De-Lurking on the Net

May 7, 2017

Curse of being a Pakistani

In this countries ranking survey website Pakistani passport comes at the at 92 and Afghanistan at 93 out of 159 countries. The website also tells which countries offer free visa travel and which countries need visas or electronic visa for which passport. Pakistanis are the ones leaving in droves to settle abroad mostly as economic migrant. But sometimes they are running away from torture, false accusation of blasphemy or simple discriminations as being minority. Though, in many countries, Pakistanis get discriminated, denied the refuge and often deported but the exodus of muslims, non-muslims from Pakistan continues unabated. This article in Herald Dawn newspaper of Pakistan

The perils of Pakistani migrants heading to Europe

is pretty detailed and apt. No doubt terrorism of Pakistan has been headache for the world. Though it is far less now in spite of having a recent spike and upsurge which is since abated and gone. Minorities along with muslims,  genuine Pakistanis all suffer. But what was the reason for  British to unleash the curse of Pakistan onto the world or why those Muslims who lived in that part were demanding a land of pure, a land for salvation and everlasting happiness knowing full well the support for Pakistan was coming from feudals, Nawabs (the Indian Lords)  etc who would have wanted to safeguard their interests in post-independence Pakistan. Why were the Muslims trying to run away from competing with Hindus on education, jobs, businesses and seeking refuge under the religious umbrella.

British, on their part, it is claimed wanted to carve out Pakistan to have a foot in the door to stop USSR and Pakistan came about as Muslim League assured to provide the base for UK(and by default all of West) whereas the Indian National Congress denied giving this access to anyone post independence. Hindus on their part before independence were still living in dark ages believing in untouchability (particularly wanted to be away generally in making any social contacts with Muslims or  Dalits). This strong feeling in Hindus, even though it is still not gone away fully yet but their divisions or old habits, prejudices etc are melting away and largely Indians including Muslims, Dalits etc have become more homogenous now after many reforms since independence like Hindu Undivided Family Laws where females inherit wealth on par with males, Reservations, Disbursement of lands to those cultivating and eliminating privy purses to ex-rulers(Maharajas) as well as eliminating large landholdings etc-2.

Hassan Nissar is  a veteran journalist who lives in Pakistan but in one TV conversation here,  I heard him describing the formation of Pakistan happened  due to meanness  of Indian National  Congress and its leader of that time not accepting the demand of Muslim league which was seeking confederation and separate electorate for Muslims.

  1.  
Nissar could not come out of his partiality for Mr Jinnah. He says Pt Nehru was midget in front of Mr Jinnah. Really! What makes him say that. Did Mr Jinnah  have vision for India, Pakistan or even Muslims?
Did Pt Nehru have vision for India? Yes Pt Nehru did have a vision as he wanted India to have strong centre? Why was strong centre needed? It was needed so that India ‘s parts were not usurped by outsiders like East  India Company  did in the past to India as it was having a weak centre then. A weak centre would have meant that centre like in the past would not be able to help any part that gets in trouble due to external imperialist/expansionist power attack. So, accepting the idea of confederation was becoming difficult for Pt Nehru. He  could also see  bringing in socialist upliftment of Masses. He could think of India ‘s  development on the lines of 5 years plans of USSR where USSR grew rapidly under those plans. These visions also entailed bringing in heavy industrial development, dams building, science education etc and of course he wanted to stablise the country post the partition trauma.
Now, let us see what vision did Mr Jinnah impart to the newly born nation Pakistan in the year after ’47 until his death in ’48.  Did Mr Jinnah  ever mention that he wanted to smash the feudalism and bring equality of masses. No, because Pakistan was born due to feudals giving support to Jinnah for making Pakistan. So, how could he turn his back on them. This was also one reason the Kashmiri secular leader Sheikh  Abdullah did not see the Kashmir ‘s destiny in Pakistan. Did Mr Jinnah think of safeguarding non-Muslims like Hindus, Christians, Buddhists, Jews, Ahmedies etc. So,  did Mr Jinnah bring in any protection law for them. He was busy usurping Baluchistan, busy sending raiders in Kashmir in spite of signing stand-still agreement with Maharaja. To this day, his policy of Kashmir is followed avidly by Pakistan. He was busy dismissing the elected govt  of NWF( present day KPK). He was busy seeking aid from USA and was ready to do anything for them (yet Pakistani loaths USA). He was busy lecturing Bengalis that Bangla language does not matter, it does not help integration and you have to give it up to become a proper Pakistani. Was he even thinking of making constituent assembly for making constitution. He was busy sidelining the persons he had used like Suhrawardy, Jogendra Nath Mandal(This chap was not Muslim enough to be taken into confidence on Kashmir etc). Jinnah was the biggest con artist even for Muslims as before the partition and after he was using these people and others, inciting many many others including Ambedkar, South Indians like Periyar (to seek Dravidistan) Nizam, Nawab of Junagadh to seek separation from India. He was telling Muslims that they can’t  live with Hindus as Muslim God or inspirations are different,  Muslim’s language is different, or culture is different. But soon after partition Mr Jinnah  was parroting the songs of secularism(his 11th Aug speech), which Congress was talking about all along before or after the partition. Did Mr Jinnah ever write a book or leave any notes that you could have a look at his vision before or after partition. No, he did not leave anything behind. Nehru on the other hand had written books on which you can judge him even today for his vision. In 1938, Nehru was appointed the chairman of planning by Mr SC Bose(famous revolutionary leader who sought help from Japan, Germany to bring down Brtitish) on the recommendation of famous Indian scientist Meghnad Saha. So, it is no wonder, Pakistanis remain confused to this day about Mr Jinnah, the con artist  if he was secular or was a hard core Muslim. Mr Jinnah had believed in confederation when he was negotiating with the Congress but not when he was usurping Baluchistan and trying to capture Kashmir or integrating NWFP. He was not thinking about democracy being driven in Pakistan from Bengal as at that time East Pakistan or Bengal was the most populous state in erstwhile Pakistan. He was not thinking of making Dhaka, the capital of Pakistan or imposing Bengali language on the rest of the Pakistanis. Though, Jinnah had no qualms imposing Urdu on Bengali people.
So, this man had no consistent principles and no vision of driving down democracy or equality, development, security of people in Pakistan. He is the reason Muslims are divided into three and not because of ‘Congress ki Kaminagi’ (or meanness of Congress) as Nisar seems to suggest in that chat when he fails to see the hypocrisy of Mr Jinnah. Mr Jinnah was the one asking for separate Muslim electorate before partition to safeguard the Muslims interests but he was not thinking of safeguarding any Hindu interests in Pakistan post independence. Elimination of Hindus was still going on fullscale in both Eastern and Western wings while Mr Jinnah was running Pakistan. Mr Jinnah is the reason bulk of the Pakistani Muslims are exploited and  trapped in endemic poverty in present day Pakistan as the feudals lord over everyone in concert with the Army, Mullahs and few prominent families.  Everybody else Hindus, Christians etc (including minority Muslims too) are suffering too along with them and  the law of blasphemy is the one that defines today’s Pakistan and is used against all specially the minorities. So, who was the midget Mr Nissar again? Mr Jinnah or Pt Nehru? It is hard to believe that Mr Nissar, who can read and analyse virtually all things very well can not see that Mr Jinnah was full of contradictions. Perhaps his love for Mr Jinnah blinds him so much as not to acknowledge the faults of Mr Jinnah. I do not know, if one would call Mr Jinnah conniving or duplicitous in saying one thing and believing in completely opposite but this (being duplicitous) has become Pakistan leaders’ national character. Can anyone trust anyone?

November 20, 2016

Mr Trump, Mr Modi, Democracies & Intelligence

Here is a video between  Mitt Romney and Trump just compiled by BBC. See how Mr Romney was judging Mr Trump in this video –

Mr Trump is a phony. His promises are as worthless as a degree from Trump University. His domestic policies would lead to recession. His foreign policies would make America and the world less safe. He has neither the temperament, nor the judgement to be president and his personal qualities would mean that America would cease to be a shining city on a hill.”

In this exchange of this video, it is clear that Mr Trump is hurling abuses at Mr Romney, while Mr Romney is analysing the man, Mr Trump is or would be in his presidency. It seems that Mr Romney has mapped out the capacities of  Mr Trump quite well but it just makes you wonder why those who can see the future, judge things minutely do hardly ever become head of the govt. Why do they  get defeated in elections.

However, I would like to apply the Romney’s assessment of Mr Trump, to the champion who is leading another democracy in the world, Mr Modi. So, let us see if Mr Modi possess that elusive quality to stave off recession by his domestic policies (demonetisation move) or if Mr Modi’s promises made at election time can be fulfilled.

mrmoditrump

India has been pretty nascent democracy in spite of its seventy years of age and the analysing capacities or scrutiny of the govts’ performances are seriously lacking in media or by opposition. Usually, either you are ready to throw away a govt like previous scam ridden govt of UPA led by Congress or you are ready to revere a govt without understanding the implications of any govt initiative. So, analysis is missing but either hurling of abuses is non-stop or showering effusive praises are endless. The current govt of Mr Modi is having a easy time in spite of giving awful time to the public by its recent drive of de-monetisation  or rather reissuing a Indian currency note and introducing a bigger note. Public is staying calm because indirectly, it seems that rich people have become less rich overnight and some sort of redistribution of wealth is going on between rich and poor in order to defeat the govt drive to eliminate black money. The poor people are getting offered a commission in order to help convert rich people’s black money into white, legitimate money. The poor people can not resist the powerful rich people(politicians included) either due to their display of force,  power by rich or due to the poor people’s own greed or need. Somehow reverence of Modi gets converted into a devotion of him in spite of the hardships of standing daily in the queues to convert the money from black to white rather than going to earn your daily wage. Chances of  wiping out a big chunk of GDP seems certain that relied on the availability of black money. So, how much of a big hole in GDP will it cause remains to be seen. Will it usher recession or merely drop some GDP growth rate is not clear to any one. Will it wipe out corruption or bring back black money stashed overseas as promised at election? It is pretty clear, it will not. It would just eliminate some black money. It will help RBI(Reserve Bank Of India) and govt to strengthen the banks balance sheets by infusing new funds into them.

A roar goes out against those who throw the pebble in the wells where devotees of Mr Modi also called Bhakthas in Hindi not only dwell but have been enjoying themselves in great numbers – specially on most of the WhatsApp groups. Discovering myself at the receiving end, recently I had wondered if  they should be dared to be asked if any of them had ever read anything beyond local publications from New York Times, Washington Post, Globe & Mail, Telegraph, Guardian or Le Monde about demonetisation drive of Mr Modi. But I resisted the urge after remembering  been questioned already once when BBC was quoted wherein a quote of the Indian PM’s speech of 2014 was referred. But Bhaktas had told that BBC was hardly trustworthy source even if it was a direct quote of the PM. One of the Bhaktha sometimes back had called the BBC as ‘Bak Bak Corporation’ meaning BBC just knows how to yap most of the time.

Recently, I was watching a video  by Mr Arun Puri, an ex editor of a magazine called India Today. Mr Puri has been very eloquent in this video in summing up Mr Modi‘s inning thus far. When Mr Modi campaigned during elections, he was projecting all kinds of hopes in the minds of voters as well as giving the ray of optimism to the world. May be, he just projected and promised too much. It seemed as if he will not only be able to stop the corruption, scams of previous govt, but also  be able to bring the efficiency in his new govt like it was never seen before. Unfortunately, he has ended up only tinkering mostly, so far in his new bureaucratic governance even though spawning some new initiatives like MakeInIndia, JanDhanYojna etc. In the early days of 2014, when he was sworn in he had raised the hope greatly by saying him believing in minimum govt, maximum governance . The Cabinet is now 80-member strong, up from 45 when Mr Modi came to power two years ago.
The tinkered bureaucratic system in India by Mr Modi is hardly ever going to complain about not changing much as why would the bureaucrats or the system  machinery not like to retain their status quo. The public is hardly ever going to debate it, if the media does not display the state of affairs to the public. The opposition is abysmal, the media delinquent, boot licking type. It is strange that Mr Arun Puri till date, had not had a chance to say his bit that he has just said in this video. I wonder how could he never got a chance to say it earlier. Why could he not write this in local media or international media. May be he waited, perhaps, for the right occasion or perhaps like most in journalistic circles, he too was not ready to take on the sloganeering brigade of Bhakthas. Let us see how he copes with the new attention that he will now draw from those in power. But I am glad, he took the opportunity to judge Mr Modi‘s govt now. Like him, I had always felt the same.  Mr Modi perhaps finds himself overawed  in that position. He offers simplicity and sincerity in the face of complex issues, problems. The plethora of advisers must be making it really tricky for him. It is difficult to drop an advice on your own, if you can not think beyond the simple things and do not understand all the complexity of a system. In financial systems, demonetisation and impact of globalisation on investment, currency flows, corruption, recession, growth etc is even hard for most people to understand, so would it be any wonder if the simple leaders do not understand it. They rely on advisers alone. So, how will one make its mind  before deciding to dump this advice or that advice. I am not surprised that Mr Modi has got lost in this conundrum.   Unfortunately,  Indian political scene is totally bereft of intelligent people in politics who could attain a position one day to challenge him politically. The political parties are really controlled by few people or groups and real talent within parties get stifled and never allowed to rise. It is not true that no intelligence exists there but what is there can never rise.  But this  democracy in India will not fail you as comprehensively as it does in most other countries where not only honesty, competence of the leader remains suspect but is also that of the leader’s advisers that the leader himself has gathered around him. One could easily conclude that democracy is a compromised system of government as individual intelligence of those not near power have not much role to play in it.

November 9, 2016

Sledge Hammer strike by India’s PM Modi on black economy and terrorism funding

Today, Mr Modi went bold. Perhaps not of his own volition but on behest of what all the economic advisors he could muster in last few months, advised him. He struck the  big denomination Indian currency notes void(Rs 500, Rs 1000). Some say these large notes amount to 86% of economy. Indians have guessed that economy is as much in black as it has been in legal/legitimate or white economy. So, given that both 86% is a guess and dividing line between black and white as at 50% of guess, then Mr Modi is writing off 43% of GDP in one hit. No matter what % is hit, the impact will be to usher the huge deflation in its black economy. It comes on the heel of his visit to Japan, a country staying in deflation since its hay days of 1993, before which it had seen any boom. Perhaps, it is just a coincidence.

pm-modi-ends-rs-500-rs-1000-currency-notes-read-his-full-address-here

His intentions can not be construed as wrong as he wanted to hit the most, two sets of people – 1) terrorists 2) Black economy peddlers who have refused to come out in open in spite of the amnesty to convert their black money into white(The scheme was not failed but could hardly be called a successful scheme).

So, what happens now – he introduces two type of notes – Rs 500 and Rs 2000 . These are not Plastic polymer notes as recently got introduced in number of countries (Australia, Canada, UK, New Zealand, Vietnam, Maldives etc) but it has new security features. Some say , Rs 2000 note has NGC technology . Details of the NGC has not emerged from Govt sources but social media rumors are fueling this. The NGC introduced in Philippines did not have any nano GPS chip as people are talking of Rs 2000 will have one. Without introducing a fool proof arrangement of  temper prevention or making it tough for some people or countries to stay in printing duplicate currency  and sending it to India, this whole exercise achieves nothing but brings pain to India. You merely burn your own notes.

There are terrorists using Hawala market, an arrangement where someone who wishes to send money into India does not go to banks or use legitimate companies. They use individuals who disburse Indian rupees from their black money in India to the recipient and get paid in return in foreign currency in a foreign country abroad. Such transactions were major source for black marketers to convert their money into white, money launderers to launder money, terrorists to get funded for new terrorist acts, drug pushers, smugglers etc . The cinema(Bollywood) largely depended on black money for funding. The Real estate particularly in north India had a big share of black money in it. All the political parties virtually live on black money. There is a domestic currency based trade between Iran and India. India’s currency is also used and particularly popular in Gulf  countries and in a country like Zimbabwe who are in the process of re-introducing their own currency again after a hiatus of several years. So, will all these people or even diaspora spread around the world will have all their money in bank or would be in position to change these notes in time?

So, immediate impact would be less housing activity, less Bollywood Cinema films, less terrorism (at least for now), less smuggling(all the smugglers money is never fully invested in metals like gold or other commodities but also remains in hard currency), less drug trafficking. There will be less activity in air travel and luxury living. There will be suffering for both poor and rich people. Poor people hardly have bank accounts, so will be impacted  a great deal. There are remote , rural areas where there can never, ever be a bank.  Even if such people have notes with honest earning or sent by their relations or kids, they will never know how to go inside a bank and convert it. There will be people not been able to pay to private hospitals. Govt hospitals rarely exist  for most in the country. There will be people who hide the money and unable to return in time to the places where they hid it to convert it or have anyone to access their money to convert it. Virtually all sectors in India have humongous corruption from ISRO scientists to judges, from North to South, West to East India. So, what happens when people suddenly have less financial muscle. Well it means, that their economic activity goes down including expenses on exorbitant weddings. So, hoteliers, caterers, etc all will have impact. It is like dropping a bomb on your own economy or helping your enemies who may all want your GDP to come down to a very low level or to see  your purchasing capacity substantially reduced.

The notes  can be converted in next 50 days . But beyond a threshold  of converting Rs 4000 in cash of new notes, conversion is allowed only by the bank accounts. If someone does not have their own bank account, then they have to use some one else’s bank account by giving them consent to receive his/her money into their accounts. Later on,  such people can withdraw their money in new notes from the account for which they consented. So, this particular activity will make the menace of already accumulated black money  in the economy to reduce substantially and it will become trackable until it stays in bank. It may stay long term in bank accounts but chances of its  staying in bank accounts long term are remote as people are used to cash transactions.  This declaration by Mr Modi, therefore, will not make the economy to become overnight controlled by banks. The networks of black economy generation, terrorists funding or drug peddling mules, duplicate currency circulators, smugglers, betting, bribe givers, bribe takers  are not going to disappear overnight. They are part of the system just like political parties or corrupt judges.  So, a new black economy will start growing as soon as one ends. Yes, there will be  people who will suffer massively and a few may even commit suicides or may even die of heart attacks when they find themselves  ruined totally. Incremental changes like Jan Aadhar Yojana etc would have achieved Mr Modi’s dream of having a economy fully running via banks etc. in few years.

Misery awaits India in short term and this will have impact on  the growth of the world economy too. Perhaps, it will teach a lesson to the other leaders to be patient.

July 8, 2014

Making a Viable Afghanistan

Filed under: Democracy,Europe,India,Pak,USA,World — Geekay @ 6:51 am
Tags: , , , , , , , , ,

To make Afghanistan viable, one has to compare it with the situation of Iraq as both have some similarities. In her interview recently, Hilary Clinton alluded to the reasons for Iraq hemorrhaging and falling apart. So, the new govt. of Afghanistan has to ensure from repeating the mistake of Iraq of alienation of its ethnic groups. Next, the task of sustaining Afghanistan will need elimination of dependence in most walks of nation’s life particularly as it is a landlocked country. The sustainability of any state depends on the economic activity and meeting defence needs.  India has already signed on being a security partner. Deal with the US should also happen after new Afghan president comes on board. So India has to ensure both these needs. Relationship of Afghanistan with Pakistan is a frayed one and the dependence on the only land route to sea via Pakistan has left Afghanistan vulnerable. So, just like it needs a formal deal with Pakistan, it needs to cut also a deal with Iran to allow transportation via its Chābahār port. So perhaps some sort of treaty is needed like Indus Water Treaty between India and Pakistan. It demarcated the division of Rivers after the emergence of both India and Pakistan. A fee for the use of their (Pakistan, Iran) resources like road or railway network need to be set up. Once, it gets formalised, the frictions will get minimised and there will be recourse to get to an international body like Indus Water Treaty, if a dispute were to arise.

(Source: Map Of the World )

For the economic activity, a country will need to have resources for agriculture like tools, fertilizers and electricity. For electricity, it will need generation, transmission equipment. For transport it will again need building roads, bridges besides the need of setting factories for auto parts or refineries for fuel. For building infrastructure setting up of steel mills will be required. For defence needs, the country will need not only ordinance factories but also the big equipment so that it can root out the Taliban etc. from making any part of their land as a base for themselves. So, defence will need re-strengthening or building new cantonment areas around the country, now that NATO is leaving those areas behind. There is a need to reassess the overall need of the locations of all the bases. Perhaps, as NATO may not even be covering certain areas. The armed forces as well as general public will also need lots of hospitals. The country need educational institutions. Perhaps, India can play a role in everything but it comes down to meeting the costs by Afghanistan. Virtually most important institutions India has like technical, management, planning, agriculture, hospital staff training or general educational institutes can start their chapters or branches in Afghanistan. Indian govt. can facilitate talks between its various bodies and the relevant parties in Afghanistan but those parties or institutes need to be formed. Some training is needed even for the bureaucracy in Afghanistan. Since in the short run there is bound to be more unemployment due to losses of jobs as NATO and US leave, India has to ensure these people get back into jobs at the earliest. They will not only be better experienced but if they get into the hands of Taliban, it will make the situation deteriorate pretty quickly. So, perhaps these resources should get the training in India to build various institutes or bodies in Afghanistan. They can then return to Afghanistan to start these bodies.

But how to build all this since there is no cash flowing into Afghanistan. In the short run, Afghanistan has to plead and seek commitment with donors like NATO, US and India, China, Russia and Iran. In the longer run, the mining activity has to start but that can only happen if transport deals with both Iran and Pakistan are in place. Afghanistan need capital not only to build factories etc. but also for building and sustaining the armed forces. One can think the private sector will come on board for 60-70% needs of economic activity like building required factories etc. But for building essential economic activity like infrastructure as roads, canals, electricity, hospitals, ordinance factories etc., the 30 to 40 % capital will be needed by the govt. So, the Afghanistan need to decide what it will need on year by year basis e.g. it needs to set up goals like 1 hospital in year 1 plus a refinery and an ordinance factory etc. This way, it can work out the capital required for these activities with the help of donors. Perhaps, Afghanistan can start getting some money if TAPI pipeline gets going. It can also build a target of 2 to 3 years before it start getting the mining revenue. It still has to move quickly on the transport deal with both Pakistan and Iran. Though a deal with Iran perhaps will need rehabilitation of Iran in international community and that is dependent perhaps on its resolution of Nuclear Issue. What is the new road block in that pursuit is not clear. The world needs a viable Afghanistan as much as Afghanistan itself needs it.

February 6, 2013

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 Zakaat 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.

January 8, 2013

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.

Image

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.

December 12, 2012

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.

October 24, 2012

Justice in Democracies

There is an article in Washington Post discussing the slick running ofDrone 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.

October 7, 2012

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 .

August 4, 2012

Death of Corruption Movement in India But A New Hope Emerges For Real Democracy

Today, India’s corruption movement died a tragic death. As a result the strong despondency came to the public’s way. However the end also brought a new hope. The movement this time last year was termed as ‘India’s Arab Spring‘ had brought the Indian government onto their knees due to overwhelming public support, it had got. Today, when this 10 day fast ended, the countrywide support hardly came. The media played for the government. They attacked the movement, tried to divide the team. Under instruction from govt., there was no coverage of the movement. The movement just limped on right from the start.


Arvind Kejriwal and Anna Hazare at the latest fast.

Kiran Bedi, the social activist gave her opinion after it came to end saying that the country needs both – a social movement and an alternative for voters. She definitely concludes it rightly. But now someone will be very brave to think of a movement in India anytime soon. The new promise is all about to create a credible political alternative by floating a party and clean the politics from the current family owned parties funded by corporates and foreign countries alike selecting candidates based on loyalty. For the existing parties, the good of the country, governance does not matter and a schism now exists between the public and the politicians. Can this development herald a new dawn for democracy? The way the movement has gone and died, the hope to die and wither remains more of a possibility rather than setting it as an example for all the world.

What are the challenges for the next task?

  1. Setting the Agenda – manifesto – Will the party be left or right of centre or lurch like the other parties at present who do not know whether any policy is in line with their principles or not. The suggestions can come through internet participation via some forums on all kind of issues. This collection of issues or people’s needs will allow to build a people’s manifesto.
  2. Selecting the right candidates. Presumably the candidates may be chosen by electorates before the election. But how the public will interact with the party? Will the party be going to the public before selecting the candidates and afterwards. Using actively the forums, websites (facebook, twitter etc) on internet, etc. will help but it will need lots of volunteers. In the absence of funds, the volunteers recruitment and retaining their enthusiasm will determine the fate of this political party.
  3.  How to fund the party – Can the party afford just funding from individuals when other well funded parties will be able to spend as much as they like due to non-reforms of election commission. In any case, the transparency of party funding will need all received payments to become visible to all people.
  4. Transparency will mean – not only keeping the accounts of all expenses and be able to explain all charges levelled by opponents who not only would want to divide the party but undermine it at all costs. So, how to fight and respond to the charges immediately will mean a slick decision making without dithering and conveying it to media without delay.
  5. The expenditure on media can’t be afforded, so how the media should be courted and used. The abusive attitude towards un-cooperative media in general can’t be the norm. The media will sing for the party who pays them and of whom they are afraid to go against to write or say. So, here also volunteers and internet will be crucial.
  6. There has to be a hierarchy within a party. All can’t be equal. If one wants to be independent, they have to leave the party. The discipline and saying the same thing from same hymn sheet will be needed for all stake holders of the party. It had become increasingly difficult with the movement.Alliances with other similar interest parties should be decided by the party management and everybody should be prepared to go with the party line and not decide to appear with another party member based on individual whim unmindful of the consequences for the party.
  7. Of course, the success of the party will not only need good running of the party but on creating a distinction between the other parties. It means the need to highlight what the new party offers and other parties do not. One can be critical of others but to what level one should fall when criticising an opponent? The decency maintained while criticising gives a lasting respect but it does not guarantee a success. So, a careful thought will be needed as unrestrained criticism of others will not help and create goodwill.

 I think  the new party should be called ‘Nirmal Dal’ to reflect its clean credentials with running water as a party symbol. At this juncture, the success of the party looks impossible given the party  funds dependence on individuals alone. The funding, perhaps, can come from individuals in two ways – one those who want to pay off one time only and the others who want to make a commitment by paying every month via their bank like for a union in an organisation. The electoral reforms will remain elusive given the current parties may not be keen to fight with minimum funds and to recall the corrupt parliamentarian. So,  the public support will be needed to build the pressure. Also a consensus should be built with other parties about it.

The recipe for the success will keep on evolving but how should the party diminish the doubts about its success, raise the enthusiasm of the public and retain it.  It will be difficult if the success is not big. Usually nobody comes first the very first time they compete. It needs patience. Will this party show that willingness to adopt and become not reactive like at this movement if the instant success eludes it? So, many questions are there, only time will tell, if this movement will be able to create a big enough countrywide machinery and offer the elusive real corruption free democracy to India.

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