Asian Musings

The Great Fall of China?

2011-02-13T05:11:00.002+05:30

"China today has the characteristics of a truly great bubble. The value of the housing stock is set to exceed 350 per cent of GDP this year, the same level as Japan at the height of its real estate bubble. Construction accounts for around one-quarter of economic activity in China, which by coincidence is the same level that Ireland attained before its dramatic implosion."

With the world being remade around us, once unshakeable facts have to be re-assessed. I found this article's Ponzi finance view of China hard to fault. You do have to have much of a grasp of economics to wonder how long all those gleaming skyscrapers can lay empty for? Not saying it's curtains for the regime but economics makes politics. What happens when the prices of skyscrapers and those ostentatious homes fall back to earth in the Middle Kingdom...

FINANCIAL TIMES
Entranced by China’s bubbling economy
By Edward Chancellor
Published: February 6 2011 10:31 | Last updated: February 6 2011 10:31

George Orwell once accused fellow socialists of playing with fire without knowing fire was hot. The same could be said of investors who are repeatedly drawn towards speculative bubbles without understanding the risks.

Even the experience of several great bubbles over the last quarter of a century – from Japan’s bubble economy of the late 1980s through to the global credit spree of the past decade – hasn’t made them any wiser. Today, investors are entranced with China’s apparently glorious prospects. Yet they are ignoring the dangers posed by China’s overheated property market.

Bubbles can be identified before they burst using simple valuation tools. But numbers alone don’t tell the whole story. Investors also need an intellectual framework to understand the dynamics of bubbles. A new book, Boombustology (Wiley) by Vikram Mansharamani provides an excellent overview of the leading work in this field.

Mr Mansharamani starts out with George Soros’s theory of reflexivity. According to Mr Soros, markets are determined by a “two-way feedback mechanism in which reality helps shape the participants’ thinking process and the participants’ thinking helps shape reality”. Chaos rules as errors of perception feed back into reality.

The financial instability hypothesis of the late Hyman Minsky complements Mr Soros’s reflexivity. Mr Minsky’s famous “Ponzi finance” theory describes a situation in which already inflated asset prices can only be sustained by further price appreciation and ever increasing leverage. When the flow of credit dries up, Ponzi finance structures collapse.

According to Mr Minsky, when Ponzi finance is widespread the economy is likely to develop into a “deviation-amplifying system”. All great bubbles have easy money and growing leverage. Mr Mansharamani turns to Friedrich Hayek and the Austrian economists to show how inappropriately low interest rates fuel credit growth and over-investment.

Behavioural psychology also helps explain why bubbles develop. Humans have a chronic tendency to overconfidence. We underestimate the probability of events that we haven’t recently experienced (what’s known as the “availability heuristic”). For instance, in Japan in the late 1980s and again in the US in the early 2000s, it was generally believed house prices could not fall because they had been on a continuously rising trend in earlier decades.

Mr Mansharamani surveys recent research into swarm behaviour in the insect world. While ants lay and follow trails of pheromone, the speculative crowd follows a trail of recently minted money. Politics provides yet another prism for identifying bubbles. Great speculative booms are often stimulated by governments, sometimes with the intent of lining the pockets of public officials. All bubbles are accompanied by fraud.

China today has the characteristics of a truly great bubble. The value of the housing stock is set to exceed 350 per cent of GDP this year, the same level as Japan at the height of its real estate bubble. Construction accounts for around one-quarter of economic activity in China, which by coincidence is the same level that Ireland attained before its dramatic implosion.

A reflexive process appears to be at work as the anticipation of future Chinese economic growth drives new construction, while new construction drives economic growth.

Ponzi finance proliferates in China. Wasteful infrastructure projects are funded with bank loans and land grants from local governments, which themselves depend on land sales for the bulk of their income. Chinese banks bypass credit restrictions by securitising loans to developers, while state-owned enterprises boost profits by dabbling in real estate. China’s financial system has become in Mr Minsky’s phrase a “deviation-amplifying system”. When land prices stop rising and real estate credit dries up, non-performing loans are likely to surge.

China’s asset price inflation has been driven by artificially low interest rates, which is contributing to a massive misallocation of capital into investment projects with palpably low returns. This bubble is the product of government policy. The construction boom was instigated to cushion the Chinese economy from shock waves of the global financial crisis.

Because Chinese property has risen continuously over the past decade, most people assume prices will rise indefinitely. Yet the newly constructed apartments in many Chinese cities are unaffordable to anyone but the rich elite, speculators have acquired millions of apartments that are currently sitting empty, while a glut of new supply is set to hit the market this year.

Beijing is trying to control the runaway housing boom with restrictions on housing speculation and tighter credit.

Mr Soros said speculative bubbles continue until the misperceptions of investors are so glaring they can no longer be ignored. In China, we may not be far from that point.

Edward Chancellor is a member of the asset allocation team at investment manager GMO

Wikileaks revealing insight into Chinese Leadership

2010-12-08T17:10:00.002+05:30

This was from yesterday's WSJ but it's an interesting peek into the worlds of Xi Linping and Li Keqiang - China's new generation of leaders.

Loved the bit about Chinese GDP figures being "man-made"...

BEIJING—Leaked U.S. diplomatic cables are shedding rare light on the personalities and opinions of Xi Jinping and Li Keqiang—the men tipped as China's next president and premier, respectively—while also revealing a surprising level of openness in their past dealings with the U.S. Embassy.

Some of the latest batch of cables published by the WikiLeaks website contain rare detailed accounts of separate meetings in 2007 between the two future Chinese leaders and Clark T. Randt Jr., then the U.S. ambassador in Beijing.

Although the cables are three years old, the level of detail in them could still embarrass Messrs. Xi and Li, and discourage other leaders from talking openly with U.S. officials, especially in the run-up to a once-a-decade Communist Party leadership change due in 2012.

Hu Jintao, China's president and party chief, is expected to retire along with seven other members of the party's nine-man Politburo Standing Committee—its top decision-making body—but precious little is known about the personal views of the people expected to replace them.

One cable reveals that Mr. Xi, now vice president, is a fan of Hollywood movies about World War II, including "Saving Private Ryan," but dislikes Chinese historical kung-fu dramas such as "Crouching Tiger, Hidden Dragon," and "Curse of the Golden Flower."

"Americans have a clear outlook on values and clearly demarcate between good and evil," Mr. Xi is quoted as saying. "In American movies, good usually prevails. … Some Chinese movie makers neglect values they should promote."

According to the cable, Mr. Xi also enjoyed "The Departed" and had a DVD copy of "Flags of Our Fathers," which he was hoping to watch soon.

On politics, Mr. Xi admits that people are unhappy with the working style of government and party officials, but says it shouldn't be surprising that among the party's 70 million members, "several thousand may be problem cases," according to the cable.

"For the present, people will not take to the streets to complain about officials' work styles," he is quoted as saying. "While there are many problem makers in the Party, the Party also counts among its members the elite of society."

He expresses strong support for private businessmen, as well as concerns about illegal financial activities among the rich, and the income disparity between the prosperous east and the relatively undeveloped western hinterland.

He also says that on a visit to the U.S. in 2006, he and other Chinese officials were worried about being served with legal papers in relation to cases brought by followers of the Falun Gong movement, which is banned in China.

Mr. Randt wrote the cable after having dinner with Mr. Xi at the ambassador's residence in Beijing when Mr. Xi was Communist Party chief in the eastern province of Zhejiang. Seven months later, Mr. Xi was promoted to the party's Standing Committee.

Mr. Xi's status as heir apparent was confirmed in October when he was appointed vice chairman of the Central Military Commission—a key military post seen as a stepping stone to the top party and government posts.

The night after meeting Mr. Xi, Ambassador Randt also had dinner at the residence with Li Keqiang, who was then Party chief in the northeastern province of Liaoning, but is now a vice premier and a member of the standing committee.

That cable quotes Mr. Li saying gross domestic product figures from China's local governments are "man-made" and therefore unreliable—a stunningly candid admission for the man tipped to take over the reins of the economy from Premier Wen Jiabao.

He expresses strong support for free trade and the rule of law, as well as concern about income disparities within Liaoning, and pride over a project that moved 1.2 million slum dwellers into government-subsidized housing, according to the cable.

"Although Liaoning residents are dissatisfied with education, health care and housing issues, it is corruption that makes them most angry," he is quoted as saying.

Mr. Li also admitted to sometimes relying on friends to gather information that he could not obtain for himself through official channels, and suggested that there is substantial internal debate about Chinese legislation.

"People don't see the behind-the-scenes reviews and feedback session that result in the original drafts of the bills being altered substantially before passage," he is quoted as saying.

The cable describes him as "engaging and well informed" with a "good sense of humor," but "coy about his hobbies and interests," although he admitted that he liked walking and built it into his schedule.

He also said he particularly enjoyed visiting Oklahoma on his last visit to the U.S. in 2001, according to the cable.

The two dinner meetings are certain to have been approved by the Party and both men will have chosen their words carefully, both to reflect the Party line and to be polite to their host.

But the details of their private conversations are still potentially embarrassing, as they reveal a far greater degree of openness than is usually conveyed by China's tightly controlled state media, which is often fiercely critical of the U.S.

Even if the cables don't precisely reflect the two Chinese leaders' personal opinions, they do shed light on how the U.S. government perceives them.

Another cable from Ambassador Randt in April 2008 quotes "embassy contacts" saying President Hu was "firmly in charge" of China's policies in Tibet following unrest there the previous month.

Despite reports of a possible split within the leadership over Tibet policy, no standing committee member had sufficient stature to challenge Mr. Hu, who served as party chief in Tibet in the late 1980s, that cable says.

Yet another cable from the embassy, dated July last year, describes the Standing Committee as being increasingly motivated by a desire to forge consensus and protect vested interests among its members and their families.

It quotes an unnamed contact saying there was "no reform wing" within a leadership that had carved up China's "economic pie," "creating an ossified system in which 'vested interests' drove decision-making and impeded reform."

Some policies, such as those on Taiwan and North Korea, had to be decided by the full 25-member Politburo, the cable said, quoting "embassy contacts with access to leadership circles."

China has declined to comment on specific cables, but said Tuesday it hoped the leaks would not affect ties with the U.S.

Washington has also declined to comment on the leaked cables' contents, while denouncing their release as a crime.

Red Pall over China

2010-08-20T18:15:00.002+05:30

Great piece from the FT on China's hidden inequality issue, a day after China's economy overtook Japan's.

China’s grey economy
August 19 2010
It is usually pleasant to find some extra money hidden under the mattress. So the claim that China has at least Rmb10,000bn ($1,472bn) in “grey” or undeclared income might be good news – more wealth for the government to tax and perhaps a bit more potential spending from Chinese consumers. Yet dismay should be the Politburo’s principal response to the findings of a recent study by the National Economic Research Institute, a non-governmental group.

The study, sponsored by Credit Suisse, is based on more than 4,000 anonymous interviews in 64 cities around the country. It provides a cross-check to the official quarterly income reports from the National Bureau of Statistics. When asked by the authorities, households seem routinely to understate their wealth, out of fear that the taxman will get the data. Incomes according to NERI are on average 90 per cent higher than the NBS version. The gap was 78 per cent three years ago.

What’s more, the wealthiest 10 per cent have a NERI average per-capita income of Rmb97,000, 65 times that of the poorest 10 per cent. That ratio was 55 times in the 2005 NERI study. The 2008 NBS calculation came up with 23, high enough to give China a Gini index ranking, a measure of wealth inequality, on a rough par with the US. The unofficial number puts China in South American territory.

Premier Wen Jiabao, for whom fairness and justice are “more glorious than the sun,” wants to help the most downtrodden urban workers. The upcoming 12th five-year economic plan is expected to go big on reforms of income distribution. The NERI study, supported by strong anecdotal evidence, suggests he is fighting a losing battle. Hidden stock gains, property deals and plain old hongbao – red envelopes stuffed with cash – are forcing China’s rich/poor divide wider by the day.

Mullah, Mosque, Military...

2010-03-18T11:53:00.001+05:30

Below is a text from Seminar. There's no link but it's a great outsider's view of Pakistan from one of its former insiders.

x

Pakistan’s existential threat

SHUJA NAWAZ

WHEN searching for the ‘elusive truth’, it is useful to not rely solely on the so-called experts but also seek out the poets and novelists. A brilliant new novel, The Wasted Vigil by Nadeem Aslam, a British author of Pakistani origin, more than the myriad expert accounts may help us better understand the conflict raging in our region.

The book, set in Afghanistan, has one of the main characters, a man named Marcus, talking about the country. He says, ‘The entire world it seemed had fought in this country, had made mistakes in this country, but mistakes have consequences and we don’t know whom to blame for those consequences. Afghanistan itself? Russia? The United States? Britain? Arabia? Pakistan?’ Another telling line from the book is: ‘Only the dead have seen the end of war.’ In the wake of the horrific Taliban killings of innocent civilians and attacks even on mosques, that quote brilliantly captures the mess that we face in Afghanistan and Pakistan today. Until the two countries themselves decide to sort out their affairs, no amount of external assistance will help do the job.

In Pakistan, it would be a disservice to look at this current conflict solely as an Afghanistan issue because Pakistan too faces the same wars within. There is a continuous battle between what the government of Pakistan wants, irrespective of its complexion, and what the people of Pakistan want. Our history clearly indicates that whenever we have experienced long periods of autocratic rule, particularly military rule, the result is a stunting of all democratic systems and institutions of civil society.

It is equally critical that we factor in the economic crisis affecting Pakistan today. In a highly urbanized society where the poorest strata spend up to two-thirds of their income on food, an inflation rate in the double digits constitutes a near insurmountable challenge for the government. In addition, the country is facing power, water, and even sugar shortages, as oligopolist cartels ensconced in government and in parliament maintain their hold on scarce resources at the expense of the common person.

Autocracy stunts democracy in Pakistan: unfortunately, any civilian government that inherits power from an autocratic regime in Pakistan too ends up acquiring all the trappings of autocracy that preceded it and is loath to part with them. That is exactly the situation in Pakistan today. General Pervez Musharraf had hijacked a parliamentary system and made it into a presidential system. The current regime essentially continued that system and only now is slowly being forced to shed those powers. But until that autocratic system is fully reversed, normal political development in Pakistan will remain a dream.

I am reminded of Yogi Berra’s famous aphorism that when you get to a fork in the road, take it! That is the Pakistani situation. We are forever at that fork and we are forever taking it, not knowing where we might end up. It is ironic that it was the Pakistan Army that helped stage a free and relatively fair election in 2008 and has now been elevated to the rank of most respected national institution in a poll done by the International Republican Institute. As the most organized and disciplined agency in the land, the army exerts enormous power in all spheres, especially on the Afghan war, the fight against internal militancy, Kashmir, and nuclear issues. That army is now under direct attack by the militant Tehreek-e-Taliban and its partners.

As for Afghanistan, it is now quite clear that the United States went in without a comprehensive plan for winning the war beyond the military ouster of the Taliban. This was evident in its shift of focus from Afghanistan to Iraq, a completely unnecessary war. There was no concerted effort at ensuring the socioeconomic rehabilitation of the country after decades of war, or even on forming a coalition with all the countries in the region, including India, China and Iran to help stabilize the situation.

Further, the US failed to pro-actively help Pakistan transform its own army and Frontier Corps into a counterinsurgency force by equipping and training it for that purpose. Having been in a kind of reactive mode since 2001, it is only recently that it realized that it did not even know what was happening to all the money it had given to Pakistan.

Another point worth remembering is that the insurgency inside Afghanistan, or the civil war as some call it, is in part fuelled by some internal issues. For instance, Afghanistan has so far not shown any willingness to address the grievances of the Pakhtoons against the excesses of the Northern Alliance in the wake of the US invasion. That is a deep hurt which apparently still affects thinking in the Pashtun belt of Afghanistan and Pakistan, enhancing support for the Taliban on both sides of the Durand Line.

It should by now be evident to all that the United States cannot win the war in Afghanistan without the full and willing participation and support of Pakistan, its army, and its general population, especially with the new civilian administration in place inside Pakistan. But equally, the US must remember that it cannot win by aligning itself to any single party or any single individual, as was evident in the misplaced reliance on General Musharraf after 2001. Simultaneously, we must keep in mind that neither capitulation to nor confrontation with US interests in Afghanistan, and especially in FATA, is the right approach. Rather, engagement and a joint effort to eliminate the causes of militancy inside both Afghanistan and Pakistan are far more likely to work.

Another point – and this comes from my own visit to FATA and NWFP – is that the Pakistan Army is seen as an alien force inside FATA. With the Frontier Corps having lost its efficacy over the years, both the army and the Frontier Corps appear ill-equipped and ill-trained for counterinsurgency warfare. What compounds their difficulty is that they are now operating against their own people.

We also need to admit that the traditional system of governance inside FATA, the Federally Administered Tribal Area that abuts Afghanistan, which involves the government’s political administrators and the largely compliant tribal mullahs, has failed. It has been displaced and supplanted by a different system under which new renegade leaders and religious leaders have assumed greater importance. We must recognize that the old system cannot be restored in its entirety, and if it is at all to be used, can only be as a finite and transitional mechanism.

Finally, no plan for FATA will work unless it involves the local people and they are given a responsible role in the implementation of the plan. Simultaneously, we have to ensure that all efforts are made to stem the leakage of funds or resources by the privileged few, and that there is equitable sharing of opportunities and finances. On my visit to North Waziristan I had the opportunity to speak with 23 tribal maliks in North Waziristan and it was amazing how clear-headed they were on their needs. Their needs are very basic and no different than the needs of people living in the United States or China or India or Pakistan: water, education, and primary health care. All they want is an equal opportunity to be able to order their lives.

On the military side, let me begin by quoting General David Petraeus, a key person engaged in evolving a new strategy for Afghanistan and Pakistan that might allow the United States to exit the area with honour. ‘You cannot shoot your way out of an insurgency. You have to recognize that the military-civil equation is 20 per cent military and 80 per cent civil and political.’ So whatever the focus of the US relationship with Pakistan, it must not allow the military-to-military relationship to overshadow the relationship with the civilian government on the one hand and with the people of Pakistan on the other. If it only concentrates on the government and loses the support of the general population of Pakistan, as it has over the last few years, then whatever the approach taken, it is doomed to failure.

In the absence of a national consensus on what Pakistan wants and what kind of society the people of Pakistan want to have, the only option before the government – once the Tehreek-e-Taliban (the homegrown version of the Taliban in Pakistan) came into being and started attacking the military and civilian administration in FATA as well as in the settled area of Swat, Dir and Chitral – was to send in the army. The policy continued even after the new government took over, even though the military had briefed the civilian government on what had happened in the past and asked them for direction about the future.

But in the absence of an overall civilian direction, the army was sent in almost as a default option, moving in the equivalent of six infantry divisions into FATA and Swat. But the Pakistan Army is a conventional force, whose posture has always been to be prepared for an eventual war with India, in case India – choosing its new strategy of ‘cold start’ – decides to shoot first and ask questions later. In having to move six infantry divisions from the strike force that faces India, the Pakistan Army suddenly felt vulnerable, a fact that must be recognized.

Further, the army did not have all the necessary tools for its operations. The Frontier Corps had over time deteriorated, no longer attracting the best officers from the Pakistan Army. And of course, all the soldiers are locally recruited. Thus, while they may be suitable for minor policing, when used in a war-like situation to fight people from their own tribal system and their own tribes, the result is ambivalence. Although efforts have been made to improve the Frontier Corps, poor training and morale affects performance. And in the face of a well-paid cadre of the Tehreek-e-Taliban Pakistan (TTP), possibly their emoluments too need to be enhanced.

Also, the locals impressed on the Frontier Corp soldiers that they were fighting on behalf of the infidels. Many of the officers in the army that I spoke to saw themselves as an alien force, not surprising given the demographics of the army. Though Pakistan has an army that represents all the provinces, but since the Punjab has the largest population, 60 per cent of the military force in Pakistan is Punjabi. In my travels in North Waziristan, for instance, it struck me that even army officers posted there for over two years still did not speak any Pashto. There was a clear disconnect. Nevertheless, despite these handicaps, the Pakistan Army has rapidly adapted to the emerging situation and learnt on the move.

In the Swat district, which is part of the settled area of Pakistan, the army has been learning by doing. Yet, it is very difficult for a military institution to change. Even the United States Army has taken a long time since the invasion of Iraq to learn many of the lessons of counterinsurgency. One such lesson is to engage insurgents and militants on all fronts, without ceding any intellectual or physical space. A military operation launched in Swat was called Mountain Viper. The name might as well have come out of the Pentagon; it meant nothing to the local population, nor the soldiers. It essentially ceded religious ground to the militants who claim to speak for Islam, wanting to bring shari’a (the Islamic code of ethics and law) into this area. However, nobody countered them by stating that this was not shari’a; that the militants were introducing a convoluted version of Islam; that they were mixing local custom and calling it shari’a. Shari’a is what we know to be Islam and what the majority of Pakistanis want it to be!

Subsequently, the commander of the first division sent into Swat launched a new operation. He used a Farsi and Urdu term, Rah-e-Haq, for that operation, which meant that it was part of the true faith or the truth. He publicized it in order to tell people that the army was acting on behalf of a government that believed in Islam and the true faith and that the insurgents were miscreants who were following a heretical path. The operation was far more successful. The lesson is clear: we have to fight using both brains and guns.

The other interesting development is that local people have now understood that the militancy and the presence of Al Qaeda, foreign fighters, as well as Afghan and local Taliban, is creating economic costs, besides causing death and destruction of their property. This has led to a spontaneous upsurge against the militants, in part primed by money from the government, and the setting up of ‘lashkars’ of local tribes. Historically, such lashkars have been drawn upon by the administration either at times of civil unrest or to quell criminal activity, because traditionally it has been the responsibility of the tribes to resolve such issues. So the political agent would approach the tribal mullahs who would then form a group to resolve the problem.

In Bajaur, we saw an instance of such spontaneous formation, particularly among the major Salarzai tribe. Mullah Zaib Salarzai, the leader of the tribe said, ‘The Taliban fighters and commanders are of humble background and thus not in a position to challenge the lashkar. They will be eliminated in a few days.’ He promised the army that if these people (the Taliban) did not leave their area, they would be killed and their property destroyed. To me this appears a good way to approach the problem – encourage the local population to take care of it.

The Pakistan Army was initially slow and took time to acquire the necessary knowledge about counterinsurgency. A favoured strategy was to isolate the militants and the insurgents from the rest of society. Normally this would involve placing the military with the population and providing security from within, not remaining in fortresses and camps outside. Instead, the army in Bajaur asked the people not involved with militancy to evacuate. Thus anybody who chose to stay behind was by default seen as a militant. The trouble with such an approach, however, was that it created unhappiness among the displaced people, more so since not enough planning had been done by the civilian agencies to accommodate them in the middle of winter, to provide them with shelter, food and clothing or to rehabilitate them when they eventually return to their homes. This is now a key element, a kind of doctrinal shift within the Pakistan Army, from a tactical use of counterinsurgency measures to forging a combined strategy with the civilians.

Earlier this year, when the Taliban’s atrocities in Swat provoked a major military operation, the army was prepared: it coordinated its efforts with the air force, identifying and pounding targets before the land forces moved in. Meanwhile the local population was evacuated. However, here too, a lack of planning was evident and only some 200-300,000 of the two million internally displaced persons were accommodated in official camps. The population at large housed the rest privately. Though a testimony to the strength of civil society, it exposed the weakness of civil administration.

A similar approach was followed later in the year in South Waziristan, the headquarters of the TTP. For one week the Pakistan Air Force attacked some 140 plus identified targets. Then the army moved in and ousted the TTP. It has since followed up with attacks in Orakzai, Kurram and Khyber, reducing the ability of the Tehreek to regroup in other parts of the border region. The TTP in turn has taken suicide attacks to the heart of the country and directly to army headquarters, even attacking mosques where militarymen and their children pray.

We also need to recognize the abiding fear inside Pakistan, as well as in its army, of a powerful India to the East and particularly its potential of becoming a regional hegemon. Until that issue is resolved, there will always be ambivalence about fighting the war within: should we retain our conventional force or should we be concentrating on unconventional approaches and weapons?

The army also strongly feels that the United States has been niggardly in its support, denying them the equipment they require. The night-vision goggles originally provided by the US were of mid-20th century vintage. They only operated ten nights of the month, failing to work in bright moonlight. This has now been rectified. The helicopters needed to move troops rapidly over this vast area, an arc that goes from South Waziristan all the way up to Dir and Chitral, were not forthcoming. Only one squadron was initially equipped by the US for that purpose. Though 27 Cobra helicopters were promised, not all were delivered with alacrity. Another squadron was recently produced for the Waziristan operation but some are already out of service due to lack of spares. Meanwhile, when additional US forces were recently deployed in Afghanistan, hundreds of helicopters suddenly became available and were seen as critical to overcome the problem of rough terrain and mobile warfare. None of this went unnoticed by the Pakistani Army, adding to the distrust between allies.

Over time, there is a need to move away from a purely military solution and strengthening the military alone. There is a need to adopt an approach that will engage the United States with the civilian population of Pakistan and, through them, with the government of Pakistan. This alone will allow economic development in Pakistan to be kick-started. In this regard, President Obama’s new Afghanistan strategy of December offers some hope. As its operational details become clear and if they address Pakistan’s concerns that the US will not simply be pushing the Taliban into Pakistan and then attacking them with increased drone attacks, we may see progress.

The Pakistan Army is already overstretched fighting the domestic Taliban. It cannot open up a new front against the Afghans who flit between Afghanistan and Pakistan’s border region. Pakistan is especially concerned about the drone attacks moving to Balochistan, an action that may inflame public opinion and put the country on another collision course with its American friends as the US demands that Pakistan do more and Pakistanis react that the US wants them to ‘do all’.

Centcom Commander General David Petraeus, in an interview with National Public Radio on 4 December, provided a clear understanding of the situation: ‘There are limits to how fast we can expect or perhaps demand that Pakistan can take certain actions. The fact is that they have shifted a substantial amount of their military capability, for example the Indian border, from other locations, to deal with this extremist threat. And I think you cannot underestimate how important the steps they have taken in the last nine or 10 months are. They have also taken very significant casualties in these fights with the extremists. And their civilians have suffered severe losses as well, as these extremists have fought back.’

Such an understanding may yet help restore balance to the US-Pakistan relationship. Equally important is the need for India to show, in the words of Canadian scholar Peter Jones, ‘strategic altruism’ towards Pakistan. Pakistani fears and concerns about Indian involvement in Afghanistan and even Indian support of some disruptive activity in Balochistan need to be addressed by India directly. The terrorist attack on Mumbai on 26 November 2008 was successful in derailing the Indo-Pakistan attempt to collaborate against terrorism. A year later, seven persons have finally been brought to trial in Pakistan for involvement with the attack. Hopefully, a greater openness between the intelligence agencies of both countries will allow them to remove each other’s paranoia. US scholar Christine Fair’s comments about Indian intelligence activities on the western frontier of Pakistan have added to the paranoia inside Pakistan about its neighbour to the East.

The external and internal situation in Pakistan is interconnected. It is important for Pakistan to address its domestic economic and political situation rapidly so that the civilian system remains robust and transparent and can be rid of corruption. Externally, a normalization of relations with India will allow it to concentrate on the war within. An equal responsibility for this rests on India and the international community. The US and the NATO coalition will need to ensure that it does not abandon Afghanistan in a precipitate manner, as some of the initial reports about the Obama strategy appear to indicate. The entire region is deeply intertwined economically and politically. The solutions will not be simple or short-term, but a start needs to be made by all countries involved.

President Obama in his West Point speech of 1 December 2009 observed:

‘In the past, there have been those in Pakistan who’ve argued that the struggle against extremism is not their fight, and that Pakistan is better-off doing little or seeking accommodation with those who use violence. But in recent years, as innocents have been killed from Karachi to Islamabad, it has become clear that it is the Pakistani people who are the most endangered by extremism. Public opinion has turned. The Pakistani Army has waged an offensive in Swat and South Waziristan. And there is no doubt that the United States and Pakistan share a common enemy.

‘In the past, we too often defined our relationship with Pakistan narrowly. Those days are over. Moving forward, we are committed to a partnership with Pakistan that is built on a foundation of mutual interest, mutual respect, and mutual trust. We will strengthen Pakistan’s capacity to target those groups that threaten our countries, and have made it clear that we cannot tolerate a safe haven for terrorists whose location is known and whose intentions are clear. America is also providing substantial resources to support Pakistan’s democracy and development. We are the largest international supporter for those Pakistanis displaced by the fighting. And going forward, the Pakistan people must know America will remain a strong supporter of Pakistan’s security and prosperity long after the guns have fallen silent, so that the great potential of its people can be unleashed.’

But American support alone will not solve Pakistan’s problems. Only Pakistan holds the key. 2009 was a ‘year of decision’ inside Pakistan, as the people and the army took the battle to the insurgents. 2010 will show how far a cohesive national effort can be formulated to win this war in order to secure Pakistan’s very existence.

* Shuja Nawaz is the author of Crossed Swords: Pakistan, its Army, and the Wars Within, Oxford University Press, 2008.

a passage to tolerance and power

2010-03-06T04:58:00.004+05:30

My piece in the Guardian saying Goodbye India is here.

A longer version is below

It was hard not to be infected by the hubris of India - a nation that feels part of history, an essential actor on the global stage. Yet if my experience was to feel admiration for a nation which had thrived as a democracy despite unbounded poverty, mass illiteracy and entrenched social divides, experiencing India as a reporter was a string of enervating and dispiriting episodes.

Whether one found oneself stepping into the Dantesque hell of a rural police station where half-naked men were hung from the ceiling during an interrogation or talking to the parents of a 12-day-old baby bulldozed to death in a slum clearance, day-to-day India was a shocking news story. Even in the country's most cosmopolitan city, Mumbai, I was aghast to see mobs of locals attack their fellow citizens for being “north Indian migrants”.

The romance of India's idealism was undone by its awful daily reality. The venality, mediocrity and indiscipline of its ruling class would be comical but for the fact it appeared to make politicians appear incapable of doing anything for the 836 million people who lived on less than 25p a day.

The selling of public office for private gain appeared so bad that it seemed the only way to make poverty history in India was to make every person a politician. Last year it was shown that the wealth of local representatives during their last five year term in the northern state of Haryana rose at an astonishing rate of £10,000 a month. Their constituents were lucky if they saw an extra few pounds extra a month.

The burden of democracy in India - to borrow from Yeats, the Irish poet much influenced by mystical Hindu thought - was that “the best lack all conviction, while the worst are full of passionate intensity”.

Yet remarkably the country continues to confound those who write it off. True India’s transformation is no Chinese quick-march into the future. Hundreds of millions of Indians still openly defecate in fields, at roadsides and beside train tracks. Common tropical diseases overwhelm the country's poorly-funded public health system.

In my six years working and living in the country, I saw it redeemed repeatedly by three remarkable quirks of history: a written liberal constitution, religions rendered ethical and a talent for sabotage. Take the last first. India won her independence not through war or revolution but non-cooperation, street protests and the quiet subversion of the economy.

Civil society in India has acquired an unrivalled mastery of such skills and its campaigners have become more savvy than politicians in realizing that democracy will not prevail unless its proponents show success at governing. The result is that it was activists who shamed the government last year into enacting a law making children’s education compulsory.

Coming from Britain, debates about the merits of a written constitution appeared to be a little academic. Yet India’s constitution, the longest in the world, vividly provided a moral compass for justice in a society where violence had been the best measure of one’s power and standing.

When homosexual sex was legalised by Delhi’s high court last summer, the judges justified striking out the previous law criminalizing the gay community saying it was in violation of the Indian constitution. By appealing to the highest sense of being Indian, the bench ended years of homophobia.

To claim religion enabled Indians to come together rather than come apart might seem far fetched. British India was rent asunder by religion at the time of independence and one of my first reporting tasks was to visit Muslim victims of state-sponsored pogroms languishing in refugee camps in Gujarat. Yet such violence in India appeared more political than theological.

During my time in India it was Europe that appeared intolerant, unable to embrace religious diversity. Whereas I awoke each day to the sound of the muzzein and was warmly welcomed by veiled Muslim neighbours for Eid celebrations, the Swiss voted to outlaw the construction of minarets.

In France a law banned headscarves and turbans in schools. Across the Channel, justice secretary Jack Straw wanted Muslims to remove the burkha. Nobody appeared to want the Turks to join the European Union. It seemed Europe’s enlightened liberalism was a cultural straightjacket of unspoken but distinctly Christian values.

By contrast tolerance in India was rooted in its own unique contribution to religious thought. The country’s philosophical genius, established today in law and custom, was that it mattered not what you believed but instead how you behaved. Lead a compassionate, religious life and the state would leave you alone. The result of this thinking is that today Indian streets are shared by people look look, dress and pray different - making them a celebration of the nation’s diversity. In Europe this was a crisis of identity.

It’s an open question whether the society being created by these forces is a fair one. India is perhaps the most unequal country on the planet, with a tiny elite engorged on the best education, biggest landholdings and largest incomes. Those born on the bottom rungs of the social hierarchy are severely handicapped in their life chances for no fault of their own - suffering a cruel legacy of caste bigotry, rural servitude and class discrimination.

To challenge this Indian politics is increasingly becoming a debate about the have and have nots. The rise in Maoist guerilla violence has come about because of the widening gulf between rich and poor in the country. This domestic issue is having a major impact on geopolitics. Delhi’s stance in almost every global talks is reduced, quite rightly, to the impact on poverty reduction in India.

Whether it is climate change, trade talks or nuclear armament India has forced wealthier nations to acknowledge that international relations is not just about power but morals. India’s negotiates with the hand dealt in the future: in a matter of a few decades New Delhi will be the third largest economy in the world. This coming gigantism means India must today be bought off with a level of compensation that is high enough to signify guilt from the west.

Coming back to London has meant coming home to a country that lives in the shadow of its former colony. Britain may see itself as a major power, sending troops to pacify Islamic insurgents and teaching the world about a thing or two about good governance. For all the bragging, these are days of delusion that will see us morbidly disappointed. Unlike Indians we do not live on the cusp of a stirring transformation. Overspent and overstretched, we live instead on the crest of a falling wave.

More Great Games

2009-12-31T03:10:00.003+05:30

Below is the complete text of a NYT piece which asks why is Nato securing the peace for Chinese investment in Afghanistan? It's basically a follow up to Indian diplomat M Bhadrakumar's excellent analysis last week.

This is a telling comment on the voraciousness of China's economy which is subservient to, who else, the United States.

Afghanistan is not the only place where the United States and China find themselves so oddly juxtaposed in the post-9/11 world. China is investing more in extracting Iraqi oil than American companies are. It has reached long-term arrangements to buy gas from Iran, even as the government there comes under the threat of Western sanctions for its nuclear program. China has also become a dominant investor in Pakistan and volatile parts of Africa.

But it is in Afghanistan where China’s willingness to take risks for commercial and diplomatic gain are most striking.

It's in the US interest for Beijing's heavy industrial base to continue as long as China produces low cost goods for the rest of the world. Once that changes, things could change in their unequal partnership.

UNEASY ENGAGEMENT
China Willing to Spend Big on Afghan Commerce

By MICHAEL WINES
Published: December 29, 2009
KABUL, Afghanistan — Behind an electrified fence, blast-resistant sandbags and 53 National Police outposts, the Afghan surge is well under way.

Uneasy Engagement
A Global Hunt for Resources
This is the ninth in a series of articles examining stresses and strains of China’s emergence as a global power.
Related
Uneasy Engagement: China Hunts for Art Treasures in U.S. Museums (December 17, 2009)

Uneasy Engagement: China’s Export of Labor Faces Scorn (December 21, 2009)

Enlarge This Image

Imaginechina, via Associated Press
The Beijing headquarters of the China Metallurgical Group Corporation, known as M.C.C.

The New York Times
Aynak's deposits were known in the time of Alexander the Great.
But the foot soldiers in a bowl-shaped valley about 20 miles southeast of Kabul are not fighting the Taliban, or even carrying guns. They are preparing to extract copper from one of the richest untapped deposits on earth. And they are Chinese, undertaking by far the largest foreign investment project in war-torn Afghanistan.

Two years ago, the China Metallurgical Group Corporation, a Chinese state-owned conglomerate, bid $3.4 billion — $1 billion more than any of its competitors from Canada, Europe, Russia, the United States and Kazakhstan — for the rights to mine deposits near the village of Aynak. Over the next 25 years, it plans to extract about 11 million tons of copper — an amount equal to one-third of all the known copper reserves in China.

While the United States spends hundreds of billions of dollars fighting the Taliban and Al Qaeda here, China is securing raw material for its voracious economy. The world’s superpower is focused on security. Its fastest rising competitor concentrates on commerce.

S. Frederick Starr, the chairman of the Central Asia-Caucasus Institute, an independent research organization in Washington, said that skeptics might wonder whether Washington and NATO had conducted “an unacknowledged preparatory phase for the Chinese economic penetration of Afghanistan.”

“We do the heavy lifting,” he said. “And they pick the fruit.”

The reality is more complicated than that. The Chinese bid far more for the mining rights to the Aynak project and promised to invest hundreds of millions more in associated infrastructure projects than other bidders. It is a risky venture that has not yet proved to be economical, and it has already been dogged by allegations of bribery.

But the Aynak investment underscores how China’s leaders, flush with money and in control of both the government and major industries, meld strategy, business and statecraft into a seamless whole. In a single move, Beijing strengthened its hold on a vital resource, engineered the single largest investment in Afghan history, promised to create thousands of new Afghan jobs and established itself as the Afghan government’s pre-eminent business partner and single largest source of tax payments.

An Odd Global Pairing

Afghanistan is not the only place where the United States and China find themselves so oddly juxtaposed in the post-9/11 world. China is investing more in extracting Iraqi oil than American companies are. It has reached long-term arrangements to buy gas from Iran, even as the government there comes under the threat of Western sanctions for its nuclear program. China has also become a dominant investor in Pakistan and volatile parts of Africa.

But it is in Afghanistan where China’s willingness to take risks for commercial and diplomatic gain are most striking.

China Metallurgical Group, often called M.C.C., will build a 400-megawatt generating plant to power both the copper mine and blackout-prone Kabul. M.C.C. will dig a new coal mine to feed the plant’s generators. It will build a smelter to refine copper ore, and a railroad to carry coal to the power plant and copper back to China. If the terms of its contract are to be believed, M.C.C. will also build schools, roads, even mosques for the Afghans.

The sweeping agreement has some experts rubbing their eyes in disbelief. “It’s almost as if the Chinese promised too much,” said one international expert who, like some others interviewed, refused to be identified for fear of alienating the Afghans or the Chinese.

But even if elements of the agreement fall through, the Chinese have already positioned themselves as generous, eager partners of the Afghan government and long-term players in the country’s future. All without firing a shot.

Nurzaman Stanikzai was a mujahedeen in the 1980s, using American-supplied arms to help drive the Red Army from his homeland. Today he is a contractor for M.C.C., building the Aynak mine’s electric fence, blast wall, workers’ dormitories and a road to Kabul.

“The Chinese are much wiser. When we went to talk to the local people, they wore civilian clothing, and they were very friendly,” he said recently during a long chat in his Kabul apartment. “The Americans — not as good. When they come there, they have their uniforms, their rifles and such, and they are not as friendly.”

American troops do not, in a narrow sense, protect the Chinese. The United States Army stations about 2,000 troops in Logar Province, where Aynak is located. But an Army spokesman said they generally patrolled well south of the mine area and had not provided direct security for Chinese investors or mine workers.

The Afghan National Police, which does protect the mine, was largely built and trained with American money. The 1,500 guards the police have posted in and around Aynak are special recruits not drawn from the main force, according to Maj. Gen. Sayed Kamal, who heads the National Police.

But the conclusion is inescapable: American troops have helped make Afghanistan safe for Chinese investment. And there is no sense that either government objects to that reality. As diplomats and soldiers alike stress, the war in Afghanistan was never motivated by commercial prospects. Had an American company won Aynak, some Afghans noted wryly, critics inevitably would have accused the United States of waging war to seize the country’s mineral wealth. Moreover, if China succeeds in developing Aynak and generating revenue for the Kabul government, that helps achieve an American goal.

“To the extent that the Chinese bring Afghanistan up to speed and start paying a billion dollars a year in royalties,” a Western government official who has followed the Aynak project said, “that would mean that Afghanistan is on a firmer ground to start paying for its own security.”

China Stays Out of War Effort

The Chinese, meanwhile, have rebuffed requests to join the Afghan war effort, saying that national policy forbids military action abroad except as part of a peacekeeping force. Instead, China’s foreign policy is based on commerce. Its state-owned companies have been snapping up energy and mineral resources worldwide for years now, often by overwhelming competitors with lavish offers.

In 2006, for example, another state-owned goliath known as C.M.E.C. swept bidding for one of the world’s largest known iron ore deposits, in Gabon, by offering to build a 360-mile railroad to the nearly inaccessible mine site, two hydroelectric dams to power the mine and a deepwater ocean port to export the mined ore.

Such splurges are both national strategy — China’s goal is to control long-term access to critical commodities — and a matter of necessity if Beijing is to keep its industrial empire running. With 700 to 1,000 steel mills to feed, China is the world’s largest importer of iron ore. Similarly, China already imports 40 percent of the world’s copper.

If the Aynak venture differs from those in the past, both international and Afghan experts say, it is because it appears to be as much a strategic coup as a commercial one.

Opportunity in Southwest Asia

The United States views Southwest Asia mostly as a security threat. China sees it as an opportunity. Decades of military cooperation with Pakistan, which shares India as a rival, have flowered into an economic alliance. A Chinese-built deepwater port in Gwadar, Pakistan, on the Gulf of Oman, is expected eventually to carry Middle Eastern oil and gas over the western Himalayas into China.

Afghanistan, which borders both Iran and Pakistan, drew scant attention from China until the middle of this decade.

Aynak’s riches had been known since Alexander the Great’s armies forged copper there 2,300 years ago. When the Soviet Union invaded Afghanistan in 1979, its geologists took core samples and mapped the Aynak deposit, but were never able to begin mining.

The Soviets were succeeded by Osama bin Laden, who used Aynak as a training camp while planning the Sept. 11, 2001, attacks on the United States. After the American-led invasion of Afghanistan, Afghan geologists rescued the Soviet surveys of Aynak and hid them until exploration could resume.

That exploration — a detailed overflight of much of the country by American surveyors in middecade — showed Afghanistan to be far richer in oil, natural gas, iron, copper and coal than anyone had imagined. Aynak, in particular, was judged a world-class copper deposit, not just huge but of unusually rich quality, and the government chose it as the first major mineral concession to be auctioned to developers.

To minimize corruption, the Afghan government decided, on the advice of American advisers, to ask the World Bank and a Colorado geological consulting firm to help oversee the bidding. A report last month in The Washington Post quoted an American official as charging that the Chinese swayed the bid with $20 million or more in bribes to the mining minister, Muhammad Ibrahim Adel, who was recently dismissed from the Afghan government in part because of the allegations. Mr. Adel has denied the charge.

Foreign experts say that the possibility of bribery in Afghanistan, one of the world’s most corrupt nations, can hardly be ruled out. But they also say that the Chinese bid was so clearly superior to others that any bribe money may have been incidental to the outcome.

“This was not a backroom deal. This was not Adel, sitting in Beijing, cooking this up,” said one of several international experts interviewed for this article. “This was thoroughly vetted by the governments of the day.”

A. Rahman Ashraf is a veteran geologist and senior adviser on mining to Afghanistan’s president, Hamid Karzai. Mr. Ashraf intervened in 2002 to stop Aynak’s mining rights from being sold under the table to a Korean bidder.

“Our wish was that this process must be very transparent,” he said of Aynak, “because this is the first time. If it is not transparent, then nobody comes to the others.”

China won the bid, he said, for good reason: it offered a package deal, from power plants to railroads to smelters to coal mines, that no other bidder could match. And it promised to staff the entire venture with Afghan laborers and managers — many of whom must be trained from scratch in a country with little mining expertise.

“After five years, it’s only Afghan engineers,” he said. “Only in administration do the Chinese stay.”

Indeed, outside experts here say, the striking aspect of China’s Aynak venture is the degree to which it left competitors in the dust. Increasingly, the world’s richest remaining mineral deposits are in hostile territory — malarial jungles, combat zones, unstable nations that possess mineral riches but no realistic way to get them to market.

With government money and backing behind them, China’s state-run giants take risks in places that even the largest private behemoths will not tolerate, and they can add sweeteners — from railroads to mosques — that ordinary mining firms are ill equipped to provide.

“The Chinese have sort of raised the bar. They’ve taken it beyond the scope of just an extractive operation,” the Western official said. “The Chinese are willing to step up and take a long-term strategic approach. If it takes 5 or 10 years, at least they have a beachhead.”

The wild card, of course, is that no outsiders can know how much of China’s Aynak venture is in fact brilliant strategy, and how much is merely a potentially ruinous business deal by an overzealous corporation. Beijing’s corporate strategy is as opaque as it is overwhelming.

China Metallurgical, a Fortune Global 500 company that has so many subsidiaries that they are mostly identified by numbers, is a signal example. The corporation reports to the top level of the Chinese government. Big foreign investments like the one at Aynak require blessing at an equally high level. M.C.C. has huge and productive investments around the world.

Yet hardly all those ventures are successes. An M.C.C. copper mine in Pakistan is widely said to have serious environmental problems. A Pakistan lead mine has been dogged by conflict, including a suicide bombing that killed 29; residents accuse the company’s Chinese work force of stealing local jobs. In Papua New Guinea, 14 Chinese workers at an M.C.C. nickel mine were injured in May in a pitched battle with local people who rioted over what they called intolerable working conditions.

That bid in 2006 for the iron mine in Gabon? Four years after C.M.E.C. struck its deal, the bargain appears to be unwinding over hints of corruption and global objections to a dam that would destroy Kongou Falls, one of central Africa’s most treasured waterfalls.

Was Too Much Promised?

Not surprisingly, that record leads skeptics to suggest that in Afghanistan, M.C.C. may have overpromised and, later, will underdeliver.

In interviews here, some experts said that M.C.C.’s Aynak bid was so munificent that the company might be forced to renegotiate lavish payments of copper royalties to the Afghan government. Others predicted that the company would be forced to shift parts of the vast project, like the yet-to-be-built railroad, to international donors.

Still others said the company’s initial environmental efforts already badly lagged behind the promise in its winning bid to strictly adhere to the Equator Principles and World Bank benchmarks — the gold standards for environmentally sensitive projects.

China Metallurgical is not talking. Its officials not only refused to be interviewed for this article, but also sought to prohibit a journalist even from photographing the mine site from afar.

But the company clearly is undeterred. The Afghan government is seeking bids for its second great mineral project, a behemoth called Hajigak that is said to contain 60 billion tons of iron ore. There are seven finalists — all companies from India and China. M.C.C. is one of them.

Li Bibo contributed research from Beijing.

Xmas Eve reading on Great Gaming in Asia

2009-12-24T13:53:00.003+05:30

Amazing analysis by Indian diplomat and thinker M K Bhadrakumar on China's chess moves in Central Asia, which Obama officials describe as "at the fulcrum of key US security, economic, and political interests".

Western experts often speak in a dismissive tone that the Central Asians prefer the Chinese because they never raise difficult issues such as democracy and human rights. But this is far too simplistic a reading. Central Asian countries see Western discourse on democracy and human rights as doublespeak from countries that pander to authoritarian regimes without scruples when it suits their business interests.

Central Asian countries draw satisfaction that eventually Washington is no more trampling on the region's sensitivities and ethos. The fashion in which Uzbekistan taught an enduring lesson to the European Union and the US regarding mutual respect and equitable relationship was widely noted in the region's capitals.

But that is only part of the story. The main thing is that China has reset the terms of the West's engagement with Central Asia. Western countries need to negotiate hard with Central Asian interlocutors squarely. Secondly, while they are under compulsion to abandon the cherry-picking approach they once took - touching the region's precious minerals and shying away from any further involvement such as in the manufacturing sector or agriculture

The piece's denouement is another level of Dante's Hell

China (and Russia) have reason to be on guard that Obama's Afghan surge and the new strategy as a whole essentially aim at pursuing longstanding US strategic interests of controlling Central Asia and containing Russia and China through "soft power" - methods different from those of the previous US administrations...

The specter of an open-ended US military presence in the region haunts China. After all, China was the US's accomplice against the Soviet Union in the Afghan jihad in the 1980s and should know that Washington has myriad ways to make use of radical and extremist elements as instruments of geopolitics.

I Love Japan...

2009-12-08T08:34:00.003+05:30

...so much I had my fingerprints surgically altered to dupe the immigration machines. It's true. Lin Rong, a 27-year-old Chinese woman, paid £9,000 to have her pads re-grafted so she could return to Japan. The story's here. Surveillance society? Phooey.

Economist blooper

2009-12-07T23:20:00.004+05:30

Oh dear. The Economist on its video offering says the man opposite is India's environment minister, Jairam Ramesh. It's not. The goatee-ed one is Prodipto Ghosh, a spiky former top civil servant in the Indian environment ministry. Do they all look the same?

The Reds and their Debs

2009-12-06T10:50:00.004+05:30

Wonder when you might see a rabid Jacobinism rise from the ashes in China? The conspicuous consumption of today's Communist party princes and princesses might be the start. Here's a great piece on some of the antics of the communist royalty.

Their grandfathers are known as China's political elite, the men who led the socialist country out of poverty into a new economic era, (but they are now known for) their high profile debut at blue-blooded Paris balls.

Of course such aristocratic pretensions might not be enough to set off a revolt. The renmin would have to suffer a heavy financial burden - job losses and rising, high prices. No wonder the economy is the priority in Beijing.

The Hindu newspaper: The press or The press release?

2009-12-05T13:37:00.004+05:30

N Ram is the editor of the Hindu, one of India's most influential newspapers. He has very clear views on a number of subjects. He buys the Chinese line on Tibet and the Dalai Lama. He has a strong anti-Islamist line. He also has backed the Sri Lankan government to the hilt. There was nothing that appeared to convince Ram that Sri Lanka had destroyed the LTTE terror machine at a terrible cost. Anyone reading his newspaper would rarely chance upon arguments that might challenge the editor's opinion.

It got to a point where the HIndu published a number of interviews with Sri Lanka's president which must have left readers confused. Was this the press or the press release?

Most brazen was N Ram's take on what some described as "internment camps" where Tamil civilians were dumped in after the end of Sri Lanka's civil war. The headline in July on visiting the Vavuniya IDP camps was that the trip was "an uplifting experience".

So what a surprise to see this story titled Things not all that well in Sri Lanka camps: India in the HIndu's news pages. Tucked away but there none the less. Looks like the editor might be afraid of the light on this one.

Parting pariah

2009-12-05T13:07:00.003+05:30

After six years I am leaving Delhi and as fine a send off that this city could give me, I think of no better eulogy than the words of Jay Landsman, the fictional sgt. in the Wire. I am not claiming anything on Det Jimmy McNulty but I can think of no reporter who would not, with some obvious modifications, wear the words below with pride.

"He was the black sheep, a permanent pariah. He asked no quarter of the bosses and none was given. He learned no lessons; he acknowledged no mistakes; he was as stubborn a Mick as ever stumbled out of the Northeast parish just to take up a patrolman's shield. He brooked no authority.

"He did what he wanted to do and he said what he wanted to say, and in the end he gave me the clearances. He was natural police. And I don't say that about many people, even when they're here on the felt. I don't say that often unless it happens to be true. Nat'ral po-lice. But Christ, what an asshole."

"And I'm not talking about the ordinary gaping orifice that all of us possess. I mean an all-encompassing, all-consuming, out-of-proportion-to-every-other-facet-of-his-humanity chasm — if I may quote Shakespeare — 'from whose bourn no traveler has ever returned.'

"He gave us thirteen years on the line. Not enough for a pension. But enough to know that he was, despite his negligible Irish ancestry, his defects of personality, and his inconstant sobriety and hygiene, a true murder police. Jimmy, I say this seriously. If I was laying there dead on some Baltimore street corner, I'd want it to be you standing over me catchin' the case. Because brother, when you were good, you were the best we had."

China's overwhelming argument of power

2009-11-19T11:33:00.002+05:30

India's fragile ego returns.

What has offended Delhi is a line in the communique issued by President's Hu and Obama in Beijing.

"(The US and China) support the efforts of Afghanistan and Pakistan to fight terrorism, maintain domestic stability and achieve sustainable economic and social development, and support the improvement and growth of relations between India and Pakistan," the joint statement said.

In a sign that the US president has a weak hand to play, Washington acknowledged that Beijing has a role in the India-Pakistan relationship. China's sees itself arriving on the world stage thanks to its national power.

Sinologist Alka Acharaya makes the point: "We must realise that China-US have a totally different relationship, they are two of the biggest powers in the world...and will naturally comment on what is happening in the neighbourhood. Instead of making sanctimonious remarks, when the PM goes to Washington we can have a line in the joint statement on Tibet and the Dalai Lama. This would be more meaningful".

India has the power of argument but not the argument of power.

Sinners repent

2009-11-15T19:36:00.005+05:30

An IMF chief economist says nationalise the US banking system and break it up.

From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight—a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response.

...there’s a deeper and more disturbing similarity:elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

The LSE Fred Halliday sums up Communism's relevance amid a welter of triumphalist clap-trap:

Communism was not just a utopian project: it was a dramatic response to the inequalities and conflicts generated by capitalist modernity. The continuation of many of these same inequalities and conflicts today suggests that further challenges, of an as yet indeterminate nature, will result.

Time for us all to reset our internal political compasses.

Why climate change is not about being fair. Yet.

2009-11-10T09:57:00.005+05:30

Vijay R. Joshi, an Oxford don, makes the case (copy below) for developing countries in climate change negotiations which acknowledges international relations is about power not morals.

This means, he says, that nobody in the rich world can be held responsible for the actions of their ancestors - therefore negating the historical responsibility argument of poor nations. Joshi, also correctly, points out that the earth's resources are not shared equitably so why should poor countries get allocations on the basis on their populations?

But Joshi does argue there is a "minimum requirement of fairness" in global talks.

Interestingly this basically gives poor nations a time frame where they have to erase abject poverty and in return the rich nations bear the burden of climate change mitigation. That is for a period of time wealthy nations either hand out loads of permits, impose a carbon tax on its rich consumers and producers or transfer tech.

But what of the other side of the deal: how do rich nations make sure that poor nations keep their promises? I think it would be only fair that there are measurable aspirations that poor countries need to accept in terms of poverty eradication. The UN's Millenium Development Goals are part of this process.

What Joshi seems to buy is that that rich states, operating in the context of an anarchy and uncertainty, adopt fairness considerations in their strategic interactions. However I think the psychology of poor nations is still that the limited gains won must be "worth it". They must be bought off with enough goodies - a level of compensation that is high enough to signify guilt.

There is a fine balance to be struck here so that a "fair" deal can be struck. Rich countries will do so because they wish for the status quo institutions and regimes to be retained. Poor nations will accept this because it will help entrench fairness as a value to be upheld.

A fairer world? Yes we can.

VIJAY JOSHI

There is now a growing consensus among governments that aggressive climate change mitigation would be desirable, though they remain bitterly divided about how the associated burden should be shared between advanced and developing countries.

Fair distribution of the cost of mitigation is important on moral grounds and for obtaining universal participation. But the concept of ideal fairness is highly controversial, and philosophers have debated it for centuries. Progress in the pivotal climate change negotiations in Copenhagen will require the adoption of a non-ideal but acceptable notion of fairness that could bridge differences in negotiating positions.

Developing countries have two different lines of argument about fair burden sharing. The first concerns “historic responsibility” for the accumulated stock of carbon emitted by the developed economies. These advanced countries have used up a large part of the safe carbon-absorbing capacity of the atmosphere and should, therefore, compensate the developing countries for this “expropriation”. This is a persuasive point. Even so, it runs up against some powerful moral intuitions. The rich countries did not expropriate knowingly. They acted in the belief, universally held until quite recently, that the atmosphere was an infinite resource. Moreover, the “expropriators” are mostly dead and gone. Their descendants, even if they could be identified, cannot be held responsible for acts they did not themselves commit. These points do not entirely overturn “historic responsibility” since developed economies benefit hugely from their past carbon-intensive industrialization. Even so, the extenuating factors alluded to above surely count to reduce the fair liability of the advanced countries.

The second line of argument advocated by the developing countries concerns the fair distribution of the burden of reducing the future flow of carbon emissions. Suppose overall global emissions are controlled by issuing tradable carbon permits. The developing countries argue that the permits should be allocated on a population or per capita income basis. The rationale of the former is rights-based. Each human being has an equal right to use global carbon space. The rationale of the latter is egalitarian; permits should be given to the very poor because they are very poor. Both these principles imply that most of the permits should be given to developing economies. This is because these countries contain most of the world’s people as well as most of the world’s poor. The trouble is, however, that the above principles are not generally accepted in international relations. There is no agreement that natural resources should be equally shared. Why should the atmosphere be any different? Nor is there any enthusiasm about stringent egalitarian obligations. Foreign aid has never reached even half the UN target of seven-tenths of 1% of advanced countries’ gross domestic product.

The way out of this maze is to focus on a principle that is widely accepted as a minimal requirement of fairness. The principle is simply “do no harm”.

In the climate change context, doing no harm means that developing economies should be enabled to reduce their cost of mitigation to zero until they have eliminated abject poverty. In practical terms, this would imply allocating enough tradable carbon permits to poor countries to allow them to maintain the growth of their living standards along the business-as-usual path, say, for the next two decades (two decades is an average. The time horizon would be less for China and longer for Africa). After that time, developing countries’ permit allocations would be progressively reduced. Climate models are capable of calculating the requisite time path of permit allocations. (So far, I have assumed that the instrument of mitigation is tradable permits. Alternatively, a worldwide carbon tax could be adopted. In addition, carbon-saving technology could be transferred, when it becomes available. This makes no essential difference to the above argument. There would have to be a revenue or technology transfer to developing economies of an amount sufficient to reduce their cost of mitigation to zero for a defined period.)

The no-harm approach to burden sharing has many desirable features. It takes some account of “historic responsibility”. This is because a significant portion of the damage inflicted by the accumulated large stock of carbon consists of raising the cost of future mitigation for all countries. In the no-harm scheme, however, developing countries’ mitigation costs would be covered for a defined period.

The scheme also takes some account of rights-based and egalitarian arguments by skewing the allocation of permits towards poorer countries, which would result in a significant financial transfer to them, unlike an allocation of permits based on current emissions, which would strongly favour the advanced countries. But the transfer to the developing countries would not go beyond offsetting the welfare cost of mitigation policies for an agreed length of time. This would be more acceptable to the governments and citizens of advanced countries than distributing permits on a population or per capita income basis, which would result in much larger annual financial transfers to developing countries, several times larger than foreign aid flows today.

The stakes in climate change are so high that inflexible bargaining positions would be a recipe for disaster. The “no harm” principle could provide the basis for an acceptable scheme, since it would go some way towards meeting the concerns of all negotiating parties.

Published with permission from VoXEU.org. Edited excerpts.

Money Money Money

2009-10-08T10:12:00.003+05:30

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

2009-10-08T09:48:00.006+05:30

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.

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

2009-10-02T15:56:00.003+05:30

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.

Republics of Fear: India and China

2009-09-28T10:35:00.002+05:30

I wrote on the Guardian's Comment is Free section about the rising paranoia between India and China warning of adversarial nationalism becoming part of the two neighbours' dialog.

Here is the Sunday Times' Michael Sheridan making the same point in a piece about the 60th anniversary of the founding of People's Republic.

Curiously, the enemy most often spoken of is India. The censors permit alarmingly frank discussion on the internet of the merits of a war against India to secure the Tibetan plateau.

“Help the Maoists take over power in India to pay them back for hosting the Dalai Lama,” said one contributor.

Veterans who know the PLA from the inside say that despite all its shiny new kit, such grandiose ideas mask the reality of a force that has no recent battle experience and is riddled with corruption. They describe a system of bribes ranging from 10,000 yuan (£909) to get a good post for a private soldier to 30,000 yuan for a place at military college.

“Compared with our last war against India in 1962, our equipment is much better but the devotion to country and people of our officers and men is much worse,” said a retired officer, who cannot be named.

Or, as General Zhang Shutian, a political commissar, put it in a recent speech: “If corruption in the army continues, ideology will decay and open the way for religion, while the promotion system risks causing a mutiny.”

Inequality in India: the scale and consequences

2009-09-16T09:59:00.007+05:30

Among poor nations India is supposed to be relatively flat society. Sure there are some people who have a little more than others but it's hardly a place of gaping chasms between rich and poor a la Brazil.

But in remarkable work by Pranab Bardhan, professor of economics at Berkeley, India is shown to be an Asian nation with Latin American disparities.

The measure of inequality is the Gini coefficient which is zero for no inequality, and one for the most iniquitous. India's Gini number was in 2005 agreed to be 0.325 but that is a measure based on spending. Using income data India's Gini coefficient of income inequality comes to 0.535 in 2005 - actually more than Brazil's and outstripping China which has one of 0.387.

It is not just income but the chance to change your position in life that is a crippling problem in India. Hundreds of millions of landless, asset-less, uneducated people trapped with little way out is a recipe for social disaster. Little wonder perhaps that the Indian prime minister is worried about the growing appeal of India's Maoist movement which promises to upend Indian society in a bloody revolution.

Yasheng Huang: Doubting China, Admiring India

2009-09-02T09:51:00.004+05:30

Every year Delhi hosts Yasheng Huang, the MIT academic who has made a name for himself as a China-doubter and an India-praiser. Yesterday he was in Beijing and gave an interview to the Hindustan Times which is worth reading because it highlights how China's stimulus plan is compounding the country's obsession with public sector controlled capitalism.

“China is clearly overbuilding. Very little real value is being created. We’re not talking of new technology, innovation...essentially more of the same.”

The stimulus is only delaying reforms, says Huang. “The state sector is advancing and the private sector is retreating. It’s creating an asset market bubble on top of a bubble that has not been burst."

Prof Huang's take is that he "favours India" for its capitalistic approach to development ie building wealth through creating a vibrant private sector.

“India needs to plod ahead on the existing course of privatisation and deregulation. China needs to actively reverse what it has been doing, which is harder," is how he explains it.

The downside of India's story is there for all to see. And I think Prof Yasheng sometimes underestimates the yawning gap in inequality that is opening up. But he's largely right - and was right before anybody else.

However the article by Reshma Patil ends with a good summing up of what anybody with a head for economics thinks when she or he visits China.

Glancing around the lobby flanked by Beijing’s most expensive stores, the professor shook his head over the Chinese obsession with luxury brands.

“India’s income growth is very respectable. The middle-class is buying appropriate purchases like Nano cars. In China, there is a sudden burst of wealth. Nobody knows how they made the money”.

Western Reporting and The Curse of the Present

2009-07-14T14:36:00.003+05:30

This was a reply to a Chinese friend of mine who had been incensed by the reporting of the riots in north west China. He had written to me that:

"The western media is still in 19th century colonism era, it just reports remote strange things to pleased its own audience or make them pour their cheap sympathy, rather than to find out the truth."

Here's the somewhat refined response:

On the matter of Xin Jiang I understand that this has been a very delicate subject in China. In defence of the news business I would say that western reporters write what they see. However the problem is one of context.

Newspapers in the west deal largely with the present not the past. Editors in London and New York are not that interested in what happened in Xin Jiang over the last 60 years. They know more about Italian holiday destinations than Central Asian ethnic identity.

Because western journalists lack a historical memory they forget how difficult it was to modernise their own societies and economies. They forget that whole races were wiped out (eg Native Americans), people enslaved (Africa), countries shackled (India) and others drugged (China).

The history of how rich countries got rich is a sorry affair but today's western newspapers are not burdened by this knowledge. They prefer to point the finger at developing societies and say protect minority rights when they themselves never did. This is newspapers' "curse of the present".

The best argument that western reporters have is that developing countries should not make the same mistakes that developed countries did. I have some sympathy with this. But this "best practice" argument is only relevant when western newspapers can say fairly that they are truly interested in the development of poorer nations. It is in poorer countries where the west's political project (liberty, democracy etc) comes into conflict with established culture and establishment power.

But which western newspaper can honestly say they are interested in such things rather than the death of a musician? I have yet to find one. After working for six years in South Asia I have become cynical about the moral pedestal placed under the seat of many journalists.

Nationalising Thought in Iran and China

2009-07-11T14:00:00.007+05:30

Below is a eye-catching piece of web journalism by the The NYT's Lede Blog, put together by Robert Mackey It compares the Iranian and Chinese responses to and media management of two very different revolts. The main thrust is a focus on the changing nature of authoritarian regimes. There are two points that stick out.

The first is that Iran and China have traded complete control for limited freedom. The main way of doing this is to convert their captive minds to consuming ones. That being free to choose your partner, your brand of shoes etc led to people in the Balkans wanting to choose their national identity must worry Tehran and Beijing. Which is probably why nationalism and a strong sense of historical victimhood is strongly cultivated by both Iran and China. This is in a sense an attempt to control the past.

The second deals with how to control the present. The mass organisations that run the two ancient states have a keen sense of the propaganda war within. In both Iran and China the game is to nationalise thought - to control the processes by which information is moulded into shape and therefore define the contours of the debate. They are not falling into the trap of Soviets who tried to battle the west by saying they were the real democrats or trading human rights abuses.

Instead it is about creating a real time narrative to events and hence a beginning, middle and end to the news cycle. In Iran the Supreme Leader says the result is final, has a faux investigation and ends by declaring a few irregularities but the President is Ahmadinejad. The keep matters simple he authorises deadly force to be used against protestors. In Xin Jiang it is by painting the Han as victims of criminal minds spurred by a rebel terrorist group of Uyghurs. There are guided tours and media centres set up for visiting journalists. All dissidents will be struck hard. Nasty stuff but it is designed to make sure bad elements capitulate to the demands of state propaganda.

July 8, 2009, 6:48 pm
Managing Dissent in China and Iran

Just weeks after the disputed presidential election in Iran, outside observers find themselves in a somewhat familiar situation: trying to piece together a sense of what is happening in China’s Xinjiang Province in the aftermath of anti-government protests that turned violent. In China, as in Iran, state-controlled media has called the protesters “rioters” and the violence on the streets “terrorism” rather than characterizing it as a spontaneous reaction by demonstrators confronted by security forces.

As my colleague Michael Wines reported on Monday, getting a clear sense of what is happening on the streets of Urumqi is not made easier by the fact that China’s government, like Iran’s, has made a concerted effort to control information about the unrest by placing restrictions on the foreign press and limiting access to the Internet for government opponents. So once again we find ourselves reading reports from news outlets controlled by or sympathetic to the state, relying on what foreign reporters who have been given strictly limited access to the area can learn and following the Twitter feeds of bloggers who reflect on and translate some of what is being said inside the country.

Beyond the way they manage dissent, Communist China and the Islamic Republic of Iran are obviously very different countries, with very different cultures and systems of government. One person who has thought about the parallels that do exist between the way the two regimes try to control their populations is the journalist Steve Coll. In a discussion of Iran’s government with Dorothy Wickenden and Hendrik Hertzberg of The New Yorker two weeks ago, Mr. Coll argued that the Iranian regime had studied the way China’s government responded to the pro-democracy movement in 1989 and “tried to construct” what he called a “post-Tiananmen China model” system of control.

In the discussion, recorded for The New Yorker’s Web site two weeks ago, Mr. Hertzberg suggested that it is not clear “what kind of society and regime Iran really is.”

“It’s not a simple dictatorship,” he said “The models that we have to tell us what kind of a place Iran is from the past are not particularly useful.”

That led to this exchange between Ms. Wickenden and Mr. Coll:

Dorothy Wickenden: Many people have been reminded of Tiananmen Square as they’ve watched this, as it’s become more and more brutal. What lessons do you think the authorities in Iran have drawn from the Chinese government’s successful crackdown?

Steve Coll: That you have to be decisive and that you have to be unified at the state level and to manage your commands in the security forces very carefully, because the Chinese almost cracked up under the pressure of routing those students from Tiananmen. But I think Rick’s right: this is not China 1989, or Iran 1979… this is an unusual hybrid state with a lot of resilience in its authoritarian and security structures. [...]

It’s a weird pluralistic dictatorship because they’ve been trying to follow what they think of as the Chinese model post-Tiananmen, where you create enough space culturally — rock concerts: good; jobs and businesses and entrepreneurship: good; defiance of state edicts, state power to be responded to brutally. So in creating this weird pluralistic dictatorship, I don’t think anybody in the state, at the top or in the street, quite understood where the balance might have shifted in this attempt to sort of both accommodate and control, especially in reference to young people, and they’re the ones that the state has always feared, in this kind Chinese model way: let them blow off steam listening to their strange music, let the women in north Tehran show a little ankle on the street if that’s really what they want to do, but there are bright lines. Part of what’s going on here I think is a kind of testing on both sides of where those lines might have shifted, given the accommodations that the regime has sponsored and the pluralism it has sponsored.

On Wednesday The Guardian’s diplomatic editor Julian Borger reported that Iran’s feared Basij militia is under the direct control of Mojtaba Khamenei, the son of Iran’s supreme leader, Ayatollah Ali Khamenei — which suggests that Iran’s leadership is indeed exhibiting strong control of the security forces.

Mr. Coll’s description of the post-Tiananmen China model recalls a comment the Croatian writer Slavenka Drakulic made in the 1990s about the Yugoslav Communists - that their decision to grant people freedom to travel and buy consumer goods helped keep the population from resenting the regime and pressing for dramatic political change. While the harsher form of authoritarianism in Czechoslovakia, for example, produced a coherent opposition whose frequently jailed leaders were ready to take over running the country communism collapsed, in Yugoslavia a less resentful population was content to stick with its former communist leaders after the fall of the Berlin Wall, with disastrous consequences. As Ms. Drakulic wrote in her book The Balkan Express:

Recently an American friend asked me how it happened that the most liberal and best-off Communist country was the one that now had the war. . . . The answer is so simple that I’m almost ashamed of it: we traded our freedom for Italian shoes.

The recent crackdown on the Internet in the immediate aftermath of the Xinjiang unrest came just after the protests in Iran were self-reported by members of the opposition with Twitter, YouTube and Facebook accounts. That might seem to be a case of China learning from Iran’s experience. But, as David Bandurski of the China Media Project wrote last month, before the violence in Urumqi, China’s government seems to have been learning how to deal with unrest in the Internet age based on its own experience with protests in the past year:

Not so long ago, the suppression of any and all information about mass incidents in China was a matter of virtual certainty. But Chinese officials have surprised over the past year. They have often been right on top of strikes, riots and opinion storms. And crisis management has been, at least on the surface, more about press conferences and press releases, and less about police muscle. At CMP, we have used the term Control 2.0 to talk about an emerging new order of information management and control in China, something more nuanced and clever, and something altogether more Hu Jintao. [...]

The difference with Control 2.0 is that the party is moving from a defensive position, as passive controllers and censors, to a more active position. That is to say, they are now on the offensive.

Control 2.0 is control that makes a shrewdly realistic assessment of China’s new information environment — the result of the Internet, predominantly — and recognizes there are some events that cannot be entirely controlled. So the core of Control 2.0 is reporting at the first possible moment those news events that cannot be concealed, getting the government’s official explanation and version of the facts out first. This pre-empts other media, including international media.

By getting the information out, officials can get the “peripheral media” (especially influential portal news sites, but also commercial newspapers) to work for them. These media feed off of the original Xinhua reports, amplifying their effect. Those same reports, with only slight permutations in many cases, become AFP, Reuters and AP reports. Finally, using those methods that create the smallest stir, you kill the information it is most critical to keep under wraps, keeping rabble-rousing professional media away, and punishing those media that “don’t listen.”

Mr. Bandurski notes that in June 2008, in an address to the People’s Daily newspaper, President Hu himself outlined the need to develop a “new pattern of public opinion guidance,” explaining:

In the age of the Web, everyone can potentially be a source of information and a wellspring of opinion. It is as though everyone has a microphone before them. This has raised the bar on the need for public opinion channeling. Faced with sudden-breaking issues, it is not sufficient for the government and mainstream [official] media to release information. They must also move quickly to understand the pulse of new information emerging on the Internet, reacting quickly to public doubts. This requires that governments, and especially propaganda offices, be equipped with the ability to rapidly and accurately compile and analyze public opinion.

Given the speed with which Twitter accounts were set up by members of the Iranian Revolutionary Guards last month, to taunt and hunt down opposition bloggers, it seems that President Ahmadinejad may be paying close attention to President Hu’s lectures.

The decline, rise and fall of Asia

2009-07-09T22:02:00.004+05:30

Missed this one, but in Foreign Policy last month Minxin Pei argues potently against the idea that the Asian century has begun. I thought his book China's Trapped Transition was a fantastic counterpoint to all the guff about China running the world. His take is more that China is ruining the world. Whatever one believes, you cannot dismiss Minxin's take.

Think Again: Asia's Rise

Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do. BY MINXIN PEI | JUNE 22, 2009

"Power Is Shifting from West to East."

Not really. Dine on a steady diet of books like The New Asian Hemisphere: The Irresistible Shift of Global Power to the East or When China Rules the World, and it's easy to think that the future belongs to Asia. As one prominent herald of the region's rise put it, "We are entering a new era of world history: the end of Western domination and the arrival of the Asian century."

Sustained, rapid economic growth since World War ii has undeniably boosted the region's economic output and military capabilities. But it's a gross exaggeration to say that Asia will emerge as the world's predominant power player. At most, Asia's rise will lead to the arrival of a multi-polar world, not another unipolar one.

Asia is nowhere near closing its economic and military gap with the West. The region produces roughly 30 percent of global economic output, but because of its huge population, its per capita gdp is only $5,800, compared with $48,000 in the United States. Asian countries are furiously upgrading their militaries, but their combined military spending in 2008 was still only a third that of the United States. Even at current torrid rates of growth, it will take the average Asian 77 years to reach the income of the average American. The Chinese need 47 years. For Indians, the figure is 123 years. And Asia's combined military budget won't equal that of the United States for 72 years.

In any case, it is meaningless to talk about Asia as a single entity of power, now or in the future. Far more likely is that the fast ascent of one regional player will be greeted with alarm by its closest neighbors. Asian history is replete with examples of competition for power and even military conflict among its big players. China and Japan have fought repeatedly over Korea; the Soviet Union teamed up with India and Vietnam to check China, while China supported Pakistan to counterbalance India. Already, China's recent rise has pushed Japan and India closer together. If Asia is becoming the world's center of geopolitical gravity, it's a murky middle indeed.

Those who think Asia's gains in hard power will inevitably lead to its geopolitical dominance might also want to look at another crucial ingredient of clout: ideas. Pax Americana was made possible not only by the overwhelming economic and military might of the United States but also by a set of visionary ideas: free trade, Wilsonian liberalism, and multilateral institutions. Although Asia today may have the world's most dynamic economies, it does not seem to play an equally inspiring role as a thought leader. The big idea animating Asians now is empowerment; Asians rightly feel proud that they are making a new industrial revolution. But self-confidence is not an ideology, and the much-touted Asian model of development does not seem to be an exportable product.

"Asia's Rise Is Unstoppable."

Don't bet on it. Asia's recent track record might seem to guarantee its economic superpower status. Goldman Sachs, for instance, expects that China will surpass the United States in economic output in 2027 and India will catch up by 2050.

Given Asia's relatively low per capita income, its growth rate will indeed outpace the West's for the foreseeable future. But the region faces enormous demographic hurdles in the decades ahead. More than 20 percent of Asians will be elderly by 2050. Aging is a principal cause of Japan's stagnation. China's elderly population will soar in the middle of the next decade. Its savings rate will fall while healthcare and pension costs explode. India is a lone exception to these trends-any one of which could help stall the region's growth.

Environmental and natural resource constraints could also prove crippling. Pollution is worsening Asia's shortage of fresh water while air pollution exacts a terrible toll on health (it kills almost 400,000 people each year in China alone). Without revolutionary advances in alternative energy, Asia could face a severe energy crunch. Climate change could devastate the region's agriculture.

The current economic crisis, moreover, will lead to huge overcapacity as Western demand evaporates. Asian companies, facing anemic consumer demand at home, will not be able to sell their products in the region. The Asian export-dependent model of development will either disappear or cease to be a viable engine of growth.

Political instability could also throw Asia's economic locomotive off course. State collapse in Pakistan or a military conflict on the Korean Peninsula could wreak havoc. Rising inequality and endemic corruption in China could fuel social unrest and cause its economic growth to sputter. And if a democratic breakthrough somehow forces the Communist Party from power, China is most likely to enter a lengthy period of unstable transition, with a weak central government and mediocre economic performance.

"Asian Capitalism Is More Dynamic."

Hardly. With the United States brought low by Wall Street and the European economy enfeebled by its welfare state and inflexible labor market, most Asian economies appear in great shape. It is tempting to say that Asia's unique brand of capitalism, by seamlessly weaving together strategic state intervention, corporate long-term thinking, and insuppressible popular desire for material betterment, will outcompete either the greed-devastated U.S. model or the hidebound European variant.

But though Asian economies-with the notable exception of Japan-are among the fastest-growing in the world today, there's little real evidence to suggest that their apparent dynamism comes from a mysteriously successful form of Asian capitalism. The truth is more mundane: The region's dynamism owes a great deal to its strong fundamentals (high savings, urbanization, and demographics) and the benefits of free trade, market reforms, and economic integration. Asia's relative backwardness is a blessing in one sense: Asian countries have to grow faster because they're starting from a much lower base.

Asian capitalism does have three unique features, but they do not necessarily confer competitive advantages. First, Asian states intervene more in the economy through industrial policy, infrastructural investment, and export promotion. But whether that has made Asian capitalism more dynamic remains an unresolved puzzle. The World Bank's classic 1993 study of the region, "The East Asian Miracle," could not find evidence that strategic intervention by the state is responsible for East Asia's success. Second, two types of companies-family-controlled conglomerates and giant, state-owned enterprises-dominate Asia's business landscape. Although such corporate ownership structures enable Asia's largest companies to avoid the short-termism of most American firms, they also shield them from shareholders and market pressures, making Asian firms less accountable, less transparent, and less innovative.

Finally, Asia's high savings rates, by providing a huge pool of indigenous capital, undeniably fuel the region's economic growth. But pity Asia's savers. Most of them save because their governments provide inadequate social safety nets. Government policies in Asia penalize savers through financial repression (by keeping deposit rates low and paying household savers measly returns on their savings) and reward producers by subsidizing capital (typically through low bank lending rates). Even export promotion, ostensibly an Asian virtue, seems overrated. Asian central banks have invested most of their massive export surpluses in low-yielding, dollar-dominated assets that will lose much of their value due to the long-term inflationary pressures generated by U.S. fiscal and monetary policies.

"Asia Will Lead the World in Innovation."

Not in our lifetime. If you look only at the growing number of U.S. patents awarded to Asian inventors, the United States appears to have a dramatically receding edge in innovation. South Korean inventors, for example, received 8,731 U.S. patents in 2008-compared with 13 in 1978. In 2008, close to 37,000 U.S. patents went to Japanese inventors. The trend seems sufficiently alarming that one study ranked the United States eighth in terms of innovation, behind Singapore, South Korea, and Switzerland.

Reports of the death of America's technological leadership are, to paraphrase Mark Twain, greatly exaggerated. Although Asia's advanced economies, such as Japan and South Korea, are closing the gap, the United States' lead remains huge. In 2008, American inventors were awarded 92,000 U.S. patents, twice the combined total given to South Korean and Japanese inventors. Asia's two giants, China and India, still lag far behind

Asia is pouring money into higher education. But Asian universities will not become the world's leading centers of learning and research anytime soon. None of the world's top 10 universities is located in Asia, and only the University of Tokyo ranks among the world's top 20. In the last 30 years, only eight Asians, seven of them Japanese, have won a Nobel Prize in the sciences. The region's hierarchical culture, centralized bureaucracy, weak private universities, and emphasis on rote learning and test-taking will continue to hobble its efforts to clone the United States' finest research institutions.

Even Asia's much-touted numerical advantage is less than it seems. China supposedly graduates 600,000 engineering majors each year, India another 350,000. The United States trails with only 70,000 engineering graduates annually. Although these numbers suggest an Asian edge in generating brainpower, they are thoroughly misleading. Half of China's engineering graduates and two thirds of India's have associate degrees. Once quality is factored in, Asia's lead disappears altogether. A much-cited 2005 McKinsey Global Institute study reports that human resource managers in multinational companies consider only 10 percent of Chinese engineers and 25 percent of Indian engineers as even "employable," compared with 81 percent of American engineers.

"Dictatorship Has Given Asia an Advantage."

No. Autocracies, mainly in East Asia, may seem to have made their countries prosperous. The so-called dragon economies of South Korea, Taiwan, Singapore, Indonesia under Suharto, and now China experienced their fastest growth under nondemocratic regimes. Frequent comparisons between China and India appear to support the view that a one-party state unencumbered by messy competitive politics can deliver economic goods better than a multiparty system tied down by too much democracy.

But Asia also has had many autocracies that have impoverished their countries-consider the tragic list of Burma, Pakistan, North Korea, Laos, Cambodia under the murderous Khmer Rouge, and the Philippines under Ferdinand Marcos. Even China is a mixed example. Before the Middle Kingdom emerged from self-imposed isolation and totalitarian rule in 1976, its economic growth was subpar. China under Mao also had the dubious distinction of producing the world's worst famine.

Even when you look at autocracies credited with economic success, you find two interesting facts. First, their economic performance improved when they became less brutal and allowed greater personal and economic freedoms. Second, the keys to their successes were sensible economic policies, such as conservative macroeconomic management, infrastructural investment, promotion of savings, and pushing exports. Dictatorship really has no magic formula for economic development.

Comparing a one-party state like China with a democracy such as India is not an easy intellectual exercise. Obviously, India has many weaknesses: widespread poverty, poor infrastructure, and minimal social services. China appears to have done much better in these areas. But appearances can be deceiving. Dictatorships are good at concealing the problems they create while democracy is good at advertising its defects.

So the autocratic advantage in Asia is, at best, an optical illusion.

"China Will Dominate Asia."

Not likely. China is on course to overtake Japan as the world's second-largest economy this year. As the regional economic hub, China is now driving Asia's economic integration. Beijing's diplomatic influence is expanding as well, supposedly thanks to its newfound soft power. Even China's once antiquated military has acquired a full plethora of new weapons systems and significantly improved its ability to project force.

Although it is true that China will become Asia's strongest country by any measure, its rise has inherent limits. China is unlikely to dominate Asia in the sense that it replaces the United States as the region's peacekeeper and decisively influences other countries' foreign policies. Its economic growth is also by no means guaranteed. Restive secession-minded minorities (Tibetans and Uighurs) inhabit strategically important areas that constitute almost 30 percent of Chinese territory. Taiwan, which is unlikely to return to China's fold anytime soon, ties down substantial Chinese military resources. The ruling Chinese Communist Party, which views perpetuating its one-party state as more important than overseas expansionism, is not likely to be seduced by delusions of imperial grandeur.

China has formidable neighbors in Russia, India, and Japan that will fiercely resist any Chinese attempts to become the regional hegemon. Even Southeast Asia, where China appears to have reaped the most geopolitical gains in recent years, has been reluctant to fall into China's orbit completely. Nor would the United States simply capitulate in the face of a Chinese juggernaut.

For complex reasons, China's rise has inspired fear and unease, not enthusiasm, among Asians. Only 10 percent of Japanese, 21 percent of South Koreans, and 27 percent of Indonesians surveyed by the Chicago Council on Global Affairs said they would be comfortable with China being the future leader of Asia.

So much for China's charm offensive.

"America Is Losing Influence in Asia."

Definitely not. Bogged down in Iraq and Afghanistan and mired in a deep recession, the United States certainly looks like a superpower in decline. Its influence in Asia has apparently receded as well, with the formerly mighty dollar in less demand than the Chinese yuan and the North Korean regime openly flaunting Washington's will. But it is premature to declare the end of U.S. geopolitical preeminence in Asia. In all likelihood, the self-correcting mechanisms in its political and economic systems will enable the United States to recover from its current setbacks.

America's leadership in Asia derives from many sources, not just its military or economic heft. Like beauty, a country's geopolitical influence is often in the eye of the beholder. Although some view the United States' declining influence in Asia as a fact, many Asians think otherwise. Sixty-nine percent of Chinese, 75 percent of Indonesians, 76 percent of South Koreans, and 79 percent of Japanese in the Chicago Council's surveys said that U.S. influence in Asia had risen over the past decade.

Another, perhaps more important, reason for the enduring American preeminence in Asia is that most countries in the region welcome Washington as the guarantor of Asia's peace. Asian elites from New Delhi to Tokyo continue to count on Uncle Sam to keep a watchful eye on Beijing.

Whether it's over blown or not, Asia is poised to increase its geopolitical and economic influence rapidly in the decades to come. It has already become one of the pillars of the international order. But in thinking about Asia's future, let's not get ahead of ourselves. Its economic ascent is not written in the stars. And given the cultural differences and history of intense rivalry among the region's countries, Asia is unlikely to achieve any degree of regional political unity and evolve into an EU-like entity in our lifetime. Henry Kissinger once famously asked, "Who do I call if I want to call Europe?" We can ask the same question about Asia.

All told, Asia's rise should present more opportunities than threats. The region's growth not only has lifted hundreds of millions out of poverty, but also will increase demand for Western products. Its internal fissures will allow the United States to check the geopolitical influence of potential rivals such as China and Russia with manageable costs and risks. And hopefully, Asia's rise will provide the competitive pressures urgently needed for Westerners to get their own houses in order—without succumbing to hype or hysteria.

Apostacy and Economics

2009-07-04T12:43:00.005+05:30

Having been persuaded by the inflation hawks for some time that the globe faces a world of rising prices, I have decided to renounce that belief. The reason is I do not think the industrialised world can pull itself of the tailspin without radical action.

There is no global uptick of demand. Germany's collapse is because it acted in Europe like China did to the rest of the world - exporter of first resort. Markets have gone and so has growth. Japan remains in a deep funk politically and economically. The UK has managed pale growth thanks to a sterling devaluation and massive spending. The US economy is doing worse than many imagined.

The rich world is wondering what is there to sell at a good price - and who can buy it? There is also in the rich world an excessive desire to save. Governments are discovered their Minsky moments - and are now effectively lending to their nation's households and businesses to bail them out.

The threat is now deflation. Falling prices, the paradox of thrift and the era of Austerity. People's tastes will become blander through lack of purchasing power. Goods will be under-engineered. Simpler and cheaper will be the watchwords of our coming lifestyles. As Keynes said, the facts have changed. Time To Change Your Mind.

Evolutionary politics

2009-05-25T16:16:00.003+05:30

A terrific piece in the FT by the man who taught a generation of teenagers to scribble.

It is time to update the ancient constitution

By Larry Siedentop

Published: May 24 2009 22:10 | Last updated: May 24 2009 22:10

Alexis de Tocqueville remarked that the British see things very clearly but can see only one thing at a time. He had a point. The storm over MPs’ expenses and the issue of their accountability has led to talk of a “constitutional crisis” – understood as a loss of confidence in the political class. But the crisis is more profound than that.

It is not just the mores of the political class but the political system as a whole that is in crisis. For Britain has reached an impasse. The process of piecemeal reform – at which the nation excelled historically – is no longer adequate to the problems it faces. Britain needs a new constitutional settlement.

Has reliance on piecemeal reform, however, impaired the ability to think constitutionally in the very country that inspired liberal constitutionalism in the l8th century?

To talk of a constitutional crisis in a country with a codified constitution is one thing – illustrated in the US by threats to “the separation of powers” revealed by the Watergate affair. But in a nation without a codified constitution – in which the political system rests on precedent and an appeal to “common sense” rather than the idea of fundamental law – a constitutional crisis becomes more far-reaching.

Britain has reached the point where the structure of society can no longer sustain its traditional political culture. To see this, one has only to look at the appeal to “common sense” that looms so large in political rhetoric. For what happens when “sense” is no longer “common” – that is, when the attitudes and habits creating a political class able to mobilise and shape consent can no longer be taken for granted.

At that point a traditional political culture dissolves. Take, for example, arrangements for the dispersal of power. Ever since Margaret Thatcher’s assault on local government it has been clear that the British constitution offers no adequate safeguards against centralisation. Local autonomy, we can now see, rested on good manners or common sense not fundamental law.

Something similar can be said about central government. The separation of powers has become more formal than real. Later 19th-century reform bills led to the emergence of a party system that created, first, cabinet control of the House of Commons and, then, prime ministerial control of the cabinet. Of late, the stranglehold of the executive has been further increased through Treasury control. It is now hard to think of a democratic political system more centralised than Britain’s. Only the judiciary has, at times, struggled against this trend.

What social changes have contributed to this? And why do they spell the doom of a traditional political culture, the so-called “unwritten constitution”.

The first is the erosion of the class system and the virtual disappearance of deference. For all of the injustices it involved, the system helped to create a political class that had the confidence and wealth to limit the centralising of power. They took much for granted – too much. But they were not careerist politicians in the contemporary sense. Their assumption of a “right to govern” also had an impact locally, where they had no interest in seeing local government replaced by local administration directed from Whitehall.

A parliament made up of people with more modest means combined with the rapid growth of prime ministerial patronage has changed all that. It has revealed how manners rather than constitutional law underpinned the British political system – giving it an extraordinary flexibility but also making it vulnerable to social change.

To the erosion of a class system has now been added massive immigration, the development of a multicultural society. That has only compounded the challenges facing a traditional political culture, reducing the plausibility of appeals to “common sense”. And it raises the question of what can create consensus, in a diverse society lacking a clear normative framework.

Britain’s problem is not so much the violation of norms as their absence.

What can people hold on to? The asymmetrical devolution introduced by New Labour has made the system of government even less easy to grasp. Arguably, it also confuses expediency with justice. What are people to make of a system that makes it possible for European Union students, like Scottish students, to attend Scottish universities without paying fees while students from England are required to do so?

Membership of the EU has been the final nail in the coffin of the ancient constitution. For attempting to integrate a common law culture – with its emphasis on precedent rather than rational coherence – into political cultures shaped by Roman law and statute has introduced serious difficulties. Implementing human rights legislation has not been easy. The absence of a codified constitution also makes it harder for Britain to assert itself in the EU. There is nothing here like the German Constitutional Court’s opinion setting limits on the EU’s jurisdiction.

A new constitutional settlement is imperative. It must include a British charter of rights, a parliament reformed by serious bicameralism (which would transform the party system and make executive control of the legislature far more difficult) and symmetrical devolution. The ancient constitution was a wonderful thing in its time. But its time is over. It created the attitudes and habits of a free people, but it is now undermining them.

The writer is Emeritus Fellow, Keble College, Oxford

Copyright The Financial Times Limited 2009

Google's Labour Theory of Under Value

2009-05-20T19:20:00.001+05:30

Google says it has an algorithm for employers which can identify "employees who felt underused, a key complaint among those who contemplate leaving".

See here in the WSJ for more on a quantitative approach to a qualitative discipline.

Frightening.

The Amazing Dr Singh

2009-05-17T23:04:00.007+05:30

The remarkable Congress victory in India's elections is as dramatic a result as the mandate Sonia Gandhi managed five years ago. The Congress has got more than 200 seats, the best showing for 18 years. The 2009 election marks the end of the rise of the smaller, regional parties and the broadening of the voters' viewpoint. It sees the Left chastened. The Hindu nationalist BJP is already introspecting about the fact the party and its core ideology repels Muslims.

But let's make this personal. Post-independent Indian history of the post Gandhi family age will remember one towering figure: Manmohan Singh. I was one who did think it was wrong not to have an elected but selected PM like Dr Singh. But these historical quirks aside Dr Singh will if he can take steps to rescue the faltering economy and right the growth path be compared to Deng Xiaoping in years to come.

Like Deng, Dr Singh was an outsider. He saw the chaos of partition, crossing over as a poor boy on foot from Pakistan. Congress' Indian nationalism was an easy option over the sulphuric odours of the Sangh. But not for him the sycophancy of Congress apparatchiks or the genuflections of Gandhi family courtiers.

Instead he viewed India's problems through the lens of an academics' chesma, coming to the conclusion as a young economist that India's Nehruvian autarky was a one way ride to economic ruin. He was right.

Singh spent a great deal of his life working to undo the effects of this debilitating mindset as a bureaucrat. By all accounts he displayed a ruthless intellectualism, a quality that usually marks the end of a political careers not the making of one. But favoured by perhaps the wiliest Indian politician of the last sixty years, Narasimha Rao, Singh grew in stature. It is a tribute to Singh that he could balance his friendship with Rao and the Gandhis, who loathed Rao's slippery politics.

Perhaps Singh's most impressive quality is that his thinking is deeply ingrained with the idea that when reform from the top becomes impossible, revolution from the bottom becomes inevitable. He understands that people of privilege will risk destruction rather than surrender any material part of their advantage. The rich think their privileges are a God-given right. Singh has tried to undermine this in a quietly determined way.

His government has not relented from telling corporate bosses not to indulge in vulgar displays of conspicuous consumption and pushing forward with the Bismarkian employment schemes for the poor. He's given millions of Indian government employees pay increases. He calls caste, a pernicious hierarchy, a version of apartheid.

In terms of political acts Singh's decision to jettison as Finance Minister in 1991 decades of Indian economic thinking about self-sufficiency and embrace an import-friendly regime will be recalled as important as Deng's conversion to capitalism. Singh's been PM for five years, he'll probably see out the next five paving the way for another reformer to take over. Let me make one prediction: Singh's revolution will be only complete when a truly competent successor takes over. This means Rahul Gandhi - may like his mother - campaign, win and then step aside for a better man or woman to be PM.

Rich Men Read Newspapers

2009-05-03T22:13:00.004+05:30

Someone has to pay for making society accountable...

"As (newspapers) disappear, I think what replaces them won't be as desirable as what we're losing," Berkshire Hathaway's Charlie Munger told shareholders on Saturday. Warren Buffett added: "Charlie and I read five a day. We'll never give them up. We would not buy them at any price. They have the possibility of going to unending losses."

Straight talking expression

2009-05-03T22:07:00.002+05:30

"I think it's important to understand that some of that wealth was illusory in the first place." - Barack Obama in the NYT on pre-crash America.

The Indian elections and the BBC news

2009-04-25T03:36:00.003+05:30

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?

Where is India's Green Party?

2009-04-24T14:43:00.001+05:30

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’.

Read My Lips... No New Taxes

2009-04-23T03:42:00.004+05:30

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.

I'm alright Jacques....

2009-04-21T03:52:00.003+05:30

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.

A good head and a good heart in South Africa

2009-04-18T21:58:00.005+05:30

"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".

The Saching of Western Civilisation

2009-04-17T22:15:00.004+05:30

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

2009-04-17T04:48:00.004+05:30

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.

India's Permanent Problem

2009-04-14T18:37:00.004+05:30

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.

Spare a dollar, buddy?

2009-04-09T16:05:00.001+05:30

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.

Nano

2009-03-26T10:45:00.004+05:30

Me as Jeremy Clarkson. Not.

The Dollar Imbalance

2009-03-14T00:12:00.004+05:30

Wen Jiaobao is an old-school communist leader with a surprising popular touch. He's a master propagandist and a deft politician - remember him at the train stations exhorting people to weather the snow and ice a year ago? Never had a Chinese leader appeared in front of crowds feeling their pain. He weighs words carefully and his tone carries conviction.

So his expression today of worry over America's attempt to spend its way out of recession should prick the world's ears up.

There's one thing Chinese leaders know better than almost anyone else it's the history of the imperialism. They have a keen appreciation for Britain's fall and decline. It went hand in hand, the history commissars will tell you, with sterling's collapse.

Under the British Empire, the colonies -that is India, Malaysia, Africa etc - all ran a current account
surplus with Britain. They had to because they were meant to be self-sufficient. These surpluses
were sent back to London where they purchased government bonds or Consols. British banks then lent to British companies to go off and invest in the empire.

Overstretch first militarily and then financially saw Britain end up in hock to the United States and voila the Sterling world became Dollarized. The colonies suffered as local industry was stifled and holdings lost their value.

Today prime minister Wen is warning the US not to overspend - fearing that dollar devaluation would affect China's own reserves. China holds a trillion dollars in US treasury bonds so a sliding US currency would hit them hard. Of course crisis offers opportunity; America weakened offers a chance for China to exert itself. But this all comes too soon for Beijing.

It is not that Beijing does not have the ambition to be top dog, it is that China is not ready to assume the mantle of global economic leadership. Hence to maintain stability - and important ensure global demand takes off without crashing down to earth - Wen Jiabao calls for fiscal restraint. By questioning the sums thrown about by team Obama the Chinese politbureaucrats are also signalling that they no longer sees the US treasuries as the safest haven. Beijing aims to put its money elsewhere. It will end its export-driven model of growth. It will end its dependency on Washington. Domestic demand will be prioritized.

Unless Obama perhaps caves in on some vital Chinese interest, Beijing will accelerate its attempts to secure a new, more independent role in global affairs. We are about to live in interesting times, indeed.

The Return of the Mamluk empire

2009-03-11T14:23:00.003+05:30

President Obama’s olive branch of talks with a moderate Taliban has furrowed brows in New Delhi. For India there is no good or bad Taliban only extremists bent on creating an Islamic state stretching across the subcontinent. India sees talk of talks with the Taliban as worse than appeasement. Already the media has picked up on the French foreign minister's innocuous comments on having to accept a possible Taliban's victory - if it came through the ballot.

True Obama has promised to raise troop levels in Afghanistan a la the Iraqi surge, but analysts worry in Delhi that this is simply a prelude to a phased withdrawal under the gaze of a US-installed regime.

For New Delhi this opens the way for the worst possible option: a soft Taliban in Kabul backed by Islamabad – which according to defence analyst Ajai Shukla would allow “the Pakistani army to run Afghanistan on its behalf”.

But Shukla undermines this thesis with a pertinent point.

“The unpredictability within Pakistan is multiplied, say Indian officials, by the fragmentation within Pakistan’s radical fringe. During the anti-Soviet jehad in the 1980s and 1990s, Pakistan dealt with just one jehadi leader, Gulbuddin Hekmatyar. In 2005, when negotiating a ceasefire in Waziristan, Pakistan had 17 tribal Shoora (council) chiefs sitting at the table. Now there are dozens of shooras, often with competing demands.”

Pakistan no longer has no single telephone number to call in the badlands along the Durand line. It could create one by boosting a single Islamic group with arms and cash so that it could wipe out its rivals.

But controlling - let alone unifying - the Taliban, who have an expansive ideological agenda distinctive from the Pakistani state, will be no easy task.

The cutting off of Nato supply lines in NWFP, the bombing of Shia mosques in Punjab and the razing to the ground of a police station point to a much bigger problem. One where imperial masters are toppled by former slaves. If this were ever to happen it would be a reprisal of the Mamluk age – when tribal vassals took over empires in South Asia and the Arab world.

The point is that Islamists do not want to be controlled. They want to control. They are authoritarians who will privilege a small percentage of Muslims to rule over all others. From where this Islamic vanguard springs will determine the distinctive vision of society imagined by Islamists in territory they acquire. Given the historical and geographical roots of the resurgent Taliban, India, Afghanistan and Pakistan have much to worry about.

Mercenaries of God

2009-03-03T16:54:00.005+05:30

Machiavelli got it right: mercenaries bring nothing but loss. The cricket killings in Lahore are part of an unfolding tragedy for Pakistan. The terror groups cultivated first to fight Soviet troops in Afghanistan and then to wage war against India in Kashmir have turned upon the civilian government. Loyal only to their version of religious truth and thirsty for power, these groups have morphed with parts of Pakistani elite - finding shelter and succour in high places. The result is bloody blowback.

The growing tribalism and lawlessness of even the country's great cities underlines how much the state has withdrawn in the past few years. Into the vacuum have sprung up huge charities, running schools and hospitals, funded by zakat contributions. The mullah, the military, the bureaucracy have been unwilling to counter hardline propaganda, seeing it as an essential service to a nation born to save Islam.

This saviour complex haunts the country in which many are simply in a state of denial about the men with guns. These mercenaries fight no holy war on poverty, illiteracy and discrimination. They see divinity in the wreck and ruin of human life. The powers that be in Pakistan need to understand that these are not armies of Allah. These are dangerous, disloyal and undisciplined condottiere. Sure they will trade bullets with the infidel armies of America and India. But at what cost? The price for Pakistan is being paid on the streets of Lahore.

Slumdoggie style

2009-02-24T01:33:00.004+05:30

It is only because our public culture has become defined by empathy, that is where one feels each other's emotions and is unafraid to speak out about them, that a film like Slumdog Millionaire could win so big at the Oscars.

Without an audience willing to ride the wave of passion crested by a foam of intuition and sentiment, the film would be little more than a very long advert for a game show that wilted long ago. Jai Ho!

Terror in India about the Taliban

2009-02-18T13:35:00.006+05:30

New Delhi has reacted with unusual alarm about Asif Ali Zardari's peace deal with the Taliban. In Pakistan's Malakand area, three million people will be subject to the will of the Islamic movement under the leadership of Soofi Mohammad. To India this is supping with the devil. Indian Foreign Minister Pranab Mukherjee today insisted the Taliban was nothing short of a "terrorist organisation." "Taliban believes in nothing but destruction and violence. In my assessment, Taliban is a danger to humanity and civilisation."

To make sure the message gets out there's been a blizzard of opinion. Here's the editorial in the Indian Express:

The deal struck in the valley is dangerous in its implications. It has virtually made the entire area over to the Taliban, where their hitherto illegal writ in the garb of Islamic Sharia laws is now being accepted as a fait accompli. Under the deal, those forced to seek justice from Sharia courts will now have no right of appeal in a higher civil court. How could you have two parallel justice systems running in the same country? And knowing justice, Taliban style, leaves one with cold feet. The intolerant and brutal tribal warlords know no mercy, and have no regard for human life and dignity. Summary executions of men and women who do not subscribe to their brand of Islam are the only justice they practise.

And equally trenchant view from the Business Standard

The question is who is controlling whom—are the Pak generals controlling the Taliban, or is the latter an independent Frankenstein that is beginning to gain the upper hand? After Swat, there is the very real possibility that it could be the latter, raising the prospect of a virtual obliteration of the Durand Line and the de facto formation of some kind of Pakhtoonistan. Those painting worst-case scenarios should do serious work on how the world will deal with the possibility of the Islamist elements getting control of nuclear weapons. It is no longer as remote a possibility as it might have seemed till the other day.

Unfortunately no one - not the US, EU, China, Russia or India - can do much to contain the crisis. Outsiders have no purchase on the Taliban, who bow to a different God. Is the Taliban a real threat to Pakistan? I am not so sure. The danger is that state institutions, essentially products of western thinking, are being infiltrated by the wider Islamist movement and their sympathisers. A dangerous tipping point comes when too many bits of the Pakistani state are ready to do deals with Islamists.

The Pakistani army is probably the country's key player. It has spent decades building up one group before knocking it down. It has armed militant outfits, such as the Lashkar and Jaish in the Punjab. It has come to the aid of political goons in Sindh. It is now securing a deal with the Taliban. The Rawalpindi command's aim is that no one group gets strong enough to challenge the military's hold over the state. It sets paramilitary organisations against each other while fuelling whatever particular prejudice - be it anti-Shia or anti-Pashtoon or anti-Indian feelings - drives the violence.

No doubt the army will attempt to snuff out a true threat to itself - witness the decapitation of the Baloch separatists. The question is whether the Islamists can put aside their differences and pull together to present a potent unified front. That would be trouble for everybody.

Abe and willing

2009-02-17T11:38:00.005+05:30

"The Lincoln legend has come to have a hold on the American imagination that defies comparison with anything else in political mythology." - Richard Hofstader, The American Political Tradition: And the Men Who Made It.

Abraham Lincoln, the 16th US president, is a more mythical than historical figure for most Americans. True he towers over virtually all others. Days after celebrations honoring his bicentennial, a survey of 65 historians ranked Lincoln the greatest ever. George W. Bush came 36th out of 42 overall. So on President's day or Washington’s Birthday, as the federal holiday is officially known in the US a chance to ponder the soft power of Lincoln.

Over at the Huffington Post Mario Cuomo, former governor of New York, sees the success or failure of President Obama's presidency as having even "greater impact globally than did the Lincoln presidency". He is at least honest to say that Americans should not be "so awestruck by the towering figure that history and legend have made of him".

This is sound advice. Abe is becoming a totemic figure for left-of-centre Indians looking post-Obama to validate their rediscovery of the United States as a country to be admired. Abe saved the US by defeating the southern secessionist states. He sought to wipe out slavery. Here's the Hindu editorial on the "Moral giant of modernity" .

Sorting the wheat from the chaff is supposed to be what newspapers do. True the Hindu does say that Lincoln " was a highly political man, ambitious, and even calculating". The paper even remembers his letter to Horace Greeley, Editor of the New York Tribune: “My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery.”

A better take comes from Hofstader. "To become President, Lincoln had had to talk more radically on occasion than he actually felt; to be an effective President he was compelled to act more conservatively than he wanted."

Hofstader's analysis was that Lincoln was a complex, flawed man and politician. The academic, writing in the forties when race was a much more visceral blot on US claims of equality of opportunity, does not fall for the Lincoln myth. He points out that that Lincoln thought democracy, in nineteenth century America, was not "broad enough to transcend colour lines". A creature of his times, Abe Lincoln's story of a boy born in a log cabin who became president still stirs. He was no saint, just another politician with some of the right ideas, some of the time. The same will be true, no doubt, for Obama.

Frieda's Old News in the Screws

2009-02-16T09:28:00.006+05:30

A few years ago one of the Dirty Digger's finest quipped about environmentalists that they "turn red faster than Kermit in a blender". Now it seems the Aussie Bruiser's publications have taken up recycling in a big way. Except it's not the paper that's being reused but the news.

Yesterday the News of the Screws caused a million hearts to sing with the headline that "Movie beauty Freida Pinto splits with fiance".

Unfortunately the Indian media beat them to it. Midday had it here two weeks ago - telling the world that "(She) did break off her engagement to her fiance... a marketing professional from Mumbai and her one-time PR agent, Rohan Antao, got the kick."

It seems O Pinto's been doing her own media relations in Britain. In the press it has appeared that she's not only dumped her man, but Bollywood too after being chased by lusty Indian directors. Could she be looking for a Hollywood agent perhaps? Certainly these pictures (above) from GQ would suggest that the diminutive one is ready to shed her slumdog role for something, ahem, more lusty...

India's laptop hoax

2009-02-04T22:39:00.005+05:30

Oh dear. After the hype, the truth. Indian officials came clean about the world's cheapest computer. It is in fact the world's cheapest storage block. Instead the real story appears here.

What pictures of the machine showed was that the "computer" was nothing more than an external storage brick, the sort of thing you'd plug into a real laptop to hold your MP3 files.

PC Magazine Editor Lance Ulanoff chipped in to say that you can do a lot with ten bucks. "Buy 10 cups of coffee. ... Get a cheap T-shirt or two. What you can't do, however, is build a PC."

"A place to put your stuff does not add up to a PC," explained Ulanoff. "A cheap motherboard, 2 GB of super-cheap RAM, integrated graphics and an external power supply would cost more than $10. Maybe you could build all that for under $100, but then you still need a keyboard and display."

Wired at least considered the possible merits

We wonder if this is a proof of concept, a way for the government to create an open standard for cheap computers. The actual making of things could be done by private companies. That way, the little box starts to make sense -- a single, core system sat inside anything from a cheap OLPC-stlyle notebook to a low-powered desktop.

For the tech press it was a classic example of "vaporware" — promised technology that never materializes.For India a case of perceptions overtaking reality. What did the government civil servants think they were doing?

PS i was suckered too: http://tinyurl.com/rrlaptop although with health warnings

Experts doubt that a laptop at $20 or $10 is commercially sustainable. Rajesh Jain, managing director of Netcore Solutions and a pioneer of low-cost computing in India, said: "You cannot even [make] a computer screen for $20. And India does not build much computer hardware. So where will the savings come from?"

Some bloggers today saw the new laptop as nothing more than a "souped up calculator". The scepticism was summed up by Atanu Dey, whose blog read: "If the government could pull-off a near-impossible technological miracle, does it not imply that the entire global computer industry is either totally incompetent or else it is a huge scam which produces stuff at very little cost and sells them at exorbitant prices."

Journalistic Insight

2009-01-27T22:08:00.006+05:30

The Sunday Times' sting has no peer

Jonathan Calvert is a remarkable reporter. Almost fifteen years ago, he and I were part of the Sunday Times Investigations Unit called Insight. It was here that the darker arts were practised in the pursuit of the truth. There were more than a few laws bent to get a story. But in one role JC was magnificent - he could act as a small time businessman looking to pay elected representatives to further his interest.

So it was that he and I went off to see what happened if MPs were offered cash to put down parliamentary questions. I did the Labour lot - and nobody took the bait although a couple came close, as I recall. Two Tories were caught. This piece of journalism, a splash in the Sunday Times in July 1994, launched the flood of sleaze that submerged the Major government. Now JC has done it again with another classic sting operation in the weekend papers - the price of a peer to fix the law. Selling public office for private gain is one lesson from history that parliamentarians and peers need to learn.

Crisis! What Crisis?

2009-01-21T21:27:00.006+05:30

You don't need Jim Rogers (above) to see that Labour is not working in Britain. Today's bad news sees unemployment top 1.9m, the highest since 1999.

This is the tip of the icebrg. With sterling falling to the lowest level since 2001 versus the dollar as well as dropping a fourth day against the euro, the pound appears without a parachute. Then there's the small matter of the taxpayer shelling out a few hundred billion quid for the banks' toxic assets. Oh and did we mention a possible sovereign debt problem of IMF-sized proportions? So there's a possible run on banks, the pound and the nation's pile of debt.

On whose watch did this mess occur? At some point voters are going to turn on the current administration. Gordon Brown may have to sack a lot of people (start at the Financial Services Authority for failing to squeeze the banks until they squeaked) to save his own job.

Obama's inaugural address

2009-01-21T00:37:00.007+05:30

The full speech, sent out by the Presidential Inaugural Committee.

Sober but telling. Both the country and the world are left the better for it.

My fellow citizens: I stand here today humbled by the task before us, grateful for the trust you have bestowed, mindful of the sacrifices borne by our ancestors. I thank President Bush for his service to our nation, as well as the generosity and cooperation he has shown throughout this transition.

Forty-four Americans have now taken the presidential oath. The words have been spoken during rising tides of prosperity and the still waters of peace. Yet, every so often the oath is taken amidst gathering clouds and raging storms. At these moments, America has carried on not simply because of the skill or vision of those in high office, but because We the People have remained faithful to the ideals of our forebearers, and true to our founding documents.

So it has been. So it must be with this generation of Americans.

That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, a consequence of greed and irresponsibility on the part of some, but also our collective failure to make hard choices and prepare the nation for a new age. Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet.

These are the indicators of crisis, subject to data and statistics. Less measurable but no less profound is a sapping of confidence across our land - a nagging fear that America's decline is inevitable, and that the next generation must lower its sights.

Today I say to you that the challenges we face are real. They are serious and they are many. They will not be met easily or in a short span of time. But know this, America - they will be met.

On this day, we gather because we have chosen hope over fear, unity of purpose over conflict and discord.

On this day, we come to proclaim an end to the petty grievances and false promises, the recriminations and worn out dogmas, that for far too long have strangled our politics.

We remain a young nation, but in the words of Scripture, the time has come to set aside childish things. The time has come to reaffirm our enduring spirit; to choose our better history; to carry forward that precious gift, that noble idea, passed on from generation to generation: the God-given promise that all are equal, all are free, and all deserve a chance to pursue their full measure of happiness.

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of short-cuts or settling for less. It has not been the path for the faint-hearted - for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things - some celebrated but more often men and women obscure in their labor, who have carried us up the long, rugged path towards prosperity and freedom.

For us, they packed up their few worldly possessions and traveled across oceans in search of a new life.

For us, they toiled in sweatshops and settled the West; endured the lash of the whip and plowed the hard earth.

For us, they fought and died, in places like Concord and Gettysburg; Normandy and Khe Sanh.

Time and again these men and women struggled and sacrificed and worked till their hands were raw so that we might live a better life. They saw America as bigger than the sum of our individual ambitions; greater than all the differences of birth or wealth or faction.

This is the journey we continue today. We remain the most prosperous, powerful nation on Earth. Our workers are no less productive than when this crisis began. Our minds are no less inventive, our goods and services no less needed than they were last week or last month or last year. Our capacity remains undiminished. But our time of standing pat, of protecting narrow interests and putting off unpleasant decisions - that time has surely passed. Starting today, we must pick ourselves up, dust ourselves off, and begin again the work of remaking America.

For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act - not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do.

Now, there are some who question the scale of our ambitions - who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them - that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works - whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public's dollars will be held to account - to spend wisely, reform bad habits, and do our business in the light of day - because only then can we restore the vital trust between a people and their government.

Nor is the question before us whether the market is a force for good or ill. Its power to generate wealth and expand freedom is unmatched, but this crisis has reminded us that without a watchful eye, the market can spin out of control - and that a nation cannot prosper long when it favors only the prosperous. The success of our economy has always depended not just on the size of our Gross Domestic Product, but on the reach of our prosperity; on our ability to extend opportunity to every willing heart - not out of charity, but because it is the surest route to our common good.

As for our common defense, we reject as false the choice between our safety and our ideals. Our Founding Fathers, faced with perils we can scarcely imagine, drafted a charter to assure the rule of law and the rights of man, a charter expanded by the blood of generations. Those ideals still light the world, and we will not give them up for expedience's sake. And so to all other peoples and governments who are watching today, from the grandest capitals to the small village where my father was born: know that America is a friend of each nation and every man, woman, and child who seeks a future of peace and dignity, and that we are ready to lead once more.

Recall that earlier generations faced down fascism and communism not just with missiles and tanks, but with sturdy alliances and enduring convictions. They understood that our power alone cannot protect us, nor does it entitle us to do as we please. Instead, they knew that our power grows through its prudent use; our security emanates from the justness of our cause, the force of our example, the tempering qualities of humility and restraint.

We are the keepers of this legacy. Guided by these principles once more, we can meet those new threats that demand even greater effort - even greater cooperation and understanding between nations. We will begin to responsibly leave Iraq to its people, and forge a hard-earned peace in Afghanistan. With old friends and former foes, we will work tirelessly to lessen the nuclear threat, and roll back the specter of a warming planet. We will not apologize for our way of life, nor will we waver in its defense, and for those who seek to advance their aims by inducing terror and slaughtering innocents, we say to you now that our spirit is stronger and cannot be broken; you cannot outlast us, and we will defeat you.

For we know that our patchwork heritage is a strength, not a weakness. We are a nation of Christians and Muslims, Jews and Hindus - and non-believers. We are shaped by every language and culture, drawn from every end of this Earth; and because we have tasted the bitter swill of civil war and segregation, and emerged from that dark chapter stronger and more united, we cannot help but believe that the old hatreds shall someday pass; that the lines of tribe shall soon dissolve; that as the world grows smaller, our common humanity shall reveal itself; and that America must play its role in ushering in a new era of peace.

To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect. To those leaders around the globe who seek to sow conflict, or blame their society's ills on the West - know that your people will judge you on what you can build, not what you destroy. To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.

To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow; to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to suffering outside our borders; nor can we consume the world's resources without regard to effect. For the world has changed, and we must change with it.

As we consider the road that unfolds before us, we remember with humble gratitude those brave Americans who, at this very hour, patrol far-off deserts and distant mountains. They have something to tell us today, just as the fallen heroes who lie in Arlington whisper through the ages. We honor them not only because they are guardians of our liberty, but because they embody the spirit of service; a willingness to find meaning in something greater than themselves. And yet, at this moment - a moment that will define a generation - it is precisely this spirit that must inhabit us all.

For as much as government can do and must do, it is ultimately the faith and determination of the American people upon which this nation relies. It is the kindness to take in a stranger when the levees break, the selflessness of workers who would rather cut their hours than see a friend lose their job which sees us through our darkest hours. It is the firefighter's courage to storm a stairway filled with smoke, but also a parent's willingness to nurture a child, that finally decides our fate.

Our challenges may be new. The instruments with which we meet them may be new. But those values upon which our success depends - hard work and honesty, courage and fair play, tolerance and curiosity, loyalty and patriotism - these things are old. These things are true. They have been the quiet force of progress throughout our history. What is demanded then is a return to these truths. What is required of us now is a new era of responsibility - a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task.

This is the price and the promise of citizenship.

This is the source of our confidence - the knowledge that God calls on us to shape an uncertain destiny.

This is the meaning of our liberty and our creed - why men and women and children of every race and every faith can join in celebration across this magnificent mall, and why a man whose father less than sixty years ago might not have been served at a local restaurant can now stand before you to take a most sacred oath.

So let us mark this day with remembrance, of who we are and how far we have traveled. In the year of America's birth, in the coldest of months, a small band of patriots huddled by dying campfires on the shores of an icy river. The capital was abandoned. The enemy was advancing. The snow was stained with blood. At a moment when the outcome of our revolution was most in doubt, the father of our nation ordered these words be read to the people:

"Let it be told to the future world...that in the depth of winter, when nothing but hope and virtue could survive...that the city and the country, alarmed at one common danger, came forth to meet [it]."

America. In the face of our common dangers, in this winter of our hardship, let us remember these timeless words. With hope and virtue, let us brave once more the icy currents, and endure what storms may come. Let it be said by our children's children that when we were tested we refused to let this journey end, that we did not turn back nor did we falter; and with eyes fixed on the horizon and God's grace upon us, we carried forth that great gift of freedom and delivered it safely to future generations.

Obama: too smart for president?

2009-01-20T20:42:00.006+05:30

Obamania peaks today with inauguration of the country’s 44th president. No other country makes such a drama out of its politics like America. This is a happy ending to the Obama fairy tale. A black boy from nowhere rises to become head of the most powerful state in the world. Today is just where the story begins.

The power of the presidency is a strangely malleable thing - one that is moulded largely by the incumbent’s personality and its personification of the popular mood. Obama has proved a natural at doing this well.

The US is a populist political culture where politicians express in large part what the public feels. During the campaign the president-elect hit the right notes on Iraq, the credit crunch and Afghanistan long before anyone else in public life. One British minister recently spoke to me of Obama in Jedi-like terms, of his “preternatural ability” in sensing what lies beyond the political horizon.

Apart from race, the most important thing about the new president is that it marks the return of the Intellectual in Office. Obama is smart. This has been a hindrance in the US political system. Clever people are not seen as warm. They are portrayed - especially by their opponents - as sly, elite types who claim to be able to fix America but cannot fix a flat tyre.

It's not always fatal. Bill Clinton was a brainy guy but it was hidden in a fug of cigar smoke, semen-stained dresses and big haired blondes. With Bill there was no moral character to ruin. Clearly Obama owes a big thank you to George W Bush, the frat boy president who nearly sunk America.

Obama’s popularity was not down to the fact he was one of the guys. Sometimes this backfired on him. Obama had to hide the fact he played hoops well and then embarrassingly turn up at bowling alleys looking like he was lost.

On this day of triumph there are reasons to worry. The United States has a tradition of resenting intellectuals, seeing them as anti-egalitarian and lacking a common touch. For all the universities and think tanks in the US, Americans are more in thrall to the public concern, independence and self-respect of ordinary citizens than any qualities possessed by a college professor.

For Obama the trick will be to mask his penchant for deliberation and precise thinking with quick, snappy decision-making and seizing of the right opportunities. Only his meanest opponents would not wish him well.

PS I am in Britain, so the Asian bit of musings may have to wait a while

Israel's biblical law: 100 eyes for an eye

2009-01-19T16:06:00.009+05:30

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Thanks to the delusions of the Bush years, Israel's mailed fist strategy had been overshadowed by the bigger and uglier punches thrown by America in the Middle East. No longer.

Twenty two days of war have left more than 1,300 Palestinians dead. About half of them have been civilians. Israeli deaths numbered 13 - nine in combat and four from Hamas's rockets. That's a death ratio of 1 Israeli to 100 Palestinians.

This show of strength is what happens when intellect gets swallowed by fanaticism. Israel looks like it will never engage in meaningful negotiations with its Arab neighbours to end disputes. The last three weeks show that Tel Aviv thinks it better to resort to overwhelming military force. Hamas has no finer recruiting officer than the Israeli Defence Force. The zealotry Hamas espouses will now grow longer roots in Gazan soil.

The only winners will be colonial Zionism and militant Islamism, blood brothers in war.

Chandni Chowk to China, India and Chindia

2009-01-16T12:44:00.006+05:30

"You are looking at a film that does appalling things to Indo-Chinese relations" - Subash K Jha

Chandni Chowk to China is apparently a "movie" - backed by Hollywood - that was supposed to herald a new wave of Chindian films. The reviews say it all however. Hammy acting, ridiculous fight sequences and heaps of bluntly racist stereotyping confirm that Asia's two great cultures will remain joined by geography and little else. At least the actors have fun. The audience do not.

Given the vast gaps in understanding between the peoples of the two countries, I am convinced that Buddhism will remain the last significant cultural export from India to China.

See for yourself below

The heat is on... Google

2009-01-12T10:46:00.004+05:30

Two search requests on the internet website Google produce as much carbon dioxide as boiling a kettle

America needs to wean itself off its dependency to know more about everything, everywhere, everytime...

read more

Obama Nationalists

2008-11-05T17:01:00.001+05:30

Like the rest of the world, India woke up this morning agog at Obama’s victory. His speech as President-elect was relayed live on every one of the three dozen local language news channels this morning displacing the usual blizzard of crime, stock market and cricket statistics.

Rolling interviews with beaming African Americans, both voters and punters, probably meant that Indians saw more black people on their screen over breakfast than ever before.

That said the US election chatter was numbing. There were vapid interviews with Indian journalists from America, chats with Bangalore geeks reminiscing about time spent in the States and Indian psephologists attempting to draw comparisons between the world’s oldest and the largest democracies.

In a country that sees itself as the third great democratic revolution (the US and France being the first two) Obamania knows no bounds. I spoke to the foreign editor of one of India’s biggest English newspapers who could barely draw breath relaying her a near-spiritual experience of Obama’s victory at Delhi’s American centre.

There is a presumption that democracies are all built the same. India and America were both colonies and are now open societies with a free press, independent judges and rights enshrined in law. However the philosophies that underpin freedom are different in each nation. America, as the President-elect, told Chicago’s Grant Park is place where “all things are possible”.

In India this is not true. People have yet to break the boundaries of gender and social-standing in India and are unable largely to choose a life for themselves. The reality is that identity – be it caste, class, race or religion - is central to the character of India's public life. It matters where you come from and who your father was in way that Americans would find bizarre.

Democracy in India is too immature to produce a President Obama. Although the country has had a Muslim nuclear scientist as president, a Sikh economist as prime minister and a Roman Catholic woman as leader of the biggest party these are merely outcomes of patronage.

All were picked to be leaders with only Sonia Gandhi having a popular mandate to be prime minister – one she could not accept as the Hindu nationalist party threatened to campaign against her on the basis of religion. It would be like white American politicians saying they could not co-operate with President Obama because he was black.

Indians love the symbolism of Obama and many compare their impressive Dalit politician Mayawati with him. In politics symbols are important. A black man in the White house is powerful stuff – just as a Dalit woman as prime minister would be in India.

Such victories can be seen as a spur for minorities in democracies who see a conspiracy to keep them out of power. But images are themselves powerless. President Obama will not be able stop everyday racism or immediately change the appalling incarceration rate of young black men in America. Neither can Mayawati stop Dalit atrocities in the Indian state of Uttar Pradesh where she is chief minister.

What is missing from India’s coverage of Obama’s electrifying election is the acknowledgement that there are escape routes in America and there are few in India. There’s still too much emphasis placed on everyone knowing their place in India. There’s a little too much reverence for the hereditary principle. Too little importance is given to the rights of the individual. The result is that India will have to wait many years before the country can claim to have an Obama moment.

white-hot elephants in the sky

2008-10-22T19:28:00.002+05:30

India’s lunar rocket blast off this morning from the balmy island shores in the Bay of Bengal is about a country asking for the moon – and getting it. To brush off those who wonder why India – the country with the world’s greatest number of poor people - is spending $86m on repeating what the Americans, the Russians, the Chinese and the Japanese have already done Indian space officials have talked of the holy grail of nuclear energy: fusion.

You see the moon has 5m tonnes of Helium 3 - which is the ideal fuel for nuclear fusion power. Fusion’s the next new, new nuclear thing. Indian officials will tell anyone who asks that fusion creates four times as much energy as boring old nuclear fission.

Although nuclear fusion can be best described as experimental, the technologists say it does not produce environmental problems like radioactive nuclear waste. The message is it is clean and green.

To create the right amount of anxiety at home, the space officials will point out that Indians must act before the Chinese do. You see the Chinese have already worked out that three space shuttle missions a year could bring enough Helium 3 for the whole planet. These are not outright lies - just calculations not grounded in reality.

Nuclear Fusion is the stuff that stars are made off. Basically it’s the energy released when two light atomic nuclei are smashed together to make a heavier one. All you need to do is heat gas up to the temperature of the centre of the sun and then design a material that can contain this superheated plasma and collect loads of neutrons.

Although the science was worked out in the 1940s fusion has led to the thermonuclear explosion and little else but a series of hugely expensive white elephants. The latest of which is the International Thermonuclear Experimental Reactor (ITER) – a $12bn project backed by the US, the European Union, Japan, Russia, China, India and South Korea. No surprise then that they all have eyes on the moon.

To sell a problem that has eluded science’s best brains for more than half a century as a solution smacks of desperation. India is a nation with a proliferating development needs – the global hunger index ranks it below Laos and Burkina Faso. Hundreds of millions of Indians still openly defecate in fields, at roadsides and beside train tracks. Common tropical diseases easily overwhelm the country’s poorly-funded public health system. Its roads, railways and airports all need money and managerial overhauls.

It’s not that India should not have a space programme. It should. To those who ask why bother to reach the moon, the answer is why did we bother to reach America. Human expansion is about expanding our capabilities. In that respect India is precocious - doing many things well ahead of what countries usually do at similar stages of development. But with precocity can come a hubris that is hard to shake off in later life. Perhaps the country would do well to direct some of its remarkable talents to the more obvious, acute problems it faces rather than inventing reasons to reach for the stars.

the crash in indian politics

2008-10-14T18:01:00.001+05:30

History seems to show that big crashes teach big lessons – and many of the new rules born out of panic and chaos remain both in law and common sense. So the humbling of Wall Street and the City of London has ended the idea that the market rules and financial capital is king.

Instead the state has returned with a vengeance – nationalising and regulating its way back into the public’s mind. Government is back in the United States, Japan and the European Union and is busy attempting to stave off “a meltdown”. Meanwhile the world is kept afloat by China and India.

Neither Asian giant will be untouched by the crisis – and growth will slow in both countries. The International Monetary Fund sees China growing at 9.3 per cent this year down from 11.9 per cent last year. India will manage 7.9 per cent, off from 9.3 per cent.

Economic developments have political consequences. But they are not the ones you might expect. The question here is not about growth but about the model of government - what works best after the crash?

India’s government would like to take the credit for running the world’s second fastest growing major economy over the last five years. It would also like electors to believe it had nothing to do with the half a trillion pounds that evaporated from the country’s stock markets since January.

The fact is none of this is relevant to Indian democracy. Most governments in India are thrown out of office – because voters do not believe they have done anything deserving to remain.

Paradoxically the lack of democracy in China has meant that performance is a necessity. Beijing’s Communist Party has to deliver public goods such as education and electricity to remain in power.

India’s democrats remain in power because the public had to vote for someone. When the polls arrive, eighty per cent of the time Indian politicians are booted out of office. Little wonder communists in Beijing think elections are bourgeois diversions.

India has built its economy without the tools of an autocratic state. The country has a legal opposition and channels for protest. But it has not had a revolutionary break with the past. There is no need for the elite to overthrow the Indian state because they benefit hugely from it. After all why would they get rid of a social structure that maintains their privileges?

Indian democracy appears a squabble for spoils rather than an urge to improve. What the west cannot see is that India’s democracy is largely built around competition by different groups, who vie to control parts of the economy. They have a shared interest in growing the economy but only to seize a larger chunk for themselves.

That’s why caste remains such a big issue – especially when government jobs and university places can be got on the basis of your ancestor’s alleged persecution. India is also a rural, unindustrialised giant so issues of class are a much smaller factor than in the west.

This is kind of talk does not sit well with the western narrative that the development of individual reason lead to capitalism and more individualistic societies. That’s because it’s wrong. The west got rich first and then got democratic.

Because the poor did not have rights, the transformation from agriculture to industry was a violent one. In England, peasants in the 18th-century were simply thrown off the land. Parliamentary acts, pushed through by a landed upper class, cut down the amount of common pastureland. The result was to create a rootless labour force that fuelled the industrial revolution. China’s modern day version is just on a bigger, perhaps bloodier, scale.

If India is to take advantage of its newfound economic might and create an industrial base for deploying mass production and employing its teeming millions, then it will need to reconcile politics with history. If India cannot industrialise, it will never be rich. But Indian democracy has shied away from the conflict that development brings – preferring talking to doing.

Although no one wants violence, Indian democracy is failing to deliver the step change it needs and instead is planting the seeds of its own demise. The fate of the world’s cheapest production car – the Tata Nano – is symbolic of problems inaction will bring.

The administration of West Bengal could not manage to negotiate with a few thousands farmers for a 1,000 acre plot of land to build a factory for the Nano. Instead the car plant will now be in Gujarat – boosting the profile of Narendra Modi, the right-wing Hindu leader of the state whose administration has been accused of orchestrating mobs to kill Muslims in 2002.

Mr Modi is a populist leader with a demagogic style. He is revered and feared. The United States has twice refused him a visa on state department advice. Yet in taking up the Tata project he is seen as a man who gets things done when others cannot. Mr Modi is a religious conservative who promises a reactionary revolution from above.

Mr Modi is also a clever politician, building a nationwide reputation as an economic reformer who has cracked down on corruption. He appears to recognise that the globe is at a turning point and portrays himself as seeking office by accident, swept into power by circumstance. If that were to happen India would regret it. So would the rest of the world.

On screen confidence without reason

2008-10-09T18:32:00.003+05:30

While the rest of the world gets used to harder times, the boom of Indian cinema appears to go on. Steven Spielberg is being bailed out by an Indian billionaire. Disney is setting up shop in Bollywood. Another movie mogul with a billion dollars to put into the movies talks of exploiting the talent of the “brown race”.

What worries me is not the fusing of art and commerce but the homogenizing spread of Indian cinema. Despite being an old civilisation, India is a young country obsessed with itself. With a billion people and a vastness to explore, Indian movies do not tend to look outside for inspiration.

The result is that Indian films have a distinctive subcontinental flavour about them. Female characters rarely go beyond eye-candy. Heroes are there to be admired not understood. Nobody appears to be able to take their life into their own hands and make decisions that transcend their place in the social hierarchy.

To escape this suffocating Indian landscape, mainstream filmmakers put Hindi-speaking actors in foreign countries. In a tacit admission of their own nation’s shortcomings, Indians abroad can have live-in relationships in Australia (Salaam Namaste), adulterous affairs in New York (Kabhi Alvida Naa Kehna) and marry who they want in London (Kabhi Kushi Kabhi Gham).

Even when the ambitious is attempted, the interpretation lacks a punch. Take Shakespeare’s Othello, the black warrior hero who is innocent in love and hence vulnerable to the treachery of his companion-in-arms, which was translated by Bollywood into Omkara. In the Indian version the main character is a “half-caste” political strongman who loses his way in the badlands of north India.

Whereas seventeenth century audiences in England could make sense of the Moor’s existential angst, twenty-first century Indians could not countenance an “untouchable” leader – a true outsider in society - preferring instead to make sure he had Brahmin blood.

Even in the new capitalist-realist genre of movies such as Mumbai Meri Jaan, which are supposed to somehow mirror real life, emotions are thick and creamy. Plots curdle, congealed by a mixture of bad acting and terrible script-writing. If you want a taste of how sour things can turn out sit through a Bollywood blockbuster like Tashaan, which is notable for little else but the stick-thin figure of starlet Kareena Kapoor in a bikini.

Of course there is cinema in India that does some real thinking about society, politics and human purpose. Malayalam films, from Kerala, can be both touching and funny. There’s often an attempt to portray people who are caught up in a web of circumstances that they are struggling to understand. But these are gems in the cinematic slurry.

Those who do produce remarkable films depart – tired perhaps by the provincialism of Indian cinema. Mira Nair, whose Salaam Mumbai is the best movie about the city for years, left India for the west and continues to make good films where characters are explored and audiences allowed to analysis situations in the light of their own experiences.

Western movies for all their faults have shown tremendous staying power, able to reinvent themselves in clever ways. The surge of ironic pop culture race humor – just look at Borat – is a sign of self-confidence. In India there’s an urge to protect the native culture that leaves a whole series of sexual, caste, racial issues untouched by any degree of purpose.

For all the triumphalism in India about its nascent soft superpower onscreen, it is sobering to note that other developing countries have produced films of lasting aesthetic value. Brazil put out the stunning favela violence of City of God. Lebanese director Nadine Labaki produced the wonderful Caramel about forbidden love in Beirut. Ominously the People's Republic of China is once again becoming a major artistic force in world cinema.

Even worse just consider the output of American television to see the gap between what India can offer and what the rest of the world chooses to watch. There’s no matching the psychological dramas and human tangles found in the Wire or Tell Me You Love Me. There’s nothing in Indian comedy that could like The Office transform the everyday into laughing gas. Even the BBC’s rendition of Thomas Hardy’s Tess of the d'Urbervilles reminds only of how far Indian scripts have to come.

There’s a lot of talent in India. There’s a lot of money. There’s a lot of technical know-how. But the verdict on the country’s cinema has been in for some time: guilty of producing nationalist ephemera that prefers to explore the Indian condition rather than the human one.

Eastwad Ho!

2008-10-03T13:52:00.003+05:30

The United States is slowly but surely being ravaged by demons of its own design. Unlike Britain at the height of its powers America does not export people or capital. It imports them. Driven by a deep sense of insularity Washington has attempted to shape the world to suit its interests without ever leaving home – unless fully armed.

The contradiction is that the United States has been a military hegemon without being a financial one. Since World War II the country has looked instead to others to carry the heavy burden of producing cheap goods and inexpensive services while it made profits.

First Europe was rebuilt by exporting to the US, then Japan, then South-east Asia, then China and more recently India. Although Chinese manufacturing workers have improved their lot in the last fifteen – real income was effectively transferred to American consumers. Indian software companies were the beneficiaries of the distribution of American outsourcing, but the American companies took home the real money.

The United States has been gobbling up the world's resources – be it labour, capital or minerals – so that Americans can live beyond their means. That these might run out has never bothered the United States. The unshakeable belief in the march of science to solve any problem no matter how big is an essential part of the American dream.

This is why the credit crunch is such a blow. The finance sector was at the heart of the United States’ economy – its profits accounted for 40 per cent of all private companies’ and top workers earned wages beyond the dreams of ordinary workers.

Yet all those high-powered PhDs could not say what their firms had been trading in, what their bankers were doing, what the risks were and how many bombs were ticking in the basement. The first went off in Bear Stearns. The rest have blown up most of Wall Street in a chain reaction that shows no sign of stopping.

The events of the last few weeks also calls into question the country’s financial sophistication – its ability to raise cash from taxpayers and borrow from investors. After all if the fact that Lehman Brothers was short by hundreds of billions of dollars slipped past regulators what else could they miss in the national accounts?

The perception that America remains an exceptional country has blinded many. For too long the world has seen America as the consumer of last resort. China has been its mirror image: the producer of first resort.

Beijing has done so by manipulating its currency so that its exports remain cheap – leading to a trillion-dollar cushion of dollar reserves. Others did the same: India has reserves of $300bn.

The consequence is that the world has allowed America to borrow egregiously and excessively in its own currency. Any other nation would have been put on bankruptcy alert by the international watchdogs such as the International Monetary Fund.

This runaway behaviour has fuelled American consumption well beyond reasonable levels. Americans need to stop buying so much and saving too little. There has to be some public acceptance that government borrowing today implies cuts in spending or increases in tax in the future.

What has not been fully recognised is that amidst the wreckage, growth in India and China has dropped but it remains high – at about 8 per cent a year. The centre of global economic gravity is still shifting away from the West to the East.

Percy Mistry, one of India’s best known investment bankers, points out that in little over a decade there are likely to be two new global currencies that will change the rules of the game: the Chinese yuan and the Indian rupee.

There is a difference in perception here between these two Asian giants, as Mr Mistry is quick to acknowledge. “China is seen by the world and treated by it as a majestic tiger; India is more like a Labrador intent more on scratching its itches than on going anywhere.”

Despite the contrasting image of and propaganda issued by the Himalayan neighbours, both are on a high-growth trajectory with prospects in India appearing even more rosy than in China.

Mr Mistry’s logic is compelling. If these two Himalayan neighbours become the biggest economies in the world then how long will developed countries allow them to gain from undervalued exchange rates?

With protectionist pressures building in the US – Clinton’s Labour secretary Robert Reich is already calling for an era of Angry Populism – it cannot be long before the yuan and rupee will be valued by the money markets. This will subject the policies of those ruling these vast populous countries where per capita incomes remain low to an unprecedented degree of scrutiny.

Should we not expect the same of the richest among us? The answer is certainly yes. Although the presidential candidates in the United States have talked about change, they have not spelt out what that change should be.

There is still a perception of prosperity round the corner. Even climate change is being sold, by none other than Thomas Friedman, as a great new way of exporting American technological breakthroughs to the rest of world. No one is being honest enough to say what is really required: to put the American way of life up for negotiation.

The Clash Within

2008-09-29T19:18:00.004+05:30

Standing next to France’s President Sarkozy, the Indian prime minister Manmohan Singh today made a heartfelt plea over the spread of anti-Christian violence in India.

The sight of Hindu mobs smashing churches and prayer halls while Christians in the country are killed or left cowering under tarpaulin sheets in refugee camps is, as Dr Singh rightly described, a “national shame”.

There are calls from within the ruling Congress party, which relies on the votes of Christians and Muslims in India, to ban Hindu extremist organisations such as the Bajrang Dal, who use force when the force of argument fails.

There’s been bloodshed on both sides. One Christian priest was “cut to pieces” in front of his wife. A Hindu priest was shot dead for campaigning against religious conversions.

The violence, which has left nearly two-dozen dead, has spread across six states. Even after the Pope intervened, the Roman Catholic archbishop of one of the worst affected areas in eastern India said the situation was “out of control”.

What lies behind this violence is nothing less than a struggle for the soul of India. Religion is deeply rooted in this country of one billion. The divine was fundamental in the creation of post-independence India. Unlike Europe, in India the Gods will not disappear in a blaze of rational thinking.

But views of God led to a schism in Indian nationalism. One side is rooted in secular thinking: that beneath the differences among India’s religions there is a common creed, a moral order articulated in the country’s constitution.

Opposing this is the Hindu right. Their philosophy aims to unify the country under the banner of the majority religion. It sees the country’s post-independence constitution as an instrument forged by “pseudo-secularists” which now needs to be updated to reflect the Hindu character of India.

Christians in India long pre-dated the British who sponsored missionary activity with little success. In 1947 only three per cent of the country was Christian. There’s an unmistakable tint to Christianity in India: the priests are mostly upper-caste Brahmin converts and the flock are mostly drawn from the country’s untouchable communities known as Dalits.

Contemporary Hindu anger centres on the idea that India’s rise will see an explosion of Christians in the country – a takeover by a foreign ideology like that experienced by South Korea in the 1960s. The Hindu nationalist party, the Bharatiya Janata Party, says it is against proselytization through coercion, inducement, or by vilifying any faith. That conversion continues and it remains legal drives Hindu groups into a bloody frenzy.

By decrying the violence but remaining powerless to prevent it, the Indian prime minister exposes his strength and weakness. The Indian federal government could suspend state administrations – for failing to quell violence. This is the nuclear option of unseating a democratically elected local regime. Instead the Indian prime minister chooses only speak up.

Martha Nussbaum, the noted American philospher, draws a comparison with 1950s America where only a few groups such as the Ku Klux Klan would openly advocate violence but “where the whole society was suffused with attitudes that …often condoned violence against African Americans, attitudes that clearly affected the behaviour of the police and other officers of the law”.

This remark is telling because in the southern Indian town of Mangalore it was Christian churches which were attacked yet the leaders of Hindu mobs walked free for days, untouched by the police.

The violence is the really about the clash within. Like the United States, India has never had a state-imposed religion. It has always had a tradition of sects and religious minorities who coexist and compete with each other without suffering state persecution or patronage.

Instead of trying to capture state power for the purpose of waging a cultural war, the Hindu right would do the country a service by reforming itself from within – promoting equality and unifying its denominations and sects. Religion’s role in India must be one of restraining passions, not inflaming them.

where's the beef?

2008-07-19T10:34:00.002+05:30

My first post after a longish break in Blighty is about one of my favourite foodstuffs - beef. I never miss the chance to eat the meat and gorged on cooked cow when back home. Returning to Delhi is a necessary culinary torture I'd rather not have to live through. So the first thing I like to do when I am back is get some cow. This is not easy in north India where they take Hinduism into the kitchen and cow-slaughter can lead to riots.

However you can find the real thing in Delhi, usually tucked away in some shady backstreet. The place I'd currently recommend is a Korean restuarant called Gung, the Palace. Went there last night and the melt-in-my-mouth beef was cooked at my table. The owner, a Korean expat whose mum does the cooking, told me that the fifty percent of the clientele was now Indian. "Now that is India progressing. Last year it was only 10 per cent".

It's not cricket

2008-05-23T15:26:00.004+05:30

This first appeared on comment is free, but what the hell...

If sport mirrors society, then India's Twenty20 cricket league has been a revelation. There have been allegations of racism, on-field violence and blunt sexism directed at imported cheerleaders. Off-field bigotry and pitch fisticuffs are deplorable, but the fact that they are being debated is not.

For this we have to thank the arrival of Twenty/20. Although cricket has always been seen as a religion in India, it was one that was only observed when the national team played. Very few people ever turned up to watch the domestic game in India, which was a poor preparation for the big occasions and did not garner meaningful television audiences.

The result was that Indian cricket became a trainspotters' delight - full of obscure language and rows over statistics, which only emphasised its idiosyncrasies. Twenty20 has finally ended this exceptionalism, asking Indians to think themselves as global trendsetters. That in turn has made the country take seriously debates about sporting attitude, fans' behaviour and the influence of money.

By borrowing from baseball and football and with a billion dollars behind it, Twenty20 has also revived a wilting sport. In this incarnation cricket has at last caught up with modern sporting age.

Like other spectator sports, razor-sharp reflexes in Twenty20 must be melded with technique. Pouring a day's game into three hours and 240 deliveries means that wrong decisions are mercilessly penalised. Purists might complain that gone is the tussle of wits between batter and bowler, replaced only by a slugfest of runs. But fans like a game that fits nicely into an evening. There is also no option for sides to draw - finally recognition that rewarding sporting prowess matters more to fans than competitive balance.

There is more to sport than watching teams vie for supremacy. Shorn of nationalism, Twenty20 has at last made cricket in India a cultural obsession in the same way football is in England. Thousands turn up at stadiums. The teams are multi-national and multi-ethnic. Indians have finally learned to love the brilliantly coarse Shane Warne, who has seen his unfancied team, the Rajasthan Royals, dominate.

The league has also proved you cannot buy success: billionaire Vijay Mallya spent a small fortune on Bangalore's Royal Challengers only to see them bottom of the league.

The game itself is a vehicle for change - challenging Indians to ask whether they as a society are really as modern as they think they are. In sport, when a country has issues, its teams face many of those same issues. So Indians have had to own up about the racism that blights their society - the apparent sending home of two black cheerleaders because of their race was front page news in Delhi. When the bombs exploded in Jaipur, home of the Rajasthan Royals, international players were not condemned for wanting to return home.

It is clear that the game is here to stay. In the coming years it will be interesting to see how the Twenty20 league shapes up. There have been calls from the Pakistan cricket board for a team to be based in Lahore. This presents risks as well as opportunities. It is true that good sporting rivalry is good for business, but it'd better if this did not stir a religious version of hooliganism.

Do not blame the game if passions explode. Twenty20 is the illustration, not the explanation, of the problem. That's why it has had a profound and welcome cultural impact in India. There are promising signs that it will become a sporting glue, binding together people from different backgrounds in support of the game. If that is not cricket, who cares?

The impotence of being

2008-05-16T10:17:00.004+05:30

You won't find me saying this too often, but there's a piece worth reading in the Hindu. In the opinion pages, Vidya Subrahmaniamexamines why Rahul Gandhi, scion of India's powerful ruling family, will fail to attract voters from the Dalit or untouchable community in the country's biggest state, Uttar Pradesh. She contrasts this with the vote-building success of Uttar Pradesh's chief minister, Mayawati, who leads a Dalit-empowerment party that swept to power last year.

The bottom line is that the Congress still functions as a royal court which pays lip service to the concerns of the downtrodden but is unwilling to let Dalit leadership advise the throne. In politics symbols are important. Mayawati's success as a politician is a spur for Dalits who see a conspiracy to keep them out of power. But images are themselves powerless. As Ms Subrahmaniam points out Mayawati is helpless to stop the everyday brutality perpetuated by other castes against Dalits.

Why the untouchable question remains central to the politics of India might confound western readers who are fed a daily diet of economic success stories about the rise of the country. The reality is that caste is central to the character of India's public life. People have yet to break the boundaries of gender and social-standing in India and are unable largely to choose a life for themselves.

Mayawati's rise seems to signify one big change. The first Indian regime was concerned with freedom from the British. It was also about defining the freedom of the self in the constitution. We are in the midst of the second regime where power is paramount. Power between the states and the nation and by one person over another.

The first regime, dominated by the Congress party, lasted more than 40 years. Mayawati's dream may be to be prime minister but I suspect her real role in politics will be to push India to the next stage of political development: that of rights of people and groups. When these become important in India, Mayawati will have won.

Left at the barricades

2008-05-08T10:09:00.002+05:30

If there is one place where the intellectual is venerated and his or her presence in or influence upon politics celebrated, then it is leftist India. The left-wing Indian leaders are clever, articulate types usually well-travelled and better read than their contemporaries.

So it is always disappointing to see them entangling themselves in knots. The thinking is never a problem. The “thinking through“ a disagreeable situation is. So on the nuclear deal with India the communists see the risks but weigh them too heavily. Indian leftists want to be seized by the moment, rather than to seize it.

Take Sitaram Yechury's piece today in the Hindustan Times, which name checks the New Statesman as the source of analysis. Again the understanding of the situation is correct: the US seeks to be top dog and cloak the pursuit of its national interest by blaming the rise of the rest.

But the solution is not to ban a form of trading, a bugbear of the communists and the demand of a very clever left-wing economist at the Planning Commission. This is merely an attempt to popularize a key part of the left's agenda, one which spectacularly failed to capture the attention of the public.

What is worrying that this strategy of permanent opposition turns off the electorate, who understand that those who shy from the logic of events can never be trusted to be masters of fate.

Would You Choose to Live in Tory Britain?

2008-05-02T17:47:00.002+05:30

Eh no. Unfortunately I don't have the casting vote in any British election. It is going to be pretty difficult to go back and have to put up with the smugness of David Cameron's Tory party.

If he does make it to No 10, it will be on the back of a slick media campaign and the tiredness of a Labour government. I interviewed "Dave" in Delhi in September 2006 and he was not the great triangulator, straddling left and right to come through the middle. He came across as a upper class public school boy on the make, resembling all those PR guys you'd meet in the 90s who were, to paraphrase Paul Keating, "shivers looking for spines to run up".

I hope this is just the public's way of saying shape up Labour.

English as she is speaking

2008-04-29T14:38:00.003+05:30

I read today that India will overtake the US as the world's biggest English-speaking population in 2010. What will this mean? The answer came in the form of a pamphlet slipped in with my newspapers. its content is reproduced below:

"DOES ENGLISH SOUNDS IMPOSSIBLE TO YOU?? LET'S MAKE IT POSSIBLE!

Hi!

All the 10thees! It is my pleasure to announce that I'm coming back again to get you succeed like genius as we did in the past.
It is an opportunity for both you and me to play English, the language of words to make outstanding performance in your board examinations within the remedial period of just three months. Let's Learn, Practice and Achieve the success."

Anyone who needs help with their English would gain from avoiding this teacher but if you feel the need to "play English" with Madam Nancy then drop me a line and I'll send you her address.

x

Indiaarrgh

2008-04-27T15:43:00.003+05:30

Was out in Delhi last night witnessing something very different in the coming class of cosmocrats, that group of people who run the world and line the corridors of the WB, IMF, UN etc. Despite the dust and heat of an incoming summer, all seemed to think their move to India was the right one to make.

These 20somethings talked about the opportunities and the energy of the place in a way that surprised me. India it appeared to them was rich with chances to flex their intellectual and creative muscle in a way that the US etc never offered. Where I saw sloth, they saw pensive refection. Where I saw bland pastiche, they saw innovation.

Tragedies in Paradise

2008-03-13T10:58:00.003+05:30

Been out of station in Sri Lanka, seeing the mockery of elections they call polls in the east of the country unfold, and then following the equally depressing drama of a mother struggle to get the police to investigate the patently obvious murder of her teenage daughter on a Goa beach.

Sri Lanka’s eastern coast is both beautiful and brutal. Death and murder hangs in the air, much like the shimmering heat that makes the place unbearable. The war over the territory has disappeared only for a reign of terror carried out by thugs, armed with weapons and attitude. Everyone is dirty. The police, the army, the officials, the would-be politicos, the rebels, the breakaway rebels. Filled with cruelty, Sri Lanka’s civil war is turning into a meaningless disaster. No winner, just buckets of blood split in the quest to impose democracy on a people who had gone to war for democratic rights.

For Scarlett Keeling and her mother Fiona MacKeown, the story is one of naivety. Fiona’s credulity for believing anyone would care if her teenage daughter dabbled in drugs and sex while she was missing from Planet Parent. Scarlett’s life was later lost in the beach spray of murder.

Worst is the Indian media’s haughty cynicism. Where were the reporters for two weeks while the mother went begging for someone to listen to her story? It took London’s Mail on Sunday to publish her distraught cries for help. And then a phalanx of Fleet St’s finest to turn up and basically expose the local drug tourism that passes for holidays in Anjuna beach.

I got into an argument with a local television reporter who turned up at the office to interview me over the Keeling case, because her private view was that Scarlett was obviously asking for it. When I got angry, the woman reporter said she’d been racially abused in England and nothing had happened. Words versus sticks and stones, I thought.

Maybe I am the naïve one. I must be stupid to believe that the world is fair. That crimes must be seen for what they are. That lives shouldn’t be lost cheaply. That when they are, someone has to pay. I don’t think these are just morally convenient notions of justice. Sure it’s hard to sift the wicked from the good. But not to bother, as in Sri Lanka and Goa, leaves it impossible for people to believe in possibility of justice. Rather humankind would be left, as I was, with the awful realisation that the world remains indifferent or even hostile to their plight.

The Grating Indian Bizarre of Paul Theroux

2008-02-23T13:56:00.002+05:30

Last week attended a talk by Paul Theroux, who luxuriated in the attention of the great and good at a talk in Delhi's American centre. I've never read a book by the 68-year-old author (he's written dozens) and after this session I never will.

Mr Theroux had nothing illuminating to say about his wanderings only remarking , immodestly, that he was one of the few travel writers to go back and retrace their steps. chatwin never did, he said with pride.

Paul Theroux went to find a tree he had planted in Kenya in teh 1960s. He talked at length about the trip, with the vim of some editor of Lonely Planet Africa. He went from London to north eastern India decades ago and said he'd done it again. And written about it again. Fascinating. Mr Theroux, like the V S Naipaul he condemns and so obviously admires, appeared supremely self-confident.

The audience had some interesting questions, among the foamy appreciation. Had he ever been wrong? (No). What civilisation did he most admire? (Vietnam because they forgave America). To a Sikh Mr Theroux went on about how he must know how difficult it must be to invade Afghanistan. he said here must be something wrong with giving aid to africa because the locals all had gone off to be English teachers in the west not in Africa. Given the difficulty of travelling for poor africans to America he sounded like some colonial worrying about uppity locals.

What Paul Theroux gave was a performance, a strut amongst the natives. Perhaps he should never have left home.

The beginning of history

2008-02-19T17:25:00.002+05:30

The unilateral declaration of independence by Muslim-majority Kosovo from orthodox-Christian Serbia has focussed the world’s gaze on Balkans again. The region is a rare piece of real estate in geopolitics — one that is able to provide a base to meddle in the soft underbelly of your adversary.

The pokers here is the EU-US axis. The target here is Russia, whose gas and oil wealth has propelled it back into the first rank of powers. Under President Putin, Russia seeks to expand its sphere of influence and curb meddling foreign powers who he sees, often rightly, as being behind the country’s decline in the 1990s.

These are not mere phantom theories. Russia knows to its cost the emergence of US-backed Islamism. The current secretary of state, Robert Gates, has admitted in his 1997 book “From the Shadows” that the US was giving aid to Islamic rebels in Afghanistan six months before the Soviet Union invaded. Zbignew Brzezinski, then President Jimmy Carter's National Security Advisor, defended this action saying it gave the Soviets “their Vietnam War”.

In many ways we are present at the beginning of a new world. Kosovo can be seen as the convergence of two trends. The first is political. There is a divide between those who favour single-party nationalist perpetual government, like that in Russia, and the multi-party system of political representation, like that of the EU. Note there is no need for the system to be secular, in effect recognising the shadow of religion on societies.

The second trend is the emergence of small nations when for centuries there was a tendency for countries to get bigger. Building large industries using captive home markets under the protection of trade barriers was the global economic norm until the mid-seventies. This favoured big nations. But the consensus fell apart in the 60s and 70s. A series of trade talks in the 1970s led to national governments scaling back tariffs.

Then came the movement of capital flows across borders in the eighties. This meant small countries did not need large populations to accumulate savings – they could attract cash from global investors who wanted better returns than they got at home. There was also an acceptance that the absolute amount of capital was not important; rather, it was the amount of capital per worker. Again small nations benefitted - despite calls for protectionism in larger economies suffering under high oil prices and unemployment.

Kosovo is a sliver of Europe and will almost certainly have a noisy multi-party system of government. It almost certainly be within a new western bloc – with its security guaranteed by the US and eventually federation with the European Union. Kosovo’s political and economic model will be modelled on the west and its stability reliant upon it.

We can see this process at work in Afghanistan, Georgia and Lebanon. Again the powers that have regarded these as virtual backyards are being replaced by western powers.

But Kosovo is a step further – carving out a state from Serbia. This is a direct result of the mid-90s war which the international community has decided was Serbi’as fault. Belgrade was simply unable to ensure human security in Kosovo. That Saddam Hussein massacred his own people was also the excuse the Blair and Bush war on Iraq.

The rising powers of the world, Russia, India and China all face Islamic insurgencies. Like Serbia they no doubt would not countenance the principle of independence for Chechnya, Kashmir or Xinjiang. All three nations might consider themselves too big and powerful to worry what the world thinks. But Kosovo is an important marker in international relations - emphasising that sovereignty and territorial integrity will be balanced with human rights. As long as it suits the US.

Mirage of power

2008-02-17T12:37:00.003+05:30

Pakistan again. My comment is free piece went up.

Despite the impression many have Pakistan is not a failing state. It is an extremely centralised one, run by set of actors over which there is little oversight. The most importnat of these is the military. In fact the only reining in is done by the Saudis, the Chinese and the Americans.

This for me remains the central point - and one upon which the Pakistani state needs to act. Whoever wins needs to be responsive to popular concerns especially on the economy. More attention perhaps on what the common man wants and less on containing India/Iran/Taliban or whatever else foreign backers desire...

The illusion of power

2008-02-14T18:26:00.006+05:30

At a talk the other night in Delhi to hear about Pakistan's forthcoming elections from various Indian thinkers - and a Pakistani diplomat - the mood was pretty somber. For the Indians Pakistan is either a failing state on the verge of collapse or a state about to fall into the hands of radical extremists. Either way it looks bad.

The elections were considered rigged - no independent judges, no independent election commission and local administration in the hands of feudal landlords. The caretaker government, which oversees the polls, is run by General President Musharraf's (GPM's) hand-picked PM. All true am afraid.

Almost uncommented upon by the western press are the millions of missing voters in this election. The election roll has shrunk in Pakistan by 20m electors since 2002 when the last (rigged) polls were held.

The Pakistani diplomat defended his country saying it was a victim of three historical earthquakes: the Iranian revolution, the Soviet invasion of Afghanistan and 9/11. These had seen the rise of extremism. This is a brave defence and one that is hard to swallow given that the Pakistani army bred its own extremists to gain depth in Kashmir and Afghanistan.

But the Pakistani diplomat, from the NWFP cadre, put his finger on exactly the problem. The politics of Pakistan is too important to be left to voters. The casting votes are in foreign hands. Truly popular policies - like ending US influence and subsidies to cope with rising food prices - won't be considered.

That underlines the grubby little secret of the west's engagement with Islamabad. For the US, the impression that a "free and fair" poll will be enough. For the Europeans, facing Afghan ire it will also be enough to rubber stamp these polls as acceptable. Saudi Arabia and China need no convincing on the need to avoid popular mandates.

Pakistan's voters will not decide the government this time. Despite plummeting popularity GPM will not face impeachment - you need 225 plus seats in a 342 seat house. Punjab has about 150 seats. Sindh another 60. No wonder Nawaz Sharif, son of Punjab's soil, and Asif Zardari, Benazir's Sindhi businessman husband, are talking.

It will remain just that. GPM has only to get his quislings, the MQM and religious parties together for long enough to frustrate the Nawaz-Zardari bandwagon. In a few months, I suspect, GPM thinks the alliance will crumble - and he will be able to divide and rule a sham chamber elected under shameful conditions.

Kerala, Naveen Andrews and me

2008-02-06T13:33:00.000+05:30

I loved this interview in the Guardian with Naveen Andrews because it deals with a lot of issues that I think about.

Like Andrews my parents came from Kerala to Britain in the 1960s. I too was slapped. I too was never gifted a linguistic heritage (my Malayalam stinks and I have learnt Hindi the hard way) because my parents wanted me to fit in. I also prefer the in-your-face working class racism in Britain to that found in the mouths of the smug middle-class. Unlike Andrews I was not a teenage dropout or an alcoholic. Drugs never led me to a serious addiction. I also do not have kids.

But in the piece I sensed something of Andrews that a group of young British Black people who grew up in 1970s London shared. That of hubris and defiance. I can see his point when Andrews talks of never feeling "at home in London, because people were constantly telling me I didn't belong here, so after a while, you tend to believe that." He is spot on in saying "people who would blanch at the idea of being thought of as being racist when they know that it fucking well is obvious."

Britain's self-perpetuating elite and its frozen snobbery is only softened by London's recent blaze of ethnic diversity. But I think Andrews found himself, like a lot of us, defying the order of things. The result is that you become an outcast. When you run afoul of the people in charge, you soon learn that you have to be chastized regardless of the value of your services. Maybe that is why he left Britain - and found love and a life away from home.

x

My enemy's enemy is my friend

2008-02-02T17:39:00.000+05:30

This week's Economist has a story which asks: "How America's own intelligence services have brought international policy on Iran to the edge of collapse". It concludes

"Iran may not yet be home free, but the international campaign to stop it getting the bomb that many countries think it wants is on the point of failure."

The story's theme is that US spies fumbled badly in producing a report last month which said Iran stopped its secret nuclear-weapons programme in 2003. A disaster for the Israelis who fear annihilation, the French and Germans who were working at the UN to contain Iran and of course the UK-US nuke-busters who consider Iran the Great Satan. Only the Russians and the Chinese (who else?) will gain.

My conspiracy theory of the day is different. The US economy is sinking - laid low by the bursting of the credit bubble. Having oil prices touch $100 is a burden the US can do without. So the president was seen begging the Saudi oil minister to increase supplies - and hence reduce the price on world markets. The Saudis are unmoved.

What could pressure them? Of course, Riyadh's rivals to the supremacy in the Middle East are the Mullahs of Teheran. So the US eases up on the Iranians - and brows furrow in the Arabian landmass. The US also wants the Saudis to tow the line in Pakistan, where they have considerable sway in the upcoming elections. Again giving Iran some leeway to chase after the Persian bomb would have the Saudis reaching for the rosemary.

None of this behaviour would surprise anyone in the Middle East where everyone knows my enemy's enemy is my friend.

Profits of Greed

2008-01-30T18:04:00.000+05:30

Am in Mumbai, India’s financial capital, when my eyes chanced upon Michael Lewis’ Bloomberg column in Mint about John Paulson, the Wall Street player who made $3bn betting that lending to US homeowners was a bubble that was going to go pop.

Lewis gave up a life on the trading floor for one behind the keyboard and knows a thing or two about the new rich. He’s pin point in identifying Paulson as the “truly satisfying villain” of the current bloodbath on Wall St. “All sorts of people are being sued, but most of them lost money, just like the victims. The first rule of financial villany is that the villain must have made off with a pile of loot”.

Paulson has made billions, garnering fame on the way. In the Wall Street Journal, Mr Paulson appears all too glad to say how easy it had all been as millions of Americans struggle to keep their homes. "I've never been involved in a trade with such unlimited upside," Paulson, 52, told the Journal. "Mortgage experts were too caught up" in their own happy talk, he added.

Although Paulson appears to be the epitome of the American Dream, having become a billionaire from humble roots in Queens, he has succeeded by undermining the foundation from where such aspirations stem, John Locke’s pusuit of “life, liberty and property”. In doing so he appears to have committed a cardinal sin: profiting by undermining everybody else in America.

This will have deep consequences. Balzac summed it up best: behind every great fortune lies a great crime. Paulson has not broken any laws. He was no rogue trader like the dodgy book-keeper in Paris’ Societe Generale. He bet on the greed of the US public overtaking its better judgement.

But Americans will undoubtedly soon start screaming at politicians, regulators and even the banks themselves for being not clever enough to not see that their world was falling apart and for not doing something to hold it all together. Paulson on the other hand will be simply counting his money. This may take some time.

Reasons

2008-01-28T11:58:00.000+05:30

I am starting a blog so that I can put down in realtime my thoughts and views.