E D I T O R I A L P A G E |
Tuesday, March 2, 1999 |
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Beyond
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GOVERNANCE-II |
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Beyond rhetoric CYNICS may see in Pakistan Prime Minister Nawaz Sharifs latest pronouncement on Kashmir the beginning of the end of the euphoria generated by the Lahore Declaration over a week ago. Those who believe in quick-fix solutions of the problems which have bedevilled relations between the two countries since Independence can never be satisfied. Diplomatic brows are bound to be raised over Mr Nawaz Sharifs reported assertion that talks with India may have to be suspended if the Kashmir issue is not resolved within a specified time-frame. However, what he has said need to be viewed in the context of the turbulence in Pakistan over the hospitality extended to Prime Minister Atal Behari Vajpayee during his historic bus journey from Amritsar to Lahore. That the rabid elements within the country, including members of the anti-India Jamat-e-Islami of Pakistan, organised protest demonstrations in Lahore has been widely reported. What was underplayed was the fact that in spite of welcoming the initiative, Opposition leader Benazir Bhutto declined the invitation to attend the official banquet in honour of Mr Vajpayee. But what must have caused Mr Nawaz Sharif more than usual embarrassment was the excuse of the three chiefs of the countrys defence services for not being present at the reception for the visiting dignitary. They would have had to salute the Prime Minister of India and the visit to Pakistan by the Chinese Defence Minister provided them a credible excuse for not visiting Lahore during Mr Vajpayees bus diplomacy. Mr Nawaz Sharif is not so
politically naive as to not understand the implications
of the negative vibes, both in official quarters and
political circles, associated with Mr Vajpayees
visit. The unstated policy followed by successive leaders
in Pakistan has been to play the Kashmir tune to deflect
attention from the more pressing domestic issues. It is
too early to write off the Lahore Declaration just
because Mr Nawaz Sharif has once again raked up the
Kashmir issue. It must not be forgotten that he was
harping on the Kashmir theme even before Mr Vajpayee
boarded the bus to Lahore. The bus journey was part of
what the two countries have described as confidence
building measures. It was neither the beginning nor the
end but the continuation of the policy which India has
always followed for improving relations with its
neighbours. Mr Vajpayee put the issue in the right
perspective when he said that we have not attacked
any country in our 50 years of Independence... we are
determined not to lose our land in future. Equality
and mutual interests should guide Indias future
ties with Pakistan and China. No one can find fault with
Mr Vajpayees assertion that friendship is the
only way out and co-existence is the key to the
future. Reducing the risk of accidental nuclear
flare-up was a key goal of the Lahore summit. Both the
countries are keen to move beyond the traditional
postures of hostility after having displayed their
respective nuclear capability. Both Mr Vajpayee and Mr
Nawaz Sharif realise that the time has now come for them
to move in the direction of economic cooperation. Mutual
hostility does create problems for the two in the matter
of governing their poor and backward nations. |
Search for goldmine EVERY year the revenue-raising exercise of the Union Government includes at least one gimmick, like kar vivadh samadhan last year and VDIS a year earlier. This time the spotlight is on gold bonds. On the face of it, the scheme is simplicity itself. Anyone can walk into a bank with his or her hoard of gold bars, plonk them on the table for weighing, collect a bond for the face value and walk out in the knowledge that for a fixed period, the metal will be earning a modest rate of interest which will escape the tax net. In the meantime, the bond-owner or the ex-owner of gold, can sleep restfully without worrying about security. Those who have converted their gold stock into jewellery are out since only primary metal comes under the scheme. In this respect, the latest attempt is very different from the 1963 gold bonds floated in the wake of the Chinese intrusion and by appealing to the patriotic sentiments of the people. Does the Finance Minister, Mr Yashwant Sinha, hope to garner a huge volume since India is known to have the biggest stock in the world? He does not seem to, as he revealed in interviews to two economic newspapers. For one thing, this is not an amnesty plan, in which the government forfeits its right to ask questions about the metal and the source of money to buy it. That rules out black-moneywallahs in urban areas from bonding their secret nuggets. The ruralites do not much believe in the government and anyway, gold for them is real and the bond just a piece of paper. Two negative features in
the proposal will deter the honest tax payer from
exchanging his metal for the bond. One is the very low
rate of interest. Mr Sinha has talked of 3 per cent,
saying it would be closer to 5 per cent because it is
tax-free. It is no big deal; RBI issues tax-free bonds
and offers 9 per cent interest. Two, the bond does not
appear to be transferable nor can it be surety for
securing bank loans. Add to this the distinct possibility
of gold prices falling. This has been a worldwide trend
and India cannot escape it. Mr Sinha must be desperately
hoping that he comes by at least 50 or 60 tonnes in the
coming financial year, and thus save about Rs 1000 crore
in foreign exchange (by selling it in the domestic
market). This year the country is expected to import
nearly 625 tonnes of gold valued at nearly $ 10 billion.
The Commerce Ministry, alarmed at the havoc the import
was causing to balance of payment position, wants some
curbs like shifting gold to special import licence (SIL)
category. If the bond idea fades out, the SIL plea will
come centre-stage. |
Economic zone idea THE most significant decision of the Northern Zone Council meeting held at Faridabad on Sunday appears to be the declaration that Punjab, Haryana, Delhi, Rajasthan and the Union Territory of Chandigarh will now have uniform floor rates of sales tax. This is the right step in the direction of having agreed minimum sales tax as also towards giving a practical shape to the idea of a common economic zone. The discrepancy in the rates of sales tax has been proving to be a major roadblock in the growth of fair trade and commerce in the states where the levy was on the lower side. This caused a revenue loss to the government concerned also, but then ruling politicians have their own compulsions to enhance the tax rates. Thus having an accord that no state or Union Territory will lower the sales rates beyond a certain level should serve as a good beginning towards finding a lasting solution to this perpetual problem. However, it must not be forgotten that the states in the region will in that case lose their capacity to push up their tax revenues. Besides this, they will not be able to use sales tax to give effect to their policy thrust, which has been the case till now. But keeping in view the overall interests of commerce and industry, this sacrifice should be made ungrudgingly. The idea of a common
economic zone, if translated into a reality with
all seriousness, can go a long way in boosting economic
activity in the northern region. The problem of
infrastructural bottlenecks can then be handled in a more
effective manner, as pointed out by the Civil Aviation
and Tourism Minister, Mr Ananth Kumar. He rightly said at
the Zonal Council meeting that better infrastructural
facilities should be provided to give a fillip to the
tourism industry, which has a vast untapped potential. It
is, however, disappointing to note that the meeting, held
after one and a half years, was used mainly to state the
official position of the states on the question of water
and power sharing without showing any indication that
they were ready to sink some of their differences.
Besides the SYL Canal issue, the control of the
Ferozepore, Ropar and Harike headworks, at present in the
hands of the Punjab government, has been a matter of
contention since the reorganisation of states in 1966.
The demand for handing over the control to the
Bhakra-Beas Management Board is unlikely to be accepted
by Punjab as it fears this will jeopardise its economic
interests. Much should not be expected from the Union
Home Ministry, which will take up the matter with Punjab
soon. The states involved will appear to be keen on
resolving their disputes on water and power sharing only
when they demonstrate the necessary willingness to give
and take. This was missing at Faridabad. |
GOOD
GOVERNANCE-II LOOKING beyond the question of good governance, I am convinced that it is education and learning that offers solutions for the future. We have recently experienced that some states of India where illiteracy has been eliminated and where primary education has been universalised, even the expansion of population has been restricted. Let me cite the example of Kerala, where dramatically the rate of population growth 1.7 is at par with that of the UK and 0.2 lesser than that of China. And all this because women are literate there. The fact of the matter also is that in todays world, commodities and materials are in abundant supply. Whether one considers steel or oil, or automobiles, or ships, or computer chips, or telecom lines, all these are often in over-supply. On the other hand, the item that is in perpetual scarcity and short supply is human learning and ingenuity, in particular, the skills and talents of well-educated and trained professionals. Whether it is computer programmers or systems analysts, whether it is designers or engineers, or surgeons, or doctors, professionals with any degree of skill and competence in their respective fields command a significant scarcity, value, and their earnings and remuneration levels are increasingly reflecting these scarcities. In India, we have, of late, begun to benefit from the development of our human resources. Young Indians who are trained in new areas such as software programming, computer sciences, the medical and engineering fields or other similar high-tech areas have done themselves and India proud by excelling in their chosen fields. Today, the single largest foreign exchange earner for India is the contribution of its skilled people. Let me now spell out the paradoxes that our polity confronts. In these fateful years, we have been debating how to cure the serious ailments that have invaded our body politic. An abundance of political and journalistic literature now focuses on the crises of the Indian State. The debate has been joined in by virtually all classes of people. With the introduction of the new economic policy of liberalisation and globalisation, Indias problems of governance have been attracting global attention too. The new economic policy has itself contributed to the crises of governance. Large flows of foreign money into the economy, despite our limited opening to the world outside, have had at least four negative impacts on Indian society. They have created new inequalities and sharpened the traditional ones, thereby lending new edges to social and political turmoil and disorder. Secondly, they have enlarged the width and depth of corruption. Thirdly, they have brought into being a flood of narcissist self-indulgence by a relatively small but not insignificant affluent consumer middle-class whose glittering lifestyle has immensely sharpened the age-old, unresolved social contradictions in India. Finally, they have expanded peoples expectations and aspirations for the glitters of good living without generating either enough national resource or enough national will to rapidly develop our vast depressed human resources exposing to national and international limelight the gaping faultiness in our chosen models and pathways of development. Hardly any thinking Indian is now unaware of the great decline in the quality of governance that has occurred in India in the last 15 to 20 years. A plethora of remedies have been prescribed, more by intellectuals than by political actors, and more by individual political actors than by political party leaderships. Indeed, I find to my deep regret that political parties have generally failed to break out of their long-calibrated framework of thinking when it comes to finding remedies for the systemic sickness that has overtaken our political life. It is now universally recognised that our electoral system calls for radical changes. The debate has been going on for some time now but we have not yet been able to evolve a nation-wide consensus, and the entire agenda gets put off from one session of Parliament to the next. In the meantime, the nexus among politics, crime and money is acquiring diabolical dimensions. The members of Parliament have been realising the need for keeping the temple of democracy clean of crime and criminality, but no efforts in this direction are manifest. The Election Commission and the Law Commission have pleaded for State-funding of elections. This remains out of sight. It is equally important that political parties be required to function democratically in accordance with their respective constitutions and submit to the Election Commission audited accounts of their funds and expenditures. It is extremely important to make political actors accountable to the people and governance as transparent as possible. The paradox remains that the parties that are not themselves democratic internally are called upon to run a democratic system. The system of rendering quick justice is loudly begging for reforms. Millions of cases are pending before the courts, some even for decades because of the practice of frequent adjournments and trials by small instalments. We need to discard these colonial styles and adopt modern systems such as those prevailing in Britain and the USA continuous hearing of cases leading to their expeditious disposals. If justice delayed is justice denied, the lawlessness prevails and people lose their faith in the system, thus leading to interventions by criminals and hoodlums. It is important that our courts are adequately manned and the laws regarding transfers and appointments are modified. The need for setting up an independent autonomous commission is urgent since the current practices are attracting adverse comments. Paradoxically, the courts do find time to expeditiously attend to the issues that may not be strictly within their domain. Ways and means must be found to correct this distortion. I am not imparting any value judgement, but the experience of the last 20 years has a message for our political actors, which they hear but do not listen to. Whether we like it or not, the age of single party rule has gone, and we have entered the age of coalitions. Our diversities, the emergence from centuries of stupor of huge masses of people to political and social awareness, the clangs and clashes of diverse ethnic identities; all these are tell-tale early warnings that we have to govern ourselves only through collaborative forms of government, both at the national level and at the level of the states. During the last one decade we have experienced some big tragedies: the assassination of two duly elected Prime Ministers, and four Lok Sabha elections, each producing a hung Parliament, leading to the formation of five coalition governments, but the tenure of all of them has been brief and full of uncertainties. Here again I am not assigning any value judgement. The realism being that the electorate, for a variety of reasons, have not favoured any single party. How do we deal with this situation? Surely, it is no ones case that we should discard the democratic order and take the nation in an authoritarian direction. Unfortunately, these early warnings are being ignored by our political parties. The experience of the coalitions tried in New Delhi so far does not cheer our hearts since we did not learn how to work together. In a democracy power can be held only if it is shared with others. We have to learn how to make coalitions work. I have already outlined some of the measures which, if taken, will stabilise our party system and remove from the electoral process the viruses that threaten to eat into its vitals. Coalitions must be built before elections so that the partners can fight the polls together and form their governments after the poll without much difficulty. I am aware of the problems in this regard. Parties cannot work together at the national level because they are rivals at the state level, and down below at the panchayat level. Like-minded parties have to learn how to work together at all the levels. In order to run smoothly a coalition system, it will be important for the coalescing partners to share powers at various levels. The management of coalition governments, it will be appreciated, is qualitatively different from that of a single party. The role of the Prime Minister of a coalition set-up is to constantly evolve a consensus among those who sit on his Cabinet table and also those who may be supporting his government from outside. The process of such consensus building, particularly in the context of basic policies, has to be further broadened. I do not intend to comment on the functioning of the present government, except for saying that the process of consensus, so essential in the present context, is fractured. Departures from this tested style of functioning would not adequately serve the nations interest at this crucial time. It would expose governmental weaknesses and neutralise its initiatives. The Prime Ministers role in this new scenario is radically different. Unlike the earlier years, he is no more a prima donna but a first among the equals. His success is co-related to his capacity to make his programmes and policies appeal across the floor of the House. To conclude, may I say that the nation is at present confronted with a series of paradoxes, some of which I have tried to project. While correcting our fault lines, it is important that we resolve the ailments of democracy through added democracy, and not by its reduction. This is the golden principle of good governance that could take us helpfully into the next century. (The author is a former Prime Minister of India.) |
Time for
Indo-Pak
power accord MISSED opportunities for cooperation in the energy sector are perhaps the most glaring economic loss being suffered by the subcontinent because of the hostility between India and Pakistan. The scope for cooperation is vast. India suffers from an acute power shortage, and Pakistan has surplus power. Secondly, if India is to take advantage of the worlds largest natural gas resources in the Gulf and Central Asia, the shortest and most logical option would be to transport it overland through Pakistan. If Islamabad were to sell its surplus power to New Delhi, it would stand to gain in terms of large revenues. But, characteristically, Islamabad has been dragging its feet. Of late, however, their opposition has been wearing thin. The World Bank and the Asian Development Bank, which assisted Pakistan in developing the hydel resources of the Indus river system, have been putting pressure on Islamabad to give up its mulishness and sell surplus power to New Delhi. Further, Pakistan is also under obligation to cooperate as a SAARC member-state. At the SAARC summit in the Maldives an agreement was signed by the member-states to share the natural resources of the subcontinent. A team of experts from India visited Pakistan to discuss a power agreement. And recently the Pakistanis made a reciprocal visit to New Delhi. It is proposed that there should be a number of transmission links between the two countries, with the first one located between Lahore and Amritsar (or Ferozepur). In fact, cooperation between Pakistan and India in the field of power should eventually become the nucleus for such cooperation in the entire SAARC region. Nepal, Bhutan and Bangladesh have ample hydel, resources waiting to be developed. The multinationals working on fast track projects in India for example, Enron and Cogentrix could be encouraged to go into these countries. The possibility of Indo-Pak cooperation in the field of natural gas is immense. If the 20th century was the century of oil, it is increasingly evident that the 21st century will be the century of natural gas. Indias requirements of natural gas are projected to grow exponentially in the coming decades. India cannot take advantage of the resources of natural gas in the Gulf and Central Asia unless Pakistan allows the overland pipeline to traverse its territory. Given the decades of hostility between India and Pakistan, New Delhi had never considered this a viable option. But now winds of change are blowing. The idea of bringing natural gas from Oman to the Gujarat coast through an underwater pipeline lying across the bed of the Arabian Sea has proved technologically difficult. New Delhi, therefore, has a renewed interest in the overland option. But while India now seems to be inclined to play ball in the gas energy-sharing sector, the question that arises is whether Pakistan is willing. For Pakistan, a pipeline running through it would mean assured supplies of natural gas. Secondly, the transit fees paid by the gas-importing countries (India and others) would keep cash registers in Islamabad ringing. As overland natural gas pipeline already exists from the Daulatabad gas fields in Turkmenistan to Kandahar in Afghanistan. This could be extended from Kandahar to Delhi via Multan. An alternative route would be Kandahar-Karachi-Gujarat. An overland pipeline to tap the Gulf natural gas resources would come through Iran, taking the route Gulf-Iran-Pakistan-India. Unlike the Oman seabed pipeline, the overland route from Iran or Turkmenistan to India and beyond poses no major technical problem as the pipeline would pass through mostly flat desert land. A mega-project of this size has naturally evoked the interest of multinationals. The region has been witness to complex pipeline politics, with American oil and gas giants wanting a piece of the action. In a bid to cut Iran out of the picture, the US oil corporate Unocal wants to build a natural gas pipeline from Turkmenistan to Pakistan, and also develop marketing outlets for the gas in Pakistan. International oil and gas majors have been wooing India with proposals to supply gas from Pakistan, allaying Indias fears of disruptions by suggesting that a multinational enterprise be set up with India and Pakistan having equal stakes. Another surprise player to
enter the fray is the Argentine oil and gas corporation,
Bridas. After months of hard bargaining, both Unocal and
Bridas signed separate agreements with Kabuls
Taliban authorities, though no joint venture has yet been
initiated. |
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