April 25, 2008 — drsubrotoroy
The Doctor of Deficit Finance should realise the currency is at stake
by Subroto Roy
First published in The Statesman, Editorial Page Special Article, April 25 2008,
The best thing that may be said of the Manmohan Singh premiership is that when it began in May 2004, it seemed, for a short while, refreshing in comparison to the dysfunctional arrogance and brutality displayed by its predecessor. By the last months of the Vajpayee-Advani Government, there were party appointees who had ended all pretence of purportedly Hindu values and were raking it in shamelessly. The Golden Rule of Democracy is “Throw the rascals out”, which is what Indian democracy upheld as it has done time and again. By 2009, India’s electorate will have the chance to decide whether the incumbent government deserves the same fate.
Manmohan Singh was seriously discussed as the Congress’s putative nominee for PM as early as 2001. The idea brewing at the time with the party’s next generation of wannabe leaders (in their 50s and 60s, where Manmohan was near 70) was that they needed to maintain good relations with the Great White Queen and wait out one term of an inevitable Singh premiership before having a shot at the top job themselves.
What is surprising is Dr Singh appeared never to feel it necessary to educate himself privately on how to retool himself for the necessary transformation from being the archetypal bureaucrat he had been in his working career to becoming the national statesman he wished to be after retirement. It is doubtful, for example, if he ever stood in front of a mirror and practised an extempore political speech in Hindi in preparation for the highest executive post in the country, let aside writing a clear-headed, original vision or mission statement of substance as to where he wished to lead it. As Narasimha Rao’s Finance Minister, he could meekly take orders from his PM; it seemed he wished to continue in the same mode even when PM himself.
Jawaharlal Nehru is supposed to have been a hero of Dr Singh’s ~ but Nehru was a thorough parliamentarian, among the finest anywhere, and someone who always respected the Lok Sabha immensely. Dr Singh, after he lost to VK Malhotra for the South Delhi seat in 1999, made not the slightest effort to enter the Lok Sabha again, even when the Akalis indicated they might not oppose him in a Punjab contest. When asked specifically at a large press conference about not entering the Lok Sabha, Dr Singh murmured words to the effect he had better uses of his time ~ a display, if anything, of the misplaced arrogance of many New Delhi academics and intellectuals. Dr Singh may be the first PM in any parliamentary democracy never to have won a seat in the lower house nor felt a need to do so.
Dr Singh’s bureaucratic expertise assisted him well in the first national crisis that came his way, which was the Tsunami of 26 December 2004. There appeared to be an air of efficiency about the Government’s response and he seemed in his element as commander of bureaucratic forces while working with Pranab Mukherjee in enlisting the military. George W. Bush (not a great geographer or historian) was apparently impressed to see on a map that India had naval forces deployed as far as the Andamans.
By 2005 though, Dr Singh’s bureaucratic mindset had its negative impact. Montek Ahluwalia had been his Finance Secretary when he was Finance Minister. Mr Ahluwalia’s spouse had been a main supporter of Dr Singh’s unsuccessful Lok Sabha attempt. During the Vajpayee Government, Mr Ahluwalia remained a Planning Commission Member for several years before moving to Washington. With Dr Singh as PM, Mr Ahluwalia returned from the USA in mid 2004 to become Deputy Chair at the Planning Commission. Simultaneously with his return, the idea that the American nuclear industry would like to sell “six to eight lightwater reactors” to India arose.
That is as much as is presently known in public. Dr Singh and Mr Ahluwalia may in the national interest want to frankly and precisely explain to the Indian people the full story of the sudden origins of this idea. Certainly, none of the lessons of the Dabhol fiasco a decade earlier seemed to have been learnt, and the Maharasthtra Government (and hence the Government of India) ended up paying some $300 million to General Electric and Bechtel Corporation for Dabhol before any nuclear talks with the USA could begin. Nor had any serious cost-benefit analysis been done or discussion taken place comparing nuclear energy with coal, hydro and other sources in the Indian case.
Indian foreign policy became frozen in its focus on nuclear negotiations with the USA, swirling around Dr Singh’s fife-and-drum welcome at the White House and President Bush’s return visit to India. At the same time arose the issue of Paul Volcker’s UN committee mentioning the name of India’s foreign minister. As The Statesman put it, regardless of the latter’s involvement, “the damage to India’s diplomatic reputation in the world” was done and it was inevitable a new foreign minister would be necessary. After dilly-dallying and much 10 Janpath to-and-fro, Dr Singh followed Nehru’s mistake of becoming his own foreign minister. The idea was that this would be temporary but it became almost a year.
Instead of transforming himself towards Indian political statesmanship, Dr Singh advanced other retired bureaucrats’ ambitions on similar career-paths. Foreign policy went out of the MEA’s control and seemingly into the control of the new “National Security Adviser”. Dr Singh, sometimes with MK Narayanan beside him, travelled a large number of countries from Brazil to Finland and Uzbekistan to South Africa and Japan. Dr Singh also found time and willingness to accept honorary degrees from British and Russian universities during these short months.
While Dr Singh seemed thus preoccupied, two of India’s main neighbours underwent massive democratic revolutions (leave aside magnificent Bhutan). Nepal’s people practically stormed their Bastille while Dr Singh and Mr Narayanan visited Germany to discuss BMWs. Pakistan’s democratic forces could hardly believe the cold indifference shown to them by a New Delhi merely following Bush’s support for Pervez Musharraf. While Pakistan and Nepal, and to lesser extent Bangladesh, saw movements towards better governance, Sri Lanka descended towards civil war ~ India’s PM remained obsessed with the magic wand that the nuclear deal was supposed to be.
Then suddenly the magic vanished ~ Dr Singh seemed to finally come to a silent private recognition that the economics of the nuclear deal simply did not add up if it meant India importing “six to eight lightwater reactors” on a turnkey basis from the USA or anywhere else. Dr Singh seemed to come out of his self-imposed trance and return a little better to reality. By the time he visited China, although he was as deferential to Hu Jintao in his body language as he had been to Bush and Musharraf and even accepted an indoor guard of honour, he also seemed willing to stand up for India. The Arunachal visit was a reality-check.
Now there is inflation ~ and one year left in the UPA’s term. What the country needs is tough sensible macroeconomics and clean public finance. A pandering profligate budget in February was not a healthy sign. Instructing Mr Ahluwalia to close down the Planning Commission and make it a minor R&D wing of the Finance Ministry would be instead a good step. Instructing the RBI to clean up its bureaucratic wastefulness and prepare itself for institutional independence from the Finance Ministry would be even better. Getting proper financial control over every Union and State government entity spending public money and resources would be most important of all. Such major institutional changes in the policy-making process are what an economist might expect of an economist prime minister who wishes to lead India in the 21st Century. India’s currency is at stake.
(See also: “The Politics of Dr Singh”, May 2006; “Mistaken Macroeconomics”, June 2009, etc.)
April 7, 2008 — drsubrotoroy
Two cheers for Pakistan!
First published in The Statesman
Editorial Page Special Article, April 7, 2008
A century has passed since British rulers in India like Curzon and Minto became self-styled interlocutors between Muslims and Hindus of the subcontinent. Up through the 19th century there had been no significant national political conversation between India’s main communities. The “Chief Translator” of the High Court in Calcutta was highly prized for his knowledge of Sanskrit, Persian and English because at least three different sets of laws governed different people in the country. Maulana Abul Kalam Azad wrote of his experience in the Bankim-inspired revolutionary societies of Bengal who treated him with extreme suspicion because they could hardly believe a Muslim wanted to join them as an anti-British rebel.
Jinnah vs Azad
Then came MA Jinnah, Iqbal, Rahmat Ali and others, initial creators of Pakistan whether through greater or lesser motives. Azad, Zakir Hussain, Sheikh Abdullah and other Muslims were equally firm the Pakistan idea was not only bad for India in the world it was bad for Muslims in particular. The Azads condemned the Jinnahs as greedy megalomaniacs, the Jinnahs condemned the Azads as minions of the Hindus. Larke lenge Pakistan, marke lenge Pakistan, khoon se lenge Pakistan, dena hoga Pakistan was the mob-cry during the bloody Partition, while the British, weakened by war and economics and bereft of their imperial pretensions, made haste to leave “this beastly country” to its fate ~ rather hoping the bloodshed would be such someone might hire them to stay on.
Certainly, having used the Indian Army for imperial purposes in the War, Britain (represented locally by a series of smartly dressed blundering fools) behaved irresponsibly in not properly demobilizing that Army during a period of intense communal tension. There were no senior Indian officers ~ KM Cariappa became a Brigadier only in 1946, Ayub Khan was a Colonel under him. Then there were the fatuous “princes” the British had propped up in “Indian India”, few being more than cardboard creatures. Among them was J&K’s ruler who was a member of Churchill’s War Cabinet and had come to harbour illusions of international grandeur. Once J&K’s Muslim soldiers returned to their Mirpuri homes, Jammu and Punjab were in communal conflict, months before the decision that Pakistan would indeed be created out of designated areas of British India just before British India extinguished itself. Army-issued Bren guns came to be used by former soldiers in communal massacres of the convoys of refugees going in each direction.
Part of the problem over J&K since then has been that it seems a dialogue of the deaf. Pakistanis since Zafrullah Khan claimed it was communal violence against Muslims in Jammu and Punjab that prompted the Pashtun invasion of Srinagar Valley beginning 22 October 1947; Indians have always claimed the new (and partly British-officered) Pakistan Army organized and instigated the invasion, coinciding with the planned takeover of Gilgit.
As in all complex moral problems, there was truth on all sides though no one doubts the invasion was savage and that the Pashtuns carried off Kashmiri women, Hindu, Muslim and Sikh. J&K descended into civil war, Abdullah’s secularists backed by the new India, Ibrahim’s communalists by the new Pakistan. Field Marshall Auchinlek, who commanded both Indian and Pakistani armies, had the decency to resign when he realized his forces were at war with one another. That J&K could not be independent in international law was sealed when the 15 October 1947 telegram sent by Hari Singh’s regime went unanswered by Attlee. The tribal invasion from Pakistan caused the old State of J&K to become an ownerless entity in international law, whose territories were then carved up by force by the two new British Dominions (later republics) and the result has been the “LOC”.
ZA Bhutto was perhaps Pakistan’s only politician after that time. The years between the assassination of Liaquat Ali Khan and the rise of Bhutto saw Pakistan’s military begin its liaison with the Americans ~ from the US Ambassador’s daughter marrying the Pakistan President’s son to the leasing of Peshawar’s airfields for U-2 flights over the USSR. Yet Bhutto’s deep flaws also contributed to the loss of Bangladesh and to brutality, supported by the Shah of Iran’s American helicopters, against the Baloch.
Bhutto’s daughter now may have succeeded in death where she could not in life. Like Indira Gandhi, there seemed a shrill almost self-sacrificial air about Benazir in her last days, and, like Indira, her assassination caused all her countrymen including her enemies to undergo an existential experience. Perhaps the public death of a woman in public life touches some chivalrous chord in everyone.
Benazir’s husband was transformed from seeming a rather dubious self-seeker to becoming a national leader of some sobriety. Her old adversary Nawaz Sharif, brought to power by one Army Chief and removed by another, is now a constitutional democrat – seemingly adamant that there be the Rule of Law and not of generals. Most of all, Benazir’s death seemed to completely shut up that most loquacious of Pakistanis: Pervez Musharraf. Musharraf seemed stunned and promised free, fair and transparent elections; though no one believed he would deliver, he somehow did. He would like now to be a senior statesman though it seems as likely his countrymen will not forgive his misdeeds and instead exile him to America.
Pakistan’s main international problem is not and has never been J&K. It has been and remains its unsettled western border and identity vis-à-vis Afghanistan (as India’s problem has been the eastern border with China). Dr Khan Sahib and Khan Abdul Ghaffar Khan knew this but they were not allowed to speak by Pakistan’s Kashmir-obsessed elite. Zaheer Shah’s Afghanistan was the only country that voted against Pakistan joining the UN sixty years ago.
The present author has said before that Osama bin Laden may well be safely and comfortably in the deserts of North Africa while NATO and the Americans raise hell in Afghanistan and Waziristan pretending to look for him. It is not in India’s interest as it is not in Pakistan’s interest that Western militaries, who seem to have nothing better to do, brutalize Afghans of all descriptions in the name of nation-building or fighting “terrorism”. Afghan nation-building can only ultimately come from the Afghans themselves, no matter how many loya jirgas it takes. What Pakistan dislikes emerging from New Delhi is the sometimes rather supercilious and ignorant condescension that our officialdom is infamous for. Instead, with a new, seemingly clear-headed and well-intentioned Government in Pakistan elected for the first time ever, it may be time for all good people in the subcontinent to raise a glass of fruit juice and say “Two cheers for Pakistan!”