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Indian Express Explained 24th April 2020

1)Why US’s offer of financial aid to Greenland has angered Denmark

Background:- Months after stirring a row with Denmark last August over a proposal to “purchase” Greenland from the Nordic nation, the US has caused consternation once again with its offers of financial aid to the autonomous island that falls within the territory of the Kingdom of Denmark.

Why is Trump obsessed or has anyone done it earlier ?:-

Trump’s interest in Greenland is almost an extension of his world view and US foreign policy in his administration.

Purchasing another country or territory is unusual, but the US government has done this twice before — once when President Thomas Jefferson acquired Louisiana from the French in 1803 and the second time when President Andrew Johnson purchased Alaska from Russia in 1867.

Importance of Greenland :- Interestingly, Greenland, though the world’s largest island, is geographically a part of the North American continent. However, it has always been culturally aligned with Europe.

Greenland is also a resource rich land mass, strategically located between the Arctic Sea and the Atlantic Ocean, with some of the largest deposits of rare-earth metals, including iron ore , uranium, byproducts of zinc, neodymium, praseodymium, dysprosium and terbium. These rare-earth metals are used in the production of electric cars, mobile phones and computers.

For the longest time, China has been the world’s largest supplier of these rare-earth metals and has expanded its acquisitory plans by excavating mines across the African continent.

The US is opening a consulate in Greenland after nearly seven decades of closing its first consulate after the Second World War.

Due to climate change, the Arctic ice is melting at an accelerated rate, opening up water routes for military and maritime trade.

This is in addition to global superpowers and regional players vying for control over Greeland’s vast untapped natural resources.

2) IIP:-Index of Industrial Production (IIP) measures the quantum of changes in the industrial production in an economy and captures the general level of industrial activity in the country.

It is a composite indicator expressed in terms of an index number which measures the short term changes in the volume of production of a basket of industrial products during a given period with respect to the base period.

The base year is always given a value of 100. The current base year for the IIP series in India is 2011-12. So, if the current IIP reads as 116 it means that there has been 16% growth compared to the base year.

IIP is a short term indicator of industrial growth till the results from Annual Survey of Industries and National Accounts Statistics are available.

However, IIP is considered to be one of the lead indicators for short-term economic analysis because of its strong relationship with economic fluctuations in the rest of economy.

Most of services, like transport, storage, communication, real estate, insurance and banking are industry dependent and are considerably influenced by industrial performance.

Index of Industrial Production is compiled and published every month by Central Statistics Office (CSO) of the Ministry of Statistics and Programme Implementation with a time lag of six weeks from the reference month. i.e., at the time of release of IIP data, quick estimates for the relevant month along with revised and final indices of previous two months respectively, (on the basis of updated production data) are released.

In India, the index is compiled using figures of mining, manufacturing and electricity sectors only.

ASI Vs IIP

The Industrial Output data is captured and monitored, primarily, through two statistical activities (i) Annual Survey of Industries (ASI) on an annual basis and (ii) Index of Industrial Production (IIP) on a monthly basis.

NIA Vs IIP

IIP is used as core ingredient in the compilation of annual and quarterly national accounts and forecasts of GDP. Furthermore, the availability of IIP on a monthly basis makes it amenable to be used as a reference series in the compilation of cyclical indicators.

National Income Accounts (NIA) uses IIP figures to proxy the growth in unorganized sectors, which is otherwise estimated only with a gap of 5 years.

While the National Income Account (NIA) estimates are based primarily on the financial accounts of companies the IIP data are based mainly on volume data obtained from establishments.

 

 

 

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