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Friday, 26 July 2019

Billionaires blame penniless Mexicans for US ills (Pakistan Observer)

M D Nalapat

HALF of the population of the United States detests President Trump while almost the same number adores him. The 45th President of the US is unusually honest for a politician, making no secret of his views, no matter how unpleasant these may be to more than a few. During the 2016 campaign, he repeatedly said that he liked people who had little or no education, as such people would be inclined to vote for him rather than for his opponent. Indeed, the more educated the person, the less likely he is likely to be a supporter of Donald J Trump. During the 2016 presidential campaign, Hillary Clinton termed supporters of Trump as “Deplorables”. Her irrepressible opponent seized on the term and began to call himself and his supporters as “deplorables”, revving up their common hatred of Hillary Clinton. For more than six months, the Clinton campaign had silently but energetically sought to boost Trump against his Republican Party opponents, in the belief that he was the easiest Republican nominee to defeat in the polls.
To the dismay of the Clinton machine, Trump turned out to be a formidable opponent, landing several punches to everyone that he received, and connecting with the imagination of tens of millions of voters. Hillary Clinton made the mistake of underestimating Trump, and as several of those who have done business with him in the past can testify, this is a bad mistake. It was not only his father Fred’s wealth but an innate shrewdness and bulldog determination that earned Donald J Trump his 4-year stay in the White House, and which may assure him another four years, if the US economy continues to do better than expected, and the Democratic Party (still influenced if no longer dominated by the Clinton machine) chooses a cautious and “safe” candidate such as Joe Biden over a Bernie Sanders or an Elizabeth Warren. While he was at his peak during the 2015 struggle for securing the Democratic Party nomination for the presidential contest, during this round, Senator Bernie Sanders seems to have lost some of his appeal, possibly because of the manner in which he joined Barrack Obama in behaving like a cheerleader for the Clintons during much of 2016.
The way in which Bernie Sanders raised the white flag of surrender to Hillary Clinton even after he was cheated of the nomination by a series of dirty tricks by the Clinton-controlled Democratic Party machine, his supporters got dismayed and began to believe that much of his aggression was in words rather than in action. Sanders thought that his forgiving stance would ensure that the “lesser evil” (Hillary Clinton) prevailed over the “greater evil” (Donald Trump). Instead, by strengthening the impression that the Democratic Party was in the pocket of the Clinton machine, Sanders paved the way for Trump to win.
Rather than lead the 2020 field as a candidate of his qualities ought to have, Sanders is behind Joe Biden, the candidate of the Clinton machine, in the opinion polls, and is only a bit ahead of Senator Elizabeth Warren, whose record in fighting the Billionaire Club is as impressive as that of Sanders himself. Another impressive Democratic Party candidate independent of the Billionaire Club is Senator Kamala Harris, who needs to race ahead of the rest of the field during the coming two months if she is to emerge as the presidential or (more likely) the vice-presidential candidate for her party in the 2020 polls. Donald Trump, of course, is a billionaire himself, who makes no secret of his view that billionaires make the best Presidents and Cabinet members, a stance that seems to have resonated with tens of millions of underprivileged voters with European ethnicity who seem to admire billionaires and revel in their being the rulers, despite this small club of hyper-rich individuals ensuring government policies which benefit them at the expense of the rest of the population.
Trump is loyal to the Billionaires Club, which is why he has become a megaphone for the message the latter seek to blare out to the people of the US. This is that the problems being faced by tens of millions of US citizens have been caused not by the predatory greed of the hyper-rich, but by the waves of impoverished Mexicans and other Central Americans trying to enter the US without a visa. Most are family units, often with very young children. What they seek is a job that would enable them to send money to those back home who are destitute. However, the Billionaires Club is relentlessly using the media to portray such intending migrants as a bagful of criminals whose primary purpose is loot, murder and rapine. The hundred million or so US citizens who believe such a nonsensical claim thereby get separated from the fact that toxic policies put in place by Presidents Bill Clinton and George W Bush, policies that were only tinkered with and not discarded by Barrack Obama, are what is responsible for the stagnation in incomes of the middle classes and continuing poverty on a scale that is impossible to conceal.
In the capital of the US, pavements of filling up with desperate individuals holding up plastic cups for passers-by to fling a few coins in. More and more of such unfortunates are of European rather than African ethnicity, hence the utility to the Billionaires Club of having a US President who manages to direct public anger at economic woes away from the Billionaire Club to hundreds of thousands of destitute migrants from south of the US, with a few even coming from North Africa and South Asia. President Trump has diverted public anger away from folks like him, the hyper-rich, which is why the Republican National Committee is getting so much more in donations than the Democratic National Committee. Judging by the confusion over policy and personalities in the Democratic Party, the odds are rising that Trump will secure a second term on November 8, 2020. Should that occur, and should Trump continue with Clinton-Bush policies that give a disproportionate quantum of advantage to the Billionaire Club, his second term is likely to be a stormy one, not so much in the US Congress but on the streets.
The substantive divide within the US is not between “white” and “black” or “coloured” US citizens but between the hyper-rich and the next. Despite efforts by the Billionaires Club to ensure that public fury remains diverted from them to the human tragedy at the southern border of the US, a time of reckoning in the shape of an administration that does not just talk about the poor (as Obama did) but which actually does something for the poor (as Franklin D Roosevelt and Lyndon Baines Johnson did) will dawn, if not in 2020, then latest by 2024.


Thursday, 18 July 2019

President Trump focuses on second term (Pakistan Observer)

M D Nalapat

FORMER Prime Minister Manmohan Singh is known in India as the “accidental” Prime Minister. His former Information Advisor, Sanjaya Baru, has written a very readable book called the “Accidental Prime Minister”, which was later made into a Bollywood movie. Baru wanted his boss to take advantage of the immense powers of the Prime Ministership and ensure that it was Manmohan Singh and not Sonia Gandhi who steered the ship of State. However, there was nothing even remotely “accidental” in the decision of Congress supremo Sonia Gandhi to select Manmohan Singh as the Prime Minister, given that her taking over the job would have given the BJP a juicy target to derive political mileage from. Atal Behari Vajpayee as Prime Minister believed that as long as a Catholic of European descent led the principal opposition party, the BJP was safe. Genial to friends and unforgiving to enemies, Vajpayee went out of his way to ensure that Sonia Gandhi was protected from the darts thrown in her direction, many from within his own party.
Those who maintained good relations with Sonia Gandhi within the BJP, such as the always charming Arun Jaitley, were promoted while critics such as Govindacharya were marginalized within the BJP. The most persistent critic of Sonia Gandhi, former Harvard professor Subramanian Swamy, was kept out of the BJP by Vajpayee, joining the party only after Narendra Modi emerged as the prime ministerial candidate of the country’s biggest party. However, Vajpayee’s calculations went wrong when his government lost its mandate to a coalition led by Sonia Gandhi in 2004. The defeat came as a surprise to Vajpayee and to his ministers, who did not even remove the computers they had been using while in ministerial office before handing over charge to the nominees of the Congress Party and its allies. Certainly the computers would have yielded a treasure trove of information about the Vajpayee ministry. In contrast, after the Congress Party lost the 2014 parliamentary polls to a supercharged BJP led by Narendra Modi, they were given ten days to “clean up” and to make decisions to the last day in power that would benefit them.
The BJP won the election on May 16 and waited until May 26 before swearing in Narendra Modi in the presence of SAARC leaders, including then Prime Minister Nawaz Sharif of Pakistan. Up to now, Prime Minister Modi has shown great forbearance where his predecessors are concerned, giving a clean chit to former PM Manmohan Singh (who held charge of the Coal Ministry when several criminal transactions took place that were later punished by the courts. The incoming government took the view that the Prime Minister’s Office under Manmohan Singh was blameless despite several dubious decisions having been cleared during that period. It needs to be said the Manmohan Singh is known to be personally honest, but regarded as having turned a blind eye to wrongdoing sanctioned by Congress Party leaders. The Modi government could have taken the view that Manmohan Singh as Prime Minister was culpable for wrong decisions taken, even though he personally did not derive any pecuniary benefit from such actions.
However, he was excused. In fact, no Minister in the Manmohan Singh government has been sent to jail under Narendra Modi, who has allowed anti-corruption agencies to take their own time investigating some of the many corruption charges that the BJP had levelled against the Manmohan Ministry during the latter’s decade in office. In fact, as Prime Minister, Manmohan Singh had sent one of his own Cabinet Ministers to prison and was about to send another when he was defeated in 2004. After the new government took office, the jailed minister was released from prison and the minister who was about to enter the portals of prison was given a reprieve from such a fate. Although a former minister, P Chidambaram, is being investigated by the anti-corruption agencies on multiple charges of wrongdoing, he has been granted bail more than two dozen times by the courts, who seem unconvinced by the Government of India’s case against him.President Trump too has shown mercy towards his rival in the 2016 presidential contest, Hillary Rodham Clinton. Rejecting the advice of several of his supporters, Trump refused to launch prosecution against Hillary Clinton, not even investigating the funding of the Clinton Foundation or retrieving through data systems the several thousand emails that the former Secretary of State deleted before they could be accessed by investigative agencies. Interestingly, Hillary Clinton has repaid this act of grace of President Trump by unleashing her many supporters on the 45th President of the US. A campaign that can only be described as frenzied erupted in the US the day that the new Head of State vetoed suggestions that the Clintons be formally investigated. That campaign has continued without pause since Trump was sworn in on January 20, 2016 and this is despite the inability of a clearly biased Special Counsel (Robert Mueller) to dig up anything that could criminally compromise Donald J Trump, who seems only to have been further energized by the unprecedented attacks on him.
In a desperate effort to further persecute (if not successful in legally prosecuting) President Trump, a motion has been moved in the House of Representatives to impeach the President. This is unlikely to be adopted, as the majority of even Democratic Party members in the House of Representatives understand that such a process would make Trump even more a hero to nearly half the voters of his country. President Trump is deliberately and conscientiously pursuing a line of action designed to attract his base even as it angers those who would anyway never vote for him. Given the confusion within the Democratic Party, only a war with Iran could derail Trump, and the New York billionaire understands this well.
However, those in the Administration who want war – such as National Security Advisor John Bolton – are ensuring that partners of the US adopt lines of action that are designed to provoke Iran into a reaction that could lead to war. An example was the UK seizing an Iranian oil tanker, an act of folly that would never have taken place had Prime Minister Teresa May not been so completely distracted by her impending exit from office. The war of 1914-1919 began as a consequence of mistakes and accidents. Hopefully, the world will avoid a repeat of the conditions which created such a conflagration. US voters like tough talk but recoil from body bags, something that Trump understands perfectly. Hopefully therefore, the standoff between Washington and Teheran will cool rather than overheat during coming weeks. Such a damping down of tensions would assist President Trump to win a second term in 2020.


Sunday, 14 July 2019

Modi’s idea of India replaces Nehru’s construct (Sunday Guardian)

By M D Nalapat

The Nehruvian construct has long lost its popular resonance, support. 

The objective of almost all politicians is simply to win the next election. This was true even of Indira Gandhi, who was described in divinely lyrical terms by A.B. Vajpayee in 1971. In contrast, Jawaharlal Nehru sought to achieve much more than just another term in office. Nehru had been chosen by Mahatma Gandhi for the PM’s job because he would (in the saint’s view) be the leader best able to transform into reality Gandhian precepts. India was indeed transformed during 1947-64, the period when Nehru occupied the Prime Minister’s room in South Block. Central planning and the eclipse of the Indian private sector by state-owned behemoths took place, as did the putting into place of a social policy that aimed to re-assure the biggest minority community through the state, in effect, treating them as the majority and Hindus as the minority. While substantial social changes were introduced by law made applicable by Nehru to the Hindus, the Muslim community was untouched by reformative legislation. Despite having large numbers still in thrall  to the “Two Nation” Partition mindset, which steadily gained ground from the early 1930s despite the efforts of the Mahatma, the Muslim community was left to past practices, many not compatible with the requirements and thought streams of the 20th century. The Nehruvian education system took away the state-funded window for the teaching of the English language to the poor, restricting fluency in that language and its global advantages to the relatively affluent. Science and technology were regarded as best left to state institutions, while foreign policy was transformed as comprehensively as the nation’s economic and social patterns were. Nehru changed India in a way that was gently sought to be altered by the homespun vision of Lal Bahadur Shastri, but whose premature death took away this danger to the Nehruvian construct. Despite some changes at the margin during the periods in office of P.V. Narasimha Rao and A.B. Vajpayee, the Nehruvian construct continued its sway over the “Idea of India”. For Vajpayee himself was far from being a Ram Manohar Lohia, who had little positive to say about Nehru and the changes made in the country by the policies adopted by one of the two most powerful Prime Ministers in free India’s history. The second was not Indira Gandhi, for her period of awesome power (1975-77) was based not on popular consent but on coercion.
Rather, the second mega-powerful PM after Nehru is Narendra Modi, who was not pitchforked into the job by a patron, but who stepped into it (and has retained it) as a consequence of grassroots support. Just as Nehru did, Modi too wishes to fashion a country that would better fit his standards and vision. During the five years of Modi 1.0, this columnist was explicit that a second term for Modi would see immense changes in the country that he for decades travelled and saw the hard way, on foot and by road. The Nehruvian Idea of India is being replaced by the Modivian Idea of India since 2014, and this change is what has accelerated since the verdict of the 2019 Lok Sabha polls. Given that the Nehruvian construct had long since lost its popular resonance, the battle cry of the opposition that their aim was to retrieve Nehruviana  back into India’s dominant reality was another of their many self-goals in a country hungry for change. In particular, the more Rahul Gandhi clothed himself in the raiments of his great-grandfather and his grandmother rather than as his own self, the less he resonated against a wholly self-made Modi. Unless the economy enters into a tailspin during the next three years, a Modi 3.0 in 2024 will complete a process of change in India that would long outlast the Prime Minister. Among the differences with the past is that Modi has joined hands with the rulers of the UAE and Saudi Arabia to roll back Wahhabism rather than pander to it the way his predecessors did.
That politicians in India understand the paradigm change in India caused by Modi is clear from the flood away from opposition parties to the BJP. Taking the example of Karnataka, it would be difficult to argue that those in charge of either the JD(S) or the Congress Party in the state lack resources. The movement from JD(S) and Congress in Karnataka cannot therefore be explained solely by money, for if so, the resourceful D.K. Shivakumar would have been welcomed by the MLAs staying in a Mumbai hotel rather than get blocked by the police as a consequence of their complaint. The MLAs are shifting along with the tide that is flowing in favour of Narendra Modi and the alternative Idea of India represented by him. All this with an opposition phalanx that remains anchored to the past rather than acknowledging the needs of the future. The challenge to the supremacy of the Prime Minister in India’s political and policy space is from within his government. North Block has historically sought to raise its relative rather than absolute share in the country’s financial resources. This has meant taxes that are both too high as well as susceptible to harassment of the business community by officials. Modi has sought to eliminate business malpractice through administrative action. A less disruptive option would be to ensure that technology becomes pervasive enough to dry up wells of malpractice. For instance, once digital governance spreads across the spectrum of administrative action, and once 5G becomes commonplace in India, the changes that this would introduce would be phenomenal, provided that they are managed not by the state (as during the Nehruvian era), but by the private sector. North Block has to change its ways so as to increase its absolute take in taxes, rather than resort to the high rates and coercive action favoured by Finance Minister Chidambaram to squeeze resources out of private hands so as to feed bloated spending. Should India continue to grow at less than double digits for the next three years, there may indeed be widespread opposition to Modi, not from politicians but from the street. However, should the Prime Minister ensure that his economic ministries implement policies which guarantee a high Modi 2.0 growth rate, Modi 3.0 may break Rajiv Gandhi’s 1984 record in Lok Sabha seats in 2024.

Sunday, 7 July 2019

Rahul should beware of the ‘Partition Mindset’ (Sunday Guardian)

By M D Nalapat

Pandering to those who misused the name of religion for divisive purposes led to India’s partition. That warning from history ought to be heeded by Congress leaders.


The fissure between Narasimha Rao and Sonia Gandhi ensured the defeat of the Congress Party in 1996 and the emergence of the BJP as the principal national party. There had till then been a psychological barrier against a BJP Prime Minister amongst many voters, but this got removed when President Shankar Dayal Sharma swore in A.B. Vajpayee as Prime Minister, albeit for two weeks. Three years later, the Indian military’s performance at Kargil ensured the victory of Vajpayee. However, he refused to approve a covert operation masterminded by Pramod Mahajan to split the Congress, a show of magnanimity that cost him his chair two years later. In 2014, it was an unequal contest between the unpopularity of Sonia Gandhi and the popularity of Narendra Modi, with Manmohan Singh not even in the political frame. The UPA-era PM ought to have stepped aside soon after his multiple bypass surgery, but he continued in office despite his health not being up to the strain involved in being Prime Minister of a democracy of 1.2 billion citizens. Given his health, it is no wonder that Manmohan Singh’s second innings was a disappointment. Had he left in the glow of the 2009 Lok Sabha triumph caused by his still good name, Manmohan Singh’s place in history would have shone rather than become smudged by scams that he had no power to prevent.
In the case of Rahul Gandhi, despite his refusal to demonstrate his administrative abilities by assuming ministerial office during the UPA period, another opportunity to prove his talents presented itself in 2014. Had Rahul rather than Mallikarjun Kharge taken over as the Leader of the Congress Parliamentary Party in the Lok Sabha, it would have been the Nehru scion constantly challenging Prime Minister Modi in the Lok Sabha. Instead, the only challenges Rahul made were in miscellaneous fora across the country, some scarcely worthy of the presence of a genuine national leader. His consistent passing of the baton of responsibility to others weakened the perception that Rahul was the primary challenger to Modi. Had the newly anointed AICC President declared early in 2018 that he was not in the race for the Prime Ministership in 2019, it would have helped Congress’ prospects, given his lack of practical experience in governance. Instead, it was made clear to the voters that Rahul would be PM, were Congress to win enough seats. When it came to choosing between PM Modi and a future PM Rahul, the overwhelming mandate was in favour of the former. Among the consequences of Rahul’s perceived eagerness for the Prime Ministership (not by 2024 it in 2019 itself) was the defeat of the Congress Party at the hands of the BJP in almost all the contests in which they were the principal contenders. Now once again, by resigning from the AICC Presidentship, Rahul Gandhi has added to the BJP’s leadership advantage. It is a commentary on the sentimentalism of many voters in India (especially in the north and the south more than in the east and west of the country) that effectively the most popular substitute for Rahul Gandhi is Priyanka rather than someone outside the Nehru clan.
Despite being reticent during the UPA days, after the 2014 Lok Sabha polls, Rahul Gandhi adopted several stances that are in tune with 21st century needs. These included his backing for the de-criminalisation of gay relationships and the need to do away with criminal defamation. Should Rahul campaign for more transparency in government and in the need to legislatively expand personal and civil liberties and nudge the Congress Party to press for such changes in Parliament, he may do more good than he has in his former office. Worryingly, Rahul Gandhi seems to believe that Indira Gandhi’s economics is the way towards the social justice only fast growth can ensure, when the fact is that many of the distortions still present in the system owe their origins to Indiranomics. Rahul needs to  take seriously his own experience in both India and abroad, that show the need for systems that transfer power to the individual rather than to the state, and which expand rather than constrict the boundaries of personal and societal freedoms. Rahul has yet to accept that “Nehruvian secularism” has promoted communalism rather than kept it at bay. He ought to have leapt to the defense of TMC MP Nusrat Jahan when she was attacked by the Wahabbi establishment. As Prime Minister, it was Rajiv Gandhi’s surrender to the Wahabbis over Shah Bano that began his descent into political purgatory. Rahul Gandhi needs to show he is aware of the dangers posed by all—repeat all—forms of religious intolerance.
The India of 2019 calls for backing only those having a modern, moderate mindset. The sooner this gets actioned on, the better for the country. Those genuinely secular need to support Nusrat Jahan in her defense of an India where people are free to express their devotion to the Almighty in varied ways rather than in the restrictive way Zaira Wasim now favours. This despite the fact that Wasim’s movies portrayed her as a young woman of moral courage and self-confidence, qualities unlikely to lead to disappointment in the afterlife. Nusrat’s traducers, who claim to speak on behalf of the Almighty, are themselves guilty of blasphemy, for claiming to know in advance as to who will go to hell and who to heaven in the afterlife. According to them, that of course depends on the food eaten, the rituals followed and the dress worn. Pandering to such individuals, who misused the name of religion to sow division in the 1920s and 1930s, led to the partition of 1947. That warning from history ought to be heeded rather than remain ignored in practice by the Congress Party leadership, particularly Rahul Gandhi.

Saturday, 6 July 2019

PM Modi will ensure Lutyens Looters get punished (Sunday Guardian)

By M D Nalapat


Those looking towards a financial market in India that rewards not insider traders and ‘fixers’ but the retail investor are hopeful that justice will be done during Modi 2.0.


New Delhi: Unlike during the past, this time around, wrongdoer after wrongdoer is having to come back to India to face justice. Among those soon expected back is Vijay Mallya, “who will have to pay back his dues as well as go to jail for seeking to escape responsibility for so long”, a top official predicted. During Modi 1.0, the Prime Minister had warned “Lutyens Looters” that they would soon be spending sleepless nights. It has taken a while, but at least for some of them, that prediction is coming true. Two recent developments involving a CBI invigorated by new leadership mark a distinct departure from past practice. These are (a) the granting by a Special Court to grant Indrani Mukherjea the status of an “Approver” in the INX matter and (b) persistent CBI pressure on the Ministry of Finance to give approval to the unforgivingly delayed matter of granting approval for the prosecution of four officials who were part of what is known within the bureaucracy as the “PC network” within North and South Block. This very profitable network was formed under a former senior minister in the UPA period who parlayed insider and even strictly confidential knowledge into billions in riches. The INX matter which concerns Mukherjea involves what for new MP Karti Chidambaram (the hugely successful businessman son of the former Union Minister for Finance and later Home) is small change—$1 million—but as per the colonial-era laws still in force, there is scant differentiation between Rs 100,000 and loot of Rs 100,000 crores where legal action is concerned. So far as the request by CBI for sanction to prosecute some senior officials for presumed complicity in the PC network’s many dubious deeds is concerned, from 1947 onwards, a sense of cadre loyalty has ensured that officials belonging to the elite central services almost invariably dismiss as “not proven” even comprehensively documented evidence of graft on the part of their “cadre brothers”, especially if the same happen to be “batchmates”. This presumably explains the tardy manner in which this Chidambaram-linked CBI request for prosecution is being considered in the Ministry of Finance. The argument of those holding back sanction is: once the dam of silence and official inaction breaks, who knows who will get drowned in the flood that may follow. Since Jawaharlal Nehru’s order to drastically reduce the salaries of the higher levels of the bureaucracy (in contrast to Hong Kong, the UK, the US or Singapore, where remuneration levels are much higher), the warning to Nehru of Lee Kuan Yew against his policy of combining low salaries with high discretionary powers has come true. Every schoolchild in India is aware of the manner in which the triumvirate of business, officialdom and politics generate and divide loot on a scale that some estimate matches what the drain from the people was during the colonial period. Once the CVC and the Home Ministry take up with the Finance Ministry the manner in which delay in sanctioning prosecution of the four officials is sabotaging Prime Minister Modi’s efforts at cleaning up the system, it will be difficult for the PC network to sabotage such sanction for much longer.
SYSTEM MANIPULATORS
Illegitimate money flows from India have long been the primary business of a group of insider traders and system manipulators that may be described as operational associates of the PC network. This is the “Mumbai Financial Force”, a small and secretive group within the financial community in the country’s commercial capital. The MFF may more accurately be described as the Mumbai Financial Fraud Force (MFFF). Given the number of senior officials who have derived monetary and other benefits from the PC-linked MFFF, it is small wonder that any infraction of law that comes to light usually gets described and later compounded as a “procedural lapse”. Harshad Mehta’s Narasimha Rao-era formula for rigging the movement of share prices so as to loot the small investor went unobstructed for years, owing to a “procedural lapse”, according to officials. The co-location shenanigans in the National Stock Exchange (NSE) have yet to yield any of the perpetrators before the portals of justice. Indeed, the matter is being treated—not just even but especially by SEBI—as largely a “procedural lapse”. Live data that no exchange should allow to be shared was handed over by the exchange to a private thinktank by an agreement that has yet to excite official notice. Software created from outside the exchange was utilised for algo trading, with the “keys” being made known to a handful of brokers, who therefore made huge amounts of money in trading, all at the cost of the retail investor. A whistle-blower made available to SEBI full details of the actions committed in order to enable a few to profit at the cost of the many, but the then SEBI chief U.K. Sinha seems to have decided that such revelations were unworthy of  significant remedial action. Even when matters involving co-location and dark fibre transactions became too many to ignore, SEBI simply went in for cosmetic steps, even after a PIL was filed in the Supreme Court pointing lapses out. Once again, the Judiciary stepped in where the Executive refused to tread. There have been proven instances where select brokers have submitted multiple applications under a single name to corner the shares offered in an IPO. These shares were then boosted through what the PC network calls “perception management”, before being sold to retail investors, who very soon saw the shares lose value. Data theft does more damage to investor confidence in a modern economy than other forms. Yet repeated data thefts in India have gone unpunished and the evil continues. By contrast, such offenses are subject to severe fines and prosecution in the US, Singapore and the UK.
NO FORENSIC AUDIT
During the period when Chidambaram was Union Minister for Finance, nationalised banks were made to sell loan assets at throwaway prices to a very few investors. These loans were before long resold to others at a huge profit. Thus far, no forensic audit has been undertaken of such loan asset sales by Public Sector banks during the Chidambaram period. Given the pervasive culture of cadre and batch protection within the elite services, it is no surprise that criminal charges were not filed in the matter despite the wide spread between what the public banks got and what the same loan assets were subsequently sold for by select private financiers, nor was even a criminal investigation initiated. Co-location and dark fibre data leakage that ruined millions of retail investors also was treated not as a criminal but as a “procedural” matter. SEBI seems unaware of the fact that in an age of advanced technology, log sheets that may have been erased by wrongdoers within any exchange can easily be regenerated, so that deleted data gets traced. No such effort has been made in this direction. Those who now head NSE seem as unconcerned about the damaging impact of the co-location scam on the reputation of the exchange as their predecessors.
Among the most successful operations of the PC network was the Multi Commodity Exchange (MCX) matter. The then MD of MCX was the classmate of an individual at the heart of the algo transactions, and he was reported to have shared live data with his classmate for the benefit of select clients. Such activity makes nonsense of regulations meant to ensure a clean and transparent exchange. However, so far as official agencies were concerned, the issue was “merely procedural”. A well regarded Chartered Accounant, T.R. Chadha, researched and presented a detailed forensic report on several of the actions that took place in MCX. Thus far, neither the present MCX Chairman or the SEBI Chairman seem in any hurry to take action on the basis of the Chadha report. Meanwhile, the PC network is known by senior officials to be active in an effort to merge NSE with MCX that would create a monolith with a history of not being held suitably accountable for its actions by SEBI, for reasons that await a comprehensive investigation. Such an enquiry needs to include the circumstances where relaxation of rules was serially given to a few favoured players in the darker corners of the share market, by not merely SEBI but the RBI, and why such leniency shown during that period took place. Two senior officials, Ramesh Abhishek and K.P. Krishnan, have been extensively mentioned by whistle blowers as being very close to P. Chidambaram, and of being responsible for several suspicious decisions involving MCX as well as the National Spot Exchange Limited (NSEL). Both bureaucrats continue to enjoy stellar careers, so it is clear that their seniors do not regard the charges against them as worthy of notice. The two are not alone. There is a network of present and former officials regarded by their peers as having facilitated the operations of the MFFF and the PC network. Only a CBI enquiry into the PC-MFFF nexus would unearth the truth, but those complicit in past scams have sought to create a perception that action against them would spook the share market, when in fact strong action would greatly increase global investor confidence in India. As for SEBI, while it has declared the subsidiaries of some brokerage firms to be “not fit and proper”, the regulator has avoided a similar verdict on the actual brokers involved. Of course, the tradition of subordinates being punished for the crimes committed by their superiors has long been extant in India. In this case, the “punishment” for grave betrayal of investor trust cannot be described as anything other than cosmetic, as indeed have been several other orders that await a comprehensive forensic investigation by a team motivated by Modi 2.0 to rid the regulators of those who are in cahoots with the very wrongdoers they are meant to police.
ZERO TOLERANCE DOCTRINE
Those looking towards a financial market in India that rewards not insider traders and “fixers” but the retail investor are hopeful that justice will be done during Modi 2.0. Both during the Narasimha Rao as well as the Vajpayee period, stock market scams that went unaddressed resulted in horrendous losses to small investors, and to the defeat of the Congress and the BJP respectively in the 1996 and 2004 Lok Sabha polls. Prime Minister Modi is known to have studied the legacy of the past carefully, and to have instructed the PMO to ensure a Zero Tolerance doctrine for the many mega financial scams that took place since the UPA came to power. Officials are happy at Indrani Mukherjea turning approver in the INX matter and the moves being made on officials in the Finance Ministry to no longer continue to deny sanction for prosecution of Chidambaram-linked officers. They are confident that the PMO together with Union Home Minister Amit Shah will ensure that the orders passed by Prime Minister Modi to clean the financial regulatory system of crooked elements will soon bear fruit even in the matter of the misdeeds of the hyper powerful PC network. It has been estimated that the loss to the public of lack of sincere regulation has led to more than 71 per cent of the NPAs incurred since 2001 by banks run by the government. Only 29 per cent of NPAs have been caused by genuine borrowers whose failure to pay was based on the market rather than on collusion.

Saturday, 29 June 2019

India and U.S. on the cusp of a 21st century security alliance (Sunday Guardian)

By M D Nalapat

If the U.S.-India relationship is to move into high orbit, there will be need for India to begin a process of replacement of Russian weapons platforms with U.S. alternatives, now accessible to India where they were out of bounds in the past.


New Delhi: Just as the US and China arrived at a historic understanding in 1972 as a consequence of the meeting of minds and interests between President Richard M. Nixon and Chairman Mao Zedong, both Prime Minister Narendra Modi and President Donald J. Trump are poised at the cusp of what could be an equally consequential geopolitical shift. This would involve a defense and security partnership between the US and India designed to ensure dominance in the Indo-Pacific as well as in Space and the Virtual World. Because of the Belt & Road Initiative, China is well on the way towards gaining primacy within the Eurasian landmass. Efforts are on to extend such control to the oceans as well, through the Maritime Silk Road. In both these endeavours, Russia has emerged as the key ally of China, and the two have come together in a Sino-Russian security and defense partnership. Given the close association between Islamabad and Beijing, the prospects for India joining hands with China and Russia in the security and defense sphere are small. In contrast to the past, the US is now strategically growing ever more distant from Islamabad, Beijing and Moscow, and in the process, coming closer to India. However, within the Lutyens Zone, the past has continued to impact the policies of the present, in the shape of a continuation of the tight bonds between the Russian defense industries and the military in India. If the US-India relationship is to move into high orbit, there will be need for India to begin a process of replacement of Russian weapons platforms with US alternatives, now accessible to India where they were out of bounds in the past. After the just concluded Pompeo-Jaishankar and Trump-Modi meetings, there has been talk within the Lutyens Zone about how India has “stood its ground” on the proposed purchase of S-400 defensive missile systems from Russia. Some reports even had it that the issue was of such small significance that it did not even figure in the Osaka bilateral parleys between both the principals on the US and Indian side, as well as between key officials. As matters stand, it would appear that the Government of India has reduced to zero oil purchases from Iran while still going ahead with the S-400 deal in the belief that the concession on purchases from Iran would compensate for the Russian transaction. The reality is that (as first reported in The Sunday Guardian article titled “S-400 deal may shatter India’s Indo-Pacific advantage” on 5 May) purchase of S-400 systems by India would shut the door on a comprehensive strategic partnership with the US. It would shut the door on the transfer of advanced US weapons systems to India, a stand that was conveyed to the Indian side during the Pompeo visit. Although not a “deal-breaker” the way the S-400 purchase would be, the choice of Huawei as the partner for rolling out 5G in India would also be a limiting factor in India-US security linkages, given the intrusive nature of the technology in the lives of citizens. However, for India to look elsewhere, the alternative would need to be as efficient and cost-effective as that offered by Huawei.
FUNDAMENTAL RE-ALIGNMENT
Prime Minister Narendra Modi, in his interactions with President Barack Obama and now with President Trump, has ensured that both sides have reached a stage where both countries are standing on the cusp of a fundamental security and defence re-alignment that could change global geopolitics the way the 1972 Nixon-Mao understanding did. Today, the world has once again been divided into two competing blocs, one led by the US and the other by China. In 1972, the two blocs were led by the USSR and the US, a situation that ended with the meltdown of the former by 1992. During much of the US-USSR “Cold War”, in effect India was on the side of Moscow rather than Washington. Since the beginning of the 21st century, while the strategic goals of the US and China have begun to visibly diverge and continue to do so, once again (as during the 1950s) Russia and China have become the closest of security partners. Should India decide in Washington’s favour in the matter of a 21st century security partnership, that would more than compensate for the accretion of strength that has been gained by China as a consequence of the China-Russia security alliance. Both President Vladimir Putin as well as President Xi Jinping are looking at whether a newly rejuvenated (by the poll landslide) Prime Minister Narendra Modi will move closer to President Trump in his second term or return the country to the traditional Nehru-era policy of keeping away from Washington-centred alliance systems, both formally as well as in practice. Both Xi as well as Putin are aware that the commissioning of the S-400 system by India would free them of any anxiety that a comprehensive security partnership would develop between Delhi and Washington. Both will make intense efforts to convince Prime Minister Modi that India’s security interests are safe even without having to enter into a close relationship with the US, a stance that several within the Lutyens Zone concur with, given their memories of past situations. However, the reality is that in a world once again divided into two competing blocs, “non-alignment” would result in a loss of both extant opportunities as well as relevance.
The decision for India as to which bloc to get linked to has been made easier by the fact that for decades, Beijing has prevaricated on coming to an agreement on the border with India on the lines that took place between China and Myanmar and between China and Russia. Even on a matter as low down the food chain as India joining the Nuclear Suppliers Group, thus far there has not been a green light from Beijing, despite the gains of the Modi-Xi summit in Wuhan. The accretion of geopolitical heft consequent to a definitive understanding on security between Washington and Delhi may ensure that India gets taken more seriously by China.
RISING THREAT LEVEL
Where India is concerned, despite the fact that the Pakistan economy is far smaller than India’s, the robust manner in which China has boosted the capacities of the Pakistan military has raised the threat level from GHQ Rawalpindi to very high levels. Given that the only target of the Pakistan military is India, there is a disconnect between the rising pitch of declarations of Sino-Indian friendship coming from Beijing and the steady acceleration of material and other assistance to the Pakistan military. The progress of work on the China-Pakistan Economic Corridor (the nomenclature of which remains unchanged even in the segment which passes through Pakistan-occupied Kashmir) is another indication that Pakistan has been given by far the highest priority by China within South Asia. The “all weather” linkages are visible even in capitals such as Colombo, Kathmandu, Male and Dacca, where the envoys of China and Pakistan meet frequently with each other in a context where GHQ Rawalpindi has given no sign of any letup in its asymmetric war against India. Now that Russia has joined hands with China as that superpower’s primary security partner, Moscow is coming ever closer to Islamabad, and is in the process of beginning sales of weapons systems to the forces commanded by GHQ Rawalpindi. Given the nature of much of policy formulation in India, there is still a propensity to ignore the immense changes in the geopolitical environment that have taken place just during the two decades of the present century, in particular the cementing of the Sino-Russian defense and security alliance. India is no match for China so far as the interests of Russia are concerned, except that Moscow would like to retain its dominant position within the military in India in the matter of weapons supplies, not just for reasons of commerce, but to ensure a comfortable (to Beijing and Moscow) distance in military matters between Washington and Delhi. President Putin has had the benefit of the fact that Moscow has been a reliable defense partner of India since the 1970s, despite a few hiccups along the way, especially during the Yeltsin period. During this period, the US has been unwilling to transfer advanced weapons systems to India, while Russia handed over even a nuclear submarine, besides providing what is at present the only window open to India to enter the age of hypersonic weaponry through modifications in the BrahMos missile. While this has been the past and remains the current reality, the trend line has shifted. The reason for such a change is the accelerating pace of the Sino-Russian alliance. This, taken in conjunction with the long-established China-Pakistan military nexus, opens the possibility of a diminution of future advanced military supplies from Russia to India. In contrast, the need for an alliance with India to counteract the density of the Sino-Russian partnership has cleared the path for the US to make India a platform for the manufacture of advanced weapons systems, the way China has made Pakistan a platform for the manufacture and assembly of advanced weapons systems, including sophisticated aircraft and missiles. However, such collaboration between Washington and Delhi would be stillborn, were Prime Minister Modi to give final approval to the plan for purchasing S-400 defensive missile systems from Russia.
‘ZERO SUM APPROACH’
While the US and India, given their compatible political systems, are potential security partners, in matters of trade, the “Zero Sum” approach of President Trump calls for India to stand its ground on a variety of issues, such as oil supplies from Iran to inter alia protect its investment and opportunities in Chabahar, which could shift China’s way in case India stops all oil purchases from Iran. Whether on the issue of pharmaceutical prices or the demand to give preferential treatment to US manufactures, a much closer fit on the defense and security side would result in the Pentagon counter-acting calls by the US Trade Representative or Department of Commerce to levy sanctions on India. To retain dominance in the Indo-Pacific and maintain primacy in space, cyber-space and underseas, a partnership with India is a necessary force-multiplier for the US. The friendly tone of the Pompeo visit as well as the friendly atmosphere that surrounded the Modi-Trump meeting indicate that this lesson has been clearly understood in Washington. However, both sides will need to make adjustments and compromises that are at odds with earlier policies. There are likely to be an increasing number of high-level contacts between Washington and New Delhi, including a much higher frequency of meetings between Trump and Modi than has been the case thus far, the bilateral summit meeting on the sidelines of the G 20 taking place after a gap of seventeen months. In the 1950s, India lost the chance to become a US ally. Both in the 1992-96 during the Narasimha Rao period as well as during 1998-2002 during the time when A.B. Vajpayee was the Prime Minister of India, it was Washington that failed to take advantage of the opportunity for a strong strategic relationship, preferring Pakistan to India on both occasions. In the era of two forceful leaders, Narendra Modi and Donald J. Trump, once again the door has been opened towards a close partnership in matters of defense and security between the US and India. Will this chance too repeat the dismal history of the past, or will history be made on a scale last seen in the Nixon-Mao handshake in 1972?

Sanders and Harris would vanquish Trump (Sunday Guardian)

By M D Nalapat

Bernie Sanders-Kamala Harris ticket would energise the Democratic Party base.


A mandate for systemic change, such as a Bernie Sanders-Kamala Harris Democratic Party ticket for the 2020 US Presidential polls, has the momentum needed to overcome Donald Trump’s many advantages. Although the 45th President of the US is frequently lampooned (mainly for his tweets), the fact is that he has relentlessly sought to fulfil the promises made by him in the 2016 campaign. Some of the methods used are unorthodox, but Trump did not emerge in politics through the conventional political process that almost all leading Republican or Democratic politicians in the US had. Several of the stances adopted by Trump are in reverse gear so far as political correctness is concerned, such as his obvious unconcern about the way the Department of Homeland Security is dealing with even infants who are in their custody as illegal immigrants. About the only member of the inner core of the Trump family who seems not to have led a privileged life from birth is the soft-spoken First Lady. However, Melania Trump has figured in the media in inverse proportion to her headline-generating husband, so that her modest life before becoming the spouse of the New York billionaire seldom gets mentioned. Overall, the present President of the US is a ruthless and brilliant tactician who grasps what needs to be said or done in order to succeed. In such a situation, the Presidential candidate favoured by the Clinton machine within the Democratic Party, Joe Biden, would soon be cut to pieces by Trump. Despite being the first choice of the Clintons, the former Vice-President was shredded just days ago by Kamala Harris, who drew attention to Biden’s past stance in favour of individuals and policies discriminating against the African-American community, which is still suffering from the error President Abraham Lincoln made in choosing a closet segregationist, Andrew Johnson, as his Vice-Presidential candidate in 1864. This “Veep pick” believed in racial supremacy, and sought to reverse moves towards justice for African-Americans soon after taking over as President after the murder of Lincoln. Had an individual closer to Lincoln’s own humanistic views on the subject of race been appointed, John Wilkes Booth may have hesitated in killing Lincoln. Given the thespian’s knowledge of politics, it is safe to assume that Booth knew that Johnson, who would succeed to the White House should President Lincoln die, was the opposite of the latter where matters of racial justice were concerned. It took a century of continuing prejudice and injustice before President Lyndon Johnson enacted the Civil Rights Act and thereby removed several of the discriminatory measures still extant against African-Americans. When compared with India’s affirmative actions in favour of the Dalit community, US moves to reverse the injustice done to African-Americans have been far less pronounced, even after the Johnson reforms. The eight years of President Barack Obama were suffused more with symbolism rather than substance where race relations were concerned, although the major healthcare reforms embodied in Obamacare was carried out in his time. President Trump has sought to roll back elements of Obamacare, while taking measures against Latino migrants that are impossible to succeed despite their cruel nature.
India is a country where the elite celebrates those who have harmed the interests of its people. Henry Kissinger and Bill Clinton (while in office) pursued policies that were hostile to India, and yet both were lionised during visits to India. In the US, it is ironic that the African-American community adores Bill Clinton, the US President who did more than almost any predecessor to empower Wall Street against Main Street, and whose measures resulted in jail for hundreds of thousands of African-Americans for petty misdemeanours conflated by such laws into major crimes. The US has displaced almost every other country in the world in the number if its citizens who are behind bars, often because of the “Three Strikes” Nixon-Clinton doctrine that specifies lengthy jail time for three offenses, no matter how petty. Despite himself having “smoked but not inhaled” marijuana, President Clinton refused to legalise non-toxic variants but instead retained the harsh provisions put in place by Nixon, who seemed to act as though prison was the most appropriate place to send minority groups to. The relative situation of African-Americans improved not at all under Clinton, yet the community seems in thrall to the Clintons. Until very late into the campaign to win the 2009 Democratic Party nomination for that year’s Presidential race, almost all major African-American associations backed Hillary Clinton over Barack Obama. Now, the same entities are supporting Clinton favourite Joe Biden in the race for the party nomination, despite African-Americans Cory Booker and Kamala Harris being in the contest, and Biden having been close in previous years to both policies and personalities opposing racial equality and justice, views and actions that he has yet to express regret for. Of course, the Clintons are diligent in their calculations, and if they find that Biden is likely to lose in the contest for the party nomination, will switch to another candidate who can be expected to follow the dictates of the Clintons in matters of policy and personnel the way Barack Obama did in his first term. What the Clintons wish to avoid is a situation in which those genuinely opposed to Wall Street (principally Elizabeth Warren, Kamala Harris and Bernie Sanders) get nominated. This despite the fact that in a contest pitting genuine votaries of change against Trump, the latter may lose. President Trump has been venting continously about “socialists” in the Democratic Party. However, Warren, Harris and Sanders may be better described as social democrats rather than as socialists. Given the manner in which Wall Street has been overwhelmingly favoured over Main Street, several million otherwise Democratic voters chose Trump in 2016 because of his proclaimed stance (in contrast to Hillary Clinton) against those involved in the business of “money making money”. Once elected, Trump turned to Wall Street to fill the top economic jobs in his administration, and surrounded himself with billionaires and a few mere millionaires. In 2020, it will be harder to convince those close to penury that Donald Trump is their champion and not a candidate such as Senators Warren, Harris or Sanders.
Given the mood of the US electorate, a Bernie Sanders-Kamala Harris ticket would energise the Democratic Party base the way Trump does his. It would be best for the Democratic nominee to indicate in advance the running mate. What is needed to be avoided is be to follow conventional logic and choose a running mate whose policy prescriptions are substantively different from those of the nominee. What happened after the death of Abraham Lincoln should be a warning that all future Presidential nominees need to heed. Every individual is mortal, and if a Head of State passes on and gets replaced by a person with opposing views on policy, it would be a travesty of the mandate. Joe Biden or Beto O’Rourke are betting that their being close to the Republicans on matters of policy will help secure more “independent” votes. They are wrong. Most voters want real, not cosmetic, change. This time around, what will count is genuine commitment to change from Reagan-Clinton-Bush-Obama-Trump policies that have reduced the relative income of the middle class, added to the number of poor, and vastly expanded the wealth of the handful of hyper-rich people having such outsize representation in Team Trump.

Friday, 28 June 2019

Prof M D Nalapat remembers P V Narasimha Rao one of India's greatest ever PMs (PGurus)

From the first time he met him in 1973 to the last interview that he did of Sri P V Narasimha Rao in 2004, Prof. M D Nalapat shares his experience of this quiet achiever. Here is the article by Prof. Nalapat on Narasimha Rao's final humiliation

Wednesday, 26 June 2019

What to expect at the G20 summit (CGTN)



This year's G20 summit will be held in Osaka, Japan this week. Chinese President Xi Jinping will attend the event. All eyes are on his meeting with his U.S. counterpart, Donald Trump. The expected meeting is seen as key in restarting talks over China-U.S. trade disputes.

https://www.youtube.com/watch?v=LIM31X4_5x8

Monday, 24 June 2019

Freedom of Double standards (Organiser)

By M D Nalapat

The so-called Babri Masjid in Ayodhya was unused for prayer by the Shia community for decades. When it was destroyed in 1992 by an out-of-control assembly of activists, an international uproar ensued. Media in the US and Europe had almost entirely greeted with silence the forcible reduction of the Hindu minority in Pakistan from 38 per cent to less than 1 per cent since 1947, or the killings on an industrial scale of Hindus in Bangladesh (not usually by Bengalis but by settlers from other parts who in the Bangladesh freedom struggle remained loyal to the Pakistan army that was killing the Bengali segment of the local population by then) since 1951. They were in full cry after the collapse of the Babri Masjid, despite the fact that not a single member of the minority community lost his or her life during that incident. Especially in the 1990s, both BBC and CNN competed with each other to label those as ‘freedom fighters’ who had just months ago committed genocide against the Pandit in Kashmir valley. What such media were championing was the freedom of extremist elements to kill innocent and peaceful people of another faith.

After the destruction of the so-called Babri Masjid, more than 160 temples in Kashmir were attacked, with several being destroyed or converted into sites, some of the uses to which they were put being best not to describe. Neither in India nor elsewhere, barring a handful of publications that were promptly labelled ‘communal’, was there mention of such a crime against secularism, a concept that implies equality of treatment and equal rights to every faith. To this day, the destruction of nearly 300 places of worship in Kashmir has gone not only unpunished but ignored by successive governments, with not a single individual even charge-sheeted for the offence. This is in contrast to the Babri Masjid trial, where some of the most powerful politicians in the country are facing prosecution for being present in 1992 when the structure disappeared in a cloud of dust.
Freedom is universal. Freedom is indivisible. Especially in an era when the Knowledge Industry needs to power the creation of a hundred and twenty million more jobs in India over the next five years, freedom of expression (FOE) is essential for economic and social development. While there are exceptions to this, such as expression designed to encourage specific perversions such as child pornography, or which explicitly call for the violent overthrow of the elected order, overall FOE needs to be accepted as part of life in a democracy. Indeed, the advance of technology will make the censorship of views even more problematic. Hence, the need for state authorities to focus only on the few necessary exceptions to the principle of free speech, rather than act in the spirit of Jawaharlal Nehru, who insisted that the first amendment to the Constitution of India should be that section limiting freedom of speech.

A contrast to the United States, the other very large democracy, where the First Amendment is explicitly designed to protect freedom of expression. Not just the central government but the courts need to protect such freedoms rather than allow busybodies (including those in authority) to subject those indulging in free expression to the rigours of the judicial and police process, for this is a conveyer belt that often drains an individual into a shadow of his or her former self. What is striking in India is that so many ‘champions of free speech’ suddenly become deaf, dumb and blind whenever the rights of those with whom they disagree personally and politically are sought to be restricted. There has been much criticism of the manner in which the UP police have dealt with media persons involved in disseminating online and on television the views of a lady about Chief Minister Adityanath. Shri Adityanath, I personally feel, needs to reflect on the experience of another Chief Minister, Narendra Modi in Gujarat, who for more than a decade was subjected to the most vicious of trolling, yet emerged stronger politically with every such abuse. The Gujarat government sought no legal action against the media persons and their platforms who were heaping insults on Modi on a regular basis, but simply ignored them. Interestingly, after the 2014 Lok Sabha polls, several of those who were fierce critics of Modi underwent a transformation and became his admirers. Just before the 2019 Lok Sabha polls, there was again a crescendo of verbal attacks directed at Prime Minister Modi. The election results showed that these actually created empathy rather than alienation towards India's first Prime Minister from both an economically as well as a socially weak section of society.
But what is strange (or perhaps not) is the silence of those condemning the action of the UP police against media persons on the ruthless, the relentless, manner in which the Bengal, Karnataka or Kerala police - to take a few examples - have used the colonial laws so carefully preserved by Nehru and his successors to send nearly two hundred media persons to jail. Publicly calling a Chief Minister in these and some other states anything other than a saintly genius has become an occupation filled with the hazard of serving a long time in prison.
Nehru’s (First) Amendment (and the sooner this gets repealed the better) has been used with alacrity in several states, and yet those claiming to champion freedom of expression ignore both this enactment as well as the manner in which those with whose political and policy views they agree are using this to try and suppress views contrary to their own. For such individuals, it would seem that freedom of speech is subject to the restriction that what is said must be such that they agree with. The rights of those with contrary views get ignored, the way the destruction of temples, Gurudwaras and lives in Pakistan or lives and temples in Kashmir or arrests of media persons in Bengal, Karnataka and Kerala have been. A genuine champion of freedom of expression will fight for the right even of those with whose opinions they are in complete disagreement with. India has suffered much from the 1947 Partition. We must avoid the error of treating as separate entities those in sync with our views and those who hold contrary opinions. One country means equal rights and freedoms for all, including freedom of speech, whether it be in UP, Karnataka, Bengal or elsewhere. Those who ignore deeds of some while focusing on a few are doing a disservice to the ideals they themselves profess.

Saturday, 22 June 2019

Trump-Modi-Xi ties set to define the coming decades (Sunday Guardian)


By M D Nalapat


In the case of US, India needs to be forthcoming on security matters, while being tough on commercial issues. In the case of China, India needs to be firm on matters concerning security, while ensuring leeway in purely commercial fields.


Yanan, China: The clay mountains of Shaanxi province are a universe away from New Delhi, where US Secretary of State Mike Pompeo is visiting, 25-27 June. The Global War on Terror (GWOT) is expected to figure high on Pompeo’s agenda in a context where there is disappointment in Washington about India not matching its tough words on terror with action on the ground in most theatres where terror groups that are clones of ISIS are active. Apart from not signing BECA (Basic Exchange and Cooperation Agreement) as yet, India is still considering the purchase of S-400 systems from Russia, a purchase that would doom future hi-tech cooperation between the US and India in the joint development of weapons platforms. Such US-India cooperation is especially welcome in the context of the fullscope manner in which China is developing Pakistan as a manufacturing hub for military aircraft, missiles and nuclear technology, while still blocking India’s entry into the Nuclear Suppliers Group. For this to happen, the S-400 bullet needs to be bitten and fast by India. After that, field cooperation could begin in Afghanistan and other theatres where terror groups are active. A robust security relationship with the US will assist in recruiting the Pentagon, the CIA and the State Department as allies against the US Trade Representative and the US Department of Commerce, both of whom wear outsize blinkers as they seek to implement measures that would destroy much of the small retail trade in India to the benefit of US tech giants. The USTR seems to feel little compunction in pressing for concessions on pharma and health pricing that would benefit a handful of US and European billionaires at the cost of tens of thousands of lives in India’s zone of poverty. In the case of the US, collaboration on matters of defence and security is desirable, while conceding to US demands on commercial matters is not. In the case of China, the situation is different. However, the fact that India will be the first country that President Xi Jinping visits after the 70th anniversary of the founding of the People’s Republic of China is significant. Those close to him say that Xi, who enjoys a good rapport with Narendra Modi, is seeking a return to the early 1950s period of a close rapport between China and India. Of course, during that period, it was India that gave almost all the concessions. This time around, as much the bigger power, it is China’s turn to be generous to a country that can emerge as its biggest market in Eurasia in the years ahead. The importance that China under Xi is giving to Modi can be gauged from the fact that the traditional heart of China, Xian, has been visited by such notables as Presidents Bush and Obama, yet the only pictures on the City Wall are those of Xi and Modi. In Wuhan as well, the Lake Guest House has pictures of the Prime Minister all over the surroundings and inside the Guest House.

Chinese authorities will be watching closely the signals emanating from Delhi on the Pompeo visit. They are now certain that the Trump administration is determined to roll back Chinese influence through downsizing economic growth. In such a context, the Indian market is a tempting prize. However, for the potential for India-China economic and commercial relations to be fully realised, Beijing will need to give more attention towards India’s core concerns than has been the case thus far.

EMPHASIS ON MAO
Such calculations seem a world away from the mountain redoubt (where Chairman Mao Zedong sheltered for close to a decade during the war between the People’s Liberation Army and the Japanese). The hillsides are covered with trees planted since the 1980s. During the 1930s, the mountainsides were bare, offering targets to the Japanese air force as they dropped bombs on the dwellings carved out of the clay soil of the mountains. In the Soviet Union, Stalin’s successor Nikita S. Khruschev swiftly repudiated the legacy of the man who had dominated the USSR since the death of Lenin in 1924 till his death in 1953. This was despite the fact that Khruschev was a favourite of Stalin, who had repeatedly promoted the corpulent apparatchik in his climb to the top of the Communist Party of the Soviet Union (CPSU). In contrast, Deng Xiaoping, who soon emerged as the effective successor to Mao on the latter’s death in 1976, was several times punished by Mao, especially during the Cultural Revolution (1966-76). Despite this, Deng paid homage to Mao’s memory, aware that any effort at downsizing his role would damage the image of the Chinese Communist Party (CCP) the way Khruschev’s 1956 recital of Stalin’s despotic nature had the unintended effect of forever destroying the legitimacy and historical resonance of the CPSU. Since his assumption of office as General Secretary of the CCP in 2012, Xi Jinping has promoted a renaissance of “Mao Thought”, pointing to the manner in which the first leader of the People’s Republic of China (PRC) unified the country and made it a global force despite widespread poverty. Around the year, Chinese citizens come to Yanan to experience the surroundings (albeit far more leafy than before) in which Chairman Mao wrote some of his most important treatises and drew up strategies to confront the Japanese, while keeping at bay the forces of the Kuomintang (KMT) led by Generalissimo Chiang Kai-Shek. It was during the Yanan years that Mao emerged as supreme within the CCP, a position that he retained until his passing. Xi has patterned himself in Mao’s mould, working on policies that would project the PRC as not simply a Great Power but in time, the world’s most consequential country. In order to achieve this, he has placed emphasis on both a strong defensive as well as technological foundation.
BEIJING MODEL CHALLENGES WASHINGTON CONSENSUS
However, there is already a superpower that has remained pre-eminent at least since the start of the 1939-45 war, and this is the United States, now led by its 45th President, Donald J. Trump. While the slogan of the billionaire-turned-politician is “Make America Great Again”, as the US is already a great country, what is probably meant is to “Keep America First”, rather than allow China to walk away with that prize. The battle between the USSR and the US was a contest between two systems, an economic model dominated by private industry that was adopted by policymakers in Washington, as opposed to the model where the state occupied the commanding heights, such as the case with the USSR and of course India under Jawaharlal Nehru and later Indira Gandhi. To this day, successive governments in India have been reluctant to let go of the privileges accruing to the policymaking establishment that flow with state control of a range of enterprises and resources, a chokehold maintained in the name of “public interest”. China is no exception. State-owned enterprises (SOEs) dominate much of the economy, although in recent days, the fact has dawned on the CCP core leadership that the private sector in China needs to be given more equitable treatment in view of the Trade War that has been ongoing with the US for the past year. China needs many more entrepreneurs such as Jack Ma and Ren Zhengfei if the country is to escape the constrictions that current US policy is seeking to enforce on its economy. Mao gave stress to two principles: that (a) China would always win over its foes and (b) that the battle would not be easy, but long and arduous, and the Chinese people are being prepared by Xi Jinping to face a long and difficult battle against the efforts of the US to weaken a system that has made China just a few steps away from overtaking the US as the world’s biggest economy. The battle between the Soviet and the US systems ended with the meltdown of the USSR in 1992, although long before that, it was clear that Central Planning was not working where living standards were concerned. Since the initial years of the 21st century, the world is once again witnessing a battle between two systems, the Chinese and the American. The Beijing Model is challenging the Washington Consensus. Once China overtakes the US in Gross National Product, the consequences for US soft power would be profound. Among the first casualties would be the US dollar, which would witness an acceleration away from it as the global currency of choice. US companies would no longer be able to set the terms of engagement with foreign companies the way they have been doing since 1945, despite the military disasters of Vietnam, Afghanistan and Iraq.
What is taking place between the US and China is not just about trade deficits or surpluses. It is about whether the US system will continue its dominance over the economies of the globe or fall behind China’s. The somewhat misleadingly labelled “Trade War” will continue for a considerable period of time, until one or the other system gives way to the other in terms of global reach and influence. Will the US dollar remain the dominant global currency, giving the US President the power to choke to near death the financial systems of countries that refuse to follow his diktats, for example that good quality and affordably priced oil from Iran should not be bought by India? Will the global supply chains for services and even manufactures be dominated by US logistics and commodity hubs? Will US soft power remain far ahead of its competitors the way it is in a world where US brands such as KFC, Pepsi or McDonald’s are ubiquitous despite doing nothing positive for the health of their customers? Will the switchboards of the internet remain almost entirely in US hands, so that a country of a billion plus people such as India has become the digital monopoly of Amazon, Facebook, Google or Twitter? President Trump cannot be faulted for seeking to slow down China’s rise in a manner that none of his predecessors dated to attempt, but in PRC President Xi Jinping, he has met a formidable opponent, who is determined that this is a war that Beijing and not Washington will win. Each of the swelling number of Chinese visitors to Yanan are there to get reminded of an earlier period in their country’s history when what seemed a hopeless struggle ended within a decade in a rout for the other side. Of course, in the conflict against Japan, both Mao and Roosevelt were on the same side, as many smiling photographs of US delegations visiting Mao and Zhou Enlai in their clay dwellings testify to. From the late 1960s onwards, it was the USSR that was the principal rival, and in the 1970s, China and the US once again allied with each other, this time to battle not Tokyo but Moscow. Now that Washington has emerged as the most potent challenger to what Xi terms the “Chinese Dream”, once again it is Moscow that has become the closest ally, with Vladimir Putin and Xi Jinping forming a Sino-Russian alliance that will soon cast a shadow across all of Europe and Asia. Both Moscow and Beijing seek to draw New Delhi into this grouping so as to ensure that a Washington-Delhi nexus does not take place that would have its ripple effects across both the seas of the Indo-Pacific as well as the Eurasian landmass, and it is expected that there will be much cordiality on display by both Putin and Xi when Narendra Modi heads to Tokyo for the G-20. Of course, while there, Modi is certain to meet not just the Russian and Chinese leaders, but Shinzo Abe and Donald Trump as well. Lutyens Zone strategists have talked about a “balancing act” between the two superpowers (the PRC and the US). Balancing on a wall has greater risk than playing hopscotch, where India jumps from one side to the other and back, depending on the need and the circumstance. That would be a much more difficult diplomatic game to play than the sterile construct of “balance” (or in other words, non-alignment), but also much more rewarding for the interests of this country. For both the US and China, India would need to differentiate the security parameters from the merely commercial. In the case of the US, India needs to be forthcoming on security matters while being tough on commercial issues. In the case of China, what is needed is to be firm on matters concerning security while ensuring leeway in the purely commercial fields.
UNPRECEDENTED DEXTERITY NEEDED
Prime Minister Modi, assisted by External Affairs Minister S. Jaishankar and NSA Ajit Doval, will need to play a dexterous hand in the diplomacy that he is engaged in between Xi Jinping and Donald Trump. For the former, the path can be cleared for Chinese investment in India, including in 5G networks if the Huawei bid is competitive. Infra projects can be taken up, both in India as well as in the region. Tourism can be multiplied manifold. In the case of the US, India needs to reinforce its commitments in the Global War on Terror by ramping up its activities even while the US assists in building up its capabilities. Given the geopolitical situation, a move away from Russian to US defence platforms is desirable, indeed inevitable. This will be among the difficult decisions that will need to be taken by Prime Minister Modi within the year, so as to set the economy on a glide path to double digit growth, while building India’s capacities in matters of defence and security. The world is entering into a period when China, the US and India (followed by Russia) will be the most consequential of the world’s countries. The 1950s were a period of missed opportunities for India. That dismal history should not get repeated during the coming decade.