When numbers add up
to trouble
by T.V.R. Shenoy
WE were taught in school that “one plus one equals two”. But Prime Minister Atal Behari Vajpayee is finding that those numbers add up to something else altogether: trouble.

Image and charm are
her assets
by Harihar Swarup
GUESS who is the most unhappy person at the change of guard in Delhi? The person is Sushma Swaraj who replaced Sahib Singh Verma as Chief Minister of Delhi. She has been ordered to take over from the besieged captain of a ship caught in a tossing tempest.

Collapse of the Bretton
Woods system
By M.S.N. Menon
HOW to run the world on the cheap — this is a theory that none but the Americans have mastered. The rest of the world is not even aware of how it is done. But it seems the game is up.

75 Years Ago

Church bribery case
CALCUTTA: Mr Robert William Church, formerly Mining Engineer to the Railway Board, who had been extradited from England on the charges of receiving illegal gratification and cheating, applied on Friday before the Chief Presidency Magistrate through counsel for the reduction of the amount of bail.

When numbers add up to trouble

by T.V.R. Shenoy

WE were taught in school that “one plus one equals two”. But Prime Minister Atal Behari Vajpayee is finding that those numbers add up to something else altogether: trouble.

The one and the one I refer to are that redoubtable pair of singletons — Dr Subramaniam Swamy and Vazhapadi Ramamurthy. Each is the President of his party and each is also that party’s sole representative in the Lok Sabha. But that is about all that the two men have in common.

Dr Swamy is currently one of Jayalalitha’s favourites as the Union Petroleum Minister definitely is not. And the AIADMK chief is trying to get the president of the Rajiv Gandhi Congress out of the Union Cabinet just as strenuously as she tried to install the head of the Janata Party back in March. It would seem that Ramamurthy hasn’t been forgiven for saying bluntly that he would throw in his lot with the BJP even if the AIADMK withdrew from the ruling coalition.

Jayalalitha’s push-pull strategy vis-a-vis Subramaniam Swamy and Vazhapadi Ramamurthy has put the Prime Minister in a spot of trouble. It is no secret at all that he was planning a minor reshuffle of his ministry. Rumour had it that some senior BJP leaders would be inducted (including Sahib Singh Verma, Chief Minister of Delhi until last week).

But the AIADMK chief has effectively muddied the waters. There is no way that the Prime Minister is going to accept Subramaniam Swamy as a colleague. But by the same token he isn’t going to throw his Petroleum Minister to the wolves.

First, Ramamurthy is in Jayalalitha’s bad books because he went out of his way to declare his primary loyalty to the Prime Minister. What kind of message will go out to the BJP’s friends if dismissal is the reward for good faith?

Second, even if the Prime Minister wants to lay ethics aside, the Petroleum Minister isn’t exactly a lone ranger. The PMK chief, Dr Ramdoss (an old friend) has vowed to pull out his ministers if Ramamurthy is removed. So the BJP is looking, potentially, at a loss of five votes in the Lok Sabha.

But Jayalalitha has her own compulsions. It was firmly driven home in March that she couldn’t push her own friends into the Union Cabinet over the Prime Minister’s objections. Later still she crossed swords with the Home Minister over her demands for dismissing the DMK Ministry in Tamil Nadu. But those rebuffs can be explained away —it isn’t easy to bully a Prime Minister or a Union Home Minister.

But can Jayalalitha afford to let someone like Vazhapadi Ramamurthy openly defy her? It is one thing to lose a battle in Delhi; it is quite another to let her position of primacy slip away in Tamil Nadu itself. The DMK’s spin-doctors won’t lose the opportunity to snigger that Jayalalitha isn’t just powerless to aid her friends, she is equally helpless to lift a finger against her foes.

But even if she can’t get her way ultimately, Jayalalitha definitely has the strength to block the proposed reshuffle. As they see her make one demand after another, other allies begin to feel they too shall get a better deal by making a little fuss.

Inordinate delays may even have repercussions within the BJP itself. It would have made life much easier for all concerned, for instance, if Sahib Singh Verma could have been inducted into the Union Cabinet even as he was eased out of the top job in the Delhi Government. Thanks to Jayalalitha, his removal became a pretty graceless affair.

In November, 1997, one government fell thanks to half a dozen ministers from Tamil Nadu. (The United Front stood by the DMK in the wake of the Jain Commission’s allegations.) It is a sign of the times that today it doesn’t need even half that many to rattle a government — just two men from the same state can effectively derail a reshuffle.

Collapse of the Bretton Woods system
By M.S.N. Menon

HOW to run the world on the cheap — this is a theory that none but the Americans have mastered. The rest of the world is not even aware of how it is done. But it seems the game is up.

The new economic crisis that has struck the world is not of countries, but of the system itself. It is perhaps the end of the Bretton Woods system.

Naturally, the IMF and the World Bank, the two pillars of the system, are beginning to crumble. They were largely responsible for the present crisis. As a result, they have come in for frank and fierce criticism. To begin with, from Bill Clinton himself! He wants a new financial system, a “new mechanism” as he calls it; no less.

But please do not rush to conclusions. He is not going to scrap the IMF and the World Bank. Washington still needs them. They have served American foreign policy for over five decades. And they can still be useful for a long time. If they have failed, it is because America barred them from moving with the times. The aim now is to “design a new mechanism anchored in the IMF to ward off global financial contagion,” says Clinton. This is double-talk. The IMF and the World Bank are there not to help borrowers, but only to protect Western investors.

But adversities bring out truths. The World Bank accuses the IMF today of being rigid in its policies, technical in approach and indifferent to human sufferings. This is of course an old charge against the IMF from its clients. But from the World Bank? It was not expected. The IMF is no more inclined to refute these charges. It admits that it had gone wrong in the formulation of its policies.

There is the demand in the US Congress that the 53-year-old IMF be closed down. A similar demand was raised during the Reagan era, when Reagan wanted the poor of the world to be left to the mercies of the commercial banks. Today, too, the argument is similar: when there is a free flow of capital across the world to meet with short-term and long-term capital needs of the world, where is the need for the IMF? Perhaps these people are innocent. Perhaps not. It shows want of understanding of Washington’s hidden agenda.

What is this hidden agenda? Let me elaborate. There is a saying: anyone can start a business with his own capital, but it takes a clever businessman to do business with other people’s money. Ergo, any nation can conquer a weaker one and exploit it, but it takes America to bring the world under its dominance — all at the expense of other countries — and exploit the world for the benefit of America — for its traders, bankers, investors.

This is a new game — a new form of exploitation, of which the developing countries are least conscious about. Marx talked of capitalist exploitation, Lenin of imperialism. The Left repeats these like a mantra. But they have no clue about the new form of exploitation.

Jeffrey Sachs, the MIT Professor, has an answer to this puzzle. He says that at a “deeper level, the problem is of a basic approach. America has wanted global leadership on the cheap”. It was scared of any enterprise which was not cost-free. And it was scared of taxing the Americans. So it devised a new cost-free imperialism. The IMF and the World Bank thought it out and executed it.

Dear reader, allow me a digression at this stage. I have not come across a single book, either foreign or Indian, on the subject of this new imperialism, of how America has maintained the leadership of the world on the cheap. And yet it was the essence of the post-war policy. So much for our understanding of modern imperialism! We have never given thought to the subject, not to speak of analysing it. Our analysis of imperialism, old or new in Marxist jargon, is totally inept to explain what Prof Jeffrey Sachs is talking about.

My own ideas on how America gained its ascendance on the cheap are confined to the following ideas: (1) by printing unlimited dollars; (2) by manipulating trade terms and exchange rates; (3) by engineering crises — that of Mexico and, of late, Asia; (4) by transferring the defence burden on to others; and (5) by mastering the psychology of nations. (I would suggest that the nonaligned should sponsor a study on this so that we have a better understanding of today’s imperialism.)

It was said that globalisation, free flow of capital and IMF guidance would bring in an era of prosperity for all. In fact, “prosperity for all” became the jingle for globalisation. And our leaders, who should have known their economic history, believed in this bosh. They (Rao, Chidambaram, Dr Manmohan Singh) even propagated it. (What have they to say today?) Others argued: with so much of capital flows, where is the need for official assistance. It was thus that the rich nations absolved themselves of their responsibility to continue official assistance? This was a fatal mistake.

Camdessus, the Managing Director of IMF, says that “for us to respond properly, we must understand clearly what went wrong. “This is a clear admission that the IMF had no clue on what went wrong. Yet that did not deter it from offering new nostrums, which ruined most of the Asian countries, especially Indonesia.

So, who were the beneficiaries in the present crisis? First of all, the foreign (Western) financial speculators (including banks) who made billions and then the MNCs who are merrily picking up the ruined companies of Asia for a song. That is how to run the world on the cheap. It is the same American companies which will emerge as lenders to governments later and finance even their military purchases.

The trouble with any system is that there are too many interest groups involved in it. The market cannot adjudicate among them. Only an impartial government can. And there must be a mechanism which is reasonably good. The IMF was against any controls of the free flow of capital, but when the capital took flight it had no advice but to raise the interest rate. But that very act is read in the market as a signal of panic. The outflow becomes a flood. And the poor country is in ruins. This is what the IMF has learnt in 50 years with the best brains it can command!

We cannot keep the IMF and the World Bank going, Jeffrey Sachs says, merely to keep them in operation or to lend new money to governments to pay off old debts. The IMF and the World Bank must find new avocations. And there are plenty of them — for example, the rehabilitation of the ruined economies (Russia, Afghanistan etc) and new forms of assistance (education, population, health, knowledge dissemination, agriculture training etc.) which are not attractive to capital in search of higher profits. In short, the IMF and the IBRD must cease to think that they are banks in search of profits. And they must stop being patrons of speculators, who go in the guise of investors. And, above all, they must cease to abet America to run the world on the cheap.

Image and charm are her assets
by Harihar Swarup

GUESS who is the most unhappy person at the change of guard in Delhi? The person is Sushma Swaraj who replaced Sahib Singh Verma as Chief Minister of Delhi. She has been ordered to take over from the besieged captain of a ship caught in a tossing tempest and steer it safely to shore. Will she be able to accomplish the task or not? This is the big question.

The BJP leadership has not been fair in putting this young, frail and charming “daughter of Haryana” at stake in the coming battle at the hustings and expect her to erase from the minds of the Delhiites months of woes and sufferings, the perpetual power crisis, the water shortage, the mustard oil calamity, the onion fiasco and increasing robberies and murders to quote only a few. She cannot tide over these problems almost overnight; in fact, no human being can do that. Her assets have been only her image and charm which the Delhiites admire in abundance. Sushma, no doubt, is at the moment the most popular leader of Delhi.

Sushma has most reluctantly accepted the responsibility of leading the BJP in the coming elections in Delhi and as she herself puts it, “I have declined the offer as long as I as a factor in the decision. Now it is no longer a question of my wish but the party’s decision. There is no question of choice”. Sushma bows out of the sensitive Information and Broadcasting Ministry at a time when she came to grips with the problems and had begun asserting. Also, she has been able “to move the immovable” in the Communication Ministry plagued over the years by seething corruption. She held temporary charge of the controversial ministry.

It will be a pity if the political career of this rising star from Haryana, who made Delhi virtually her home since 1976, is cut short, even temporarily, because of the political expediency of the BJP’s leadership. In her mid-forties, Sushma came to the limelight as an articulate, clear-headed and eloquent spokesperson of the BJP. She was able to establish good rapport with Delhi’s press corps. She had, however, difficulty when her party wanted her to defend the indefensible. The void left following her induction in the Union Cabinet is far from being bridged and there has been a sharp decline in the BJP’s daily briefings.

Twentytwo years back life was not easy for Sushma and her husband, Swaraj Kaushal, when they moved to Delhi and had to maintain two establishments; one in the union capital and another at Ambala. Her husband was a Socialist and an ardent follower of Jayaprakash Narayan and actively participated in the Sarvodaya leader’s “Nav Nirman” and “Sampurna Kranti” movements. Call it a coincidence but within three weeks of Sushma’s marriage, J.P. was arrested and her husband plunged headlong in anti-Emergency movement. Twentythree-year-old Sushma too became a “bhakta” of the Lok Nayak and joined her husband.

Both Sushma and Swaraj are lawyers by profession and they defended the present Defence Minister, George Fernandes, and other co-accused in the famous Baroda dynamite case. The first trial for her came in 1977 soon after the Janata Party Government was formed at the Centre and the Haryana Government was dismissed. She was nominated to seek election from Ambala Cantonment and was pitted against 80-year-old Devraj Anand. The contest turned out to be between the oldest and the youngest. The generation gap was bridged when she trounced her octogenarian rival and hit the headlines.

So impressed was Devi Lal by her victory that he inducted her in his Ministry and allocated her eight portfolios, Sushma became the youngest-ever Minister of Haryana. The Jat patriarch always used to address her as “beti”. She again contested from Ambala Cantonment in 1987 but this time on the BJP ticket and won. She became a Minister for the second time in the coalition government headed by Devi Lal.

Electoral success did not come to her easily and initially she faced a series of reverses. She suffered successive defeats thrice in the Karnal Lok Sabha constituency. The general elections in 1980, 1984 and 1989 were not lucky for her even though she was quite popular in Karnal. She was, however, a roaring success in South Delhi, having won the seat in a byelection held following the elevation of Madan Lal Khurana as Chief Minister of Delhi. Since then there has been no looking back for her; she comfortably retained the seat in the 1996 and 1998 elections.

Sushma belongs to a staunch RSS family but her socialist husband has influenced her political thinking a great deal. Kaushal became the Governor of Mizoram in 1990 and was the youngest-ever leader to hold such a post. The names of Sushma and her husband figure in the Limca’s Book of Records, 1992, under the caption “youngest Governor, youngest Minister”. It says: “Swaraj Kaushal was appointed Governor of Mizoram in 1990 when he was 37 years old. His wife, Sushma Swaraj, was appointed Minister in Devi Lal’s Cabinet on July 16, 1977, when she was 25 years old”.

75 YEARS AGO

Church bribery case

CALCUTTA: Mr Robert William Church, formerly Mining Engineer to the Railway Board, who had been extradited from England on the charges of receiving illegal gratification and cheating, applied on Friday before the Chief Presidency Magistrate through counsel for the reduction of the amount of bail. On Thursday, he was ordered to be released on bail of four lakhs of rupees in four sureties of one lakh each.

The counsel submitted that the bail was excessive and it would not be possible for the accused to find such a heavy bail; and unless the accused was released, he would be very seriously prejudiced in his defence. The Advocate-General opposed the application.

The Magistrate ordered the accused to be released on bail of four sureties of Rs 50,000 each.

Later in the afternoon, Mr Church was released on furnishing three sureties, Messrs J.N. Appear, J.C. Gaulstan and C.L. Philips for Rs 50,000 each and a personal recognisance of Rs 50,000.

Police officer extorts bribe

The Sub-Inspector of Moideen (Calicut), who was in charge of the Makatoor police station during the last Moplah rebellion, has been dismissed from service on the charge of extorting a sum of Rs 1,000 from a Moplah after threatening him with implication in the rebellion case.