The Tribune, Chandigarh, India

Politics of quotas
EC’s restraining act is reassuring

The Election Commission clearly meant business when it pulled up this week the Union Law Minister, Salman Khurshid, who also holds the minority welfare portfolio, for promising a sub-quota for the backward classes among the Muslims. Describing the poll promise as a ‘serious’ breach of the model code of conduct, the Commission served the Minister with a show-cause notice, despite Khurshid’s plea that he had merely reiterated his party’s programme and not made any appeal on the basis of religion.

The day after, the Commission directed the Union Government to put on hold the 4.5 per cent sub quota for the backward classes among the minorities, including Sikhs and Christians, in the five poll-bound states of Uttar Pradesh, Punjab, Manipur, Uttarakhand and Goa till the electoral process ends on March 9. The directive followed strident opposition to the sub-quote from the Bharatiya Janata Party, which accused the Congress of pushing the country to the brink of a ‘second partition’.

There is little doubt that the hurried notification for the sub-quota for minorities, issued barely two days before the model code of conduct came into force in the five poll-bound states, was meant as a carrot to the large section of minority voters. But while the sub-quota is meant for the backward classes among minority communities, the BJP’s interpretation that the sub-quota is based on religion and is, therefore, violative of the Constitution, does not appear convincing.

Islam, Sikhism and Christianity do not promote a caste hierarchy, but it would not be factual to claim that ‘backward classes’ do not exist among these communities. What is more, neither the quota for the Muslims in UP promised by Khurshid, nor the 4.5 per cent ( of the 27 per cent reserved for the OBCs) quota is substantial enough to make much of a difference on the ground.

The rhetoric of ‘reservation’, unfortunately, remains a poll gimmick. And despite the Election Commission’s directive, the Congress appears to have succeeded in diverting attention from the Lokpal fiasco, shifting it to an affirmative action instead.

Open up aviation
Airlines need FDI, not aid

The new Aviation Minister, Mr Ajit Singh, has ruled out a bailout to private airlines. This is apparently in response to the troubled airline Kingfisher’s demand. For Air India, however, he promises all help because it is the government’s obligation.

A few days earlier the minister had said that he would not let any airline close down. If some airline cannot carry on, the government need not play the saviour every time. Many feel it is “none of the government’s business to be in business”.

The government cannot afford to, and should not, endlessly pump the taxpayers’ money to keep the ailing airlines alive, private or public. Aviation is a highly competitive and capital-intensive industry. Only the fittest can and should survive. The airlines cannot ask for a situation where profits are private but losses become public. They are in business. Those that cannot be run efficiently should be allowed to wind up. The government’s job is to provide a level-playing field with a long-term clear policy framework in place. It should not arm-twist banks to extend soft loans to sick airlines. Some banks are in deep trouble as airlines are on the verge of default. Banks are accountable to their share-holders and the government cannot saddle them with non-performing assets.

Airlines have landed in trouble due to the badly timed acquisition of new aircraft and accumulation of heavy loans shortly before the 2008 recession, which was followed by a debt trouble in Europe and a dwindling recovery in the US in 2011. Economic troubles have hit foreign travel almost every where. For too long the RBI has raised interest rates, making it difficult for airlines to repay loans. The rising fuel costs have only added to their woes. The solution is not aid but opening up of aviation to 49 per cent foreign direct investment – a demand to which the government seems receptive.

Thought for the Day

The evils of government are directly proportional to the tolerance of the people. — Frank Kent

ARTICLE

Democracy and poverty
Unhealthy politics is spoiling the system
by S. S. Johl

Politics is a highly sacred profession. It requires honest and service-oriented practitioners impregnated with statesmanship. Wherever in the world politicians of integrity and commitment governed a country, socio-economic development moved on optimum growth path with speed. History of governance provides enough proof that competent and committed political leaders have made success of even weaker systems, and incompetent and dishonest or corrupt leaders have failed even an otherwise good system.

For instance, the socialist system of governance is based on inclusive growth and development. It talks of a just social order based on the principle, “to each according to capacity and to each according to the need”. This system worked fairly well in the erstwhile USSR for quite some time, but with time, inefficiency, favouritism, overly centralised control, rigidity, selfishness, corruption and other such evils overtook clean governance and ultimately the country got disintegrated.

Chinese socialism has been handled better by its leadership in a pragmatic manner on the principle of “Marxism-Leninism-Maoism in a dynamic context”. Whereas socialism in the USSR failed due to frigidity imposed ruthlessly, ignoring the dynamics of international developments, Chinese communism moved with the times and is holding on itself fairly successfully. The same system of communism in Cuba has been managed much better by the country’s committed leadership in spite of its most powerful enemy, the US, watching closely. In fact, no system of governance, whether socialism, communism or capitalism, is perfect or free of weaknesses. It is the ingenuity of a diligent and alert leadership that compensates for shortcomings and fills up the gap.

The free market economy or capitalism too has to work within some healthy parameters and requires rational policies, dispassionate monitoring, self-discipline and effective auto-controls. When governance slips on any of these aspects, the system drifts towards chaos of the type we are witnessing in the free market economies with its consequential impact on the countries whose economic interests are enmeshed with these major economies.

The system of governance and socio-economic development have inviolable interactive influence on the healthy growth and well-being of society. Inclusiveness is the key word and a pivotal point. Any deviation from this central point leads to below optimum outcome. Farther the economy moves from this point, more vulnerable it becomes to the debilitating influences of negativity of governance. The history of governance shows that in spite of its fragility on several counts, democratic governance of a free market economy with built-in auto-controls in the context of operational aspects is the best option. When its tenets were violated anytime and anywhere, the economies concerned got derailed sooner or later.

India adopted the governance system of a socialistic-democratic republic with the flavour of a mixed economy. The Indian system of governance has been based on universal suffrage and a socialistic pattern with the public sector having the commanding heights. There was no fault in the system, yet the human element that governed the country failed the system through rigidity in policy formulation and implementation. Inefficiencies, favouritism, the rigidity in approach, a frigid bureaucracy and self-seeking politicians brought the system down to the nadir of misgovernance and inequity.

The economic situation came to a point when the country was left with foreign exchange reserves of only $ 1 billion. It reached a stage where it could default on its repayment obligations on international borrowings. However, good sense prevailed and funds for repayments were obtained through pledging the country’s gold reserves with the Bank of England. The gold had to be physically shifted to the coffers of the Bank of England. Yet the decision sent out healthy signals, indicating that India would never default on its repayment obligations. As a result, when the country floated Resurgent India Bonds, these were oversubscribed and the economy again had healthy financial fundamentals.

From a socialistic pattern of the economy the country has gradually moved to the system of privatisation, liberalisation and globalisation of the economy with the elements of a free market visible all over. The system, in spite of its vulnerabilities to the volatilities of the international market, is paying dividends in terms of higher rates of growth much above the Hindu rate of growth. Yet the inherent weaknesses of the system are leading to inequities in the ownership of assets and inequalities in the distribution of incomes, and it is happening at an increasing rate. The situation is analogous to a person having one leg getting longer and longer and the other shorter and shorter. Such an economy cannot move on the optimum growth path at a desired rate. A small percentage of the population is getting richer day by day and a large majority poorer and poorer.

These inequities and inequalities have vitiated the democratic system of governance. The command of society has gone into the hands of the rich with unaccounted money and a large section of the poorer sections of society is virtually on sale for casting their votes. It is a shocking revelation that leaders of several areas where mostly the poor live openly demand money for their votes. Those who have adopted politics as a commercial venture have made it a family business, primarily on the strength of their unaccounted money, which they spend liberally. And after coming to power they make more money than they spend in elections through illegal and unhealthy means.

Thus, the democratic system has been damaged by the election system which has come to depend on money power, criminality, muscle power, lies and false promises that help mislead illiterate and poor voters. After elections, for five years the voters are again left high and dry with no way to get their grievances redressed.

Unfortunately, the people have no choice — they have to choose from the same political class, a shifting mass from one party to another. One wonders if this was the freedom for which our elders sacrificed their lives!

The writer, a former Vice-Chancellor of Punjabi University, Patiala, is a well-known economist based in Ludhiana.

MIDDLE

A daughter’s dilemma!
by Manika Ahuja

I took with a pinch of salt a recent report of a barber being gifted a car when he was sent with an invitation for the groom and his family in accordance with an old tradition till I attended that big, fat wedding with my parents. On the way back my parents were engrossed in how expensive weddings had turned and how much they themselves would require for their own daughter’s marriage one day!

The discussion soon turned to some other weddings. At one “milni” before a wedding, 11 solitaire rings costing Rs 1.5 lakh each and 7 BMW cars were gifted by the opulence-crazy parents to close relatives of their daughter-in-law. A prominent industrialist got a special necklace for his daughter worth Rs 2.5 crore and gifted 11 solitaires to the nanas, dadas, mamas, chachas, tayas and their spouses.

I was shocked to learn that one father had gifted a helicopter to the groom as if to make a statement that gifting cars to one’s daughter on her wedding was passé. This wedding attended by 18,000 guests reportedly cost over Rs 250 crore. These weddings are rightly being described as “extravagant”.

The conversation brought tears to my eyes when my mother pointed out to my father that this was the major cause for the most abominable female foeticide. I for once could immediately relate with those poor parents who did not allow their little ones to come to this harsh world.

My father could understand my predicament and quoted William Shakespeare, “My little daughter is my little angel when she smiles,/ Oh yes she’s my little angel and I don’t ever want to see her cry.” That made me smile again but I did not find an answer to why this show of opulence for their little angles.

I have read Shakespeare telling his lady love about lasting relationship in Hamlet, “Doubt thou the stars are fire,/ Doubt that the sun doth move,/ Doubt truth to be a lier/ But never doubt I love”.

Why is then such show of material wealth when marriage is a manifestation of pure love? No doubt, a survey by a leading matrimony portal revealed that only 49 per cent girls preferred arranged marriages as against the majority 51 per cent who liked love marriages. A huge majority of 93 per cent girls were interested in studying or working after their marriage. That shows the change sweeping through the system which some affluent people are yet to notice.

I wondered for how long these little angles would be treated like this? What more they need to prove now when they have excelled in various fields? They are shining in business, sports, politics, arts, hospitality, entertainment, literature, etc, and keep raising the bar and breaking untouched barriers. My dilemma like “to be or not to be” continued on the way back home from the wedding! It still continues.n

OPED-Document

India, China can ill afford to remain adversaries
India and China are bound to remain strategic adversaries, believe some experts in both the countries. But they ignore the ability, experience and wisdom of leaders in the two countries to manage differences since 1988 at least. Nevertheless, dialogue and communication between business, media and scholars hold the key to better relations
Shiv Shankar Menon

Beijing: Top Chinese diplomat Dai Bingguo and Indian Ambassador to China, S. Jaishankar (Right) at the valedictory function of India-China year of exchanges at the new Indian Embassy premises in Beijing. — PTI Photo

Today India-China relations attract attention beyond our two countries. International developments and achievements in domestic construction by our peoples in the last few decades have given our relationship wider significance. Relations between India and China and their new equilibrium hold an important key to the emerging economic and strategic landscape of Asia and, to a certain extent, the world.

Let us look briefly at the context within which we conduct our relations and then look at the content of our relations today.

The Context

FRIENDS NOT FOES

l Bilateral trade reached over US $ 67 billion in the first 11 months of 2011
l China has remained India’s largest trading partner in goods since several years
l Indian investment in China in 676 projects is today worth US$433 million
l Chinese investment in India worth US$300 million
l India is China’s most important market for project exports with the cumulative value of the contracted projects at US$53.5 billion
l 7,000 Indian students studying in China today

The basic facts are evident and well known. India and China are the two most populous nations on earth, are the two largest developing countries, and are among the societies and economies in the world that are transforming themselves most rapidly. They are the largest and the third biggest economies in Asia. China has the distinction of being the second largest economy in the world. The two countries are building a strong domestic economic base and rapidly training scientific and technical manpower. When much of the world is reeling under recession or grappling with political turmoil, our two countries have managed to register reasonably healthy rates of growth and maintain stability.

We share a common geopolitical space and similar socio-economic aspirations for ourselves. The future is less certain or evident. Uncertainty in the international system is at unprecedented levels. The economic and security situation facing both India and China has become far more complicated in the last few years. On the positive side, thanks to sustained growth rates, high savings rates and a prudent financial approach, Asia and the developing world have witnessed a greater accretion of relative economic power following the financial crisis of 2008. In Asia, larger economies like China, Japan, India, South Korea and Indonesia, all members of the G-20, have increased their ability to influence economic outcomes. The BRICS process has also gained ground. These are welcome developments.

At the same time, risks remain for economies which are still developing. An early return to robust growth and spending in the developed world are necessary for world economic recovery. The US, Europe and Japan still account for approximately $20 trillion of consumption expenditure as against about $2.5 trillion by China and India together.

A re-balancing of economic structures in our countries in the face of such differences could be difficult. More generally speaking, the relatively benign external environment in the last two decades is changing negatively and is threatened by protectionism in the developed world.

World politics also faces new challenges. The balance of power is in flux in Asia and the world. As uncertainty rises, powers follow hedging strategies. The mechanisms of strategic communication and consultation and a common security outlook are evolving slower than the changes in objective reality.

Besides, both India and China are increasingly linked to the rest of the world, through trade, investment and their Diasporas. The impact of changes in West Asia on our energy security, for instance, is an example of how developments further away from our shores also affect India and China more and more profoundly. It is therefore natural for us to take ever greater interest on global issues.

Equally, global issues like climate change, nuclear proliferation and cyber and space security matter more to both India and China in this globalised world as they influence our development, peace and prosperity.

India-China relations

What does this context imply for India-China relations?

Both India and China currently give the highest priority to their domestic transformation, which will take time. A peaceful periphery, a stable and benign world environment and continued prosperity among our economic partners are of utmost importance to both of us. This will remain so for quite some time. It is in our mutual interest to work together, bilaterally and with other partners, to reduce uncertainty and create an international environment that is supportive to our domestic transformation efforts. Economics and development are not zero-sum games.

It is for this reason that we believe that there is enough space for both India and China to realise their development aspirations.

Economically, we are already integrated with each other to an unprecedented extent. Our bilateral trade reached over US$67 billion in the first 11 months of last year, and China has consistently remained our largest trading partner in goods for several years.

However, investment flows between us have not kept pace with trade. Indian investment in China worth a total of US$ 433 million is spread over 676 projects, while Chinese investment in India is worth nearly US$ 300 million. There are several opportunities for cooperation in developing infrastructure. India is already one of China’s most important markets for project exports, with a cumulative value of contracted projects at US$ 53.5 billion and turnover realised at US$ 24.6 billion.

What is less noticed is the range of contact between our two societies. For instance, over 7,000 Indian students are studying in China today. This scale of interaction never occurred before in history.

Naturally, the corollaries of such an intensification of economic and social engagement are issues of trade imbalance, diversifying the trade basket and commercial disputes. The two governments have taken several initiatives to make our trade more balanced and harmonious, and to facilitate and streamline our business engagement. More remains to be done and we will learn by doing.

For instance in September last year we held the first Strategic Economic Dialogue between India and China which identified several areas of promise for the future. Equally the business communities and their Chambers need to take advantage of growing opportunities while sharpening competitive edge. I am convinced that our business and economic engagement with each other and with other countries will intensify as we seek to overcome the prospect of sluggish recovery in the traditional engines of growth in the world economy.

Our Governments have common or similar positions on the global development agenda, in WTO and on climate change, which has made it possible for us to work together internationally.

Adversaries ?

A few vocal experts in our two countries and elsewhere argue that notwithstanding the numerous cooperative elements in our economic relations and approach to international issues, India and China are bound to be strategic adversaries. I find such determinism misplaced. It ignores the successful experience and demonstrated expertise of both governments in managing differences and building on commonalities for over three decades and particularly since the Rajiv Gandhi visit to China in 1988. It also ignores the wisdom of the leaders of the two countries, who have consistently worked to ensure that problems are managed in a mature manner.

The issue is whether we can continue to manage the elements of competition within an agreed strategic framework which permits both of us to pursue our core interests. I see no reason why that should not be so. Indeed I would go further and say that the rapid changes in the international situation today also create an opportunity for India and China to work with others to shape benign international outcomes.

The boundary question remains unresolved, and there is no denying that it is a difficult issue. However, a number of mechanisms have been put in place to ensure that the border stays peaceful while we seek a settlement of the boundary question. On the settlement itself, we are in the second stage of the three stage process of agreeing principles, a framework and finally a boundary line.

Similarly, on other bilateral issues of potential difference there exist mechanisms of dialogue and communication to address them. We appreciate China’s assistance to us in tackling floods and natural disasters in the downstream areas of our shared rivers. There is a need to widen the scope and deepen the level of our communication in some areas. These include new challenges and new issues in the changing context of our relations. I am confident that we will do so.

Indeed, some security challenges, especially of the non-traditional variety, are common to India and China, and offer an opportunity to work together. Both India and China face the challenge of terrorism in our shared neighbourhood. It requires common effort by all members of the international community to tackle terrorism.

Energy is the key to domestic transformation in both India and China, which is why both of us have a common stake in energy security, and in the freedom and security of transportation on the global commons. We both have an interest in global public goods like a peaceful order, freedom of the seas and open sea lanes. We similarly need to address issues of piracy with common resolve. As important maritime nations, we can contribute to each other’s maritime security by coordinating approaches.

Asia’s security is interlinked across this great continent. India has therefore argued for an open, inclusive Asian security architecture. India and China will have key roles to play in forging a new compact for common and collective security for Asia. We should also contribute within our capacity to the global public goods that are increasingly important to our well being.

The robustness of our bilateral relation will depend on dialogue and communication so that the potential for misunderstanding and miscalculation is limited. This dialogue process must not be limited to the two Governments.

Today, there are multiple stakeholders in our relations as also multiple determinants of these relations. Each of them, be it businessmen, media or scholars of the two countries, has a responsibility to take our relations to the desired level of equilibrium. It is therefore absolutely essential that they acquire an informed understanding of their neighbour. Today, as both India and China change fast, our understanding of each other needs to keep pace. Both the quality and the scale of our interactions have also grown so rapidly that we need to learn new ways of dealing with the relationship.

To conclude, India and China have demonstrated an ability to deal with difficult issues and to build a cooperative partnership based on common interests. Its regional and global impact, and its long term significance to our own development, is what makes the India-China relationship strategic in the true sense of the term.

I do hope that I have been successful in giving you some idea of why I am confident that by working together India and China will be able to successfully face the challenges that the new geopolitics are throwing up, and would best serve their own national interests by further deepening their strategic cooperative relationship.

The address delivered by the National Security Advisor Shiv Shankar Menon this week in Beijing on India-China Relations