Important summits in the USA, Russia, Copenhagen can be attended by the Prime Minister of India as he is not a Member of the Lok Sabha

Subroto Roy notes that since Dr Manmohan Singh is the first Indian Prime Minister ever to have chosen with deliberation not to be a member of the Lok Sabha, he has been free to hold important summits at the White House, Kremlin, Copenhagen etc while the Lok Sabha debates mundane matters like the Liberhan Commission report, inflation etc.

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Do diplomatic parties help the common man?

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Subroto Roy is afraid he does not think the interests of the common man and woman of India come to be served in the slightest by a fancy dinner-party whether given by the Queen of  England at Buckingham Palace for the President of India or by the President of the United States at the White House for the Prime Minister of India….(…though some businessmen and bureaucrats become happy…)

Crunch-time: Do New Delhi’s bureaucrats have guts enough to walk away from the ADB, World Bank etc? (And does India have a Plan B, or for that matter a Plan A, in dealing with Communist China?)

I have had slight experience with the so-called multilateral financial institutions — attending a conference and helping to produce a book on Asia & Latin America with the ADB back in Hawaii in the 1980s, and being a consultant for some months at the World Bank and the IMF in Washington DC in the 1990s. The institutions seemed to me gluttonous and incompetent though I did meet a dozen good economic bureaucrats and two or three who were excellent in Washington. The “Asian Development Bank” (under Japan’s sway as the Word Bank is under American sway and the IMF under European sway) was reputedly worst of the three, though the Big Daddy of wasteful intellectually corrupt international bureaucracies must be the UN itself, especially certain notorious UN-affiliates around the world.

Now there are newspapers reports the ADB has apparently voted, under Communist Chinese pressure, to prevent itself from

“formally acknowledging Arunachal Pradesh as part of India”.

This should be enough for any self-respecting Government of India to want to give notice to the ADB’s President that the Republic of India is moving out of its membership. Ongoing projects and any in the pipeline need not be affected as we would meet our debt obligations.  There is no reason after all why a treaty-defined entity may not conclude deals with non-members or former members and vice versa.

But New Delhi’s bureaucrats may not find the guts to think on these lines as they would have to overcome their personal interests involved in taking up the highly lucrative non-jobs that these places offer. They will need some political kicking from the top. Thus in 1990-91 I had said to Rajiv Gandhi that “on foreign policy we should ‘go bilateral’ with good strong ties with individual countries, and drop all the multilateral hogwash”… “We do not ask for or accept public foreign aid from foreign Governments or international organizations at “concessional” terms. Requiring annual foreign aid is an indication of economic maladjustment, having to do with the structure of imports and exports and the international price of the Indian rupee. Receiving the so-called aid of others, e.g. the so-called Aid-India Consortium or the soft-loans of the World Bank, diminishes us drastically in the eyes of the donors, who naturally push their own agendas and gain leverage in the country in various ways in return. Self-reliance from so-called foreign aid would require making certain economic adjustments in commercial and exchange-rate policies, as well as austerity in foreign-exchange spending by the Government….”

Today, nineteen years later, I would say the problem has to do less with the structure of India’s balance of payments than with trying to normalise away from the rotten state of our government accounts and public finances. I have thus said “getting on properly with the mundane business of ordinary government and commerce… may call for a gradual withdrawal of India from all or most of the fancy, corrupt international bureaucracies in New York, Washington, Geneva etc, focussing calmly but determinedly instead on improved administration and governance at home.” We need those talented and well-experienced Indian staff-members in these international bureaucracies to return to work to improve our own civil services and public finances of the Union and our more than two dozen States.

As for India developing a Plan B (or a Plan A) in dealing with Communist China, my ten articles republished here yesterday provide an outline of both.

My Ten Articles on China, Tibet, Xinjiang, Taiwan in relation to India

nehru
I have had a close interest in China ever  since the “Peking Spring” more than thirty years ago (if not from when I gave all my saved pocket money to Nehru in 1962 to fight the Chinese aggression) but I had not published anything relating to China until 2007-2008 when I published the ten articles listed below:

“Understanding China”, The Statesman Oct 22 2007

“India-US interests: Elements of a serious Indian foreign policy”, The Statesman Oct 30 2007

“China’s India Aggression”, The Statesman, Nov 5 2007,

“Surrender or Fight? War is not a cricket match or Bollywood movie. Can India fight China if it must? “ The Statesman, Dec 4 2007

“China’s Commonwealth: Freedom is the Road to Resolving Taiwan, Tibet, Sinkiang” The Statesman, December 17, 2007

“Nixon & Mao vs India: How American foreign policy did a U-turn about Communist China’s India aggression”. The Statesman, January 7 2008.

“Lessons from the 1962 War: there are distinct Tibetan, Chinese and Indian points of view that need to be mutually comprehended,” The Statesman, January 15, 2008

“China’s India Example: Tibet, Xinjiang May Not Be Assimilated Like Inner Mongolia, Manchuria”, The Statesman, March 25, 2008

“China’s force and diplomacy: The need for realism in India”, The Statesman, May 31, 2008

“Transparency and history” (with Claude Arpi), Business Standard, Dec 31 2008

With new tensions on the Tibet-India border apparently being caused by the Chinese military, these may be helpful for India to determine a Plan B, or even a Plan A, in its dealings with Communist China.

See also https://independentindian.com/1990/09/18/my-meeting-jawaharlal-nehru-2/

https://independentindian.com/2009/11/25/on-the-zenith-and-nadir-of-us-india-relations/

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Disquietude about France’s behaviour towards India on July 14 2009

The Indian press and media, especially the Government-owned part, exulted about Dr Manmohan Singh’s presence at France’s Bastille Day parade this year.   And of course it was generally a splendid occasion and there were things that the organisers of Indian military parades could have and should have learnt from it.   But there were two sources of disquietude.

 

Did anyone but myself notice that Dr Manmohan Singh had been placed on the left hand side of the French President?   Is that the place of a Guest of Honour?

 

Who was on the right hand side?  Germany’s President Horset Köhler.   Why?  Some French reports said Dr Singh was the Guest of Honour; others said both were.  Either way diplomatic protocol should have placed Dr Singh to the right of President Sarkozy.  If President Köhler too was an equivalent Guest of Honour through some last minute diplomatic mishap, he should have been to the right of Dr Singh.

 

France slighted India by placing Dr Singh to the left of President Sarkozy and still calling him the Guest of Honour.  (And why Dr Singh was invited was clearly not because of any new great power status for India but firstly to reciprocate the recent invitation to President Sarkozy last 26 January, and secondly, to gain advantage in business deals with India.)

 

Secondly, what business did a French paratrooper have to parachute out of an aircraft holding India’s tricolour and then, upon landing, drag it momentarily on the ground?  What business did two French paratroopers have to be holding the Indian  tricolour in a salute to the French President?

 

Again, France has slighted India.

 

I love Paris and I am generally Francophilic — except for such  instances of Napoleonic self-aggrandisement.

 

Subroto Roy

 

Postscript July 15:  Where her husband did not, Mme Sarkozy  did get the protocol  right, placing Mme Singh to her immediate right and Mme Köhler to Mme Singh’s right.

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Does the Govt. of India assume “foreign investors and analysts” are a key constituency for Indian economic policy-making? If so, why so? Have Govt. economists “learnt nothing, forgotten everything”? Some Bastille Day thoughts

Today is Bastille Day in France and the Prime Minister of India, Dr Manmohan Singh, at the invitation of President Sarkozy, is visiting Paris (where the Government of India has flown in military contingents to participate in the annual parade), before he goes to another summit in Egypt with Present Mubarak and others, following his recent summits in Italy with the Pope and others, and in Russia with President Medvedev and others, and in London with President Obama and others, etc.   Dr Singh has  almost certainly become the most internationally well-travelled of all Indian leaders on official visits ever in history, which adds to his having had the longest experience in India’s bureaucracy of any Indian political leader in history, which came to be followed by his stint in the Rajya Sabha as Finance Minister and now as a two-term Prime Minister.

But as a result of being out of the country yesterday, the Prime Minister would have missed the TV interview broadcast last night with his chief economic policy aide when it was said that “foreign investors and analysts” are an important constituency for Indian economic policy-makers, as expressed in the President’s speech to the new 15th Lok Sabha or Pranab Mukherjee’s Budget speech last week.  The interviewer seemed to agree and constantly pressed the aide, who is doubtless the most prominent Government economist on television,  about how stock-market brokers and businessmen seemed to have found the Budget not to their immediate liking, and how  privatisation or “raising insurance caps” would have been seen by businessmen as  crucial elements of future economic reform.  In fact privatisation or the insurance business have little to do with any important economic reform but the lobbying power and spin-control of  organised business becomes manifest in getting interviewers to ask such questions of Government spokesmen —  all part of the (doubtless unconscious) process of camouflaging their private interests in the guise of purported public economic policy discussion.

I have taken a very different view.  For example, I said a few years ago in starkest contrast:

“Running through the new foreign policy is a fiction that it is driven by a new economic motivation to improve development and mass well-being in India. The bizarre idea of creating hundreds of so-called “Special Economic Zones” (reminiscent of 17th and 18th Century colonial fortifications) illustrates this. India’s ordinary anonymous masses ~ certainly the 850 million people entirely outside the organised sector ~ have little or nothing to do with any of this. Benefits will accrue only to the ten million Indian nomenclatura controlling or having access to the gaping exit holes to the outside world in the new semi-closed economy with its endless deficit finance paid for by unlimited printing of an inconvertible domestic currency. It is as fallacious to think private investment from foreign or domestic businessmen will support public “infrastructure” creation as it is to think foreign exchange reserves are like tax revenues in being available for Government expenditure on “infrastructure”. Such fallacies are intellectual products of either those who know no economics at all or those who have forgotten whatever little they might have been once mistaught in their youth. What serious economics does say is that Government should generally have nothing to do with any kind of private business, and instead should focus on properly providing public goods and services, encourage competition in all avenues of economic activity and prevent or regulate monopoly, and see to it all firms pay taxes they are due to pay.  That is it. It is as bad for Government to be pampering organised foreign or domestic business or organised labour with innumerable subsidies, as has been happening in India for decades, as it is to make enterprise difficult with red tape and hurdles. Businessmen are grown ups and should be allowed to freely risk their capital and make their profits or their losses without public intervention. An economics-based policy would have single-mindedly sought to improve the financial condition of every governmental entity in the country, with the aim of improving the provision of public goods and services to all 1,000 million Indians. If and when budgets of all governmental entities become sound, foreign creditors would automatically line up before them with loans to sell, and ambitious development goals can be accomplished. As long as public budgets (and public accounts) remain in an outrageous shambles, nothing can be in fact achieved and only propaganda, corruption and paper-money creation results instead. Whatever economic growth does occur is due to new enterprise and normal technological progress, and is mostly despite and not because of New Delhi’s bureaucrats (see “The Dream Team: A Critique”, The Statesman 6-8 January 2006).  The first aspect of the new Indian foreign policy has been for Government to become wholly ingratiating towards any and all “First World” members visiting India who may deign to consider any kind of collaboration whatsoever. The long line of foreign businessmen and heads of government having photo-ops with the Indian PM began with Vajpayee and has continued with Manmohan, especially when there is a large weapons’ or commercial aircraft or other purchase to be signed. The flip-side has been ministerial and especially Prime Ministerial trips abroad ~ from Vajpayee’s to a Singapore golf-cart immediately after commiserating Gujarat, to Manmohan receiving foreign honorary doctorates while still holding public office.  Subservience to foreign business interests in the name of economic policy extends very easily to Indian naval, military or diplomatic assets being used to provide policing or support services for the great powers as and when they may ask for it. Hence, Indian naval forces may be asked by the Americans to help fight pirates in the Indian Ocean, or escort this vessel or that, or India may be asked to provide refuelling or base facilities, or India may be requested to vote against Iran, Venezuela or whomever here or there. But there would be absolutely no question of India’s role in international politics being anything greater than that of a subaltern or comprador whose response must be an instant “Ji, Huzoor”. The official backing of the Tharoor candidacy was as futile and ridiculous as the quest for UN veto-power or the willingness to attend G-8 summits as an observer. While subservience towards the First World’s business and military interests is the “kiss up” aspect of the new foreign policy, an aggressive jingoism towards others is the “kick down” aspect….”

Dr Singh’s aide at one point challenged his friendly interviewer  suggesting the very need for “fiscal stimulus” could hardly be questioned as if such a thing was beyond his imagination.  And again, I am afraid, I may have been quite alone  in December 2008 in lambasting as counter-productive all this purported “fiscal stimulus”. Just another colossal, indeed perverse, waste of public resources driven by organised business lobbies in their own interests, since in fact no one — not Dr Singh nor any of his aides, acolytes or flatterers, foreign or domestic, or anyone else anywhere — has any empirical or theoretical models of any kind depicting the phase, period or amplitude of any possible business-cycle that India’s economy may be on.  Since none of them has any idea whatsoever of what the amplitude or frequency is of any such purported business cycle, they are as likely to have caused a pro-cyclical exacerbation of the amplitude as any sort of counter-cyclical dampening! (Viz., Leibniz ‘s principle of insufficient reason.)

How to see what is happening in Indian macroeconomic policy in the simplest comparative static terms is this: both the IS and LM curves are being pushed outwards drastically based on a deliberately erroneous assumption that there is  or might develop mass involuntary unemployment of the sort Maynard Keynes once described in 1936.  The overall impact on nominal interest-rates is indeterminate; the process of inflationary deficit-finance with an inconvertible currency that the Government has indulged in for half a century merely continues, further pushing us towards a potential hyperinflation.

The Bourbon regime swept away by the French Revolution that Bastille Day celebrates were said to have “learnt nothing and forgotten nothing”.   I am afraid the macroeconomic illogic often found among Government economists, private commentators and business lobbyists in India today suggests to me nothing less than that they have  either learnt nothing or forgotten everything from their economics classes decades ago! We in India may need our own storming of the Bastille to sweep away the perverse thoughts and power structures of the post-1947 Dilli Raj.

Subroto Roy
Kolkata

A Dozen Grown-Up Questions for Indian Politicians Dreaming of Becoming/Deciding India’s PM After the 2009 General Elections

The 2009 General Election campaign is supposed to elect a Parliament and a Head of Government for the Republic of India, not a Head Boy/Head Girl at an urban middle-class high school or the karta of a joint family. Unfortunately, our comprador national-level media seem to be docile  and juvenile enough in face of power and privilege to want to ask only touchy-feely koochi-woochi pretty baby questions of the “candidates” for PM (several of whom are not even running as candidates for the Lok Sabha but still seem to want to be PM).   Rival candidates themselves seem to want to hurl invective and innuendo at one another, as if all this was merely some public squabble between Delhi middle-class families.

So here are a set of grown-up adult questions instead:

1. Pakistan is politically and strategically our most important neighbour. Can you assure the country that a government headed by you will have a coherent policy on both war and peace with Pakistan? How would you achieve it?

2. Do you agree with the Reagan-Gorbachev opinion that “a nuclear war cannot be won and must never be fought”? If so, what would your Government do about it?

3. If there are Indian citizens in Jammu & Kashmir presently governed by Article 370 who wish to renounce Indian nationality and remain stateless or become Pakistani/Afghan/Iranian citizens instead, would you consider letting them do so and giving them Indian “green cards” for peaceful permanent residence in J&K and India as a whole?

4. Do you know where Chumbi Valley is? If so, would your Government consider reviving the decades-old idea with China to mutually exchange permanent leases to Aksai Chin and Chumbi Valley respectively?

5. Nuclear power presently accounts as a source of about 4% of total Indian electricity; do you agree that even if nuclear power capacity alone increased by 100% over the next ten years and all other sources of electricity remained constant, nuclear power would still account for less than 8% of the total?

6. The public debt of the country  may now amount to something like Rs 30 lakh crore (Rs 30 trillion); do you find that worrisome? If so, why so? If not, why not?

7. The Government of India may be paying something like Rs 3 lakh crore (Rs 3 trillion) annually on interest payments on its debt;  do you agree that tends to suck dry every public budget even before it can try to do something worthwhile?

8.  If our money supply growth is near 22% per annum, and the rate of growth of real income is near 7% per annum, would you agree the decline in the value of money (i.e., the rate of inflation) could be as high as 15% per annum?

9. Do you agree that giving poor people direct income subsidies is a far better way to help them than by distorting market prices for everybody? If not, why not?

10. How would you seek to improve the working of  (and reduce the corruption in) the following public institutions: (1) the Army and paramilitary; (2) the Judiciary and Police; (3) Universities and technical institutes?

11. There has never been a Prime Minister in any parliamentary democracy in the world throughout the 20th Century who was also not an elected member of the Lower House; do you agree BR Ambedkar and Jawaharlal Nehru intended that for the Republic of India as well and thought it  something so obvious as  not necessary to specify in the 1950 Constitution?  What will your Government do to improve the working of the Presidency, the Lok Sabha, Rajya Sabha and State Assemblies?

12. What, personally, is your vision for India after a five-year period of a Government led by you?

Subroto Roy,

Citizen & Voter

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