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Immunity
& entitlement Repeating
bad medicine |
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Waiting
for food inflation to fall
An
encounter in train
Russia
new pivot of Eurasian geopolitics
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Repeating bad medicine It
is easy to be wise in hindsight, but foolish to not learn from experience. The apprehensions of wrongdoing expressed at the time of handing over of the Punjab Institute of Medical Sciences, Jalandhar, to a charitable society headed by Akali leader Surjit Singh Rakhra have today proved right. The premises with fabulous infrastructure is lying in waste, with doctors refusing to work, beds empty and medical students’ future in jeopardy. To correct the situation, the government is giving its tacit approval to PIMS being handed further to a private company. The lack of transparency in the fresh ‘settlements' being worked out is likely to end up in a repeat of the first mistake of letting a society take over the place without a workable financial model. Two factors have to be ensured by the government. One, whoever runs the institute should be in a position to maintain the flow of funds required. Two, patients should receive affordable services on the lines of government hospitals. No private entity is going to enter an arrangement that does not allow it a profit. The ‘charitable society’ entrusted with PIMS has obviously failed to do much charity. The government’s patience with the society despite a string of violations of the contract ever since it was signed in 2009 brings into question the former’s integrity. It is especially so when the chairman of the society is a minister in the government, who is refusing to own up any responsibility. The public-private partnership model has worked in the case of roads, with users made to pay a heavy toll, but with health services it has yet to show sustained benefits. When treatment is given, someone has to pay. In the case of the poor, it has to be the government — through whichever channel — or they'll go without medical care. The government cannot escape the responsibility of universal delivery of two basic services, education and health. Whether in conjunction with the Centre or on its own, the Punjab government has to take charge at
PIMS.
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Be who you are and be that well. — Saint Francis de Sales
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Co-operative societies and education
The formation and working of Co-operative Societies in the Punjab villages is said to have stimulated a desire for education among the rural population. It is to be hoped that this desire will be very general and that the societies will be useful in starting primary schools for the education of the children of the members. It appears that many applications to open village schools have been sent up by the societies. But it is not stated whether their applications are favourably dealt with and schools are started. The Registrar of the Co-operative Societies says that “the Jullunder district will probably start its 10 per cent contribution for educational purposes at the end of this year, and I think that as time goes on the department of education will find the Co-operative Societies a very useful ally.
Censorship of plays
The question of censorship of plays has been well discussed in England where there is an effective censorship exercised in regard to most plays. In India apparently the matter is left to the discretion of the police authorities. The Police Commissioner of Bombay has recently circulated certain rules for the control of houses of public amusement. These rules affect the growth of dramatic literature and the development of dramatic art and leave the final decision to the Police Commissioner. A meeting of the proprietors of theatres, dramatists, and literary men was recently held in Bombay. Mr. D. G. Padhye, M.A. Editor of the “Indo-Prakash” presided. They complained that some of the rules were vague and others arbitrary. One of the rules empowered the Police Commissioner to prohibit plays when he considers them objectionable on the ground of violation of public morals, public peace and creating religious animosities.
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Waiting for food inflation to fall
The
blame game has started after the defeat of the Congress party in the recent assembly elections in four states. Many have blamed the weak state of the economy and rising inflation for the Congress defeat. Inflation has been a burning issue for long and has affected all, especially people with fixed incomes and those in the low and middle income brackets. After the elections there has been another 'triple whammy' which is a spurt in retail (Consumer Price Index) inflation which reached a high of 11.24 per cent in November. Annual food inflation was at 14.72 per cent and the Wholesale Price Index was at a new 14-month high of 7.5 per cent. Industrial growth, on the other hand, contracted by 1.8 per cent in October. The data show that the country is facing a serious crisis of high inflation and industrial slowdown--something which needs to be addressed immediately. The negative industrial growth is a shocker because in October, industrial growth was 2 per cent, which was interpreted as a sign of reversal of a declining trend and industrial recovery. The question is: what should the government do next? Another repo rate rise by the Reserve Bank of India seemed imminent and was factored in by the market. In fact, RBI Governor Raghuram Rajan raised the repo rates twice (which led to higher lending rates) since he took over in September 2013 to rein in inflation but this did not have much impact. On December 18 he surprised all by not raising the repo rates any further. He said he was waiting for further data on inflation and banking on food inflation coming down. Food inflation came down a few notches recently due to a better supply of vegetables in the market but this could be temporary. In general, the overall high prices have stubbornly remained a part of the economic landscape. One can trace this phenomenon back to the global financial crisis when in order to avoid any impact of the crisis the government gave two big stimulus packages to revive the economy and demand. This it created an unprecedented budgetary deficit and the fiscal deficit rose to 6.5 per cent. There was too much liquidity in the economy and prices started to rise and even though the government tried to control it by raising interest rates 13 times, inflation remained high. The inflationary expectations are also building up which means industrialists are reluctant to invest and are holding on to their money. Investment is at a low point also because of the high interest rates. There has been a virtual famine of fresh investment in industry and even real estate. Investment decisions have been postponed for other reasons also and one of them is political uncertainty. People are waiting for the government to change and the new government to make its policies clear. The rupee’s value keeps fluctuating which has created uncertainty and foreign investors are cautious. On the positive side, exports did rise as a result of the fall of the rupee but in November, they showed only 5.9 per cent growth. The forex reserves have risen to $291 billion. The FIIs are investing once again in the emerging markets, including India. The current account deficit has shrunk-more because of a compression of imports than through the rise in exports, and it would not put pressure on the rupee. Yet there are dangers of the FIIs going out again with the slow and steady recovery in the US economy and the much talked-about tapering off the monetary easing policy by the Federal Reserve will start in January 2014. This may lead to FIIs turning back to the US and there could be a dollar shortage and the rupee could fall further. The rupee's fall could also be triggered by demand from the corporate sector to pay off bunched-up debts. Regarding industrial growth, the problem has been a slowdown in demand, especially in consumer goods which grew only at 5.1 per cent in October 2013. The good monsoon this year, however, is leading to higher demand for consumer goods and durables, especially in the rural areas, but this is getting mitigated by the slow growth in demand in the urban areas due to inflation. On the whole what is keeping the economy afloat is the huge black economy. It is the poor who have been bearing the brunt of inflation silently and apart from facing high food prices, their own housing, transportation, jobs, children’s schooling and healthcare have all remained stressed due to corruption and has caused widespread discontent. The fiscal deficit target of 4.8 per cent of the GDP and the revenue deficit target, however, will have to be met and it will mean cutting expenditure. Yet the various subsidy programmes of the government will require big-ticket financing, which may make it difficult to cut expenditure. Revenue collection, on the other hand, is facing a slowdown and has been slower than normal this year. Any further borrowing of funds by the government from the market would create inflationary pressures. Proper management of food supplies will also be imperative. The government is perhaps keen on projecting a welfare-oriented profile in which the poor are looked after. This would contrast with the corporate-oriented outlook of BJP prime ministerial candidate Narendra Modi in the forthcoming LokSabha elections. The promise of welfare measures can go down well with the public in the May 2014 elections provided the government manages to rein in inflation and reduces corruption. A government that cares is important for the poorer sections than the one in which the rich are given more incentives and sops for promoting growth. The UPA government has assured the people food security and will do well to increase expenditure on healthcare but with so many additional expenditures, its hands are tied. It is in a bind because while meeting the fiscal deficit will require a ‘hair cut’ or austerity, the expectations from the government would be for more welfare schemes and sops by the public. More than anything else, the government’s image of delivering public goods to the poor efficiently and smoothly would be most important. It is also a corruption-free government that people are looking for and not one with more welfare schemes that are announced but not implemented. Prices, jobs, higher industrial growth and prospects of rapid economic recovery will remain the most important planks on which the next elections will be fought. The RBI’s latest move of not raising the repo rate may also help in economic recovery.
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An encounter in train On observing closely, I felt convinced that the lady sitting some seats away in the train was the girl from our old school. Even five decades later, the familiar glint in the eye and that dimple in the right cheek gave her away. After some hesitation I walked over to confirm. As I sauntered along the passage, the old school memories got revived. She was the only girl in our class of 46. Expectedly, for boys she was the centre of attraction, and mischief. The special peer attention and teachers' patronising protection had pampered her enough to complain often and get the errant boys punished. We sat on rough wooden double benches. The left seat on her bench had been removed. I occupied the bench on her right, across the narrow aisle. We had frequent eye contact though we seldom spoke. As a 13-year-old I could not read any meaning in her eyes beyond a sense of friendliness. During class tests, I would deliberately tilt my answerbook so that she could see. I was never sure if she took help but the very thought motivated me to prepare harder. Infatuation makes an early start in life. Not sure how and when it began but I found her increasingly in my thoughts. I was too shy and scared to tell her. One day I decided to put my feelings on paper. My linguistic horizon at the time terminated at my textbooks. What I wrote came straight from the heart. To add heroics I then pricked my finger, pressed out blood and signed my name in it. I folded the jagged page of the copy book and kept it in my breast pocket. I intended giving it as the class broke up; I somehow feared facing her after I did. I recalled my punctured finger had turned septic and remained under bandage for some weeks. I had concealed the cause from all. My heart thumped violently against the paper most of the day. My hands were clammy with sweat and I had difficulty in concentration. Just as I took out the missive preparatory to hand it over, she walked up and complained against another boy for teasing her. The offender then received six cane lashes. Realising the lucky coincidence had come as a providential saviour, I quickly slipped the note inside my history book and never looked at it again. Approaching now I asked if she was ‘K’ of our old school. As she furrowed her forehead in thought, “Roll number 24”, I said helpingly. She brightened, “Don’t tell me it is R...?” We reminisced and recounted names and many old events. Surprisingly she had noted much more about me than I had imagined. Feeling at ease I decided to tell her about the aborted note. As I began she said, “Yes, I know.” You know? “I asked somewhat rattled to learn that my best-kept secret was already known to the very person from whom it was meant to be hidden. You must have been nervous because it slipped out of your book as you were packing your bag”. She continued her easy smile while I went speechless. And when she teasingly enquired, “Does your finger still hurt?” I could feel the sharp pain of cane lashes on my outstretched palms. Time seemed to have frozen. It seemed an eternity before I could recover and mutter, “Let me introduce you to my wife”.
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Russia new pivot of Eurasian geopolitics As
the year draws to a close, it is worth recording a remarkable transformation of the fortunes of Russia as a power with renewed clout since its nadir by the end of the 1990s. In 1999, as the humanitarian crisis in the Balkans with graphic photos of emaciated prisoners behind barbed wire fences brought back deeply unsettling memories of the Holocaust, NATO powers decided to act on the oft-repeated but not always honoured slogan “Never Again.” The crucial site where the key decision among the major NATO powers was hammered out on the principles to resolve the crisis was the G8 summit in Koenigswinter outside Bonn, Germany, on May 6, 1999. Russia was the Serb’s major ally but, despite being a G8 member, the weakened, exhausted and demoralised ex-superpower was in a position to challenge the expanding reach of the United States in its unipolar moment. Indeed Russia’s essential irrelevance had already been demonstrated in the peace talks held at Rambouillet, France, and the designed-to-be-rejected “ultimatum” given to Belgrade by NATO in February, whose rejection was the trigger to NATO’s sustained bombing campaign from March 24 to June 11, 1999. As a result of the Gulf War in 1991, influential members of Washington’s policy elite had concluded that post-Cold War, Russia lacked the capacity and will to thwart American use of military power in the Middle East to pick off clients and allies of the former Soviet Union. In Europe itself, the borders of NATO and its de facto sphere of influence had been pushed relentlessly eastwards, closer and closer to Russia’s borders, breaking the understandings on which Russia had acquiesced to the terms of its Cold War defeat. Moscow fretted and fumed but could not check the trans-Atlantic alliance. Russia’s relations with the US became strained after Moscow’s decision to grant temporary asylum to Snowden, who leaked documents about widespread US surveillance activity Moscow accused Washington of ignoring Russia’s appeals for proof of Syrian Government involvement in chemical weapons attacks in Syria during the country’s more than 2-1/2-year-old civil war On avoiding the use of force against Syria, Russian President Vladimir Putin recently said, “This will improve the atmosphere in international affairs and strengthen mutual trust.”
The 1999 Rambouillet talks and Bonn G8 summit marked the decline of Russian power and the collapse of its influence even in central Europe and highlighted the growing global clout and role of the G7 (Canada, France, Germany, Italy, Japan, UK, USA) as an exclusive western club. (Japan has never demonstrated any significant capacity to say no to Washington-led western powers on any major geopolitical issue.) As power, wealth and influence seep from the old West to the still older Asian giants China and India, and the new kids on the block like Brazil, the institutions and sites of global governance are playing catch-up. Using purchasing power parity (PPP) dollars, the combined GDP of the five BRICS countries surpassed that of the 27 members of the European Union five or six years ago and, on present trends, will overtake the aggregate GDP of the old G7 countries around 2023. Increasing Russian influence In vivid contrast to Rambouillet and Bonn around the turn of the century, the St Petersburg summit of the G20 on September 5-6 marked the return of Russia to the centre of world politics as a significant player once again, the waning influence of Washington, and the symbolic shift from the G8 to the G20 as the new centre of global geopolitical gravity. The shutdown of Washington because of the spat between Democratic President Obama and Republican-controlled Congress did not simply underline the dysfunctional nature of current US politics. It also led to Obama cancelling his scheduled trip to attend the APEC summit in Bali on October 7-8, which then highlighted the enhanced presence of China and Russia. The G20 accommodates both the old G8 and the new BRICS (Brazil, Russia, India, China and South Africa), with Russia being the only country to belong to both clubs. The humanitarian crisis gripping the summit this time was Syria. The G20 met in the looming shadow of the threat of joint British-French-US (P3 — the three western permanent members of the UN Security Council) military strikes to punish the Syrian regime for alleged use of chemical weapons in a Damascus suburb on August 21. The P3 alliance was already fractured before the G20 summit when the British parliament voted down Prime Minister David Cameron’s request to authorise military action. The audacity of President Vladimir Putin lay in simultaneously decrying US self-belief in exceptionalism while successfully repositioning Russia to make it the indispensable nation in the Syrian crisis and the Security Council, much as the US had assumed that indispensable role in the Balkans crisis at the end of the last century. Even more crucially, the symbolism was unmistakable. The western P3 are the warmongers and Russia is the diplomatic peacemaker. Most headlines were in agreement: Russia is back! Describing Obama as a diminished president on the world stage, Peggy Noonan in her Wall Street Journal column (Sep. 27) noted: “If you draw a line and it is crossed and then you dodge, deflect, disappear and call it diplomacy, the world will notice.” Russian diplomacy secured the great disarmament goal of Syria’s agreement to verifiably and permanently destroy its chemical weapons stockpile and dismantle the infrastructure. Had the agreed timetable been delayed, Washington would still have found it hard to justify a strike: it has not been able to meet the 10-year deadline from 1997 to destroy its own stockpile, nor even the deadline extended by another five years. In the event, by all accounts Syria has been cooperating fully with the agreed steps and schedule for the destruction of its CW capability. The price of this was to assure Bashar al-Assad’s continuance in office: no regime change. The West has seriously underestimated his resilience, ignored the gravity of the threats to key Assad backers if his regime collapses so that they are prepared to fight to the death to defend him, and miscalculated the openings for jihadists and al-Qaeda in the civil war. Retired US Air Force General Michael Hayden, head of the CIA until 2009, told a Jamestown Foundation conference recently that there are three possible outcomes to the conflict in Syria. The first is continuing conflict between ever more extreme rebel Sunni and pro-government Alawite-Shia factions backed by Christian minorities; the moderate rebels supported by the West have steadily lost ground to the jehadists. The most likely outcome was disintegration of Syria as a state, which could threaten the existing artificially drawn borders all over the region. The third possible outcome is the survival of the Assad regime. Given the alternatives, General Hayden concluded reluctantly that Assad’s survival was the best of the three outcomes. The Syrian solution The crisis in Syria has also always been as much about Iran’s relations with the West and with Saudi Arabia. Efforts to exclude Iran from any role in determining Syria’s future was thus a self-deluding strategic error. In the sectarian Sunni-Shia divide, now infecting much of Middle East politics, Riyadh exercises significant influence on the Islamist rebels while Tehran backs Assad. Should the interim Geneva deal on Iran’s nuclear program produce a longer-term comprehensive settlement, it will open the way for seeking Iran’s cooperation on the crisis in Syria as well. According to the BBC’s account of the G20 summit (Sep. 6), “Correspondents in St Petersburg say opponents of US military intervention appear to far outnumber supporters within the G20.” Just as Rambouillet and Bonn in 1999 rubbed Russia’s nose in the dirt of its historic Cold War defeat, so a Russian official in St Petersburg mischievously called Britain a “small island.” The western members had no real cause to be caught by surprise. Eighteen months earlier, at the BRICS summit in New Delhi in March 2012, the five leaders had registered joint opposition to the US and European efforts to isolate Syria and Iran as preludes to regime change or war. The summit communiqué emphasised the importance of peaceful transition and diplomatic dialogue in “a Syrian-led inclusive process” that respects its independence, territorial integrity, and sovereignty. “The situation concerning Iran cannot be allowed to escalate into conflict,” the five leaders added. Moreover, all the BRICS countries back a central role for the UN in authorising any use of military force. Politically, the Delhi Declaration had signalled growing self-consciousness by the five BRICS that they have global weight and mean to begin using it, but hubris prevented the G7 from receiving and decoding the signal. In the BRICS, China exhibits two related but distinct interesting features. First, it is in the process of transcending its regional footprint to focussing on global geopolitics. Second, it shows signs of transitioning from a largely passive to a more active global role. The reaffirmation of the Security Council centrality in deciding on the use of force and in enforcing global WMD regimes enhances China’s international leverage and authority as a P5 member. In St Petersburg, alongside Syria being put in the CWC box, Washington, was put into the Security Council box. Will the new normal be that a stable world order should be UN-centred and based on P5 consensus? Or is that a fleeting phenomenon? The writer is director of the Centre for Nuclear
Non-Proliferation and Disarmament, Crawford School of Public Policy, Australian National University
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