Wednesday, March 25, 2009

UPA will cost India economic superstardom

The current global crisis is potentially an inflection point that marks the transition from an Anglo-American dominance to an Asian dominance in world economic affairs.

Certainly, there is a startling turnaround in the fact that China holds $2 trillion in US Treasury securities and therefore lectures the Americans about running their economy -- it feels like only yesterday when the shoe was on the other foot.

Another indicator is China's aggressive fire-sale purchases of commodities, including oil, copper, iron ore, et cetera from all over the world. 'Have money, will buy' is China's mantra.

But where is India in this 'Asian century'? Alas, India has once again fumbled a golden opportunity to rise to economic superstardom.

Given the profligate spending of the United Progressive Alliance and its self-proclaimed galaxy of economic geniuses, India now sports perhaps the highest deficit of any country: about 13 per cent, a far cry from the 5 per cent that the UPA has been promising us all along.

Yet again, the Congress has successfully brought India back to the verge of the 'Nehruvian rate of growth' of 2-3 per cent, which is an economic crime against humanity, imposing abject poverty on 250 million people.

After sixty years of Congress misrule, India has most of the world's poor people, and some of the worst health and nutrition indicators, even worse than much poorer sub-Saharan Africa. This is truly a crime and a national shame.

It is evident that India's wonderful 'hybrid economy' gives the country the very worst of, both, capitalism and communism. For, when the world was going through a capitalistic feeding frenzy, India, not being sufficiently open to trade and capital flows, did not benefit. In contrast, China, taking full advantage of its World Trade Organisation accession, amassed a singular fortune, and uplifted large numbers of its poor.

So India didn't grab that opportunity. One would think, then, that the obverse would be positive -- that is, when the excess leverage hit the fan, isolated India would not be affected very much. To some extent this is true: since India is a tiny trading power (accounting for perhaps 1 per cent of world trade in goods), the precipitous decline in demand from the West has not affected India anywhere near as much as it has hit China.

That is India, a slow and steady tortoise to China's flashy hare. In fact, this is why commentators are crowing about the alleged virtues of the dirigiste Indian State and its (usually deadening) hand on the levers of the economy.

In comparison to the formerly-lionized-and-now-reviled Alan Greenspan's laissez-faire Federal Reserve in the United States, so the theory goes, the virtuous Reserve Bank of India has been able to protect India from Anglo-American buccaneer investment bankers.

If only that were more than a half-truth!

The reality is closer to the way Pay Commission reports are implemented in India -- only one half of the recommendations is implemented. Pay Commissions routinely suggest a) reducing headcount, b) increasing working hours, c) tying salary increments to productivity, and d) increasing base salaries substantially. Of course 'a', 'b', and 'c' are ignored, and only vote-winning 'd' is implemented at large cost to the taxpayer.

Similarly, it is true that Anglo-Americans were unable to dump toxic mortgages on the Indian banking system. Unfortunately, India's politicians, including an alleged 'Dream Team' of economics mavens, have done the dastardly deed entirely on their own through almost Rs 200,000 crore (Rs 2,000 billion) of deficit spending, which will result in crushing inflation with a vengeance in the near future.

This in the name of programmes for the 'common man': such as the NREGS (National Rural Employment Guarantee Scheme), the waiver of farm loans, and the windfall for bureaucrats.

Rs 70,000 crore (Rs 700 billion) for the NREGS, which, if we had truth-in-advertising, should be renamed 'National Employment Guarantee Scheme for Party Cadres', because 95 per cent of the funds ended up in their pockets (I quote Rajiv Gandhi who said 20 years ago that 90 per cent of the funds were pilfered en route, and surely they are more innovative now).

Rs 70,000 crore for the waiver of farm loans, most of which went to rich landlords already flush with untaxed agricultural income that has led to a boom in consumption in villages. Rs 30,000 crore (Rs 300 billion) spent on the corrupt, do-nothing bureaucracy. All this is money that the Congress printed out of thin air.

Not to speak of the billions-worth of counterfeit currency introduced by the friendly neighbourhood printing presses in Karachi.

One ocean-going container full of Rs 500 and Rs 1,000 notes from Pakistan -- by all accounts very good copies -- was seized at the Cochin port, which means hundreds of other containers could have gotten through.

Thus, even though there is a deflationary trend -- especially in real estate after the bubble burst, and it too had been propped up the same unaccounted-for money in the politician-civil servant-criminal nexus -- the long-term prospects are of raging inflation, as this Rs 200,000-plus crore chases limited goods.

Interestingly, the US is heading down the same path by announcing that it will inject $1 trillion in the system via Fed purchases of long-term Treasury securities. In other words, they too printed money. The reaction was swift -- the dollar tumbled, naturally.

Lost in all the hoopla about India's inflation coming down to 0.44 per cent recently is the fact that 12 per cent inflation for months has imposed a high-water-mark pricing on practically every manufactured good. Prices have gone up by 50 per cent in many cases; they have stubbornly remained there, and the chances of them coming down are nil.

In India, peculiarly, prices go up, but they never come down. This must be a 'feature' of the chimerical 'hybrid economy'. The only things that have come down are agricultural commodities like grain, and post-bubble real-estate.

Thus, once again, India has managed to snatch defeat from the jaws of victory. China will go on to make it the 'Chinese century', and India will always have unrealized potential.

India's curse, (noted economist) Jagdish Bhagwati once observed, is its clever economists. This has been proven with a vengeance in the last five years.

Saturday, February 28, 2009

2 Major-Generals face corruption charges

NEW DELHI: In yet indicator of the declining standards of probity and discipline in the armed forces, two Major-Generals from the Army Ordnance Corps (AOC) are now in the dock for their alleged acts of commission and omission.

Both the Maj-Gens are facing courts of inquiry (CoI), which will establish whether there is enough prima facie evidence to try them through court martial, in separate cases.

The first, Maj-Gen Anand Swaroop, officiating commandant of College of Materials Management (Jabalpur), is facing charges of irregularities in purchase of items for a unit headed for a UN peace-keeping mission.

The second, Maj-Gen S P Sinha, ordnance chief at the Western Army Command at Chandimandir, in turn, is accused of irregularities in purchase of general stores for ordnance depot at Choeki. Both officers, on their part, have refuted the charges against them.

This comes after the case of yet another senior AOC officer, Maj-Gen A K Kapur, who is facing a CBI probe after raids led to the discovery of property worth around Rs 5.3 crore in his or his family's name in late-2007. The CBI, however, is yet to file a chargesheet in the case.

With the three seniormost AOC officers facing corruption charges, even if they have not been proved so far, the post of director-general of ordnance services at the Army HQ continues to remain vacant.

Both AOC and Army Service Corps (ASC) have been embroiled in such controversies in recent years, with senior officers jostling for top posts, often levelling accusations against each other.

The ASC, for instance, witnessed a bout of controversy some time ago with two Lt-Gens, S K Sahni and S K Dahiya, also having to face legal proceedings. The names of Sahni, Dahiya, four Maj-Gens, nine Brigadiers, a Navy Commodore, two Commanders, a Lt-Commander, an IAF Group Captain and a Coast Guard DIG had figured in a list of 21 senior officers facing corruption charges tabled by defence minister A K Antony in Parliament.

The corruption charges ranged from selling military liquor in civilian markets to financial bungling in purchase of cereals, petrol and the like in the armed forces.

A Maj-Gen had faced the music for even sexual harassment last year. The court martial against Maj-Gen A K Lal, who was removed as commander of the strategically-located 3 Infantry Division at Leh in September 2007 after a woman officer accused him of "misconduct'' and "misbehavior'', held that he should be dismissed from service.

Many of these officers, including Maj-Gen Lal, however, have appealed in high courts against the court martial verdicts against them.

Monday, February 2, 2009

India a sponge protecting US: Ashley Tellis tells US Senate

On a hearing held on January 28, 2009 by the US Senate Committee on Homeland Security and Governmental Affairs summarizes the testimony of Ashley Tellis, strategic affairs expert and an influential policy adviser, as follows:

QUOTE:
India has become the "sponge" that was protecting the United States and the West from the terror campaign of Lashkar-e-Tayiba and is absorbing most of the blows unleashed by terrorist groups in Pakistan.

LeT, which has been blamed for the Mumbai attacks, remains a terrorist organisation of genuinely global reach and represents a threat to regional and global security, second only to Osama bin Laden's al Qaeda.

Tellis, a Senior Associate at the Carnegie Endowment for International Peace, made these remarks while testifying before the Senate committee on homeland security and governmental affairs on Wednesday on the November 26 terrorist attacks in Mumbai and their consequences for the US.

"India has unfortunately become the sponge that protects us all. India's very proximity to Pakistan, which has developed into the epicenter of global terrorism during the last 30 years, has resulted in New Delhi absorbing most of the blows unleashed by those terrorist groups that treat it as a common enemy along with Israel, the United States, and the West more generally," he said.

Tellis said the Barack Obama administration should keep Pakistan's feet to the fire and ensure that Islamabad makes good on its promises to take on terrorist groups.

Washington should also demand more of Islamabad precisely because the LeT threatens to become a significant global terrorist threat, he said, adding, the US should insist that Islamabad roll up and eliminate the entire LeT infrastructure of terrorism that currently exists inside of Pakistan.

Tellis also termed India's response to the Mumbai attack as inadequate and suggested that New Delhi should set up a body on the lines of America's national counter-terrorism centre and take US help.

Tellis said since the launch of the global war on terror post 9/11, Inter-Services Intelligence's assistance to LeT has become more recessed but it has by no means ended, even though the organisation was formally banned by then Pakistans president Pervez Musharraf on January 12, 2002.

Throwing light on LeT's links with Pakistan's Inter Services Intelligence, Tellis said the terror group has received strong financial, material, and operational support from Pakistan's powerful spy agency -- including from its field stations in Nepal, Sri Lanka, and Bangladesh -- because of the growing conviction within the Pakistan military that the war against India could never be won if the hostilities were to be confined only to Jammu and Kashmir issue .

While India has occupied the lion's share of LeT attention in recent years, he said the organisation has not by any means restricted itself to keeping only India in its sights.

LeT was from the very beginning a preferred ward of the ISI, enjoying all the protection offered by the Pakistani state, he added. Even when Pakistan, under considerable US pressure, formally banned LeT as a terrorist organization in 2002, the LeT leadership remained impregnable and impervious to all international political pressure.

Tellis said it would be a gross error to treat the terrorism facing India, including the terrible recent atrocities as simply a problem for New Delhi alone.

In a very real sense, the outrage in Mumbai was fundamentally a species of global terrorism not merely because the assailants happened to believe in an obscurantist brand of Islam but, more importantly, because killing Indians turned out to be simply interchangeable with killing citizens of some 15 different nationalities for no apparent reason whatsoever.
UNQUOTE.

To watch and listen to the hearings. please click: http://hsgac.senate.gov/public/index.cfm?Fuseaction=Hearings.Detail&HearingID=4bad8b13-1ed8-4ea4-8ed7-0c020c6205f4

(It takes some time for the video to start).

For the text of Ashley Tellis's prepared testimony. please click: http://hsgac.senate.gov/public/_files/012809Tellis.pdf

Tuesday, January 13, 2009

Poonch pooh pooh

This operation is symbolic of an unlearning nature of the Indian army. Unfortunately, nothing will change even now.

The operations against terrorists in the Mendhar forest against militants got over with an egg on the face of the Indian Army. One JCO and one soldier was killed with the weapon of the JCO sieged by the militants. Neither a single militant was captured nor was a dead body found in the area.

Best of the armies encounter failures but the really great ones draw the right lessons from those experiences. An experience of over four decades in counterinsurgency in the North East, nearly two decades fighting Islamist insurgents in Kashmir and more specifically, a similar experience with Mast Gul and gang at Charar-e-Sharif 13 years back should have prepared the army better to handle such situations.

The reactions to this incident will be the most obvious. The army will try its level best to find some scapegoats — sack the Brigade Commander, crucify the local battalion commander and full stop. Things will get back to the usual after that pretty soon. The prevalent culture in the services will not allow any in-depth study of the incident, quick dissemination of the lessons to other units in COIN operations, introduction of new tactics and induction of latest equipment or weaponry to prevent such incidents in the future. The unintended message to junior and middle ranking officers from all this is to follow the proverbial eleventh commandment — Thou shall not get caught.

If the internal mechanisms in the army are failing, then the external entities are doing no better. The highly voluble veterans community which was so strident on the pay commission issue will not even point out this weakness of the Indian army. The ignoramuses in the mainstream media, will continue to treat army like a holy cow and brush this incident under the carpet.

This downhill slide of a professional force, which is hell-bent on drawing its strength solely from the past and is blithely unconcerned about its future, will continue till a military tragedy of calamitous proportions strikes the nation. Then there will be many queuing up to lambast the defence services. By then it will be too late for constructive criticism, one that seeks constant improvement and betterment of the Indian Army.

Monday, December 29, 2008

SUPPRESSING INDIAN HISTORY

The anniversary of Ayodhya has come and passed. Once more, many of India's intelligentsia felt that the destruction of the mosque has signalled the end of a certain tolerant India, for which secularism was the unifying factor and has planted a dangerous seed of Hindu "nationalism" in India's psyche. Yet, one should remember that the Hindu 'fundamentalists' did not kill a single soul in Ayodhya, whereas the bombs planted a while later in revenge by Indian Muslims with the help of Pakistan, killed more than 350 innocent human beings. In fact, during its long history, Hinduism has been one of the most peaceful creeds in the world, accepting the reality of different beliefs, never trying to convert -even in a non-violent manner, like the Buddhists did in Asia - and submitting itself rather meekly, except for a Shivaji, a Guru Gobind or a Rani of Jhansi, to numerous invasions. The same thing cannot be said about Islam, whatever N. Ram says in Frontline. Many historians, amongst them Will Durant, Louis Frederick, or Alain Danielou, have remarked that the Muslim invaders were so certain that they were doing their holy duty by razing temples and killing Hindus, that they had recorded down carefully and proudly their deeds in their own archives.

Mahmud of Ghazni, for instance, who patronised art and literature, would recite a verse of the Koran every night after having razed temples and killed his quota of unbelievers. Firuz Shah Tughlak, personally confirms that the destruction of Pagan temples was done out of piety and writes: "on the day of a Hindu festival, I went there myself, ordered the executions of all the leaders and practionners of his abomination; I destroyed their idols temples and built mosques in their places". Aurangzeb did not just build an isolated mosque on a razed temple, as Romila Thapar would like us to believe, he ordered all temples destroyed, among them the Kashi Vishvanath, one of the most sacred places of Hinduism and had mosques built on a number of cleared temples sites. All other Hindu sacred places within his reach equally suffered destruction, with mosques built on them. A few examples: Krishna's birth temple in Mathura, the rebuilt Somnath temple on the coast of Gujurat, the Vishnu temple replaced with the Alamgir mosque now overlooking Benares and the Treta-ka-Thakur temple in Ayodhya. The number of temples destroyed by Aurangzeb is counted in 4, if not 5 figures. This is a small excerpt of his own official court chronicles: "Aurangzeb ordered all provincial governors to destroy all schools and temples of the Pagans and to make a complete end to all pagan teachings and practices". Or:: "Hasan Ali Khan came and said that 172 temples in the area had been destroyed... His majesty went to Chittor and 63 temples were destroyed. Abu Tarab, appointed to destroy the idol-temples of Amber, reported that 66 temples had been razed to the ground".. Aurangzeb did not stop at destroying temples, their users were also wiped-out; even his own brother, Dara Shikoh, was executed for taking an interest in Hindu religion and the Sikh Guru Tegh Bahadur was beheaded because he objected to Aurangzeb's forced conversions. As we can see Romila Thapar and Percival Spear's statement of a benevolent Aurangzeb is a flagrant attempt at negationism (the negation of historical crimes). Even the respectable Encyclopedia Brittannica in its entry on India, does not mention in its chapter on the Sultanate period any persecutions of Hindus by Muslims, except "that Firuz Shah Tughlaq made largely unsuccessful attempts at converting his Hindu subjects and sometime persecuted them".

Indian school books seem to have taken their cue from the Encyclopedia Brittannica , as there is hardly any mention of this dark aspect of India's past. But why does India negate its history? We know that Nehru and Gandhi wanted to keep Pakistan within India and wished to avoid the splintering away of Muslim groups. But was it a good enough reason to suppress information about Muslim atrocities during ten centuries of bloody invasions and the massive destruction of Hindu temples ? On the contrary this has only created more terrorism. Denying and suppressing the history cannot keep the harmony. In its place, truth and reconciliation are necessary. Hiding the truth denies sympathy to the victim, civilization and culture. A nation unless, it is ready to face its own history - the Good and the Bad, the Courageous and the Cowardly - can never bloom into its full plenitude. Hidden aspects of its own history sooner or later will surface and bring with them the guilt, anger, regret, which are the necessary ingredients to wipe-off that particular black karma. In Germany, for instance, Germans have been reminded again and again about the atrocities committed by the Nazis during World War II, and that has brought a sense of guilt, which has acted as a deterrent to future atrocities

The Jews have constantly tried, since the Nazi genocide, to keep alive the remembrance of their six million martyrs. This has got nothing to do with vengeance. Do the Jews of today want to retaliate upon contemporary Germany? No. It is only a matter of making sure that history does not repeat its mistakes, as alas it is doing today in India : witness the persecution of Hindus in Kashmir, whose 250.000 Pandits have fled their 5000 year old homeland, or the oppression of Hindus in Bangladesh and Pakistan. To remember, is to be able to look at today with the wisdom of yesterday. No collective memory should be erased for appeasing a particular community. Hiding the facts and justifying past Muslim crimes has led to terrorism in the Indian sub-continent. Muslims were never held accountable. One of the first steps to curb violence is to make one aware of past mistakes. Guilt in the culprit and forgiveness in the victim can put an end to self-righteousness and the kind of terrorism we see today in Kashmir, in spite of India's peace overtures.


FRANCOIS GAUTIER