Jul 15, 2014, 4:39 AM
News Code: 81237742
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Iraq’s instability is being closely monitored by New Delhi: Report

New Delhi, July 15, IRNA – Since the beginning of the conflict in Iraq, it is being closely monitored by New Delhi.

How long will the Islamic State of Iraq and al-Sham’s (ISIS) bloody rampage in Iraq last? That is the question India’s financiers are asking as they brace themselves for the impact of the instability in Iraq on India’s economy.

India is a precariously energy insecure country: it is home to 17 percent of the world’s population but has a mere 0.03 percent of its oil reserves, 0.7 percent of its gas reserves and 7 percent of its coal. India’s enormous energy needs are met almost entirely by imports – it is the world’s fourth largest oil importer – a significant proportion of which come from the Middle East, according to a analysis by Ram Mashru, published in current issued of “The Diplomat-Know The Aisa-Pacifi.

India imports 500,000 barrels of oil from Iraq every day. So great is India’s reliance on Iraq’s supply that the governor of India’s central bank, Raghuram Rajan, issued a statement on June 17 to make clear that he was closely monitoring the situation for any possible disruption.

The instability “will not result in a shortage of petroleum products,” says Amit Bandari, a researcher on energy and the environment at the Mumbai-based think tank Gateway House. “India’s oil exports are processed to produce fuels such as diesel and petrol – far in excess of what is consumed domestically.”

But oil is integral to India’s resource-intensive economy, with its price “running through” the transport and agriculture sectors. For ordinary consumers in India, therefore, the violence in Iraq will mean increases in the costs of traveling and produce.

In fiscal terms, the real impact lies with the cost of imports. At the beginning of June the cost of importing a barrel of Brent crude was $106.88, a figure that peaked and then fell slightly to $112 by June 17. India imports almost two million barrels of oil per day, so increased costs will further widen India’s already gaping balance-of-payments deficit.

As Bhaskar Chakraborty, a Mumbai-based energy analyst, told the Financial Times, “If crude goes up, India’s import bill goes up, so the cost of fuel and fertilizer subsidies go up, and the rupee comes under immediate pressure.” Indeed the rupee has been hit hard, slumping to 60.24 against the dollar on June 20, a low last plumbed in April.

In the face of this exchange-rate volatility, Raghuram Rajan was keen to reassure that India has slowly re-amassed its foreign currency reserves. As of June 13 its reserves totaled S 313.536 billion, more than enough to see through the fluctuations in the rupee’s rate.

But these are a worrying cocktail of factors. This week Moody’s, the ratings agency, published a research report blaming budget deficits, high inflation levels and widening current-account deficits for the slowdown in India’s growth rates since 2011. These are all factors rearing their heads in the wake of the violence in Iraq, prompting stark conclusions about India’s growth outlook. Barclays, in a widely reported estimate, predicts that the price of oil could cut India’s annual growth rate by 0.5 percent.

Of course, the security of Indian citizens in Iraq is no less important. As many as 10,000 Indian workers are employed in Iraq, the majority of which are manual laborers in the oil and construction industries.

Being a national endeavour to evacuate all Indians safely India put all national assets now in readiness. In this regards two war ships have been sent at Persian Gulf and IAF have been put on alert.

Taking the matter of high priority for the entire Government of India, Prime Minister chaired a meeting of senior Ministers - who include the Home Minister, the External Affairs Minister - the National Security Advisor, the Cabinet Secretary, the Home Secretary and the Heads of Indian agencies as well as senior Foreign Service officials. This was the meeting to review the entire dimensions of the issue taking into consideration all facts. During the meeting it was decided that any Indian national who is indigent and who desires to return but is unable to pay for his ticket, will be assisted through the Indian Community Welfare Fund in Iraq.

This is what were the sum and substance of the activities that Government of India undertook in Iraq since the conflict begun. the facilitation phase of Government’s assistance to Indian nationals in Iraq is now underway.

Meanwhile on the political front, as the black clad militants of Islamic State of Iraq and Lavant (ISIL) attacked and taking over of some cities, including Mosul and Tikrit since June 8, India strongly condemned attack and clear its stand to firmly stand by the government and people of Iraq in their fight against international terrorism.

“The Government of India is deeply concerned with deteriorating security situation in Iraq, resulting out of recent attacks and taking over of some cities, including of Mosul and Tikrit by terrorist outfits since 8 June 2014, which is a direct threat to the security and territorial integrity of Iraq. The Government of India strongly condemns such attacks and firmly stands by the Government and the people of Iraq in their fight against international terrorism and in their efforts to preserve the unity and territorial integrity of the friendly country of Iraq.

India remains strongly committed to the emergence of a stable, peaceful, united and democratic Iraq, which is in the interest of regional and global peace and security”.

The insanity of the US policy makers is responsible for all the mayhem and destruction in the Middle East.

The whirlwind of black-clad militants, ISIL from Syria to Iraq, were part of the US government engagements in one military intervention after the next in the region.

World, mutely, is witnessing that billions of dollars being thrown into escalation and intervention in Middle East crisis. Arming the same group in Syria and fighting the same militants in Iraq indicated the US government’s insanity of the endless war in the Middle East.

This is the apathy of the world that the money, which should be used for the improvements to the conditions of life for the masses of people, handed around for the destruction of the life of millions and the destruction of whole societies. The priorities of capitalism have gone into the realm of dementia. This sharply expresses the evolution of greed into the insanity of the endless wars in that part of the world, bringing not 'democracy' but the whirlwind.