Three Coins In The Fountain

Three Coins In The Fountain


Romantics throw coins into wishing wells and fountains. The Trevi in Rome is a particular favourite. But such wishes as accompany those myriad coins, despite the illogic of it, are sometimes, some say always, answered. In the Indian context, there are at least three wishes and hopes that have caught the public’s fancy in recent days.

Number one would be the opposite of our woeful lack of military preparedness should China decide to push into Ladakh, Arunachal Pradesh, Uttarakhand, Himachal Pradesh and Sikkim. They have walked into, or fired, flown and littered in, all of the above lately, and found no one on our side to object.

Some, including the Prime Minister, the NSA, our Lah-di-Dah helmsmen at the MEA, and a section of the media, would have us believe this is nothing to worry about now that we are in 2009 and not 1962. But, as far as I know, the law of the jungle has not changed in the interim.

If one listens to what retiring service chiefs let slip routinely, coupled with nuclear scientists casting aspersions on our much vaunted nuclear deterrent, our level of preparedness to beat China back-is about the same as it was in 1962. Then too, Pandit Nehru and Defence Minister Krishna Menon were dismissive about the Chinese threat.

And let us not forget that in 2009 we have to reckon with China’s well documented encirclement policy too, using the Pakistanis, the Nepalis, the Bangladeshis, the Srilankans, the high seas, and even the Burmese!

And also note the insurrections they are fanning on the inside - in the North East, among the Maoists, via the Pakis and the Nepalis. Besides, the Khalistanis are reportedly active once again. And the Pakistani sponsored terrorism continues unabated.

We need to urgently beef up every law and order and national security force/agency from the police and intelligence to the para-military, the commando units, the armed forces and their support systems; and equip them with generous quantities of the best weaponry and logistics available. We also need to sharply upgrade our own defence/nuclear manufacturing facilities including those that can be developed faster and better by the private sector alongside.

This entails at least a doubling of the defence budget from present levels. China, an economy over three times as large as ours, currently spends 4.3% of its GDP on Defence and it would be silly to suggest it is doing so without purpose. India, on the other hand, spends less than 3% of its GDP, even after increasing it 34% in Budget 2009-10.

To gain any kind of parity with China, we need to enhance our spends to about 10% of GDP in short order, or about $ 100 billion annually. Most of the new money should go towards modernisation and expansion of armed strength of numbers as well as access and deployment oriented military roads, airports, harbours, surveillance equipment and other infrastructure; which will, coincidentally, also benefit civil society and commerce just for being built.

The Government could also introduce tax free Defence Bonds paying a competitive rate of interest. And such Defence Bonds should also welcome our unfathomable reserves of Black Money, including returning hawala money from abroad, no questions asked.

The second debate that is much in the news concerns the size of our government itself and its gargantuan expenditure. It has grown to truly worrisome proportions, and similar runaway but inefficient statism was partially responsible for the economic collapse of our erstwhile mentor, the USSR.

While token efforts to cut expenses under “austerity” drives are commendable, they are not nearly enough. To really bring down recurring costs we need to downsize government and privatise as many parts of it as possible. Many new initiatives in the core sector may still need initial government investment, though recent private sector successes in the fields of oil and gas and increasingly in steel and power seem to suggest otherwise.

But it is seen that several older government owned core sector behemoths are now doing well. They need to be offloaded to public investment and listing on the bourses. Many that have already gone public are showing good results and far greater management accountability.

The third issue creating a buzz is the disbelieving optimism arising out of a “V” shaped recovery on the bourses that has confounded many expert doom merchants. And an FII influx of USD 9 billion so far this year is also nothing to sniff at. But the big question is, will it last?

No one can tell you about day to day fluctuations with certainty, but the point to be understood is that this next decade is going to be the decade of infrastructure and modernisation in India. And this transforming endeavour will suck in enormous investment that cannot but help boost the economy and keep it growing at a healthy clip of anywhere between 6 to 9 per cent per annum.

So as things stand in the world, India’s is a growth story second only to China. And some argue that is why China will not upset the applecart with war. That might turn out to be right and yet needs to be seen as cold comfort. Because China seems determined to pressurise all our bilateral negotiations and contain India’s aspirations in a multilateral context as well.

Meanwhile, the UN General Assembly is about to hold its annual summit in New York. The world’s leaders and diplomats will assemble to make and listen to speeches. They will discuss the proliferation of weapons of mass destruction and the apparent inability of the world to stop it.

Iran, the latest designated bad boy will be there. China will be there to protect North Korea and Pakistan. China will also side with Iran, and Russia will concur. Libya will be there to underscore its reformed status. Political correctness will rule the roost. Everyone will avoid remarks that are liable to sharpen the North-South Divide.

The Security Council will also be there. So what if it is reduced to a checkmated chess game.

India will be a non-presence as usual, perfect at being there in a manner as good as not being there. But then New York in the autumn can be very pleasant, and one might just find a wishing well and a coin to drop into it.

(1,052 words)

19th September 2009
Gautam Mukherjee


Published as OP-Ed Page Leader on 21st September 2009 entitled "Enter the dragon". Also published online at www.dailypioneer.com and archived there under Columnists.