A Central Banker's Vision

BOOK REVIEW

Book Title: Emerging India-Economics Politics & Reforms

Author: Bimal Jalan

Publisher: Penguin Viking, 2012

Price: Rs. 599/-

A Central Banker’s Vision

Every page of Bimal Jalan’s new book on the economy of a broadly reformist India underscores the vast potential of India. As a highly erudite central banker and top flight economist, Mr. Jalan’s narrative balances the accomplishments since the first tentative moves to unleash India’s economic destiny from its Socialist shackles. While this began in the mid-eighties and even earlier, the breathtaking possibilities waiting to be taken up even in 2012 are most compelling.

Whenever one reads a book of distinguished essays and speeches such as this, one is reminded of the extent to which independent India has erred on the side of caution if not inertia. And this, perhaps because it is very difficult for a political class weaned on the failed promise and rhetoric of Socialism to totally cast off its brain numbing effects. That policies based on the Socialist ethos delivered little beyond spiteful beggar-thy-rich stratagems and the stifling straightjacket of the infamous licence-permit Raj is now well accepted.

But today most parliamentarians are busy operating the leverages of coalition politics with its endless jockeying for narrow gain at the expense of the common weal.   Still, since policy must be made with the existent environment, India can only make progress by working within the bounds of coalition governments both at the Centre and quite often in the States as well. In addition, factionalism within parties is also part of the dynamic of democracy today as are the demands of regionalism.

Mr. Jalan covers a lot of ground in this compendium of various papers, speeches and essays and is consistently in favour of  liberalisation and reform. He rejects, quite unequivocally, the old and failed “command and control” policies copied from the Soviets. He also questions the efficacy of the elaborate five year plans in the absence of a dynamic “public delivery system” at the “Centre, state and district” levels.

Mr. Jalan plainly states: “Without strengthening the ability of  the government to do what it alone an do, and narrowing the focus of its activities to what matters most for the future development of the country-education, health, clean environment and a functioning infrastructure- India cannot adequately seize the opportunities that lie ahead.” He goes on to say, “No amount of macro-policy reforms by themselves will be sustainable or yield permanent results.”

This manifestation of government malfunction alluded to is evident to all, but while prescriptions on what can and should be done are plentiful if only in outline, he is unable to address the dilemma of narrow vested interest that define the success and tenor of implementation in this country. At best, India can take comfort in the trickle down effect of growth which tends to blunt the hungry competitiveness of disparate interests.

Mr. Jalan, as a former RBI Governor, is particularly refreshing in his comments on the future of central banking in India. He wants to see a further “strengthening of our prudential, provisioning and capitalisation norms” to “bring them in line with best international standards.” We may however, have to devise these for ourselves because the “international” ones have not exactly covered themselves with glory.

He also wants “maximum transparency, disclosure and accountability” and votes for “increase” in the “capitalisation” of banks “quite substantially”. This of course, cannot be faulted because our banking system is much too small to meet the requirements of high trajectory growth and development.

And he wants a legal system that delivers justice quickly as the present state of affairs is not “tenable,” but this, of course, calls for substantial legal reform.

Mr. Jalan is in favour of pragmatic action for managing currency and exchange rate fluctuations rather than the adoption of rigid policy stances either in terms of a complete  “free-float” or high levels of intervention. This too makes sense as it allows the Reserve Bank of India to react appropriately to varying situations, some far away from our own borders, on a case to case basis and over the medium term.

Mr. Jalan’s latest book has a broad-brush approach and a predominantly liberal stance, but since it is a collection of writings as opposed to a book in situ, it offers few detailed insights on the topics covered.

The problem with a discussion on India’s economy is that there are precious few items such as the IITs and IIMs, a clutch of core-sector industries, and a backbone such as the antiquated but yet impressive Indian Railways worth retaining from the past. For the rest, we have to look to a vision for the future which is a fresh construct arrived at by an inductive leap without the baggage of fear of exploitation or even that of progress. This is not such a book, but perhaps we can look forward to a path-breaking economic vision for the future when Mr. Jalan finds the time and inspiration to write it.

(807 words)

April 15^th 2012

Gautam Mukherjee

Published in The Sunday Pioneer on 22nd April 2012 as "Central banker's reformist vision" on the BOOKS page in the Agenda Section.Also online at www.dailypioneer.com and in The Pioneer ePaper.

The Age of Miracles

The Age of Miracles

Innocence and the miraculous somehow go together. Take out the one and the other wilts and fades. And along with receding innocence goes youth. And this can happen at any biological age. You can have 12 year old ravagees with “tombstones in their eyes” and 90 year olds with their impish inner-child intact.

Applied to the akhara of Indian politics, and indeed the international political landscape in all its varied hue, innocence would probably transform into idealism. And idealism is definitely in short supply in today’s world.

Idealism is ever denigrated as the dewy-eyed impracticality of school boys not fit for mature discourse in the thrust and parry of real politics. And where it rears its inconvenient head despite the almost universal attempt to scorn and shame it into decline, it is promptly corralled into a reservation of non-governmental activism. The suggestion is that idealism is not mainstream political activity, riddled with impracticality as it is. And thus, the baby goes out with the bathwater.

But if history and political theory is to be believed, it wasn’t always so. Great movements and struggles, we are told, were born out of lofty idealism. It was idealism that fired the imagination of people and received their commitment. It was the self- same that moved mountains of opposition and perceived injustice with its sheer motivational strength.

And yet, every once in a while, an act of political will cuts through the fog of cynicism and calibrated calculation that passes for political leadership. The bounty of $ 10 million announced for the head of brazen terrorist-at-large Hafiz Saeed by the US Government is one such clear-eyed act of idealism.

Hafiz Saeed, supported by the Pakistani Government and establishment, pretends to run a clutch of charitable organisations while preaching obscurantist hatred against the classic targets of Hinduism, Zionism and Christianity. It’s not that he doesn’t, but the charity is a cover.

But if Saeed Hafiz was just a rabid preacher and demagogue it would be bad enough. As it happens he is also a hands-on terrorist himself and a leading light of the infamous Lashkar-e-Taiba, which supports and trains killers and fanatics. They, in turn, go out and do its bidding and that of the Pakistani Government via the formidable Inter-Services-Intelligence (ISI).

Everything Hafiz Saeed’s followers do thereafter can be cloaked in the garb of “non-governmental actors” for the “plausible deniability” the ploy offers. And the Pakistani establishment nurtures a number of very competent Saeed Hafizes, many of them highly trained ex-army or ex-ISI operatives, along with their hate spouting organisations.

 It is now universally recognised that Pakistan has refined the techniques of terrorism as an instrument of state policy like no other country around the world. It has been called “the most dangerous country in the world” on more than one occasion. Even the LTTE was not the Government of Sri Lanka but only a break-away movement in the cause of an elusive Tamil Eelam, and neither was it a nuclear power!

But in Pakistan, this could change at any time, creating the first non-governmental nuclear power in the world.  So the long awaited decision to put Saeed Hafiz in the cross hairs of US accusation is not a hollow thing. After an interminable delay since 26/11 which took place in 2008, it strikes a clear cut blow at the root of international hypocrisy and selectivism in terrorism targeting.

The global nightmare is that the Pakistani Government and its nuclear arsenal could fall to the institutionalised terrorists in the country grown terribly powerful over the years. It is also a truism of history that revolution, even if one were to characterise the jihadi mindset as righteous, tends to devour its own children. While that would be very sad, particularly for the more enlightened sections of Pakistani Civil Society, it would be catastrophic for the targets of Islamic terror around the world.

The facts that have come to light since the US went into Abbotabad and eliminated Osama Bin Laden, shows him living in different locations in Pakistan with the connivance of the Pakistani Government, for most of the over 11 years since 9/11. The bluster and denial, the leaning on Saudi diplomacy to reduce the pressure from America, the petulant threats at large from the Pakistani military that violations of its territorial sovereignty, including the routine US drone attacks, would be stoutly resisted, have not worked. Neither has the admirable articulation of its foreign office and media stalwarts.

Intelligence sources around the world are of the opinion that the strategic triangle on which Pakistani political thinking is built involves first, the backing from China, second, an anti-India policy as a justification to nurture an elaborate terrorist network designed to bleed it, and third, the blackmailing of the West, particularly the US, over Afghanistan for money and military hardware to run an otherwise bankrupt economy.

The problem, as with all Frankensteinish creations, is that each tends to take on a life of its own and refuses to follow the script. And so, the “death by a thousand cuts” strategy against India has been largely stymied by the strategic depth provided by a country teeming with over 1.2 billion people. It is difficult to judge whether Maoist violence in India, or Islamic terrorism, or indeed border and territorial tensions with China have primacy here.

The backing of China for Pakistan comes at the price of being reduced to a satellite and subordinate state. It is forced to serve China’s own geo-political ambitions in the Gulf, Baluchistan, Afghanistan, Iran, Bangladesh, Myanmar, Sri Lanka, the Indian Ocean littoral and in international fora.

The West is now coming around to the view-point that crippling Pakistan’s terrorist factory is essential to draw its poison teeth, and not just in terms of its projected withdrawal from Afghanistan.

That still leaves its nuclear arsenal intact of course, but hopefully it will continue be the responsibility of moderate and reasonable people in the political and military space in Pakistan. Besides, the West knows that the main proliferator in nuclear matters in recent times is China, with Pakistan and North Korea only playing supporting roles.

But is there idealism afoot here too? Is the US Government putting the finger on Hafiz Saeed in order to seek retributive justice? Was that at the root of the action to kill Osama Bin Laden not so long ago?  Some would say that it is, and marks yet another instance of how the true and straight-forward can indeed serve statecraft and make the world a safer place to live in.

(1,093 words)

April 4^th, 2012

Gautam Mukherjee


Published as Leader Edit on the Edit Page of The Pioneer as "Return to idealism" on 16th April 2012 and online at www.dailypioneer.com

Book Review: The Fall of Idi Amin

Book Review

Title: Culture of the Sepulchre-Idi Amin’s Monster Regime
Author: Madanjeet Singh
Publisher:Penguin Viking, 2012
Pages: 237.
Price: Rs. 499/-

The Fall of Idi Amin

In the tradition of the ICS Collectors of the 19^th century, a former Indian Ambassador to Uganda has written an engaging first-hand account of his experiences in Uganda during the latter part of Idi Amin’s rule. Such memoirs prove to be very useful accounts of a time and place when information on the inner workings and doings are not generally accessible.

 This book is a personalised account of the chaotic last days of Idi Amin’s blood-soaked regime through the recollections of then Indian Ambassador Madanjeet Singh. The Indian perspective from that time is important because Idi Amin triggered the largest Asian refugee exodus from Uganda to the UK, Canada, America, India and other places in the Seventies.

 In his zeal to blame these industrial and trading classes who had served to build the country for generations, Amin expelled all Asians without distinction. Amin labelled them disloyal and was angry with their perceived refusal to integrate with the native Ugandan, particularly by way of marriage.

Today it is seen that Uganda’s loss was the gain of all the countries that received the desperate refugees, including some neighbouring African countries such as Kenya and Tanzania. Many of these erstwhile exiles have proved to be highly successful, starting afresh from scratch in their new domiciles. And some have even gone back to their beloved Uganda.

The book makes for interesting reading today, three decades or more after the rule by terror, intimidation, torture, subterfuge, outright lies and assassination described in it. This precisely  because such tactics have not disappeared even today. Also in the annals of recent African history, Idi Amin’s brutal rule and tribal fratricide was not that atypical or exceptional.

Depicted as a buffoon in this and many other accounts, Idi Amin  may well have been underestimated. Witness that he died comfortably abed, decades after his fall from power, in luxurious exile in Saudi Arabia. He was granted asylum there with all the trappings and status of a former ruler, in recognition for his services towards the promotion of Wahabi Islam in Uganda.

Amin’s other notable friend and benefactor while in power, Muammar Gaddafi of Libya, was himself hounded to death in his own country for a style of governance and  performance not unlike Amin’s. Colonel Gaddafi’s attraction for Amin was due to the latter’s vociferous support of the Organisation for African Unity. The OAU was and remains an elusive quantity, but nevertheless caught the imagination of the strong man of Libya as a desired bulwark against big power manipulation.

And of course, militant Islam, an off-shoot and possibly unintended consequence of state sponsored Islamisation, has a lot to answer for in our current era of continuous terrorism and retribution. Today it seems clear that the promotion of Islamism results in extremism overtaking the accepted norms of nationhood. And Idi Amin’s experiment in this regard not only opened up religious and tribal fissures at the time but also ended badly.

Idi Amin did very well for a semi-educated army cook risen to absolute power. He practiced classic British style divide and rule policies with considerable panache. Amin did this amongst his own supporters and Government appointees in his dictatorship. He exploited tribal and religious rivalries by playing one off against the other. He used the semi-foreign Nubians, originally from neighbouring Sudan, to carry out his suppressions and oppressions. He killed or exiled his perceived opponents or they jumped ship on their own to save their lives. And yet, his Opposition, both at home and abroad remained sorely divided amongst themselves.

In addition, Amin also exploited big power rivalries. He milked the Soviets for guns, troops and technicians by leaning towards “African Socialism” and by offering them a sphere of influence. He did the same with the Libyans and Saudis, obtaining money and armaments through or paid for by them, in exchange for his commitment against “Imperialism” and for “African Solidarity”.

And yet, Uganda’s greatest export and revenue earner, Coffee, was purchased largely by the Americans and Europeans. Ironically, it is when, to counter-balance Soviet influence, the US embargoed purchases from Uganda, that Amin’s hold on power began to unravel. Nevertheless, this proactive foreign policy worked for a very long time for Amin.

Madanjeet Singh has written his book in the form of a memoir, and this gives it authenticity, particularly as he peppers it with events from his own personal life. And remarkably, for a career diplomat, he demonstrates extraordinary courage. He refused to leave Kampala throughout the defeat of Amin’s forces by those from Nyerere’s Tanzania, the installation of the new government and all the instability and lawlessness that accompanied those dangerous days. But having said that, there is more than an occasional whiff of self promotion in the book which however can be forgiven in favour of the sincerity it exudes.

 (802 words)
20^th March 2012
Gautam Mukherjee

Published in The Sunday Pioneer and online at www.dailypioneer.com in the AGENDA Section BOOKS Page on       

The New National

The New National

The authors of the Indian Constitution provided for a quasi-federalism in order to separate so-called local issues from national and international ones. And, significantly, to subordinate the States to the Centre to make for greater cohesiveness and strength.

This worked after a fashion for the initial decades of one party rule, even though the States were often, and infamously, dealt with more imperiously than they might have been. The matrix of Union subjects, State subjects and Concurrent ones, conceived by the founding fathers, was, it is now seen, only adequate to meet the demands of a bygone era.

Also, as the time went on, the limitations of the old notion of exclusively State Subjects which include “public order and police”, became evident, given the rampaging externally instigated terrorism and Maoist violence that many regions are facing.

A graphic image to remember in this regard is the invasion of the Taj Mahal Hotel and Mumbai’s Jewish Chabad House on 26/11, by terrorists first and the NSG commandos later. That was in 2008, already a few years ago, and a lot more has happened, both before and since, to underline the new reality. And this, without the Republic of India properly coming to grips with the problem even to date as scores of innocents continue to be killed.

Law and order, as visualised at the state level, was meant to address simple security and crowd control issues. These, the local police are indeed trained and equipped to tackle. But the bigger challenges of politically motivated assassination attempts on politicians, kidnapping of prominent citizens or their relatives, subversion, bombings, planned sedition etc. call for national and international intelligence sharing and coordinated action, often involving several States, the Centre, and foreign governments. While this may be self evident, what has remained sadly unchanged is the attitude of a weakened Central Government nevertheless thinking it can impose its views on the States without consultation.

Still, having tasted the power of controlling their own security, albeit augmented by para-military, military, intelligence, investigative and other central forces, brought in on the State’s invitation, the States are now unwilling to have the Centre oversee or worse, overrule them in their own backyards. And this, crucially, because many of the States, not run by the ruling coalition at the Centre, are not beholden for their electoral success or standing to the Union Government.

Apart from security as in “public order”, another important State Subject, “Public Health,” is also woebegone and apathetically dealt with, almost from the start. This is because the States rarely have the funds themselves, or the wherewithal to properly administer central or foreign funds to conduct programmes, or create facilities to the standard necessary. And yet, the reform in this vital regard has not really been forthcoming.

One reason for this is because it enables the Centre to blame the States for poor public health administration rather than take responsibility for its betterment themselves.

“Education”, which is on the Concurrent List, does not fare much better, again because of divided responsibility and weakened accountability. The whole area of “Criminal Law and Procedure” and “Civil Procedure”, also on the Concurrent List suffers from the ravages of dual responsibility and local manipulation.

But the answer towards betterment in all this is probably not greater centralisation. Because, when it existed and prevailed through the long years of the Nehru and Indira Gandhi eras, it did not deliver the requisite results. It didn’t, probably because, combined with Socialism and its chronic shortages, and a GDP growth rate of between 1.8 to 2.2 per cent, there was very little money to throw at development, let alone those issues designed to modernise organisation and methods. Besides, there was no credible political Opposition, or even the kind of factionalism now rife, to threaten the ruling party. All this is now history as the recent results in the just concluded Assembly elections in four states have shown.

In 2012 also, the notion of quasi-federalism itself is facing spirited challenges. The authority of the Centre has been eroded steadily since the era of coalition politics settled in properly. Today, the definition of “national” and “regional” when applied to political parties too is undergoing a sea change. 

A National Party like the BJP for example, derives a great deal of its authority and presence at the Centre from the fact that it is running an increasing number of States. And likewise, regional parties such as the BSP, the SP and the TMC are no longer content to confine their electoral pitches only to their home states, and are winning seats in other state assemblies also.

In the Lok Sabha and Rajya Sabha too, it is the tail that wags the dog, more often than not, with coalition partners exercising near veto-like influence on the initiatives of the largest coalition partner in the ruling UPA.

And the Opposition BJP also often finds itself in the peculiar position of facing many of the problems of the Congress Party both at the Centre and in the States.  What we are witnessing is a weakening of the mooring bolts of our quasi-federation, and this fact has not been lost on the various regional parties.  To them, pushing for more power, both at the Centre and in the States, this is a welcome development.

Nor has the implications of this trend been unnoticed by the several powerful State Chief Ministers from both the principal national parties or their allies in their respective coalitions, who also happen to run some of the States. Some States in turn are even running local coalitions of their own. 

The Centre has undeniably been performing very poorly for several years now, stymied and conflicted about how to go forward. It has increasingly fallen back on old hat tactics such as populist soppery to buy votes or insulting divisiveness to garner minority support. The net result has been both a loss of credibility and face reflecting a new sophistication amongst voters that it has failed to gauge.

The inheritors of the power that has slipped away from the Centre are the regional parties, along with those national parties more able to make common cause with them, and the Governments across the political spectrum that are ensconced in the States.  It is they who will give new meaning to the Constitution and its provisions, and determine the future of India both at the Centre and in the States.

And it is also they who will determine and provide the future occupants of Race Course Road and Rashtrapati Bhavan as well as many of those on Raisina Hill.

(1,099 words)

7^th March 2012

Gautam Mukherjee

Published as Leader on Edit Page of The Pioneer on 8th March 2012 as "Power shifts to the States" and also online at www.dailypioneer.com

Realism

Michael Parkes- Magic Realism painting

Realism

                            

As “isms” and ideologies go, realism is often passed over. Is this because, like the girl next door, one does not generally look for panaceas, or love for that matter, quite so close at hand?

But at least amongst American thinkers, you’ve had two notable realists, namely Hans Joaquim “the national interest” Morgenthau, and later, the much discussed “clash of civilisations” Samuel Huntington. Both were vigorously criticised at first, before being acknowledged for their prescience as political scientists.

And currently, we have Chicago University Political Science Professor John “offensive realism” John Mearshimer, making postulates to offend large sections of the intelligentsia.  

There was a hue and cry when Professor Morgenthau first argued for the need to amorally pursue the “national interest”, and not value-base it on right and wrong. But soon enough, this idea came to permeate every facet of international relations, including the sovereign use of military force and diplomacy.

Huntington’s “clash” idea for many people encapsulated the rise of the militant Islamic “terrorist” who, in his place, often justified his bombings and mass murders as a jihad. Culturally too, the jihadist has no compunctions against demonising anyone who doesn’t agree with him. Enemies to target include rival Islamic sects, so-called apostate Muslims and Christians in all their variety. There are also issues of perceived “decadence”. As for polytheists, it must be impossible for the madrasa indoctrinated jihadist to regard such people as anything but the infidel.

The ironic point is that a born again Christian, like former President George W Bush, who saw his battle against militant Islamists in crusading terms, and his arch enemy, the Sunni warlord Osama Bin Laden, had something in common after all.

Bin Laden directed the violence against America, the West, Israel, India, and their friends, relentlessly framing his rhetoric and moral imperative in jihadist terms. The crusading former American president, backed solidly by America’s Christian Right, and holy-warring Osama Bin Laden, are both stark illustration of Huntington’s postulations. 

Morgenthau, who died in 1979 and Huntington who passed on recently in 2008, have made their mark as realists. So, it may well be time to listen very carefully to the most vilified realist of current times, 63 year-old Mr. John Mearshimer.

Professor Mearshimer thinks celebrated Metternich/Bismarck admiring former Secretary of State Henry Kissinger is a magisterial waffler who misses the point of what makes international relations tick. This despite Kissinger’s famous tilt towards China in the Nixon years that many say was a masterstroke that eventually led to the demise of the Soviet Empire.

Mearshimer does not dwell on the tremendous leg-up the US gave to China by endlessly buying Chinese for over thirty years of a most-favoured-nation (MFN) relationship. Instead, he concentrates on the present day, and says it is all heading for an inevitable showdown between the US and China.

When it comes, implies Mearshimer, it won’t be the stand-offs, shadow-boxing and covert attrition of the Cold War, but a gun battle on main street, like the climax of an old Western. He thinks China is building its military muscle and its forward diplomacy because it is the world’s most active “offensive realist”, bent on hegemony.

We in India can feel China’s aggressive mood first hand, as it seeks to relentlessly encircle us via Myanmar, Sri Lanka, Nepal, The Maldives, Pakistan, and menaces us directly at several points of our long land border with it.

Mearshimer, focussed on the US “national interest”, says China wants to take over the Eastern hemisphere, probably above and below the equator, land and sea, and would like to see the US confined to its own backyard, meaning, probably its own territory, Canada, South America and Western/Eastern Europe and the seas around them.

Africa, though certainly west of China, is not to be given up easily by either rival or their proxies, because of its vast natural resources able to feed the engines of industry, as well as massive arable land to grow more food for the planet.

India, a potential rival from South Asia aspiring weakly to world power status, with its muted forays into Africa, The Middle East, Eastern Europe, its loose alliances with the West and a tighter one with Russia, is nevertheless very easily bullied.

But Mearshimer thinks the great powers attack non-nuclear countries to settle things militarily, but cannot afford to go after the nuclear ones, whatever the human rights, terrorist and other provocations may be.

India, ideologically, has never pursued the Morgenthauist “national interest” line particularly, nor subscribed to the Huntington “clash of civilisations” theory, and certainly can’t reconcile Mearshimer’s “offensive realism” with Gandhian notions of non-violence. We can therefore expect to be continually menaced into submissiveness but survive nevertheless because of our nuclear power status.

The Middle East with its anachronistic forms of government and vast reserves of oil seems to be the arena where all three realists and their ideas can play out their potential in short order. The current hot button is Iran, though the instability in places such as Syria, Yemen, Iraq, Egypt, Lebanon, Palestine, Sudan, Libya, Afghanistan and Pakistan are quite worrisome too.

China seems to be against the UN backed unilateralism that helps the West. Ever the covert proliferator, it enabled first neighbouring North Korea to go semi-nuclear, and then via it and directly, Pakistan, to do so openly. China wants to use nuclear diplomacy to reduce the power of the West by promoting proliferation via proxies, and there is not much the West can do about it.

If Iran goes nuclear, Saudi Arabia is determined to follow suit. Israel is a covert nuclear power already. Many more will join the club if China has its way, making it more and more difficult to resort to the kind of militarism that proved recently possible in Libya, and yet could in Iran. This is Mearshimer’s point precisely.

Iran’s current belligerence might indeed be taking some strength from China’s open support. Pakistan, the only nuclear Islamic nation, it is seen, along with non-nuclear but resource rich Afganistan and Iran’s neighbour, is also standing together in solidarity with it. 

China, with its mature nuclear arsenal capable of targeting every major city in the US and its burgeoning conventional military machine, seems determined to change the current global power equation. But this will have to play itself out.

At a minimum, even if there are no fireworks, as Andrew Kapinevich, President of the Centre for Strategic &Budgetary Assessments in the US says, much of China’s environs and sphere of influence is being “Finlandized”,  meaning nominally sovereign states that are forced to toe the Chinese line.

(1,097 words)

18^th February 2012

Gautam Mukherjee

Published as Leader on Edit Page of The Pioneer on 23rd February 2012 as "It's time to get real about Iran". Also online at www.dailypioneer.com and in The Pioneer ePaper. Archived under Columnists at www.dailypioneer.com

The Masquerade in the Reformer's Habit

The Masquerade in the Reformer’s Habit

“That which can be asserted without evidence, can be dismissed without evidence.” 
Christopher Hitchens

Staring down the barrel at a 6.9% GDP Growth annual forecast for the fiscal in February 2012, down from an erstwhile 9%, does not look like the handiwork of a cracker-jack economist-in-chief. Nor does it look like the report card of a reputedly reformist two consecutive terms in office prime minister.

Dr. Manmohan Singh’s turn at the top has been sadly undistinguished, weak, ineffectual, feeble and helplessly time-serving. This is not surprising, given his Faustian pact to “run” the Government without being, in electoral, organisational or power-broking terms, either the one who can bring in the votes or the money.

Dr. Singh, on his part, seems content with the form of being in-charge while being divested of most of the substance. But of course now he is having trouble staying above the fray too, as he is catching a good deal of the opprobrium from the most corrupt Government of India since 15^th August 1947.

Dr. Manmohan Singh’s longish tenure in office is marked, at best, by personal honesty though not blamelessness. Because like Dhritarashtra, the blind but covetous king from The Mahabharata, his enigmatic silences, and hurt, stage-managed though plausible denials, don’t quite wash.

He does come across as the whipping boy for other’s sins, but we are well aware he signed up for it, and is taking his knocks willingly enough. But presiding over a hugely corrupt Government, in drift, has quite eclipsed expectations of vision, clarity and a continuation of the new India Dr. Singh is credited with launching in 1991.

Dr. Singh, for a highly intelligent Oxford educated economist, has swallowed pride and ignominy through two consecutive terms of underachievement and belied hopes, and still has not lost his appetite for the remainder. But his track record is certainly not a good advertisement for “Manmohanomics”, whatever the silly coinage actually means. Because this box, supposedly containing wondrous gifts and boons for the Indian economy, seems to be empty, even of the expected jack-in-the-box on a spring and blowing a raspberry. And it is not empty because someone stole the contents either.  

But are we, in effect, criticising the mild-mannered erstwhile professor, flip-flopping between Socialism and the free market as the occasion and situation demands, for our own flawed perceptions? Has Prime Minister Singh been wrongly invested with the mantle and habit that properly belongs to his deliberately eclipsed predecessor in the job? Is the true author of Manmohanomics the Chanakya-like Telegu bidda Mr. PV Narasimha Rao, who pushed it all through while running a minority Government in just five years?

Was Dr. Singh ever really the great liberaliser of 1991 in his own right, or the mere front man for the ever poker-faced PV? Could he have been flying independent kites as Finance Minister then, given his evident timidity of temperament and penchant for expedient survival?

Or were both PV and Dr. Singh taking instruction from abroad? Was Dr. Singh actually brought in from the World Bank to carry out America’s bidding, and under their dictation at the point of our national near bankruptcy?

Or was Dr. Singh a closet Socialist even then, merely doing his job at the behest of the prime minister, or the World Bank, but without conviction? After all,  even now, our Government representatives never fail to say market-friendly things at Davos, at Washington, London, Tokyo, Paris, Moscow and Singapore too, projecting India as a worthwhile investment destination. And this, while being extremely obstructionist back home, obsessed with voter-friendliness and massive welfare programmes to the exclusion of most other elements of governance, let alone development.

UPA I and II have so far seemed oblivious of foreign complaints of red tape and bureaucracy at every step and how difficult it is to do business in India. This has apparently not changed appreciably from the protectionist/socialist Indira Gandhi era. But this fact does not seem to bother anyone important in the Government. The pertinent question is why, and particularly with the same man in charge, who allegedly changed things irrevocably in 1991.

Perhaps the Government of India under the UPA, Dr. Singh included, don’t want double-digit growth after all, and has the collective psyche of the poor man who grows richer but is embarrassed by it. Besides, there are plenty, some would argue far too many, Leftist commentators, who talk endlessly of inclusive growth, the gap between the rich and the poor, how GDP growth is not enough, how “India Shining” is a joke etc.

A retrograde, nostalgic, robotic, loss-making HMT style watch and ward step, worn inwards to the wrist, and backwards in one’s soul, holds powerful appeal in a century plus old Congress Party built on Socialism. The poor are the purpose of the Congress Party Chief, plus the mysteriously not yet quite mature heir apparent, with his aam aadmi shibboleth, and the absurdly powerful and unaccountable cabal called the National Advisory Council (NAC).

There is nothing wrong with this emphasis on the poor in itself, but it becomes very difficult for any reformer, if the spending on the poor is divorced from the income side of the balance sheet. Perhaps it is this cavalier attitude that may have put paid to Manmohanomics the day he first became prime minister, let alone now, when the whole ball of twine - governance, corruption, terrorism, communalism, indiscipline, revolt in the coalition and so on, is beginning to unravel.

Or was it Mr. Rao all along, erudite in several languages, highly urbane, minister of everything for 30 years in precedent to the top job, who was the actual architect of the courageous decisions and the bold departure from our pathetically underperforming past?

And didn’t Mr. P. Chidambaram, in a happier incarnation as Finance Minister, sitting in the cavernous Raj era room in North Block he has occupied thrice so far, not also do his bit with his landmark “Dream Budget” of 1997?

Besides, some of the recent past in economic terms, that period when we were cranking out 9%, was part of the time and tide of momentum, caused by the global steeple chase between 2003 and 2008. Our stock and property markets also boomed between 2003 and 2008, but the pity is we were able to absorb barely a couple of percentage points of global investment capital because, in the end, our market and economy are too small in absolute terms at about USD 1 trillion each.

The growth statistics of UPA I, with its tantalising promise of breaching the double digit barrier, has been achieved only in Opposition ruled Gujarat so far, at 12% p.a. recently, under the stewardship of Mr. Narendra Modi.

And yes, Dr. Manmohan Singh did get the civil nuclear power deal through during UPA I, though it remains sadly unimplemented on the ground to date. Why he did it, with a certain verve never before displayed seems a bit of a puzzle. Perhaps, it is because it was one initiative he could call his own, along with US Secretary of State Condoleezza Rice and President George W Bush,  the latter starved of foreign policy successes too.

UPA II, by way of contrast, has been hit by the converse blight of international economic collapse, flight of FII capital from India, and ham-fisted local efforts at inflation control that nearly garrotted the economy altogether. It has also seen the antics of rebellious minor partners get in the way. It is as if the Left from UPA I has been replaced by others with the same thinking but another name. 

  

In the midst of this difficult global scenario, there has been an expansion of the welfare agenda such as the looming Food Security Bill which will need lakhs of crores to fund, in addition to the ongoing NREGS, the NREGA, the subsidies on diesel, cooking gas, fertilizer and so on.

Ironically, though some people have grown rich off such programmes, the poor, not surprisingly, have stayed “deserving” as ever. Do the Leftists who back these initiatives to the hilt have any answer for the leakages and corruption that rules such welfare programming? The answer is a resounding no. And never mind that this, the nation’s present and future income, is being handled with such utter profligacy leading to a runaway debt situation.

Socialism has after all been unable, even in its Welfarism avatar, in small, under-populated and rich countries like Norway and Kuwait, to square its circle. So, there is no point on dwelling on its inequities, including the tens of millions of people killed in its name in Stalinist Russia and Maoist China. Never has there been a lie so frequently repeated, nor one as seductive to the young and naïve, or old and venal alike.

But a country such as ours, in bold, zealous and relentlessly reformist mode, could literally catapult itself into prominence, even as the statist and Communist-in-name China has demonstrated.

On the ground however, the matter of our progress has always been tangled up in the swamp of our political will and perhaps the recalcitrance of our karma. It is as if the politicians will render themselves redundant if there is all round prosperity. So, in a keep them barefoot and pregnant kind of cynical ploy, the powers that be  may want the masses to stay fecund, poverty stricken, and dependent.

We have, of course, disappointed all those who were rooting for a resurgent BRIC of a country. But maybe the cheer leaders still have some relevance. What is evident is that the Manmohanamics of the 1990s, whether of the man’s own write or not, is alive and well and has indeed changed India forever.

The current and long-standing malaise is to do with the blockages and stoppages that we see in every aspect of governance today. But this also implies that one day, who knows, it could be soon, we will be unshackled from our dungeons afresh and let out into the sunlight, free to move away and ahead once more.

When we do so, as inevitably we must, because there is no congenital defect to prevent or thwart such outcome, we will meet that very destiny unveiled with the first deft moves after near bankruptcy in 1991.

The same man was manning the financial levers of the country then, and so he must be more than aware of what needs to be done now. The only problem is, does he have the power, the intention, or the will to get it going in the remaining two years of his current term? Otherwise, one can safely send Manmohanomics, such as it is, to the history books, and talk of it as a brilliant beginning and foundation that may have to be built upon by some one else in future.

(1,800 words)

9^th February 2012

Gautam Mukherjee

Published as Cover Story in AGENDA of The Sunday Pioneer on 19th February 2012 as "Manmohanomics shackled" and online at www.dailypioneer.com

Straws in the Wind

Straws in the Wind

In a “those were the days” kind of way, time passing can seduce us to think of a perfection encountered long ago. This is, of course what myth is made of, with every inconvenient inconsistency air-brushed out of memory.

But certain things are dug too deep to evaporate in the mists of time. The inequities and savage barbarisms of racism, for example, or the blood soaked wounds of religious feud. But even such fore-knowledge and genetic memory can be, and often is, suppressed on the altar of expediency. The question, in evolutionary terms however is, does an old trick work in perpetuity?

The covering up of elephant statues in Uttar Pradesh while turning a blind eye to the numerous schemes and themes named after Jawaharlal Nehru and his stick-to-power family of successors, is one such straw in the wind.

Income Tax raids on the UP Chief Minister’s crony capitalists, not in the routine course of a work-a-day week, but pretty much during state elections, is another. The barring of controversy’s child Salman Rushdie’s visit to a literary festival at the instance of a hard-line Deoband is yet another.

But not all our straws in the wind portend the pessimistic. The once unassailable bastions of Western prescription, the venerable Time magazine and Newsweek too, now routinely feature Indian, Asian, even Iranian lead-writers, even on their covers, using their non-Caucasian by-lines. No more are such people confined to the footnotes and acknowledged for “inputs”.

Newsweek’s international edition even boasts an Indian-American Muslim Editor, though nothing can apparently save it from going the way of all print in the West.

The poignancy in such “establishment” publications turning fair-handed and liberal at the point of death may not be lost on all. What are they expecting now--Asian White Knights or perhaps resurrection in Hindi and Mandarin? Why not, after all, it is happening all over in business and industry. Not only are Indians and Chinese snapping up Western businesses but even the once Western glamour-struck Arabs are beginning to invest in India, having lost billions down the plughole in Europe and the US.

But, all in all, the belated fairness does rankle, and makes for hard-hearted negotiations. One should pause before blaming the Chinese for this, and perhaps take a cue from them instead. Or have we already begun to do so?

The new “make-nice” is a departure from arch imperialist Rudyard Kipling’s back-handed compliment to Gunga Din, the selfless water-bearer of his famous poem. Gunga Din’s day is decidedly done. He is seen to be as anachronistic as Harriet Beecher Stowe’s Uncle Tom. Sweet as the tales may have seemed once, they are slurs and swear-words now.

American Actor Will Smith says he is a Star because of the success of the Civil Rights Movement. President Barack Obama acknowledges as much too. There were, of course, early White sympathisers, but history shows us that morality turns into reality when economic compulsions force the conversion. The American Civil War and the abolition of slavery is a case in point.  

This was also the reality during Mahatma Gandhi’s struggles too, both here and in South Africa before that. And how women got the vote in the West, and later, man-size jobs, battered and depleted as men-folk were by the ravages of two world wars.

 Interestingly, even though as a nation we hesitate to overtly express hard power, having been born in the crucible of non-violence which encompasses, at least in concept, thought word and deed; we sometimes do manage to make our intentions plain.

Acquiring a nuclear sub at last on lease from Russia, albeit for the second time, but this one in the context of our own nuclear weapons carrying indigenously built nuclear submarine Arihant about to be inducted, some say, before 2015, is a clear message to China which has six such subs in its navy already.

Our buying some USD 20 billion worth of the French Dassault Rafale state-of-the-art Fighters is a departure from our default position of buying Russian. Though we will continue to hang on to that line of military supply for other items, including Sukhoi -35 aircraft and that much delayed and awaited aircraft carrier.  

We can’t, and won’t, win an all-out war with China today or any time soon, but we are not going to be a pushover as we were in 1962. And that is why we are raising another mountain regiment for Arunachal Pradesh and getting on with roads, bridges, helipads and air strips there. Also, why we are talking to others in the Pacific maritime region which China wants to convert to a Pax of the Dragon pond.

The British and the Americans might be sorry to lose to the French, but we may have done something, for ourselves, based on merit, of both the aircraft and the accompanying commercial deals. We may be giving shape and fuel to our long-term ambition to actually make our own Fighters, not by just bolting them together, but inclusive of the technology development.

France needed us to buy its Rafale aircraft, unable as they have been to find international buyers so far. We needed a good aircraft to see us through today’s challenges and twenty years ahead and the possibility of developing indigenous fifth generation Fighters one day. China is already doing all this, but this decision says, after five pondering years, that we are not giving up the ghost either.

There are other hopeful straws in the wind. The FII gush of funds into India in January 2012 may portend the revival of the Indian stock markets after all. Our markets do represent viability and long term potential in a world that has largely let itself down.

The FIIs can apparently see their way beyond the current softening in growth rates and seem encouraged by the successful curbing of food inflation. The RBI and Ministry of Finance too have started injecting financial liquidity into the system and this is definitely good news.

Politically, we continue to appear chaotic, but a consolidation of public opinion in favour of good governance and the candidacy of Mr. Narendra Modi for Prime Minister per a recent opinion poll is a good sign for the next general elections.

Mr. Anna Hazare may have been eclipsed for the moment, but his anti-corruption crusade has certainly touched a chord with the public. Besides China, the West and the Arabs may decide to curry favour with a deceptively mild-mannered India now, instead of perennially trying to show us our place. And Pakistan too won’t be in a position to exploit the difference.

(1,098 words)

February 2^nd, 2012

Gautam Mukherjee


Published as Leader Edit on the Edit page of The Pioneer as "Hopeful straws in the wind" on 8th February 2012. Also published online at www.dailypioneer.com and in The Pioneer ePaper and archived at www.dailypioneer.com under Columnists.