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As Goans dream walk to the precipice.

In Politically wrong on April 30, 2013 at 9:08 am

Recently I came across an interesting story in a local paper titled “Europe calling, Goans on the run”. The news story goes on to speak about two thousands and more Goans who hold Portuguese nationality or passport. The figure may be accurate or off the mark; but the fact remains that a large number of Goans are indeed on a run allured by Europe. Though they are Portuguese nationals, almost all of them live and work in Britain.

euroCrucial to the success of this ‘return voyage of discovery’ are answers to three basic questions : One, how long is Britain likely to provide employment to them ? Two, how long will the unique circumstance which provides these Portuguese nationals with unlimited access to Britain last ? And, three, will Portugal provide them with the conditions for the fulfillment of their dreams, if they have to return to it ?

 In the immediate aftermath of WWII Europe began a process of integration to avoid the extreme nationalism that had led to the devastating war. After a number of moves, in 1957 the European Economic Community (EEC) was formed; starting with 6 countries, EEC gradually embraced almost all the countries in Europe. The Schengen Agreement of 1985 led the way towards the creation of open borders without passport controls, ensuring free movement of people, goods, services and capital across the member countries of EEC. This is what makes it possible for Portuguese nationals to live and work without restrictions in Britain.

In 1992 the Maastricht Treaty was signed creating the European Union and a single European currency, the euro. But Britain negotiated an opt-out from the part of the Maastricht Treaty that would have required it to adopt the common currency. The coalition government elected in May 2010 pledged not to join the euro for the lifetime of the parliament. British public opinion has consistently opposed joining the euro. Britain therefore has always been on the fence of the European union – one foot in, one foot out.

LONDON: Record numbers of rich Indians are swooping on high-end residential properties in London, thanks to a booming economy, favourable foreign exchange rates and rise in number of students here from affluent Indian families.

 In the residential property market in which each house is worth 5 million pounds and above, Indians now figure as the second biggest foreign buyer group. European buyers top the prime market, while Chinese buyers are third, behind Indians, according to Savills, a prominent estate agent. EconomicTimes, Jan 21, 2011, 11.03pm IST

The Maastricht Treaty outlines 5 convergence criteria EU member states are required to comply with in order to adopt euro :

  1. Inflation cannot be more than 1.5% higher than the inflation rates in the 3 EU member states with the lowest inflation.
  2. The ratio of the budget deficit to gross domestic product at market prices cannot exceed 3% at the end of the preceding fiscal year.
  3. The ratio of government debt to GDP at market prices cannot exceed 60% at the end of the preceding fiscal year.
  4. The countries should have joined the exchange-rate mechanism under the European Monetary System for two consecutive years, and should have succeeded to keep its monetary exchange-rate within a +/- 15% range from an unchanged central rate. (Prior to adoption of euro.)
  5. Long-term interest rates cannot be more than 2.0% higher, than the similar 10-year government bond yields in the 3 EU member states with the lowest inflation.

germanyThe convergence criteria were and still are a must for the financial stability of the EU. It is the divergence from these criteria that led to the Euro crisis. But they were doomed to diverge from the very start. The member countries of EU were never on a level playing field; and they could never be. Adhering to these criteria would impose severe restrictions on their economic governance, and would go against their economic goals. That is the reason Britain opted to stay out of the European monetary integration. Further, more integrated a country is into the union, greater would be the contagion of any financial destabilisation within the union. For those countries which are already in, the choice is more difficult; they cannot opt out now; they have to leave the EU altogether. And one country leaving could open the flood gates for the dissolution of the union.

The member countries of EU basically fall into two categories : those which are worse off than the others (like Greece, Italy, Spain, Portugal, etc.) and those which are better off than the others (like Germany, France, Holland, etc.). Both are caught in a dilemma. The former need the union to tide over their bad times; but have to put up with the hurting domination of the others – beggars cannot be the choosers. The latter need the former (markets) to keep their fires burning; but have to put up with the burden of irresponsible extravagance of the former.

porThe question relevant to us is, in such a situation, how long can Britain remain dangling over the fence, particularly as it sees the union getting into bigger and bigger mess day by day ? Perhaps Britain finds itself at the tether’s end. A few months ago British Prime Minister David Cameron sent a clear message to the rest of Europe that the British wanted a few things changed; with a veiled threat that if not it will quit. Of course Britain is not alone in the disillusionment with the EU. Several economic groups in the continental Europe would rather prefer to be out of the union. But these countries have an overpowering political reason to see that the union survives – the memories of WWII are still strong; that is not true of Britain. So all said and done, it is difficult to say how long Britain will remain in the union, even if the union itself survives. Influx of migrants from the less


prosperous countries of EU into Britain has been one of the most hurting consequences of Maastricht Treaty. 2.3 million people from the rest of EU live and work in Britain; as against this only 1.7 million British citizens live in the rest of EU. This needs to be seen in the context of the unemployment situation in Britain. It would not be surprising then if the sentiment against the migrants from the rest of EU picks strength as time passes.

Let’s now turn to the other two vital conditions for the success of the ‘return voyage of discovery’ : the economic health of Britain that is needed to sustain the Goan Portuguese nationals there if EU survives; and the economic health of Portugal that is needed to accept the Goan Portuguese nationals back if EU collapses; the graphs above speak for themselves. 



For the full story log on to : http://www.navhindtimes.in/panorama/goans-dream-walk-precipice


An airport too far – 2

In Politically wrong on April 11, 2013 at 3:57 am

Let me now turn to the demolition of the second restrictive premise : that an airport is merely a place where planes land. An airport need not be merely a place where planes land. All international airports that have made big today are more than mere airports – they are integrated transport hubs which people prefer to use. That requires out of the box thinking; and that is what I want to show is necessary in case of an airport in Goa.  I am basing my suggestions particularly on my experience of the new Kuala Lumpur Airport.

mopaThe idea of an integrated transport hub suggests itself once we look at the map of the area around Mopa. NH 66 (old NH 17) runs at 1.66 km from the airport location; and the Konkan Railway line runs at 3.06 km. When the airport comes up it is likely to be skirted by the NH (though at different elevations) and will have the KR line within less than 2km from its periphery. Does that suggest to you a multimodal transport hub ? I know there are some ground level difficulties there; mainly because of the topography and the distance (about 2 km) between the KR line and the NH.

Move your sight a little lower on the map and you have the two lines – the NH and the KR – converging at the Pernem Railway Station – just about 6 km from the airport; considering the spread of the airport, the distance may be actually about 4 km. Here is where the out of the box thinking comes in. And this is what the new KL International Airport (KLIA) has demonstrated : the airport where the planes land and take off can be far from the Passenger Terminal. At KLIA , which is 60 km away from KL city, the major flights land and take off from what is known as the Satellite Terminal A, while the passengers check in and check out at Main Terminal or Terminal 1. It is here that the passengers complete their immigration and other tasks like buying local currency or SIM card or duty-free shopping. A dedicated passenger train called the Aerotrain takes the passengers from the Satellite Terminal to the Main Terminal.  The 3-car 250-person capacity driverless trains complete the 2 km journey in less than two minutes. If the Mopa Airport is so designed that the ‘Satellite Terminal’ is located at Mopa plateau and the ‘Main Terminal’ is located on the plain at the convergence of NH and the KR lines, a similar train should be able to cover the 4 km distance in less than 5 minutes. A smaller capacity train with a lower frequency may be what we will need to start with.

aeroAn integrated multimodal transport hub could be developed at the Pernem Railway Station where passengers can switch from plane to train or bus and vice versa, from train to bus and vice versa, all under one roof in absolute comfort. The complex would also provide for booking of tickets, sanitary utilities, relaxation while waiting, food and refreshments, booking of hotels and shopping. It is needless to say that the hub is not just a utility; it is a business proposition that will provide employment and income to locals and revenue to the Goa government. That is what it has to be eventually : a hub for growth of the entire region. Integrated hubs like this can provide tremendous boost to local produce as they attract large congregations of customers; it becomes a virtuous cycle : activity  attracts crowds, and crowds attract activity, and the growth effect trickles down over a wide region. And the right type of growth : growth without the ill effects of crass urbanization, rapacious industrialization and unjust concentration of wealth.

kliaEven looking from the narrow point of view of the viability of the airport, no major airport can be viable if it cannot derive more than half of its income from non-aeronautical activities; I suppose the ratio for a viable business model is something like 20:80 between aeronautical and non-aeronautical activities. Or else the non travelling public has to bear the tax burden; or the airport has to simply price itself out of the competition.

 Crucial to the viability of the integrated transport hub is the connectivity. And that is the locational advantage of Mopa : the KR Station, the NH 66 and the airport will be in close proximity, providing connectivity within the region as well as with the rest of the world. But this advantage will work for the viability of the hub and the airport if and only if the KR line and the NH are used optimally. Passengers landing at Mopa need to be shuttled to their destinations in comfort and in the shortest possible time. One excellent option is to use the major KR stations as the hubs for disembarkation of air travellers and run fast trains connecting these stations. This is again a superb idea that has been tried out by KLIA. A high speed non-stop train KLIA Express connects the airport to another marvelous transport hub KL Sentral in the heart of Kuala Lumpur – in just 28 minutes; another train KLIA Transit makes two stops in between; what is the most important, the trains start from within the Main Terminal of the airport. Other railway lines – metro, suburban, intercity and transnational (going to Bangkok and Singapore) – either originate at or pass through KL Sentral; as a result the air passengers have unsurpassed connectivity with comfort, speed and economy. (For more details see https://olvaddo.wordpress.com.)

krSimilar trains could start from the Pernem Integrated Transport Hub or the trains passing through Pernem KR Station could be utilised for this purpose, depending on the traffic volumes and track availability. They would have to then connect to the major stations on the KR route between Ratnagiri and Bhatkal; some trains could connect to only few stations, others could connect to more. If we are to get back to the narrow context of tourist flow to Goa, as an illustration, Thivim would cater to the Calangute-Baga belt, Madgaon would cater to the Mobor-Bogmalo belt, and so on. This would also provide impetus to the up gradation of KR infrastructure, and make KR the dream lifeline of Konkan, that it was supposed to be.

Integration is very critical for the success of this model. Or else, we will have a situation similar to that in Chennai. Chennai International Airport (CIA) is one of the few in India probably which can be accessed by a train. The other one is Delhi Indira Gandhi International Airport (IGI); I am told the Metro connection from New Delhi to IGI is of global standards. CIA has the rail connectivity, but the switch is not at all smooth. Chennai city is served by the Metro; the metropolitan area is served by local trains. So if you are somewhere in the city – say Triplicane, Royapettah or Mylapore – and you have to fly, you need to take a Metro train to Chennai Fort and then catch a local train back to Tirusulam – the station close to the airport. The subway at Tirusulam station opens out into the airport area; but the subway stinks and is usually inundated; and after that you need to walk about 400 metres through dusty rubble to enter the Terminal. Hopefully, once the Metro line gets extended to the airport, the switch should be smoother. Integrating the airport into the local transport network goes a long way in making an airport passenger friendly.

The beauty of Pernem Integrated Transport Hub is that it offers a parallel mode for dispersion : the NH 66. Fast and comfortable coaches could carry the air passengers to their destinations in the hinterland. The two modes, therefore, would complement each other, offering flexibility and wider reach; NH 66 would provide access to those areas lying away from the KR line.

The question is, why not follow the same model at Dabolim ? Dabolim has the added advantage of access to the South Western rail line. Yes, Dabolim has access to SW line; but, as said before, it is a weak link. Well that could be strengthened. So I will not discard that point altogether. But Dabolim is too far from the KR line, which is more vital to service the hinterland of the airport. (Actually that is not really true : the KR line passes very close to the airport, but some half a kilometer below !) Dabolim is also far from the NH 66; that however is not a big problem, as NH 66A (the so called Four Lane Highway), which passes by the airport, can be a strong link to NH 66. But most important handicap is the unavailability of space to develop an Integrated Multimodal Transport Hub in the neighbourhood of Dabolim. Some 25 years back it would have been possible; that is before Verna was developed as an industrial hub. Verna Plateau would have been an excellent site for an Integrated Multimodal Transport Hub.

To conclude, the choice today is not between Mopa and Dabolim. The only real challenge that I perceive for Mopa is Sindhudurga. Because, all that I have proposed for Mopa will also work for Sindhudurga. If Sindhudurga materialises in a big way, Mopa will have to bow out; and even Dabolim.  If we do not want that to happen, we will have to act fast  and act decisively on a massive scale to emerge the winner between the two. 

For the full story log on to : epaperoheraldo.in and check the March 10, 2013 edition.

An airport too far – 1

In Politically wrong on March 17, 2013 at 9:52 am

At the end of the article MOPA v/s DABOLIM by Rahul Basu that appeared in the Herald Review of Sunday, 10th February, 2013, based on a blog post of the same name dated 9th February (http://moreseriously.blogspot.in), the author seems to very convincingly conclude that the idea of an airport at Mopa is ‘stupid’ : “Our politicians are not stupid, why are they still pushing for Mopa ?”  

Well, the idea is made to look stupid by putting blinkers on the readers’ eyes.  What I wish to do here is to let the reader look beyond the blinkers. 

AirportsFirst and foremost, let me accept that Mopa is not perhaps the best location for a new airport. But I suppose now we are beyond the stage of looking out for an optimum location for the airport; so, accepting fait accompli, I am restricting myself to just Mopa and Dabolim. Further, I fully agree with Mr. Basu that two airports in such close vicinity is a ‘stupid’ idea.

Now let me come to the two restrictive premises that make an airport at Mopa look stupid : one – that the international airport in Goa is for Goa alone; two – that an airport is merely a place where planes land.

An international airport in Goa cannot be for Goa alone; it cannot be sustained by the traffic generated by a small place like Goa. Goa may be a state, but it is smaller in area and population than many districts in India. We may be under an illusion that Goa’s tourist flow will sustain an international airport. We need to rethink that assumption.

HighwaysTherefore we have to necessarily look at a larger catchment area. What could be the catchment area of an airport in Goa ? Goa’s geographical positioning, I feel, restricts the catchment area of the airport to the coastal belt – south of the hinterland of Mumbai and north of the hinterland of Mangalore. We may have to replace the existing Mumbai airport in the north by the airport in or around Navi Mumbai, whilst doing this calculation. That gives us about 250 km to the north and 200 km to the south, which encompasses the districts of Ratnagiri (South) and Sindhudurga in Maharashtra and Uttar Kannad in Karnataka.

Why not the area beyond the Ghats like the districts of Kolhapur and Sangli in Maharashtra and Belgaum, Dharwad and Haveri in Karnataka ? Passengers or freight from beyond Ghats cannot be easily captured by an airport in Goa because of tenuous links across the Ghats. The only robust road link between the coast and the up-Ghat region along the entire stretch between Mumbai and Ernakulam is NH 48 (old NH 4) connecting Mumbai to Pune; nowhere below that there exists such a link. There are numerous roads crossing the Ghats to the south of Mumbai : Ratnagiri-Kolhapur, Panaji-Belgaum, Kumta-Sirsi, Honnavar–Shimoga, Managalore-Madikeri, etc.; but none of these are capable of providing robust and rapid links. As for the rail links, Madgaon-Londa is the only broad gauge line crossing the Ghats between Mumbai and Mangalore; seven trains run on the route of which only two are daily.

RailwaysThe broad gauge line connecting Mangalore to Hassan is an even weaker link, with only two daily trains running on it. Both these are single lines and not electrified; the Railway Vision 2020 document too does not propose any improvement in the situation. The next link below that – the Shorannur-Erode line – is however a robust link. The Ghats, therefore, have remained ‘insurmountable’ at least as far as the hinterland of Goa is concerned. Thus, it makes sense to restrict the catchment area of an airport in Goa to the coastal belt – south of the hinterland of Mumbai and north of the hinterland of Mangalore.

The Belgaum and Hubli airports, therefore, move out of reckoning; they cannot be competitors to an airport in Goa. That leaves us with two contenders – Sindhudurga and Karwar. Of these Karwar should be dropped out. It is going to be a Naval Airport, just like Dabolim; and, therefore, like Dabolim, can never aspire to be a ‘real’ International Airport.  A Naval Airport is basically a Defence Establishment, with all its necessary constraints. A civilian airport needs to be free of all constraints, save those related to environment; only then can it aspire to attain global standards. Sindhudurga airport is the only and the real contender; and I have no argument to wish it away; at least at this point. 

For the full story log on to : epaperoheraldo.in and check the March 10, 2013 edition.

Once upon a time on an island

In Politically wrong on February 22, 2013 at 10:53 am

Many years ago, as a young man, I had seen a play about the people on an island; and my blood had boiled with anger. The island was owned by a landlord; all the people on the island worked for him. And he was a ruthless landlord. One day a young man from across reached this island. He was shocked to see the exploitation by the landlord, and the misery of the people. He decided to fight. One day he freed the people from the tyranny of the landlord. He gathered them all in the marketplace and announced that from that day onward they were free; that they shall own the lands they plough; that they shall work and feed themselves.

As the young man turned to go, an old man, bent and limping, walked up to him, and said : “Lord, tell us what to do. We are at your service.” And the rest followed him to fall at the feet of the young man.

That was a fable, alright; but that seems to be about us. Sixty four years after gaining independence from the British and sixty one years after becoming a democratic republic, today we have set out to rewind history : to fall at the feet of a man called Lokpal – he who shall deliver us from all evils, he who shall protect our constitutional rights, he who shall decide whether we go to hell or to heaven. Just like the people on that fictional island. And my blood is once again boiling with anger.

I was born after India gained independence; I do not know what the British were, except for what my history teacher taught me. However I was fortunate enough to be born on that small piece of land that never became independent at the stroke of midnight on August 14, 1947. We had to wait for another fourteen years, till our masters, the Portuguese, were driven out in 1961. I was only seven years old then.

But I was well over twenty and yet not too old when President Fakhruddin Ali Ahmed declared a State of Internal Emergency upon the advice of Prime Minister Indira Gandhi on 26th June 1975. I did not know at the outset what emergency meant. But my father, who had experienced the midnight knocks under the Portuguese regime, told me it means you either piss in your pant or be ready to die. That was the wrong age for me to choose the former.

part-005Censorship was imposed. The leaders of all opposition parties and other outspoken critics of Indira’s government were arrested and behind bars.  On 5th August 1975 the infamous Maintenance of Internal Security Act was passed by the parliament. On 26th September 1975 the Thirty-ninth Amendment to the Indian Constitution, placing election of Prime Minister beyond the scrutiny of judiciary, was passed. On 9th January 1976 the government suspended the seven freedoms guaranteed by Article 19 of the Constitution of India. On 18th January 1977 the President dissolved the Lok Sabha. The entire country was in a state of shock.

Fully assured that democracy had been finished for good in India, a jubilant Indira Gandhi declared elections; no one could dare imagine Indira’s gamble could go wrong. But it did. Indian democracy triumphed; the people asserted their sovereignty notwithstanding the consequences.

Today, once again my blood is boiling with anger to see a motley mob howling to finish democracy – a democracy that has proved its power time and again, kicking into dust leaders who have disdained it; the latest probably was the Left Front in Paschim Banga. But definitely that shall not be the last.

Guys, hands off democracy; we shall not tolerate even a “benevolent” dictatorship; call it Lokpal, call it anything. Just get lost.

Insider Trading or Outsider Targeting

In Politically wrong on February 8, 2013 at 3:57 am

I know what I am going to say is politically incorrect; but let me say it : Perhaps the biggest undoing of Mr. Rajat Gupta was the fact that he was an Indian.

I am not defending insider trading; and, for argument’s sake, I am ready to grant that the evidence against Mr. Gupta was conclusive. What I cannot agree with is the concept of wrong that forms the basis of Mr. Gupta’s conviction. There are natural wrongs and there are legal wrongs. Natural wrongs violate basic human rights to life and dignity; murder or sexual assault, for instance. Such acts are wrong, irrespective of what the enforcing authority thinks about them, or whether it acts against those who commit them.  As against this, legal wrongs are violations of a legislation enacted by a duly constituted authority. What is legally wrong at a given point of time may cease to be so at another point of time; it is all a matter of the same or a higher authority changing the legislation. And the intent of the authority with regards to the legislation is expressed not only through the formal process of enactment or repealing, but also through its choice to enforce the legislation. More particularly, discriminatory enforcement deprives the legislation of its justification. And by choosing to not enforce the legislation, the authority de facto repeals the legislation.

This is exactly the point that I want to make. US Securities and Exchange Commission defines insider trading as “buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security”. Any person who commits an act that fits this definition should be prosecuted under the relevant legislation. Countrywide Financial’s CEO Angelo Mozilo made $ 140 million by dumping his Countrywide stock in the 12 months before the company collapsed. And he went scot free. The SEC did bring a civil suit, accusing Mozilo of engaging in fraud and insider trading. He flicked that away with a cash settlement that hardly touched his personal fortune. According to a Congressional investigative report, he created a “Friends of Angelo” unit, which doled out discount loans to members of Congress. Under US law, “whoever directly or indirectly, corruptly gives, offers or promises anything of value to any public official … with intent to influence an official act” is to be fined, imprisoned or both. Mozilo is still a free man.

money In SEC’s own words the basis of the legislation against insider trading is the fact that “insider trading undermines investor confidence in the fairness and integrity of the securities markets”.  SEC chose to ignore when after driving his firm into the ground, Merrill Lynch’s board of directors allowed Stan O’Neal, the CEO of the company to resign, and offered him $161 million in severance pay. O’Neal’s successor, John Thain, was paid $ 87 million in 2007; and in December of 2008, two months after Merrill was bailed out by U.S. taxpayers, Thain and Merrill’s board handed out billions in bonuses to themselves. In March of 2008, AIG’s Financial Products Division lost $ 11 billion. Instead of being fired, Joseph Cassano, the head of AIGFP, was kept on as a consultant for a million dollars a month. Was that not sufficient to “undermine investor confidence in the fairness and integrity” of the US corporations ?

Now the most scandalous of my contention : Mr. Rajat Gupta was targeted for being an Indian. Well, I have no hard evidence to back that; there probably will never be. But, from the time of my school days I have one question unanswered : Why did US drop the atom bombs on Japan, not Germany ?


The Systemic Myopia Endemic to Democracy

In Politically wrong on January 24, 2013 at 9:22 am

Viral Acharya is an engineer turned economist, currently the C.V. Starr Professor of Economics in the Department of Finance at New York University Stern School of Business. He is also the Program Director for Financial Economics and a Research Affiliate at the Centre for Economic Policy Research; a member of Advisory Scientific Committee of European Systemic Risk Board, Advisory Committee of Financial Sector Legislative Reforms Commission of India, International Advisory Board of SEBI (India), and Advisory Council of the BSE Training Institute, Mumbai, and an Academic Advisor to the Federal Reserve Banks of Chicago, Cleveland, New York and Philadelphia.

But this big list of positions, and the list of publications and the awards that Acharya has won for his academic work in finance and particularly in the area of Systemic Risk, is not perhaps as impressive as his being the co-author of the book Guaranteed to Fail : Fannie Mae, Freddie Mac and the Debacle of Mortgage Finance (Princeton University Press; March 2011); the book nails the  myth of sovereign guarantee.

But why I am talking about him today is not even because of that book; its what he said in one of the talks on the book at Kansas City Public Library that I wish to bring to your attention; because that has a lot of relevance to India; in fact, Acharya himself confessed that the idea came to him from his childhood experience in India.

What he said in that talk, and perhaps his unique contribution to the analysis of the 2008 US financial crisis may be summed up in just two closely connected points : democracy distorts the vision of national welfare – it sets the time horizon for the vision to five years; and since both the electorate and their democratically elected representatives get affected by this myopia, the latter tend to pay the former in the currency that the former desires. 

Acharya recalls a very telling memory from his childhood in India. In the Bollywood movies he would watch, he would see candidates distributing sarees to the women in their constituencies; and romp home to victory. And he found it very amusing and satisfying. It was only much later when he switched over from Engineering to Economics at NYU-Stern in 2001, that two questions faced him point blank : Who pays for those sarees ? Is the saree the ultimate satisfaction of the woman’s need ? As long as we do not ask those questions, the myopia makes a mockery of the democracy. Saree is only a symbol; the myopia metastasises through the entire democratic functioning.

The 2008 US financial crisis was less about finance. The unbridled greed of the private corporations like Bear Sterns, Lehman Brothers, Countrywide Financial or AIG, or the wicked genius of the financial engineers who were nicknamed “masters of the universe” may look as the obvious culprits for the mass financial destruction. But that came later. Where it all started was in the White House. Documents after documents, testimonies after testimonies (the folder on my HDD weighs about 15GB as on date) evidence only one thing : a government desperate to woo an electorate faced with an imminent rerun of the 1930’s experience, let loose a new New Deal. If it was the saree in India, it was a house in US.

gasThe five year window that democracy affords to a government probably could not accommodate anything more than that. And the situation was desperate. The WWII opened the door to a new age of prosperity for US. The subsequent governments kept it going for another half a century by igniting wars all across the globe in unfailing regularity. But to their bad luck, new wars refused to start after that, and the American economy got into dire straits.  

But that is a fait accompli; my concern here is not about the 2008 US crisis. What worries me is the fact that India and US are the world’s largest democracies; and what is happening in India, is no different from what happened in US. Sarees is a relatively low impact issue. As I have said before, the democratic myopia pervades the entire functioning of governance, and more sadly, even the critique of the governance. Look at the populist schemes that are ground at the mills of the government; and the way in which they are lapped up. Look at the counter-establishment movement; what is it focusing on ? The broader issues before the nation or the pic-pocketing by the powerful ? What is more important : who made how much profit in allocation of coal blocks or how much benefit is the national resource delivering to the people of India and at what cost ?

For me the saddest day was when I had to watch on a 48” Plasma screen the run up to the Presidential election filmed through a 0.2 mm camera aperture – it was as exciting as a blow by blow depiction of a wrestling match where I was the losing player. 

Why I wish Kejriwal fails

In Politically wrong on January 11, 2013 at 6:54 am

The morning after Mrs. Indira Gandhi declared Emergency, my father told me in whispers : “Do not worry; her end is near.” And then he quoted some Greek phrase whose meaning was : Those whom the gods wish to destroy, they first take away their sense.Kejriwal

I feel exactly the same way about Mr. Arvind Kejriwal and his companions – those that are still with him in the blitzkrieg against corruption. I have no reason to fault his entry into politics, or more correctly party politics; Anna Hazare’s movement was always political, whichever way you interpret that word. If you say politics is about the dynamics of power, the movement was political – power of the people against the power of the establishment. If you say politics is about which party wins the next election – by making corruption coterminous with Congress, the movement sought to determine the result of the next election.

Where, I feel Kejriwal has faulted is in putting the aam admi on his topi – that is, by making him the centre of his model of governance. My finding fault with aam admi may sound strange to you; after all every successful politician, and even those not so successful, swear by him. It is my firm belief that aam admi cannot be the decision maker in day to day governance of a country; he will destroy it much faster than all the politicians have been able to do in last half a century. For aam admi is a monster, created by the politicians to further their own interests. The difference between him and that of Frankenstein’s is that this one has no mind of his own.

And now, Kejriwal wants to give it in the hands of the aam admi to frame the laws, make the budget for the country, fix the prices of goods, … Can there be a better recipe for anarchy ? As someone said (was it Warren Buffet ?) after the 2008 meltdown referring to the role of the cheaply populist policies of the US government : If the devil had kept awake the whole night, he wouldn’t be able to find a better way to destroy the country.

Think of just one of Kejriwal’s utopian idea : aam admi fixing prices of rice and chillies. The atta will then be available for Rs. 10 a kg and onions for Rs. 5 a kg. How great ! But why do you forget that even now it is the aam admi who decides the prices ? Is it not the aam admi’s demand in the market that determines the prices, given the supply ? So Kejriwal is contemplating a schizophrenic aam admi : who puts a board in front of the shop with the price of tomatoes at Rs. 3, and then goes by the backdoor to clear all the available stock of tomatoes at Rs. 13. As long as Kejriwal does not succeed in growing enough tomatoes (and rice, chillies, onions, wheat, sugarcane, …) at Ram Lila Maidan or Constitution Club, these will remain stupid dreams on a sultry night.

In the run up to the last panchayat elections we got a chance to try out an interesting experiment with the aam admi. We used an existing NGO which had done remarkable work in a village, and earned considerable respect, to float an unique idea in grass root democracy : a truly peoples’ candidate. Our logic was simple but impeccable (in theory); we argued that if the people of a ward select from among them one person who is honest and capable, and at least 50% of the people back this selection, then this candidate would be 100% assured of victory in the elections.  To make it really fool-proof, we laid a condition that any of the activists of the NGO or anyone who has an ambition of contesting the election cannot present himself or herself as a candidate; the name has to necessarily come from the people. Within a week or two a strong opposition built up for the idea, including from the loyal workers of the NGO. We had to naturally retreat defeated.

A similar experiment was tried in Dhenkanal in Orissa. Two childhood schoolmates with diametrically opposite views of democracy ended up contesting the panchayat elections in a certain ward. To keep their identity under wrap, let us call them Bansi and Abheer. Bansi had a steady job in the city and was known in the village for his sober habits and integrity of character; already a large number of villagers availed of his services to put straight their property matters or sought his advice on education of their children and their employment. Abheer, on the other hand, was unemployed, given to drinking and gambling and was seen most of the time hobnobbing with politicians. To make the contrast more striking, they followed totally different modes of canvassing : Bansi would not spend a pie on his voters, would only meet them one-on-one in their houses and explain his stand. Abheer, on the other hand would spend lavishly on his voters, wine and dine them and “pay” them for the votes. Abheer won by a large margin. 

I am not a Marxist !

In Politically wrong on June 27, 2011 at 7:11 pm

i am not a marxist. i have hated marxism all my life. And have stood by free enterprise even when it was politically wrong to do so. 

The red.

But, no i have not changed my mind, but i see no other option to get out of the situation into which we have let ourselves drift. 

i am not talking about the economic or political affairs. We have a robust and vibrant democracy. i am quite happy with that. that is the reason i am not even for a Lokpal. Yes, the corruption is there; rather too much of it. But that is because we like it that way. i fully agree that it thwarts our economic progress. But the truth is very simple : the day we decide that we do not want it, it will be gone. We do not require a major surgery to extricate it; definitely not a deft surgeon. We need to just drop it, and it will be in the dust, dead. 

But that is not the issue i am agitated about. My nightmare is about the people and their resources – the relation between them. Somebody asked the Gonds what price they want for their sacred hill – what price they want to sell their God for. You may be anything – a believer, an agnostic or even an atheist. But that is a question that gets to your bile sac. The question is not about the sacredness of the hill. The question is about the sacredness of the relationship between a people and their resources. You cannot profane that. 

No, socialism is not a solution for the problem. Because, with that comes centralisation of power. And that is where the problem lies. For the powerful have a vested interest in concentration of control over resources. Democracy is what suits the people’s control over resources the best. But, more of democracy, not less. The people to whom belong the resources should have more control over the resources.

Who is going to give them more control, more power ? No one; they need to wrest it, with force if necessary. That is where marxism comes in – marxism of the proletariat, not marxism of the politburo.

i see no other way out. Do i propose a violent class war ? No, not necessarily. But certain amount of coercion is necessary. Old dirt does not go with sponge; one needs a fairly abrasive scrubber. Democracy has to be the main plank. But a more aggressive democracy. Shall i say democracy of the proletariat, not the democracy of the politburo ?

That brings the focus back on “we”. Yes, we the people. 

Shall we preside over the demise of Indian democracy ?

In Politically wrong on June 13, 2011 at 1:01 am

How did you find the movie “A Wedneday !” ?

Apart from everything else the movie focuses on one very significant point : Ends do not justify means.

That’s exactly where i beg to differ with Anna Hazare and the rest.

We are all fed up with corruption; boiling angry and ready to shoot from the hip. Agreed. But is setting up a Lokpal the solution to the problem ?

According to me : NO.

The Lokpal will act and punish the guilty (i suppose so) when she receives a complaint. The complaint has to be investigated. There cannot be summary trials. Will evidence come forth ? How fast will the decision come ? Given this, will the whole process be “effective” in curbing corruption ? If i am the one who has a vested interest in bribing the man in power – be it a bureaucrat or a politician – will i want to kill the goose that lays the golden eggs. Whom do you expect to bell the cat then, if  Tom and Jerry have a “symbiotic” relationship ?

So, Lokpal cannot be expected to be any more effective in curbing corruption than the existing machinery. The cure for corruption lies not in recruiting a new surgeon; corruption can be cured only if the patient wills to undergo the surgery.

But i fear worse. Lokpal is not a democratic institution. Frustrated with democracy we are tempted by dictatorship. That may be explainable; but it is definitely not justifiable. Let us not be blinded by our anger. We have set out to create a Frankenstein that may eventually destroy our democracy. Let us not forget that whatever our disappointment with it, our democracy has served us well. It has thrown the mighty into dust and raised the lowly to power. However much its shortcomings may overwhelm us for the moment, let us not dump it in a fit of anger. History shall not pardon us for that.

Why i beg to differ with Anna Hazare, Kiran Bedi, Prashant Bhushan, …

In Politically wrong on June 11, 2011 at 7:34 am

A Wednesday!    is a 2008 Indian thriller drama film written and directed by Neeraj Pandey. It stars Anupam Kher and Naseeruddin Shah in the lead roles. The film depicts an about-to-retire police commissioner narrating a sequence of events that unfolded on a particular Wednesday and which do not exist in any written record, but only in his mind and in those of several individuals who were involved in it, both willingly and unwillingly, and how those events affected the lives of all the concerned people.

The  film opens witMumbai Police Commissioner Prakash Rathod taking a respite after a jog, describing in a voice-over that he is going to retire from office the following day, and how numerous people have been recently questioning him about the most challenging case he had to deal with in his entire career, and how he has been deliberately evading such questions. As his voice-over ends the film switches into a narrative, showing the events that occurred on a certain Wednesday. An unnamed man is shown to strategically carry a travel bag, assumed to be explosives, in the Chatrapati Shivaji Terminus railway station and proceeding to place the bag, under the false pretense of lodging an FIR, in the toilet of a police station located near the Mumbai Police headquarters. He then calls up Rathod and informs him that 5 bombs have been placed in different locations throughout Mumbai, which are programmed to explode simultaneously within four hours unless the Commissioner gives in to his demands and releases four militants. In response, Rathod immediately alerts his team involved in intelligence research and surveillance, tapping all the available resources in gathering preliminary information and tracing the location of the caller. Meanwhile, the caller tips off television news reporter Naina Roy, telling her to reach the police headquarters immediately as it is going to be “the most important day of her life”. Rathod suspects the anonymous caller to be bluffing, but his doubts are dispelled as the caller, to prove his seriousness and the police force’s helplessness, reveals that a bomb has been planted in the police station right opposite to the Police headquarters. He tries to trigger the bomb through a cell phone, but it is located in the nick of time and defused.

Meanwhile, as Rathod and his team desperately try to locate the caller, the four militants demanded by the caller are taken to the location specified by the caller.

Click this link to view the last scene of the movie : A Wednesday !