Friday, May 23, 2014

PM-designate Narendra Modi invites leaders from neighboring and other countries

PM-designate Modi's out-of-box action in inviting foreign leaders to his inauguration breaks the mold in Asia, where unlike in Latin America, such events are treated as purely domestic. That is all to the good, and shows both new thinking and a personal action style. Most welcome.

The objective of the Herat attack? To make it difficult for Pakistan's democratically-elected PM Nawaz Sharif to engage in real dialogue with Modi, and to sabotage that small new opening.

Link this with yesterday's attack on the Indian Consulate General at Herat, Afghanistan. A coincidence? Sure, no more than every other high-profile terrorist attack on India, be it the outrage against the Indian Parliament on 13 December 2001 or the strike on Mumbai on 26 November 2008 -- each of these took place when new hope had emerged in India-Pakistan relations, thanks to initiative by the one side and meaningful response by the other. Each time, the larger aim of the attack was to poison the well, to provoke response from India that derailed the political relationship.

And yes, a couple of other noteworthy points. On each and every occasion, the action originated in Pakistan. And India was the target, as well as victim.

How many times does this sequence have to play out before independent and objective observers, Pakistan's friends, and the world community, says this is enough.

And at what stage does realization dawn in Pakistan that its insidious, pervasive, shadow power, the ISI and the military, are the greatest threat to their own country? Is democracy in Pakistan forever to be hostage to its autocratic, illegitimate shadow power?

Tuesday, May 20, 2014

Indian Elections: A Massive Mandate for BJP's Modi


20 May 2014

The Indian election results of 16 May are a tsunami in home politics on various counts. Consider some of the dimensions of BJP and Modi’s remarkable success:
·      With over 66% of the electorate voting, this is the highest turnout in any Indian election. Democracy faces no loss of credibility in India, despite all that doomsayers speak about us.
·      No one imagined that a single party could gain a majority in the midst of an extraordinary diversity of national, pseudo-national, regional, linguistic, caste-based, and individual-oriented political parties, ally vying for the same space. That is in itself the result of a ‘Modi Tsunami’ though this phrase is not current in India. One individual fired the imagination of people across regions and diversities, not with ‘Yes you can’ type of rhetoric, but with a simple message, that growth and governance were the need of the hour.
·      Across the country, the BJP vote was just 31% of the total, but in a ‘first-past-the-post’ system, that was enough to win 282 of 542 Lok Sabha seats. And Congress, with around a 20% national vote share, could get only 44. That is the cruel logic of the system. True, a proportionate vote system might be fairer, say as in Germany, but it would need to be coupled with a ruthless minimum threshold, again like the 5% qualifying mark in Germany; any party gaining less than that would be automatically excluded. But such discussion is pointless in India, because it would be impossible to craft agreement for such change.
·      What helped Modi? Many elements. A leading factor was the AAP party, who had a major contribution to making India aware of the need for change. Also, they helped to split the vote of those that had huge allergy to Modi. Did they eat into the Congress Party’s votes, or did they also hurt the BJP? I guess experts will debate this for long.
·      Columnist Swaminathan S Aiyer, who writes a weekly column for TOI, noted that the migrant laborers from UP and Bihar played a role; on return home to their villages they brought back stories of how Gujarat villages have 24/7 power, and how officials do not lord it over those villagers. Such word-of-mouth is always more credible than any other form of propaganda.
·      To a point, BJP is becoming a party with a national footprint, in that they now have a presence, albeit small, in the South and East. This is good for this party. The Congress party has shrunk, with not a single seat in ten states, and with not more than nine seats in any state. Other major parties, like Mayawati’s BSP and Mulayam Singh Yadav’s SP, both strong in UP, have suffered too – in the latter case, all the five seats won have gone to Yadav’s family. But one should not count out anyone, least of all Congress. There is no sign that it will implode, and the next election will be a new game. The Indian wheel always turns.
·      Modi has 60 months to show result, but his honeymoon period will be just 12 months or so, during which he will have the credibility and strength to do almost all he wishes. Can he tackle hard issues in this time, say labor law reform, a task that has remained untackled now for 23 years of Indian Economic Reforms? But he can only do so much, and prioritizing actions will also be vital. How well can he do this?
·      Another open question is how well he carries with him those that are not his supporters. It is a plain fact that there is not a single Muslim – and strangely not a single Sikh either – among the 282 BJP members of parliament. That is a significant weakness. The total number of Muslims in the Lok Sabha is just 24, again the lowest in any of the 16 Lok Sabhas we have seen in India. How these deficits are tackled will also be important.
With his allied parties, the BJP has 333 in the 542 strong Lok Sabha, and already two parties with some 12 MPs are lined up in support. The BJP will face a hard time in the upper house, the Rajya Sabha, where it does not command a majority, but that is a kind of built in check in the Indian system -- the dominant party in the national elections gets to elect its upper house MPs after a lag of 2 years, given the 6 year term of these MPs, who retire in cyclic fashion every 2 years. The Constitution provides the formula of a joint sitting of the two houses, to overcome legislative logjams. Here again, Modi will need to show inclusiveness.
The new government is to take office on 26 May. These next few days will see much lobbying and jostling among those seeking high office, ministers and officials alike. Some had expected this event a couple of days earlier, but I do not see any indecisiveness in this. That is not the Modi style. I do share the view: good days lie ahead for India.





Friday, March 14, 2014

Flight MH-370 and its lessons

The mystery of the disappeared Malaysian flight MH-370 throws up many questions.

One issue that merits more attention is why passenger aircraft use outdated technology, when far better options exist. We live in an age when a mobile phone conversation almost anywhere in the world can be picked up and analyzed by intelligence agencies. Why then do airlines depend on 'transponders' that date back to some 60 or 70 years, even if modernized in some ways?

Why should we not be able to track passenger aircraft, regardless of numbers involved, in real time, all the time? Why should not comprehensive data be sent out continually by such aircraft?

These are questions that should now be examined, even while effort to resolve the mystery remains a major priority. Is this happening, I wonder.

Friday, April 19, 2013

Indian Exports Slump in FY2012-13; Hopes of Growth This Year


15 April 2013

President Uhuru Kenyatta in Kenya

Last week the newly elected President assumed office in Nairobi. It took me back to the wonderful two-and-half years I spent in that enchanting country in 1984-86. In those days Daniel arap Moi was the country’s President and Mwai Kibaki was then Vice President. I have written about those days, in my first book Inside Diplomacy (2000). I was fortunate in making several visits to Kenya in 2009-11, and learnt more about the country and region. Of course Nairobi will also figure prominently in my memoir, which is half-written; I hope to complete that book by the end of this year.

Kenya has longbeen the star of East Africa, the most advanced economy and a land with huge potential. And it did not, for long, quite fulfill that potential. Some thoughts:

1.     For the great part the country gave room to its entrepreneurs, and furnished reasonable infrastructure; Africans and ‘Asians’ led the growth of industry and business, notwithstanding occasional bouts of ethnic frenzy, the most recent in 2007-08. But the system has not been able to tackle massive unemployment.
2.     Unlike Tanzania, Kenya and the other neighbors did not overcome tribal fissures. It seems a paradox that while Founder-President Julius Nyerere managed to create a Tanzanian national identity in which tribal issues were overcome, the same Nyerere failed to get that country’s economy to move to high gear, unlike Kenya. Is there a moral here that we need to understand?
3.     The East African Community is now finally moving forward, having expanded to include Burundi and Rwanda, with South Sudan waiting in the wings. Uganda is also on the move. Kenya has a special role to play in the EAC.
4.     Tourism is the great money-spinner for all these countries, and here too Kenya is now doing well. This is the reason the smooth election process in 2013, and stability, is so important, for this country and for the entire region.
5.     Across this region, the ‘Asians’ have been a positive force, and in the eyes of most Africans, the internal political segmentation of these ‘mohindi’ does not matter. As Indians and Pakistanis we can learn from this. I wonder if you know of ‘The Indus Entrepreneurs’ [https://www.tie.org ], a remarkable collection of South Asian diaspora, who focus on venture capital and entrepreneurship, again on a basis that is deliberately blind to political division. Should we in South Asia not learn from these diaspora situations?

President Kenyatta faces charges at the ICC, flowing from the flawed election process of 2007 and its aftermath. But for me that is a sideshow. His real challenge is at home, and if he succeeds in providing good governance, that should take care of his principal tasks.

Rwanda and Uganda have also done well, though I have no first-hand knowledge of either country.

16 April 2013

‘The Times of India’ in its issue of 15 April [can you believe: it is currently the  largest circulation English newspaper in the world?], carried a thoughtful editorial-page lead article on India’s local level elected institutions, which have come to be known by the name Nehru gave them in the 1950s – ‘Panchayat Raj’. http://timesofindia.indiatimes.com/home/opinion/edit-page/Panchayati-raj-or-collector-raj/articleshow/19545157.cms

These institutions are part of an ancient Indian heritage, which fell into disuse over time, and were destroyed under British rule. But even after their official revival, they have sadly been under-used, in effect given little authority, because Indian officials and local level politicians, are loathe to share power with them. The latter much prefer weak institutions that can be manipulated, which can neither demand accountability, nor hold officials and politicians responsible for misuse of funds and gross misgovernance.

But the story is not altogether dismal. In many villages and local communities, information technology has empowered the Panchayat institutions, despite obstacles. Some officials have also been supportive. The Right to Information Act (now part of what Indians call an ‘RTA movement’) has also shown many communities that they can demand accountability. Young activists, even college students visit distant villages to spread the word; ten years back, while in college, our grand-daughter spent some weeks of hot summer in small villages that had no electricity, as a volunteer with some 20 others working in one such movement.

A related development is the Indian government’s move to shift to direct bank transfers of cash payment to those ‘Below the Poverty Line’. The concept is borrowed from Brazil’s Bolsa Famila. The aim is to do away with subventions of food and fuel, which reach the poor only in a small percentage of the original intended payment, thanks to ‘leaky buckets’, in the memorable words of Arthur Okun. Rajiv Gandhi as PM once said that barely 10% of the funds reach the poor.

This is one of the development dramas of India, organically linked with similar processes under way in much of Asia, as well as Africa and Latin America, part of the transition of traditional society into a modern age.

As often, the glass is only half-full.

19 April 2013

Indian newspapers today carry an interesting story of what happens in a country that has witnessed good economic growth for several years, and thereafter, in a self inflicted mood of hubris, compounded by inaction on an essential reform agenda, faces real slowdown. The times of India story is at: ow.ly/kdkwb

Immediately after the global economic recession of 2008, it seemed that India, with its cautious banking policy and controls on capital movements, had weathered the storm. But a couple of years later, economic reforms stalled, and the political leadership seemed inactive, virtually assuming that India had achieved economic take-off, and growth was on autopilot. Consequently, in 2012, GDP growth came down to under 6%. Today's figures, giving the foreign trade scene during the financial year 2012-13 again confirm this economic slowdown.

Over the last 8 years, India's exports have grown each year at between 10 and 20%. In FY 13, exports have fallen by 1.7%. Worse, at a total of 300 billion, they have missed the target by $50 billion. Imports, at $491 billion, have grown by a mere 0.4%. India needs much higher exports as well as imports to sustain its economic momentum. The gap between exports and imports, is $190, which again is a commodity trade deficit that India can ill afford. Asked about the current financial year, Commerce Minister Anand Sharma refused to hazard a guess, citing uncertainty in global markets. Fortunately, the commerce ministry has implemented a number of measures, which are aimed at renewing export growth. Let us hope this delivers result. Indian industry and exporters are a hardy lot, and will surely rise to the challenge. Facing national elections in just about a year, the Manmohan Singh government seems finally clear on giving a real push to economic reforms; a number of good measures have been launched in the past four months.

The above figures do not include the invisibles, especially IT services, which continue to do well. The manner in which the information industry has grown in India since the 1980s, is an example of that part of India which ‘Grows at Night’, to use the title of Gurcharan Das’s interesting book. The IT industry has thrived primarily through its own efforts, with just a limited amount of official support, and an absence of over regulation, which is, alas, a major Indian trait. As India's consul general in San Francisco, from 1986 to 1989, I was fortunate to both witness, and make a small contribution to that initial marketing of Indian IT services. I wrote about this in my 1st book, ‘Inside Diplomacy’ (2000), and the theme will figure again in my memoir, which I hope to complete by the end of this year.







Tuesday, April 16, 2013

Local level governance and development

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16 April 2013

‘The Times of India’ in its issue of 15 April [can you believe: it is currently the  largest circulation English newspaper in the world?], carried a thoughtful editorial-page lead article on India’s local level elected institutions, which have come to be known by the name Nehru gave them in the 1950s – ‘Panchayat Raj’. http://timesofindia.indiatimes.com/home/opinion/edit-page/Panchayati-raj-or-collector-raj/articleshow/19545157.cms

These institutions are part of an ancient Indian heritage, which fell into disuse over time, and were destroyed under British rule. But even after their official revival, they have sadly been under-used, in effect given little authority, because Indian officials and local level politicians, are loathe to share power with them. The latter much prefer weak institutions that can be manipulated, which can neither demand accountability, nor hold officials and politicians responsible for misuse of funds and gross misgovernance.

But the story is not altogether dismal. In many villages and local communities, information technology has empowered the Panchayat institutions, despite obstacles. Some officials have also been supportive. The Right to Information Act (now part of what Indians call an ‘RTA movement’) has also shown many communities that they can demand accountability. Young activists, even college students visit distant villages to spread the word; ten years back, while in college, our grand-daughter spent some weeks of hot summer in small villages that had no electricity, as a volunteer with some 20 others working in one such movement.

A related development is the Indian government’s move to shift to direct bank transfers of cash payment to those ‘Below the Poverty Line’. The concept is borrowed from Brazil’s Bolsa Famila. The aim is to do away with subventions of food and fuel, which reach the poor only in a small percentage of the original intended payment, thanks to ‘leaky buckets’, in the memorable words of Arthur Okun. Rajiv Gandhi as PM once said that barely 10% of the funds reach the poor.

This is one of the development dramas of India, organically linked with similar processes under way in much of Asia, as well as Africa and Latin America, part of the transition of traditional society into a modern age.

As often, the glass is only half-full.

Sunday, April 14, 2013

Kenya Events


15 April 2013

President Uhuru Kenyatta in Kenya

Last week the newly elected President assumed office in Nairobi. It took me back to the wonderful two-and-half years my family and I spent in that enchanting country in 1984-86. In those days Daniel arap Moi was the country’s President and Mwai Kibaki was then Vice President. I have written about those days, in my first book Inside Diplomacy (2000). I was fortunate to make several visits to Kenya in 2009-11, and learnt more about the country and region. Of course Nairobi will also figure prominently in my memoir, which is half-written; I hope to complete that book by the end of this year.

Kenya has longbeen the star of East Africa, the most advanced economy and a land with huge potential. And it did not, for long, quite fulfill that potential. Some thoughts:

1.     For the great part the country gave room to its entrepreneurs, and furnished reasonable infrastructure; Africans and ‘Asians’ led the growth of industry and business, notwithstanding occasional bouts of ethnic frenzy, the most recent in 2007-08. But the system has not been able to tackle massive unemployment.
2.     Unlike Tanzania, Kenya and the other neighbors did not overcome tribal fissures. It seems a paradox that while Founder-President Julius Nyerere managed to create a Tanzanian national identity in which tribal issues were overcome, the same Nyerere failed to get that country’s economy to move to high gear, unlike Kenya. Is there a moral here that we need to understand?
3.     The East African Community is now finally moving forward, having expanded to include Burundi and Rwanda, with South Sudan waiting in the wings. Uganda is also on the move. Kenya has a special role to play in the EAC.
4.     Tourism is the great money-spinner for all these countries, and here too Kenya is now doing well. This is the reason the smooth election process in 2013, and stability, is so important, for this country and for the entire region.
5.     Across this region, the ‘Asians’ have been a positive force, and in the eyes of most Africans, the internal political segmentation of these ‘mohindi’ does not matter. As Indians and Pakistanis we can learn from this. I wonder if you know of ‘The Indus Entrepreneurs’ [https://www.tie.org ], a remarkable collection of South Asian diaspora, who focus on venture capital and entrepreneurship, again on a basis that is deliberately blind to political division. Should we in South Asia not learn from these diaspora situations?

President Kenyatta faces charges at the ICC, flowing from the flawed election process of 2007 and its aftermath. But for me that is a sideshow. His real challenge is at home, and if he succeeds in providing good governance, that should take care of his principal tasks.

Rwanda and Uganda have also done well, though I have no first-hand knowledge of either country.


Saturday, April 13, 2013

On 12 April 2013 I attended a conference of civil society organizations, held by the respected NGO, CUTS of Jaipur, where the theme was regional integration in South Asia, or rather, lack of it. I was struck by the remarks of Lise Grande, UNDP's Resident Representative in India. I summarized what she said in three Tweets [my handle is @diplophile]

S Asia I: at conf UNDP ResRep gave chilling figures: we have 25% of world pop, 40% of poor, 3% of GDP, 1.5% of FDI

S Asia II: in global trade of 8 SAARC states mutual trade is 5%, dubious honor of world's least integrated region

S Asia III: we need new thinking on how to truly integrate, political will + popular support India-Pakistan must lead

Ms. Grande and others made a powerful point, that regional integration is not 'neutral' or balanced, as we might imagine it to be. It does tend to increase domination by large economies, unless specific measures for the benefit of weaker economies are built into the integration process.

This needs vision, which is all too often in short supply.

Example: Bangladesh colleagues at this conference said that while the unilateral trade concessions given by India to their country as an LDC did help in increasing Bangladesh exports in 2011, the following year its exports slumped, partly owing to a slowdown in the Indian economy, but also due to contrary actions from New Delhi. These have included new non-tariff barriers applied in India, plus a 'countervailing duty' imposed by the Indian Finance Ministry in the Feb 2013 budget. So we give with one hand, and take away with the other.

Do please take a look at our 2011 book 'Economic Diplomacy: India's Experience', details at: http://www.cuts-international.org/Book_Economic-Diplomacy.htm

Three chapters are available for free download as PDF files. In that book the two articles on the 1999 India- Sri Lanka Free Trade Agreement are especially revealing. First, one sees how difficult the decision making process can be, with a prime minister having to impose a personal decision on a reluctant lead ministry, which may be stuck in an illogical legacy viewpoint. Second, how unrealistic might be the 'safeguards' that the big country imposes, even when these are really not needed. Third, how much economic ministries need to improve their coordination, and bring a foreign ministry into that process.

Comments welcome. Thanks.