For those of you who are hearing of this gentleman for the first time, he was the 19th century scholar who postulated (the Malthusian Theory), that nature will keep producing population growth, until it creates a resource crunch, which will then create a series of natural calamities, decimating the population and setting off a new cycle.
Intuitively, he found a lot of adherents, because in the old, pre-industrial, deflationary economy, this was actually true; till man learnt ‘systematic innovation’ and started to create new professions and economics became a tool in his hands to achieve progress.
After 1850, the world learnt about inflation, monetary policy and the Industrial Revolution, which created the modern era. Thereafter, the ‘natural limits’ to any constraint started to shift outwards, until 150 years later, we have started to believe that even a desperately poor country like India has a hope of beating the Malthusian Theory.
After Japan, it became the done thing to argue that human ingenuity would be able to beat all known (resource) constraints. You could have a tiny island nation with almost no natural resources, and the dubious distinction of having a quarter of all known natural disasters, which could grow to be the most productive nation in the world, by all known measures of savings and wealth accumulation.
As always, we Indians learn the wrong lessons. We extrapolated this to tell ourselves that our huge population would never hit a resource crunch, and that our own ingenuity would always delay the onset of Armageddon.
We forgot that every time man beat the Malthusian clock, then it was because he had a lot of time to see the threat and react to it.
This time, global warming will set off a series of events that might not give us enough time to react. If the current El Nino effect turns out to be a regular affair, how many years of 60 per cent monsoon deficits can we survive?
The current monsoon deficit may well turn out to be the most comprehensive, countrywide drought that we have seen in the last 100 years. We have been following coal-based energy usage, refusing to give up our right to pollute, with the “dog in the manger” attitude that it was the West that had done the most damage till now. But the worst affected will be us; the frail, weak uptick that we have seen these last 10 years, will be over-shadowed by what follows.
If we have three monsoon failures in a row, do we have the desalination industry that will produce enough clean, potable water to quench an entire nation’s thirst? How quickly do we have communication systems to create a culture of rain harvesting, water conservation/recycling etc.? No doubt, Israel has beaten all limitations to agricultural productivity, but how quickly can we duplicate those achievements?
In the short run, we will need to quickly create a market for water. There is no way you can tell a population that something has suddenly become precious, without putting a price to it.
The reason this will not happen is this: Mamata Banerjee/The Left/The BJP will politicise the issue. Just as any concessions given to the Kyoto negotiations is seen as a sign of weakness. I am very sure that no national consensus on water will be built, until it is too late.
This time, the consequence will not be economic, but humanitarian. Geopolitical think-tanks have postulated that India will be one of the worst-affected victims of global warming, with an estimated 100 million people dying.
If 2009 is to water, what 1991 was to forex, then we have the same man-in-charge. The PM hopefully has the same understanding of this problem that he had of the forex crunch. Certainly, he has the mandate to move swiftly on this issue. He just needs to tick off the following policy prescriptions:
* Get off your high horse on the Kyoto negotiations. It makes no sense to defend our right to pollute just because the West had done so;
* The country that gets off the ground first, on ‘alternate energy’, will see technological leadership in one of the most important pillars of economic progress in the current century — clean energy. The solar mission, if it is serious, is a step in the right direction. It needs to be followed up with the development of a quasi-fiscal investment market that subsidises the excess capital cost of solar energy, leaving enough space for cost-led innovation;
* Then focus on the clean energy applications. The first would be a full commodity market in water: just make water enormously profitable to everyone;
* Create a panel of IDFC-like nodal investment institutions, whose bonds have 200 per cent weighted tax-free deduction, i.e. for every Rs 100 subscribed to the bonds, you get Rs 200 as deduction (far better than raising the taxable limit). That provides a 70 per cent subsidy to the capital cost of solar power, which the institution channelizes as debt to the sector. Set high debt norms with long paybacks for eligible projects.
* Now let a thousand flowers bloom. Include the desalination industry in this panel of clean energy users. Create a pseudo-market in “water paper”, where credits are given to those who recycle industrial (waste) water, converting it to agricultural-grade clean water. This should create millions of recycling units, mostly based on solar applications, a variant of the solar water heating systems that have been so successful in rural areas;
* Promote the same ‘water paper’ to create a micro-irrigation industry, through which farmers can buy entitlement to water through the adoption of micro-irrigation techniques. Target subsidies through a small set of producers, where the leakages would be less;
* The first step is to create a sense of crisis, before a real one is created (I hope I have not spoken too late). The current monsoon may be typical of many more to come, and we will need a typical Dhirubhai Ambani overkill: create a giant capacity, 100 times the water needs of Delhi, then get to work at making it dependent on clean energy, maybe solar.
The problem with a product market for water is that the (commodity) prices will be very volatile, with prices collapsing during a good monsoon. So it has to be an investment-led market, not a product-market, i.e. the capital cost would be contributed through a market instrument, similar to the timeshare industry, or the one-time premium insurance products. If all sides of the industry are left open to market pricing, then there would be enough space for innovation to create a spectacular winner. A company that either reduces the cost of the project, or which can reduce the cost of capital, or which can extract other operating efficiencies, will find itself at the top of the industry.
“The cost of communication will go to zero”, said Ambani to a new recruit in 1989, when asked about the next big thing for the ‘90s. For the new millennium, Reliance should have been working at taking the cost of energy to zero. Certainly, if it can take the cost of water to zero, it would have made every Indian its customer: another Dhirubhai dream.
There is more greatness for anyone interested. A company that sits at the heart of all Indian energy usage is bound to be the next Reliance (if it isn’t Reliance itself). 80 per cent of the energy used in India’s villages, goes into water management. Think of the economic potential that will get unlocked by someone who takes that out.
Monday, September 28, 2009
Thursday, September 17, 2009
10 Ways To Get Rich By Warren Buffet
With an estimated fortune of $62 billion, Warren Buffett is the richest man in the entire world. In 1962, when he began buying stock in Berkshire Hathaway, a share cost $7.50. Today, Warren Buffett, 78, is Berkshire's chairman and CEO, and one share of the company's class A stock worth close to $119,000. He credits his astonishing success to several key strategies, which he has shared with writer Alice Schroeder. She spend hundreds of hours interviewing the Sage of Omaha for the new authorized biography The Snowball. Here are some of Warren Buffett's money-making secrets -- and how they could work for you.
1. Reinvest Your Profits: When you first make money, you may be tempted to spend it. Don't. Instead, reinvest the profits. Warren Buffett learned this early on. In high school, he and a pal bought a pinball machine to pun in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Warren Buffett used the proceeds to buy stocks and to start another small business. By age 26, he'd amassed $174,000 -- or $1.4 million in today's money. Even a small sum can turn into great wealth.
2. Be Willing To Be Different: Don't base your decisions upon what everyone is saying or doing. When Warren Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall Street, and he refused to tell his parents where he was putting their money. People predicted that he'd fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Warren Buffett, the average is just that -- what everybody else is doing. to be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world's.
3. Never Suck Your Thumb: Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Warren Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking "thumb sucking." When people offer him a business or an investment, he says, "I won't talk unless they bring me a price." He gives them an answer on the spot.
4. Spell Out The Deal Before You Start: Your bargaining leverage is always greatest before you begin a job -- that's when you have something to offer that the other party wants. Warren Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Warren Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance -- even with your friends and relatives.
5. Watch Small Expenses: Warren Buffett invests in businesses run by managers who obsess over the tiniest costs. He one acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only on the side of his office building that faced the road. Exercising vigilance over every expense can make your profits -- and your paycheck -- go much further.
6. Limit What You Borrow: Living on credit cards and loans won't make you rich. Warren Buffett has never borrowed a significant amount -- not to invest, not for a mortgage. He has gotten many heart-rendering letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you're debt-free, work on saving some money that you can use to invest.
7. Be Persistent: With tenacity and ingenuity, you can win against a more established competitor. Warren Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Warren Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.
8. Know When To Quit: Once, when Warren Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick -- he had squandered nearly a week's earnings. Warren Buffett never repeated that mistake. Know when to walk away from a loss, and don't let anxiety fool you into trying again.
9. Assess The Risk: In 1995, the employer of Warren Buffett's son, Howie, was accused by the FBI of price-fixing. Warren Buffett advised Howie to imagine the worst-and-bast-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself "and then what?" can help you see all of the possible consequences when you're struggling to make a decision -- and can guide you to the smartest choice.
10. Know What Success Really Means: Despite his wealth, Warren Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He's adamant about not funding monuments to himself -- no Warren Buffett buildings or halls. "I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life."
1. Reinvest Your Profits: When you first make money, you may be tempted to spend it. Don't. Instead, reinvest the profits. Warren Buffett learned this early on. In high school, he and a pal bought a pinball machine to pun in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Warren Buffett used the proceeds to buy stocks and to start another small business. By age 26, he'd amassed $174,000 -- or $1.4 million in today's money. Even a small sum can turn into great wealth.
2. Be Willing To Be Different: Don't base your decisions upon what everyone is saying or doing. When Warren Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall Street, and he refused to tell his parents where he was putting their money. People predicted that he'd fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Warren Buffett, the average is just that -- what everybody else is doing. to be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world's.
3. Never Suck Your Thumb: Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Warren Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking "thumb sucking." When people offer him a business or an investment, he says, "I won't talk unless they bring me a price." He gives them an answer on the spot.
4. Spell Out The Deal Before You Start: Your bargaining leverage is always greatest before you begin a job -- that's when you have something to offer that the other party wants. Warren Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Warren Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance -- even with your friends and relatives.
5. Watch Small Expenses: Warren Buffett invests in businesses run by managers who obsess over the tiniest costs. He one acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only on the side of his office building that faced the road. Exercising vigilance over every expense can make your profits -- and your paycheck -- go much further.
6. Limit What You Borrow: Living on credit cards and loans won't make you rich. Warren Buffett has never borrowed a significant amount -- not to invest, not for a mortgage. He has gotten many heart-rendering letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you're debt-free, work on saving some money that you can use to invest.
7. Be Persistent: With tenacity and ingenuity, you can win against a more established competitor. Warren Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Warren Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.
8. Know When To Quit: Once, when Warren Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick -- he had squandered nearly a week's earnings. Warren Buffett never repeated that mistake. Know when to walk away from a loss, and don't let anxiety fool you into trying again.
9. Assess The Risk: In 1995, the employer of Warren Buffett's son, Howie, was accused by the FBI of price-fixing. Warren Buffett advised Howie to imagine the worst-and-bast-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself "and then what?" can help you see all of the possible consequences when you're struggling to make a decision -- and can guide you to the smartest choice.
10. Know What Success Really Means: Despite his wealth, Warren Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He's adamant about not funding monuments to himself -- no Warren Buffett buildings or halls. "I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life."
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.
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.
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
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.
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.
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