India sits precariously in global recession

During April-February 2012-13, India had £182 bilion deficit in foreign trade. India’s trade deficit is likely to widen between $193 billion and $196 billion in the last fiscal year. It sits precariously and sliding towards 1991 when balance of payments situation arose. The trade deficit grew mainly due to the 14.5 percent growth in imports and the 0.1 percent increase in exports; thereby widening the trade deficit by 49.2 percent during the period. India’s oil import bill leaped 40 per cent to a record $140 billion in Year 2011-12 as high oil prices bringing down its GDP growth rate.
India needs to see why it should import any thing other than the items which it definitely needs like copper, petroleum, fertilizer, gas products and edible oil. It of course have to import those items where it adds the value to export them back after finishing like diamonds, gems etc. But, it needs to eliminate or limit gold and coal import for domestic use even if it renews the Gold smuggling. India should not be importing any chemicals but rather building a domestic capacity to export it back. Currently European Union, Japan exports the most and China and Mexico imports most chemicals. There should be thinking of exporting of only finished goods rather than raw materials unless it is too abundant. Coal could be replaced by electricity for which it should use  hydel energy, domestic coal, solar, nuclear energy but alas reactors based on thorium which is abundant in India are never going to be ready in spite of ongoing research for eons and uranium dependence will remain in spite of growth in uranium production where India’s production increased by 73% in 10 years (2011). But China increased its production by 81 % in just one year and now its annual capacity stands 3.5 times of India. This is how the import bill stood -

                              2011-2012                2010-2011

Oil imports            $140 bn                    $73.7 bn

Gold and silver     $62 bn                     $31.2 bn

Coal                      $29 bn                      $8.6 bn

No wonder the rupee value is sliding for last few years. It slid 16 per cent in 2 years in dollar terms.The question to ask is if the exports can not increase due to global recession why should imports continue to gallop. Its current account deficit now stands at highest 6.7% in latest quarter which is an alarming figure.

The British Miners strike In 1984-85 [Photo Credit: Wikipedia]

How the coal import is allowed to be increased close to 4 times of previous year figure, one wonders. Is it due to production shortfall. If that is so then any figure will be justified. In the data both coal and oil imports have gone up. If it was just coal then one could have thought the coal has replaced the oil import but that is not the case. Also, privatising the coal mines has just led to big license scams only so far. The increase in production tonnage perhaps will come later. The coal India Ltd which meets country’s 81% consumption requirement has seen its annual production capacity stuck at same figure of 420-430 million tonnes for last 3 years to 2013. Clearly it is beyond Coal India Ltd to add more production. China’s coal production is 5 times that of India. Clearly, increase in coal production can reduce current account deficit as oil requirement should come down if the coal is used in electricity production and freight is moved onto electric railway lines. So, there is a need to remove quickly, the monopoly stranglehold of Coal India Ltd, the biggest coal miner of the world. Perhaps it should be broken into pieces – based on coal pits. The ones not being cost effective should be closed down. In mining, India has plentiful reserves but Coal India consistently fails to meet targets. The coal import permitted should only be to meet production shortfall and that too should be of higher grade coal from abroad. Also, there is a particular need to attend the rail transport bottleneck experienced by major coal consumers like steel producers or thermal power plants.

Maggie Thatcher ‘s example of selling the equity to general public should be followed. It can make more middle class investors by limiting the equity lots offered for sale thereby increasing number of investors. The preferential treatment should be given to sell the holdings to the workers. With coal strike almost every year in Dhanbad etc (in Jharkhand state), the trade union reforms along similar lines as ushered by Maggie Thatcher should be introduced where she brought a compulsory ballots by members before a strike can be called upon. The election of trade unions has to be more transparent on the lines of national election. The limit of terms should be introduced for the party posts etc-2. The  privatisation of coal India Ltd will also help in removing the subsidy India has to make so that state electricity boards can buy the coal at cheaper prices. That would mean the state electricity boards have to ramp up electricity prices meaning the electricity prices will have to be at realist and sustainable level and close to other parts of the country where they may not have a subsidy. It can also help in removing need for dispute arbitration on quality like the ongoing tussle between NTPC and coal India Ltd, where NTPC says – Why should it pay for the stones that coal India Ltd produces. Divestment or privatisation should not be allowed to be rolled back by trade unions as is the case now. The unions need to be confronted or how else India can confront its current account deficit.

Was Partition a blessing in disguise – A travel from Akhand Bharat to Akhandit Hindu Samudaay

Amidst the gathering gloom about imploding Pakistan, I came across a positive news from Pakistan. It said Pakistan carried out drone attacks in Feb: US Officials . Well, isn’t it a surprise when many Pakistan political leaders were deriding US drone attacks for killing innocent civilians along with terrorists and wanted it to be stopped, that establishment in Pakistan realised that with US departure, now Pak army has to do what US was doing all along. Well, other news emerging from that country seem all depressing. A third major attack within last 2 month on Shia community and the news that part of the Pakistan state is now controlled by outside fighters not just in FATA etc but within its biggest city Karachi itself is hugely depressing. The Shia community is new target. Earlier targets for attacks have been other religious minorities like Hindu, Christian. The puzzle now seems who will follow Shias. Will it be Barelvis, Muhajir (Muslim migrants from India who came at Pakistan creation), will it be Punjabi v rest Pukhtuns, Sindhis etc. Baluchi like Shia are already on the anvil getting hammered.

Figure 1 After the Shia Bombing in Pakistan

Every time, all these bad news gather pace, the question goes back to the genesis of Pakistan. Was it necessary to placate and encourage a few Muslims by British to create a partition of India. The present affairs of Pakistan seems uncontrollable but who knows if more resources come into Pakistan, it may stabilise. There seems more if statements and wishful thinking about it, though.

Recently, I came across a facebook Hindu group page wanting to besmirch the good memory of Mahatma Gandhi decided to post a picture of Gandhi’s killers. The others were supposed to fall in line and pay respect to the killer because it would have meant rejecting Gandhi’s love for Muslims, Hindus etc. I was not happy for them losing sight of Gandhi’s contribution in India’s freedom as well as inspiring others like Mandela, Martin Luther King Jr. etc for the world peace in general.The group photo had included unfortunately another individual called “Veer Savarkar” who spent considerable years  in jail from (1911 -1924)  for violent struggle against British.  Savarkar was a complex person. In jail, he turned to revive Hinduism and wrote several books.  In 1920, the Indian National Congress and leaders such as Mahatma Gandhi, Vithalbhai Patel and Bal Gangadhar Tilak demanded his unconditional release. Savarkar tactically signed a statement endorsing the trial, verdict and British law, and renouncing violence, a bargain for freedom. But his incarceration continued. After his release, however, in stead of joining India’s non-violent freedom movement with Congress, he went against the Congress and Jinnah’s Muslim League. He, presided over a new organisation till 1943  called Hindu Mahasabha which became a pre-cursor to current BJP (Bhartiya Janta Party). Hindu Mahasabha could not reconcile to partition. Gandhi was considered guilty as he acquiesced to partition. It is hard for anyone to conclude those days in 1948 that Veer Savarkar had nothing to do with Gandhi’s murder,  if he was sitting in that photo along with Gandhi’s eventual killers and met the killer just before the murder mission. So, Savarkar was also arrested for Gandhi’s murder too along with others but he was freed  as the evidence linking him with it lacked independent corroboration. Current BJP brigade keep bringing Veer Savarkar in front because  of their need to highlight his message of Akhand Bharat (undivided India) and also for his so much work on Hinduism.  Savarkar was a patriot to the core and devoted to the cause of India. I believe he should be brought to lime light denied to him so far but BJP should not dismiss Gandhi’s contribution and spoil his memory as  it was not just Savarkar who gave the message of Hindu unity and empowerment but Gandhi too did the same in equal measure, if not more.

Savarkar (above) and Gandhi politely agreed to disagree on whether Ramayana justified the use of violence in freedom struggle. (Photo credit: Wikipedia)

BR Ambedkar, the man responsible for Indian Constitution, talked about Savarkar like this –

“In his scheme a Muslim is to have no advantage which a Hindu does not have. Minority is to be no justification for privilege and majority is to be no ground for penalty. ”

Savarkar also expressed joy at the recognition of the claim of Jewish people to establish an independent Jewish state, and likened the event to the glorious day on which Moses led them out of Egyptian bondage.

However, there is a concern in majority Hindus that the current Congress and many other parties in India like SP, BSP, TMC(Trinamul Congress), AIADMK etc  who all want Muslim votes are doing the same thing that led to partition of India. It was  then the active appeasement of Muslim constituency  by British. The appeasement of any section of society lead to disenchantment in others. Already the reservations for even Hindu lower castes(dalits etc) is causing this. This has been extended  to Muslim reservation in number of states but if Muslim reservation for Jobs etc goes nationwide,  it will exacerbate into a deep seated anger against the beneficiaries and divide the communities along religious lines too besides already castes divided Indians. So, while most Indians thinking nostalgically about Pakistan hurts in one way asking question as to why we had to separate or why this dream of Savarkar ‘s  Akhand Bharat could not be kept, I have begun to feel and thank God for partition that India is saved at least from the mayhem (daily bombs) that Pakistan is facing. The Hindu community swelled after migration from Pakistan, perhaps, they must be feeling blessed too that they have become now an Akhandit Hindu Samudaay (undivided Hindu Community). However, it is not just Hindus, but Muslims feel relieved too. Here there is one Shia Muslim expressing his joy on remaining in India .He commented on the Pakistani news paper Dawn’s website like this –

“Javed Hussaini

  February 17, 2013 7:13 pm

So much for the two nation theory, Maulana Azad was 100% right, I am glad my parents stayed put in India and not move to Pakistan, on the eve of partition. Being a Shia , and a minority in India, I feel much safer in Haryana, a 90% Hindu area where I live, then I ever will in a Muslim nation. Pakistan needs to learn to respect people and be tolerant, if the Hindus want they can wipe out Muslims from India and the world would probably do nothing , as it is a big economic power on which no military or economic sanctions will work, but that does not happen in India, periodic riots do happen that is as much a fault of Muslims and Hindus or Sikhs, Our MLA is a Muslim, the next constituency the MLA is a Sikh, and again the population of both communities is less then 10%. I hope that this venom from Pakistan does not spread to Muslims in India, already we have seen anti Shia violence in Lucknow.

“

Well, I hope India remains undivided between castes, groups and religions for long long time irrespective to whatever is happening in Pakistan.It was a blessing in disguise that partition happened. India should survive to give refuge to any one undergoing persecution anywhere.

Af-Pak Region after Nato departure

As US is beginning to leave in 2014 after 13 years, many in Pak started to rejoice as its army felt it could now freely flex its muscles back in Afghanistan and subsequently in Kashmir. But it is beginning to dawn on the main political parties and intellectuals that the Pak itself is beginning to slip through their fingers. This editorial and the article “The shadow over Pakistan” gives away the anxiety felt by intelligentsia. It is clear now that they have to somehow talk peace with Tehreek-e-Taliban Pakistan (TTP) without asking for any pre conditions for talks like laying down weapons etc. So, Taliban will emerge from any talks stronger. How things shape up after Pak compromises with Taliban will be anybody’s guess as another major actor in this area is Pak Army who has not abandoned anything of the past. It continues to support Afghan Taliban and help other fundamentalist groups within Pakistan. No body is reporting any more of militant training camps, IED factories running within Pakistan to help Taliban dislodge NATO from Afghanistan but there is no reason to stop such an activity now if these were operating before. Even if the violence escalates within Pakistan, the chances of army and political establishment are far more further and further to compromise with these groups than to wage war on them. Without the US funds in Af-Pak, the drones, the holding off Taliban in Afghanistan by NATO there is simply no chance of averting Taliban dominance very much longer after US departure. Should India rue that other countries like Russia, Iran can not do anything to stop this. Both of these as well as China want a stable Afghanistan and not the one infested with Islamist training camps. But other than China, the others do not have big enough economic muscle. China also has an economic interest there just like India. In fact Indian and Chinese interests in Afghanistan are very much in sync to keep Afghanistan away from Islamic turbulence and stable enough for carrying out the economic activity. Iran can also play a big role in stopping Taliban from becoming unstoppable. Since all these three countries (Iran, Russia, China) have same interests in Afghanistan, they should convene a meeting with Afghanistan as to how to help it after NATO departure. Perhaps, India or any of these countries can take initiative for such a meeting. Although, it is in Pakistan’s interest as well not to help Taliban but Pak Army will not undo what it has been doing since 1979′s at the beginning of 9 years Soviet occupation of Afghanistan. US perhaps should do a speedy deal with Iran on the Nuclear concerns bringing that country out from cold. This can help India and Iran relations. These relations could be crucial for the health of Afghanistan as India or anyone else will be able to use Chābahār port of Iran for Afghanistan trade. Perhaps, a railway line can also be laid to connect Chābahār with Zaranj upto where India built a road but which still remains unconnected with the nearby road across the border in Iran due to Taliban control over that area.

India and Pak history of wars have always brought a stalemate because all those victorious PMs from India have shown magnanimity to sign accords with Pak and return the won territories for the sake of peace. But peace has not arrived because all these accords have strengthened Pak Army and not its civilian democracy. Current Pakistan media has twin worries on reporting any incident within Pak that they will have to face the wrath of Army as well as militant gangs supported by Mullahs. So, when the Pakistan troubles will escalate no body will come to know about them. Pak Army’s big role will continue to haunt this whole Af-Pak region and India at least   .

The GDP Growth, Inequality in China and India and trusting any Statistical Data

Sometime back, I was looking at the data on equality. Since, I was mainly interested in the subcontinent plus China etc. So, I compiled this data.

Country                Gini Coefficient (%)                             Year

China                            47.0                                                  2007

India                            33.4                                                   2005

Pakistan                      30.0                                                  2008

Sri Lanka                    40.3                                                  2007

This data is based on World Bank sources as reported in Wikipedia. Here, point to remember is that all the countries aspire for the lower Gini coefficient as that means there are less unequal citizens . Therefore, it is also a measure of the stability of the political system of any country as it  indicates less room for strife (crime, protests etc) by  unequal citizens of a country.

Looking at this data, I noticed that India is better in terms of equality than China but perhaps, it is worse than Pakistan. I tried to reason why. I thought perhaps, Muslim organisations are more charitable (Islamic Jakat concept) and even if the people are poorer there they are redistributing the wealth in such a way that people are not feeling the poverty as much as they are in India or may be even in China. Pakistan data is even more enigmatic given the worst level of corruption and instability it has in comparison to India and China. But then after coming across this report recently from US govt on China, I felt differently. It says this about the data that comes from China and trusted by all.

“NBS surveys continue to provide inadequate samples of important sectors of China’s economy. Small-scale businesses in manufacturing and retail are hard to capture, while sectors like transport logistics are almost completely unaccounted for. Although the NBS measures 94 sectors of the economy on an annual basis, it does so for just 17 sectors on a quarterly basis.

Surveys also fail to capture “opaque spots” in the economy. One of the most egregious is household income. In the United States, tax returns provide a proximate indication of household income. Indeed, personal income tax accounts for about 40 percent of U.S. government tax revenue. But in China, the personal income tax in 2011 makes up just six percent of revenue. A big reason for this is that even the wealthiest Chinese households are taxed directly on their wages, but not on their non-wage income, such as real estate, stocks, bonuses, and personal gifts. Households must actively report such income – but many understate their income in tax returns, or refuse to participate in sample household surveys. In this way, they can evade taxes and also avoid the political implications of having excessive wealth in a nominally socialist state. Chinese economist Wang Xiaolu has determined that national spending on real estate, luxury goods, and travel in China implies much higher income among the top 10 percent of earners than is given in official income data.

In January 2012, the NBS in fact admitted that it does not publish the Gini coefficient –a leading measure of income inequality – because data on high earners is inaccurate. It is also notable that, in an economy with a large state sector, government officials have only recently begun to disclose their own salaries and wealth to the public, and none are under any legal obligation to do so. Opacity extends to other sectors as well. Many state-owned enterprises remain secretive about their income statements, especially if they are not publicly listed. New types of large corporate entities, such as fund management companies and real estate arms of conglomerates, often go unaccounted for in both the direct reporting and enterprise survey systems. In local governments, “off-balance sheet” budgets can also skew fiscal revenue and expenditure.

Opaque Areas of the Economy

The Outdated System of Direct Reporting Enterprise revenue determines which firms are eligible for China’s direct reporting system. As China’s economy grows, so does the number of firms with sizable revenue, which combines to overwhelm the data processing capacity of the NBS. The NBS has tried to reduce the number of firms by continually raising the revenue threshold for direct reporting. When this reform began in 1998, the number of direct reporting firms was decreased from 460,000 to 165,000. However, by 2009, 434,000 firms were again reporting. As of 2011, only firms with annual revenue exceeding RMB 20 million report to the NBS, a measure that has again reduced the number of reporting units.

“

This data unreliability from China has big similarity to under reporting of data in Indian economic system The Indian economy has a parallel black economy which remains unaccounted for.  I had a chance to meet someone on my last trip to India. He is not only an industrialist but also sells his finished goods from his retail outlet besides distributing it across the country. This person does not use banks most of the times for his business transactions. He uses cash and prefers it over any debit or credit cards. He chose not to have any. It helps him to remain anonymous or untraceable for any tax liabilities. It was incredulous to hear that all his capital (turnover) remains fully invested in the market all the time either in raw material or lent to the buyers who will repay it at different dates all in cash . As his business grows, the extra generated capital also gets absorbed into the same business hands.  When a big spending need arrived for him, he merely clears some lent positions and invests it or spends it on the required need e.g. to buy land or spend on something like children’s expensive (no hold bar) marriage. He also gave me another insight how they have never paid full excise duty. Excise can indicate the produced goods or turnover of the firm. He said, “Usually, they fill just one excise form for the whole day and every time the transport  carries the goods from manufacturing unit, it goes with the same excise form. The form did not register any loading time or departure time of the goods vehicle . So, this way they could report whatever turnover they are comfortable to pay tax on. Since, they never bank the business money and only do it when some customer is making a payment via bank draft or cheque.  The whole of the business community in the capital region of India employs this same method. Of course the problem just does not lie with business community alone. The officials(bureaucrats) who are prepared to accept either bribes, donations for their respective parties or some gifts and favours on various occasions are hand-in-glove. The problem of under reporting by business is considered so much high as to 50 to 60 percent of real data. But this remains a guess in the absence of unreliable official data.

This indicates that India as well as China are growing at far larger rates than they report. They hardly know themselves the correct figures. This national data is from the trading economics Website.

The unreliability of income data makes the estimate of inequality even more difficult to judge. The official Gini
coefficient, the measure of inequality around the world can never be worked out in reliable manner as in corrupt countries (most of the world is) the estimate of income of top earners as well as that of poor can never be done reliably. Just like rich, the poor also does not want to give their real income so as to seek bigger handouts from govt or charities. But, I still relied on Indian data far more because first of all India is reporting far more indices than China does and there is also a possibility of cross checking of its data . Also it has so many NGO and some world bodies like UNESCO, ILO operating in India. Its democratic system and open, free press certainly should cause less data manipulation. I saw my this view-point resonated in this Bloomberg report which wanted to bet on India for investment and growth more than it does on China but no matter how much India may be a better bet in terms of growth, I certainly have been very naive to trust any data quality on equality or the GDP. Let that be  from India, China or elsewhere.

Thanks Karl Marx, the world is still changing the right way.

When Karl Marx published Das Kapital in 1867, the world had seen just capitalism and exploitation of masses. It was the time, the capitalism was looked down for its labour exploitation . The exploitation gave way to the thought of equality. The feudalism, capitalism and class culture started melting down across Europe and gradually elsewhere. In some societies, the class distinction was not very visible like in Americas (North and South). In place of feudalism, there the capitalism took roots as  neo rich people wanted to achieve the same social status which was denied to them in their European home countries from where they had emigrated.  The new class system based on wealth now took root in all countries. The wealthy people wanted to see capitalism to flourish and therefore abhorred those who wanted to finish this off.  Marx’s economic theories were changing the thought process . His books had affected the minds of Russians first as Russia was emerging out of profound  serfdom.  The book had got translated in Russian first before in English. Whether  Marx got the inspiration from the French Revolution(1789), melting away of slavery around the world (1833 in UK, 1865 in US)  and serfdom abolition in Russia (1861) to expound that theory  on the use of  capital, one can not be sure.

Somehow, that theory from Marx led  the Russia and the world to try communism . While the neo rich and capitalists in US and other countries carried on fighting to establish whether  capitalism and wealth should be  worshipped or the equality (socialism).The Marx has infected the minds of millions . A new social order has become desirable where those people who work are not looked down upon by wealthy and indolent people and they have more freedom.

When colonialism was giving way to democracies in late 20th centuries, all  the leading lights of the day were embracing socialism like Nehru, Tito, Bhutto, Nasser etc.  But, after the 1989 breakdown  of  communist bloc , the communism  is now considered a failed ideology whose time is gone. The socialism as being associated with communism is therefore a word people want to retreat from even though every body still wants to bring equality to masses.

In recent past, the socialism was just used by many to come into power and then forget about it. The socialist halo was also present in Sukarno, , Indira Gandhi and in military men Gaddafi, Suharto, Nasser & Anwar Sadat. The socialism  led many leaders to nationalise the  production assets, the banks etc. However, the nationalisation was on the retreat after the Margret Thatcher‘s show in UK to claim back the world from that ideology of socialism where the  labour unions had virtually paralyzed the country. So, for operational aspects the world began to see the folly of putting everything under the state control. But this retreat of socialism has also affected the effort in elimination of exploitation by few of the masses.

Arab Spring of 2011 began to claim back the rights of have-nots in Muslim world  and  let people have freedom. The democracy which was thought is not suitable model by some Muslims was now wanted by them. It also inspired other countries too by stressing that however entrenched any govt or system may be, it can be thrown away. The trigger was a single incident of Mohamed Bouazizi self immolation in Tunisia for the start of Arab Spring.

The advent of internet and means of mass communication like mobile phone has allowed people to see that the things can be changed . So, the aspirations of people are changing too. Why would they be willing to put up with the same exploitation and denials of their rights which they had in the past. But there are always those who have the capital, the power . They would not be willing to change and give it away so easily without struggle. So, Syria has simmered on and on.  While some struggles have started in some countries and some will have it some day  but the danger lurks that it may come suddenly to that country causing widespread misery and chaos.

Recently, this struggle manifested in a movement to claim back proper gender equality in India after the death of a woman following a rape but the govt  muzzled the protest. The govt may have had success in controlling the protest by closing lots of metro stations, water cannoning the protesters etc. but any such success of govt and the failure of masses to register protest stores the mass fury for the next time.

In Pakistan, there was a march scheduled to the capital Islamabad calling for the end of feudalism.  The march  organisers have been under tremendous pressure to scrap the march in case it derails the democracy and allow the military to usurp power again. So, whether anti-feudal  struggle remains in abeyance will become clear on Jan 14, the March date to see if it has any effect. China is still waiting for something to happen as it is yet  keeping the individual freedom at bay. If its new leadership of 2012-13 does not take small steps now to let people allow  some protests, there is a danger that it will boil over in big way one day which will then also affect the whole world.

So, some govts will be changing a little and some will remain the same until the mass fury visits that country one day. But it is thanks to Karl Marx and his ushering a thought of socialism, the world after about 150 years of his book looks lot better place to live and breathe in as it is little more equal and allows lot more freedom.

Which one is the best government in the world? The winner is Canada !!

I wanted to seek reasons why the democracies are wobbling in reaching maturity. Of course the reasons are not far from comprehension – it is due to inability to develop mature institutions. Any successful democracy needs lots of institutions which are independent and beyond corruption. It needs independent media, independent judiciary, a fully working corruption free legislature who can raise the questions of probity without compromises and legislate the right laws and finally the executive who can oversee the implementation of those laws. Of course, one would also need independent election commission, a strong corruption free military and police for a working and mature democracy . I would like to rank democracies based upon these measures as to how much mature the democracy is. Since, China and other single party state also have to be accommodated in this maturity index. Let us call it govt maturity index rather than democracy maturity index. So, for this I have used stats from ‘Transparency International‘. I have used their stats on the measures like human resource development, judicial independence, press freedom, voice and accountability based on country wide data to discuss governance maturity. I have ignored corruption here as people tend to use this as a single parameter to discuss governance. In my view, there is no single consolidated governance parameter justifying why any country is getting better governance than another and how any country is travelling towards a better governance. But the world definitely need one govt maturity index. There is of course the table printed on which is the best country to live in but it has more to do with issues like standard of living, health, infrastructure etc. Here, I have picked up those countries I was interested in to compare them – the Source is Transparency International

Country	Judicial Independence (score out of Max 7)	Rule of Law	Press Freedom (High means bad)	Voice and Accountability
UK	6.2	1.769596058	2.00	1.312851012
France	4.9	1.524405497	9.50	1.225976029
Japan	5.8	1.31377106	-1.00	1.047643331
Germany	6.3	1.627934067	-3.00	1.345103086
USA	4.9	1.584584729	14.00	1.16180876
Canada	6.3	1.789068657	-5.67	1.379444766
Australia	6.1	1.770200087	4.00	1.428903554
China	3.9	-0.346839923	136.00	-1.649501221
India	4.3	0.057769364	58.00	0.42402758
Pakistan	3.9	-0.785570665	75.00	-0.81606361

Clear winner here is Canada. It has the best measure in all commonwealth countries even better than the mother country UK. The only measure Australia is better than the Canada is on “Voice and Accountability”. Comparing USA with Canada makes you wonder why USA is not as good – is it because the number of people it has in comparison to Canada? If that reason was plausible then it could justify why India is so low down as it has even more people. I consider that it has more to do with the will to change. Comparing India, Pakistan and China makes one wonder about the China’s real achievement. Other than the wealth creation, it virtually falters on everything else. How its citizens must feel one can only empathise. In Europe, it is not the UK who holds the flag of having best govt – but it is Germany. The only measure on which UK leave Germany behind is the “Rule of Law”. And of course, the Asia has also a first world govt in one country at least – it is in Japan.

Justice in Democracies

There is an article in Washington Post discussing the slick running of ‘Drone Attacks‘ across Pakistan, Yemen, Somalia. There may even be need to enlarge the area of operations soon as Al- Qaeda seem to be taking root in Northern Mali, Algeria and Arab Spring States. Well, the acceptance of targeted killing is justice denial but there is little doubt that when states are unruly (Somalia, Yemen) and unable, unwilling to act (Pakistan), the drone action gets justified. But will the taps ever stop now having gotten used to them. The worrying aspect is that the judgement of deciding the targets based upon the input may be not all that right always. Inputs may be tainted, compromised or from a biased informer trying to take revenge of his own enmity.

The justification for anything can be done as attack on Iraq comes to mind which was justified at the time being based on WMD presence. But, I will contrast this theme of justice denied (effectively to terrorists or damned as terrorists) to selective justice practiced in India where it came to light more prominently in last few weeks. Recently, one activist turned politician Mr Arvind Kesriwal started giving the evidences against all corrupt politicians in India irrespective of which party they belonged. First, Mr Kesriwal presented the case of making big money via the government connections against the son-in-law Mr Robert Vadra of the ruling party president Mrs Sonia Gandhi, who is proxy PM of India. The ruling party responded the only way it knows that is by keeping quiet and speaking at times as if some sin has been committed by dragging the relatives of the party post holders as they said they never bring the matters related to the relatives of opposition party in public domain however damning these may be. Next, Mr Kesriwal gave evidence against another ruling party functionary or so called Law Minister for defrauding the system systematically via a government funded NGO. Brazenly, the Law Minister, Mr Salman Khurshid refused to resign, the PM decided not to meet anyone or probe or say anything. Next Mr Kesriwal decided to present evidence against the opposition party president, Mr Gadkari.

While the ruling party dismissed all evidence against its own party holders or beneficiaries but then they decided to use the government departments to probe for cases against the opposition party president. So, this is another pattern of selective justice in so called democracy which can aptly be described sham-o-cracy, brazen-o-cracy or thug-o-cracy (Russian democracy seems more apt for that, though). So, in some ways democracies should not be talking of human values and equal justice which they often seem to champion while talking about China, Syria, Sudan, Zimbabwe etc. While, there seems no real way to nab terrorists and the only way left is to strike and eliminate them in their own currency of terror but should we continue to uphold these values for unforeseen period? It signifies the failure of reason, diplomacy, decency as the outbreak of drone wars between countries could lead to bigger catastrophes for mankind while partisan justice of India will lead to witch hunt following a regime change.

Dreaming a Governance Model for Europe and India

European Parliament

Markets finally made Mrs Merkel (Chancellor of Germany) to agree to second European integration step recently. The first step was the launch of Euro and now the new step of a month ago was the unlimited bond issues by ECB for the need of member countries. This is the akin to quantitative easing (QE) in a way though it is sterilised in spite of effectively expanding money supply by printing currency or doing repo auctions and buying bonds of member states. This bond buying may be soon be needed for further rescue of Spain, Italy and who knows even that of France one day. It is not sustainable in the long run, as there will be a need of higher contributions needed by some member states of European Stability Mechanism(ESM) as some will not be able to contribute anything to ESM bailout funds. So the next integration step will be inevitable within 2-5 years. At present, there are tax provisions for financial transactions, pollution (carbon tax, air travel tax) etc on individual states. But perhaps a direct taxation has to be on the table soon to cope with ever more growing need of finance. The taxation without representation or elections of authorities can not happen as member states would not agree to current model of positions to EU governing bodies by mere nomination or selection. For more integration through election, the Europe will need to evolve parties across member states. They also have to agree to a model of governance.

Interior of European Parliament

At present, the Europe has variety of models – the republic model of France ( team of President and PM), the Chancellorship of Germany and constitutional monarchy with prime-ministership of Belgium, Holland, Spain & Britain etc. So, the new important issue will be of selecting a governance model for Europe. The debate on this may take very long. But I assume it will settle something close to US model of President system rather than of the current models of governance in number of European countries. The parliamentary model based on British model lacks direct public participation and any subsequent interactions with the public. The local authorities governance may seem to assuage the feeling that local population have direct control over their affairs but it seldom does. Even the local representatives fight it out between themselves in councils rather than listening to the majority voice of the public after the elections. In days gone by, without electronics means the public participation in decision making was never there but now the public is armed with the new means of communication, so the politics has to be more engaging with the public. The online petition system to start a debate in British parliament may be alright for now but the need to consult on all kind of issues with the public will be important in future for any MP.

In countries like India, Pakistan, where the democracy is only skin deep. The parties do not have the democracy within themselves as there are no elections of party post holders and are considered to be owned by one family or a bunch of individuals. The systems in Australia, Irish etc. suffer from the ills of proportional representation system and not following the first past the post system in vogue in most countries while Brazilian presidential model brings a mix of both system in play in such a way that there is over-representation of smaller states which they exploit to the hilt. However, the US system has one big advantage over the 2 round election system (also called run-off system) of French. It enfranchises the public in direct voting of the country’s leader and therefore gives them more satisfaction. It also pushes the minor parties to aspire to become big parties by joining these major parties or perish. It does not incentivise the smaller one leader parties to prosper over a longer term. In a way, it is good for the integration of the very big geographical areas which Europe could indeed be and avoid the kind of coalition politics of paralysis India is engaging in for last 25 years. India’s current leader was anointed by the victor of last elections, so neither victor (proxy leader) feels responsible to the public nor the anointed one. The only problem I foresee in US system is the inclusion of electoral college voting system or the indirect election along with the direct election of president and vice-president by public. The decision of a election or arbitration by a court in tied results like the world witnessed in 2000 at the Bush V Al Gore election is never right as the election outcome will become dependent on the selected judge. Even the electoral college’s extra 5 votes for Bush also tilted that election in spite of the more overall votes for Al Gore across the whole country. So, this all could be avoided altogether if the overall % votes should be considered the first measure. If somehow that still leave a result tied then number of overall states won by any candidate should decide the result. The electoral college system should be eliminated completely to make the election fairer as it was the need of the hour some 200 or so years ago in both France and US but it can not serve today’s need of direct representation.

The system that should be adapted from France however is on regulation of spending and financing of campaigns by any political parties. The cap in France on spending is at approximately 20 million Euros. The government public financing of 50% of spending is done if the candidate scores more than 5%. If the candidate receives less than 5% of the vote, the government funds €800,000 to the party. The advertising on TV is forbidden but official time is given to candidates on public TV. An independent agency regulates election and party financing. Just like US, now France also has maximum 2 terms for president . The length of term however is 5 years which may not be that bad at present but perhaps it may prove really long and antique in 20 years time. Well, not only I am dreaming of a fast tracked presidential system in Europe but also for India to chuck away their parliamentary system for this so as to speed up their governance as there is a fear in the air that India will go into yet another election without letting public know who will lead the country. Suddenly an undesirable leader may reach to the top of the winning party and therefore may win the right to lead the country.  If public were to know about such a person before elections they may never vote such a party.   Well, I know some dreams always stay dreams but there is no harm in dreaming .

Waking Up of Ummah

Let me tell those who do not know what Ummah is – Ummah is an Arabic word meaning “nation” or “community”. It is commonly used to mean all the Believers (Ummat al-Mu’minin), and thus the whole Muslim people. There is an Organization of the Islamic Conference (OIC). It has 56 member countries. India is not one of them in spite of being no 3 in Muslim population. Perhaps, OIC can be referred as Ummah.

During the last fortnight, the world has witnessed the waking up of Ummah. Following the discovery of film “Innocence of Muslims ” by Egyptians. The storm across Muslim world erupted. It started gathering pace in other nations as well like Australia, UK, Italy, Netherlands etc where demonstrations took place.

The doubts on existence of Ummah always came as the Ummah rarely woke up before in unison like this time. Yes, there were times, it has awoke as when cartoon controversy outraged it from Denmark,  the burnt pages of Quran were found in Afghanistan, the photos of US soldiers came out abusing the prisoners of Abu Ghareb or urinating pictures on the dead Talibans emerged more recently. The reactions however were far more constrained unlike this time.

Has Ummah been having  selective amnesia ?  Islam has not made Muslims virtuous. No religion can make any. Muslims have committed and continue to commit all kinds of crimes – much more sinister and grave.

1. Did Ummah condemn terrorism on US soil on 9/11/2001, London 7/7/2005, Java Attacks 2002/2003 or Mumbai 26/11-29/11/2008?

2. Did Ummah stir into action when Muslims people abused the white girls in Rochdale(Manchester), Telford(Birmingham), Bradford, Oxford in UK .

3. Did Ummah utter a word of concern on forced conversions of minorities specially in Pakistan though it goes on across Muslim countries.

4. Does Ummah condemn the attacks including drone attacks on civilians who are driven to Nuba Mountains in Sudan. In 2011, more than 500,000 Sudanese civilians were driven from their homes by government action and that number continues to grow in 2012. The attacks in Darfur are on-going since 2003. The International Criminal Court has indicted Sudanese President Omar Hassan al-Bashir and issued an arrest warrant for Defence Minister Abdel Raheem Muhammad Hussein for war crimes in Darfur. But will Ummah rise and declare that Al-Bashir is criminal.

5. Where does Ummah stand on who is Muslim and who is not. Why Shias, Bahais, Ahmadiyya are considered non-Muslims by most of Sunnis leading to their killing or not allowing to worship.

6. Where does Ummah stand on infidel killings(Christians, Hindus) – is it legal to kill others in the land where Muslims have majority.

7. Where is Ummah on reforms within Islam? Why Ummah can not agree to basic human values in Ummah member countries. Muslims cherish these when they live in countries that offer these values but they do not enjoy it when they are at home. These are rights to freedom of speech, rights to practice the religion and rights to wear what is acceptable to all countries, rights to minority to live on equal footing, rule of law and avail equal justice, opportunities.

So, what has changed? Is it the effect of Arab Spring? Perhaps, young liberated Muslims of North Africa are ready to show to the west that they are their own master now. Pakistan always thought itself more Islamic than the rest of Muslims, so 20 or more people died there in the protests. What about the real Muslims? – the Salafis (Wahhabis) of Saudi Arabia. Why there was no reaction from them? Well – The Al Arabiya News reports that Prince Alwaleed bin Talal, billionaire nephew of Saudi Arabia’s king, said on Tuesday only a minority were involved in violent anti-US protests over a film mocking the Prophet Mohammad, and Islam was too strong to warrant such an uproar over the matter. Grand Mufti of Saudi Arabia, the highest religious authority in the kingdom, on Saturday condemned the attacks against diplomatic representations as contrary to Islam after protests that have rocked the Arab and Muslim world.

So, is Ummah one? The answer is “no”. It never was and it never will be. If it was one,  will any Muslim go hungry. Will there be any discrimination bordering on racism within Muslims. When some of the Muslim countries are richest,  poverty reigns supreme in lots of Muslim countries as Somalia, Bangladesh, Indonesia etc..  But  new converts to Islam will still continuously be persuaded and deluded to believe in the universal Muslim brotherhood of Ummah. I only wonder why do these Muslim world’s leaders in UN (on world stage) protest so vociferously about their indignation. Ummah does not want to change anything on their side but it is seeking an international  blasphemy law like the one in Pakistan  in the wake of this film. The other world leaders like Obama should ask this Ummah  to act on some of the points mentioned here like providing basic human values in Muslim countries to all.   Ummah needs to prove that it has sense of justice too before seeking anything from international community.

Will there be anything left to save in India

The anti-corruption movement got ruptured and broke into two yesterday. The leading figures broke on the movement’s next action. The main face of the movement, Anna Hazare, 75 year old man wanted to keep the movement apolitical whereas the leading organiser of the movement Arvind Kesriwal wanted to change the system by providing an alternative party to voters. Both are needed but why they broke like this is bad for the country. The young Kesriwal will now have to move in top gear to form the party and spread it around the country which is no mean task given he has got only volunteers to work with and no funds. He has to keep the movement transparent, clean and full of probity while building the network of party workers in a very short time.

Chances of success are looking remote as events have suddenly started unfolding very fast in last few days. The ruling party which was trying to keep it going without doing any thing for last few years, suddenly woke up last week and announced a slew of initiatives to attract FDI in India. Most bizarre was FDI in retail. Naturally, the most parties had to take a stand and while almost all parties barring the ruling party is against it, the FDI in retail will get enforced as there are few opportunistic parties which on one hand are opposing it on street but are not willing to vote against the party in parliament. Now, becoming emboldened the 79 year old PM of India who was described as tragic figure in Washington Post just a few week back wants to announce more and more initiatives to attract FDI.

One wonder where is this sudden need and desire for FDI. It comes from not so much down from the need to improve growth but to carry on running a program for rural employment guarantee also called NREGA. For a long while, it was becoming apparent that current account deficit India is running was pretty high and unsustainable and with faltering growth, the deficit started growing beyond manageable. It is considered that beyond 6%, the country ‘s finances may need help from others like IMF. Last year in 2011 Greece’s current account deficit was 9.8% and from 2002 it was running higher than 6.5%. So, with India’s 2012 current account deficit in june at 30 year high of 4.5%, the alarm bells were ringing that sooner or later, India was heading for a unsustainable 6% figure and will need a bailout in spite of having respectable 5% GDP growth. It was feared that it will become first BRIC country to have junk rating.

It was said that the new FDI in retail will bring 2.5 to 3 billion dollars worth of inflow by 2017. But in recent coalgate scam the govt agency CAG (Comptroller and Auditor General) estimated the loss due to free distribution of licences to cronies was the same amount i.e 3.5 billion dollars (Rupees 1.86 lakh crores). So, basically, India did not need this FDI for sustaining its growth. Also, one has to remind oneself that during last few years, the scams are unfolding with such regular frequency that if the revenue loss alone was prevented, it would have taken India several notches forward on very fast growth. Of course, the need to lift the poor is there through scheme like NREGA but does it really reach the poor or most of the scheme cost gets lost in the corruption of its implementation.

The new saviour Mr Kesriwal is clamouring that India is for sale and he wants to launch the new party to save it. Now, with foreign equity participation allowed in so many sectors ranging from 7% to 100%, I only wonder if anything will be left to save by the time he gets in there. I wish him well though.