The Lesson of the Decade

BRP Bhaskar
Gulf Today

The United Nations had designated the first 10 years of this century as the “decade for a culture of peace and non-violence for the children of the world.” However, it is unlikely that anyone in India will see it as a time when children found themselves in a congenial environment. Chroniclers are calling it the decade of scams.

Three major financial swindles were reported in 2001, the first year of the decade. The biggest of them involved the Unit Trust of India, a mutual fund organisation set up under an act of Parliament nearly four decades earlier. The financial loss was estimated at Rs48 billion.

Every passing year since then threw up at least one major scam involving the Central government or one of the state governments. The last year, 2010, was the worst with large-scale irregularities in the grant of telecom licences, conduct of the Commonwealth Games, allotment of land in Maharashtra and Karnataka and sanction of loans by the state-owned LIC Housing Finance Limited coming to light

The telecom scam, currently under investigation, resulted in an estimated loss of Rs1,760 billion to the exchequer and is described as the biggest single swindle in the country’s history. Unofficial sources have put the total cost of all known scams at Rs73,000 billion.

A commentator has pointed out that the scam money is 27 per cent more than the gross domestic product of Rs53,000 billion and that this was enough to give the 400 million Indians living below the poverty line a cash subsidy of Rs182,000 each.

Businessmen, bureaucrats and politicians are the beneficiaries of the scams. Many of them have invested the ill-gotten money in land or parked it abroad. Indians are reportedly holding an estimated Rs71,000 billion in secret Swiss bank accounts.

Many of the scams can be linked directly to the big developmental effort set in motion by the economic liberalisation policy and the globalisation process which got under way in the 1990s. The shady stock market deals and corruption in the grant of licences fall in this category.

Corruption in a fast developing economy is not unusual. England went through such a phase as money flowing in from newly established colonies, notably India, fuelled industrial growth. The spread of corruption in China after the opening up of the economy in 1978 is well known.

Both England and China came down heavily on corruption. Robert Clive and Warren Hastings who looted India were tried by Parliament when they returned home. Chen Liangyu and Chen Xitong, who were both members of the powerful Politburo of the Communist Party of China, are now serving long prison terms on corruption charges.

In India, central and state ministers belonging to many political parties have attracted charges of corruption and some have been forced to step down but no one of consequence has been sent to jail. Biased investigation, inept prosecution and tardy court proceedings have helped the accused to get away.

When former Kerala chief minister K Karunakaran died last month, the corruption case registered against him two decades ago had not reached the trial stage. Madhu Koda, who allegedly amassed about Rs40 billion during 2006-08 when he was chief minister of Jharkhand, has been in judicial custody since November 2009 but there is no knowing when the case against him will come up in court.

Observers of a later period may not view the developments of the past decade in the same way as contemporary chroniclers. They may focus on the developmental activity of the period instead of the corruption that it generated. The 40 per cent growth in the telecom network in 2010 may interest them more than the big loot by politicians, officials and businessmen.

The decade saw Indian companies mopping up a staggering Rs2.09 trillion through public issues. Coal India, a big public sector undertaking, and Reliance Power, a big private corporation, made the biggest hauls.

Nine companies entered the capital market in the first three years of the decade and raised about Rs25 billion. Investors were shy at that time as a couple of stock market scams had just come to light. As the memory of the scandals receded, the market became buoyant.

Looking beyond the scams, the lesson of the decade is that if a reasonable level of accountability can be established the pace of development can be accelerated.--Gulf Today, Sharjah, January 3, 2011.

Shape of things to come

BRP Bhaskar
Gulf Today

The Big Power status which five nations nominally enjoyed at the end of World War II ended and enabled them to become permanent members of the United Nations Security Council may be irrelevant today but it is not without significance that the heads of all five governments figure in India’s 2010 guest list.

British Prime Minister David Cameron was in New Delhi in July, United States President Barack Obama in November and French President Nicolas Sarkozy and Chinese Prime Minister Wen Jiabao this month. Russia’s Prime Minister Vladimir Putin came in March and President Dmitry Medvedev is coming this week.

Business was high on the agenda of all visitors and they struck many deals. The embargo imposed on India after the nuclear tests of 1998 having been lifted, some were seeking orders for nuclear equipment and military hardware.

Britain got orders for 47 military aircraft under a $1 billion deal. The US, which was ready to provide equipment for power plants and civilian aircraft, secured orders worth $10 billion. France, which offered equipment and fuel for two nuclear plants, did business worth $13 billion.

Wen’s delegation, which included about 400 businessmen, signed 49 agreements valued at more than $16 billion. The size of the transaction testifies to the growing economic ties between China, which is already the world’s second largest economy, and India, which is tipped to take the third place in the not-too-distant future.

India has a trade deficit of about $16 billion with China, which has replaced the US as its biggest trading partner. This has not deterred it from planning to boost the two-way trade, now estimated at $60 billion, to $100 billion in five years.

The two countries have a combined market of $7 trillion. Clearly, it is in the interests of both to raise the level of economic cooperation. However, there are inhibiting factors. India complains of hurdles in the way of increased exports to China. India has not so far allowed any Chinese bank into the country although 10 Indian banks operate in China.

It should cause no surprise if Medvedev, who arrives today (Monday) pulls off even more than Wen. At least 15 pacts will be signed during his visit. While the agreements will be fewer in number than were signed during Wen’s visit, they have greater significance in strategic terms as they cover vital areas of fighter aircraft manufacture and nuclear power production. They underscore the strength of the ties built up during the Soviet days.

As early as 1961 India had opted for MiG fighter planes in preference to western aircraft as Moscow was ready to transfer technology and allow local assembly of aircraft. The new agreement will give India access to fifth generation fighter aircraft.

The first of four units of the 4,000 megawatt nuclear power plant being built in Tamil Nadu with Russian assistance is due to be commissioned shortly. Although Russia has reservations about some provisions of India’s new civil nuclear liability law, it has offered to help build a dozen more nuclear plants in the next 15 or 20 years. Agreements to set up two plants are expected to be signed during Medvedev’s visit.

While economic matters were uppermost in the visitors’ minds, the host was looking for political dividends as well. India is an advocate of reform of the UN and an aspirant for a permanent Security Council seat. Since the UN system cannot be changed without the concurrence of the existing permanent members, India has been raising the topic in all top-level meetings.

After Obama committed US support to India’s claim for a permanent seat when he was in New Delhi, China was the only P5 country still holding out. Wen signalled no change in its position. He only offered support for “India’s aspirations to play a greater role in the Security Council.” This suggests Beijing does not favour India’s elevation to the status of a permanent member with the right of veto.

From India Wen went to Pakistan and reiterated China’s desire to strengthen its strategic relationship with that country. Around the same time Japan said it was “realigning its resources” from the north to the south, indicating it views China as a greater potential threat than Russia. Evidently, geopolitical factors are as important as economic factors in determining the shape of things to come. -- Gulf Today, Sharjah, December 20, 2010

Can China browbeat the world's largest democracy?

The following is a statement issued by the Asian Human Rights Commission, Hong Kong:

China has cautioned that India's participation in the 2010 Nobel Prize ceremony in Oslo will have adverse effects in China's bilateral relationships with India. It is reported that the Chinese government has informed the Indian Ambassador in China, S. Jaishankar, to advice New Delhi not to attend the 10 December ceremony in Oslo or to send any representatives. China has sent similar messages to other countries.

The Chinese administration's concern for one of its human rights activists, Liu Xiaobo, being awarded the Nobel Prize is understandable. Dr. Liu who once lectured at Colombia, Oslo and Hawaii Universities and a co-author of Charter '08 is in detention in China since June 1989, branded as a criminal. Indeed advocating for legislative democracy, judicial independence, fundamental freedoms of assembly, association, expression and religion are subversive activities in China. Recognising someone who believes in basic human freedom is tantamount to "intervening in China's judicial sovereignty", to quote a statement by the Chinese Foreign Ministry.

Indeed it is for China to define what the term 'judicial' implies and to determine the manner in which a civilian version of a military tribunal, that the Chinese administration refer to as 'its judiciary' function. China has no right; neither does it make any sense should it expect the rest of the world to follow the Chinese model of administration. Perhaps it is time for China to understand and also respect the fact that in some parts of the world, people are born free and citizens expect their states not to restrict freedom, but to respect, guarantee and protect it. Probably it is time for the world to advice China that its circumscribed worldview, defined by the Communist Party of China or the interpretation of rights as permitted by the People's Political Consultative Congress or the National People's Congress is not always correct. The economic prowess of China can also be its Achilles Heel, only if the states that respect fundamental human freedoms can play Paris.

As for India, it is reported that New Delhi has not yet decided whether to succumb to Beijing's diplomatic browbeating or to defy it like any mature and self-respecting state that honours what is etched into its Constitutional template. India indeed will not be 'hurt' like Pakistan or Sri Lanka should China be unhappy with New Delhi. In fact if China stay away from dumping in India, it will benefit Indian economy. The FDI inflow from China in India as of August 2010 is only a meagre 52.41 million USD, placing China 35th in the list of 128 countries having FDI stakes in India. Developing democracies like South Africa, Mauritius and Indonesia have much more investments stakes in India, with Mauritius toping the list with 50 billion USD worth FDI inflow. Investments apart, India's decision whether to participate in the December 10 event at the Oslo City Hall must be based on what India believes.

Yet another concern for New Delhi will be China's position concerning India's candidacy to have a permanent seat at the UN Security Council. If the Security Council is to be expanded shattering the narrow self-interests of the Coffee Club led by Italy, like other members in the G4 India's question should also be decided on its merits. This seat is not worth occupying, should it require betraying universal respect to fundamental human freedoms and dignity.

India however has its own version of Dr. Liu. It is Ms. Irom Sharmila Chanu of Manipur, also known as the iron lady of Manipur. Since the past ten years Sharmila is imprisoned in an isolated room within the security ward of the Jawaharlal Nehru Hospital in Imphal, Manipur. The state government in Manipur, upon instructions from New Delhi has charged Sharmila under Section 309 of the Indian Penal Code, 1890 interpreting her indefinite fast demanding an end to the existing culture of impunity in Manipur as an attempt to commit suicide and thus a crime. The judiciary in India, concerning this case in particular and Manipur generally, has behaved like their Chinese counterparts, subjugated and biased.

India is hardly any different from China in smothering dissent and negating democratic freedoms concerning Jammu and Kashmir and Manipur. India enacts its June 4 and October 19 in Manipur and Jammu and Kashmir, as often it is required. Indian media emulating their Chinese counterparts avoid impartial and continuous reporting of human rights violations and brutalities committed by the state and non-state actors in these two high intensity internal domestic conflict zones.

India also has its own historical and cultural nemesis to its proclaimed belief in equality. It is the 3000-year-old caste system, a brutal discriminatory practice that has helped survive political, religious and administrative bigotry that continues to force an estimated 200 million Indians to live within the fringes of the society. It is the poverty, starvation and malnutrition among this 200 million and an additional and substantially large tribal community who are increasingly driven out of their habitats on the excuse of development that places India worse than 26 poor African states put together in terms of poverty. Concerning all these issues, India is hand in glove with China in its resentment to international condemnation. Like China, these are all 'internal issues' for India, conveniently to be swept under the carpet.

So the question to be asked is, will India loose anything and will it paint a different picture of itself if it fails to participate in the Nobel Award Ceremony? Not quite!

The Asian Human Rights Commission is a regional non-governmental organisation monitoring and lobbying human rights issues in Asia. The Hong Kong-based group was founded in 1984.

Growth without justice

BRP Bhaskar
Gulf Today

Last week the Indian capital market came up with Rs2,360 billion when the government offered a block of shares of Coal India as part of the ongoing public sector disinvestment programme.

Also last week, hundreds of thousands of people, most of them members of tribal communities, gathered at two remote villages of Maharashtra and Madhya Pradesh as part of the ongoing struggle by the poor to save their land and livelihood.

The two events brought into sharp focus the contradictions inherent in India’s current developmental effort. It is producing two Indias: one flush with money and ready to grab good stocks and the other desperately poor and struggling for survival.

In theory the state has long been committed to growth with justice. The Constitution ushered in three years after the country gained freedom gives primacy to “justice — social, economic and political” in its statement of objectives. However, as the economy grows injustice too has been growing.

In the early years of independence, the government opted for a mixed economy in which the public and private sectors will have their places, with the former commanding the heights. Many huge public undertakings were established in keeping with this policy. Some of them enjoyed monopoly in their areas of operation. The private sector’s functioning was subject to curbs.

The globalised economy demanded a change in approach. The restrictions on the private sector were eased. Many areas which were earlier the public sector’s preserve were thrown open to private players. Foreign capital was allowed in.

The government also decided to divest part of the shares of the big state undertakings to raise funds for developmental programmes. Progress in this direction was, however, slow as organised labour controlled by leftwing parties put up stout resistance.

The course change resulted in acceleration of the rate of growth of the economy. As the economy boomed, pundits prophesied that the country would emerge as a major economic power by the middle of the century, closely behind China, which had made the policy shift a decade and a half earlier.

Business fortunes rose rapidly. Forbes magazine, the chronicler of the rich, counted 69 billionaires in the country this year. It also predicted that the wealthiest Indian, Mukesh Ambani, now at fourth place in the list of the world’s richest, might move into the top spot by 2014.

The Indian stock market was the one least affected by the global meltdown sending shivers around the world. It was also the earliest to recover from the shock. Coal India’s rich haul — through sale of its shares the government fetched as much as one-fourth of the national budget — shows investors are hungering for good stocks. Naturally, Indian Inc. is in an exuberant mood.

The two rallies in Maharashtra and Madhya Pradesh, organised to mark the 25th anniversary of the Narmada Bachao Andolan (Save Narmada Movement), are a stark reminder that millions in the country do not share the exuberance. Most of the participants were Adivasis rendered homeless by the massive Narmada river project.

The mega project envisaged diversion of the waters of the Narmada by constructing a chain of canals and dams to irrigate lands in MP, Maharashtra and Gujarat, provide drinking water to 40 million people and generate 1,450 megawatt of power.

Medha Patkar, a young research scholar, who visited the project site in MP 25 years ago, was deeply moved by the plight of the Adivasis whose homes were submerged by a reservoir. She stayed back, founded the Narmada Bachao Andolan and has spent the rest of her life fighting their battle as well as others whose livelihood is affected by similar projects.

Originally, the project cost was estimated at Rs64 billion. In 30 years the government has spent Rs392 billion and many more billions are needed to complete it. Critics claim the project goals could have been achieved through alternative schemes at much less human and environmental costs.

Since the globalisation process began in the 1990s, the Centre and the states have sanctioned many more projects that adversely affect the poor, especially the Adivasis.

A World Bank study of 2008 showed one-third of world’s poor are in India. It also revealed that rate of decline of poverty has fallen since 1990. Evidently, as the number of billionaires goes up the number of the poor also goes up. While the government talks of inclusive growth, more and more people are getting excluded.