The Tribune, Chandigarh, India

Eternal India
Some parts just never improve

Election time is constituency darshan time for candidates. They revisit most areas with the same promises. But then, there are also some areas which they never care to visit. These are the ones which have hardly seen any development in 61 years of Independence. As a page 1 story of the Tribune brought out in sordid details on Friday, there are villages like Dhauri Mangri and Sagatpura of Rajasthan, which still have no water, no electricity, no pucca road and no decent school— sixtyone years after Independence. Even the candidates give such habitations of tribals a go-by. The people are so poor that they live in mud houses which have no doors. Where is the need for the doors when they have no valuables worth the name? Leave alone valuables, they have nothing to even get them two square meals. Ironically, every political party swears by ameliorating the lot of such poorest of the poor!

It is a matter of national shame that such islands of utter neglect exist in almost every part of the country. Development schemes launched with much fanfare skip them totally and yet no politician loses sleep. The children of a lesser god are most of the time fed on false promises. Even the basic necessities are a luxury for them. Unless this section of society is lifted out of the depths of misery, all talks of development and progress appear to be phony.

With the government having abdicated its responsibility, the only way out for the neglected tribals would have been to get educated and hope for some redemption, may be through low-paid jobs. But even education is a distant dream for them. As the Tribune story highlights, the teachers also avoid visiting such areas. That completes the sense of abandonment for the citizens. The turn of the century has not done them much good. May be the centenary of Independence will!

People still die of TB
Need to step up fight against the disease

Until Robert Koch discovered the bacteria causing tuberculosis, over a century ago, TB was considered a killer disease. Unfortunately, even today it causes deaths of millions especially in the developing world. India alone accounts for 30 per cent of world’s patients afflicted by the disease. Undisputedly TB is curable, if detected in time. But 40 per cent of deaths worldwide occur because TB is either not diagnosed or detected in time. In India every year two million people develop active tuberculosis, out of which nearly half a million die.

To address the TB epidemic, India began what in officialese is called the DOTS treatment. Today, India has the second largest DOTS programme in the world. Though the death rate among infectious patients treated within the DOTS programme is much less, yet coverage does not necessarily mean detection. So, TB kills more people in India than many of the diseases combined. Whatever the claims, in Punjab, the working population has been considerably affected.

The challenge before India is not only to expand services to manage multi-drug resistant TB but also to improve the quality of DOTS. Since smoking causes half the male tuberculosis deaths in India, anti-smoking campaigns must gain momentum. In recent times the increasing susceptibility of HIV infected patients to TB is another area of grave concern. The HIV-TB linkage requires immediate response. Since TB affects those living in unhygienic conditions, TB care must reach out to the poor. To facilitate the discovery of new, safe and affordable drugs TB research has to be accelerated. The central and the state governments need to be doing more than they have done to fight the disease and save lives.

Thought for the Day

We call the tree good from its fruits, and the man, from his works. — Ralph Waldo Emerson

ARTICLE

The economic crisis
Poor are the most vulnerable
by Jayshree Sengupta

THE recent OECD growth forecast predicts a sharper economic downturn for US, Europe and Japan on account of the current global financial crisis. It means that the demand for goods and services from these rich countries would be flagging and both India and China would be experiencing slack export growth.

China has introduced a huge ($586 billion) package to bring relief to the economy. Of course, China’s exposure to the global meltdown is much greater than India’s because almost all that one can buy anywhere in the world and especially in American stores, is made in China. Its share of exports to GDP is much higher than India’s. The burden of sustaining the livelihoods of unemployed labour will thus be heavier on the Chinese government.

Indian industry too is experiencing the onslaught of slower domestic and international demand and jobs are being shed. The capital expansion plans of companies have been stalled and in many cases, declining sharply. A series of companies have already declared and are likely to declare lower profits this quarter. That is why the stock market took a plunge recently.

Inflation, however, has come down to single digit at 8.9 per cent which is not surprising because the world over, inflation is coming down due to the sharp fall in oil prices which have reached below $50 a barrel.

The decline in commodity prices is also hurting Indian exporters of steel, cashew kernel and a host of other commodities. Tata has declared a three-day holiday a week in its Jamshedpur steel plant. Even importers of commodities are suffering because when they booked their orders, prices were higher but when shipments arrived, prices had fallen by a large amount. This has led to order cancellations and some importers are not willing to lift the cargo from ports.

Many of India’s export industries are already reeling under the impact of a slowdown in the demand for manufactured goods and there have been massive job cuts in Tirupur, Surat diamond cutting outfits and Punjab woolen and garment production units. Others engaged in carpet making , metal works and silk sari weaving industries in Benaras, are taking a beating.

On the real estate front, there is also bad news. Already the banks are receiving dud cheques and NPAs are mounting with banks. Are we heading for a housing crisis like in the US? The $10.5 trillion dollar housing bubble that burst in America on September 13, 2008, has resulted in mass-scale retrenchment in the last two months. US unemployment rate is at a 25 years record high.

Even in India’s IT and telecom industries, job orders are declining and when Barack Obama assumes office in January 2009, if the unemployment rate reaches 8 per cent , he would turn protectionist and this would hurt IT firms in India. Even top IT companies like Infosys is asking its employees to take a holiday for a year and work for NGOs at half the pay.

The good points about India and China, however, are that they are both huge economies and they can generate enough demand at home which can shelter them from the recessionary forces in the western world. But due to the economic reforms and liberalisation in recent years, all sectors of the economy are dependent and linked with the global economy.

In any case, the world is now linked through the international oil prices and flow of funds (hot money) in stock markets. India would not have had the current liquidity crisis had the Foreign Institutional Investors not withdrawn such a huge chunk of foreign exchange ( $11.1 billion) from the stock markets. There was a vacuum created and though the government has made sure that there is enough liquidity, business is not picking up.

The government has spent $ 63 billion in six months to intervene in the market, propping up the rupee against the dollar and injecting liquidity. But liquidity is still a problem because no bank is willing to take the risk of lending to clients exposed to foreign markets and facing the risk of default.

Still, we have been saved because India has not got full convertibility of the rupee, otherwise more capital flight would have taken place. The exposure to the international financial crisis is much less also on account of the partial liberalisation of the insurance sector and the banking sector. The financial crisis has also not hit the public sector undertakings much because their investments do not have exposure to the American banks that have failed.

There is another reason for concern-slower industrial growth. The industrial growth numbers for September 2008 show that it rose to 4.8 per cent but everyone expects the October numbers to be lower. China’s industrial growth has also come down but still it remains at 8.2 per cent. Exports to the US may also be impacted by Obama’s likely policy of making countries observe environmental and labour standards. Indian exporters may have to install new technology to conform to the norms and this might raise costs. Without higher industrial growth India cannot achieve higher GDP growth. On the agricultural front, though the wheat crop has been good and there is even a surplus available for export, agricultural credit has shrunk recently. This is not good for the future of agricultural investment.

What is the government doing about the present crisis? Apart from raising the quantum of liquidity in the system by cutting down the repo rate and the cash reserve ratio twice and enabling banks to have more liquidity, not much has come by way of a full package to tackle the crisis. Expectations have been raised about an interest rate cut and reversal of the petrol price hike. But one does not know what is in the offing.

In the present world crisis, the more vulnerable groups are the poor and the very poor. How the government is going to help them is not clear. China is going to invest in infrastructure like roads and low cost housing and rebuild the earth quake affected areas. This will take care of tackling the problem of unemployment and since incomes will be generated, domestic demand will be kept up. They are also going to train people to do other jobs that are in demand domestically.

Bigger amounts of public investment will be needed in these hard times in all countries. More banks will have to be refinanced in India and even in the US. Like in the US some form of fiscal stimulus may be needed. A comprehensive plan for tackling the problem of rising unemployment plus how to make the economy more self reliant in the absence of a rising flow of foreign institutional investments, is long overdue. How to mobilise the high rate of domestic savings and the foreign exchange reserves for continuing development programs and giving help to the poor in terms of jobs, food subsidies, better health care and shelter, should remain important items on the agenda.

MIDDLE

When Uncle Sam sneezes ....
by Anurag

NO need to panic. It is their creation. They will face it. We are safe in our well. Did I hear someone say, “Because our fundamentals are strong.” Right, if you mean by it, our complacency.

Recall the nineties when the worldwide Y2K scare gave sleepless nights to those companies whose computer software engineers had assigned two, rather than four, digits to represent a year, apparently to save the expensive computer disk and memory space. This was a major bug for the finance industry as the difference between 1 Jan 2000 and 31 Dec 1999 could be calculated as (——) 100 years rather than 1 day. The years preceding Y2K saw all major industries, including utilities, banking, manufacturing, telecom and airlines spending billions of dollars to become Y2K compliant before the fast approaching deadline.

How did we cope with the ticking time bomb? We didn’t panic at all. Our fundamentals were strong. How? Our leaders triumphantly declared that we had nothing to worry as we had hardly computerised our major industries and utilities. Yes, our IT bellwether Infosys made major moolah fixing the Y2K bug in the developed world, even as no major problems were reported when the clock ticked Jan 1, 2000! The whole world went on with its normal life.

Post — reforms initiated by then FM Manmohan Singh in 1992, the Asian Tigers were held up as miracle economies to be emulated by us. Flashback to March 1992 and Big Bull Harshad Mehta, the darling of the stock markets. Who did not gloat over the galloping markets? Some even claimed credit for this! Remember who said; “This is not something I should lose my sleep over”.

Come 1997, the currency crisis that began in Thailand spread to South Korea and Malaysia in domino fashion. Growth rates fell through the floor in 1998 in the emerging economies of East Asia once heralded as shining examples of export — driven growth. They still remain below pre-crash levels.

How did we react — Our currency and other fundamentals are strong. Our economy is not yet integrated with the outside world. Our exports account for less than 1% of the world trade. Lo and behold, Indian economy slumped during 1997-2002 posting 5.5% GDP growth against 7.5% during 1994-97! Indian industry crashed in 97 - 98 and barely limped forward for some years. So much for the fundamentals!

When top notch US investment banks went bust and the contagion appeared to be heading Europe wards, our experts blabbered that the impact on our financial institutions would be hardly any, as they had no direct exposure to Wall Street.

The stock markets have been heading southwards since Jan’08. Didn’t they tell us that Indian growth story was intact for our huge domestic market would continue to drive our consumption led economy, even if the export market shrank owing to global recession. And to cap it all, our fundamentals remain strong!

Be it as it may, brace yourself for a bumpy ride ahead. Don’t you know when Uncle Sam sneezes the world catches pneumonia.

OPED

Taxes and subsidies
Govt taxes the poor to subsidise the rich
by S. S. Johl

IN a welfare state, it becomes imperative that the rich are taxed rationally and the poor are supported through temporary and focussed subsidies and grants are given to help them stand on their own feet so that gradually they too become productive and self-respecting members of society.

Yet, when taxation becomes irrational and subsidies become an addiction and a tool in the hands of politicians to garner votes, specially the ones that flow to the undeserving ones, it shatters the economy and hits at the very vitals of society.

This aspect can be appreciated by statesmen only and politicians of indifferent hues refuse to understand the nuances of such robust economic, social and political policies and prefer to pursue their narrow political ambitions that do not let the economy grow and develop at an optimal rate and to the level of its potential.

It is here we stand in India. The country’s political class has degenerated to the level that votes are being appropriated through corrupt practices of all shades and criminality is writ large on the face of this class.

Hereditary accessions without any trace of genuine democracy and transparent processes within any of the political parties topped with unaccounted money power and criminality have become the bane of our political system.

Political governance under such a dispensation cannot be expected to act rationally. Yet, the political class of the country is not entirely devoid of rational souls like the Finance Minister of Punjab, who believes in thinking for the “next generation, not next election.”

The annual subsidy, amounting to approximately Rs 4,500 crore, given as misplaced sops to the undeserving ones, in his genuine perception, could be very well used for economic and social development of the state.

Had this money been used for development of infrastructure, the generation of power, providing affordable quality education, health and medical facilities in the rural areas and on generating gainful employment, the state would have not been in the throws of a financial crisis in which it is today.

The state’s debt since this government took over in March, 2007, has increased from around Rs 4800 crore in 2006-07 to over Rs 57,000 crore estimated in 2008-09. The state in a virtual debt trap and the ruling combine is happily indulging in squandering the scarce resources through arbitrary doleouts and misplaced sops.

The state provides undifferentiated and unfocussed power subsidy to the farm sector almost equal to the realisation of excise tax on liquor in the state. In 2007-08 the subsidy on power amounted to about Rs 1,450 crore and the tax on liquor was about Rs 1,470 crore.

In 2008-09 the power subsidy is estimated to be around Rs 1,600 crore and the excise tax on liquor over Rs 1,560 crore.

On one hand, the state is promoting liquor consumption to increase its excise tax realisation and is virtually chiding at the face of NGOs engaged in de-addiction programmes and on the other, almost an equal amount is channelled to the undifferentiated power subsidy to the farm sector, the major benefit of which gravitates to rich farmers.

There are farmers who have scores of tubewells, grow hundreds of acres of potatoes and vegetables. There are big farmers growing tens and scores of acres of cotton, hundreds of acres of wheat and rice and other crops as well as orchards.

The major benefit goes to such farmers. One cannot help wondering if the rich politicians of the state have a stake in such subsidies and are not inclined to focus the subsidies to the really deserving farmers.

Unfortunately, a majority of small and marginal farmers do not even have electric tubewells and they depend on diesel pump sets. Thus a major part of this subsidy is appropriated by the rich farmers.

On the other hand, the excise tax is primarily paid by the lower middle class and poor consumers. The rich drink the imported or Indian version of foreign brands. The tax realisation from this richer segment of society amounted to less than Rs 120 crore out of total realisation of Rs 1470 crore in 2007-08 and less than Rs 130 crore out of over Rs 1,560 crore total realisation.

Thus the poor consumers and addicts to the liquor, who consume country liquor, are the real contributors of excise tax on liquor and are paying for the subsidy doled out primarily to the richer class of farmers in the state.

The Punjab Finance Minister also believes, and rightly so, that populism does not work in the context of votes. This contention has been proved repeatedly in Punjab. The previous Akali-BJP government had made power supply free to the farm sector lost the next elections.

The succeeding Congress government, after reimposing charges on the supply of power to the farm sector, retraced its steps suddenly as the elections approached and again made the power supply free to the farm sector. The party got defeated in the following elections.

Thus, it is not such sops that count. It is the corruption-free, transparent, good governance and socio-economic development that matter at the hustings.

The policies that are not designed to take the poor out of the quagmire of poverty and ignorance and rather keep them dependent on doleouts and sops thrown out to them are bound to fail in garnering votes as the voters are progressively becoming mature in making voting decisions.

Making movies the Afghan way
By Robert Fisk

Drive north of Kabul for an hour, turn left into a grey desert and head east for fifteen minutes, the sand shawling up the side of the windows until an armed man in the uniform of the Iranian police stops you before a forbidding compound of watchtowers, mud walls and razor wire.

For a brief moment, that willing suspension of disbelief - I can see the inmates sitting on the sand beyond the iron gate – I forget that this is an Afghan movie set, and that Daoud Wahab, the producer of ‘The White Rock’ is sitting in front of me. “Looks real, huh?” he asks over his shoulder. It does.

For incredibly, as Afghanistan sinks back into the anarchy which became its natural state these past 29 years, Afghan film-makers are producing movies of international quality, turning out pictures which prove – even amid war – that a country’s tragedy can be imaginatively recreated for its people.

Safaid Sang – Dari (Persian) for White Rock – was an Afghan refugee detention camp inside Iran whose Iranian guards helped to massacre more than 630 of their prisoners in 1998 after inmates protested at their treatment.

The atrocity – largely unknown in the West – ended after two Iranian helicopters strafed the Afghans with machine guns. Quite a story. Quite a movie.

“I’m really hoping for something big for this,” Wahab says as he eases himself into the producer’s folding canvas chair inside the prison gate. “We built all the mud walls, bought the razor wire, constructed the concrete lavatories – we even made fake shit to put all over the floor – and I found a real Iranian flag in the ‘souk’ in Kabul.”

It snaps above us now in the desert wind, the silken split-onion symbol of the Islamic Republic between red and green, the banner fringed with gold. The guards even speak with the right accent because some are half-Iranian. At least one of the actors was himself a prisoner in the real camp.

The Afghan actors squat beside an inner fence of wire, pleading with family visitors for help while the ‘guards’, immaculately dressed in near-perfect Iranian uniforms – Wahab and director Zubair Farghand searched the internet for photographs which showed cap badges and insignia of rank – shout abuse at their charges.

One young man with an American rifle – the real Iranian police do indeed have US weapons – walks up to a ‘prisoner’ and kicks him brutally in the back, pulling out a cosh and bashing him on the legs.

“I think he enjoys beating these people – he’s grown into the part,” Wahab says sharply. He paid £30 for each of the 64 refugee tents to be sewn and patched together in the bazaar. They are a distressing backdrop to the White Rock camp where the dust and wind bleach out the colour of the landscape, even the great mountains that shoulder their way across the landscape, the foothills of the Panshir Valley. The movie, of course, is called ‘The White Rock’.

But unkind thoughts move through my mind. When the Third Reich was collapsing, didn’t Goebbels produce an epic movie about Frederick the Great to boost the morale of German troops?

And – while I made sure that Daoud Wahab didn’t take offence at the Hitler parallel – wasn’t there a certain irony that his film was being shot scarcely three miles from the vast American base where Afghans prisoners are held in their hundreds, even as we sit in this desert today, and where US personnel have sadistically tortured – perhaps still do torture – their inmates. Why not make a film about this far more contemporary violence?

We have met before, in the days after the overthrow of the Taliban, when Afghanistan’s surviving film community found that the gunmen of the most obscurantist militia in the world had bulldozed a pit in Kabul and used it to burn every foot of film they could find. Paiz’s his friends hid original Afghan movies and archive documentary footage, letting the Taliban cremate old Russian and Indian films of which there were copies in Moscow and Mumbai.

One of the ‘old guard’ directors, Siddiq Barmaq, is now himself a leading film-maker and has confronted the US occupation of his country today. His new film, ‘Opium Fields’, tells the story of two American soldiers who try to escape the country in an old Russian tank – only to find an Afghan family living inside the wreck. The movie has just won the Critics Award at the Rome International Film Festival.

In all, 630 Afghan prisoners – women as well as men — are believed to have died in the original camp massacre, which lasted for six hours. Some of the prisoners managed to escape and hid in the mountains. Daoud Azimi was one of them and plays an Iranian police guard in the film.

We drive back to the broken highway to the east. An American convoy races past us at speed, four-by-fours with blacked-out windows guarded by Humvees, US troops hunched over machine-guns on the roof. Daoud Wahab has plenty of material for his next film. No doubt Homayoun Paiz will play the hero. And die at the end.

— By arrangement with The Independent

Cairo meeting discusses piracy
by Jeffrey Fleishman

Worried that piracy could scare ships away from the Suez Canal, Egypt on Thursday held emergency talks with nations bordering the Red Sea on how stop brazen Somali gunmen from hijacking oil tankers and other vessels.

The Cairo meeting was called amid concerns that lawlessness was disrupting sea lanes and creating panic that might force shipping companies to avoid sailing the Red Sea region.

Such a scenario would hurt the Egyptian economy, which relies on more than $5 billion a year in fees collected from vessels passing through the Suez Canal.

The scourge of pirates comes as West Asia is increasingly sensitive to the global financial crisis, which has pushed oil below $50 a barrel and is depressing markets and affecting trade, real estate and other businesses.

Fewer freighters coming through the region would further strain countries linked to transportation and oil and could spark social and political unrest.

Diplomats from Egypt, Saudi Arabia, Yemen, Sudan and Jordan balanced their concerns over chaos on the seas with assurances to respect the sovereignty of the troubled government of Somalia, a country in the Horn of Africa scarred by civil war.

A statement released after Thursday’s meeting did not suggest the delegates had come up with any immediate solutions.

It said the diplomats “expressed the anxiety of Arab states overlooking the Red Sea toward the growth of the phenomenon of piracy. ... Piracy off the Somali coast is one of the consequences of the deterioration of the political, security and humanitarian situation in Somalia.”

Egyptian Foreign Ministry spokesman Hossam Zaki was quoted by the state news agency as saying: “All options are open.” He added that Egypt’s national security agencies will decide “whether a diplomatic and political solution would be preferred.”

The Red Sea nations also faced the prospect of how to end a standoff with pirates who on Saturday captured a 1,000-foot tanker carrying $100 million worth of Saudi crude. The bandits anchored the ship off the Somali coast and are holding the crew hostage.

The gunmen reportedly are negotiating with Saudi officials and are demanding $25 million to release the Sirius Star and its crew.

Zipping around in swift rubber boats and brandishing automatic weapons, Somali pirates have seized at least 80 ships off the Horn of Africa this year. The tactics have made perilous the shipping routes in the Gulf of Aden off Yemen that lead to the Red Sea, the Suez Canal and finally the Mediterranean. In October, Egypt collected $467.5 million in shipping fees from the canal.

The Red Sea nations, especially Egypt and Saudi Arabia, were expected to discuss the possibility of joint naval and military operations to secure the seas. The U.S., India, Russia and European nations have naval forces patrolling near the Gulf of Aden.

— By arrangement with LA Times-Washington Post