Sunday, September 14, 2008
Not Buddha but Stalin
Indian Communist’s old shibboleths are now haunting them in Nandigram
Fifteen years ago, when the economic reforms were just taking off in India, then-finance minister Manmohan Singh, pointing to the hard days ahead, called for a bit of belt-tightening. Leading Left parliamentarian of the day Indrajit Gupta countered Singh with the poser: “What about people with no belt to talk of?”
I was reminded of this while reading the accounts of the shocking police atrocities in Nandigram, where farmers, deprived of their land by the Communist-led government to make way for industry, were shot dead in cold blood when they protested.
India’s main Communist party, the CPM, till recently has been bad-mouthing the economic reforms. The reasons for this are not difficult to fathom. The CPM is more worried about the reforms impacting its biggest vote bank – organised labour. The party has historically used the street-fighting prowess of its unions and its misguided student’s movements to derail any law or initiative that goes against its interests.
This ruinous policy, in force for over the past 20 years, has rendered the southern state of Kerala a basket case. The CPM, whether in the government or in the opposition, made sure private capital never prospered in the states they run. In Bengal, too, the results of this flawed approach showed. Industry is moribund, while states such as Gujarat, which welcomed private capital with both arms, prospered.
Thankfully, at least some CPM leaders have realised that his policy has run its course. The CPM is no party of fools. They know rhetoric has its uses but also that it can’t be stretched to eternity. Therefore, came Chief Minister Buddhadeb Bhattacharya’s reform plans for Bengal where he is chief minister. His moves had the blessings from the apparatchiks in AKG Bhavan, the party headquarters in New Delhi.
Budda’s policies came as a whiff of fresh air after the stifling 25-plus years rule of Jyothi Basu, during which the industry was on the back foot and militant labour on the front foot. The beauty of Budda’s new policy was that it fits seamlessly into the framework laid down by the federal government, which allowed Special Economic Zones to allow for faster growth.
As this policy was a big success in China and also since the federal government was being propped up by the Left, with an exclusive ‘veto’ power, the CPM had reasons to be smug about it. But, as usual, the CPM blew its chance. And how.
The way the government went ahead with its plans was appalling. The party’s motto of inclusive governance was thrown to the winds; instead the brute force of the state was unleashed in full force on the poor, including their women and children, clearly quite unconscionable for a party which swears by the proletariat. What happened in Nandigram was less of Buddha and more of Stalin and Pol Pot.
In the process of trampling over the poor, the party has given reforms a bad name, which by their reckoning should have a human face! Managing contradictions was one of the strongest points of the CPM. Their Bible and its interpretation depended on the party’s views at any given point of time and that could change contours any which way the party felt. Kerala’s Communists famously rejected the tractor in the 1970s and the computer in the 1980 as anti-labour. Now IT firms are being chased for investment with liberal incentives. In Kerala, the Tata conglomerate is untouchable, but in Bengal they are to be welcomed with a red carpet. The poor be damned.
Another instance of the party’s perfidy is the manner in which its state government in Kerala signed a loan agreement with the Asian Development Bank. While in the opposition, the CPM had opposed the deal tooth and nail but once in government the party decided to sign loan agreement, only to be done behind its own chief minister back, who was bitterly opposed to it.
But in Nandigram, the CPM finally got it in the eye. This time they had no cover nor could they find any of their favourite whipping boys to save face – globalisation, America, Bush or even the federal government. The day after the atrocity, even the Left allies of the party in Bengal were feasting on the mangled corpse of the party so used to taking the pulpit to lecture all and sundry on the leadership of the proletariat. The party never looked so pathetic, never so exposed.
For the CPM leaders, their old shibboleths have come to haunt them. The party should realise that the ideological hide it developed over the years cannot be jettisoned one fine morning. This party dictatorship will not go down well with the proletariat, and Nandigram is the best example. The party has to change with the times, slowly but surely. But the risk of atavistic mantras and ideas getting a second lease of life is more real now, post-Nandigram. Call it the revenge of the proletariat led astray by the party.
This article was published in Oman Tribune
Fifteen years ago, when the economic reforms were just taking off in India, then-finance minister Manmohan Singh, pointing to the hard days ahead, called for a bit of belt-tightening. Leading Left parliamentarian of the day Indrajit Gupta countered Singh with the poser: “What about people with no belt to talk of?”
I was reminded of this while reading the accounts of the shocking police atrocities in Nandigram, where farmers, deprived of their land by the Communist-led government to make way for industry, were shot dead in cold blood when they protested.
India’s main Communist party, the CPM, till recently has been bad-mouthing the economic reforms. The reasons for this are not difficult to fathom. The CPM is more worried about the reforms impacting its biggest vote bank – organised labour. The party has historically used the street-fighting prowess of its unions and its misguided student’s movements to derail any law or initiative that goes against its interests.
This ruinous policy, in force for over the past 20 years, has rendered the southern state of Kerala a basket case. The CPM, whether in the government or in the opposition, made sure private capital never prospered in the states they run. In Bengal, too, the results of this flawed approach showed. Industry is moribund, while states such as Gujarat, which welcomed private capital with both arms, prospered.
Thankfully, at least some CPM leaders have realised that his policy has run its course. The CPM is no party of fools. They know rhetoric has its uses but also that it can’t be stretched to eternity. Therefore, came Chief Minister Buddhadeb Bhattacharya’s reform plans for Bengal where he is chief minister. His moves had the blessings from the apparatchiks in AKG Bhavan, the party headquarters in New Delhi.
Budda’s policies came as a whiff of fresh air after the stifling 25-plus years rule of Jyothi Basu, during which the industry was on the back foot and militant labour on the front foot. The beauty of Budda’s new policy was that it fits seamlessly into the framework laid down by the federal government, which allowed Special Economic Zones to allow for faster growth.
As this policy was a big success in China and also since the federal government was being propped up by the Left, with an exclusive ‘veto’ power, the CPM had reasons to be smug about it. But, as usual, the CPM blew its chance. And how.
The way the government went ahead with its plans was appalling. The party’s motto of inclusive governance was thrown to the winds; instead the brute force of the state was unleashed in full force on the poor, including their women and children, clearly quite unconscionable for a party which swears by the proletariat. What happened in Nandigram was less of Buddha and more of Stalin and Pol Pot.
In the process of trampling over the poor, the party has given reforms a bad name, which by their reckoning should have a human face! Managing contradictions was one of the strongest points of the CPM. Their Bible and its interpretation depended on the party’s views at any given point of time and that could change contours any which way the party felt. Kerala’s Communists famously rejected the tractor in the 1970s and the computer in the 1980 as anti-labour. Now IT firms are being chased for investment with liberal incentives. In Kerala, the Tata conglomerate is untouchable, but in Bengal they are to be welcomed with a red carpet. The poor be damned.
Another instance of the party’s perfidy is the manner in which its state government in Kerala signed a loan agreement with the Asian Development Bank. While in the opposition, the CPM had opposed the deal tooth and nail but once in government the party decided to sign loan agreement, only to be done behind its own chief minister back, who was bitterly opposed to it.
But in Nandigram, the CPM finally got it in the eye. This time they had no cover nor could they find any of their favourite whipping boys to save face – globalisation, America, Bush or even the federal government. The day after the atrocity, even the Left allies of the party in Bengal were feasting on the mangled corpse of the party so used to taking the pulpit to lecture all and sundry on the leadership of the proletariat. The party never looked so pathetic, never so exposed.
For the CPM leaders, their old shibboleths have come to haunt them. The party should realise that the ideological hide it developed over the years cannot be jettisoned one fine morning. This party dictatorship will not go down well with the proletariat, and Nandigram is the best example. The party has to change with the times, slowly but surely. But the risk of atavistic mantras and ideas getting a second lease of life is more real now, post-Nandigram. Call it the revenge of the proletariat led astray by the party.
This article was published in Oman Tribune
Tuesday, September 9, 2008
Guns and Roses
The police in India are a good instrument to use and abuse at will for politicians
Thursday morning started with an interesting piece of news. No, not one, but two. Talk of coincidence, both the incidents happened at the Indian airport in Chennai, formerly known as Madras . The first one was the case of a French cartoonist on vacation being roughed up by securitymen for lighting up in a non-smoking area. The other, interestingly, was the case of a former federal aviation minister trying to board an aircraft with a loaded pistol in his hand baggage. A pouch containing bullets was also found in his bag.
CM Ibrahim is no stranger to controversy. The former minister’s reaction to the ruckus is not known but the news report made it clear that he was allowed to board the plane and continue the journey.
While the news of the roughing up of the Frenchman would provide some devious pleasure to a few in the light of Indians and others being detained at western airports on “suspicions” and others being racially profiled, the simple truth here is the Indian securitymen behaved just as they have been trained — beat to pulp anyone who dares question them, unless of course, he is some politician.
The Central Industrial Security Force (CISF) personnel, which guard the airports in the country, were initially raised as a force to protect government-owned industrial plants from thieves and saboteurs who were handed out rough justice when caught in the act. Handling air passengers is not their forte. Therefore, there is no point in blaming them for the Frenchman’s misfortune. It was a Pavlonian reaction on the part of the CISF — Frenchman or Indian, air traveller or rickshawallah — their justice is blind, beat him to pulp. Shoot first, ask questions later.
Meting out rough justice is but not the forte of the CISF alone, and as a colleague (who is the son of a police officer) remarked: “The Frenchman is lucky he was not handled by our local policemen!” The truth can’t be better. Indian policemen still behave the way they were 100 years back when the British were the masters and the police were the means to subjugate the restive natives who were asking for freedom from colonialism.
Anyone who has seen the movie Gandhi will have vivid memories of the policemen’s handling of the strikers at the Salt Satyagraha in Dandi. The cruelty was appalling but was a reality of those days. But there is no point in blaming the British. They left nearly 60 years ago, leaving behind some good institutions and some bad like the police force. Those who followed the British in the line of governance found the police a good instrument to use and abuse at will. No real effort was put in to reform the force in tune with the changed realities. The police machinery was reduced to the role of a force to be used for achieving the narrow political ends of the governing class. In the process the force learnt they have to fear only one species – the politician. The rest are of no consequence.
Recently, I read an article by a much-travelled Indian writer. His point was that India was one of the few places in the world where the citizen addressed the policeman as “Sir.” In developed countries it was the other way around – the policeman addressed the citizen as “Sir.” The reason, the writer opined, was the training that went into turning a normal guy into a policeman. He is taught who pays his salary, it is the tax payer, that is, you and me. He is the master and, not the other way around. Till this issue is sorted out the Indian policemen will make merry thrashing people and killing them in police lock-ups and their political bosses will collect rain cheques from them to protect them. The show will continue.
Meanwhile, VIPs like Ibrahim go scot-free for trying to carry loaded guns into airliners. Though his weapon was confiscated by the securitymen he was not arrested for the gross offence of trying to take gun inside the aircraft and produced before a magistrate as the law requires. His gun was confiscated because he did not have the licence papers with him. How nice. Can anyone see such a courteous police force anywhere in the world?
The report went on to add that CISF sources said Ibrahim had faxed the details of his pistol licence and it was found to be valid. No questions asked. His gun would have been released in double quick time.
That is rule of law in India for you.
This article was first published in Oman Tribune
Thursday morning started with an interesting piece of news. No, not one, but two. Talk of coincidence, both the incidents happened at the Indian airport in Chennai, formerly known as Madras . The first one was the case of a French cartoonist on vacation being roughed up by securitymen for lighting up in a non-smoking area. The other, interestingly, was the case of a former federal aviation minister trying to board an aircraft with a loaded pistol in his hand baggage. A pouch containing bullets was also found in his bag.
CM Ibrahim is no stranger to controversy. The former minister’s reaction to the ruckus is not known but the news report made it clear that he was allowed to board the plane and continue the journey.
While the news of the roughing up of the Frenchman would provide some devious pleasure to a few in the light of Indians and others being detained at western airports on “suspicions” and others being racially profiled, the simple truth here is the Indian securitymen behaved just as they have been trained — beat to pulp anyone who dares question them, unless of course, he is some politician.
The Central Industrial Security Force (CISF) personnel, which guard the airports in the country, were initially raised as a force to protect government-owned industrial plants from thieves and saboteurs who were handed out rough justice when caught in the act. Handling air passengers is not their forte. Therefore, there is no point in blaming them for the Frenchman’s misfortune. It was a Pavlonian reaction on the part of the CISF — Frenchman or Indian, air traveller or rickshawallah — their justice is blind, beat him to pulp. Shoot first, ask questions later.
Meting out rough justice is but not the forte of the CISF alone, and as a colleague (who is the son of a police officer) remarked: “The Frenchman is lucky he was not handled by our local policemen!” The truth can’t be better. Indian policemen still behave the way they were 100 years back when the British were the masters and the police were the means to subjugate the restive natives who were asking for freedom from colonialism.
Anyone who has seen the movie Gandhi will have vivid memories of the policemen’s handling of the strikers at the Salt Satyagraha in Dandi. The cruelty was appalling but was a reality of those days. But there is no point in blaming the British. They left nearly 60 years ago, leaving behind some good institutions and some bad like the police force. Those who followed the British in the line of governance found the police a good instrument to use and abuse at will. No real effort was put in to reform the force in tune with the changed realities. The police machinery was reduced to the role of a force to be used for achieving the narrow political ends of the governing class. In the process the force learnt they have to fear only one species – the politician. The rest are of no consequence.
Recently, I read an article by a much-travelled Indian writer. His point was that India was one of the few places in the world where the citizen addressed the policeman as “Sir.” In developed countries it was the other way around – the policeman addressed the citizen as “Sir.” The reason, the writer opined, was the training that went into turning a normal guy into a policeman. He is taught who pays his salary, it is the tax payer, that is, you and me. He is the master and, not the other way around. Till this issue is sorted out the Indian policemen will make merry thrashing people and killing them in police lock-ups and their political bosses will collect rain cheques from them to protect them. The show will continue.
Meanwhile, VIPs like Ibrahim go scot-free for trying to carry loaded guns into airliners. Though his weapon was confiscated by the securitymen he was not arrested for the gross offence of trying to take gun inside the aircraft and produced before a magistrate as the law requires. His gun was confiscated because he did not have the licence papers with him. How nice. Can anyone see such a courteous police force anywhere in the world?
The report went on to add that CISF sources said Ibrahim had faxed the details of his pistol licence and it was found to be valid. No questions asked. His gun would have been released in double quick time.
That is rule of law in India for you.
This article was first published in Oman Tribune
Kerala: New dawn or half-way house?
The state should place private enterprise, national and multinational, at the heart of its economic development
Kerala Chief Minister AK Antony has reason to be pleased as punch. The recently concluded Global Investor Meet (GIM), which saw firm investment commitments of roughly Rs80 billion, has been hailed as a great success in laying a new path to sustainable development in the industrially backward state. The meeting, which has been instrumental in attracting investment proposals to the tune of Rs260 billion, is being seen variously as a "great success and a new beginning,'' by Antony, and a political milestone for the state, according to commentators in the local press.
Antony is mightily pleased with the response of the investor community, both from India and abroad – mostly from the NRI Diaspora in the Gulf. The strategy of proactively identifying investment opportunities and placing them before the investor community has paid off very well, he said. The meeting has lead to hopes of a turnaround in the industrially moribund state’s fortunes after remaining trapped in outdated dogmas and sterile ideological debates for decades. For the state, which has a rate of unemployment almost three times the national average, the success of the meeting is being seen as the result of a new mental churning among the people to leave the past behind and to make up for lost time.
For Kerala, which missed the industrial boom and the later IT boom, in this era of globalisation it is now or never. And GIM is being seen as a precursor to more positive changes to come and many more bold initiatives to be adopted. After lurching from one crisis to another from a worsening financial crisis for the past 20 months it has been in power, GIM has given the government an opportunity to provide a direction to the new developmental model. And that politics has for once taken a back seat as the focus of discussion in the run-up to the meeting is something for the politically volatile state to be happy about.
Also noteworthy is the fact that GIM has achieved a breakthrough in political consensus-building on development after an all-party meeting convened by the chief minister. True, controversies over some of the project proposals, which were to figure at GIM, did create a problem but this has only helped in highlighting the need for transparency in every step. The government has hailed the Leader of the Opposition's gesture in co-operation, and post-Gim the government has reiterated that it would hold more discussions with the Opposition parties on projects and that the government would go ahead only with their consensus.
And the results are there to see. The federal government has promised an investment of Rs100 billion in the public sector over a few years, which basically involves expansion of units in the State. Federal investment in Kerala as a percentage of the total sectoral investment in the country has been declining steadily from 3.24 per cent in 1975 to 1.28 in 1995, though the population of the state is about 3.4 per cent of the country's total.
The other proposals include interest in the proposed Express Highway project and others from the private sector, including Reliance, Infosys, Microsoft and Sutherland of the US. Within the MoUs, the sources of investments are as follows: foreign companies (nine) Rs4.64 billion, from outside Kerala (17) Rs 9.07 billion, Public Sector Units (four) Rs46.2 billion, Non-Resident Indians (17) Rs23.26 billion and the Kerala entrepreneurs (48) Rs28.34 billion.
The figures look attractive. They offer a lot of promise on the outside. But will this “new beginning” propel Kerala to the ranks of the industrialised states in the country and make it ready to “take on globalisation,” as Antony said on the opening day of Gim? Has the state really jettisoned the ideological baggage and cherished shibboleths of the past decades so quickly to set off on a path of sustainable development to catch up with the world?
The reason why Antony has been harping on the need to build consensus has not been lost on anyone. Kearla’s polity is still fractured and till some tectonic shift happens in the thought process of the state’s pro-socialist/pro-organised-labour politicians the so-called new dawn could run empty anytime soon. The signs to this were on much before GIM. The Marxist-led Left Democratic Front had made it clear it would not allow any multinational company to “exploit” the state and its labour force, come what may. The recent controversy on a water supply scheme in Palakkad, allegedly proposed by struggling French conglomerate Vivendi, is just a case in point. Kerala’s politicos and it feeder organisations and even the state’s mostly-left-aligned media (read journalists) have yet to come to terms with the role of global private capital in the development paradigm. For a state which has been brought up on a strict diet of anti-capitalism and bourgeoisie avarice and colorful catchwords such as “exploitation,” “capitalistic culture” and “bourgeoisie” over the past five decades and where people looked to the state as the provider of jobs, it will not be easy to instill an outlook that paints the private sector/multinational mega corporation in favourable light.
Kerala’s tragedy is that it is still where China was before Deng Xiaoping initiated his pro-capitalist experiments -- inward looking. And to a great extend this malaise could be blamed on the state’s media, which could not see beyond its nose and perpetuates the myth that the state is one of the most progressive in the country. Of course Kerala has a lot to its credit in social sector advances in terms of infant mortality and literacy levels. But that was all. In a state where popular littérateurs/artists were given the status of oracles who could pronounce “learned” verdicts on every developmental/entrepreneurial activity, which were taken as unvarnished truth by the middle class, it comes as no surprise that more emphasis was placed on small-scale industry and government initiatives on investment. And the results are there to see -- a bloated government with an empty treasury, too broke to pay salaries even after taxing every conceivable item, tangible and intangible, and a hemorrhaging public sector, which eats up more and more scarce government funds to feed its excess labour. This madness had to stop, somewhere. Therefore came Gim.
But can Gim set a paradigm shift in development strategy? Hardly. Running through the set of proposals with a fine comb it can be seen that except for a few multibillion-rupee proposals on federal public investment and some telecom, IT and tourism initiatives most of the other proposals are on real estate – bus terminals and other sundry projects, most of which proposals were already there before but were signed at Gim.
Now of this much-touted federal investment in the state, only time will tell how much of it will materialise, if at all any. With New Delhi set on a programme of public sector divestment to cut losses and to rein in the ballooning fiscal deficit it remains to be seen how it will find the money to put where its mouth is. And that too when Kerala remains a political lightweight in New Delhi as any observer in the capital can attest to. For the time being Keralites will have to satisfy themselves with the platitudes the prime minister mouthed about the state and the people. And the investments proposed by Reliance Industries is nothing sue generis. It is just part of the national telecom network it is building, nothing Kerala-specific to buttress the argument that the state has come of investment age. The same is the case with the few petrol pumps in has promised to set up as part of its national chain of retail outlets. In any case petrol pumps can’t be a precursor to long-term development!
What Kerala needs now is a Deng who could cut through the outdated ideological mantras of the dying socialist developmental model. Like China before us it is time to emerge rapidly from the self-imposed economic isolation. The fruits of China’s determination to place private enterprise at the heart of its economic development are there for all to see – the communist state is set to see its total trade surpass Japan’s – the world’s second biggest economy – this year. China’s foreign direct investment (FDI) last year touched $52 billion, mostly from multinational corporates lured by its status as a low-cost manufacturer of quality good with world class infrastructure, including ports and roads.
In this context Kerala’s move to develop a multibillion-rupee express highway with private participation is a classic case of putting the cart before the horse. Instead the state, which lies bang on a major international maritime route to the fast growing Gulf region and Europe beyond, should have placed more onus on building a world-class port. The seaboard city of Kochi with its new airport and deep-water all-whether port could easily emerge as a base for relocation of MNC IT hardware, electronics production facilities if the government, the media and the people of the state used a bit of both imagination and dynamism. The lead shown by Kerala in building the country’s first private airport is a shining example of what can be done. But building facilities is not all, something it has not learnt. In the service sector service counts, and the reversion of the ownership of the airport to the government is nothing but a tragedy. Kerala should hand over the running of the Kochi deep-water port and airport to companies which can offer globally-benchmarked performance and turnaround times, the first outlook of an MNC manufacturer, for whom every second counts when it comes to merchandise transport. Along with this the state could also develop an export free zone in Kochi with a world class road network to the port and airport and a state-of-the-art telecom and power infrastructure thrown in. This will be money better spent than on a highway to nowhere.
Kerala, which missed the software bus, should now concentrate its energies on becoming a pioneering IT and electronics hardware manufacturing center by virtue of it port facilities and educated workforce. In this context it should be remembered that the state only recently opened a number of engineering colleges. What are the employment prospects to the thousands of engineers waiting to graduate in another four years? The law of economics says demand will fall as supply exceeds and it will only a matter of time before engineers could be hired dirt cheap as is the case in China. Japanese majors, involved in a massive exercise of shifting factories to China, are desperate to lock in manufacturing costs. What most firms are doing is shifting assembly of components for process and exports to developed markets. And the list of companies who have put their money in China is impressive – IT majors like Intel and Acer, telecom majors such as Motorola, Lucent and Sony Ericsson, contract electronics manufacturers such as Scoletron and Flextronics and almost all consumer electronics majors and the many more as can be evinced from the $52 billion the communist state attracted in FDI in 2002.
Experts are also of the opinion that this relocation of production bases could be a one-off “rebalancing” by global producers of their investment portfolios and that once an optimal portfolio distribution is reached things could even reverse, that is, the investment could move elsewhere. And they also say there are limits to China’s growth of competitveness; it can’t be the lowest-cost producer in all sectors. This should offer some hope to other countries, like India, which are interested in snaring at least a small part of the global FDI pie.
If Kerala with its quality human resources could get its act together with a global vision for creating a world-class export infrastructure FDI could easily wing its way to the state. But it has to accept one more thing, like China: place private enterprise, both national and multinational, at the heart of its economic development. That would be a real paradigm shift.
Now, did we hear Gim say MNC? No. Did anyone at Gim see BPL, the Rs30-billion electronics major built by a Keralite outside the state? No way, not today. Maybe tomorrow. Maybe.
This article was published in The Gulf Today
Kerala Chief Minister AK Antony has reason to be pleased as punch. The recently concluded Global Investor Meet (GIM), which saw firm investment commitments of roughly Rs80 billion, has been hailed as a great success in laying a new path to sustainable development in the industrially backward state. The meeting, which has been instrumental in attracting investment proposals to the tune of Rs260 billion, is being seen variously as a "great success and a new beginning,'' by Antony, and a political milestone for the state, according to commentators in the local press.
Antony is mightily pleased with the response of the investor community, both from India and abroad – mostly from the NRI Diaspora in the Gulf. The strategy of proactively identifying investment opportunities and placing them before the investor community has paid off very well, he said. The meeting has lead to hopes of a turnaround in the industrially moribund state’s fortunes after remaining trapped in outdated dogmas and sterile ideological debates for decades. For the state, which has a rate of unemployment almost three times the national average, the success of the meeting is being seen as the result of a new mental churning among the people to leave the past behind and to make up for lost time.
For Kerala, which missed the industrial boom and the later IT boom, in this era of globalisation it is now or never. And GIM is being seen as a precursor to more positive changes to come and many more bold initiatives to be adopted. After lurching from one crisis to another from a worsening financial crisis for the past 20 months it has been in power, GIM has given the government an opportunity to provide a direction to the new developmental model. And that politics has for once taken a back seat as the focus of discussion in the run-up to the meeting is something for the politically volatile state to be happy about.
Also noteworthy is the fact that GIM has achieved a breakthrough in political consensus-building on development after an all-party meeting convened by the chief minister. True, controversies over some of the project proposals, which were to figure at GIM, did create a problem but this has only helped in highlighting the need for transparency in every step. The government has hailed the Leader of the Opposition's gesture in co-operation, and post-Gim the government has reiterated that it would hold more discussions with the Opposition parties on projects and that the government would go ahead only with their consensus.
And the results are there to see. The federal government has promised an investment of Rs100 billion in the public sector over a few years, which basically involves expansion of units in the State. Federal investment in Kerala as a percentage of the total sectoral investment in the country has been declining steadily from 3.24 per cent in 1975 to 1.28 in 1995, though the population of the state is about 3.4 per cent of the country's total.
The other proposals include interest in the proposed Express Highway project and others from the private sector, including Reliance, Infosys, Microsoft and Sutherland of the US. Within the MoUs, the sources of investments are as follows: foreign companies (nine) Rs4.64 billion, from outside Kerala (17) Rs 9.07 billion, Public Sector Units (four) Rs46.2 billion, Non-Resident Indians (17) Rs23.26 billion and the Kerala entrepreneurs (48) Rs28.34 billion.
The figures look attractive. They offer a lot of promise on the outside. But will this “new beginning” propel Kerala to the ranks of the industrialised states in the country and make it ready to “take on globalisation,” as Antony said on the opening day of Gim? Has the state really jettisoned the ideological baggage and cherished shibboleths of the past decades so quickly to set off on a path of sustainable development to catch up with the world?
The reason why Antony has been harping on the need to build consensus has not been lost on anyone. Kearla’s polity is still fractured and till some tectonic shift happens in the thought process of the state’s pro-socialist/pro-organised-labour politicians the so-called new dawn could run empty anytime soon. The signs to this were on much before GIM. The Marxist-led Left Democratic Front had made it clear it would not allow any multinational company to “exploit” the state and its labour force, come what may. The recent controversy on a water supply scheme in Palakkad, allegedly proposed by struggling French conglomerate Vivendi, is just a case in point. Kerala’s politicos and it feeder organisations and even the state’s mostly-left-aligned media (read journalists) have yet to come to terms with the role of global private capital in the development paradigm. For a state which has been brought up on a strict diet of anti-capitalism and bourgeoisie avarice and colorful catchwords such as “exploitation,” “capitalistic culture” and “bourgeoisie” over the past five decades and where people looked to the state as the provider of jobs, it will not be easy to instill an outlook that paints the private sector/multinational mega corporation in favourable light.
Kerala’s tragedy is that it is still where China was before Deng Xiaoping initiated his pro-capitalist experiments -- inward looking. And to a great extend this malaise could be blamed on the state’s media, which could not see beyond its nose and perpetuates the myth that the state is one of the most progressive in the country. Of course Kerala has a lot to its credit in social sector advances in terms of infant mortality and literacy levels. But that was all. In a state where popular littérateurs/artists were given the status of oracles who could pronounce “learned” verdicts on every developmental/entrepreneurial activity, which were taken as unvarnished truth by the middle class, it comes as no surprise that more emphasis was placed on small-scale industry and government initiatives on investment. And the results are there to see -- a bloated government with an empty treasury, too broke to pay salaries even after taxing every conceivable item, tangible and intangible, and a hemorrhaging public sector, which eats up more and more scarce government funds to feed its excess labour. This madness had to stop, somewhere. Therefore came Gim.
But can Gim set a paradigm shift in development strategy? Hardly. Running through the set of proposals with a fine comb it can be seen that except for a few multibillion-rupee proposals on federal public investment and some telecom, IT and tourism initiatives most of the other proposals are on real estate – bus terminals and other sundry projects, most of which proposals were already there before but were signed at Gim.
Now of this much-touted federal investment in the state, only time will tell how much of it will materialise, if at all any. With New Delhi set on a programme of public sector divestment to cut losses and to rein in the ballooning fiscal deficit it remains to be seen how it will find the money to put where its mouth is. And that too when Kerala remains a political lightweight in New Delhi as any observer in the capital can attest to. For the time being Keralites will have to satisfy themselves with the platitudes the prime minister mouthed about the state and the people. And the investments proposed by Reliance Industries is nothing sue generis. It is just part of the national telecom network it is building, nothing Kerala-specific to buttress the argument that the state has come of investment age. The same is the case with the few petrol pumps in has promised to set up as part of its national chain of retail outlets. In any case petrol pumps can’t be a precursor to long-term development!
What Kerala needs now is a Deng who could cut through the outdated ideological mantras of the dying socialist developmental model. Like China before us it is time to emerge rapidly from the self-imposed economic isolation. The fruits of China’s determination to place private enterprise at the heart of its economic development are there for all to see – the communist state is set to see its total trade surpass Japan’s – the world’s second biggest economy – this year. China’s foreign direct investment (FDI) last year touched $52 billion, mostly from multinational corporates lured by its status as a low-cost manufacturer of quality good with world class infrastructure, including ports and roads.
In this context Kerala’s move to develop a multibillion-rupee express highway with private participation is a classic case of putting the cart before the horse. Instead the state, which lies bang on a major international maritime route to the fast growing Gulf region and Europe beyond, should have placed more onus on building a world-class port. The seaboard city of Kochi with its new airport and deep-water all-whether port could easily emerge as a base for relocation of MNC IT hardware, electronics production facilities if the government, the media and the people of the state used a bit of both imagination and dynamism. The lead shown by Kerala in building the country’s first private airport is a shining example of what can be done. But building facilities is not all, something it has not learnt. In the service sector service counts, and the reversion of the ownership of the airport to the government is nothing but a tragedy. Kerala should hand over the running of the Kochi deep-water port and airport to companies which can offer globally-benchmarked performance and turnaround times, the first outlook of an MNC manufacturer, for whom every second counts when it comes to merchandise transport. Along with this the state could also develop an export free zone in Kochi with a world class road network to the port and airport and a state-of-the-art telecom and power infrastructure thrown in. This will be money better spent than on a highway to nowhere.
Kerala, which missed the software bus, should now concentrate its energies on becoming a pioneering IT and electronics hardware manufacturing center by virtue of it port facilities and educated workforce. In this context it should be remembered that the state only recently opened a number of engineering colleges. What are the employment prospects to the thousands of engineers waiting to graduate in another four years? The law of economics says demand will fall as supply exceeds and it will only a matter of time before engineers could be hired dirt cheap as is the case in China. Japanese majors, involved in a massive exercise of shifting factories to China, are desperate to lock in manufacturing costs. What most firms are doing is shifting assembly of components for process and exports to developed markets. And the list of companies who have put their money in China is impressive – IT majors like Intel and Acer, telecom majors such as Motorola, Lucent and Sony Ericsson, contract electronics manufacturers such as Scoletron and Flextronics and almost all consumer electronics majors and the many more as can be evinced from the $52 billion the communist state attracted in FDI in 2002.
Experts are also of the opinion that this relocation of production bases could be a one-off “rebalancing” by global producers of their investment portfolios and that once an optimal portfolio distribution is reached things could even reverse, that is, the investment could move elsewhere. And they also say there are limits to China’s growth of competitveness; it can’t be the lowest-cost producer in all sectors. This should offer some hope to other countries, like India, which are interested in snaring at least a small part of the global FDI pie.
If Kerala with its quality human resources could get its act together with a global vision for creating a world-class export infrastructure FDI could easily wing its way to the state. But it has to accept one more thing, like China: place private enterprise, both national and multinational, at the heart of its economic development. That would be a real paradigm shift.
Now, did we hear Gim say MNC? No. Did anyone at Gim see BPL, the Rs30-billion electronics major built by a Keralite outside the state? No way, not today. Maybe tomorrow. Maybe.
This article was published in The Gulf Today
Monetary union ahoy
The GCC countries have embarked on a challenging task – setting up a monetary union by the end of this decade. Such a union will lead to diversification of the economy, rise in competitiveness followed by greater integration with globalisation. With oil prices, one of the main drivers of the GCC economies, ruling at all-time highs, fiscal euphoria among the members has also peaked. The GCC countries request for an observer status at IMF committee meeting should be seen in this backdrop. The setting up of the monetary union will lead to the development of a major economic entity in a region which holds some 45 per cent of the global oil reserves and 17 per cent of gas. In 2002 the GCC had a combined GDP close to $340 billion.
Of late the pace of the intra-GCC economic integration has increased with the adoption of the unified common external tariff. Further movement towards integration will only lead to strengthening of non-oil growth, which is showing good promise, thanks to the diversification away from oil as the major source of revenue. Yet much more needs to be done. The GCC countries have decided to peg the common currency to the dollar. But with the European common unit gaining currency over the greenback other options should also be looked into particularly when the continent remains a major trade partner of the region. Therefore, another option that should be looked into would be pegging the common currency with a basket of currencies, a practice very much vogue in other parts of the world. Success in integrating the diverse economies will call for the seamless flow of transparent macroeconomic statistical information across the member countries based on internationally accepted standards and concepts. This should remain high on the wish-list but looks a rather tall order in the present situation.
And this is where the IMF should come in. The experience of the European countries suggest that for a successful monetary union it requires political and economic preparation of a magnitude which is yet to be experienced in the region – it calls for a strong political commitment. Since the GCC is venturing into an area in which its expertise and experience is rather limited it is imperative that international agencies with the requisite process-knowledge is there to extend a helping hand for the smooth implementation of the rather difficult task. This is important particularly since the price volatility of oil is high.
This is an editorial published in Oman Tribune
Of late the pace of the intra-GCC economic integration has increased with the adoption of the unified common external tariff. Further movement towards integration will only lead to strengthening of non-oil growth, which is showing good promise, thanks to the diversification away from oil as the major source of revenue. Yet much more needs to be done. The GCC countries have decided to peg the common currency to the dollar. But with the European common unit gaining currency over the greenback other options should also be looked into particularly when the continent remains a major trade partner of the region. Therefore, another option that should be looked into would be pegging the common currency with a basket of currencies, a practice very much vogue in other parts of the world. Success in integrating the diverse economies will call for the seamless flow of transparent macroeconomic statistical information across the member countries based on internationally accepted standards and concepts. This should remain high on the wish-list but looks a rather tall order in the present situation.
And this is where the IMF should come in. The experience of the European countries suggest that for a successful monetary union it requires political and economic preparation of a magnitude which is yet to be experienced in the region – it calls for a strong political commitment. Since the GCC is venturing into an area in which its expertise and experience is rather limited it is imperative that international agencies with the requisite process-knowledge is there to extend a helping hand for the smooth implementation of the rather difficult task. This is important particularly since the price volatility of oil is high.
This is an editorial published in Oman Tribune
Theatre of the absurd
Maybe the CIA is interested in the new ‘Kerala Model’
Adlai E. Stevenson once observed that “in America any boy may become president and I suppose it's just one of the risks he takes.” Stevenson, who lost twice as a US presidential candidate, must surely not have heard of the south Indian state of Kerala. But if he had and if he were alive today, the shenanigans indulged in by the rulers of this ‘red state’ would have alarmed him of the risks ordinary folks take by electing dinosaurs to public office.
Kerala, which has been alternately ruled by political parties, which profess to be either Communist or Socialist, has had its share of comics masquerading as politicians, as is the case all over the world. As far as the Communists who rule the state now are concerned, the Cold War is still on, the Soviets be damned. One does not have to search far to get evidence on this ‘discovery’. Kerala Chief Minister VS Achuthanandan, a veteran of many ‘anti-imperialist struggles,’ has been of late on a roll with his latest discovery that some of the journalists and media houses in the state are in the pay of the CIA of the US of A.
While there have been credible allegations of the CIA trying to bankroll the state’s politicians during the height of the Cold War, the new allegation is no slip of the tongue, the usual excuse of politicians the world over. The dyed-in-the-wool Communist chief minister is emphatic that the CIA is very much in play in the state. He even had the gall to reiterate the allegation in the state assembly. And in the past few days he has gone further ahead by identifying two major media houses of being in the pay of the US agency.
One of the media houses has come out with a strong rejoinder, denying the allegation and also asking the chief minister to use his powers to conduct an inquiry to clear the air. The chief minister, for reasons best known to him, is yet to take up the challenge.
For an outside observer this ruckus in this postage stamp-sized state is all the more intriguing. Is Kerala that important in the geopolitical scenario of the 21st century for the CIA to bankroll a section of the media? Does it have a say in how the federal government policies are formulated? Is it a major industrial state in the country? Does it have a major port or airport, which is quintessential for international trade? Does it have any major university or research institution of even a national stature? The answer is a resounding no. So what is the CIA’s game plan, if there is one?
Kerala does have something to crow about – its reputation as the most literate state in the country. But isn’t there a distinction between being literate and being educated?
The common refrain among Keralites is that they find it difficult to get jobs in major private companies outside the state. They blame this on an ‘anti-Kerala lobby’, a much-abused word that has gained currency in the state as unvarnished truth. But the plain truth is: Most placement agencies say Kerala’s educated job seekers are so raw they are eminently unemployable as they come, except when put through some refresher courses, according to many reports. This only shows the pitiable state of the education sector in this literate state. But does the government care? It is a different matter altogether that Keralites have the reputation of being excellent workers while employed outside the state, far from the reach of the claws of organised labour the state is notorious for. This being the state of affairs, why should the CIA meddle in the state’s affairs, if what the comrade chief minister is saying is right? The state and its Communists for a long time were content with showing off its once famous “Kerala Model” of development. That was till economist Amartya Sen gave them a realty check and said the model was history. So is there a new Kerala Model in the works that the CIA would be interested in learning about?
One can’t say for sure, but yours truly has a hunch. Maybe the much-reviled Cold War villain is trying to get some inside info on the new revenue-generation model, which is in vogue in the state now. Kerala, of late, has become a hot international tourist paradise and goes by the slogan, ‘God’s own country’. Tourism is a good revenue earner. But it is not a patch on the other major, ever-growing source – alcohol, sold exclusively by the government to all age groups.
Recent findings show that the state tops the country in per capita alcohol consumption and suicides. Now, before any one jumps to the conclusion that the millions of litres of tipple are guzzled by the tourists visiting the so-called paradise, let me put the record straight. Last year, the state government made a cool Rs60 billion by way of sloshing the citizens with alcohol. Tourists account for just a blip.
It is well known that this financially broke state is staying afloat on the indulgence of the tipplers and various federal loans. Government employees get their salaries in time, thanks to the generous tipplers. So do pensioners. Since most of the government revenue is taken up for salary payment there is no point in going into the lack of developmental activities. For instance, government hospitals, which the poor rely on, are in a mess. But for the ruling elite, they have the private hospitals. Who cares for the poor, for they are not organised.
Surely, no economist can come up with a better revenue generation model for the state that is opposed to big industry and big business, thanks to the Communists. The government cares two hoots about the population turning slaves to alcohol. The main worry is how to stop the imperialists – the US and private capital. Some wise man famously said: “The intermediate stage between socialism and capitalism is alcoholism!”
In the middle of this looming social catastrophe, comes the hackneyed ‘theatre of the absurd’ storyline of the CIA trying to meddle in the state. Nero’s story is too well known to be recounted. “The whole problem with the world is that fools and fanatics are always so certain of themselves,” wrote Bertrand Russell. “But wiser people are so full of doubts.”
How true.
This article was first published in Oman Tribune
Adlai E. Stevenson once observed that “in America any boy may become president and I suppose it's just one of the risks he takes.” Stevenson, who lost twice as a US presidential candidate, must surely not have heard of the south Indian state of Kerala. But if he had and if he were alive today, the shenanigans indulged in by the rulers of this ‘red state’ would have alarmed him of the risks ordinary folks take by electing dinosaurs to public office.
Kerala, which has been alternately ruled by political parties, which profess to be either Communist or Socialist, has had its share of comics masquerading as politicians, as is the case all over the world. As far as the Communists who rule the state now are concerned, the Cold War is still on, the Soviets be damned. One does not have to search far to get evidence on this ‘discovery’. Kerala Chief Minister VS Achuthanandan, a veteran of many ‘anti-imperialist struggles,’ has been of late on a roll with his latest discovery that some of the journalists and media houses in the state are in the pay of the CIA of the US of A.
While there have been credible allegations of the CIA trying to bankroll the state’s politicians during the height of the Cold War, the new allegation is no slip of the tongue, the usual excuse of politicians the world over. The dyed-in-the-wool Communist chief minister is emphatic that the CIA is very much in play in the state. He even had the gall to reiterate the allegation in the state assembly. And in the past few days he has gone further ahead by identifying two major media houses of being in the pay of the US agency.
One of the media houses has come out with a strong rejoinder, denying the allegation and also asking the chief minister to use his powers to conduct an inquiry to clear the air. The chief minister, for reasons best known to him, is yet to take up the challenge.
For an outside observer this ruckus in this postage stamp-sized state is all the more intriguing. Is Kerala that important in the geopolitical scenario of the 21st century for the CIA to bankroll a section of the media? Does it have a say in how the federal government policies are formulated? Is it a major industrial state in the country? Does it have a major port or airport, which is quintessential for international trade? Does it have any major university or research institution of even a national stature? The answer is a resounding no. So what is the CIA’s game plan, if there is one?
Kerala does have something to crow about – its reputation as the most literate state in the country. But isn’t there a distinction between being literate and being educated?
The common refrain among Keralites is that they find it difficult to get jobs in major private companies outside the state. They blame this on an ‘anti-Kerala lobby’, a much-abused word that has gained currency in the state as unvarnished truth. But the plain truth is: Most placement agencies say Kerala’s educated job seekers are so raw they are eminently unemployable as they come, except when put through some refresher courses, according to many reports. This only shows the pitiable state of the education sector in this literate state. But does the government care? It is a different matter altogether that Keralites have the reputation of being excellent workers while employed outside the state, far from the reach of the claws of organised labour the state is notorious for. This being the state of affairs, why should the CIA meddle in the state’s affairs, if what the comrade chief minister is saying is right? The state and its Communists for a long time were content with showing off its once famous “Kerala Model” of development. That was till economist Amartya Sen gave them a realty check and said the model was history. So is there a new Kerala Model in the works that the CIA would be interested in learning about?
One can’t say for sure, but yours truly has a hunch. Maybe the much-reviled Cold War villain is trying to get some inside info on the new revenue-generation model, which is in vogue in the state now. Kerala, of late, has become a hot international tourist paradise and goes by the slogan, ‘God’s own country’. Tourism is a good revenue earner. But it is not a patch on the other major, ever-growing source – alcohol, sold exclusively by the government to all age groups.
Recent findings show that the state tops the country in per capita alcohol consumption and suicides. Now, before any one jumps to the conclusion that the millions of litres of tipple are guzzled by the tourists visiting the so-called paradise, let me put the record straight. Last year, the state government made a cool Rs60 billion by way of sloshing the citizens with alcohol. Tourists account for just a blip.
It is well known that this financially broke state is staying afloat on the indulgence of the tipplers and various federal loans. Government employees get their salaries in time, thanks to the generous tipplers. So do pensioners. Since most of the government revenue is taken up for salary payment there is no point in going into the lack of developmental activities. For instance, government hospitals, which the poor rely on, are in a mess. But for the ruling elite, they have the private hospitals. Who cares for the poor, for they are not organised.
Surely, no economist can come up with a better revenue generation model for the state that is opposed to big industry and big business, thanks to the Communists. The government cares two hoots about the population turning slaves to alcohol. The main worry is how to stop the imperialists – the US and private capital. Some wise man famously said: “The intermediate stage between socialism and capitalism is alcoholism!”
In the middle of this looming social catastrophe, comes the hackneyed ‘theatre of the absurd’ storyline of the CIA trying to meddle in the state. Nero’s story is too well known to be recounted. “The whole problem with the world is that fools and fanatics are always so certain of themselves,” wrote Bertrand Russell. “But wiser people are so full of doubts.”
How true.
This article was first published in Oman Tribune
The return of the prodigal
Communists are now owning stuff and selling it too
My eyes popped out. As a seasoned journalist, I thought seen all sorts of published news – wars, riots, pestilence and revolutions. But this took the cake. Consider this report put out by Reuters a few days back – NEW DELHI: A US citizen, representing the All India Students' Association (AISA), a union affiliated to the Communist Party, on Saturday became the first foreigner to win a student election at New Delhi ’s Jawaharlal Nehru University (JNU) after mounting a campaign critical of his country’s foreign policy. Tyler Walker Williams, a student of Hindi, was elected vice-president of the students' union of JNU, which has produced many of the country's top politicians.
My first reaction was: Yankee Communist? But wait. Did anyone say the commies are on the rebound? For me, till recently, Communism was like T-Rex – extinct, or something to be studied in class rooms. Looks like I am out of sync. The commies are coming back, and how? In Nicaragua, Sandinista hero Daniel Ortega, who during the Cold War time of Ronald Reagan vowed an endless fight against the US , which was determined to overthrow him, is back in power after nearly 20 in the waste bin. In nearby Venuzeuela, Hugo Chavez is thumping his chest and daring the US to take on him, thanks to his petrodollars. Closer to his backyard it is Evio Morales in Bolivia, a country so loved by Indian Commies that is has been a running joke in movies to see comrades at indoctrination classes mouth grandiose words like “comrades, in the dark jungles of Bolivia …!!! Then there is the grand-daddy of the Communist rump, Comrade Fidel still refusing to call it a day. So it is Communism redux?
Back to JNU, which maverick Indian politician Subrahmaniyan Swami once famously called the “Kremlin on the Yamuna.” Yamuna is the Volga-of-sorts of Delhi . Walker Williams’ victory is not surprising, for he won the election for mounting a campaign critical of the US, particularly on Iraq . Running down the US is now the most popular spectator sport in the world, Gary Kasparaov wrote in the Wall Street Journal some time back. One does not have to read the esteemed Journal to know that. But I wondered why Walker Williams didn’t chastise the US for tightening the screws on the ‘democratic” North Korea . Maybe Dear Leader Kim of the ‘workers paradise’ was a not an easily saleable commodity; remember the other equally well known but jettisoned Commie, none other than the one and only Pol Pot of Cambodia (or was it Kampuchea?)
Walker Williams and the Indian Communists surely are not alone in this opposition to Washington’s policies as the recent US elections results have shown. So one can’t say for sure whether it is a case of the JNU-ites for once seeing eye-to-eye with the Yankee voters or it is the case of cheering a Yankee leading the charge from the Indian Kremlin against his Commander-in-Chief. Or was it a case of ‘Globalisation’, so earnestly pushed by the US only to rebound on it so conclusively?
Speaking of Globalisation, I always thought the Communists were much ahead of Washington in this game. But the globalised proletariat had a more saleable name for it – ‘Anti-imperialism’. How they sold this platform worldwide, both to the illiterates and the intellectuals alike, should be a case study at Harvard for aspiring PR students. Nothing succeeds like success and the Indian franchisee of this global proletariat conglomerate has seen its fortunes also rising with the global tide. Now they have a big say, if not a stake, in the coalition that runs the Indian government. Recently they returned to power in their only base in the south, Kerala, which once boasted of the first elected Communist government in the world.
For the Communists of Kerala, more famous as God’s Own Country on the tourism circuit, the going has never been so good. The party owns a TV company, which has a few channels. It is listed on the stock market, and is now planning a string of mega shopping malls! Frank Zappa once said Communism doesn't work “because people like to own stuff.” But now the Commies are owning stuff and selling them, too. Not bad. But the problem in Kerala now is that the commies are trying to sell is Saddam of Iraq fame. He is the election poster boy for them. Their TV channels are running a ‘Save Saddam Campaign’ just in time for a by-election. This is not very surprising since Anti-Americanism has been a pet theme for anti-imperialists. But this has left the ex-leftist in me confused -- from Marx to Saddam, that’s quite a distance. Maybe Stalin (of the Gulags fame) to Saddam would be better. So who has lost the plot? The Commies or poor me?
Economist John Kenneth Galbraith, who passed away recently, once said that “under capitalism, man exploits man. Under Communism, it's just the opposite.” All these years I wondered what he meant. Now I get it.
Ortega says he has now traded his wartime military fatigues for a white shirt and jeans. His guide, he says, is God, not Karl Marx. That sounds like George W. Bush. Wonder what Walker Williams has to say on that.
This article was first published in Oman Tribune
My eyes popped out. As a seasoned journalist, I thought seen all sorts of published news – wars, riots, pestilence and revolutions. But this took the cake. Consider this report put out by Reuters a few days back – NEW DELHI: A US citizen, representing the All India Students' Association (AISA), a union affiliated to the Communist Party, on Saturday became the first foreigner to win a student election at New Delhi ’s Jawaharlal Nehru University (JNU) after mounting a campaign critical of his country’s foreign policy. Tyler Walker Williams, a student of Hindi, was elected vice-president of the students' union of JNU, which has produced many of the country's top politicians.
My first reaction was: Yankee Communist? But wait. Did anyone say the commies are on the rebound? For me, till recently, Communism was like T-Rex – extinct, or something to be studied in class rooms. Looks like I am out of sync. The commies are coming back, and how? In Nicaragua, Sandinista hero Daniel Ortega, who during the Cold War time of Ronald Reagan vowed an endless fight against the US , which was determined to overthrow him, is back in power after nearly 20 in the waste bin. In nearby Venuzeuela, Hugo Chavez is thumping his chest and daring the US to take on him, thanks to his petrodollars. Closer to his backyard it is Evio Morales in Bolivia, a country so loved by Indian Commies that is has been a running joke in movies to see comrades at indoctrination classes mouth grandiose words like “comrades, in the dark jungles of Bolivia …!!! Then there is the grand-daddy of the Communist rump, Comrade Fidel still refusing to call it a day. So it is Communism redux?
Back to JNU, which maverick Indian politician Subrahmaniyan Swami once famously called the “Kremlin on the Yamuna.” Yamuna is the Volga-of-sorts of Delhi . Walker Williams’ victory is not surprising, for he won the election for mounting a campaign critical of the US, particularly on Iraq . Running down the US is now the most popular spectator sport in the world, Gary Kasparaov wrote in the Wall Street Journal some time back. One does not have to read the esteemed Journal to know that. But I wondered why Walker Williams didn’t chastise the US for tightening the screws on the ‘democratic” North Korea . Maybe Dear Leader Kim of the ‘workers paradise’ was a not an easily saleable commodity; remember the other equally well known but jettisoned Commie, none other than the one and only Pol Pot of Cambodia (or was it Kampuchea?)
Walker Williams and the Indian Communists surely are not alone in this opposition to Washington’s policies as the recent US elections results have shown. So one can’t say for sure whether it is a case of the JNU-ites for once seeing eye-to-eye with the Yankee voters or it is the case of cheering a Yankee leading the charge from the Indian Kremlin against his Commander-in-Chief. Or was it a case of ‘Globalisation’, so earnestly pushed by the US only to rebound on it so conclusively?
Speaking of Globalisation, I always thought the Communists were much ahead of Washington in this game. But the globalised proletariat had a more saleable name for it – ‘Anti-imperialism’. How they sold this platform worldwide, both to the illiterates and the intellectuals alike, should be a case study at Harvard for aspiring PR students. Nothing succeeds like success and the Indian franchisee of this global proletariat conglomerate has seen its fortunes also rising with the global tide. Now they have a big say, if not a stake, in the coalition that runs the Indian government. Recently they returned to power in their only base in the south, Kerala, which once boasted of the first elected Communist government in the world.
For the Communists of Kerala, more famous as God’s Own Country on the tourism circuit, the going has never been so good. The party owns a TV company, which has a few channels. It is listed on the stock market, and is now planning a string of mega shopping malls! Frank Zappa once said Communism doesn't work “because people like to own stuff.” But now the Commies are owning stuff and selling them, too. Not bad. But the problem in Kerala now is that the commies are trying to sell is Saddam of Iraq fame. He is the election poster boy for them. Their TV channels are running a ‘Save Saddam Campaign’ just in time for a by-election. This is not very surprising since Anti-Americanism has been a pet theme for anti-imperialists. But this has left the ex-leftist in me confused -- from Marx to Saddam, that’s quite a distance. Maybe Stalin (of the Gulags fame) to Saddam would be better. So who has lost the plot? The Commies or poor me?
Economist John Kenneth Galbraith, who passed away recently, once said that “under capitalism, man exploits man. Under Communism, it's just the opposite.” All these years I wondered what he meant. Now I get it.
Ortega says he has now traded his wartime military fatigues for a white shirt and jeans. His guide, he says, is God, not Karl Marx. That sounds like George W. Bush. Wonder what Walker Williams has to say on that.
This article was first published in Oman Tribune
Proletarian illusions
Terming the CPM row in Kerala as ‘ideological’ is hogwash
Indian Communist patriarch EMS Namboothiripad made an interesting observation when Rajiv Gandhi took over as prime minister in 1984 upon the death of his mother Indira Gandhi – “Rajiv is a pilot and he should stick to flying and leave politics to people who know politics; (brother) Sanjay knew politics but not flying. He tried flying and see what happened.” As everyone in India knows, Sanjay died in a plane crash while trying some aerobatic stunts while Rajiv met his end at the hands of the LTTE, which extracted revenge over his government’s flip-flop Sri Lanka policy. If EMS were to be alive today CPM’s new General Secretary Prakash Karat would have got some advice on the same lines as Kerala politics, particularly of the Marxist variety, is a different ball game. It is not for Marxian ideologues like Karat living in the ivory towers of New Delhi .
The raging row in the Kerala unit of the party over the denial of a seat to popular leader VS Achuthandan in the state elections has brought to the front the role rootless ideologues have in setting the direction for the ossified party. Interestingly, the row has been given a twist, with the popular press calling it an ideological fight between the ‘reformists’ and the ‘hardliners’. But the fact remains -- the popular mood in favour of a grassroots leader like VS has less to do with him being a hardliner and more to the respect he commands from millions outside the party rank and file for his unvarnished integrity and unflinching, principled stand on many issues, which on many occasions has held the state in a thrall and equally in other instances given the party a dour image of being stuck in the past.
Sure, VS is the last leading dinosaur in the antediluvian party, which is forever cursed to continue blowing the trumpet of the not-in-fashion-anymore slogan of proletarian revolution. But what the hell, that is what he has been doing all his life and that was what the party has been saying all along and that why he is a leader in his own right. To call this rebellion an ideological war between the ‘hardliners’ led by VS and ‘reformers’ led by the state party honcho, the scam-tainted Pinarayi Vijayan, is pure hogwash. This collapse in discipline in the cadre-based party has more to do with the miscalculation and ignorance of rootless wonders like Karat than any ideological issue.
The Pinarayi-VS clash has its genesis in the Malabar versus Travancore (North versus south) clash that erupted in the mid-80s. Interestingly, the Communist movement in present-day Kerala was built up by grassroots leaders like the legendary KPR Gopalan and AK Gopalan (AKG) in North Malabar and EMS in South Malabar and MN Govindan Nair in the Travancore region. Though MN parted company with the others after the party split in 1964, the Communist Party Marxist (CPM), which is the torchbearer of the movement, still swears by the ideals of AKG and EMS . And the leaders of the Malabar region always had a big say in the party, thanks mostly to the unrivalled respect AKG and EMS commanded in the party and also due to the second rung Malabari leaders like CH Kanaran, MK Kelu and Azhikodan Raghavan and EK Nayanar who had no real rivals in the south, save for KR Gowri, a formidable leader in her own right.
The ascend of VS, who is from central Kerala, as the state secretary in the early 80’s coincided the party’s return to power after more than 11 years in the wilderness. The new government was led by Nayanar, a simpleton and an unknown commodity in the south where the capital Thiruvanathapuram is located. The seeds of the present-day North-South fracas actually were sown then. And the division continues. Postings on a popular web site for set up for VS now goes on to say: “Comrade, we are with you to finish off the Malabar Mafia!”
Though VS rose to leadership on his own after a lifetime in popular struggle, including the disastrous but ‘heroic’ Punnapra-Vayalar uprising against the misrule of the maharajas in the south, he was a lightweight in the North. And for the North Malabar Communists (mostly from the Kannur and Kozhikode districts), who considered themselves the blue-blooded Marxists, Punnapra-Vayalar was no big deal. They swore by the Kayyur-Karivallur rebellion against the British. For them AKG, KPR, EMS and others fought the real big boy, the British. KPR was even sentenced to death by a British court and only Mahatma Gandhi’s intervention saved his life. This being so, it was only natural the third generation of the ‘Kannur Mafia’ comprising story petrel MV Raghavan (MVR), Patiyam Rajan and others like PV Kunjikannan fell out with VS and the party line taken by him. And it was an open secret that Nayanar was involved in this from behind the scenes, something which he denied.
VS as party honcho got the Kannur Mafia rusticated from the party on classical Marxist charges of ‘revisonism’ and in this, surprisingly, he had the whole-hearted support of patriarch EMS . For a while it seemed the North would breakaway as MVR had the masses with him. But timely intervention by EMS, who cobbled a front with the old guard of Malabar, which included the Kozhikode honcho, the much-respected MK Kelu, saw the rebellion was confined to Kannur alone for some time. EMS ’ whirlwind tour of the region with meetings in every nook and cranny cooled tempers and saved the party. MVR’s rebellion died a natural death as is the case in all cadre-based parties though his new outfit still survives.
Now the old ghosts are revisiting the party. And this is the time for the new generation leader Karat to show his skills for the new century. But instead of leading from the front he has allowed regional satraps like Pinarayi to set the policy for the divided state unit which flies in the face of common sense, thereby letting the issue to snowball into a public controversy on the eve of an election so crucial for the party. Karat should have realised that VS is no pushover and he should have been handled with more care considering his seniority, reputation and standing among the common people. Instead he was unceremoniously dumped on the on the sidewalk of Communism’s road to nowhere for no clear reason, something not even the diehard opponents of VS would agree was the right thing to do.
Karat’s position now resembles Rajiv Gandhi’s, who soon after making his famous speech to rid the party of ‘power brokers’ had to buckle down due to his lack of experience. Karat problem is that he more at ease with the classical Marxian approach with theory than to the rough-and-tumble of politics of the Kerala variety. The sooner he gets off the ivory tower and gets a handle on the issue the better it will be for the party and the millions of Keralites who have put their trust in the party for generations. And this time around there is no EMS for the party to turn to.
This article was first published in Oman Tribune
Indian Communist patriarch EMS Namboothiripad made an interesting observation when Rajiv Gandhi took over as prime minister in 1984 upon the death of his mother Indira Gandhi – “Rajiv is a pilot and he should stick to flying and leave politics to people who know politics; (brother) Sanjay knew politics but not flying. He tried flying and see what happened.” As everyone in India knows, Sanjay died in a plane crash while trying some aerobatic stunts while Rajiv met his end at the hands of the LTTE, which extracted revenge over his government’s flip-flop Sri Lanka policy. If EMS were to be alive today CPM’s new General Secretary Prakash Karat would have got some advice on the same lines as Kerala politics, particularly of the Marxist variety, is a different ball game. It is not for Marxian ideologues like Karat living in the ivory towers of New Delhi .
The raging row in the Kerala unit of the party over the denial of a seat to popular leader VS Achuthandan in the state elections has brought to the front the role rootless ideologues have in setting the direction for the ossified party. Interestingly, the row has been given a twist, with the popular press calling it an ideological fight between the ‘reformists’ and the ‘hardliners’. But the fact remains -- the popular mood in favour of a grassroots leader like VS has less to do with him being a hardliner and more to the respect he commands from millions outside the party rank and file for his unvarnished integrity and unflinching, principled stand on many issues, which on many occasions has held the state in a thrall and equally in other instances given the party a dour image of being stuck in the past.
Sure, VS is the last leading dinosaur in the antediluvian party, which is forever cursed to continue blowing the trumpet of the not-in-fashion-anymore slogan of proletarian revolution. But what the hell, that is what he has been doing all his life and that was what the party has been saying all along and that why he is a leader in his own right. To call this rebellion an ideological war between the ‘hardliners’ led by VS and ‘reformers’ led by the state party honcho, the scam-tainted Pinarayi Vijayan, is pure hogwash. This collapse in discipline in the cadre-based party has more to do with the miscalculation and ignorance of rootless wonders like Karat than any ideological issue.
The Pinarayi-VS clash has its genesis in the Malabar versus Travancore (North versus south) clash that erupted in the mid-80s. Interestingly, the Communist movement in present-day Kerala was built up by grassroots leaders like the legendary KPR Gopalan and AK Gopalan (AKG) in North Malabar and EMS in South Malabar and MN Govindan Nair in the Travancore region. Though MN parted company with the others after the party split in 1964, the Communist Party Marxist (CPM), which is the torchbearer of the movement, still swears by the ideals of AKG and EMS . And the leaders of the Malabar region always had a big say in the party, thanks mostly to the unrivalled respect AKG and EMS commanded in the party and also due to the second rung Malabari leaders like CH Kanaran, MK Kelu and Azhikodan Raghavan and EK Nayanar who had no real rivals in the south, save for KR Gowri, a formidable leader in her own right.
The ascend of VS, who is from central Kerala, as the state secretary in the early 80’s coincided the party’s return to power after more than 11 years in the wilderness. The new government was led by Nayanar, a simpleton and an unknown commodity in the south where the capital Thiruvanathapuram is located. The seeds of the present-day North-South fracas actually were sown then. And the division continues. Postings on a popular web site for set up for VS now goes on to say: “Comrade, we are with you to finish off the Malabar Mafia!”
Though VS rose to leadership on his own after a lifetime in popular struggle, including the disastrous but ‘heroic’ Punnapra-Vayalar uprising against the misrule of the maharajas in the south, he was a lightweight in the North. And for the North Malabar Communists (mostly from the Kannur and Kozhikode districts), who considered themselves the blue-blooded Marxists, Punnapra-Vayalar was no big deal. They swore by the Kayyur-Karivallur rebellion against the British. For them AKG, KPR, EMS and others fought the real big boy, the British. KPR was even sentenced to death by a British court and only Mahatma Gandhi’s intervention saved his life. This being so, it was only natural the third generation of the ‘Kannur Mafia’ comprising story petrel MV Raghavan (MVR), Patiyam Rajan and others like PV Kunjikannan fell out with VS and the party line taken by him. And it was an open secret that Nayanar was involved in this from behind the scenes, something which he denied.
VS as party honcho got the Kannur Mafia rusticated from the party on classical Marxist charges of ‘revisonism’ and in this, surprisingly, he had the whole-hearted support of patriarch EMS . For a while it seemed the North would breakaway as MVR had the masses with him. But timely intervention by EMS, who cobbled a front with the old guard of Malabar, which included the Kozhikode honcho, the much-respected MK Kelu, saw the rebellion was confined to Kannur alone for some time. EMS ’ whirlwind tour of the region with meetings in every nook and cranny cooled tempers and saved the party. MVR’s rebellion died a natural death as is the case in all cadre-based parties though his new outfit still survives.
Now the old ghosts are revisiting the party. And this is the time for the new generation leader Karat to show his skills for the new century. But instead of leading from the front he has allowed regional satraps like Pinarayi to set the policy for the divided state unit which flies in the face of common sense, thereby letting the issue to snowball into a public controversy on the eve of an election so crucial for the party. Karat should have realised that VS is no pushover and he should have been handled with more care considering his seniority, reputation and standing among the common people. Instead he was unceremoniously dumped on the on the sidewalk of Communism’s road to nowhere for no clear reason, something not even the diehard opponents of VS would agree was the right thing to do.
Karat’s position now resembles Rajiv Gandhi’s, who soon after making his famous speech to rid the party of ‘power brokers’ had to buckle down due to his lack of experience. Karat problem is that he more at ease with the classical Marxian approach with theory than to the rough-and-tumble of politics of the Kerala variety. The sooner he gets off the ivory tower and gets a handle on the issue the better it will be for the party and the millions of Keralites who have put their trust in the party for generations. And this time around there is no EMS for the party to turn to.
This article was first published in Oman Tribune
Crisis in Kerala
The purge in Kerala of Leader of the Opposition VS Achuthandan by the Communists is nothing short of revolting. That the Stalinist VS, as Achuthandan is known, has been caught in the crosshairs of the Communist Party of India (Marxist) nextgen leadership, both at the state and national levels, is a well known fact. VS, the ultimate orthodox Communist, has of late found the going tough, particularly after the recent party conclave in Malappuram, where his nominees to the state council bit the dust in the showdown against state party chief Pinarayi Vijayan. But what has shocked his supporters and detractors alike is the move to banish him from contesting the state election, though the party line is that he will lead the campaign – somewhat like a non-playing captain in a tennis match. Party leaders, as usual, have been playing down the public revolt in the state unit as a storm in a tea cup and as ‘propaganda’ of the ‘bourgeoisie’ press. But no one is buying this, and the writing on the wall is clear – VS is a dead man walking.
Forever the ideological hardliner, VS is a man out of sync with the present-day realities, particularly due to his opposition to the economic reforms and the role of private capital. As has been the case in India, where leaders never call it a day, VS, at 83, still pushes his ideological conviction with surprising gusto, and that makes him some sort of dinosaur in the party, which feels his stance on most issues does not gel with the realities of the 21st century. Rightly so for the party but not quite for many others. As a member of the old guard, which built up the party from among the dirt-poor, unorganised and illiterate proletariat during the British Raj and draconian rule of the maharajas, VS retains his stellar reputation as an uncorrupted politician with a mind of his own, which is something that cannot be said of the many telegenic, suave nextgen CPM leaders, who parachuted into leadership positions from university politics. And that is the root of the problem.
This battle between the old guard and the ‘new generation’, such as Prakash Karat at the national level and Pinarayi at the state level, was something waiting to happen. Purges are nothing new in Stalinist parties like the CPM and even VS had earlier been associated in some high-profile purges of leaders such as MV Raghavan on contrived ‘ideological grounds.’ But in an age when the breed of upright politicians, especially of the Communist variety, famous for their unvarnished integrity, is fast turning extinct, romantics will miss the hectoring honesty of leaders like VS.
This is an editorial published in Oman Tribune
Forever the ideological hardliner, VS is a man out of sync with the present-day realities, particularly due to his opposition to the economic reforms and the role of private capital. As has been the case in India, where leaders never call it a day, VS, at 83, still pushes his ideological conviction with surprising gusto, and that makes him some sort of dinosaur in the party, which feels his stance on most issues does not gel with the realities of the 21st century. Rightly so for the party but not quite for many others. As a member of the old guard, which built up the party from among the dirt-poor, unorganised and illiterate proletariat during the British Raj and draconian rule of the maharajas, VS retains his stellar reputation as an uncorrupted politician with a mind of his own, which is something that cannot be said of the many telegenic, suave nextgen CPM leaders, who parachuted into leadership positions from university politics. And that is the root of the problem.
This battle between the old guard and the ‘new generation’, such as Prakash Karat at the national level and Pinarayi at the state level, was something waiting to happen. Purges are nothing new in Stalinist parties like the CPM and even VS had earlier been associated in some high-profile purges of leaders such as MV Raghavan on contrived ‘ideological grounds.’ But in an age when the breed of upright politicians, especially of the Communist variety, famous for their unvarnished integrity, is fast turning extinct, romantics will miss the hectoring honesty of leaders like VS.
This is an editorial published in Oman Tribune
The dinosaur shrugs
The 18th Congress of India’s main Communist party, the CPM, held in New Delhi, has raised hopes that the party will show signs of shedding its ideological baggage of the Cold War days. For a change, the leadership, famed for its gerontocracy, has passed on to younger hands. The ‘unanimous’ election of new party general secretary Prakash Karat, 56, apart, what was significant is that the party has signaled a significant shift in the Marxist debate. It has agreed to ‘engage’ with the ‘existing world realities.’ This means the hide-bound party will not wish away the problems of ‘liberalisation,’ ‘privatisation’ and ‘globalisation.’ The guidelines suggested by the party Congress open, rather than close, doors to foreign direct investment (FDI). On the face of it, it looks the party is ready to meet the 21st century realities with a fresh perspective, something what the Chinese Communist Party had done years ago. But as is usual with the communists, the devil is in the detail.
Despite all the noise and the ‘consensus’, the party Congress has not accepted the second part of the Political Organisation document, which dealt with the crucial questions on globalisation on the grounds these were issues which needed wider debate. Though this could mean the CPM is finally getting ready to face the new realities, it need not be so considering the hold of the Jurassic hardliners, which the party has in abundance. Despite this publicised soul-searching, the Congress did not have any meaningful discussion on the relationship between capital and labour in the 21st century and the role of the state in the economy.
The blame for this should fall squarely on the old guard which refuses to fade away.
Deng Xiao Peng said the colour of the cat does not matter if it can catch mice. For the Indian Communists only the color matters. The Communists’ biggest problem in moving with the times is their fidelity to a doctrine modeled to take on the inequalities of another era. Moreover, its failure to adopt its doctrines to suit Indian realities has been one of the main reasons why it has failed to prosper, save for in two states. One hopes the new ‘young’ chief of the party will shove the discredited shibboleths down the drain along with the in-house dinosaurs to lead to party to face the realities of this century. But going by experience the odds are against it.
This is an editorial published in Oman Tribune
Despite all the noise and the ‘consensus’, the party Congress has not accepted the second part of the Political Organisation document, which dealt with the crucial questions on globalisation on the grounds these were issues which needed wider debate. Though this could mean the CPM is finally getting ready to face the new realities, it need not be so considering the hold of the Jurassic hardliners, which the party has in abundance. Despite this publicised soul-searching, the Congress did not have any meaningful discussion on the relationship between capital and labour in the 21st century and the role of the state in the economy.
The blame for this should fall squarely on the old guard which refuses to fade away.
Deng Xiao Peng said the colour of the cat does not matter if it can catch mice. For the Indian Communists only the color matters. The Communists’ biggest problem in moving with the times is their fidelity to a doctrine modeled to take on the inequalities of another era. Moreover, its failure to adopt its doctrines to suit Indian realities has been one of the main reasons why it has failed to prosper, save for in two states. One hopes the new ‘young’ chief of the party will shove the discredited shibboleths down the drain along with the in-house dinosaurs to lead to party to face the realities of this century. But going by experience the odds are against it.
This is an editorial published in Oman Tribune
Sushi and chopsticks
The past week has been quite momentous for Asia. First it was Japanese Prime Minister making a rare public apology for its country's World War II aggression on its neighbours. His remarks preceded a meeting set later with Chinese President Hu Jintao to defuse a diplomatic row over how Japan interprets its wartime history. While Japanese leaders have extended such apologies in the past, it is rare for a prime minister to address the issue in a public conference. The apology over Japan's war record was significant -- it was intended to calm a dispute that has sparked bitter anti-Japanese protests in China. The apology also comes as Japan tries to advance Tokyo's campaign for changes at the United Nations and a permanent seat on the UN Security Council, an ambition some of its neighbours oppose. Relations between China and Japan have been tested in recent weeks by the issues of how Japanese textbooks treat aspects of Japan's wartime conduct as well as the nations' overlapping claims to a group of islands surrounded by oil and gas fields.
The other related development this week, though not much noticed, was China’s reassurance to its neighbours and the world at large its commitment to 'peaceful development'. This official pronouncement followed three weeks in which China's foreign policy seemed hostage to pervasive and violent anger against Japan. China has been eager to restore conviction to its claim that its rising economic influence and political clout will enrich and reassure its neighbours, not threaten them. China’s Hu struck a chord of reassurance at the Bo’ao meeting, portraying China's economic and political rise as a "path of peaceful development." "The purpose of China's foreign policy is to maintain world peace and promote common development," Hu said. Jia Qinglin, a member of the Communist Party's ruling inner circle, added: "China's development will be peaceful. We have no reason or chance to threaten others, and that is our abiding promise."
The climbdown by the two Asian majors from their respective high-adrenaline political grandstanding of the past weeks will surely bring a much-needed respite to the region. As we had said last week, it is time both the parties left the past behind and move ahead to bring prosperity and peace to their people and the region. The peaceful emergence of a successful China is in everyone's interest. So also is Japan’s move to acknowledge the wrongs of its wartime past.
This is an editorial published in Oman Tribune
The other related development this week, though not much noticed, was China’s reassurance to its neighbours and the world at large its commitment to 'peaceful development'. This official pronouncement followed three weeks in which China's foreign policy seemed hostage to pervasive and violent anger against Japan. China has been eager to restore conviction to its claim that its rising economic influence and political clout will enrich and reassure its neighbours, not threaten them. China’s Hu struck a chord of reassurance at the Bo’ao meeting, portraying China's economic and political rise as a "path of peaceful development." "The purpose of China's foreign policy is to maintain world peace and promote common development," Hu said. Jia Qinglin, a member of the Communist Party's ruling inner circle, added: "China's development will be peaceful. We have no reason or chance to threaten others, and that is our abiding promise."
The climbdown by the two Asian majors from their respective high-adrenaline political grandstanding of the past weeks will surely bring a much-needed respite to the region. As we had said last week, it is time both the parties left the past behind and move ahead to bring prosperity and peace to their people and the region. The peaceful emergence of a successful China is in everyone's interest. So also is Japan’s move to acknowledge the wrongs of its wartime past.
This is an editorial published in Oman Tribune
War and peace
China’s silence on the rowdy protest against Japan, which has entered the second day, is intriguing to say the least. On Sunday around 20,000 anti-Japanese protesters took to the streets of two cities in southern China. This came one day after more than 10,000 protestors on Saturday marched through Beijing, hurling rocks, bottles and eggs and shouting abuse at the Japanese embassy and the residence of the Japanese ambassador. The rioters want Japan face up to its wartime past, which is fair game in China, considering Japan’s bloody occupation up to 1945, the most infamous incident being the 1937 massacre by Japanese troops of both soldiers and civilians in Nanjing. The protestors are also angered by Japan's bid for a UN Security Council seat. Predictably, Japan has made a formal diplomatic protest over the embassy attack. And no apology was forthcoming from Beijing.
Tensions of this sort if not contained at the right time could get out of hand and could turn into confrontations. Already the opinion is that this is the worst time of bilateral relations between the two countries since diplomatic ties were established in 1972. Apart from the UN seat and test book issues, relations between the two Asian economic giants have not been on an even keel. In December, Japan for the first time listed China as a potential threat. The two have also demanded the other halt projects to explore for oil and gas in disputed areas of the East China Sea. And the irony of all this is that bilateral trade is booming and the two economies are becoming increasingly interdependent. In 2004 China replaced the United States as Japan's biggest trading partner for the first time. And Japanese firms are queuing up to set operations in China, drawn by the country’s pool of cheap labor and growing middle-class market.
Harping on the injustices of the past to justify the provocations of the present does not do good to China’s image as a responsible Asian power on its way to greater glory as the fastest growing economy in the world. Nationalism in the extreme could turn into jinjoism, which is not the way to go for the two. The irony here is that in the age of globalisation, the economic interests of the both countries are symmetrical. The problems between them are actually old issues. Therefore, it is better to let bygones be bygones and move ahead.
This is an editorial published in Oman Tribune
Tensions of this sort if not contained at the right time could get out of hand and could turn into confrontations. Already the opinion is that this is the worst time of bilateral relations between the two countries since diplomatic ties were established in 1972. Apart from the UN seat and test book issues, relations between the two Asian economic giants have not been on an even keel. In December, Japan for the first time listed China as a potential threat. The two have also demanded the other halt projects to explore for oil and gas in disputed areas of the East China Sea. And the irony of all this is that bilateral trade is booming and the two economies are becoming increasingly interdependent. In 2004 China replaced the United States as Japan's biggest trading partner for the first time. And Japanese firms are queuing up to set operations in China, drawn by the country’s pool of cheap labor and growing middle-class market.
Harping on the injustices of the past to justify the provocations of the present does not do good to China’s image as a responsible Asian power on its way to greater glory as the fastest growing economy in the world. Nationalism in the extreme could turn into jinjoism, which is not the way to go for the two. The irony here is that in the age of globalisation, the economic interests of the both countries are symmetrical. The problems between them are actually old issues. Therefore, it is better to let bygones be bygones and move ahead.
This is an editorial published in Oman Tribune
Encouraging signs?
The recent willingness shown by Palestinian groups, Hamas and Islamic Jihad, to be a part of the Palestinian Liberation Organisation (PLO), the umbrella group holding together all the major resistance factions, is a welcome development. Jihad, at the time of going to press on Tuesday, was to attend for the first time a meeting of the PLO executive committee. This should be seen as a sign the group’s willingness to join mainstream politics in their fight for an independent homeland. Jihad and Hamas have long boycotted the PLO but have shown signs of easing their position after Mahmud Abbas replaced the late Yasser Arafat as Palestinian leader in January. So does this mean there has been a tectonic shift in the attitude of the armed resistance vis-a-vis Israel and also towards violence? Though it is too early to make any predictions on this count there seems to be pattern to this development since the election legitimised Mahmud Abbas’ position as the Palestinian President.
Abbas’ election showed the whole world that democracy can work in Palestine and the elections in nearby Iraq only helped to buttress the fact democracy will work in the region. Again, in Egypt, the calls for democracy have been growing shriller by the day, and even the Islamic Brotherhood has shown its willingness to participate in the democratic process. That this development has been there for all to see in places as different as Iraq, Lebanon and Egypt should not have been lost on the Resistance. Moreover, the United States has been pushing so-called armed groups like Lebanon’s Hizbollah to shun the gun and to join the political mainstream to reap the fruits of elected office. Therefore, does the new development signal that the Resistance is also thinking on the same lines, particularly since they had recently contested local body elections?
Hamas has made it clear that its readiness to participate in the PLO does not mean it has renounced its commitment to a Palestine incorporating modern-day Israel whereas the PLO charter calls for the creation of a Palestinian state only in land conquered by Israel in the 1967 war. Clearly there is a lot of chasm left uncovered. Before anyone jumps to any conclusion on this it has to borne in mind that the Palestine-Israel conflict is like a minefield sown in a quagmire. Therefore, only time can tell whether the new development is a light at the end of the tunnel, or the light from another train rushing past.
This is an editorial published in Oman Tribune
Abbas’ election showed the whole world that democracy can work in Palestine and the elections in nearby Iraq only helped to buttress the fact democracy will work in the region. Again, in Egypt, the calls for democracy have been growing shriller by the day, and even the Islamic Brotherhood has shown its willingness to participate in the democratic process. That this development has been there for all to see in places as different as Iraq, Lebanon and Egypt should not have been lost on the Resistance. Moreover, the United States has been pushing so-called armed groups like Lebanon’s Hizbollah to shun the gun and to join the political mainstream to reap the fruits of elected office. Therefore, does the new development signal that the Resistance is also thinking on the same lines, particularly since they had recently contested local body elections?
Hamas has made it clear that its readiness to participate in the PLO does not mean it has renounced its commitment to a Palestine incorporating modern-day Israel whereas the PLO charter calls for the creation of a Palestinian state only in land conquered by Israel in the 1967 war. Clearly there is a lot of chasm left uncovered. Before anyone jumps to any conclusion on this it has to borne in mind that the Palestine-Israel conflict is like a minefield sown in a quagmire. Therefore, only time can tell whether the new development is a light at the end of the tunnel, or the light from another train rushing past.
This is an editorial published in Oman Tribune
Hezbollah’s heft
Tuesday’s massive rally by Hezbollah in Beirut in support of Syria’s continued presence in Lebanon has truly set the cat among the pigeons. In one single grand stroke it has nailed the talk doing the rounds that all of Lebanon wants Syria and its state apparatus out of the country. No one with an interest in Middle Eastern affairs can afford to shut their eyes to this reality. Therefore, it comes as no surprise that the Bush administration has, in a major foreign policy shift, signalled it was ready to accept Hezbollah as a player in mainstream politics in Lebanon, as was reported by The New York Times on Thursday. Though the US has officially denied it, ground realities dictate it is time the superpower recognised that Hezbollah is a huge political force in Lebanon that could block Western efforts to get Syria to withdraw its troops.
Conventional wisdom says that it is time the West encouraged the Shiite group to focus more on politics now with the elections around the corner, which is all the more important since Shias form the single largest community in the politically fragmented country. This is specially so since no one can ignore the situation in Lebanon where the divide seems to be steadily deepening between what is being termed the government’s ‘opponents’ and ‘loyalists’. The 1.5-million-strong show of strength indicated the magnitude of the support the loyalists’ enjoy. It also reflected the considerable support for the regime that appreciates Syria’s role since 1976 and showed that a large percentage of the population supports that role and opposes any attempt to belittle the role the Syrian army has played to maintain security and stability over the past 30 years.
This should be warning enough for the West, particularly for the US and Israel, not to try to re-kindle a sectarian war in Lebanon.
It also underscores the need for others to understand that there are forces in Lebanon that stand against foreign intervention, the internationalisation of the issue and substitution of Syrian forces by others. These factors should be taken into consideration by the external “well-wishers” while also remembering that finding the truth behind the assassination of Rafiq Hariri and those who were behind it would be in the interest of the regime, the opposition and Syria. Also, it is incumbent on the present rulers to consider political reforms because overlooking them could lead to more frustration, which in turn would mean wider resentment.
This is an editorial published in Oman Tribune
Conventional wisdom says that it is time the West encouraged the Shiite group to focus more on politics now with the elections around the corner, which is all the more important since Shias form the single largest community in the politically fragmented country. This is specially so since no one can ignore the situation in Lebanon where the divide seems to be steadily deepening between what is being termed the government’s ‘opponents’ and ‘loyalists’. The 1.5-million-strong show of strength indicated the magnitude of the support the loyalists’ enjoy. It also reflected the considerable support for the regime that appreciates Syria’s role since 1976 and showed that a large percentage of the population supports that role and opposes any attempt to belittle the role the Syrian army has played to maintain security and stability over the past 30 years.
This should be warning enough for the West, particularly for the US and Israel, not to try to re-kindle a sectarian war in Lebanon.
It also underscores the need for others to understand that there are forces in Lebanon that stand against foreign intervention, the internationalisation of the issue and substitution of Syrian forces by others. These factors should be taken into consideration by the external “well-wishers” while also remembering that finding the truth behind the assassination of Rafiq Hariri and those who were behind it would be in the interest of the regime, the opposition and Syria. Also, it is incumbent on the present rulers to consider political reforms because overlooking them could lead to more frustration, which in turn would mean wider resentment.
This is an editorial published in Oman Tribune
Murder in Beirut
The assassination of former Lebanese prime minister Rafik Al Harriri on Monday in a bomb blast follows the familiar cycle of violence that has earlier visited luminaries like president-elect Bashir Gemayal in 1982 and Druze leader Kemal Jumblatt in 1977 during the civil war that left the picturesque country a near-wasteland. With the end of the civil war hopes were high a new Lebanon would resurrect from the ashes of the fratricidal violence. Among those who foresaw a new country was Hariri who had a vision when he took power in 1992. But his optimism on his ability to resurrect Lebanon as a financial and tourism hub was tempered by the ground realities of the religiously divided land, which had been the staging post for regional dominance by powers such as Israel and Syria. And the result of this was very much in evidence even after the embers of the civil war died down.
Friction with Pro-Syria President Emile Lahoud curtailed Harriri’s efforts to handle Lebanon's debt that ballooned during the postwar reconstruction project he spearheaded. Added to this was the mounting number of battles he had to fight with Lahoud loyalists over privatisation and other cost-cutting plans. When Lebanon was on the brink of a financial crisis in 2002, Hariri successfully persuaded France to host an international summit of lenders who pledged enough cash to avert a meltdown of the economy. Hariri leaves behind a mixed legacy. His admirers saw him as the architect of the country's post-civil war reconstruction programme. For his detractors he was a spendthrift, whose administration dragged an already feeble economy deeper into debt and used sky-high interest rates to stabilise the Lebanese pound.
But now it is the time for all Lebanese to ponder where they go from here. Murder has been for too long used as a tool to settle scores with political rivals in Lebanon. The list of luminaries eliminated by rivals has been a long one not seen in any other country in the region in the recent past. That things have stooped to such a level only shows how much the protagonists are prepared to go to achieve their ends in this fractured land. It is now time all the parties involved in the political tug-of-war realised that there are certain red lines that has to be kept in mind in terms of acts of violence against anybody who is involved in the political arena. The earlier it is understood the better for the country or it will be soon back to the dog days of civil war. Surely no sane man will ever want to revisit those loony days again.
This is an editorial published in Oman Tribune
Friction with Pro-Syria President Emile Lahoud curtailed Harriri’s efforts to handle Lebanon's debt that ballooned during the postwar reconstruction project he spearheaded. Added to this was the mounting number of battles he had to fight with Lahoud loyalists over privatisation and other cost-cutting plans. When Lebanon was on the brink of a financial crisis in 2002, Hariri successfully persuaded France to host an international summit of lenders who pledged enough cash to avert a meltdown of the economy. Hariri leaves behind a mixed legacy. His admirers saw him as the architect of the country's post-civil war reconstruction programme. For his detractors he was a spendthrift, whose administration dragged an already feeble economy deeper into debt and used sky-high interest rates to stabilise the Lebanese pound.
But now it is the time for all Lebanese to ponder where they go from here. Murder has been for too long used as a tool to settle scores with political rivals in Lebanon. The list of luminaries eliminated by rivals has been a long one not seen in any other country in the region in the recent past. That things have stooped to such a level only shows how much the protagonists are prepared to go to achieve their ends in this fractured land. It is now time all the parties involved in the political tug-of-war realised that there are certain red lines that has to be kept in mind in terms of acts of violence against anybody who is involved in the political arena. The earlier it is understood the better for the country or it will be soon back to the dog days of civil war. Surely no sane man will ever want to revisit those loony days again.
This is an editorial published in Oman Tribune
Kerala’s curse
THE dismissal of rebel Congress party leader Muraleedharan from the party in the south Indian state of Kerala amounts to too little, too late. Politics in India has been a family business for a long time and this family business has mushroomed all over the country. Though this is a new phenomenon in Kerala, the one involving Muraleedharan, his octogenarian father Karunakaran, and sister Padamaja has rendered the state’s politics into a scatological drama with a pungent stench, leaving the hapless citizens to live through it noses shut. The stench emanating from the nauseating show had not only halted governance in the state but also had a ruinous effect on the party’s fortunes in last year’s national elections where it failed to win even a single seat. What surprises most is that the party took so long to crack the whip on nincompoops like Muraleedharan. But then, waffling and shuffling is nothing new to the Congress High Command.
Karunakaran and his offspring are yet to prove their claims of mass support through the democratic process. What they have done so far is to hold public meetings of substantial sizes in major cities, which amounts to nothing considering the role of money and muscle in politics and the availability of crowds for rent. Muraleedharan, who literally parachuted into Congress politics and leadership, thanks to his father’s unmatched clout a decade ago, has yet to show the spark that makes leaders out of ordinary men. That ill-gotten wealth and the shady world of mafia connections have helped nurture and sustain politicians in the state is an open secret. And in this Karunakaran and his children are not alone, they have the entire political spectrum in the state for company. Sadly, this has been accepted as inevitable, given the way politics is run in the country. But what makes the trio stand out in this squalor is their unbridled flaunting of hubris and excess in the face of the need for restraint in any civilised society.
Politics, it is said, is the art of the possible. But sadly in Kerala it is mostly people who fail to make it possible anywhere else who end up in politics. Kerala is not immune to India’s curse of the full-time politician. But one wonders why the state, which boasts of being the ‘most literate state’ (not the most educated!), has to endure such ‘leaders’. Maybe it is a reflection of the people’s unvarnished love for base politics. Therefore, it is no surprise they get the leaders they deserve.
This is an editorial published in Oman Tribune
Karunakaran and his offspring are yet to prove their claims of mass support through the democratic process. What they have done so far is to hold public meetings of substantial sizes in major cities, which amounts to nothing considering the role of money and muscle in politics and the availability of crowds for rent. Muraleedharan, who literally parachuted into Congress politics and leadership, thanks to his father’s unmatched clout a decade ago, has yet to show the spark that makes leaders out of ordinary men. That ill-gotten wealth and the shady world of mafia connections have helped nurture and sustain politicians in the state is an open secret. And in this Karunakaran and his children are not alone, they have the entire political spectrum in the state for company. Sadly, this has been accepted as inevitable, given the way politics is run in the country. But what makes the trio stand out in this squalor is their unbridled flaunting of hubris and excess in the face of the need for restraint in any civilised society.
Politics, it is said, is the art of the possible. But sadly in Kerala it is mostly people who fail to make it possible anywhere else who end up in politics. Kerala is not immune to India’s curse of the full-time politician. But one wonders why the state, which boasts of being the ‘most literate state’ (not the most educated!), has to endure such ‘leaders’. Maybe it is a reflection of the people’s unvarnished love for base politics. Therefore, it is no surprise they get the leaders they deserve.
This is an editorial published in Oman Tribune
Boiling oil
The inexorable rise of oil prices to stratospheric highs has brought a collective cheer to producing countries, more so to the producers in the Gulf. That prices could break free from gravity with such vehemence was something unthinkable even a few months back. And the results are there to see. Most of the oil majors in the region, who had budgeted for oil at around $18-$24 for this financial year, have seen massive surpluses – in short a ‘problem of plenty’. And with no likelihood of oil climbing down from its present $54 threshold the problem of plenty is going to stay for some time, particularly with the winter demand in the third quarter likely to push prices further into the $60-plus region.
Sounds too good to be true for the Gulf producers, who only till six years ago were groping in the dark to escape the double whammy of a low oil price of $9 and galloping fiscal deficits brought on by the cradle-to-grave welfare schemes in much of the region. It was with this backdrop that Saudi Crown Prince Abdullah then famously said: “The good old days of high oil prices are over and will never return.” That was one of the reasons that brought in fiscal tightening and disciple to many of the regional producers used to profligate public spending. Also, it brought to light the urgent need for more reforms, transparency and steps to move the economy from the vagaries of oil prices, over which most of the time the producers of the region had not much control. Though Opec tried to bring in a band to control prices over the commodity it was the traders and hedge funds operating out of London and New York who determined the prices. And it is now more true than ever.
But the flip side to this sweet story for the Gulf Cooperation Council countries could be something bitter if one were to go by experience. Volatile prices could impact government revenues and could prove to be big challenge to their fond hopes of putting in place a monetary union in place by 2010. Sharp swings in prices could torpedo efforts at reaching an economic-convergence regime and also efforts to police fiscal discipline. And since the countries are yet to find convergence on the issue of fiscal deficit one can only imagine what a prolonged volatility in oil prices can bring about.
This is an editorial published in Oman Tribune
Sounds too good to be true for the Gulf producers, who only till six years ago were groping in the dark to escape the double whammy of a low oil price of $9 and galloping fiscal deficits brought on by the cradle-to-grave welfare schemes in much of the region. It was with this backdrop that Saudi Crown Prince Abdullah then famously said: “The good old days of high oil prices are over and will never return.” That was one of the reasons that brought in fiscal tightening and disciple to many of the regional producers used to profligate public spending. Also, it brought to light the urgent need for more reforms, transparency and steps to move the economy from the vagaries of oil prices, over which most of the time the producers of the region had not much control. Though Opec tried to bring in a band to control prices over the commodity it was the traders and hedge funds operating out of London and New York who determined the prices. And it is now more true than ever.
But the flip side to this sweet story for the Gulf Cooperation Council countries could be something bitter if one were to go by experience. Volatile prices could impact government revenues and could prove to be big challenge to their fond hopes of putting in place a monetary union in place by 2010. Sharp swings in prices could torpedo efforts at reaching an economic-convergence regime and also efforts to police fiscal discipline. And since the countries are yet to find convergence on the issue of fiscal deficit one can only imagine what a prolonged volatility in oil prices can bring about.
This is an editorial published in Oman Tribune
Lacklustre show
Indian Finance Minister Palaniappan Chidamabaram, who presented the budget for 2006-07, has managed to please everyone by doing little. His government, which needs the support of the Left parties for survival, has pledged to raise spending on health, education and rural infrastructure while at the same time promising to aim at fiscal prudence. The corporate sector is breathing easy as no new tax has been introduced. The middle class is happy, for they can look forward to owning small cars, for which the taxes have been slashed, and some of the auto majors have already promised to pass on the benefits to the customers. But it looks like Chidamabaram was loath to mollycoddle the middle class too much. Hence the proposal to treat services and goods on an equal footing. This means an additional 10 per cent service tax on mobile bills. A service tax on ATM (automated teller machine) transactions is also very much possible.
The finance minister expects the country to maintain the growth momentum at 8.1 per cent this year and plans to raise that to 10 per cent in the coming years. This he thinks is the best way to raise his 260 million countrymen, a quarter of its billion-plus population, out of poverty in the continent-sized country. “I believe that growth is the best antidote to poverty," he said. But though the government has accepted that export-oriented growth, as has been seen in China, is the best way of spreading wealth among the poor, the finance minister has not made any far-sighted proposal on removing the impediments to the country’s emergence as an export powerhouse -- poor roads, congested ports and shortage of power. Instead, the coalition, which came to power in 2004 on a ticket of lifting the poor out of poverty, is doing something on that front now that elections in five states are around the quarter, which could pit the collation partners against each other. Hence the finance minister’s thrust on increasing education spending by 31.5 per cent, health by 22 per cent and boost spending on rural infrastructure projects to Rs186.96 billion.
The budget is also short of any reform proposals for the labour market. That will keep the Communists happy -- their bread-and- butter is unharmed -- who cares for good investment climate as long as the unions have their way? And the stock market is also happy, it was not expecting much anyway. Thankfully, this no-surprises budget does not have anything that could upset the natural growth momentum of the economy. That is small mercy in an election year.
This is an editorial published in Oman Tribune
The finance minister expects the country to maintain the growth momentum at 8.1 per cent this year and plans to raise that to 10 per cent in the coming years. This he thinks is the best way to raise his 260 million countrymen, a quarter of its billion-plus population, out of poverty in the continent-sized country. “I believe that growth is the best antidote to poverty," he said. But though the government has accepted that export-oriented growth, as has been seen in China, is the best way of spreading wealth among the poor, the finance minister has not made any far-sighted proposal on removing the impediments to the country’s emergence as an export powerhouse -- poor roads, congested ports and shortage of power. Instead, the coalition, which came to power in 2004 on a ticket of lifting the poor out of poverty, is doing something on that front now that elections in five states are around the quarter, which could pit the collation partners against each other. Hence the finance minister’s thrust on increasing education spending by 31.5 per cent, health by 22 per cent and boost spending on rural infrastructure projects to Rs186.96 billion.
The budget is also short of any reform proposals for the labour market. That will keep the Communists happy -- their bread-and- butter is unharmed -- who cares for good investment climate as long as the unions have their way? And the stock market is also happy, it was not expecting much anyway. Thankfully, this no-surprises budget does not have anything that could upset the natural growth momentum of the economy. That is small mercy in an election year.
This is an editorial published in Oman Tribune
Infrastructure ahoy
The Indian finance minister put it very succinctly while presenting the National Budget for 2005-06: “India is not a poor country. Yet a significant number of our people are poor." Chidambaram’s Budget lays out a broad blue print to combat many of the ills plaguing Asia’s third-largest economy – poor infrastructure, lax tax compliance, poverty, high tariffs and also to boost corporate governance. Given the fact that about 260 million Indians live below the poverty line it is only natural that one of the thrust areas of the Budget was eliminating poverty and to give to every citizen the opportunity to be educated, to learn a skill and to be gainfully employed. Even today, around two-thirds of the population is dependent on agriculture. This is only one reason why funding to build up the country's rural infrastructure was also high on the agenda. The more pressing reason is the sorry state of the country’s urban infrastructure, be it highways, ports or airports. That the budget proposes to do something concrete on this by using a portion of India's foreign exchange reserves, currently about $133 billion, IMF objections notwithstanding, to develop roads, ports, airports and tourism is indeed good. The importance of infrastructure for rapid economic development cannot be overstated, as the minister pointed out.
India’s $600-billion economy is targeted to grow 7-8 per cent in 2005-06, compared with 6.9 per cent in 2004-05. As part of the rationalisation of the tax structure, rates will to be restructured, with top rates on personal tax reduced. This is something that will be welcomed by the salaried class. On the whole the budget exercise looks balanced. It is aimed at boosting industrial growth and for this corporate tax rate for domestic firms has been cut to 33 per cent, which has cheered industry and helped push up share prices on the Bombay bourse. The Bombay share index rose 2.19 per cent to a new closing peak of 6,713.86 points post-Budget.
Going by the initial reactions of industry captains, the stock market and also the common man it looks the minister has done a pretty good job given the fact expectations were on the higher side. The focus on the poor by the Congress-led coalition supported by Left parties, which was voted into power last May, is only incidental and need not be seen as pandering to the Communists. Hopefully the budget would assist in reducing the numbers of the poor in the country.
This is an editorial published in Oman Tribune
India’s $600-billion economy is targeted to grow 7-8 per cent in 2005-06, compared with 6.9 per cent in 2004-05. As part of the rationalisation of the tax structure, rates will to be restructured, with top rates on personal tax reduced. This is something that will be welcomed by the salaried class. On the whole the budget exercise looks balanced. It is aimed at boosting industrial growth and for this corporate tax rate for domestic firms has been cut to 33 per cent, which has cheered industry and helped push up share prices on the Bombay bourse. The Bombay share index rose 2.19 per cent to a new closing peak of 6,713.86 points post-Budget.
Going by the initial reactions of industry captains, the stock market and also the common man it looks the minister has done a pretty good job given the fact expectations were on the higher side. The focus on the poor by the Congress-led coalition supported by Left parties, which was voted into power last May, is only incidental and need not be seen as pandering to the Communists. Hopefully the budget would assist in reducing the numbers of the poor in the country.
This is an editorial published in Oman Tribune
Sensex superstar
For India, home to Asia’s oldest stock market, 2004 has been a year of records. And the New Year began with a bang with the benchmark Bombay index closing at a new high. The index on Monday rose 76.51 points, or 1.16 per cent, to close at 6,679.20, compared with the earlier record of 6,602.69 on December 31. Last year saw the index breaking the 6,000 barrier for the first time and also its largest intra-day fall, of 800 points, on Black Monday after the ruling party lost the elections. Since Black Monday the index has gained 50 per cent and 5 per cent in December alone. But even at these levels, most analysts feel the market is not overvalued.
The same year overseas funds invested a record $8.51 billion in Indian stocks, compared with $6.59 billion the previous year. The foreign funds have pushed the index 763.73 points or 13.1 per cent in 2004. The growing attractiveness of India vis-a-vis other emerging markets has seen the foreign funds riding on the booming economy and focusing on the growing attractiveness of the country as an investment destination. Experts are of the opinion the market could move up by 15-20 per cent from current levels -- at around 7,500-8,000 points within the next 12 months if the corporate sector can sustain the present growth rate, barring any unforeseen circumstances such as a sharp spike in crude prices and a bad monsoon. A poll of CEOs has suggested that over 27 per cent expected profit growth between 10 and 20 per cent, 17.24 per cent expect it to be between 30 and 40 per cent, and 13.8 per cent expected it to be between 40 and 50 per cent during this financial year. And if this trend is to continue foreign funds will continue to ratchet up the market for some more time and India is where the action is going to be for some time.
It is quite probable that 10 years from now people will all be reading about Indian corporates that grew big and prosperous in front of their eyes, like the Korean chaebols Of course sceptics, which India has one too many, who make a living from running down the capital markets as temples of greed and gambling, will continue to point to the laws of physics -- what ever goes up must come down. Maybe this time they are missing the picture. When the Dow Jones index crossed 500 in April 1956, it was at a 10-year high, having dizzily risen from the 50 levels of 1930s. Less than 50 years later that same index crossed 10,000. No investor could have foreseen that in 1956.
This is an editorial published in Oman Tribune
The same year overseas funds invested a record $8.51 billion in Indian stocks, compared with $6.59 billion the previous year. The foreign funds have pushed the index 763.73 points or 13.1 per cent in 2004. The growing attractiveness of India vis-a-vis other emerging markets has seen the foreign funds riding on the booming economy and focusing on the growing attractiveness of the country as an investment destination. Experts are of the opinion the market could move up by 15-20 per cent from current levels -- at around 7,500-8,000 points within the next 12 months if the corporate sector can sustain the present growth rate, barring any unforeseen circumstances such as a sharp spike in crude prices and a bad monsoon. A poll of CEOs has suggested that over 27 per cent expected profit growth between 10 and 20 per cent, 17.24 per cent expect it to be between 30 and 40 per cent, and 13.8 per cent expected it to be between 40 and 50 per cent during this financial year. And if this trend is to continue foreign funds will continue to ratchet up the market for some more time and India is where the action is going to be for some time.
It is quite probable that 10 years from now people will all be reading about Indian corporates that grew big and prosperous in front of their eyes, like the Korean chaebols Of course sceptics, which India has one too many, who make a living from running down the capital markets as temples of greed and gambling, will continue to point to the laws of physics -- what ever goes up must come down. Maybe this time they are missing the picture. When the Dow Jones index crossed 500 in April 1956, it was at a 10-year high, having dizzily risen from the 50 levels of 1930s. Less than 50 years later that same index crossed 10,000. No investor could have foreseen that in 1956.
This is an editorial published in Oman Tribune
Reprieve for Reliance
In his lifetime, India’s Reliance industrial empire builder Dhirubhhai Ambani created history by setting up manufacturing plants at record pace. Now his sons have set a record of sorts in creating geography – splitting the conglomerate in record seven months -- by no means a small feat considering the long-drawn messy issues plaguing many of the country’s family run industrial houses. The settlement of the issues between the two brothers, Mukesh and Anil, have resulted in an amicable split with the elder brother getting control over Reliance Industries (RIL) – the flagship company with interests in oil exploration, refining and downstream petrochemical. Anil gets telecom, energy and finance businesses.
The settlement should offer happy tidings not only for the family but for the nearly three million Reliance shareholders, for whom it has been a roller-coaster ride since the news broke. That the dispute, which had seen a lot of dirty linen being washed in public, has ended so fast shows the maturity with which the brothers approached the issue. While the settlement can be seen as a victory more for Anil, who quite apparently made sure the settlement came about with the equitable division of assets among all players. He played his cards well – having gained control over Reliance Infocomm, which was Mukesh’s pet project and Reliance Capital, while holding on to Reliance Energy, while having to relinquish his role in the flagship, though his role in RIL has been on the wane since the death of the group patriarch. Mukesh, on the other hand, while having had to concede more, must be congratulated for showing the large heartedness to go the extra mile for the sake of an amiable settlement. But then it should be no small consolation for him that he can lord over the money spinning petrochemicals giant built up by his father.
Now that the worries of the shareholders and the family have been set to rest, the only question that remains is: How did the government and its myriad arms perform in the drama in the light of the corporate governance issues Anil had raked up, particularly in Reliance Infocom. It is a shame that in India, despite the plethora of laws and the entry of foreign institutional investors, promoters still keep the investing public and the regulatory authorities in the dark over their shenanigans and use companies as personal property. The federal government has not covered itself in glory by not looking into the issues raised, something which is not surprising considering the relationship the conglomerate has with the ruling party, whose chief recently flew to Moscow in the company’s corporate jet.
This is an editorial published in Oman Tribune
The settlement should offer happy tidings not only for the family but for the nearly three million Reliance shareholders, for whom it has been a roller-coaster ride since the news broke. That the dispute, which had seen a lot of dirty linen being washed in public, has ended so fast shows the maturity with which the brothers approached the issue. While the settlement can be seen as a victory more for Anil, who quite apparently made sure the settlement came about with the equitable division of assets among all players. He played his cards well – having gained control over Reliance Infocomm, which was Mukesh’s pet project and Reliance Capital, while holding on to Reliance Energy, while having to relinquish his role in the flagship, though his role in RIL has been on the wane since the death of the group patriarch. Mukesh, on the other hand, while having had to concede more, must be congratulated for showing the large heartedness to go the extra mile for the sake of an amiable settlement. But then it should be no small consolation for him that he can lord over the money spinning petrochemicals giant built up by his father.
Now that the worries of the shareholders and the family have been set to rest, the only question that remains is: How did the government and its myriad arms perform in the drama in the light of the corporate governance issues Anil had raked up, particularly in Reliance Infocom. It is a shame that in India, despite the plethora of laws and the entry of foreign institutional investors, promoters still keep the investing public and the regulatory authorities in the dark over their shenanigans and use companies as personal property. The federal government has not covered itself in glory by not looking into the issues raised, something which is not surprising considering the relationship the conglomerate has with the ruling party, whose chief recently flew to Moscow in the company’s corporate jet.
This is an editorial published in Oman Tribune
Family business
Retaining control over the business and passing it on to the next generation is the driving passion for Indian entrepreneurs, according to a recent study. The study says 46 per cent of Indian businessmen feel their successor should be from the family. In comparison, only 22 per cent of North Americans and 24 per cent of Europeans subscribe to this view. And as many as 57 per cent of the 185 Indian businessmen covered say the shares in a company should be transferred only to family members. The study makes for interesting reading inasmuch as it shows how unprepared are Indian family-owned businesses for the respected distinction between family, ownership and management.
This study is all the more interesting in the backdrop of the Ambani-versus- Ambani battle being fought in full glare of the media. Reliance Group patriarch Dhirubhai Ambani, who started as a small-time trader, built a $22-billion industrial empire in his lifetime. During his period he placed his two sons in managerial positions, and oversaw the generational transfer of ownership and control. As many as 461 of India's 500 most valuable companies are family-owned enterprises; many of them were once under single ownership but with the break-up of families after the passing away of the first generation, they are now individual entities. And most are pale shadows of their past glory. The best-known business families, the Birlas, the Modis, the Bajajs, the Singhanias, the Walchands, the Shrirams and the Sarabhais have seen brother battling brother for control and ownership. With the collapse of these families, their business empires have splintered into smaller entities. Many have disappeared altogether. Clearly, business and family should not be mixed.
The more irritating part of the family business in India is the way it takes the investing public for a ride. Though businesses are run by families, most of the money to run the business actually comes from the public by way of equity investment and debt provided by government financial institutions, which again use public money. In fact, the contribution of most Indian promoters to the companies capital will not more than 10 per cent, which means the entire money used to run a family business comes ordinary people, who but have no say in the management of these companies. And history has shown repeatedly how such families have got away unscathed while their business rotted and their stocks crashed leaving investors with worthless paper, as was the case of Nocil, once a bluest of blue chip stocks on the Bombay Stock Exchange, run by the Mafatlals. And one cannot for sure say whether Reliance, which incidentally bought Nocil recently, cannot have a different fate.
This is an editorial published in Oman Tribune
This study is all the more interesting in the backdrop of the Ambani-versus- Ambani battle being fought in full glare of the media. Reliance Group patriarch Dhirubhai Ambani, who started as a small-time trader, built a $22-billion industrial empire in his lifetime. During his period he placed his two sons in managerial positions, and oversaw the generational transfer of ownership and control. As many as 461 of India's 500 most valuable companies are family-owned enterprises; many of them were once under single ownership but with the break-up of families after the passing away of the first generation, they are now individual entities. And most are pale shadows of their past glory. The best-known business families, the Birlas, the Modis, the Bajajs, the Singhanias, the Walchands, the Shrirams and the Sarabhais have seen brother battling brother for control and ownership. With the collapse of these families, their business empires have splintered into smaller entities. Many have disappeared altogether. Clearly, business and family should not be mixed.
The more irritating part of the family business in India is the way it takes the investing public for a ride. Though businesses are run by families, most of the money to run the business actually comes from the public by way of equity investment and debt provided by government financial institutions, which again use public money. In fact, the contribution of most Indian promoters to the companies capital will not more than 10 per cent, which means the entire money used to run a family business comes ordinary people, who but have no say in the management of these companies. And history has shown repeatedly how such families have got away unscathed while their business rotted and their stocks crashed leaving investors with worthless paper, as was the case of Nocil, once a bluest of blue chip stocks on the Bombay Stock Exchange, run by the Mafatlals. And one cannot for sure say whether Reliance, which incidentally bought Nocil recently, cannot have a different fate.
This is an editorial published in Oman Tribune
Family fracas
It’s boom time in India – the economy is doing well despite a not-so-encouraging monsoon, the stock market is shining and has crossed 6,000 points this week. Foreign portfolio investors are flocking to the country in droves – what was a trickle last year has turned into a torrent now. From a low 30-35 last year, the number of foreign portfolio investors has ballooned to more than 130 by the latest count.
Indian corporates are recording good growth in spite of the average monsoon and are making good profits and rewarding their shareholders well. Some of the big boys are casting their eyes abroad. Looks like India’s family owned conglomerates are turning into true-blue multinationals finally. But the flip side can be as bad. Indian corporates are now in the news for the wrong reasons. First it was the blue-blooded Birlas squabbling over the remains of the riches of a widow who gave away all her money and companies to an outsider. The Birla clan is now fighting it out in the courts, which could, well, take some time to reach a conclusion. In the meantime came the BPL family drama. The first-generation entrepreneur falls out with his son-in-law, accuses him of plotting to take away one of his companies. Accusations fly thick and fast. So much dirty linen was washed in the press and courts before the duo settled for an out-of-court deal.
Barely had the ink dried on the report of the BPL settlement comes the report of the schism between the two brothers running the Reliance empire, India’s biggest conglomerate. On Thursday Chairman Mukesh Ambani admitted to differences regarding ownership issues with his brother and vice-chairman Anil Ambani. At stake is the Ambani family's 46.67 per cent equity in Reliance Industries, now worth $7.92 billion (Rs 355.52 billion). According to Mukesh, Reliance is a strong, professionally managed company and has moved beyond any one, two or three individuals, including himself. So there is no reason for investors to panic. That is easier said than done since reports say the empire-builder, the late Ambani Senior, died intestate. The stock market reacted sharply on Friday. Shares on the Bombay market fell, led by a sharp fall in Reliance Industries, which closed 3.4 per cent lower. With the stakes so loaded in the unravelling Amabani family drama, is India Inc. just about to witness another round of sordid washing of dirty linen, particularly when the protagonists are considered among the cream of the Indian industry. Surely not something the old man would have liked and is best avoided.
This is an editorial published in Oman Tribune
Indian corporates are recording good growth in spite of the average monsoon and are making good profits and rewarding their shareholders well. Some of the big boys are casting their eyes abroad. Looks like India’s family owned conglomerates are turning into true-blue multinationals finally. But the flip side can be as bad. Indian corporates are now in the news for the wrong reasons. First it was the blue-blooded Birlas squabbling over the remains of the riches of a widow who gave away all her money and companies to an outsider. The Birla clan is now fighting it out in the courts, which could, well, take some time to reach a conclusion. In the meantime came the BPL family drama. The first-generation entrepreneur falls out with his son-in-law, accuses him of plotting to take away one of his companies. Accusations fly thick and fast. So much dirty linen was washed in the press and courts before the duo settled for an out-of-court deal.
Barely had the ink dried on the report of the BPL settlement comes the report of the schism between the two brothers running the Reliance empire, India’s biggest conglomerate. On Thursday Chairman Mukesh Ambani admitted to differences regarding ownership issues with his brother and vice-chairman Anil Ambani. At stake is the Ambani family's 46.67 per cent equity in Reliance Industries, now worth $7.92 billion (Rs 355.52 billion). According to Mukesh, Reliance is a strong, professionally managed company and has moved beyond any one, two or three individuals, including himself. So there is no reason for investors to panic. That is easier said than done since reports say the empire-builder, the late Ambani Senior, died intestate. The stock market reacted sharply on Friday. Shares on the Bombay market fell, led by a sharp fall in Reliance Industries, which closed 3.4 per cent lower. With the stakes so loaded in the unravelling Amabani family drama, is India Inc. just about to witness another round of sordid washing of dirty linen, particularly when the protagonists are considered among the cream of the Indian industry. Surely not something the old man would have liked and is best avoided.
This is an editorial published in Oman Tribune
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