Saturday, April 25, 2009

The Indian elections and the BBC news

Why is the BBC's Damien Grammaticas doing a piece about Chiranjeevi in Andhra Pradesh and using Bangalore and a village Panakanahalli from a different state Karnataka to illustrate his political message?

No one would illustrate Arnold Schwarznegger's run for Gov of California with examples from Seattle.

The Indian elections are a series of state polls. Why is the BBC's reporting so confused?

Friday, April 24, 2009

Where is India's Green Party?

A great piece by Sunita Narain who runs Delhi's Centre of Science & the Environment. I reproduce it in full below.

Elections 2009: Where is the green party?
(By Sunita Narain)
Whenever election to India’s Lok Sabha approaches, two questions tend to emerge: When will India get a green party? Are environmental issues important in our elections? The answers are interlinked; they relate to the nature of the Indian electoral system as well as the nature of India’s environmental concerns.

Our parliamentary democracy borrows its structure from the Westminster system of first-past-the-post, which makes it difficult for any pan-India issue-based party to succeed. For instance, it is no surprise there exists a Green Party in Germany that even comes to power within a coalition government, but cannot in UK. Some years ago, in elections to the European parliament, the UK Green Party got a substantial percentage of votes. In other words, there is a green concern in the UK, but because of UK’s electoral system, the concern cannot translate into a presence in Parliament.

Of course, it is also true, in Europe, the green agenda has been incorporated as a set of mainstream issues by all parties - Left, Right or centre. All parties, for instance, do accept the need to protect the environment, to mitigate emissions, necessary to tackle climate change and even agree to invest in low-carbon technologies such as renewables and hybrid vehicles. The challenge these governments face, once voted to power, is whether they can bite the bullet and make the structural alterations in their economy that climate change imperatives demand. This has been, and remains, Europe’s green Waterloo.

Consider, in this light, the conservative government of Germany’s Angela Merkel. The Christian Democratic Union took on the Green Party agenda so totally that it almost marginalized the latter. But now, when the government has to take some tough decisions about acting on climate change, on the one hand, and move fast on the economy and job-losses, its true anything-but-green colours are showing. The German government which once stood for matters green is now backtracking - it’s seeking emissions allowance for big industry, giving the automobile industry benefits in terms of subsidies to car owners to buy new vehicles, even lobbying hard for time for this industry to tighten fuel efficiency standards.

It is the same in the case of Australia, where, interestingly, the major political party, the Australian Labor Party, came to power saying it was against the environmentally-hostile policies of its opponent (the John Howard government). But now the Labor Party is in power, its actions on environment and climate change are even more pathetic than its predecessor’s. It is tough to walk the talk, when it comes to reinventing the economy for real change. It will be no surprise (it will definitely be disappointing) if Barack Obama finds he, too, has little room to make the changes he has so persuasively promised us all.

For us in India, the issue is similar, yet different. Green issues, including climate change, have made it to all major party manifestos. The Congress, the BJP and the CPI (M) all promise to protect the environment, check river pollution and invest in renewable energy systems for a low-carbon economy. There are even nuances and differences in approach. The BJP, for instance, says it will also protect the tiger and other wild animals through a permanent task force, while the CPI (M) says it will review the Environmental Impact Assessment draft notification, which is seen as industry-friendly. All pure green issues have been listed and there is a minimum common agreement on this matter.

Here, I have questions: are these so-called pure green issues really the core environmental issues that need to be addressed? Can these be addressed without tackling the key issues of growth and economic change? Such questions directly lead to the nature of India’s environmental concern. The fact is in our country, the bulk of the people depend on the environment - the land, the water, the forests - for their survival. The core environmental issue is to increase the productivity of these natural resources in a sustainable manner and to ensure the benefits of the increased productivity go to local people, so building a local economy and livelihood. It is about investing in the resources of the poor. It is about the political framework - the rough-and-tumble of governance - in which this investment will benefit people and build green futures.

We need to care about the pollution of our rivers because people depend on them for drinking water and for survival. We need to revise our strategy for development because these projects take away land, or forests, critical for livelihood security. We need to invest in decentralized water or energy systems so that we can minimize the damage to the local environment and provide access to resources to all, not some.

But this is where political party manifestos get frayed on the green-edge. It is easy to talk about green issues - particularly those the middle-class of India understands as green. But it is difficult to join the dots - to show how the country will green its economy itself, so that it can provide growth for all, without compromising on the present and the future generations.

Interestingly, but also predictably, no manifesto discusses how parties intend to deepen democracy in India - move it from the representative nature, which exists even in the Panchayati Raj system, to a participatory system. The green agenda demands that local communities must have rights over their resources and that participatory democracy - through the strengthening of gram sabhas, for instance - must work. The green agenda is a political agenda, not a technocratic laundry list.

This is why it is easy, here, to look like a green party but not promise a ‘green revolution’.

Thursday, April 23, 2009

Read My Lips... No New Taxes

Gordon Brown's manifesto pledge not to raise taxes disappears in the bucketload of red ink in today's budget. British budgets are not generally events of global significance. But this one does signal something wider.

One tax rises and spending cuts are on everyone's agenda in the west. Two politicians will go back to their bases: the centre left will tax the rich and the right will cut back on services.

Everyone in the west will borrow more and try to reprime their economies so that the consumers spend, manufacturing revives and exports pick up. But will it do so before debt burdens overwhelm national economies? The UK will borrow 700bn pounds over five years.

One thing that appears to be on the horizon will be return of labour. I wonder about the workers' share of national income. You need it to be high to stimulate spending but not so much that it'll squeeze the bottom line. How politicians in the west react will depend where the sympathies of the middle class, which plays the central role in developed society, lie.

Tuesday, April 21, 2009

I'm alright Jacques....

Martin Jacques has championed China longer than most Englishmen. His foresight is sharper than most.He predicted the rise of Thatcherism. He moved out of Britain after sensing the vacuum at the heart of New Labour. He saw Asia as the future. Martin is also a sensitive soul and has been quick to point out the racism at the heart of Sino societies, a canker worm that might devour the whole barrel of red, red apples.

But he has for the last few years, ever since I saw him in Beijing in 2005, been a born again Marxist Leninist. The left lost in the Soviet Union its stick to poke the west's eyes with. Now an assortment of awkward progressives have Beijing. For these red-starry eyed uber-realists only the mandarins of the Chinese Communist Party have mastered a truly intrusive and effective state capitalism that can outrun the west.

Martin's latest piece in the Guardian is heavily-influenced by such thinking. In Martin's new world the dollar will disappear, replaced by the yuan. The G20 will become a forum of unequals - dominated by Beijing. No architect - designing cars, buildings or global finance - will move without reference to China. The Chinese people have stood up and are reading tomes extolling their coming greatness.

Yawn! China's coming out party is over and people need to sober up. China is a developing country whose GDP per capita is $3,000. It's population is rural despite decades of forced industralisation. In the mainland return on capital is pitiful. The CCP spent 15 years squeezing native talent to the extent that there is no real functioning stock market and a dearth of mainland businessmen. The political-criminal nexus is out of control.

China is a remarkable country and is full of great people. But it's export model of development is dead. And as Harvard's Marty Feldstein in today's FT makes it clear inflationary risks are building up in the US, and hence global, system. How the Chinese leadership deals with a very different world is more important than believing that the Middle Kingdom is about to ascend to the superpowerdom just yet.

Saturday, April 18, 2009

A good head and a good heart in South Africa

"A good head and a good heart are always a formidable combination.” - Nelson Mandela

The African National Congress is almost certain to be the winner of the South African election. This is viewed in the west as a loss for democracy. It's not the case. True there is widening inequality, corruption and a battle between institutions of the state. But that's normal for a developing country.

Like the first few years of independence in India, South Africa is dominated by a liberation movement. In this case it's the ANC. In India's it was the Indian National Congress. Mandela led his country to freedom. Nehru did the same for India. The adoration for both men kept alive the spirit of their young nations. Like the INC, the ANC is fragmenting. There will be regionalism. There will emerge perhaps linguistic parties or tribal politics. It is normal.

True African independence and liberation movements generally fail on three counts: leadership without dictatorship, building democracy and running sound economies. Whatever the failures of Mandela, Mbeki and Zuma I don't think there's been a mission critical mistake.

Western commentators will remain sceptical. My friend Ram Guha, the Indian historian, collects such sentiments about India's prospects when it was born more than 60 years ago. Here's a few choice ones:

'Indians will (not may) - Indians will soon vote in their first and surely last general elections' - Neville Maxwell, India correspondent the Times from the 1960s.

'An army of German janissaries would have to be imported to secure the armed ascendancy of the Hindus.' - Winston Churchill.

Actually Britain's chief of army staff in India at the time of independence thought the place will disintegrate in a few years into 20 nations.

Proof that former colonialists never understood their subjects and never will. And also hope that people are wrong today too about South Africa's failure to "secure democracy".

Friday, April 17, 2009

The Saching of Western Civilisation

These graphics are from the backroom boys in the BRIC lab of Goldman Sachs and were used today by Hamish McRae in the Independent to illustrate his prediction that "this recession will hasten the shift to a new world order". Goldman Sachs is credited with predicting the end of western hegemony, snappily wrapping up the new power bloc as BRIC.

True the data does point to the rise of Brazil, Russia, India and China. Beijing will be especially happy that Wall St's finest have pointed out that the Chinese consumer will contribute more to global consumption (and hence world economic recovery) than the American one for the next two years.

Much as I respect Hamish, having worked in the same office as him a decade ago, I think the jury is still out on this one. These countries will all have to face up to some seriously big changes.

The most obvious is the end of the low-inflationary globe. The printing of money by the bucket load is the most obvious pointer to this. Commodity prices such as oil and foodstuffs are all rising. New technological developments in the west, especially around climate change, will not be allowed to be diffused by shifting production to low cost centres. Last the entrenchment of social programmes and the depression-like features of the downturn may see labour rights restored (as perhaps a quid pro quo for public spending cuts) in many western economies. An more inflationary environment looms.

How the new kids on the block, BRIC and others, fare in this new price-rising world will determine their fate.

Further Chinese Study

In China, it's long been said that officials create statistics to create careers. So in today's FT piece on the Middle Kingdom's efforts to "prop up growth" one line caught my eye.

(The spokesman for the National Bureau of Stats) had no explanation for the discrepancy between falling power consumption and rising industrial production but insisted that both figures were accurate and the issue required “further study”.

Time to get back to the books then...

PS Am indebted to The Gold Standard who pulled together this great post which makes the same point and backs it up with data. Cheers.

"Based on the official G.D.P. numbers, China’s growth has slowed in the worldwide recession, but remains very impressive. The electricity data paints a different picture.

Following are the year-over-year increases in its gross domestic product and electricity consumption for first quarter of each year.

2002: Electricity up 9.4%, G.D.P. up 8%
2003: Electricity up 14.7%, G.D.P. up 10.3%
2004: Electricity up 16.7%, G.D.P. up 9.8%
2005: Electricity up 14.3%, G.D.P. up 9.9%
2006: Electricity up 13.4%, G.D.P. up 10.4%
2007: Electricity up 12.4%, G.D.P. up 11.7%
2008: Electricity up 16%, G.D.P. up 10.6%"

Nuff said.

Tuesday, April 14, 2009

India's Permanent Problem

Peter Preston has had a long love affair with Pakistan, which began in the early 1970s when as a young reporter he covered the break up of the country and its devastating loss against India. Since then things have slowly slid downhill in Pakistan, bolstered briefly by US backing against the Soviets and Zia's uber-Islamism in the 80s.

So the former editor's cri de coeur in today's Guardian for India To Save Pakistan From Itself should not surprise. What does is that PP suggests India flies in to rescue Islamabad from the Frankenstein monsters it created.

It is disappointing to see PP reach for hoary old analysis. He says India's political chiefs on the hustings trail have shown feet of clay and thoughts stuck in a timewarp. To quote the piece

Where - in so much of the hustings talk - is there recognition of the peril that Pakistan's internal implosion might bring? And where is the resolve to stretch out a hand of understanding or positive aid? India's economic advance is new: India's political chieftains, though, are old, and set in their ways. They knew who to blame after Mumbai. They see the Taliban beginning to target Kashmir. They do not trust President Zardari or his army or his spooks. They welcome the announcement by Washington's special envoy, Richard Holbrooke, that India "is the absolutely critical leader in the region" with an enhanced role in Afghanistan, but they leave subcontinental relations frozen as usual. They do not realise they are not absolutely critical in Kabul, but in Islamabad itself.

This I am afraid is out of date by a decade or two. The Indian elections are not dominated by Pakistan because the two countries by mutual consent don't get involved in each others internal machinations. An endorsement by Delhi of a Pakistani politician ends careers in Islamabad. Former president Musharraf's bluster and swagger simply irritated the Delhi elite in March.

India and Pakistan have had hands outstretched for five years, ever since the breakthrough 2004 Islamabad summit. The prime minister of India, a respected economist born in what is now Pakistan, blamed official agencies in Pakistan after Mumbai because of the evidence he had seen. Manmohan Singh is not given to idle conspiracies. The gunfights on the Line of Control have got tougher and harder in recent months. Just before I left eight soldiers from one of India's paramilitary units were killed in a shootout in Jammu. This is a step change for Indian security forces. Hence the paranoia. And who does trust Zardari?

The fact is in the region India and Pakistan remain permanent neighbours. India's leaders have for years been warning anyone who cared to listen about the rise of militant armed jehadism. Delhi knows all about blowback - the LTTE and Sikh Fundamentalism were aided by Delhi until they bite the hand that fed them. Pakistan's army has yet to face up to what they have done in the name of saving their country. Until Rawalpindi Corps stops vetoing normal relations with India (because officers believe in bleeding India until Kashmir becomes theirs), there will be no meaningful talks, no substantive outcomes and no enduring peace.

Thursday, April 9, 2009

Spare a dollar, buddy?

Interesting piece by Gillian Tett in the FT. When hedge fund managers talk of moving out of the American money and into gold and the Chinese call for a new neutral reserve currency rather than the US note, there’s no doubt the dollar is heading for choppy waters.

The question is whether it is just a bit of turbulence or a big, epoch-making moment. The US is heading for a seriously big deficit and will stoke inflation to ease the debt burden. This should seen the greenback being dumped. Unless the US cons the world into believing its Ponzi scheme, sorry economy, delivers real assets to back all these new dollars.

Hence the call for a gold standard. As Ms Tett points out that fallen god of finance, Al Greenspan, thought this way in the 1960s.

But the US will not give up the dollar's role so easily. Because the dollar is the world's reserve currency, the US government can outspend any rival. The power to issue money is intimately related to the power of a country. No country, least of all America, will give up power that easily.