THE HINDU EDITORIAL : MARCH 16, 2018
THE HINDU EDITORIAL : MARCH 16, 2018
a) Rex Tillerson sacking: Rexit and beyond
Even by his standards for unexpected diktats, U.S. President Donald Trump’s decision to fire his Secretary of State, Rex Tillerson, and replace him with CIA Director Mike Pompeo, came out of the blue. Mr. Tillerson, who was the CEO of ExxonMobil Corporation before taking up the role, did not agree with Mr. Trump on fundamental policy matters, the President said. This is widely seen as an allusion to Mr. Tillerson’s preference, contra-Trump, for diplomacy as a means of defusing the North Korean crisis. Also implied was a widening chasm between the two men on the merits of the Iran nuclear deal. With Mr. Tillerson’s departure, the number of senior officials exiting the Trump administration after a little more than a year has reached at least 24. Less than a week before the long-rumoured “Rexit”, White House Chief Economic Adviser Gary Cohn, formerly a Wall Street banker, quit his post over his opposition to Mr. Trump’s proposal to levy hefty steel and aluminium tariffs. And, less than a week before Mr. Cohn, White House Communications Director Hope Hicks resigned after admitting to a Congressional panel investigating Russian influence on the 2016 election that she had occasionally told “white lies” on Mr. Trump’s behalf. Rumours now swirl that National Security Adviser H.R. McMaster may also soon be ousted. The question at this point is: does the existing coterie of senior White House officials enjoy the confidence of their President to a sufficient magnitude as to ensure that policies can be executed in a meaningful way? In one sense, there does not appear to be cause for alarm over the incessant departures from the White House. It is quite possible that Mr. Trump has used his first year in office to consolidate his vision and attract the right talent to realise his governance paradigm, essentially rooted in a nationalistic, or “America First”, world view. Take the case of Mr. Pompeo: he is far more aligned with Mr. Trump’s hawkish approach towards the Kim Jong-un regime than Mr. Tillerson was. There is a case to be made that Mr. Trump’s hardline stance is what is ultimately bringing the North Koreans to the negotiating table. Mr. Tillerson, insistent on talks, was likely to have been an impediment to this strategy. The deeper message is that the liberal order of the Obama years is gone. Propriety, protocol and punditry no longer hold sway — Mr. Trump had no quarrel with Mr. Tillerson over the Secretary leaving numerous senior State Department posts vacant, but only cared about the top diplomat’s concurrence with his strategy. The President will likely apply this principle — and find himself the right people — in other policy areas as well, such as trade and immigration. Nations that engage with America may glean valuable lessons from this churn.
b) Credit tangle: on LoU ban
A month after the ₹12,800-crore letters of undertaking (LoUs) fraud at Punjab National Bank came to light, the Reserve Bank of India has decided to ban such instruments as well as letters of comfort issued by bankers to businesses for international transactions. While the government has been in fire-fighting mode, unleashing all investigative agencies to probe the fraud, this is the first major step by the central bank on the issue, apart from asking banks to ensure there are no slip-ups between their core banking systems and the SWIFT mechanism used for international money transfers. LoUs are among the most popular instruments to secure overseas credit by importers — known as buyers’ credit in banking parlance — because of their attractive pricing. It is estimated that overall, bank finance for imports into India is around $140 billion, of which over 60% is funded through such buyers’ credit. Naturally, industry is unhappy with the RBI decision as this would raise the cost for importers, who will now need to rely on more expensive instruments such as bank guarantees and letters of credit. The move will also impact the competitiveness of exporters who import raw materials for their products. While the central bank had earlier blamed “delinquent behaviour by one or more employees of the bank” and failure of internal controls for the PNB-Nirav Modi fiasco, RBI Governor Urjit Patel has finally commented on the fraud. Mr. Patel said he had chosen to speak because the central bank also feels the anger and pain over the banking sector frauds that amount to “looting” the country’s future by “some in the business community, in cahoots with some lenders”. Reiterating that PNB’s internal systems failed to take note of the RBI’s warnings about such risks, Mr. Patel took on severe criticism about the RBI’s inability to detect the fraud. He stressed that the RBI didn’t have adequate powers to regulate public sector banks, and it could not remove any of their directors or liquidate such a lender, as it can in the case of private sector banks. He made an eloquent demand that the owner of public sector banks (that is, the government) must consider making the RBI’s powers over banks ‘ownership-neutral’ and say what could be done with these banks. The RBI’s stance is valid, as is its discomfort with knee-jerk reactions and the blame games since the fraud came to light. In the very same vein, its omnibus ban of LoUs will impact the $85 billion buyers’ credit market that was mostly conducted in accordance with the law of the land. If an individual or some failed systems of a bank were indeed to blame, why should bona fide transactions suffer? Perhaps the RBI could have tightened the norms for LoUs and introduced safeguards based on the latest learnings. It is still not too late to do that.
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WORDS/VOCABULARY
1) Diktats
Meaning: An order or decree imposed by someone in power without popular consent.
Example: “a diktat from the Bundestag”
2) Fire
Meaning: Dismiss (an employee) from a job.
Example: “I had to fire men who’ve been with me for years”
Synonyms: Dismiss, Discharge
3) Out of the blue
Meaning: Without warning; unexpectedly.
Example: “she phoned me out of the blue”
4) Widening
Meaning: Make or become wider.
Example: “we should widen the scope of our investigation”
Synonyms: Broaden, Stretch
Antonyms: Narrow, Restrict
5) Chasm
Meaning: A profound difference between people, viewpoints, feelings, etc.
Example: “the chasm between rich and poor”
Synonyms: Breach, Gulf
6) Hefty
Meaning: Large and heavy.
Example: “a hefty young chap”
Synonyms: Heavy, Sturdy
Antonyms: Slight, Gaunt
7) White lies
Meaning: A harmless or trivial lie, especially one told to avoid hurting someone’s feelings.
Example: “when I was young, I told little white lies”
8) Swirl
Meaning: A quantity of something moving in a twisting or spiralling pattern.
Example: “swirls of dust swept across the floor”
9) Ousted
Meaning: Drive out or expel (someone) from a position or place.
Example: “the reformists were ousted from power”
Synonyms: Expel, Remove
10) Coterie
Meaning: A small group of people with shared interests or tastes, especially one that is exclusive of other people.
Example: “a coterie of friends and advisers”
Synonyms: Clique, Crowd
11) Incessant
Meaning: (of something regarded as unpleasant) continuing without pause or interruption.
Example: “the incessant beat of the music”
Synonyms: Constant, Continual
Antonyms: Intermittent, Occasional
12) Paradigm
Meaning: A typical example or pattern of something; a pattern or model.
Example: “society’s paradigm of the ‘ideal woman’”
13) Rooted
Meaning: Establish deeply and firmly.
Example: “vegetarianism is rooted in Indian culture”
Synonyms: Fixed, Ineradicable
14) Hawkish
Meaning: Advocating an aggressive or warlike policy, especially in foreign affairs.
Example: “the administration’s hawkish stance”
15) Stance
Meaning: The attitude of a person or organization towards something; a standpoint.
Example: “the party is changing its stance on Europe”
Synonyms: Attitude, Stand
16) The negotiating table
Meaning: A situation or place in which people formally discuss something in order to reach an agreement.
Example: We were completely unsuccessful at the negotiating table.
17) Impediment
Meaning: A hindrance or obstruction in doing something.
Example: “a serious impediment to scientific progress”
Synonyms: Hindrance, Obstruction
Antonyms: Benefit
18) Concurrence
Meaning: The fact of two or more events or circumstances happening or existing at the same time.
Example: “the incidental concurrence of two separate tumours”
19) Glean
Meaning: Obtain (information) from various sources, often with difficulty.
Example: “the information is gleaned from press cuttings”
Synonyms: Obtain, Get
20) Churn
Meaning: To move something.
Example: The Sea was churned up by heavy winds.
21) Came to light
Meaning: If facts come to light, they become known publicly.
Example: Fresh evidence has recently come to light that suggests that he didn’t in fact commit the murder.
Synonyms: Reveal, Disclose
22) Letters of comfort
Meaning: A letter from a company that tells a bank that it supports a request for a loan made by one of its subsidiary companies (= one of the companies that it owns)
Example: The parent company withdrew its letter of comfort and the funding required to sustain the subsidiary.
23) Fire-fighting
Meaning: Spending time on problems that need to be dealt with quickly, instead of working in a calm, planned way.
Example: I spend all my time firefighting rather than making any progress.
24) Unleashing
Meaning: Cause (a strong or violent force) to be released or become unrestrained.
Example: “the failure of the talks could unleash more fighting”
25) Parlance
Meaning: A particular way of speaking or using words, especially a way common to those with a particular job or interest.
Example: “dated terms that were once in common parlance”
26) Letters of credit
Meaning: A letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.
27) Delinquent
Meaning: (typically of a young person) tending to commit crime, particularly minor crime.
Example: “delinquent teenagers”
Synonyms: Lawless, Criminal
Antonyms: Well-behaved, Conformist
28) Fiasco
Meaning: A complete failure, especially a ludicrous or humiliating one.
Example: “his plans turned into a fiasco”
Synonyms: Failure, Disaster
Antonyms: Success
29) Looting
Meaning: Steal (something) from someone.
Example: “a gang looted Rs. 1.5 lakh from a passenger”
Synonyms: Ransack, Sack
30) Cahoots
Meaning: Colluding or conspiring together secretly.
Example: “the area is dominated by guerrillas in cahoots with drug traffickers”
Synonyms: Conniving, Allied
31) Reiterating
Meaning: Say something again or a number of times, typically for emphasis or clarity.
Example: “she reiterated that the government would remain steadfast in its support”
Synonyms: Repeat, Restate
32) Criticism
Meaning: The expression of disapproval of someone or something on the basis of perceived faults or mistakes.
Example: “he received a lot of criticism”
Synonyms: Censure, Denunciation
33) Liquidate
Meaning: Wind up the affairs of (a business) by ascertaining liabilities and apportioning assets.
Example: “if the company was liquidated, there would be enough funds released to honour the debts”
Synonyms: Dissolve, Disband
34) Eloquent
Meaning: Clearly expressing or indicating something.
Example: “the bus journey alone is eloquent of class inequality”
Synonyms: Expressive, Suggestive
35) Knee-jerk reactions
Meaning: (of a response) automatic and unthinking.
Example: “a knee-jerk reaction”
36) Blame games
Meaning: A situation in which one party blames others for something bad or unfortunate rather than attempting to seek a solution.
Example: “he elects to play the blame game but that isn’t very constructive”
37) Omnibus
Meaning: Comprising several items.
Example: “omnibus editions of novels”
38) Conducted
Meaning: Lead or guide (someone) to or around a particular place.
Example: “he conducted us through his personal gallery of the Civil War”
Synonyms: Escort, Guide
39) Accordance
Meaning: In a manner conforming with.
Example: “the ballot was held in accordance with trade union rules”
Synonyms: Following
40) Tightened
Meaning: Make or become tight or tighter.
Example: “he tightened up the clips”
Synonyms: Secure, Strengthen
Antonyms: Loosen, Slacken
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THE HINDU EDITORIAL – MARCH 10, 2018
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