Today's News Diary on 9 Marc 2021
 

1. Japan to stage Tokyo Olympics without foreign spectators due to COVID-19 concerns

2. Gymnastics | Artistic All-Around World Cup in Tokyo cancelled due to COVID-19 impact

3.Delhi will bid for 2048 Olympic Games: Manish Sisodia

4. Uttarakhand CM Trivendra Singh Rawat resigns

5. Refiners Asked To Cut Reliance On Middle East Oil After OPEC+ Decision: Report

6. As Oil At $70 Challenges Global Economic Recovery, What India May Face

7. "Gross Interference": India Summons Envoy Over UK Debate On Farm Laws

8. Air India Employees Consortium Disqualified From Divestment Process

News in detail

1. Japan to stage Tokyo Olympics without foreign spectators due to COVID-19 concerns

Kyodo news agency said the government had concluded that welcoming fans from abroad would not be possible given public concern about the coronavirus and the detection of more contagious variants in many countries

Japan has decided to stage this summer's Tokyo Olympics and Paralympics without overseas spectators due to concern among the Japanese public about COVID-19, Kyodo news agency said on Tuesday, citing officials with knowledge of the matter.

Kyodo said the government had concluded that welcoming fans from abroad would not be possible given public concern about the coronavirus and the detection of more contagious variants in many countries, Kyodo cited the officials as saying.

The opening ceremony will also be held without spectators, Kyodo said.

"The organising committee has decided it is essential to hold the ceremony in the northeastern prefecture of Fukushima behind closed doors, only permitting participants and invitees to take part in the event, to avoid large crowds forming amid the pandemic," Kyodo said, quoting the officials.

The Games are set for July 23 to Aug. 8.

Most Japanese people do not want international visitors to attend the Games amid fears that a large influx of visitors could spark a resurgence of infections, a Yomiuri newspaper poll showed.

The survey showed 77% of respondents were against allowing foreign fans to attend, versus 18% in favour.

2. Gymnastics | Artistic All-Around World Cup in Tokyo cancelled due to COVID-19 impact

The event, which had been scheduled for May 4, was meant to conclude this year's all-around series

The International Gymnastics Federation (FIG) said on Tuesday it has cancelled the Artistic All-Around World Cup in Tokyo, which was also to be a test event for the Olympics this summer, due to difficulties related to the COVID-19 pandemic.

The event, which had been scheduled for May 4, was meant to conclude this year's all-around series.

However, the cancellation of two earlier events led to the scrapping of the series as qualifiers, the governing body said in a statement.

"For this reason, the decision has been taken to cancel the World Cup in Japan, especially given the current travel restrictions and difficulties worldwide as well as the measures taken by the Japanese authorities to limit the rate of coronavirus infections in the country ahead of the Olympic Games," the federation said.

In a separate statement, Tokyo 2020 organisers said they would hold an operational test event on May 4 with a national gymnastics event, adding that there was no change to the May 8 rhythmic gymnastics test event.
 

3.Delhi will bid for 2048 Olympic Games: Manish Sisodia

Delhi hosted the first Asian Games in 1951, and later the 1982 edition. In 2010, the national capital had hosted the Commonwealth Games.

The Delhi government aims to host the 2048 Olympic Games and to achieve that goal it will build adequate infrastructure and create an atmosphere where sports flourishes, Deputy Chief Minister Manish Sisodia said on Tuesday.

"The 32nd Olympic Games are to be held in Tokyo. The next three host cities have also been decided. Our government aims to bring the sports facilities and the atmosphere towards sports competitions to such a level through the new Sports University that we can apply to host the 39th Olympic sports competitions for 2048," he said.

"This may seem far away, but we have to bid for it 10 years before 2048. And before that, it will take 15 years to build adequate infrastructure, create an atmosphere where sports flourishes and bring our players to a level where they bring medals in sports competitions leading to Olympics 2048," Mr Sisodia said.

The deputy CM said the sports university will also initiate its activities this year.

Delhi hosted the first Asian Games in 1951, and later the 1982 edition. In 2010, the national capital had hosted the Commonwealth Games.
 

4. Uttarakhand CM Trivendra Singh Rawat resigns

Uttarakhand Chief Minister Trivendra Singh Rawat resigned on Tuesday and former Chattisgarh Chief Minister Raman Singh and Rajya Sabha member Dushyant Gautam, sent by the BJP’s national leadership as observers to Dehradun, will conduct a meeting of the legislature party on Wednesday morning to elect a new leader who will take over as chief minister.

Uttarakhand has had a record of not having a single chief minister, except N.D. Tiwari, to have completed a full term since its formation.

While changing a chief minister so late in his term is not usually the norm in the BJP, the party’s experience in Jharkhand, where refusal to change Raghubar Das, another unpopular Chief Minister, before the polls, had led to a rebellion in the party ranks and the BJP’s subsequent defeat in the Assembly polls.

5. Refiners Asked To Cut Reliance On Middle East Oil After OPEC+ Decision: Report

Most of the OPEC+ producers, led by world's top exporter Saudi Arabia, last week decided to extend most output curbs into April.

Government has asked state refiners to speed up the diversification of oil imports to gradually cut their dependence on the Middle East after OPEC+ decided last week to largely continue production cuts in April, two sources said.

India, the world's third biggest oil importer and consumer, imports about 84 per cent of its overall crude needs with over 60 per cent of that coming from Middle Eastern countries, which are typically cheaper than those from the West.

Most of the OPEC+ producers, led by world's top exporter Saudi Arabia, last week decided to extend most output curbs into April.

India, hit hard by the soaring oil prices, has urged producers to ease output cuts and help the global economic recovery. In response, the Saudi energy minister told India to dip into strategic reserves filled with cheaper oil bought last year.

"We have asked companies to aggressively look for diversification. We cannot be held hostage to the arbitrary decision of Middle East producers. When they wanted to stabilize the market we stood by them," said a government source.

Government had not cancelled any shipment of crude oil from the Middle East in 2020 when oil demand collapsed due to COVID-19, the source said. Already OPEC's share in India's oil imports declined to a historic lows during April 2020-January 2021, the first ten months of this fiscal year.

While initial costs could be high, the strategy will pay off in the long term, the source said.

Two oil refiners confirmed that the government had asked them to expedite efforts to diversify crude import sources.

One plan is to import oil from new producer Guyana, the sources said. The country's top refiner Indian Oil Corp has also renewed its oil import contract with Russia, they added. India hopes to resume Iranian oil imports this year.
 

Iraq and Saudi Arabia are the two biggest oil suppliers to India. This year, Iraq has cut annual supply volumes while Kuwait has shortened the duration of contracts with Indian buyers to 9 months.

After OPEC's last week decision, crude oil prices rose to over $71 per barrel although the prices eased to $69.08 a barrel by 1027 GMT. Saudi has also raised April official selling price of its oil for Asia.

6. As Oil At $70 Challenges Global Economic Recovery, What India May Face

A missile attack Sunday on a key Saudi Arabian export facility sent Brent crude, the international benchmark, above $70 a barrel for the first time since January 2020
 

The spike in oil prices has focused attention on how the steady rise in energy costs is threatening to create a drag on the global economic recovery and stoking fears of inflation. After surging more than 30 per cent this year on coordinated supply constraints by major exporters and demand returning from the depths of Covid-19 crisis, a missile attack Sunday on a key Saudi Arabian export facility sent Brent crude, the international benchmark, above $70 a barrel for the first time since January 2020.

While prices have since pulled back, the impact on inflation and the overall global recovery depends on how sustained the underlying rally proves to be.

Here's a look at some of the factors at play:

What does it mean for global growth?

For economists, the cause of higher prices is what matters, rather than the price itself. Rising energy costs on the back of strong demand normally indicate robust and resilient growth, while a surge from crimped supply could weigh on a recovery. Morgan Stanley economists estimate that oil would need to average $85 a barrel for the global oil burden to rise above longer-term averages.

"For context, the global oil burden last rose above its long-term average in 2005, but with the backdrop of strong global growth, economies were able to withstand the impact of higher oil prices until 2007, when global growth momentum was already weakening and yet oil prices shot up rapidly," the bank's economists wrote last week.

What about inflation?

The run-up in oil prices comes against the backdrop of a global inflation debate that has heated up over the past month. With spikes in bond yields, investors continue to test policy makers, including Federal Reserve Chairman Jerome Powell, on their insistence that inflation isn't a threat this year, even with trillions of dollars of stimulus being pumped into the global economy.

Oil and food costs are both bubbling, though as the two most volatile categories of consumer prices they're easier for policy makers to look past as transitory. And while costs for homes and semiconductors also are on the rise, the prevailing trend worldwide is still one of damped price growth.

"As good economists, we stand somewhere in the middle: The era of meager inflation seems to be over, but that doesn't necessarily mean hyperinflation is around the corner," ING global head of macro Carsten Brzeski said in a March 5 report.

What does it mean for central banks?

While energy is a prominent component of consumer-price gauges, policy makers often focus on core indexes that remove volatile components such as oil. If the run-up in prices proves to be substantial and sustained, those costs will filter through to transportation and utilities. That scenario would pressure central banks to rein in their support for the economy, though for now officials continue to stress that high unemployment will offset any inflation pressure.

What Bloomberg Economics Says...

Emerging markets "with below-target inflation, stable price expectations, commodity-linked currencies or high real rates could look through the oil-driven price increases without tightening. Others will probably either raise rates (Brazil and Nigeria) or face a higher likelihood of delayed rate cuts (India, Mexico and Turkey) to stem the oil-fueled price gains."
 

Who wins from higher prices?

Exporting nations -- including Saudi Arabia, Russia, Norway and Nigeria -- will enjoy a boost to corporate and government revenues that will help repair budgets and improve current-account positions, allowing them to increase spending to drive the recovery. Emerging economies dominate the list of oil producers, which is why they're affected more than developed ones.

Who loses?

Consuming nations will bear the cost of pricier energy, potentially fanning inflation and hurting their recoveries. Those emerging economies that rely on imported energy could see their current-account positions and fiscal deficits come under pressure. That could trigger capital outflows and weaker currencies, laying the groundwork for inflation and potentially forcing governments and central banks to consider raising interest rates despite slow growth. That includes Turkey, Ukraine and India. As the world's biggest oil importer, China is also vulnerable to higher prices.

What's OPEC's role in the latest price run-up?

The Organization of Petroleum Exporting Countries and allies including Russia delivered a shock decision last week to continue with output cuts that have buoyed the market. Saudi Arabia also raised pricing for next month's shipments to the U.S. and Asia, signaling it sees demand holding up despite the cost increases. The bullish producer policies come even as Brent easily passed $60 a barrel last month, roughly the annual average level needed for the cartel's largest producers to balance their budgets this year.

What about geopolitics?

Despite a surge in U.S. output, the price of oil remains tightly linked to fragile geopolitical relationships in the Middle East, which is home to most of the world's major exporters.

The responsibility for Sunday's attack was claimed by Houthi fighters in Yemen, who are backed by Iran, and comes as the Biden administration has started to revise U.S. relationships in the region.

7. "Gross Interference": India Summons Envoy Over UK Debate On Farm Laws

The foreign ministry today said the Foreign Secretary had summoned the envoy and conveyed "strong opposition to unwarranted discussion on agricultural reforms in India in the British Parliament".

The British parliament on Monday discussed farmers' protest and press freedom in India.

New Delhi: India called in the British High Commissioner today to express its disapproval of the discussions on farmers' protest and press freedom in the British parliament, calling it "gross interference" and "votebank politics".  This is the first time the government of another nation has officially conducted internal discussions on the protests, which have been continuing for more than 100 days.

The 90-minute debate was held on Monday, during which several MPs of the Labour party, Liberal democrats and the Scottish National Party raised concern over the Indian government's reaction to the protests.

The UK government had responded that concerns will be raised with India when both Prime Ministers meet in person."

New Delhi today said the Foreign Secretary had summoned the British envoy and conveyed "strong opposition to unwarranted and tendentious discussion on agricultural reforms in India in the British Parliament".

The official has made it clear that this represented a gross interference in politics of another democratic country, the foreign ministry said. 

"He advised that British MPs should refrain from practicing votebank politics by misrepresenting events, especially in relation to another fellow democracy," a statement from the ministry read.

The debate had evoked a sharp response from the Indian High Commission in London yesterday.  "We deeply regret that rather than a balanced debate, false assertions - without substantiation or facts - were made, casting aspersions on the largest functioning democracy in the world and its institutions," the High Commission had said in a statement.

8. Air India Employees Consortium Disqualified From Divestment Process

Air India Employees Consortium, which participated in the Air India divestment bid, was disqualified from the divestment process by the Transaction Advisor to the Government of India (Ernst & Young LLP) on Monday. AI Employees Consortium submitted an ''expression of interest'', last year, to participate in strategic divestment of the national carrier Air India. The Government of India has informed the AI Employees Consortium by an email on Monday that their submission for the Air India disinvestment acquisition process is not fulfilling the eligibility.

Transaction Advisor to the Government of India said that the three reasons for the disqualification of the ''Expression of Interest'' of the employees are non-submission of required three years audited financial statements for foreign consortium member, non-submission of information or details by interested bidders for investments in offshore companies, which forms a substantial part of the net worth of the foreign consortium member and the foreign consortium member not being an appropriately regulated foreign investment fund as defined in the Preliminary Information Memorandum.

Meenakshi Malik Air India commercial Director informed AI employees in a letter, "As of late last night, I have seen an email from the Transaction Advisor to the Government of India (Ernst & Young LLP), informing the Employees of Air India that we have been unsuccessful in qualifying to the next phase of the ''Disinvestment Acquisition process''. "

Further, Meenakshi Malik stated in an emotional letter to AI employees, "Dear all, While I write to you with a heavy heart on the outcome of our bid to acquire Air India, I cannot help but be filled with a great sense of pride and admiration for the sincerest efforts we have made over the last few months, together."

"As of late last night, I have seen an email from the Transaction Advisor to the Government of India (Ernst & Young LLP), informing the employees of Air India that we have been unsuccessful in qualifying to the next phase of the ''Disinvestment Acquisition process''," further read the letter. Divestment of Air India still under process and the Aviation ministry informed the media recently that, "divestment process is going very smoothly".