Takeover Balasaheb Thackeray Legacy

Takeover Balasaheb Thackeray Legacy

Devendra Fadnavis showed prescience, despite being heckled by Shiv Sena workers, when he visited Shivaji Park on November 18^th to pay his respects on Balasaheb Thackeray’s 7^th death anniversary.

This was particularly poignant because it is just seven years since Bal Thackeray passed away. And already, his son Uddhav, showing little political vision, was making ready to dump his Hindutva legacy. This in the thick of Shiv Sena-NCP-Congress’attempts at cobbling together a government.  

And Balasaheb’s once charismatic nephew Raj Thackeray has no influence beyond his bailiwick of Thane either. It is an irony that he made no attempt to split the party when he had the chance in Balasaheb’s declining years.

The orphaned MLAs born and bred in the Balasaheb vision can now head for the BJP along with large numbers of party workers. As the remains of the Uddhav-led Shiv Sena reaps the whirlwind for its past financial misdeeds, it won’t have much money to look after its flock either.

Bal Thackeray however is certainly a Hindutva icon worth the honouring. He stood firm when there were very few flag-bearers of the saffron ideology.  Despite his legacy being unceremoniously betrayed by the party he founded under the leadership of his son, it remains valuable. Uddhav saw fit to quickly dump the demand for a Bharat Ratna award for Veer Savarkar too.

Balasaheb  Thackeray however, supported Hindutva and the Marathi Manoos all along. His party belonged to the NDA from the days of the Atal Bihari Vajpayee government and through the decade of thick and thin after NDA1.

Today, the Shiv Sena, circa 2019, still invokes Bal Thackeray’s name, but apparently denies his explicit and implicit legacy. It is therefore there for the taking by Devendra Fadnavis in the state, and the BJP/RSS national leadership.

The situation is reminiscent of the legacy of Sardar Patel, adopted by the BJP, even as the Nehru-Gandhi led Congress tried to all but forget about him.

Balasaheb’s story is described in a new film starring Nawazuddin Siddiqui and probably does not need repeating. It all started decades ago, as did the story of Maharashtra as a state, with Bombay as its capital.

I too lived in the Bombay of the seventies - 1969 to 1979. Most of it was under the stable and low-key governance of Chief Minister VP Naik of the Indira Gandhi led Congress. His son went to St.Xavier’s College, as I did, and remember visiting him at Varsha on Malabar Hill. It was unfussy. Just like going to any other friend’s house.

It was a very pleasant Bombay in those days. There was enough room to sit down at the front of the double-decker B.E.S.T buses, upstairs, with the windows propped open to take in the sea breeze.

The Shiv Sena was then just a fringe pressure group. It had demanded the ouster of South Indians working in Bombay, then concentrated in the suburb of Chembur. The anti-Pakistan-anti-Muslim stance came much later, provoked, no doubt by terrorism and the bomb blasts in the wake of the Babri Masjid demolition of 1992.

But in South Bombay, Shiv Sena, under the early Bal Thackeray, with his occasional threats, trade unionist cum extortionist ways, his goons, did not matter very much. You heard names like Datta Samant, and later, George Fernandes, the former provoking factory lockouts. And the latter - railway shut-downs and road blockages at Fountain in Fort.

The infrastructure of Bombay those days was largely adequate, the trains ran on time, the electricity never went on the blink. However, water, gas, milk and other things that were obtainable against a ration card, Padmini cars, bakelite telephones and connections, were, along with many other things like foreign exchange, in typically socialist short-supply.

It must be remembered the Indira Gandhi years were hardly known for development or GDP growth. But the broad civic and policy neglect, carried on for decades, with little redress by a largely Congress government, either on its own or in coalition.

Meanwhile, Shiv Sena had grown into a considerable political influence throughout Maharashtra, if not much of a stable electoral presence, right through the Balasaheb years. Since his demise, truth be told, Uddhav Thackeray has led it to a terminal decline.

If the Balasaheb legacy is taken over by the BJP now, the Shiv Sena  may be presented with the uphill task of reinventing itself in its new found “’secular” role in the Opposition, both in Maharashtra and nationally.

Today, in the 21^st century, even as India boasts of its economic progress, people routinely die in pot holes in Mumbai, even as the richest municipality in the country run by the Shiv Sena, looks on unmoved. That the BJP, which has almost as many seats in the BMC, has kept quiet about this disgrace can perhaps now be remedied at last.

Even apart from the shortcomings of the BMC, the massive demands of a megapolis, often called the Maximum City, are badly unmet to this day.  

The first notable development, besides a carriageway towards the airport built long ago, and sundry flyovers, was the Bandra-Worli Sea Link, opened as recently as 2009, and of course, the 94.5 km Bombay-Pune Expressway, build in record time by Nitin Gadkari during NDA 1, in 2002.

The Fadnavis first term however, has been marked by movement in long-stalled infrastructure development, including the Mumbai Metro and the shortly expected first bullet train between Mumbai and Ahmedabad.

And now, with a second term in hand, pending the floor test and the misinformation swirling thick and fast, more confident and rapid progress can be expected.

Of course, the timely alliance with the NCP or a sizeable number of its MLAs in another configuration, should it choose this moment to split between the Supriya Sule (Sharad Pawar) and Ajit Pawar factions, has a glue to it.

The NCP has a number of corruption cases against some of its most prominent leaders including Sharad Pawar, Ajit Pawar, Praful Patel and could even rope in Supriya Sule and her husband. This will tend to keep the junior partner in this new configuration well-behaved during the five year term going forward.

(1,020 words)

For: Sirfnews

November 23^rd 2019

Gautam Mukherjee

A Change In The Weather

A Change In The Weather

When a regime changes, all who have benefited from the old order are suddenly deprived of their influence. They are left with little besides their litany of complaints and criticism.

Still, it is understandable, for those not nimble enough to change stripe, that contemplation of an interminable stretch, out of the limelight, is akin to the Roman Catholic state of purgatory. It is a suspension, in suffering, stuck indefinitely between Heaven and Hell. Except, that the old order admits to none of its sins.

Instead, it adopts a stance of indignation when a procession of their number, including the all powerful who thought themselves beyond the law, are prosecuted for corruption. It was corruption, almost institutionalised, that was a major reason for  the UPA’s humiliating rout at the hustings, not once, but twice in a row.

When Narendra Modi, a provincial but clean Chief Minister, with no first hand foreknowledge of the Centre, won  a majority in the Lok Sabha after 30 years, in 2014, the old guard was astounded. There were those in the capital who thought it was a massive over-reaction on the part of the electorate to his spectacular oratory. Modi’s popularity would surely wane by mid-term, they said, as it had in the case of the ill-fated Rajiv Gandhi administration. And he would be shown the door at the end of his one and only five year term.  It was a flash in the pan. All one had to do was be patient and disdainful. 

It was axiomatic to such people that no “Communal” government, with a nebulous grip on the economy and governance, and clumsy law-making, could possibly last more than a single term. Even the avuncular, get-along Atal Bihari Vajpayee’s saffron government from a decade ago, lasted only about six years.

Demonetisation in Modi 1.0, they cried, and do so still, as each anniversary of the November 8,2016 announcement approaches, was a disaster. It destroyed livelihoods of the MSME sector and the labouring classes. Then, GST bamboozled the shopkeeper. And the shortfall in its collections month after month point to both a slowing economy and its flawed architecture. Not for nothing was it kept in abeyance by the Congress for long years.

So, a second Modi term in 2019, despite spurious accusations of corruption in the 36 fighter Rafale purchase, in a forced re-enactment of the Bofors scenario that brough Rajiv Gandhi down, was most galling. And that too with an increased majority. What can the electorate be thinking? Do they not see the mismatch between performance and promise?

And now, six months into Modi 2.0, two daunting but long-promised Hindutva aspirations have been fulfilled. The first is the dramatic abrogation of Articles 35A and 370 less than three months into the second term - by simply voiding them both of all content. It was a spectacular bit of legal interpretation and execution.

This, and the resultant main-streaming of J& K via the creation of two new Union Territories -one of Buddhist majority Ladakh, and the other by combining Jammu & Kashmir. There is a new awakening of hope and ambition in both these territories. There has been very little by way of fall out. Pakistan has been reduced to near tears for the lack of support it garnered internationally. And domestically, there has been a broad acceptance of the move. Of course, most of the prospective trouble-makers were safely locked up, out of harm’s way.

The other major achievement within 6 months of this term, is the unanimous and positive Supreme Court verdict on the Ram Temple at Ayodhya. This will lead to the construction of the cherished temple soon, after a very long interregnum. Ayodhya itself is set to be transformed as well.

Other possibilities, to set right the distortions in secularism, is the promulgation of the Uniform Civil Code and the implementation of the National Register of Citizens nationally. Repossession of Gilgit-Baltistan and PoK could also come about through a fortuitous quirk of fate within this very term.

Even on the basis of its present successes, the NDA, increasingly becoming synonymous with the BJP till new allies come along, should be re-elected in 2024.

The only fly in the ointment is the Modi government’s handling of the economy. Not only is it imperative to improve performance for the sake of the hopeful masses looking for jobs and livelihood, but also to keep up with our raised international diplomacy.

To be taken seriously abroad, we have to spend money by way of aid, grants and ventures. Money which we patently do not have at present. Nor can we properly finance our own necessary development and welfare programmes domestically. Holding to the fiscal discipline we have set for ourselves is proving extremely difficult at a 5.5% GDP growth rate when we need 10%.

In today’s world, to raise one’s political profile, particularly in competition with China, without the assurance of a robust economy, simply cannot be sustained. The government will have to take many bold and reformist steps and quickly.

If there is anything that will upset the applecart politically from mid-term in 2021, it is a floundering economy. The cyclical and global position notwithstanding, Prime Minister Modi and his cabinet have no room for excuses or bluster in this regard. The economy is the keystone, and its neglect could bring the whole house down.

(893 words)

For: WIONNEWS

November 19^th, 2019

Gautam Mukherjee

Gautam Mukherjee is a perceptive commentator on current affairs based in New Delhi

The Transition To Complete Dominance

The Transition To Complete Dominance

What does the Bharatiya Janata Party stand for? Is it patriotism, nationalism with a saffron hue, and economic welfare of all? This will have to be made clearer. Others, allies and opponents both, are falling by the wayside. Political space is being ceded. And not by just those of the Lohiaite or Socialist persuasion.

The challenges have begun to come from BJP allies themselves. One in particular, that even professes Hindutva moorings. But, when the ideological position of the ruling dispensation, including its integrity, is challenged, a change must come.

An “ally”, may now be in apparent cahoots with their so-called political rivals. It is time to speed things up. Is this just brinkmanship?

Can the pre-poll alliance towards formation of the government in Maharashtra be stabilised by influential quarters from Nagpur?

But how much of the situation has been provoked by ideological drift, both in the BJP and the Shiv Sena, and how much is just a political battle for survival on the part of the latter?

How so ever the immediate situation pans out, in future it needs to be remembered that an assertive Hindu nationalist BJP provides proof of commitment and maintains its credibility. Being all things to all people is a political position that has long belonged to Congress.

The Congress has portrayed itself as liberal and inclusive. However the reality has unravelled over time. It is actually tightly dynastic and partisan. It bases its political power, what remains, on the 170 million or more Indian Muslims including a soft attitude towards separatists and terrorists rather than the Indian armed forces in the Kashmir Valley, and even a sympathetic, collusive view on Pakistan and China.

In addition, there are the numerically poor but vociferous and educated liberal-leftists of all hues and creeds fanning the flames.

There is, in common with almost all of the political landscape, the rank opportunism of the political draw that makes for instability and very strange bedfellows.

And then, there are the other minorities, including the small but influential number of Christians, particularly in a Western context.

This manipulation of people on the margins, against majority interests, over several decades since independence, has angered the vast Hindu nation.

This includes the OBC and Dalit masses, even though some of these sections enjoy reservations and other affirmative action benefits. Together with the upper castes, Hindus comprise, even today, nearly 80% of the populace.

The Congress-led partisanship has lost it, the UPA, and even its other allies in the erstwhile loose Mahagatbandhan, many votes. That, and its massive corruption.

In 2019, it is seen that the Congress also suffers from a vacuum caused by the lack of charismatic, articulate, intelligent leadership beyond its ageing seniors.

The public may have largely lost patience with Congress and its friends including the Communists, but a revival in its political fortunes might be forming. This is largely in reaction to the absence of a clear cut ideological position in the BJP.

However, the reforming of the status of J&K in Modi 2.0, and the imminent decision, probably favourable, on the Ram Mandir at Ayodhya have taken care of two long pending issues.

But to go the whole hog, the Uniform Civil Code is a must, as is the nation-wide implementation of the NRC and a concerted move towards a Hindu Rashtra to replace the false secularism we have known so far.

Prime Minister Modi did start his consecutive second term in 2019 with an enlarged mandate. But strangely, in the very first flush, he floated an extension to his winning slogan of 2014-namely ‘Sabka Vishwas”. This took many of his supporters by surprise, but wasn’t believed by his detractors either. Was it, in fact, a political experiment?

It was interpreted to primarily mean an inclusion of the Muslims, in particular, into the BJP’’s vision of “Vikas”. Did it intend to introduce special measures to exclusively help Muslims, just like the Congress? Was it an attempt to reboot the BJP image by edging from the right towards the middle? But why? Why, for that matter, did Modi 2.0 expend  so much political energy on passing the strictures of Triple Talaq into law? Does the BJP expect to garner much of the female Muslim vote? Is this a realistic aspiration beyond a weak 10 to 15 percent of Muslim women?  Is the effort put into Triple Talaq, by casting it in terms of women’s empowerment, commensurate with the political returns?

Try as it might, the opponents of the BJP including most Muslim leaders, never tire of depicting it as “divisive”. Echoes of this position come from parts overseas, not only from Pakistan, but from left-leaning journalists, intellectuals and academics in the West. But can this leopard ever change its spots irrespective of the inducements?

Could there not have been time saved and better yields from promoting Hindutva and right-wing economics for the faithful?

The present leadership of the BJP is honour bound to promote the core agenda of the RSS, which has long supported and inspired BJP. And straying far from this path makes it look very much like the Congress. Moving away from its core beliefs also confuses its solid mass of voters.

The Modi-Shah led BJP would have the public view the abrogation of Articles 370 and 35A and the formation of two union territories where J&K state once stood in purely nationalist terms.

But many, amongst the libleft and the minorities see it as a curtailment of Muslim freedom, and human rights violations. All this is projected as a political battering ram against the BJP. There is no acceptance on its part of the BJP line that it is a visionary move to foster the better development of the region. A reform designed to take the region away from the scourge of Pakistan sponsored terrorism. But what about promoting a demographic shift in the Kashmir Valley as the Chinese have effected into Tibet?

BJP wants the nation as a whole and the international community to see the changes in Kashmir as the setting right of a historical mistake. But, to make it stick it has to push onwards. Minorities need to be protected but the majority must assert irself.

The behaviour of the Shiv Sena in the formation of the new government in Maharashtra is a harbinger of things to come.    More NDA allies are likely to worry about being thrust into oblivion, via the submergence of their own distinct identity. This, more so, because their bases are in one or the other state of the union, rather than a national presence.

Shiv Sena was born and bred in Maharashtra. And even though it laid claim to the mantle of national Hindutva, this started slipping away to the BJP right from the start.Even as it was indeed the Shiv Sainiks who brought the domes of the Babri Masjid down in 1992.

And today, days before the decision by the Supreme Court to allow a new temple to come up in its place, the Shiv Sena itself is apparently about to self-immolate. If it bows its knee to BJP for the sake of government formation, it will be steadily marginalised for its extreme disloyalty. And for having used up most of its political capital.

If it forms the government with its ideological enemies, the NCP and the Congress, it will definitely be short-lived.  

Others in the NDA, most notably the Akali Dal, currently out of power in Punjab, with grave alleged charges of corruption against it, could in time, also become history. This, not just because of its loss of power to the Congress, led by the popular Captain Amarinder Singh of the Patiala royal family, but because they stand rejected by the Punjabis and Sikhs.

But even as regional parties in the NDA alliance discredit  and marginalise themselves, the resurgent RSS backed BJP has to fulfil its own promises. It must shake off other ideas and prepare to go it alone to fulfil the aspirations of its voters.

(1,331 words)

For: Sirfnews

November 5^th, 2019

Gautam Mukherjee

PoK, Here We Come!

Pakistan Occupied Kashmir, Here We Come!

The informal summit at Mahabalipuram, Tamil Nadu, has some unremarkable, if solid, agenda items. But these could have appeared in any bilateral state visit between the heads of government of India and China. These concern trade, investment, technology, tariffs, visas, broad-based terrorist threats and so forth.

Such matters can, and do, also get taken up at other venues and summits that dot the annual calendar. These, jointly and severally, afford handy delegation level talks on their sidelines.

But an informal summit like the one in Wuhan, China, and the one now, which allows several hours of one-on-one informal meetings, can work on medium term strategic issues better than most other formats.

The defensive positions and formal reservations can be set aside as already read, as both leaders come to them extremely well briefed.

The type of work they individually and jointly do at such summits therefore, may not emerge into the official lexicon on either side, let alone the public domain, for a considerable time after.

Even if certain sensitive things are agreed upon, the enabling actions that are put into motion, also take time to fructify.

But, as a consequence, these confidential tete a tetes as a diplomatic construct, can truly tackle game-changer issues.

Which is possibly why India and China have begun to hold them soon after the lengthy stand-off at Doklam.

In a broader context, that is no doubt impelling, China is under considerable financial pressure and stress even as its economic growth has halved from peaks of a few years ago. This is a widely held perception in strategic circles, though details of how tough the situation is are hard to come by, given China’s opaque systems of governance.

But, it is safe to assume that China carries massive debt, most of the legacy amounts from its high growth years being internal debt, as otherwise, if it were external, the world would be privy to it. Suffice is to say, its foreign exchange dollar/euro reserves, though it runs into trillions, is not even a fraction of what is the position here.

There is also the massive amounts owed to China by a host of impoverished or fairly poor nations that have availed of China’s offer to build large infrastructure in their countries. Yet other countries have sold China their land and mines. China’s ongoing liabilities are considerable without commensurate revenues to balance it.

That China has obtained masses of such infrastructure on long lease in these countries when they have been unable to pay instalments against their debt, inclusive of tax holidays and other favorable terms, does not, as yet, help its cash flow. Nor does it make China popular in this day and age, because it smacks of colonial style imperialism.

Nevertheless, to get this reality going into economic viability, China needs people to use, and pay for the facilities they have created. But even a couple of years after Hambantota and Gwadar are operational, next to nobody has come to call at these ports.

In the case of Gwadar, the resentment against both the Pakistanis and Chinese felt by the Balochis makes it a volatile prospect for trade that needs to pass from that port through and from Pakistan.

In the case of Sri Lanka, nobody else seems to want to use a Chinese port, when China has gone out of its way, in the garb of helping, to menace most of the countries bordering the South China Sea, and even further afield in the Asia-Pacific and Indian Ocean region.

The China Pakistan Economic Corridor (CPEC), that will absorb at least $ 60 billion of China’s money, is also in financial trouble. Investment from China has slowed of late as a consequence, and the costs of keeping what has been put on the ground secure have risen exponentially. It is also extremely vulnerable to a conventional war between India and Pakistan. This could well be provoked by cross-border terrorist attacks and the belligerence against India of Pakistan’s armed forces along the international border or line of control (LoC).

Pakistan, on its part, is unhappy that the CPEC has not generated very many Pakistani jobs, or contributed substantially to its economy while saddling it with massive debt. A politically unstable Pakistan, run, de facto, by its all-powerful army, is near bankrupt. It is totally dependent on loans from the multi-lateral lending agencies, and China. Aid is also taken from whichever quarter it can secure it. This makes the future prognosis even bleaker.

Besides, like the Palestinians before them, fellow Islamic nations are reluctant to fund Pakistan. It is widely seen as a basket case and bottomless pit, that carries the opprobrium of being terrorist central too. America’s strategic dependence on Pakistan, because of its long standing involvement in Afghanistan has diminished. And this to the extent that the US is pulling out of the region irrespective of the consequences.

The prospect of piggybacking on an “Islamic nuclear capacity” is no longer as alluring as it once was, given the fate that engulfed Col. Gaddafi of Libya, and the pressures being exerted on would-be nuclear Iran.

And using seconded or retired Pakistani troops, trainers and advisers, in Saudi Arabia and the UAE, has not yielded very good results versus the Houthi rebels, or even for routine security work internally.

As Pakistan’s sole benefactor cum colonizer today, things are not going very well financially for China. It is forced increasingly, to protect its sunk investment, to prop up the Pakistani military with money, planes, guns, and tanks. This, at its own expense, to all intents and purposes.

China’s tariff negotiations with the US, its biggest export market still, are not going very well either. President Trump is determined, like none other before him, to wring unprecedented concessions out of the People’s Republic. This is altering the status quo drastically. This more so because Chinese exports to a slowed US economy, and a recessionary Europe have dwindled over the last several years. There is little upside in prospect even in the medium term. 

China’s production costs have also risen substantially occasioning many foreign manufacturers to emigrate to Vietnam, Bangladesh, and India. It is in urgent need of finding other markets, and India, with its size and population, is a good prospect despite a handsome trade surplus in China’s favour already.

India, on its part, has steadfastly refused to join China’s belt and road initiative, unlike Nepal, because  the CPEC runs from Xinkiang via PoK and Gilgit-Baltistan, which are both Indian territory that it intends to reclaim. This, more so, after the abrogation of Articles 370 and 35A and the reorganization of J&K into two union territories for now.

In is thought, in the strategic thinking of the Government of India, that it is impossible to remove  Pakistan’s Kashmir obsession till the rest of the territory is reclaimed from Pakistani occupation as well.

India has vowed to do so of late, at the opportune time. It has also made it clear to China that any infrastructure it has built, or is in the process of building in PoK and Gilgit-Baltistan, is without its expressed permission. This includes the road and associated infrastructure, a dam in PoK and so forth. The native people of the region are also unhappy with the Pakistani-Chinese occupation and want to revert to India at the earliest.

The time is ripe therefore, and perhaps the matter has been, or will be, discussed between Prime Minister Narendra Modi and President XI Jinping at Mahabalipuram.

If China tacitly approves of India reclaiming PoK/Gilgit-Baltistan and uses its good offices to hold Pakistan to a token resistance; a case can be made for India joining the belt and road initiative in return.

This will give new life and strength to the whole enterprise, without  compromising China’s abiding support to its ally Pakistan, and  the latter’s legitimate territorial integrity.

That Baluchistan that contains the port of Gwadar, will chafe at the bit and seek independence from Pakistan, is a real, if separate, issue, and China will have to come to terms with it later, perhaps in league with India.

However, subduing Pakistan’s aggressive instincts, its calls for jihad, including its cross-border terrorism, is as much in China’s best interest as India’s.

 Trade cannot flow between Xinkiang and Gwadar, and all points of the compass within India, and via Pakistan, if peace and tranquility is not secured. China can make this happen, if it undertakes an about turn from the long held policy of using Pakistan to bait India.

(1,418 words)

For: Sirfnews

October 12, 2019

Gautam Mukherjee

The Shingle Is The Same,But Everything Is Changed

The Shingle Is The Same, But Everything Is Changed

Ancient civilisations have a predilection for retaining the markers of the ages they inherit. Rome is always careful to leave its ambience as the “eternal city’’ undisturbed. China reveres its storied and ancestral past, and is loathe to rip apart even its modern ideological structures. This, also if they have outlived their purposes in certain areas. India has always been a confluence of cultures and ideas. These have formed and travelled both outwards and inwards in a wide arc of influence and inspiration. To not take this along into the future, even as perversions are corrected, would not do its essential ethos the justice it deserves.

The People’s Republic of China is today a considerable capitalist success, second only to the US in terms of the size of its economy. It is still Communist, in name, and political organization; but no longer in terms of its economic policies.

This change has been wrought since the 1980s, under the guidance of its late great leader Deng Xiaoping, who decided to change direction. This, after the collectivisation failures and excesses of the Mao era came to an end with the Chairman’s death. Particularly, since it did not add much economic value, and was marked and scarred by a tremendous cost in human suffering. Chairman Mao’s administration, since 1949, is credited with having killed over 30 million of his own people.

China has made quick economic strides since the 1980s, with 30 years of continuous double-digit growth, using its version of the dictatorship of the proletariat.

However, it was helped in this spectacular performance, by not allowing for the tumult of democracy. Since 1997, it has had to endure the freedoms of democracy, in a limited way, and as an exception, in Hong Kong. This, of course is due to historical reasons, because the island was under British colonial administration for a very long time. This may have been authoritarian too, but European democratic ideals, and the principles of free trade were taught, revered, and were, to some extent, implemented. Hong Kong was, and is, a dynamic trading citadel.

Having got Hong Kong back in 1997, after 156 years, under the treaty obligations signed by an imperial Britain with Qing China post the Opium Wars, China has tried to proceed with delicacy and caution.

Even now in 2019, China continues to profess a principle of “one nation, two systems”, for the benefit of the advanced and sophisticated people of Hong Kong and the sake of their promised autonomy. However, it has been tightening its grip over the island very gradually over the years.

But now, its centralised ways are facing embarrassing opposition from the residents, who think very differently from those who live and work on the mainland.

China’s stiffening stance under President Xi Jinping, might be because it calculates that it can afford to substitute very successful Shenzen, on the mainland, in place of Hong Kong, and not suffer in terms of connectivity and trade with the rest of the world.  But, as may be expected, the people of Hong Kong are not amused. Most people in Hong Kong however, particularly the wealthy, have seen the writing on the wall, and are emigrating to other countries, including Singapore and Canada.

In addition, scant miles away from Red China is Taiwan, formerly the island of Formosa- now constituting all of The Republic of China, which is democratic, and fiercely independent of the mainland.

The vagaries of history may have to answer for why Red China continuously claims Taiwan to this day. But, it is a separate country today, recognized by the whole world, and backed in its independence by the US. It was born after Generalissimo Chiang Kai Shek and his Nationalists fled the mainland after losing the fight to Mao Tse Tung and his Communists in 1949.

So China lives cheek by jowl with democracy, both within its own territory in Hong Kong, and in the lost territory of Formosa/Taiwan. But it manages to follow a different drummer ideologically for itself.

It has long been speculated how long China can hold out before its masses reach out for more political freedom despite considerable prosperity compared to the old days. But for now, under President Xi Jinping, things seem to be in control. A repeat of the Tianeman Square protests of 1989 seem unlikely on the surface. Although a slowed economy, running at half of its boom years in terms of GDP, the tariff wars with its biggest export market in the US, and massive national debt, could fuel unrest at any time. The world is perpetually running blind to a certain extent when it comes to China, and will only find out if anything comes out in the open.

India too is going through a transition. It is redefining the meaning of secularism and socialism inserted into the preamble of the Indian Constitution during the Emergency of the 1970s. From the early days after independence in 1947, a Hindu majority country was seen to pointedly favour its minorities. 

This was the norm for decades, and led to a distorted sense of both entitlement in certain quarters, and glaring exclusion in others. The unfairness of the situation was not thought to be remarkable. In fact, the people of the country were lectured and hectored to shun majoritarian tendencies.

The present government is actively engaged in rectifying the situation with the enthusiastic backing of over 40% of the electorate. In fact, if the NDA allies are counted, the percentage is closer to 50%. The remainder of the votes are fragmented and no other political entity can boast of much more than 30%, if that.

This transitionary period is not without its share of heartburn, particularly as the once mighty and seemingly all- knowing have been replaced by the electorate.  In economic policy too, the earlier dispensation professed to spend on the upliftment of the poor, even as it neglected the engines of growth. This led to runaway inflation, as expenditure bore no relationship to income, in a deficit fueled and extremely corrupt administration. The money for the poor only saw under 15% of it reaching its destination.

Today, the welfarism continues but so does growth. And the benefits for the poor reach them in every instance without middle-man pilferage.

In a very telling way, both secularism and socialism have come to mean very different things today. Secularism is now an even playing field for all. 

Hinduism is allowed its rightful place in the public discourse without imposing on any of the other religions. But by the same token, manipulated and forced conversions are being checked. However, because of decades spent with a tilted outlook, evening the balance may look revanchist to those who have been dispossessed of their authority. This is not right, despite the caterwauling, but can nevertheless be understood.

In a sense, both India and China have decided to retain the framework created and established by their founding fathers, while modifying the content to suit present times and the demands of the future.

The recent changes in J&K however have shown up the limitations of retaining unfair legal structures. So, in a way, the conversions made there must be seen as exceptions that prove the rule. There is a new secularism, a new socialism, as practiced by a renewed and resurgent India.

China is on its way to seeking global leadership based on its considerable success. This, of course, is not without its obstacles. India, on its part,  is busy course-correcting internally as much as externally to remove the impedimenta to its future greatness. It is also determined to seize its leading position in the comity of nations, economically, politically, militarily and culturally.

Will there be increasing convergence between the two Asian giants? Rivals, even senior and junior ones, will never converge, and so this seems unlikely. A transactional cooperation, yes, will increase as the time goes on, but good fences always make for good neighbours.

(1,324 words)

October 2, 2019

For: Sirfnews

Gautam Mukherjee

The Worm Always Turns

The Worm Always Turns

India’s economy, structurally sound, and much admired by the international rating and lending agencies for its probity, has been beaten down to a growth rate of  5% GDP in the June 2019 quarter. Growth has also been slipping for five quarters.

This has excited much comment, but needs to be seen in perspective. Domestic consumption is sharply down, jobs are being lost in the formal sector, and even core sector parameters are in the doldrums. But, given all this and more, there is no existential threat whatsoever.

We are still ticking over, making treaties, purchasing armaments, strengthening our defences, furthering our diplomacy and international reach. We hold strong foreign exchange reserves, even as chunks of foreign investment exit the stock market, and the rupee takes the battering of its life.  

Most developed countries, suffering from miniscule growth, or mild to severe recessions over a prolonged period, think 5%  is still enviable. But of course,  it is a sharp come-down from our own peak performances of the recent past.

As an emerging economy, though even now in the top ten, if 5% were to become the annual figure instead of just the latest quarter, we have to see it through the prism of the embedded growth propulsion in our DNA. And this, for decades to come. There is much to be built, improved and modernized. There is always a demand push towards addressing huge deficits in infrastructure and systems to tap our full potential in all sectors. This downturn is cyclic.

However, given resource constraints and a massive 1.3 billion population, our relatively responsible management of the economy, despite inheriting almost 11% of banking assets in NPA, we are not doing too badly. And we are indeed collecting on the Non Performing Assets by a more determined pursuit of economic offenders than ever before in our 72 year history. But the very cure may be the culprit too. Austerity in government money management has reduced demand and consumption.  

On the plus side, again in an unprecedented way, the Modi government has itself steered clear of all scandal and corruption since 2014. This has been combined with delivery of welfare to the poor without leakages.

Our sovereign and domestic debt levels are modest yet, with even domestic debt at around 80% of the $2.8 trillion economy and external debt at some 5% . We will, it appears, never become a banana republic at this rate! The Indian government has never defaulted on a payment obligation so far.

 This debt scenario is the main difference with the mature developed economies, many of whom owe many multiples of their GDP. Some, are to all intents and purposes bankrupt, only kept afloat by their lenders. Others are having difficulties just servicing the debt, let alone bringing it down or spurring growth.

The current 5% in India is comparable to the 4.7%  in the quarter at the end of UPA II (2013).  It had tumbled from a high of over 9%  at its peak. And this, with inflation surging in the double digits too. The UPA could not even blame demonetization or GST, as it does now with its ravaged and much diminished presence. However, high oil prices did plague it at the time.  

This was the state of play under the stewardship of eminent economist and former Prime Minister Manmohan Singh. It is therefore quite droll that Singh is making bold to vehemently criticise the present position.

Through all of Modi 1.0, the economy turned in a performance of over 7%  in GDP despite inheriting a scorched earth economy. The other chief parameters such as the fiscal and current account deficits and inflation have also been admirably controlled throughout, and continue to be in check into the first months of Modi 2.0.

However, because of the sharp slowdown, the government is now easing money supply to different sectors and reducing interest rates. It is also removing road blocks to FDI. In addition, the PMO itself, rather than the apparently Leftist and 1980s style Garibi Hatao Finance Ministry,  is working on each distressed sector. This  includes those that can provide an early boost, such as Real Estate and the Stock Market.

Indications are that business, industry ,  the farmers, rural India,the  stock market and international investors  have confidence in, and are appreciative of, the recent government efforts to revive growth. Particularly after a most peculiar budget presentation in July. The unfeeling budget in July caused a lot of economic damage in the aftermath, but the recent response of the government to sharp all round criticism has helped matters immensely.

Now the doomsday scenario projected by some of the government’s critics is far from justified. The corrupt, mostly from the decade long UPA regime circa 2004 to 2014, and its adherents, are being brought to book alongside. And this is indeed very  uncomfortable for those who may be next in line.

There are some international headwinds from the battle of tariffs between America and China but this is affecting the whole world. The tensions with Pakistan and China post the turning of J&K and Ladakh into separate Union Territories could, however, have a silver lining. The focus has shifted to PoK as a bargaining chip for India. America wants India’s military help in Afghanistan, where India has sunk over $20 billion in Afghan infrastructure already; and China wants India’s participation in the CPEC. PoK could well be the price for India’s cooperation. Other countries such as Russia, France and Britain, all permanent UNSC members, may play along too, goes the informal buzz.

A total solving of the Kashmir imbroglio with gain of  long lost territory, along with a defanging of Pakistan, will have strong economic benefits in the medium term.

The ideal way to approach the current economic situation therefore is to regard it as an opportunity that may not present itself again.  

We have mature skills and diplomacy on our side today, and there is nothing wrong with the economy that can’t be fixed. Prime Minister Narendra Modi is acutely conscious of the importance of boosting the economy to aid India’s progress, and enjoys a very high level of public trust. He is ably backed by a very can-do Home Minister in Amit Shah. This has resulted in moving forward the safety and security of this country, diminishing threats from multiple directions. This too has long been a drain on the exchequer.

Large sections of those MPs and MLAs who sit on the non-treasury benches are also supportive of this government. All this makes for a very worthwhile economic springboard for the near future.  

The early life of legendary American entrepreneur J Paul Getty presents some pointers on what is possible. With an education in California and Oxford, Getty became, not a diplomat, as he first thought, but a freelance oil prospector and dealer in oil leases in Oklahoma.

This was early in the 20^th century, when the so called “seven sisters”, The Standard Oil Company, Shell, Union Oil Company, General Petroleum Company, Richfield Oil, Texas Oil Company, Tide Water Associated Oil Company, were huge and integrated, and went on to dominate the international oil business too.

Getty and his father were pioneering, seat-of-the-pants, independent drillers, known as “wildcatters”.  The Gettys leased likely plots, rigs and crews, like many others, but repeatedly struck viable quantities of oil. In a short time, apprenticing under his father, helped by his legal acumen, feel for a likely lease, and experience, J Paul Getty parlayed his own “gushers” into a first $1 million in profits by the age of 24.

And then, to everyone’s astonishment, he retired to two years of utter hedonism. Bored with the exclusive life of pleasure, Getty came back into the oil drilling business at 26. Thereafter, he multiplied his fortune, eventually buying a superior building block. Getty purchased his way into one of those large integrated oil companies by patiently accumulating its common shares. He started in after the Wall Street Crash of 1929, when bluechip stocks were severely beaten down. In time, almost a decade, he had control of Tidewater, a big oil company that had refining, marketing and distribution reach, but bought some of its crude oil from others. Later in the day, by now a billionaire, Getty competed with the Seven Sisters in Arabia too.

India is at a crossroad and watershed today, but there is no need to expect anything but greatness and growth in its future. It has a clear vision of where it wants to go with its $ 5 trillion and $10 trillion roadmap, and its destiny is to be in the top three economic powerhouses of the world. With no structural shortcomings, Modi is, and will continue to steadily take the right policy decisions. This will strengthen  the economy/infrastructure, security, and technological modernization of this country. There will be holistic and all-round development.

Judging things quarter-to-quarter is an American practice we have adopted, and it  has its advantages, but we should not allow ourselves to lose the woods for the  trees.

(1,504 words)

September 3^rd, 2019

For: SirfNews

Gautam Mukherjee