- Invited to attend the negotiating sessions of the Paris Club but they cannot participate in the negotiation itself, nor sign the agreement that formalizes the result of negotiation.
- International Monetary Fund (IMF); World Bank; Organisation for Economic Co-operation and Development (OECD); United Nations Conference on Trade and Development (UNCTAD); European Commission; African Development Bank; Asian Development Bank; European Bank for Reconstruction and Development (EBRD); Inter-American Development Bank (IADB)
Conditionality: Only negotiates debt restructurings with debtor countries that:
- Are expected to provide a precise description of their economic and financial situation.
- Implemented and are committed to implementing reforms to restore their economic and financial situation.
- Demonstrated track record of implementing reforms under an IMF program.
  - Means country must have a current program supported by an appropriate arrangement with the IMF, example: Extended Fund Facility, Poverty Reduction and Growth Facility
  - Level of the debt treatment is based on the financing gap identified in the IMF program.
Negotiations:
- Debtor country signing an agreement with its Paris Club creditors should not accept from its non-Paris Club commercial and bilateral creditors terms of treatment of its debt less favourable to the debtor than those agreed with the Paris Club.

India’s constructive role in supporting Sri Lanka during the recent economic crisis:

Sri Lanka’s worst economic crisis is attributed to a mix of external shocks (such as the Covid-19 pandemic and the Russia-Ukraine conflict shock) and poor macroeconomic management by the ex- Government.

In January, 2024, India became the first country to have submitted its letter of support for financing and debt restructuring of Sri Lanka to the International Monetary Fund.
India’s financial and humanitarian support worth USD 4 billion to Sri Lanka is far in excess of the total anticipated Extended Fund Facility of the IMF.
India extended multi-pronged assistance through multiple credit lines, deferred loans and grants and currency support, in line with India’s ‘Neighbourhood First’ policy.
Use of Rupees for trade settlement is further helping Sri Lanka’s economy.
In 2023, India was the largest source of tourists for Sri Lanka with over 100,000 tourists.

International Monetary Fund (IMF):

Major financial agency of the United Nations, and an international financial institution.
Headquarters: Washington, D.C., United States.
Role:
- Lender of last resort to national governments; Leading supporter of exchange-rate stability.
- Management of balance of payments difficulties and international financial crises.
Mission:
- Foster global monetary cooperation; Secure financial stability; Facilitate international trade; Promote high employment and sustainable economic growth; Reduce poverty around the world.
Established in 1945 at the Bretton Woods Conference.
Special Drawing rights (SDR):
- The IMF created the SDR as a supplementary international reserve asset in 1969.
- SDR was defined as an equivalent to a fractional amount of gold that was equivalent to one US dollar.
- Fixed exchange rates ended in 1973: IMF redefined the SDR as equivalent to the value of a basket of world currencies.
- It is not a currency but an asset that holders can exchange for currency when needed.
- Individuals and private entities cannot hold SDRs; IMF members and the IMF itself hold SDRs.
Funding:
- Funding by 190 member countries.
- Two major sources: Quotas and Loans.
  - Quotas: pooled funds from member nations, generate most IMF funds.
  - Size of members' quota increases according to their economic and financial importance in the world.
  - Amount of financing a member can obtain from the IMF (called as access limit) thus depends upon its quota.

Extended Fund Facility (EFF) of the IMF:

Lending facility, established in 1974.
Provides financial assistance to countries so as to address medium and longer-term balance of payments (BOP) problems because of structural weaknesses that require time to address.
Help countries implement medium-term structural reforms and offer longer program engagement and a longer repayment period.
Eligibility:
- All member countries facing actual or potential external financing needs.
- Most often used by advanced and emerging market countries
- Low-income countries sometimes use the EFF together with the Extended Credit Facility (ECF).
  - ECF: medium-term financial assistance to low-income countries (LICs) with protracted balance of payments problems.
  - It is one of the facilities under the Poverty Reduction and Growth Trust (PRGT).
Conditionality:
- Countries’ policy commitments are expected to focus on structural reforms to address institutional or economic weaknesses.
- Disbursements conditional on the observance of quantitative performance criteria.
Approved for periods of 3 years, but can be extended to 4 years to implement deep and sustained structural reforms.

International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE)

Context: 41st Steering Committee Meeting of International Partnership for Hydrogen and Fuel Cells in the Economy (IPHE) is being hosted in India.

About International Partnership for Hydrogen & Fuel Cells in the Economy (IPHE)

IPHE is an international partnership mechanism to organise and implement, effective, efficient and focused international research, development, demonstration and commercial utilisation activities related to hydrogen and fuel cell technologies.

The formation of IPHE was facilitated by US Department of Energy and US Department of Transportation in 2003 to foster international cooperation on hydrogen and fuel cell.

Membership of IPHE: 23 Countries including India and the European Commission. However, membership of IPHE does not result in any legally binding obligations on Partners.

Functions of IPHE are:

Identify and promote potential areas of bilateral and multilateral collaboration on hydrogen and fuel cell technologies.
Analyse and recommend priorities for research, development, demonstration and commercial utilisation of hydrogen technologies and equipment.
Analyse and develop policy recommendation on technical guidance, including common codes, standards and regulations to advance hydrogen and fuel cell technology development, demonstration and commericial use.
Foster implementation of large-scale, long-term public private cooperation to advance hydrogen and fuel cell technology and infrastructure research, demonstration and commercial use, in accordance with Partners' priorities.
Coordinate and leverage resources to advance bilateral and multilateral cooperation in hydrogen and fuel cell technology research, development, demonstration and commercial utilisation.
Address emerging technical, financial, legal, market, socio-economic, environmental and policy issues and opportunities related to hydrogen and fuel cell technology that are not currently being addressed elsewhere.

Organisation of IPHE

Chair of the IPHE is elected by IPHE members for a term of two years, with a potential for renewal.
Steering Committee with two representatives for each of the Partner countries governs the overall framework and procedures of IPHE.
Secretariat of IPHE to be coordinate overall activities of IPHE.

Funding of IPHE: Any costs arising from the activities will be borne by the Partner that incurs them. Secretariat Office is supported by voluntary contributions (Financial or in-kind) of all members.

Eurasian Economic Union (EAEU)

Context: India is exploring the possibility to forge a free trade agreement with Eurasian Economic Union (EAEU).

About Eurasian Economic Union (EAEU):

It is an international organization for regional economic integration.
It has international legal personality and is established by the Treaty on the Eurasian Economic Union.
It provides for free movement of goods, services, capital and labor, pursues coordinated, harmonized and single policy in the sectors determined by the Treaty and international agreements within the Union.
Member-States: Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia.

The Union is being created to comprehensively upgrade, raise the competitiveness of and cooperation between the national economies, and to promote stable development in order to raise the living standards of the nations of the Member-States.
Each year, a Member State is elected chairman to head the Union. Chairmanship is passed from country to country in alphabetical order in the Russian language.

NATO’s expansion

Context: Sweden became NATO’s 32nd Ally upon depositing its instrument of accession to the North Atlantic Treaty with the United States government.

Steps to Accession Process

North Atlantic Treaty Organization (NATO) members decide to invite a country to become a member of NATO and they officially invite the country to begin accession talks with the NATO.
Accession talks place between individual invitees and NATO experts at NATO headquarters in Brussels.
Invitees send letters of intent to NATO, along with timetables for completion of reforms.
Accession protocols are signed by NATO countries.
Accession protocols are ratified by NATO countries.
Once Accession Protocols are ratified the invitee countries become eligible to participate in NATO meetings as non-members.
NATO Secretary General invites potential new members.

Is NATO membership open to all?

Ans. NATO membership is open to any other European country which adheres to the principles of NATO and contributes to the security of the North Atlantic area. A NATO decision is the expression of the collective will of all 30 member countries since all decisions are taken by consensus.

Note: Finland became the 31^st member of NATO in April 2023.

Schengen Visa for Kosovo

Context: Recently, Kosovo secured visa-free access to the Schengen zone in Europe, world’s largest zone of free movement, becoming the last western Balkan non-European Union nation to waive visa requirements.

The zone is known after Schengen, the tiny Luxembourg village bordering France and Germany, where the agreement was signed in 1985.

Croatia, a European Union (EU) member since 2013, joined Schengen in 2023, while Romania and Bulgaria, EU members since 2007, will gain partial Schengen entry in March.

Obstacle that Kosovo faced?

The single biggest obstacle to the country’s Schengen visa waiver was strong opposition from several EU members, which do not recognise the 2008 unilateral declaration of independence by the breakaway state from Serbia.
Kosovo has not been accorded legal statehood by the UN and denied recognition by Russia and China.

Does Schengen have only the members of the EU under it?

The Schengen area comprises 27 countries, including four non-EU members: Iceland, Liechtenstein, Switzerland and Norway.
Also there is no requirement for the EU members to mandatorily become a member of Schengen.

About European Union (EU)

European Union (EU) is a supranational political and economic union of 27 member states that are located primarily in Europe.
EU was established, along with its citizenship when the Maastricht Treaty came into force in 1993

Maastricht Treaty

Treaty on European Union is signed in Maastricht in the Netherlands. It is a major milestone, setting clear rules for the future single currency as well as for foreign and security policy and closer cooperation in justice and home affairs.
‘European Union was officially created by the treaty, which entered into force on 1 November 1993.

Decision making setup in European Union

There are 4 main decision-making institutions which lead the EU’s administration. These institutions collectively provide the EU with policy direction and play different roles in the law-making process:

the European Parliament (Brussels/Strasbourg/Luxembourg)
the European Council (Brussels)
the Council of the European Union (Brussels/Luxembourg)
the European Commission (Brussels/Luxembourg/Representations across the EU)

EU - BUDGET

The EU budget is financed from the following sources

a proportion of each country’s gross national income (GNI) in line with how wealthy they are
customs duties on imports from outside the EU
a small part of the value added tax collected by each EU country
starting in 2021, a contribution based on the amount of non-recycled plastic packaging waste in each country
other revenue, including contributions from non-EU countries to certain programmes, interest on late payments and fines, as well as any surplus from the previous year

Spending

The EU budget is mainly dedicated to investment. For this reason, the EU adopts long-term spending plans, known as multiannual financial frameworks (MFFs), that run for a period of 5-7 years.
The EU budget finances activities that range from developing rural areas and conserving the environment to protecting external borders and promoting human rights
The budget helps EU economies to recover from the COVID-19 crisis. The Commission, the Council and the Parliament all have a say in determining the size of the budget and how it is allocated

How big is the EU economy?

The European Union operates as a single market made up of 27 countries.

Trade

The EU27 accounts for around 14% of the world’s trade in goods.

What is enlargement?

Enlargement happens when new countries join the European Union. This has taken place several times in the EU’s history, each time transforming both the EU and the countries that join.

Which countries can join?

Any European country can join the EU if it fulfils the membership criteria, also known as the Copenhagen criteria.

For the countries that are wishing to join must have

stable institutions that can guarantee democracy, the rule of law, human rights and the protection of minorities.
a functioning market economy and the ability to cope with the competitive pressure of the EU market.
the ability to take on the obligations of EU membership, including the capacity to implement all EU law and adhere to the aims of the Union.

Admission of New Members to EU

Step 1: Candidacy

A country wishing to join the EU must submit a membership application to the Council of the EU
The Council then asks the European Commission to check the applicant country’s ability to fulfil the membership criteria.
Based on the Commission's recommendations, the Council decides whether to grant the country candidate status and to begin formal negotiations for its accession to the Union.
All EU Member States must agree on this decision.

Step 2: Membership negotiations

During membership negotiations, the candidate country prepares to implement EU laws and standards, also known as the acquis.
The Commission monitors the candidate's progress on these reforms and keeps the Council and European Parliament informed of this through regular reports and communications.

Step 3: Accession

Once the negotiations are complete, the Commission gives its opinion on whether the candidate is ready to become a Member State. If the Commission recommends that the candidate is ready, an accession treaty is prepared.
The European Commission, the European Council and the European Parliament before being signed and ratified by all EU Member States and the candidate country.

India resists against Data Exclusivity Clause in trade negotiations with EFTA countries

Context: India has rejected demand for data exclusivity in drug development in FTA talks with European Free Trade Association.

What is data exclusivity?

Data exclusivity is an embargo clause that puts a minimum of six-year embargo on clinical trial data generated during the testing and development of a drug.
Data exclusivity also applies to drugs not patented in India.
Need for Data Exclusivity: This ensures adequate Intellectual Property Rights protection for the original drug manufacturers and incentivising innovation and R&D.
Concerns of India and other developing countries against Data Exclusivity: However, such IPR restrictions like Data Exclusivity hampers the development of cheap generic drugs in the developing countries, particularly India and decreases the accessibility and affordability of latest drugs, hampering healthcare outcomes.

About Europe Free Trade Association (EFTA)

It is an intergovernmental organisation set up in 1960 (through Stockholm Convention) for the promotion of free trade and economic integration between its members.
Members: Four European countries of Iceland, Liechtenstein, Norway and Switzerland. Note: All these countries are not members of EU’s Common Market.
EFTA does not envisage political integration but only an economic cooperation. It is not a customs union.
EFTA States are not obliged by EFTA Convention to conclude preferential trade agreements as a group. They maintain the full right to enter bilateral third-country arrangements.
EFTA Council is the highest governing body of EFTA, usually meets eight times a year at the ambassadorial level (heads of permanent delegations to EFTA) and twice a year at Ministerial level. Each Member State is represented, and decisions are taken by consensus.
The Chairmanship rotates every six months. For the EFTA Council, the chairmanship rotates between Iceland, Norway, Liechtenstein and Switzerland.
Secretariat: Geneva, Switzerland.

What is India- EFTA trade agreement?

The India EFTA text is a broad-ranging agreement that is being negotiated between India and the four countries since 2008 to increase investment by these countries in India and reduce tariffs, on a range of exports from these countries.
Trade and Economic Partnership Agreement (TEPA) is the the name of free trade negotiations between India and EFTA Countries.
Over the past two decades, the total trade between the EFTA States and India has been growing steadily. In 2022, the combined EFTA-India merchandise trade surpassed USD 6.1 billion. The primary imports to the EFTA States consisted of organic chemicals (27.5%), while machinery (17.5%) and pharmaceutical products (11.4%), excluding gold, constituted the main exports to India.

Pharmaceutical Industry in India:

Indian pharma industry is the third largest in the world by volume.
India accounts for 60% of global vaccine production, making it the largest vaccine producer in the world.
India accounts for 20% share in global supply of generic drugs by volume.
The pharmaceutical industry in India is expected to reach $65 Bn by 2024 and to $130 Bn by 2030.

Growth drivers of the pharmaceutical industry in India:

Government Support: PLI schemes to promote the production of high-value products in the country and increase the value addition in exports. Three bulk drug parks, located in Gujarat, Himachal Pradesh, and Andhra Pradesh should provide a consistent supply of bulk drug active components and will ensure India's drug security.
Medical tourism: Quality services at marginal costs compared to US, Europe, and South Asia
Infrastructure development: India has the highest number of US-FDA compliant plants outside the US.
Strong drug manufacturing: Expertise in low-cost generic patented drugs as well as end-to-end manufacturing
Strong domestic demand: Launch of the largest National Health Protection Scheme globally in the form Ayushman Bharat Yojna.

About Generic Drugs

Generic Drugs refer to a medication that is equivalent to a brand-name drug product in terms of its active ingredient, strength, dosage form, and intended use.
It is marketed either by a chemical salt or brand name. They have the same potency, quality, and implications and work in an identical manner as the branded medicine.
India is the largest producer of generic drugs globally.

Need for generic drugs:

Reduce Out-of-Pocket Expenditure: In India, around 94 million people are pushed into poverty due to expenditure on healthcare. About two-thirds of the expenditure is incurred on medicines.
Accessibility, availability and affordability: It may become available once the patent on the brand-name drug expires. This allows for competition in the pharmaceutical market, which often results in lower prices for consumers. This makes generic medicines price 30% to 70% less than branded medicines.
Effectiveness: It works in the same way as their brand-name counterparts. They have the same intended use and are equally effective.
Rise in the number of fatal diseases: It has increased over the years and the cost of medicines for such diseases is very high.

Challenges to generic drugs

Falsified and counterfeit drugs: Due to lack of transparency in the licensing procedures of Drugs, and lack of quality facility, it has resulted in the increased supply of low-quality, spurious and substandard drugs.
Poor Quality drugs: In 2018, the Central Drug Standard Control Organization (CDSCO) identified nearly 4.5 per cent of all generic medicines in the domestic market to be substandard due to lack of testing facilities.
Counterfeit products have entered the supply chain with severe consequences, as seen in Gambia and Uzbekistan.
Doctors do not prescribe a generic drug due to their lack of trust in the quality available in the Indian market, which lacks scientific standards in India.
Lack of resources and manpower: Drug control procedures in India suffer from a lack of resources and manpower. Widespread corruption within the system makes matters worse.
Problem of naming a fixed-dose combination (FDC): Many fixed-dose combinations (FDCs) drugs contain even 8 or 9 Active Pharmaceutical Ingredients. To prescribe a generic name for each of the eight or nine ingredients is a very tedious and impractical task.

Government Initiatives

Pradhan Mantri Bhartiya Janaushadhi Pariyojana (PMBJP): To provide quality generic medicines at affordable prices. Prices of medicines sold through these outlets are 50-90% less than that of branded medicine prices in the open market.
Free Drugs Service Initiative (FDSI) 2015: It was launched under the National Health Mission (NHM) on procurement of generic essential medicines at low prices, eliminating irrational medicines and unscientific fixed-dose combinations.
Drugs Technical Advisory Board (DTAB) has recommended that retailers should maintain a separate rack/shelf solely for the storage of generic medicines sold in the proper name.

Way Forward

Utilising anti-counterfeiting technologies for counterfeit drugs: Through imaging technologies, variable data printing of unique numbers or barcodes with speciality inks, including invisible inks, and with RFID.
Strong regulatory framework: Strengthen and enforce regulations that ensure the safety, quality, and efficacy of generic medicines. Create a clear approval process for generic drugs to enter the market.
Drugs Controller General of India need to work in close association with the pharmaceutical companies and local drug control authorities to combat the menace of counterfeit drugs.
Research and Development Support: Provide grants or incentives to pharmaceutical companies to invest in research and development of generic versions of essential medicines.
Pharmacy Incentives: Reward pharmacies for promoting and dispensing generic medications.
API Sourcing: Ensure the sourcing of APIs from reputable and approved manufacturers, preferably those that adhere to Good Manufacturing Practices (GMP) to ensure the quality of drugs.

Western countries pause funding amid Gaza war for UNRWA

Context: The US and eight other Western countries, which together provided more than half of UNRWA’s 2022 budget, have decided to pause funding for the agency. Western Countries have accused officials of UNRWA of being involved in Hamas’ October 7 attack on Israel. The development could have severe implications for Palestinians in Gaza.

More about the news:

UN officials strongly urged countries to reconsider their decision to suspend funding for the United Nations Relief and Works Agency for Palestinian Refugees in the Near East (UNRWA).
UN has assured that strict action would be taken against any staff member found to be involved in Hamas' October 7 attack on Israel.
The agency emphasized that two million Palestinians in Gaza depend on UNRWA services, which would be significantly reduced if funding is not restored.
Israel asserts that Hamas tunnels run next to or under UNRWA facilities and accuses the agency of promoting anti-Israel sentiments in its schools.
In response, UNRWA has denied all allegations, asserting no links to Hamas.
Former UNRWA spokesman Chris Gunness characterized the accusations against the agency as a ‘coordinated political attack’ by Israel, claiming that Israel seeks to disband UNRWA to achieve its objectives in Gaza.

About UNRWA:

The agency offers education, health, relief, social services, microfinance, and emergency assistance programs both inside and outside refugee camps. Most of the Palestine refugees, totalling 5.9 million, are descendants of those displaced during the 1948 Arab-Israeli war.

United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA), is a UN organization committed to supporting the relief and human development of Palestinian refugees.
UNRWA's mandate extends to Palestinians displaced by the 1948 Palestine War and subsequent conflicts, including their descendants and legally adopted children.
Established in 1949 by the UN General Assembly (UNGA).
It initially offered assistance to both Jewish and Arab Palestine refugees within the State of Israel until the Israeli government assumed responsibility for them in 1952.
Operating as a subsidiary body of the UNGA, UNRWA's mandate undergoes periodic renewal every three years.
Since its inception, it has consistently received extensions, most recently until June 30, 2026.
UNRWA operates in five regions: Jordan, Lebanon, Syria, the Gaza Strip, and the West Bank, including East Jerusalem.
Assistance for Palestinian refugees outside these areas falls under the purview of the United Nations High Commissioner for Refugees (UNHCR), established in 1950 as the primary agency aiding refugees globally.
Notably, UNRWA is unique among UN agencies as it is exclusively dedicated to assisting refugees from a specific region or conflict.
In contrast, UNHCR has a distinct mandate focused on helping refugees eliminate their refugee status through local integration, resettlement in a third country, or repatriation when feasible.

History:

In the aftermath of the 1948 Arab-Israeli War and the subsequent displacement of Palestinian Arabs, the United Nations General Assembly passed Resolution 212 (III).
The General Assembly, in 1949, established the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA). The resolution was adopted without opposition, receiving support from Israel and Arab states, with only the Soviet bloc and South Africa abstaining.
Commencing operations in 1950, UNRWA initially focused on ‘direct relief and works programs’ for Palestine refugees, aiming to prevent conditions of starvation and distress while fostering peace and stability.
The agency's mandate underwent further expansion. UNRWA was to ‘establish a reintegration fund’ for the permanent re-establishment of refugees.
More funding was to be given for reintegration than relief, urging UNRWA to continue providing programs for health care, education, and general welfare.

Definition of a Refugee:

UNRWA has adopted its own operational interpretation of the term ‘refugee’ to facilitate the provision of humanitarian aid, excluding considerations of final status.
In the context of Palestine, a refugee is defined as an individual whose habitual residence was in Palestine between June 1, 1946, and May 15, 1948, and who suffered displacement of both home and livelihood due to the 1948 conflict.
While primarily centred on Palestine refugees, the mandate also extends to those displaced by ‘the 1967 Arab-Israel war and subsequent hostilities’ and occasionally includes a broader segment of the local community.
Numerous individuals, although not officially designated as ‘Palestine refugees,’ have long been registered as eligible recipients of UNRWA services.
The offspring of male Palestine refugees, including adopted children, are also deemed eligible for refugee registration.

Organization and mandate:

It holds the distinction of being the UN agency that directly reports to the General Assembly, lacking a constitution or statute, unlike counterparts such as the Office of the UN High Commissioner for Refugees.
The determination of UNRWA's scope and mandate primarily relies on General Assembly resolutions, with potential influence from other UN organs, such as the Secretary-General.
Leadership of UNRWA is entrusted to a Commissioner-General. The Commissioner-General, an Under-Secretary-General of the UN, oversees all agency activities and personnel.
UN General Assembly formed an Advisory Commission to assist the Commissioner-General in fulfilling the agency's mandate.
Initially composed of four members, the commission now comprises 28 members and four observers.
Membership is determined through General Assembly resolutions, with host countries of Palestinian refugees (Jordan, Syria, Lebanon) sitting on the commission, followed by the 24 major donors and supporters of UNRWA.
Palestine, the European Union, and the League of Arab States have held observer status since 2005, with the Organization for Islamic Cooperation (OIC) joining as an observer in 2019.

Funding:

Budget is established by the UN General Assembly and is predominantly derived from voluntary contributions by UN member states.
It also receives some revenue from the regular UN budget.
In addition to the regular budget, UNRWA secures funding for emergency activities and special projects, such as those responding to the Syrian civil war and the COVID-19 pandemic.
In 2019, nearly 60% of the total pledge of $1.00 billion came from EU countries, with Germany as the largest individual donor.
UNRWA also forms partnerships with non-governmental donors, including nonprofit ‘national committees’ based in donor countries.

Since its inception, UNRWA has expanded beyond immediate relief and social services to provide a diverse range of social and humanitarian services. As of 2019, the majority of its budget is allocated to education (58%), followed by healthcare (15%), and general support services (13%).

International Court of Justice

Context: South Africa urged ICJ to order Israel to suspend its military operations in Gaza.

About International Court of Justice (ICJ)

It is the principal judicial organ of the United Nations. It was established by the United Nations Charter, signed in 1945.
The ICJ functions according to the Statute of the International Court of Justice. Statute of ICJ is an annexed document of the UN Charter and forms an integral part of the UN Charter.
It is situated in the Peace Palace Hague, Netherlands.

Membership of International Court of Justice:

All members of the UN are also considered to be party to the Statute of the International Court of Justice.
A state which is not a member of the UN may become a party to the statute of ICJ on conditions to be determined by in each case by the UN General Assembly upon recommendation of the UN Security Council.
It has two primary functions: first, to settle, in accordance with international law, legal disputes between States submitted to it by them and, second, to give advisory opinions on legal matters referred to it by duly authorized United Nations organs and specialized agencies.

Settlement of disputes by ICJ:

Only States are eligible to appear before the Court in contentious cases. At present, this essentially means the 193 Member States of the United Nations.
The Court has no jurisdiction to deal with applications from individuals, non-governmental organizations, corporations or any other private entity. It cannot provide them with legal advice or help them in their dealings with national authorities.
However, a State may take up the case of one of its nationals and invoke against another State the wrongs which its national claims to have suffered at the hands of the latter; the dispute then becomes one between States.

Advisory Jurisdiction of ICJ:

UNGA or UNSC can request the ICJ to give an advisory opinion on any legal question.
Other organs and specialized agencies of the UN can also request the ICJ to provide advisory opinions on legal questions arising within the scope of their activities.
Judges of International Court of Justice: It is composed of 15 judges who are elected for a term of nine years, by the United Nations General Assembly and the United Nations Security Council. No two judges can be nationals of the same country.

Limitations of ICJ:

ICJ does not have power to initiate proceedings on its own. This power is present with the International Criminal Court.
ICJ is not permitted to investigate and rule on acts of sovereign states as it chooses.
States must consent to ICJ considering the dispute in question. States can give consent to ICJ’s jurisdiction by three ways:
- By a special arrangement: two or more States with a dispute on a specific issue may agree to submit it jointly to the Court and conclude an agreement for this purpose;
- By a clause in a treaty: over 300 treaties contain clauses (known as jurisdictional clauses) by which a State party undertakes to accept the jurisdiction of the Court should a dispute arise with another State party about the interpretation or application of the treaty;
- by a unilateral declaration: the States parties to the Statute of the Court may opt to make a unilateral declaration recognizing the jurisdiction of the Court as binding with respect to any other State also accepting it as binding. This optional clause system, as it is called, has led to the creation of a group of States each of which has given the Court jurisdiction to settle any dispute that might arise between them in future. They are deposited by States with the Secretary-General of the United Nations.
Judgments delivered by the Court are binding upon the parties concerned; are final and without appeal.
Mechanism for compliance of judgment of ICJ: If any party to a case fails to the obligations incumbent upon it under a judgment rendered by the ICJ, the other party may have recourse to the UN Security Council, which can make recommendations or measures to be taken to give effect to the judgment.

Davos Summit

Context: The World Economic Forum is holding its annual meeting from January 15 to 19 in Davos, Switzerland.

About World Economic Forum (WEF):

Professor Klaus Schwab founded WEF in 1971, originally called the European Management Forum, as a non-profit foundation based in Geneva, Switzerland.
It is the International Organization for Public-Private Cooperation.
It introduced the concept of ‘stakeholder capitalism’ i.e. a form of capitalism in which companies do not only optimize short-term profits for shareholders, but seek long term value creation, by taking into account the needs of all their stakeholders, and society at large.
In 2015, the Forum was formally recognised as an international organization.
The Forum is chaired by Founder and Executive Chairman Professor Klaus Schwab.
The Managing Board, chaired by the Forum's President, Børge Brende, acts as the executive body of the World Economic Forum.
The Great Reset Initiative is an economic recovery plan drawn up by the World Economic Forum (WEF) in response to the COVID-19 pandemic.
The Global Redesign Initiative (2010) of WEF was a global, multistakeholder dialogue on the future of international cooperation. Set up in the midst of the global financial crisis, its purpose was to stimulate thinking and debate about how the international community and its institutions and organizations in their widest sense can be adapted to contemporary challenges.
Reports released by WEF:
- Global Risks Report
- Global Gender Gap Index (#2017 Prelims)
- Fostering Effective Energy Transition Report
- Travel and Tourism Development Index
- Global Cyber Security Outlook
- Global Competitiveness Report (#2019 Prelims)

International Labour Organisation warns about rising global unemployment

Context: ILO in its ‘World Employment and Social Outlook’ report highlighted that the global unemployment rate is set to increase in 2024.

About International Labour Organisation (ILO)

It is the only tripartite U.N. agency which brings together governments, employers and workers, (Tripartite) to set labor standards, develop policies and devise programmes promoting decent work for all women and men.
It was created in 1919, under the League of Nations, as part of the Treaty of Versailles that ended World War I, to reflect the belief that universal and lasting peace can be accomplished only if it is based on social justice.
In 1946, the ILO became a specialized agency of the newly formed United Nations.
It is headquartered in Geneva, Switzerland.
In 1969, the ILO received the Nobel Peace Prize for improving fraternity and peace among nations, pursuing decent work and justice for workers, and providing technical assistance to other developing nations.
The Governing Body is the executive body of the International Labour Organization. It meets three times a year, in March, June and November.
The ILO constitution permits any member of the United Nations to become a member of the ILO.
ILO is also a member of the United Nations Development Group (UNDG).
The International Labour Conference, held in June 2019, adopted a landmark ILO Centenary Declaration (focuses on the major challenges and opportunities for the future of work, ranging from technology to climate change, from demographic shifts to the need for new skills).

Eleven Fundamental Instruments of the International Labour Organisation:

ILO Governing Body has identified 11 fundamental conventions covering subjects which are considered to be fundamental principles and rights at work. Their Conventions (or Protocols) are legally binding international treaties that may be ratified by member states.

ILO Convention 87: Freedom of Association and Protection of the Right to Organize Convention, 1948.
ILO Convention 98: Right to Organize and Collective Bargaining Convention, 1949
ILO Convention 29 and its 2014 Protocol: Forced Labour Convention, 1930. (India has ratified)
ILO Convention 105: Abolition of Forced Labour Convention, 1957 (India has ratified)
ILO Convention 138: Minimum Age Convention, 1973 (India has ratified and enacted the Child Labour (Prohibition & Regulation)
ILO Convention 182: Worst Forms of Child Labour Convention, 1999 (India has ratified)
ILO Convention 100: Equal Remuneration Convention, 1951 (India has ratified)
ILO Convention 111: Discrimination (Employment and Occupation) Convention, 1958 (India has ratified)
ILO Convention 155: Occupational Safety and Health Convention, 1981
ILO Convention 187: Promotional Framework for Occupational Safety and Health Convention, 2006

India has ratified 6 fundamental conventions out of the 11 fundamental conventions. ILO Conventions ratified by India are: ILO Convention 29 (Forced Labour Convention), ILO Convention 105 (Abolition of Forced Labour Convention), ILO Convention 138 (Minimum Age Convention), ILO Convention 182 (Worst Forms of Child Labour), ILO Convention 100 (Equal Remuneration Convention) & ILO Convention 111 (Discrimination (Employment & Occupation) Convention).

Governance Conventions:

ILO Governing Body has designated four Conventions as governance (priority) instruments, thereby encouraging member states to ratify them because of their importance for the functioning of the international labor standards system. The four governance conventions are:

Labour Inspection Convention, 1947 (India has ratified)
Employment Policy Convention, 1964 (India has ratified)
Labour Inspection (Agriculture) Convention, 1969
Tripartite Consultation (International Labour Standard) Convention, 1976 (India has ratified).

Reports released by ILO:
- World Employment and Social Outlook
- World Social Protection Report
- Global Estimates of Modern Slavery
- Global Wage Report
- Global Employment Trends for Youth

Importance of International Law

Context: The state of international law is a contentious one. Some scholars doubt the relevance of International Law, while others uphold the importance of the same despite the challenges it faces. Israel’s bloody war in Gaza has caused unprecedented death and destruction in the backdrop of Russia’s brazenly illegal invasion of Ukraine. These two wars have led many to pronounce the death of international law, especially the rule prohibiting the use of force in international relations under Article 2 (4) of UN Charter.

Importance of International Law

International law matters because, through its argumentative practices, it has the potential to hold those who wield public power accountable for their conduct. For Example South Africa moved the International Court of Justice (ICJ) alleging that Israel’s conduct in Gaza violates the Convention on the Prevention and Punishment of the Crime of Genocide and this pushes countries and actors to explain their conduct. For example, the Israel Defence Forces have tried to explain how their military offensive is consistent with international law.
Even if there is no universal compliance with international law, especially international humanitarian law, there is a universal aspiration towards compliance.

UN Charter Article 1 and 2

Articles 1 and 2 of the Charter of the United Nations outline the purposes and principles of the United Nations.

Article 1 (2) establishes that one of the main purposes of the United Nations, and thus the Security Council, is to develop friendly international relations based on respect for the “principle of equal rights and self-determination of peoples”.

Article 2 (4) of the Charter prohibits the threat or use of force and calls on all Members to respect the sovereignty, territorial integrity and political independence of other States.

Defining International Law:

It can be defined as a set of guidelines which regulates the interaction between governments and international entities. These International laws has played a crucial role in advancing global peace, justice, and human rights.

India’s position on International Law:

India is actively participating in the International Legal System, it is signatory to various international treaties and conventions along with United Nations plus associated agencies.
India’s position in international law is determined by the values of sovereignty, territorial integrity, non-interference in internal affairs, respect for human rights and peaceful conflict resolution.
India has also made changes to its internal legal system to advance human rights by passing laws on labour rights, environmental protection, against violence towards women etc and for its implementation has made the judicial system more robust.

Challenges faced by International Law

Inadequate Enforcement Mechanisms: The efficacy of the international legal system is compromised by lax enforcement, as certain governments neglect their duty to uphold international laws without facing consequences. The absence of a robust enforcement mechanism undermines the authority and credibility of the international legal system. Additionally, the limited authority agreements signed by states with the International Court of Justice (ICJ) and the reluctance of powerful states to endorse the Rome Statute, establishing the International Criminal Court (ICC), further weaken the enforcement framework.
Lack of a Unified Global Regulatory System: The world grapples with the absence of a comprehensive global regulatory framework, resulting in overlapping and conflicting international regimes. The clash between entities such as the World Trade Organization (WTO) and the United Nations Framework Convention on Climate Change (UNFCCC), each with distinct aims, principles, and goals, contributes to confusion and inefficiency in addressing global challenges.
Marginalized Voice of Developing Nations: Developing nations confront challenges in actively participating in international affairs due to limited capacity and resources. This marginalization leads to a disregard for their interests and concerns, fostering a perception of bias in favour of developed Western countries within international institutions and laws.
Harmonizing State Sovereignty with Globalization: The concept of state sovereignty, enshrined in the UN Charter, occasionally impedes successful international cooperation. The escalating cross-border activities propelled by globalization underscore the need for periodic updates to international laws to keep pace with evolving global dynamics.
Geopolitical Dynamics Among Great Powers: Power politics significantly influences the effectiveness of international law. Dominant global players manipulate international legal frameworks to favour their interests and those of their allies. Criticism has been directed at the United States, for instance, for leveraging its influential position to reshape international trade regulations at the expense of less developed states.

Way Forward:

Strengthening International Institutions: International Laws will be as strong as the international institutions and their implementing mechanism. Thus there is a need to enhance the implementing mechanism of the UN, ICJ, ICC and WTO at the earliest.
Increased representations: There is a need for increased representation of weaker and smaller states in international institutions in order to overcome power disparities. This can be done by giving these states more chances to participate in decision-making processes.
Promoting dialogue and negotiations: There is a need to promote more discussion and negotiation between states and non-state entities in order to enhance international law.
Focus on Human Rights: The gravest challenge that the world faces today is Human Rights violations across continents and thus there is need to enhance standards, norms of human rights and its implementation mechanism.
Pressing Accountability: International law must be moulded and accentuated to become an instrument that holds the powerful accountable in international relations.

Houthis Attacking Red Sea Ships & Operation Prosperity Guardian

Context: Post the Israeli military offensive against Hamas in Gaza strip region of Palestine the peace and security of the middle east region has again started to appear fragile. Houthi rebels based in Yemen have started conducting a series of attacks using UAVs and ballistic missiles on commercial and merchant shipping vessels in the Southern Red Sea. To counter this threat by Houthi rebels against merchant vessels, US has announced establishment of Operation Prosperity Guardian under the Combined Maritime Forces.

Operation Prosperity Guardian

Operation Prosperity Guardian is a multinational security initiative for countering the threat posed by Houthis rebels against merchant vessels and ensuring the foundational principle of freedom of navigation in the Red Sea.
Countries like USA, UK, Bahrain, Canada, Netherlands, Norway and Seychelles will come together to jointly address security challenges in Southern Red Sea and Gulf of Aden.
The Operation will function under the umbrella of Combined Maritime Forces (CMF). CMF's Task Force 153 is charged with international maritime security and capacity building in the Red Sea, Bab-al-Mandeb and Gulf of Aden.
Operation Prosperity Guardian will serve to create a safe passage for commercial and merchant ships in the Red Sea and Gulf of Aden.
It is a defensive coalition aiming to reassure, assist and respond to global shipping and mariners that will be transitioning the Red Sea and Gulf of Aden Waterway.

About Combined Maritime Forces (CMF)

CMF is a multinational maritime partnership, which exists to uphold the rules-based international order (RBIO) by countering illicit non-state actors on the high seas and promoting security, stability and prosperity across approximately 3.2 million square miles of international waters, which encompass some of the world's most important shipping lanes.
Established in 2001.
Headquarters of CMF is in Manama, Bahrain.
Focus areas of CMF: Counter-narcotics, counter-smuggling, suppressing piracy, encouraging regional cooperation and engaging with regional and other partners. Promoting a safe maritime environment free from illicit non-state actors. When requested, CMF assets at sea will also respond to environmental and humanitarian incidents.
39 Members of CMF are: Australia, Bahrain, Belgium, Brazil, Canada, Denmark, Djibouti, Egypt, France, Germany, Greece, India, Iraq, Italy, Japan, Jordan, Kenya, Republic of Korea, Kuwait, Malaysia, the Netherlands, New Zealand, Norway, Oman, Pakistan, the Philippines, Portugal, Qatar, Saudi Arabia, Seychelles, Singapore, Spain, Sri Lanka, Thailand, Türkiye, UAE, United Kingdom, United States, and Yemen. (India is a member and also Pakistan).
Functioning of CMF: CMF is a coalition of the willing and does not proscribe or mandate a specific level of participation from any member nation. CMF members are not bound by a fixed political or military mandate.
Combined Task Forces under CMF:
- CTF 150: Conducts Maritime Security Operations outside the Arabian Gulf to ensure that legitimate commercial shipping can transit the region, free from non-state threats.
- CTF 151: Aims to suppress piracy outside territorial waters of Coastal States, indirectly curb trafficking of humans and illegal, unreported and unregulated fishing.
- CTF 152: Focuses on regional maritime security cooperation focusing on illicit non-state actors in the Arabian Gulf, especially between Gulf Cooperation Council (GCC) nations.
- CTF 153: Focuses on Red Sea Maritime Security in the Red Sea, Bab al Mandeb and Gulf of Aden. Established in 2002.
- CTF 154: Train partner navies and improve operational capabilities to enhance maritime security in Middle East. Established in 2023.
CMF's head or commander by vice-admiral of US Navy. CMF's deputy commander is a UK Royal Navy Commodore.

About Red Sea

Red Sea is a narrow sea between Arabian Peninsula and Africa.
Towards its north lies the Sinai Peninsula of Egypt and Gulf of Suez and Gulf of Aqaba. Suez Canal connects the Gulf of Suez to the Mediterranean Sea.
Towards its south, Bab-al-Mandeb strait connects the Red Sea to the Gulf of Aden. Bab al Mandeb separates Yemen on the Arabian Peninsula to the Djibouti and Eritrea located on the Horn of Africa.
Bab al-Mandeb passage (choke point) which connects the Red Sea with the Gulf of Aden is only 29 km wide at its narrowest point.
Currently, between 10-15% of global shipping flows through the Red Sea.
On account of the recent Houthi attacks, many international shipping companies have had to re-route through the Cape of Good Hope adding weeks to the delivery of goods and materials, including oil and gas.

About Houthis

Houthis are an armed group who as sect among the Shia muslims minority known as Zaidis in Yemen.
They rebelled against ex-Yemen President Saleh, who was supported by Saudi Arabia.
Houthi rebels have been fighting a civil war against the Saudi backed Yemen Government since 2014.
Houthi rebels have modelled themselves on lines of Shia armed group Hezbollah based in Lebanon and are supported by Iran.