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Talking growth Criminals as customers |
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Obliging judges of Pakistan
Fall in stock markets
Hail the rise of the son!
French dismayed by Sarkozy’s antics Asia needs cooperative security Chatterati
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Talking growth THE clouds have started dispersing from the Indian horizon. In a way, the Prime Minister’s emphatic assertion that India can sustain the 9 per cent growth has contributed to the change in sentiment. Besides, all the bad news from the US has been factored in the BSE Sensex’s plunge from 21,000 in early January to 16,600 on February 11. The foreign institutional investors, it seems, are through with their selling spree to meet their commitments elsewhere. The Sensex has finally signalled a shift from gloom to a possible boom. Realisation is, perhaps, growing that the fears of a US slowdown adversely impacting Indian growth were exaggerated. While the Prime Minister cites the high investment and savings rates, which are at 38.5 and 37 per cent of the GDP, respectively, to support his claim for continuing the 9 per cent growth rate, Finance Minister P. Chidambaram believes agriculture will grow at the expected 4 per cent and give a push to the national growth. However, the RBI and the Central Statistical Organisation do not share the top leadership’s optimism and have scaled down their growth projections to 8.5 per cent and 8.7 per cent, respectively, for the current fiscal. The industrial production data for November and December, 2007, point to a deceleration. The RBI refusal to a rate cut has disappointed India Inc. The next trigger for a growth push is expected from the coming Budget. The industry has high hopes for tax relief, especially the abolition of irritants like the cash withdrawal tax and the fringe benefit tax. However, the FM has a political agenda to implement in view of the coming elections. Sustainable growth cannot be achieved by tall talk alone. It requires concrete action. The government needs to implement the remaining reforms, speed up clearances for industrial projects, invest more in agriculture, education and health infrastructure in rural India and improve governance. Hopefully, populism will not be allowed to hijack this year’s Budget.
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Criminals as customers THE scale of the police corruption is shocking. The kidney racketeers were very much within the clutches of the Delhi Police more than a fortnight before the macabre scandal came to light, but the worthy cops allowed them to go scot-free in return for a bribe of Rs 19.85 lakh. Once the money was paid, all the sins of the kidney stealers stood washed away in the eyes of the Delhi Police. When the Uttar Pradesh Police made this allegation against its Delhi counterparts after the scam was unearthed on January 24, the top brass of the latter reacted with indignation. It has arrested an ASI and some constables only now, that too after pressure from the CBI. Still, no senior officer has been hauled up, despite ASI Ravinder Kumar Singh confessing that he had got only Rs 55,000 from the loot, while the rest of the money went to others. An ASI cannot detain or question anyone without clearance from senior officers. Does that mean that bigger fish were involved too? This cries for honest answers. But then, Dr Amit Kumar and gang were always well connected. It is not only the policemen who were specially considerate towards them. So were politicians. His colleague, Dr Upendra Kumar , who was let off by the Delhi Police allegedly in return for Rs 19.85 lakh, but was later arrested has already told the Uttar Pradesh Police that an MP from Haryana had come to the rescue of the racket kingpin when income tax sleuths had recovered Rs 6 crore from his house in a raid. It is strange that these close relations and politicians are not being investigated with the seriousness that they deserve. It is thanks to their backing that Dr Kidney had spread his network to Haryana, Uttar Pradesh, Uttarakhand, Rajasthan, Jammu and Kashmir, Bihar and Nepal. The dirt can no longer be pushed under the carpet. The Chief Ministers of these states should conduct a thorough and coordinated inquiry, if for no other reason than to re-establish the credibility of their governments.
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Obliging judges of Pakistan THE Pakistan Supreme Court’s verdict on the petitions challenging the imposition of the emergency, the dismissal of 60 judges of the apex court and the provincial courts and some other orders issued by President Pervez Musharraf on November 3 is the latest proof of how pliable the present judiciary is there. A seven-member Bench of the superior court has ruled that the sacked judges cannot be reinstated as they, “by way of judicial activism, transgressed constitutional limits and ignored the principle of judicial activism”. The judgement should be seen against the backdrop of the continuing agitation by lawyers for the restoration of the judiciary as it existed before the promulgation of the emergency and the dismissal of the then Chief Justice, Iftikhar Mohammad Chaudhry, and a number of other judges who refused to approve of President Musharraf’s controversial decisions. The former General is apprehensive of the outcome of Monday’s elections. There is the possibility of slain leader Benazir Bhutto’s PPP and Mr Nawaz Sharif’s PML (N) coming together to form a coalition government if neither of them is unable to come to power on its own owing to rigging and pre-rigging of the polls. If this really comes about, there is the possibility of the dismissed judges, including former Chief Justice Chaudhry, getting reinstated. That will mean a serious threat to President Musharraf’s continuance in power and further chaos in Pakistan. Already Mr Sharif has been threatening to impeach the President for his constitutional transgressions. More chaos is, in fact, inbuilt in the likely post-election scenario. No aggrieved party in the opposition may approach the Supreme Court for seeking justice because of its image of being packed with pro-Musharraf judges. If the polls are rigged to the extent of preventing the PPP and the PML (N) from taking advantage of the strong anti-Musharraf sentiment, they are unlikely to take it lying down. The latest opinion polls have predicted the emergence of the PPP as the single largest party mainly because of the reported sympathy wave after Benazir’s assassination and the PML (N) as the second biggest group with the Musharraf-backed PML(Q) lagging behind. How President Musharraf reacts to save his position will be interesting to watch.
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When society requires to be rebuilt, there is no use in attempting to rebuild it on the old plan. — John Stuart Mill
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Fall in stock markets
THE stock market has fallen by almost as much as it went up. Volatility is high. The fears about the American economy and a global meltdown to come, volatile foreign fund flows that come in and out of the Indian market at will, speculation, and the reverse flows with the help of “participatory notes” enable some promoters to borrow abroad and hide their identity in buying their own shares in India are all supposed to be the causes. The American economy has not improved despite large interest rate cuts. The stimulus package of President Bush may not help as long as huge amounts are spent on the Iraq war. The decline in the US, the largest market in the world, and its largest investor will hurt other major economies and hence India as well. Growth in Indian industrial production is slowing. Foreign exchange inflows have also slowed and the rupee has weakened a little. Corporate profits in the last quarter have grown by less than in earlier quarters. I.T. companies are reducing their staff or cutting new recruitment while freezing salaries. All these are frightening the people that good times for the Indian economy are going. Indian stocks rose over the year by less than China but by more than other Asian countries. Our market is driven largely by foreign fund inflows. They are influenced by trends in the world economy. But the Indian GDP, which has shown excellent growth over five years, is not much influenced by the world economy. India is not an export-driven economy. Even China, which is a much bigger exporter, is not so much export-driven as by internal demand. But China does have very substantial exports to the US and has placed much of its huge foreign exchange reserves invested in the US. The American economic decline will hurt China more than it will hurt us. However, the decline in China, aggravated by China’s efforts to slow its economy so as to restrain inflation, along with the decline in European and Japanese economies will have some negative effect on India. It could also benefit us as import prices from these countries fall. To reduce costs, outsourcing to India might increase, benefiting us further. The global economic decline might be bad for our stock markets but not as much for the general economy on which production and employment depend. Industrial growth has slowed a little. So have foreign fund inflows. The former is probably due to less consumer borrowing for housing and consumer durable products because of the higher interest rates. Corporate profits have also been squeezed by higher interest costs and intense competition. Easy access to cheaper external finance has become difficult as the Reserve Bank seeks to restrain foreign fund inflows. They were strengthening the rupee and making exports However, the consumer demand continues to grow and the reduction in home loan rates will improve the spending on housing. Inflation is a worry, and hidden by subsidised fuel prices. These subsidies will certainly continue, moderating inflation. The more stable rupee because of slower foreign fund inflows will help domestic production and exports (for example, of garments). The State Bank of India has marginally reduced the interest rates, as have some other banks. Very substantial government expenditures on social programmes, roads, metros, railway projects, slum clearance, rural reconstruction, the employment guarantee scheme, and health and education programmes are growing further. Substantial public and private investment in power is on the anvil as the recent award (and others to come) of three ultra-mega power projects demonstrates. Tax revenues of the Centre and states are buoyant. The government has the money to spend on infrastructure and social programmes. There is also no dearth of private finance within India as shown by the overwhelming response to the recent Reliance Power IPO which collected Rs 300,000 crore, almost 30 times what was allotted. Such government and private spending not only adds new capacities but also generates employment, incomes and spending by households, thus stimulating the economy. There is, therefore, little cause for alarm despite grim reports of the American decline. However, the government must control its finances carefully. Inflation must always be a worry, with rising crude prices. The food price increase can have only moderate impact if the public distribution reaches those for whom it is meant. Electricity tariff hikes as coal and gas price increase could also fuel inflation. The decline in stock markets is not reflective of a decline in the economy. The economy will continue its growth if the currency, inflation, foreign fund inflows, public investment and interest rates are well managed. They are at
present.
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Hail the rise of the son!
Fortysix-year-old
Sukhbir Singh Badal has at last been anointed president of the Shiromani Akali Dal. His father, the present Chief Minister Parkash Singh Badal, has done great service to the Sikh Kaum and Punjab by offering the services of his only son and heir apparent. I do not understand why some leaders are calling it kunba parvari or propagation of dynastic rule and reminding the people of the time when Mr Badal and other Akali leaders had criticised Jawaharlal Nehru for making Indira Gandhi as leader and later Rajiv Gandhi. That should be forgotten and forgiven as juvenile outburst. Does not Punjab need a Sukhbir Singh Badal to match tomorrow a Rahul Gandhi in Delhi? It can’t be left to a long bearded kurta- pajama clad blue turbaned jathedar of hoary days. Those who criticise the rise of dynasties on the Indian political horizon should not forget that politics is mostly in the genes and a DNA test of the leaders could easily reveal this. Why bemoan? Do we protest when a doctor’s son becomes a doctor, lawyer’s son a lawyer and journalist’s son a journalist [may be, sometime] or engineer’s son an engineer. Why curse the politicians who day in and day out suffer long travels and fatigue; undergo long distress of public speaking and then meet all sorts of people for public welfare? Look at their sacrifice; they offer their sons to serve the country and the people. Bear those garlands of marigold around your neck for a day and then you would realise their troubles. It is a different matter that not many politicians in Punjab or Haryana have offered their daughters to lead the people. It is after all the land of foeticide and infanticide. It is also abode of honour killings. Please do not forget the huge sacrifices made by leaders like Mr Badal and others. They have been leading morchas and suffering imprisonments and police beatings. All this suffering was for whom: evidently for the farmers and the poor of Punjab. It is now the sweet choice of farmers to leave the land and farming. Look at the advantages of this momentous choice. The elder and highly experienced Mr Badal is the Chief Minister and the son leads the party. And, with half a dozen close relations as ministers in the Cabinet, all kind of dissidence is ruled out. There is cohesion and please forget those nagging voice of the BJP raised just to mark its presence, there is no threat to the government. Also, Sukhbir can lead a new agitation and hold morchas to protest against the injustices meted out to Punjab and the Sikhs by the Congress government in Delhi. He can very skilfully use his management technique he so painstakingly learnt in America and has not been able to use
well.
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French dismayed by Sarkozy’s antics
PARIS – Nine months along, the presidency of Nicolas Sarkozy is drawing increasing comparisons to a bad soap opera. He is ruthlessly lampooned on the Internet and portrayed in the media as a monarch and a money-obsessed dilettante, with a documented passion for yachts, country estates and travel on private jets – with the tabs typically picked up by tycoon friends. His presidency has been marked by public temper tantrums, a 172 percent pay raise orchestrated by his office, a divorce and then marriage four months later to an Italian supermodel-turned-singer whom he’d known for 80 days. These and other startling acts have more than a few people here speculating about conditions inside the man’s head. “It’s a conversation everybody’s having,” said Nicole Bacharan, a political analyst at the Institute of Political Studies in Paris. “The whole country, especially people who voted for him, are turning into therapists.” Sarkozy invites comparison to Tom Cruise – intense, headstrong, athletic, dynamic, charismatic. The president has not started jumping up and down on a couch, but there is a sense among many people here that he could, at any moment. “I sometimes feel that he’s totally crazy,” said Lois Nathan, 63, an American English professor who has lived in France for 20 years. “When I watch him talk, I often say to myself that he doesn’t have a stable psychology. And I often wonder, what on Earth is he doing?” All this comes from a man who won election with some very sober promises. He would revitalize a stodgy presidency and reinvigorate a morose country. People’s hard work would be rewarded with higher pay. He would run a can-do administration, open and modern, that would restore French pride. Sarkozy’s approval ratings have plummeted to about 39 percent, with polls showing his party could take a shellacking in municipal elections next month. Pollsters attribute the collapse to two main factors: his failure to improve economic conditions and overexposure to his personal life, elements of which strike some people here as nouveau riche and vulgar. The popular TV news parody “Les Guignols de l’Info,” a nightly puppet show, sometimes mocks Sarkozy’s affinity for Rolex watches by giving him an armful. He has also been saddled with a disparaging nickname: Bling-Bling, the hip-hop expression for the gaudy trappings of wealth. “He is the president of France, and I wish that he was a little more classy,” said Felix Noir, 33, a Web developer and communications executive. He faulted Sarkozy for first publicizing his affair with Italian supermodel Carla Bruni with a much-photographed outing to Disneyland Paris in October. “It was pathetic. ... That was the beginning of the end – the hunter got captured by the game.” A three-month romance followed, including trips to Egypt and Jordan, lavish parties and exchanges of expensive gifts, all chronicled by both the tabloid and mainstream press. Almost-nude photos of Bruni from her modeling days showed up in the media, with much recounting of her previous liaisons with Mick Jagger, Eric Clapton and Donald Trump. She and the president were married in a secret ceremony at the presidential Elysee Palace on Feb. 2. If the French think they’ve seen everything, they can think again. Three books are just hitting the shelves that deconstruct the Sarkozy-Bruni love affair in glorious detail. Such as Bruni supposedly telling a friend, “I want a man with nuclear power.” Such as the former model reportedly inviting Sarkozy up to her apartment for a cup of coffee when he drove her home after their first dinner together, and Sarkozy replying, “Never on a first date.” Tuesday night, L’Express magazine posted excerpts from Bruni’s first interview as first lady on its Web site, in which she put the relationship on further display. “Between Nicolas and me, it wasn’t quick, it was immediate,” she declared. While many French seem captivated by the spectacle of a rock star president at the same time they are repulsed by it, people in other European countries sometimes find the show endearing. “Sarkozy is behaving like a teenage boy who just got his first girlfriend - it’s weird, but there’s something flamboyantly French about it,” television producer Alan Eyres, 35, said while sitting at a central London coffee shop. “He’s had everything out in the open, and it’s hard to have a go at him because of that,” Eyres said. “Sarkozy says, it’s here, you know what’s happening. He’s so wrapped up in it he wants to share it and he’s entirely unembarrassed by
it.” Special correspondents Corinne Gavard in Paris and Karla Adam in London contributed to this
report.
By arrangement with LA Times-Washington Post
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Asia needs cooperative security IT did not require a conference on Asian Security, held in the capital recently, to tell us that the 21st century is going to be centered on this continent. Three of the world’s four largest economies by 2025 will be Asian countries; China, Japan and India. Four of the five most powerful militaries will be from Asia; Russia, China, India and Japan. By the middle of the century, India and China together will constitute almost half of the global population and GDP. The USA is an important player in Asia, notwithstanding the fact that it is geographically located so far away. It maintains substantial military forces in the region and its economic and political interfaces are comprehensive and widespread. Not to recognise this reality would be naïve. The major players on the Asian scene, therefore, are five – Russia, China, Japan, India and the USA. India is not yet in the same league but will almost certainly be there in the next ten to fifteen years. Of these five, the USA and Japan are in military alliance, the rest are essentially ‘stand alone’ powers. Four are nuclear weapon states and three are permanent members of the Security Council. Two are developed nations with high per capita incomes, Russia has been an erstwhile superpower while China and India are trying hard to reach somewhere near the levels where the others already are. Despite these disparities their sheer size and potential makes them very credible players, China more so. To these Big Five, so to speak, should be added the Asean group, a strong economic entity in its own right and the energy rich Gulf countries. On the negative side, there a number of states in various stages of turmoil, including nuclear Pakistan and huge numbers of non-state entities, some operating in connivance with them. This is the Asian broth which will make this continent ride the 21st Century. Even as economic growth in China and India continues impressively, numerous problems continue to bedevil both nations. China has maritime boundary problems with all its neighbours, both in the South and East China Seas which are unlikely to be resolved in the foreseeable future; there is also the long-festering land border issue with India. Urban-rural mismatch resulting from uneven development could lead to societal disturbance. Reunification of Taiwan is a major issue which has potential to create tension. It is not surprising, therefore, that Chinese leadership, fearful that any instabilities arising from any of these subsets could jeopardise the country’s economic growth, has set ‘peace and tranquility’ as its plank. From the days of Deng Tsao Peng the first quarter of this Century is being seen as the time of strategic opportunity which has to be exploited if China is to become a major global power. Conflict and disturbance on its periphery, even beyond, is the last thing that its leadership will want. India, itself, is not placed very differently. Its major goals are similar to those of the Chinese and tranquility on the borders and stability within the country are areas of vital national interest without which economic growth can be seriously impeded. Unlike China, its own neighbours are in different stages of upheaval and the possibility of some of them even collapsing can not be ruled out. Energy security is going to be a crucial factor, not just of availability but also of safe and secure transportation, much of it over the sea. China and Japan have long supply lines to and from the Gulf and passing through some dangerous choke points such as the Malacca Straits, where non-state actors, read terrorists, wield asymmetric capabilities to interdict or attack. India, itself, has such a line, albeit much shorter, which needs to be guaranteed safe passage. There is, therefore, need among these nations not only for collaboration in exploring and exploiting new sources of energy but also to ensure that the supply chain is protected and safety of movement at sea ensured. In the emerging environment, the possibility of military conflict between nation states has diminished greatly even though preparedness has to be maintained. On the other hand, threats from non-state entities are increasing. As many as 187 of the nearly 300 terrorist organizations that exist globally operate in Asia; their operations are transnational and stretch across boundaries. There is also direct and indirect nexus between many of them and some enjoy protection of the host country. The possibility that one or more of them may lay hands on weapons of mass destruction is very real. Individual countries, no matter what their military or police power, cannot cope with these threats on their own. There is need for cooperation with others, for sharing intelligence and for stringent and compatible laws. So, even as collective security, as represented by military alliances has become passé, cooperative security to cope with the new threats must acquire much more impetus than it has so far. It has been said that when many major powers are located in close proximity, some form of hostility is inevitable. Europe saw continuing wars through the 18th and 19th centuries as the great regional powers, Russia, France, Prussia, Spain and Great Britain sought to create their own spheres of influence. The two World Wars in the last century climaxed the struggle, leaving millions dead. The question now is whether enough lessons have been learnt to deal with the new geopolitical reality in a different and more sensible way. Fortunately, the emerging environment and the priorities of major players have created a fairly benign playing field in which cooperative security can play a useful role. This requires the regional powers to interact positively with one another at one end and with external powers at another. India is well placed on this chessboard; its relations with Russia and the USA are good, improving rapidly with Japan and better than at any time before, with China. It also has friendly interfaces with countries of the Asean group, in the Gulf and in Central Asia. All these relationships must continue to be further strengthened as they, ultimately, help counter invisible and asymmetric threats to the nation’s well being. Plain military strength is no longer enough to safeguard our
interests. The writer has served as Director General, Defence Planning Staff
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Chatterati Valentine’s
Day seems to have really caught up with all age groups in India. Rich or poor, on that day, Cupid was ruling the hearts and mind of old and young alike. Counselors had to deal with students from class 10 and 12 too. On this lovers day the Bajrang Dal and the Shiv Sainik seem to have gone a bit soft. Every restaurant and theatre in town was sold out. Roses were sold in thousands as every market wore a red or pink look. In some corporate sectors even employees were asked to dress in pink, while some Human Resource departments decided to distribute heart shaped cookies. There were some students who celebrated Valentine’s Day in a different way. The AIIMS and National Thalassemia Society of India organised a blood donation camp and collected around 70 units of blood. The message was, by donating blood, you could save a human life. Meanwhile, in Delhi University, Deepika Padukone was voted this year’s “hottest female.”
February clearly is the month of high profile weddings. In Mumbai, a girl from the Essar family got married last week. It was a power packed gathering of all political heads of all parties. In Delhi, the only daughter of an editor-in-chief of an English daily got married. It was another power packed reception with the Prime Minister, Sonia and Rahul Gandhi, and ‘PM in waiting L.K. Advani’ all attending; There were many Chief Ministers and, of course, several media heads of the country. The industrialists were present in big numbers. The bride and groom are both part of the media too. Now there is Congressman lawyer R. K. Anand’s son’s wedding in Delhi. Next week in Udaipur is Praful Patel’s daughter’s wedding, which is sure to be a big affair too. So, a season of big, fat, power-packed weddings.
Congress puzzles Three top Union Ministers have been posted to their home state as state Congress chiefs. They will remain ministers in the union cabinet also. This exercise of the Congress proves that they are making a serious attempt at doing everything possible to win the assembly elections in these forthcoming states. Trying a balancing act in Madhya Pradesh, Arjun Singh’s son Ajay Singh has been made manager of the campaign committee. Former Chief Minister Digvijay Singh is General Secretary in-charge of Uttar Pradesh, so he is out of Madhya Pradesh for the moment. The local Congress guys in J & K just cannot fathom why the Congress high command could not find a loyal Congress person for the job of PCC President. Some of them are unhappy that the high command had to choose an old National Conference hand to run the state Congress unit.
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