Thursday, October 8, 2009

Money Money Money

Could not resist highlighting this from P Sainath in today's Hindu:

Take for instance, the 42 MLAs re-contesting this time in Haryana’s polls. On average, their assets have increased by around Rs.48 million each since 2004. A nice 388 per cent leap. That is to say, each of them added Rs.800,000 a month (£10,000) to their wealth in their last term. Or over Rs.1,100 for every hour that they were MLAs (for five years). A healthy rate of growth. Maybe we need a constitutional amendment requiring every Indian to serve as MLA for one term at least. It could be the biggest poverty reduction programme ever undertaken.

Spot on.

The sinking pound in your pocket

Below is today's Business Standard piece about the UK's increasingly flat-earth view of the pound. The world sees London as a great place to live and do business in but the UK currency is an anachronism.

The British currency does give the government some leeway in spending and borrowing compared to Europe, but I think it won't be long now before the weight of EU makes it a club the Brits will have to get full-membership of. Nobody in Washington, Tokyo, Brussels or Beijing loses any sleep over the pound.

The wider point seems obvious: the old powers have lost their way and need new institutions to keep up with the growing muscle of aspirants on the block. In a way Japan was the country that blazed a trail but really this is about designing the world for the new global power centres.

What this means for British electors is that David Cameron, should he be elected PM, will be forced into some face-saving manoeuvres later this year. He will undoubtedly opt to stay in Europe and fight for a bigger say in the Union. He will have allies in Eastern Europe. In this fight for State rights over the Centre, the UK will have to accept that the sun has finally set on Britain.

The pound without a G-string
The time may have come for Britain to adopt the euro

Nearly eight decades after the pound went off the Gold Standard, has the time come for Britain to consider whether it needs the pound at all? Britain’s euro-sceptics have congratulated themselves ever since they rejected then Prime Minister Tony Blair’s abortive attempt to get the pound replaced by the euro, a move that the then chancellor of the exchequer and present Prime Minister, Gordon Brown, had opposed. Indeed, Britain’s euro-sceptics may feel vindicated today as they watch Ireland go into a spin over the decline in its competitiveness vis-à-vis the US because of a strengthening euro (which Dublin had accepted as its currency, replacing the Irish pound). But how long will Britain hold out in the name of its financial district, the City, and because of its desire to remain a global financial centre? Last week’s Irish vote in favour of the Lisbon Treaty, affirming the country’s support for a European Constitution by another name, brings Ireland closer to the European Union at a popular level, even though Britain has also signed onto the Lisbon Treaty. The Irish have demonstrated less discomfort in accepting their European status. Britain’s island mentality may not fit very well with the European integration process, but the City will have to take note of the US’ kite-flying exercise in Istanbul, on a likely four-currency group—yet another ‘G’ to string China along!

An unidentified US participant at the G-7 finance ministers’ meeting in Istanbul has been reported as saying that the US could consider forming a smaller group within the G-20 to take forward the work of the increasingly anachronistic G-7. The G-7 was the ‘management committee of the global economy’ in the old days of the North-South divide. With the eclipse of the G-7 by the G-20, even the US has recognised that it needs a smaller ‘executive committee’ of the ‘management committee’. Who would the US want in such a core group of the world’s key economies? It seems to regard Europe, Japan and China as natural claimants to membership. Hence the suggestion that a G-4 be formed with the managers of the US dollar, the euro, the yen and the yuan working together to ensure stable conditions in global currency markets. This is undoubtedly a concession to China, which has aggressively pushed for a larger global role for the yuan. The US needs China to play ball to come out of the global imbalances trap and is, therefore, willing to co-opt it.

Where does this leave Britain and the pound? A bit lost, and nervous, perhaps. British spokespersons have rubbished the idea of a G-4 and the US has officially denied any such move. But the writing on the wall for the pound is clear. Go along with the euro, like the Irish and the rest, or join the likes of the ‘has-been’ rouble and the ‘wannabe’ rupee! The idea that the dollar, the euro, the yen and the yuan belong to a special club to which the pound will not be invited must be galling. But this moment was coming, as the once pivotal pound lost its sterling edge three-quarters of a century ago.

Friday, October 2, 2009

The pen is mightier than Gandhi's legacy but not his ideas

A piece that is headed for the Guardian but you read it here first

The rebadging of the ascetic apostle of peace, Mohandas K Gandhi, as a salesman for haute couture fountain pen, costing more than £15,000, in India is a triumph of celebrity over his legacy but not over his ideas.

Gandhi, who spurned both luxury and foreign made goods during his lifetime, was not averse to wealth. Although he shunned ostentatious displays of riches, his campaign to rid India of British rule was backed by both industrialists and the poor masses. It took a lot of Indian millionaires to keep Gandhi in poverty was a quip that resonated because it was true.

However there is little that links the Indian independence movement to the sale of expensive writing instruments. This has not stopped Germany’s Montblanc which has begun selling commemorative fountain pens bearing the Indian leader’s signature inlaid with a saffron-colored opal. The price is £15,500.

Each pen comes with an 8-metre golden thread designed to invoke the cotton Gandhi spun and wove as part of his drive to promote Indian cottage industry. To drive home the penmaker’s marketing message, only 241 pens will ever be made – one for every mile that Gandhi walked during his 1930 "salt march", a protest that called for the abolition of British taxes levied on the making of salt.

By boiling seawater in western India, Gandhi said he was “shaking the foundations of the British Empire”. What he did not think he was doing was the laying the foundation for a marketing campaign for such Gilded Age accoutrements as a rhodium-plated, jewel encrusted fountain pen.

Montblanc must have been aware of the potential blowback by appropriating Gandhi’s image – especially today on the 140th anniversary of his birth, which is a national holiday in India.

To blunt the accurate charges that it was profiting from Indian leader’s name, the company handed over a cheque for £91,000 to Gandhi's great grandson, Tushar Gandhi, for a charity he runs to improve child nutrition and education. The great man’s younger relation, who has previously blasted auction houses for selling Gandhi’s items, coyly admitted the Indian leader “would not have used such an expensive pen." Without irony Montblanc said it was considering a more “accessible” range of Gandhi pens too. Montblanc rollerballs retail at £2,000.

What this sorry tale tells us about is the power of personality in modern-day India. In short Gandhi sells. Although he is still referred to as India’s Bapu or father, the country Gandhi fathered is far from what he idealised.

Gandhi believed in abstinence over gluttony, rural simplicity over urban complexity and economic self-sufficiency over free trade. All are notable in modern India today only for their absence.

Gandhi's India, or at least his influence on economics, has all but disappeared in the past decade. Until the country opened up to the world in the nineties, its leaders backed Gandhi-ite ideas and championed equality and social stability over wealth creation. After 1991, that all changed. Notions of speed and efficiency were stamped on to a civilisation that traditionally took a slower, more relaxed view of life. The message was similar to that of China during the 90s, in the phrase attributed to Deng Xiaoping: "To get rich is glorious."

This sentiment appears dwarfed by India’s teeming millions of poor people. The awful reality is despite India’s rise, the rate of malnutrition in children under five is a shamefully high 45%. The talk of making poverty history sounds hollow in India, a land which is home to a third of the world's poor and where some 300 million people live on less than $1 a day.

Yet another world is growing up, fuelled by the immense wealth that is being amassed by India's new monied classes. Their appetite for goods has seen a new money culture - how to make it and how to spend it. India's masses were, under the more equal state-run economy, denied shopping choices. The country is today undergoing a consumer boom. For some, this is proof enough that, in opening up, India has gained from globalisation - allowing Dior, Bulgari, Rolls-Royce and Montblanc into the country. Consumption in this India is nothing if not conspicuous.

It is not therefore surprising to see that the ruthless exploitation of the Mahatma (great soul) is not limited to penmakers. When Apple urged people to “Think Different”, it used an iconic image of the loinclothed Indian leader. Even Google, which proclaims “Don’t’ be Evil”, has today plastered Gandhi’s image on its search engine.

That Gandhi could become a face for consumer goods and services is a triumph for an economic model he railed against. In accepting this defeat, we should not lose Gandhi’s real message to the world. This was his attachment to his conscience. He thirsted for righteousness in defiance of gods and men. His strategy for non-violence change revolutionised the way we protest today – through non co-operation, peaceful mass dissent and the quiet subversion of the economy.

Because he practised what he preached, he could rally the masses behind him both for the liberation of the country and their “souls”. As a shrewd political operator Gandhi would have been pleased that the modern world has venerated his disciples such as Mandela and Martin Luther King. He was no ideologue, as Mandela pointed out, he even conceded the armed struggle was necessary when the choice was between “cowardice and violence”.

Undoubtedly Gandhi’s image will, like other titans of the twentieth century, become used to sell ever more improbable items. It is in the nature of the modern age to co-opt greatness to peddle the mundane for exorbitant prices. But Gandhi’s advice to be “the change you want to see in the world” is the moral slogan of everyone who seeks to alter the globe for the better – not least for President Obama who has publicly acknowledged his debt to the Mahatma. Find yourself facing a £15,000 luxury pen bearing Gandhi’s signature and the answer is simple: don’t ban his face. Just don’t buy the pen or into the culture that allows it to be sold.