Gloom & Doom

Aplenty (registration required):

The US has already entered into a recession and this recession will be much uglier than the mild recessions of 1990-91 and 2001 as a shopped out, saving less and debt burdened consumer is on the ropes and faltering.

The world will not decouple from the US hard landing; there will be significant recoupling and a sharp global economic slowdown. When the US sneezes the rest of the world catches the cold; and today the US will not experience just a simple common cold but rather a protracted and severe case of pneumonia; thus, the real and financial contagion to other economies will be severe.

Whatever the Fed does now is too little too late; the Fed had a wrong diagnosis of the economy and was behind the curve for over a year. The Fed claimed that the housing slump would bottom out a year ago; instead we have the worst housing recession in US history still getting much worse now. The Fed claimed that the subprime would be a niche and contained problem; instead we have had massive contagion to the entire financial system as a credit bubble and excessive debt and leverage occurred throughout the economy and the financial system. The Fed claimed that the housing problems would not spread to the rest of the economy; instead we had had real and financial spillovers and now a fall of most components of aggregate demand: housing, capex spending, commerical real estate investment and now, ominously, private consumption that represents 70% of demand.

The US stock market is now entering in a seriously bearish territory and will fall much more sharply throughout the year as earnings sharply drop in the recession; the Bernanke put and the aggressive Fed easing will not rescue the stock market or the financial markets as a severe recession is unavoidable regardless of what the Fed does. Fed easing cannot resolve severe insolvency problems among consumers, mortgage lenders, home builders, highly leveraged financial institutions and, soon, enough among over indebted corporate firms.

Equity markets around the world are now plunging and will plunge much more as investors are realizing that a severe US recession will lead to a sharp global economic slowdown and a significant fall in profits across the world. In an integrated global economy both economic growth rates and markets are highly correlated.

Many risky assets will face downward pressure in 2008, not just US and global equities: junk bond yield spreads will widen as bankruptcies spread; corporations will default in great number; housing bubbles will pop in many countries and lead to falls in home prices; securitized products - in housing, real estate and otherwise, will experience further massive losses.

Losses in the financial system will be greater than $1 trillion; thus there is a serious risk of a systemic banking and financial crisis. The credit crunch will become much more severe as capital of financial institutions is eroded and reintermediation of financial flows into the banking system occurs.

Udayan Mukherjee a few days ago:

These may be tough days but it may well turn out to be the best buying opportunity of 2008. Do not panic, accumulate slowly, there is still a long bull market ahead of us. Maybe not in the US but in India for sure.

And The Award For Best Question

Goes to this question: Which is the best share we must purchase in this downfall for greatest profit?

Direct, to the point, no beating around the bush.  Make me rich!

The Chicks

Have come home to roost (via Atrios):

I don't think it's an exaggeration. It's an understatement. You've heard me say here I think we are facing the worst financial crunch and crisis since the Great Depression. You have the entire banking system now that is virtually frozen and there are not just the sub-prime mortgage thing. There are other things called credit default swaps where they're going to lose as much money, 250 billion dollars on. The banks are frozen. They're not making loans because they have such huge debts that they have to take onto their balance sheets and nobody knows how to deal with that because you had a dramatic...you had two bubbles that have burst at the same time. The housing bubble which has collapsed in this country. The first time since the Great Depression that housing values have gone down for a year since the depression and it's going to go down even more next year. The credit crunch, you've just exploded the whole credit system in this country. We were way over leveraged. The banking system was over-leveraged. People didn't even know about it. The bankers didn't know about it. They didn't access the risk. Now that risk is piling in and every body's going to pay the price. Uh it's going to stimulate nothing other, I mean it's going to destimulate the economy. Nobody has money to lend. They're saving all their money to pay off their debts. They're borrowing money or looking at uh the rest of the world to enhance their capital and it's still not going to solve their problems.

This too!

Update: And it's all related:

Citigroup and Morgan Stanley, hit by mortgage-related losses in the US, were aggressive sellers during the day.

I bet these sellers are not selling at a loss. A note to the India Rising folks: the foreign money pours in, and pours out, India Rising or not.

Outsourcing To India

The President of Intel Russia:

“The policy we have at Intel is simple. If we can, we commit difficult problems to engineers in the U.S. If the task is very labour-intensive, we assign it to Indian specialists. If the problem cannot be solved, we offer it to Russians.”

That's not a very nice thing to say sir.

Leaders Bollywood Style

Nothing less, is what we'll get courtesy TOI. Santosh Desai in Tehelka:

...the TOI’s Lead India campaign is going strong. Among the eminent people who will judge the suitability of candidates for the onerous task of nation building in These Exciting Times are people who have toiled tirelessly for the downtrodden and showed us new ways of punching, kicking and riding motorcycles on screen. Yes, I am talking about Akshay Kumar and Ajay Devgan, the intrepid reformers who we all owe so much to.

Nicholas Burns

Retires. He will take up a private job. Intriguingly he'll still be looking at the 'Indian file'. How so? Well, apparently:

"There are special provisions within the law that allow people for discrete periods or limited periods of time, not necessarily measured by the calendar year but by the number of days you spend doing something, that allow people who are not part of the government to work on specific functions."

Money Talks

And it may even sing and dance, in Britain:

LONDON: In a classic case of money speaking louder than merit, anyone with £1 million in the bank and willing to invest some of their “dosh” in Britain can now hope to literally buy their way into this country even if English language sounds Greek to them.

Under new immigration plans, ostensibly designed to ensure greater integration of prospective immigrants into British society, it will be compulsory for anyone who wants to come and live in Britain to pass an English language test even before their application is considered.

But an exception is proposed to be made in case of rich businessmen on grounds that the money they would bring into this country outweighs the little difficulty of their lack of sufficient knowledge of English.

Apparently, the move follows representations by foreign millionaires, notably Russians and Japanese, who are willing to invest pots of money in Britain but don’t know enough English and are reluctant to be lumped with lesser mortals on this issue.

Anchors On CNBC

What's wrong with the anchors on CNBC? When the markets tank royally as they are doing now they go all gloomy faces and talk about 'It's been a very very bad day today' and so on. What the #&@! is so bad about the markets dropping like a rock? Conversely what is so good about the markets going up like a gas-filled balloon even when there are small and not so small warnings all around? Markets go up and down - that's what they do.

Questions, Questions

P Sainath:

How many upper caste men have had their eyes gouged out for marrying outside their caste? Ask young Chandrakant in Sategaon village of Nanded in Maharashtra why he thinks it happened to him last week. How many higher caste bastis have been torched and razed in land or other disputes? How many upper caste folk lose a limb or even their lives for daring to enter a temple? How many Brahmins or Thakurs get beaten up, even burnt alive, for drawing water from the village well? How many from those whose “privileges are dwindling” have to walk four kilometres to fetch water? How many upper caste groups are forced to live on the outskirts of the village, locked into an eternal form of indigenous apartheid? Now that’s discrimination.

How about 'none'?

God's Gift

Now here's a fatwa for the times we live in:

Clerics at Deoband have come out with a new fatwa, dispelling notions that Islam is against family planning.

Contrary to the belief that contraceptives are not allowed in Islam, Deoband has ruled that their use is necessary.

Darull-Uloom says contraceptives are permissible under Islamic laws so that the children are properly nourished.

Another prominent Muslim body Jamia-Ulema-e-Hind has supported the Fatwa. However, the Islamic body called permanent methods of contraception like vasectomy or tubectomy haram (unlawful).

Several Muslim nations like Turkey and Iran encourage their citizen to adopt contraceptives, a move to check the growing population in those countries.

It makes the Deoband clerics, Turkey and Iran more liberal in this very important respect than the Catholic church and the Pope:

Now we’re ready for the hard part of the evening: why does the Church forbid contraception? Artificial contraception is wrong because it violates the "gift of self" which ought to be at the center of every act of physical love. When you take the pill or use a foam, diaphragm, condom or whatever, you are, in effect, saying to your spouse, "In this, the most intimate act of our marriage, I am going to give myself to you, but only up to a point." Or, conversely, you are saying, "I want you in this act to make a total gift to me of yourself, except that part of you which so deeply defines you as a sexual being, your fertility." The body has its own deep language, and when we add chemicals or latex to the act of love, when we deliberately destroy its potential for making new life, we falsify the nuptial meaning of its actions. We hold back the full "gift of self" which during the wife’s fertile period must include an openness to new life.

I still remember a scathing documentary on BBC which examined the impact of this ban on extremely poor communities of Catholics in countries like Phillipines and many African countries. It was so hard to understand how this ban could continue in the face of all the suffering.

I'm expecting our media to swarm over the news of this fatwa once they are through with jallikattu and other pressing topics - it must be the die-hard optimist hidden in some corner of myself.

More Nano Please

Ramesh Ramanathan of Janaagraha/JNURM in Mint (no link):

The Nano Inspiration

I am inspired by the story of the Nano. Beyond its cute look or frugal engineering-driven price tag, I find it remarkable how Team Tata pulled it off in just four years.

I've watched and read the rumblings – on congestion, traffic, the environment. Confession: I own a car. This makes it hard for me to criticise the Nano: people-in-glass-houses constraint. There is an Indian equivalent of this – the "unreserved compartment syndrome". All those inside the compartment do everything to keep outsiders at bay; but once someone gets in - bravely beating the odds - he becomes an insider, repeating the same behaviour, so nothing changes. We need to understand the sentiments of the outsiders - how many people who don't own cars criticise the Nano on the grounds of traffic congestion and environmental concerns.

But the larger point is the inspirational lamp that the Nano story lights. There are hundreds of challenges in India where the lessons of the Nano can be applied – design innovation, scale efficiency, vendor networking and so on. I want to talk about three illustrative examples.

Healthcare

Dr Devi Shetty, one of the country's leading heart surgeons is also focused on bringing affordable health services to the poor. He talked of the need for innovation and scale in healthcare, based on our unique challenges in India .

Using the example of a CT scan, which costs Rs 5,000 - 10,000 per patient, he said, "We have a few hundred CT scan machines in India, each doing 3-4 scans a day, although the capacity is over 100/day. These machines are like planes that earn money only when they fly. We need to increase the flow of patients through these centres. But this is related to other issues like hospital bed capacity and inpatient/outpatient ratios. Today, most hospitals make their money from inpatients. We need to reverse this relationship where thousands of outpatients who each pay a few hundred rupees for tests can subsidize the operating costs of the hospital."

Imagine if we could get a CT scan cost down to Rs 500, offer a heart surgery for a few thousand rupees or a gall bladder surgery for under a thousand. This requires a fundamental redesign of all the parts of the healthcare delivery system - from re-engineering individual components like the CT scan, to embedding these into scaled health "cities" that can get a critical mass of 10,000 outpatients a day.

Housing

In urban India alone, we need to build over 26 million homes to meet projected demand until 2012, and over 95% of this is for the poor. If we ignore government subsidised programmes, and focus on market-driven solutions, we need to build homes with an all-in cost of Rs 2 - Rs 2.5 lakhs for land and building, so that the EMI is around Rs 2,500. Given current land costs and fsi/far ratios in urban India , this translates to a construction cost of about Rs 300- 400 per square foot for a 400 sft dwelling. Imagine the kind of demand that can open up if we can change the engineering specifications, reduce the cost-per-unit by scale economies, improve the construction process, and deliver a product that might not have marble floors, but doesn't compromise on quality.

Public transport

The Design Museum of London ( www.designmuseum.org) says this about the famous London double-decker bus, "Developed over nine years from 1947 to 1956 by a team led by industrial designer Douglas Scott, the Routemaster was designed with mass-production in mind. By constructing a bus from the maximum number of interchangeable parts, they cut the cost not only of the initial tooling and manufacturing, but of repairs and maintenance too. They also equipped it with the latest automotive engineering innovations such as power steering, an automatic gearbox, hydraulic brakes, independent springs and heating controls."

I think of the public bus system in our cities. If the experience is bad for passengers, it's worse for the bus drivers, having to navigate these Noah's arks through the narrow Indian streets. We need buses designed for Indian conditions: our roads, our traffic, our people. With environmental challenges thrown in, we are looking at a fundamental redesign of the Indian bus. Can we create an icon like the London Routemaster?

These challenges – and the hundreds more that India faces – would normally result in little more than wishful thinking or simplistic dead-end pilot projects. The Nano story inspires us to say, "Why not?" with a clear-headed acknowledgement of the complexities. To me, this itself is worth the applause it is receiving.

Nuclear Deal

I see headlines like this everywhere today:

India, China pledge to strike N-dosti
India, China to cooperate in civil nuclear energy

But I thought the accepted wisdom was that China was trying to scuttle the nuclear deal and our nuclear ambitions and that the Left was acting more or less as an agent of China in opposing the deal.

Imposing Progress

From The Hindu:

Survival International has just released its hard-hitting report, ‘Progress can kill.’ If you think the title is challenging, the contents are even more shocking: the report clearly shows that forcing our ideas of ‘progress’ on tribal peoples destroys their mental and physical health.

Even after working on the report for three years, I’m still shocked, choked and outraged by what it lays bare: ‘progress’ forced on tribal peoples leads to desperate suffering and, all too often, to the total destruction of whole tribes.

India’s Great Andamanese are one tragic example. The British brought ‘progress’ to them in the late 19th and early 20th centuries by forcing them out of their forest and into a ‘home’ in Port Blair, where 150 babies were born and every single one of them died before their third birthday. Overall, 99% of the tribe died, leaving just 53 people alive today.

Relatedly, this. The move for forming CWHs seems to be nothing but a workaround to get around the Forest Rights Act.

Children & Frogs

Juan Cole:

One of the arguments warmongers gave for overthrowing Saddam Hussein was that his regime was responsible for the violent deaths of some 300,000 civilians between 1968 and 2003. That estimate now appears exaggerated, since the number of bodies in mass graves has not borne it out. But what is tragic is that in 4 1/2 short years, a foreign military occupation has unleashed killing on a scale achieved by the murderous Saddam Hussein regime only over decades. Bush did not kill all those people directly, of course, but he did indirectly cause them to be killed, since these are excess deaths beyond what you would have expected if there had been no invasion and occupation.

I am often struck by how clueless the American public is to the vast destruction we have wrought on Iraq and its people, directly or indirectly. It strikes me as a bitter joke that 4 million are displaced, often facing hunger and disease, and the rightwing periodicals and presidential candidates are talking about how the "surge" has "turned things around." For whom? How many orphans have we created? How many widows? How many people who weep and cry every night while trying to fall asleep on straw mats? I estimate on the basis of a UN study of refugees in Syria that as many as 600,000 or 700,000 Baghdadis were ethnically cleansed from the capital under the nose of the American troops implementing the surge. There is an old Chinese proverb, "Children throw stones at frogs in jest, but the frogs die in earnest."

The Nano & Congestion

And Ratan Tata's take on it:

We produce about 7 million two-wheelers a year. Today we must have 60-70 million two-and three-wheelers in the country. Last year we produced about 1.4 million cars and at some point we will exceed two million. Well, nobody says anything about that. It is only this car that is being targeted. You may say, 'Well, the two-wheeler takes less space.' Our car pollutes, if not less, then certainly not more than a two wheeler—not per passenger but as a vehicle. Our engine conforms to Euro IV and Bharat III—all two wheelers are Bharat II today. So, yes you may take a view that this small car will take less space than a large car. It will carry four people instead of the normal two on a scooter and therefore, instead of two scooters, you will have one car on the road.

That criticism also assumes that the small car will not replace a bigger car. You produce two million cars and you produce half a million small cars, so you produce 2.5 million cars. That's not how it is going to work. We will cannibalise some of the existing low-end cars and two-wheelers, and even some of our own cars. The Indica too is going to feel the effects. So it will not be that it will be on top of everything and there won't be a square inch of space on the road.

Second, we are looking at congestion in the top major cities. Have we got affordable family transport in the two tier and three tier cities? Is it their lot not to have a vehicle? The huge potential lies when India gets connected in the rural areas.

Let's wait and watch!

Recession, Recession Everywhere

At least, the UN & Goldman Sachs think so (via this comment thread). More on the Goldman report here.

BJP And Gandhi

Time was when a sure-shot way to identify a closet BJP supporter was by his views on Gandhi. Negative? Most probably a BJP supporter. Positive? Mostly a non-BJP supporter. Alas, that may no longer hold if the leadership goes on like this.

Nanded's Shame

That's the headline on every TV channel and every newspaper that will shut out everything else for the next 24 hours and beyond, now that this has happened. Really. They will get round to it I'm sure, though they were still dealing with Mumbai's Shame, Racism in Golf, the OZs and other equally important things, when I checked just now .

Clinton, Obama... Does It Matter

While Ramesh Thakur goes all dreamy and idealistic here, Siddharth Varadarajan brings us down to earth:

Given the disasters the Bush administration has caused in Iraq and elsewhere, it is only natural that all candidates — Democrats and Republicans — feel obliged to declare they will bring about a substantive change in the way the U.S. deals with the world.

In reality, the change, when it comes, will at best be marginal.

And that's the truth.

PS: If anyone out there is wondering where Siddharth Varadarajan vanished after the nuclear deal fracas, he's here.

Comparing Riots

Swaminathan S Anklesaria Aiyar pulls a fast one here. Ticking off various points proving that the anti-Sikh riots of 1984 were worse than Gujarat, he writes

So, on virtually every parameter you can measure, 1984 was worse than 2002. Why then is Modi called a fascist while the Congress is heralded as a secular saviour? Sitaram Yechury of the CPM points out that the Congress ultimately apologised for the 1984 killings, but the BJP has still not done so for 2002.

That is indeed a difference. Modi needs to make a similar gesture. But have the two Communist parties apologised for the millions murdered by their comrades globally?

What does the left parties apologising or not have to do with Gujarat & the anti-Sikh riots?! We're talking about the Congress and the 1984 riots here, aren't we? And why does the left have to apologise for what happened in other countries? As for Nandigram - there is no clear record on what happened there yet and in any case the government there is trying to find a way out and has apologised more than once as far as I can remember. And yes, a sorry makes a big difference.

He also forgets one point: the Gujarat riots are different from the anti-Sikh riots in this respect too: no one can call the Congress anti-Sikh, so the riots can be explained away as a madness of a few days. However, the BJP has always been and perceived to be anti-Muslim - how much ever they try to claim otherwise - hence Gujarat riots acquire a different meaning.

Nitish Kumar Gets A Pat

On the back here, for bringing in a lot of good changes in Bihar.

Bloggers & Their Readers

From here:

now have to explain to my wife why I have had tears running down my cheeks all afternoon.
…
Try explaining it to coworkers. I have to keep dashing to the washroom to dab and check for blotchiness.

Wife: So, you’re real upset over this person you never actually met?

Me: Yeah.

W: Huh?

Me: Well, I still felt like I knew him. He was decent, and honest, and funny, and sometimes a real pain in the ass. You know, a real person?

W: But this was online? You never met him even once?

Me: Nope. Read him a while, argued with him a bit. Never met him…

W: Huh?

Me: Yeah…

W: So you have this whole other life online I know nothing about?

Me: Well, it’s not like a dating service or anything. It was a blog.

W: What?

Me: Later honey…

More On Benazir Bhutto

More about Benazir Bhutto's policies during her rule, via Huffington Post

Benazir Bhutto was certainly a brave and secular-minded woman. But the obituaries painting her as dying to save democracy distort history. Instead, she was a natural autocrat who did little for human rights, a calculating politician who was complicit in Pakistan’s becoming the region’s principal jihadi paymaster while she also ramped up an insurgency in Kashmir that has brought two nuclear powers to the brink of war.

People Power

This sounds exactly like how it should be:

The government doesn’t hold much land. The land belongs to communities, and this Congress government will not go against the wishes of the people.

Oil Prices Spikes

Crude touches $100 a barrel. Of course, Goldman Sachs had predicted this two years ago. Are they clairvoyant?
Update: Here's someone who was not clairvoyant:

Rupert Murdoch, on the eve of the invasion of Iraq: The greatest thing to come out of this for the world economy, if you could put it that way, would be $20 a barrel for oil. That's bigger than any tax cut in any country

Puzzled

That's what I am by a NY Times piece in The Hindu (link here via Churmuri). Growing craze for Indian eduction in Japan? Wow. But again, just "roughly" half a dozen Indian schools in the whole of this nation which is so crazy for it? Double wow!

Triumph of hype over reality? I don't know.

Stop The Goa SEZs

Please! Let Goa continue to be the beautiful place it is. Don't mess it up like you've done the rest of the country. And no, don't get all prim and legal about scrapping the ones that have started. Work on a way out of it.

Of Investigations

Scotland Yard to help with the investigation into the Bhutto death. No I will not call it assassination, murder, killing or any of those things. I'm sure it was a natural death. Just like Bob Woolmer's death, the investigation into which Scotland Yard helped too. Update: Scotland Yard was of course brought in 2 months after Woolmer's murder. And it is being brought in now, after the area where Bhutto was killed was hose-cleaned within hours of the murder, most probably destroying crucial evidence.

Also, interesting that the killing of a Rafiq Hariri, allegedly by anti-US Syria, gets an UN investigation and becomes a major international incident, but the death of Bhutto gets a mere Scotland Yard helping hand.

Wake Up

Wake up our foreign policy est., 'cos the world is changing:

New Delhi needs to think hard about the shifting templates of the Middle East’s geopolitics. All indications are that Russia and China anticipated, months ahead, the inevitable collapse of the U.S.’ containment policy toward Iran. How such wisdom eluded our government, remains a question mark. If the U.S decides now to march towards a constructive engagement of Iran — which seems likely — where does that leave the UPA government? The latter must first unscramble the omelette.

That is to say, it must rapidly deconstruct what it precipitated under American pressure — and then try to rebuild. Not an easy task.

The LNG deal with Tehran negotiated by the National Democratic Alliance government has all but perished following the UPA government’s somersault under American pressure at the International Atomic Energy Agency over the Iran issue. No one talks anymore about our grandiose plans of a “north-south” transportation corridor via Iran. The gas pipeline project languished while the government used one lame excuse after another to drag its feet.

The State Bank of India’s curb on normal trade with Iran is completely illogical. Evidently, Washington pressured us. While doing so, the Bush administration kept us in the dark about the NIE sailing into view. Now, what sort of a “strategic partnership” with the U.S. — and what sort of a “friendly” President in the White House — are we talking about? Washington took our government’s naiveté for granted.

It is plain common sense that India has a congruence of interests with Russia and China in optimally exploring the primacy that Iran places on Asia for its energy exports. That is why the Iran pipeline becomes crucial. That is precisely why Washington wants to stifle the project. The spectre that haunts Washington is the emergence of an Asian energy club involving Russia, Iran, China, and India. The U.S. apprehends that such an Asian grouping — first proposed by Russian President Vladimir Putin in 2003 — will disrupt its strategy of global domination. Through its lukewarm attitude towards the Iran pipeline, the UPA government has tacitly collaborated with the U.S. global strategy.

Profit-Making PSU?!

From The Hindu. KSRTC gets an award for

the successful delivery of “multiple end results” ranging from quality customer care, environment protection and fuel conservation to better overall use of available resources, transforming a typically cash-constrained transportation PSU into a viable business entity, thereby becoming a role model for other State PSUs.

But PSU''s are not supposed to be viable business entities! Loss-making, draining the public exchequer, yes. Profit-making, no. That's what I was led to believe.

On Moha

The Pejawar Mutt head:

He also said that going abroad was not ‘impure’, but dhanamoha and videshamoha were bad.

What does he have to say about rajakiyamoha I wonder. He may not consider it bad, seeing how he does not mind dipping his pure toes in the murky swamp of rajkiya, especially of the right-wing kind. See here and here.

Conversions

From DH:

The VHP’s action is a violation of the constitution which recognises the right of every citizen to practise any religion he chooses. It is not for the VHP to decide whether citizens have the right to convert or not. It is a matter of concern that the government has failed to take stern action against the VHP when its activists rape, kill and loot people belonging to other faiths.

Of course, the constitution is for suckers.

In The Beginning Was Money

And the money was given to the ISI (via wired):

A very broad pattern was established in which the CIA subcontracted the anti-Soviet jihad to ISI. Pakistani intelligene is a division of the Pakistani army and not organized as a civilian intelligence service. ISI is generally commanded by a two-star general, and its cadres are drawn from the officer corps of the Pakistan army.

They are organized in clandestine regional bureaus. The Afghan Bureau became the instrument of the anti-Soviet jihad. These were often Pashtuns, who had language and local identity and were seconded to the Bureau for long periods of time.

Why did the CIA turn over its political program in the jihad to ISI? Partly the Agency was scarred by its experience in Vietnam, and there was a sense of no more "hearts and minds" for us. We’ll let the Pakistanis figure out who the winners and losers are politically. If they have a complicated regional agenda that is even more Islamist than we would like, so be it. We will focus on the main adversary, the Soviet Union. We won’t try to tell the Pakistanis how to run politics in the region.”

That established a pattern in which the United States and the Saudis together turned over enormous sums of money to ISI and said, “You pick the winners.” ISI chose Hekmatyar as their primary winner, and Hekmatyar, in turn, created a nexus in which al Qaeda thrived by the end of the 1980s.

And the we in the region suffer while the country that started it all goes on.

Brave Indeed

Imran Khan:

“She was far bolder and braver than most men I know....She had to come back, she was a brave lady — one thing she was not was timid".

But Will It Happen?

Juan Cole lists some steps that Bush must insist on in tackling the crisis in Pakistan:

In order to get through this crisis, Bush must insist that the Pakistani Supreme Court, summarily dismissed and placed under house arrest by Musharraf, be reinstated. The PPP must be allowed to elect a successor to Ms. Bhutto without the interference of the military. Early elections must be held, and the country must return to civilian rule. Pakistan's population is, contrary to the impression of many pundits in the United States, mostly moderate and uninterested in the Taliban form of Islam. But if the United States and "democracy" become associated in their minds with military dictatorship, arbitrary dismissal of judges, and political instability, they may turn to other kinds of politics, far less favorable to the United States. Musharraf may hope that the Pakistani military will stand with him even if the vast majority of people turn against him. It is a forlorn hope, and a dangerous one, as the shah of Iran discovered in 1978-79. '

But will Bush do it?

Let's Give It Up For Panditji

I'm sure we'll soon start hearing praise for our own leaders who ensured a secular state was put in place and India did not go the Pakistan way - you know, Nehru mainly and others. But I'm not holding my breath. Because, when I put it to my friend - who is, if I may put it this way, anti-pseudo-secularist, or to put it in another way, is pseudo-nationalist - he said that only Vallabhai Patel is responsible. It must be true.

The Deathly Touch

Any thing the Bushman touches, goes wrong. Man, what a guy and what an administration!

The NYT reported that US Secretary of State Condi Rice tried to fix Musharraf's subsequent dwindling legitimacy by arranging for Benazir to return to Pakistan to run for prime minister, with Musharraf agreeing to resign from the military and become a civilian president. When the supreme court seemed likely to interfere with his remaining president, he arrested the justices, dismissed them, and replaced them with more pliant jurists. This move threatened to scuttle the Rice Plan, since Benazir now faced the prospect of serving a dictator as his grand vizier, rather than being a proper prime minister.

With Benazir's assassination, the Rice Plan is in tatters and Bush administration policy toward Pakistan and Afghanistan is tottering.

Update: via Atrios

In terms of policy implications, this is reflective of a massive US foreign policy blunder, in that the Bush administration, in a monumentally stupid move, shoved Bhutto down the throat of Musharraf (and the rest of Pakistan) as a savior, despite her lack of broad popular support and general reputation as corrupt. In making someone who didn't necessarily have the ability to deliver the savior for democracy in Pakistan, we simultaneously set up our own policy to fail and offered Musharraf a return to (or continued) total power in the event that our little power-sharing arrangement didn't work. We also -- though not only us -- painted a big fat target on her back. Really a debacle all the way around.

Of course, "When you look into the General's eyes, and he says to you I'll take care of the Taliban and the extremists", you trust him. At least if you are Bush.

Flawed Politician

Courageous but flawed:

Benazir Bhutto was rather more complicit in encouraging and tolerating Pakistan’s many pathologies (Faustian bargains with the Islamists that included tolerating anti-woman laws, state sponsorship of cross-border terrorism in Kashmir, and self-enrichment — her husband was widely known within Pakistan as “Mr. 10 per cent” based on what people alleged was his share of any government contracts); while Mr. Sharif tried to curb some of them and made some effort at reconciliation with India.

The fascination with Ms Bhutto by the people and governments of the West remains a mystery. Perhaps it is due to her charisma and Western education. She certainly knows how to press the right buttons when speaking to Western audiences through the mass media. Clichés of female empowerment, democracy, poverty eradication, human rights and war against the terrorists trip readily enough off her tongue. But they are all at odds with the actual record of her rule as Prime Minister, not once but twice.

Military-Industry-Democracy Complex

The US wants to sell us arms and get a pie of the $40 billion we give away to other countries currently. But they have to clothe the whole desire in the garb democracy:

"By reaching out to India, we have made the bet that the planet's future lies in pluralism, democracy and market economics," said Nicholas Burns, the State Department's No. 3 official, "rather than in intolerance, despotism and state planning," an apparent reference to communist-ruled China.

No, Mr Burns, you have made the bet that there is no way China is going to buy any arms from you, and that India, on the other hand, will quite possibly do so. Especially as you have so many levers to manoeuvre us into doing so. Russia at least talks only about friendship when it sells us its wares. No hypocritical statement linking everything to the chimera of democracy.

And look at this:

"A significant Indian defense purchase from the United States ... would be a great leap forward and signal a real commitment to long-term military partnership," he added in the November/December issue of the journal Foreign Affairs.

A real commitment won't do, we need to show them some moolah too.

Modi's Win

Just back after a pleasure trip with friends. And I hear on the TV that Mr Modi's win signifies the return of development-based politics and of strong national security, and that Mr Modi is all set to move to Delhi.

Please not the politics of strong national security - a Bush in the US is more than enough for the world.

Heretic

Interesting thought from Atrios:

It's somewhat heretical to say, but I'm one of those who thinks that too many people go to college, though it may be individually rational for them to do so given the signaling nature of it. That is, going to college doesn't really transform people into better works for a lot of jobs, but employers require a college education because it's how people signal they aren't a "complete loser"* who couldn't even manage to graduate from college.

*To be clear, I don't think one needs to graduate from college to avoid loserdom. That's my whole point! It's just that in our society it's become an entrance ticket to a lot of careers even when the education you get in college isn't really training for those careers.

True here also - that lots of things learnt during college don't get used on the job, and there are lots of jobs that don't need a degree. Including IT, as this commenter notes:

i've only got one year as a drama major, and been cto for three companies. odd, isn't it? but i have been passed over for jobs at or below the level i was alredy doing because i lack a degree.

But we still need lots more of education in country, rather than less, at this point of time I guess.

Please Do Something

From NYT:

“China and India are closely studying South Korea as a trendsetter in Asia,” said Chung Woo-jin, a professor at Yonsei University in Seoul. “They are curious whether the same social and economic changes can occur in their countries as fast as they did in South Korea’s relatively small and densely populated society.”

Please complete your studies quickly and do something about it. If I remember correctly the ratio in some states is 685 to 1000.

The Way The Cookie Crumbles

From NY Times (via The Hindu):

In a 1963 essay for Ms. Rand’s newsletter, Mr. Greenspan dismissed as a “collectivist” myth the idea that businessmen, left to their own devices, “would attempt to sell unsafe food and drugs, fraudulent securities, and shoddy buildings.” On the contrary, he declared, “it is in the self-interest of every businessman to have a reputation for honest dealings and a quality product.”

It’s no wonder, then, that he brushed off warnings about deceptive lending practices, including those of Edward M. Gramlich, a member of the Federal Reserve board. In Mr. Greenspan’s world, predatory lending — like attempts to sell consumers poison toys and tainted seafood — just doesn’t happen.
...
Of course, now that it has all gone bad, people with ties to the financial industry are rethinking their belief in the perfection of free markets. Mr. Greenspan has come out in favor of, yes, a government bailout. “Cash is available,” he says — meaning taxpayer money — “and we should use that in larger amounts, as is necessary, to solve the problems of the stress of this.”

Laddoo

From The Hindu:

At the market square in Rajkot in Saurashtra, a Leuva Patel shopkeeper compared the Congress to the laggard who opened his mouth to yawn only to find someone had slipped a laddoo into it.

Nice imagery. Read the whole thing - build up the suspense for the day.

FM News

From DH:

The FICCI radio forum, in the memorandum, has urged the government to allow six to eight minutes per hour of news & current affairs programming on the channels to reverse this trend.

The thin end of the wedge.

More Money For Education

Good tidings. From DH:

“Education is an area of special focus in the 11th Plan. Education is our best hope for achieving inclusiveness and for spreading development to backward regions and marginalised groups,” Dr Singh said.

Dr Singh can say that again.

Food for thought:

Asserting that public education was indispensable, he said the deficiencies in basic education could not be met by the expansion of private schools, which “have not been able to play that role anywhere else in the history of the world.”

Of course, no self-respecting private school would go to even the least remote village.

Today's House Special - Citibank

Ramesh Ramanathan in Mint (no link, this came in with the email).

THE CASE OF THE AMERICAN BANK, THE ABU DHABI LIFELINE AND THE INDIAN CEO

It's a potent recipe - take a household name in global financial markets, grill over the heat of a mortgage meltdown, marinate in the mystery sauce of middle-eastern money, and garnish with the spice of an Indian CEO. Each of these ingredients by itself would be sufficient for heated dinner-table debates among the cognoscenti, but taken collectively, this dish is hot.

 

  For the uninitiated in the cuisine of the financial markets: the bank – Citibank. The middle-eastern bailer-outer – the $ 850 billion Abu Dhabi Investment Authority (ADIA) which took a $7.5 billion stake.The Indian CEO – Vikram Pandit.

The situation begs so many questions that I've clubbed them into four categories.

About the CEO

• Why did Vikram Pandit take the job? What's the motivation for someone already worth  a  few hundred million dollars to step into a near-impossible situation?
• What are the odds that he will succeed? (See the next question on mega-banks)

About institutions

• Is a global full-service bank with businesses in investment banking, brokerage and   consumer products spread across hundreds of countries, actually possible to run as      a single entity, with sustainable value accretion to shareholders?
• What's the role of governing boards? AIDA's investment does not give it a seat on       Citibank's board, but so what. There is an interesting story in the Wall Street Journal    about Robert Morgenthau, a US  public prosecutor who - in the 90s - pursued the        scandal around the collapse of BCIC, a Middle-   Eastern bank funded by the Abu Dhabi  Emir.  The report states, "Sheik Zayed called to inform the  State Department that, if  Mr. Morgenthau indicted anyone in the royal family over the scandal, he would pull his  billions out of the U.S." Can Citi's board of directors actually call the shots?
• Even if independence of the board were possible, is this how we want capitalism to  work, that key  investors are separated from governance? How does this jell with the  argument for private equity funds  who use their stakes to drive organisational change?

About national interests

• Does the Federal Reserve Bank have one more reason to feel nervous? Just a few weeks  ago, Chairman Ben Bernanke told the US Congress that he supports a code-of-conduct f or Sovereign Wealth Funds (SWFs) to promote transparency and accountability.  Very  little is known about ADIA - its website (www.adia.ae) is an electronic fortknox.  Will  the  Fed demand more disclosure, given that Citibank is a "too big to fail" institution linked  to systemic financial stability?
• What's the likely political backlash, especially in an election year? The Dubai Port Trust  investment in several US ports was shot down by the US Congress, after criticism that  national interests were being sold out. Can this issue also mushroom into a political one? How will an Indian CEO answer these?
• What are national interests anyway? Is Citibank really a US bank any more? How would we measure this – origin of deposits, domicile of shareholders, source of revenues?

About global markets and governments

• What does the growth of SWFs mean for global financial governance? National regulators  are increasingly finding themselves hobbled by transnational flows, like using mosquito  nets to protect against the flu. The voices for a global regulatory regime are getting  louder.  But can this really work, given that political power – and hence true decision - making leverage - is created and harnessed only within national boundaries?
• What is happening to the relationship between market economies and democracy? Over   the past two decades, the trend seemed inevitable – or at least was projected as such  that one would drive the other, and the sum of the two was good for things like liberty  and freedom. Francis Fukuyama wrote in  "The end of history" of the "universalisation of   Western liberal democracy as the final form of government." This hypothesis may come   under fire.  The UAE falls far short of acceptable global standards in democracy - it   doesn't even have adult franchise for its citizens. And yet it runs an investment fund  that gives it access to the crown jewels of the capitalist system, at the heart of the  mature  democracies of the world. Are we seeing a new order emerge?

 Citibank was often ahead of the pack in the banking industry. This time around, its actions are unleashing a torrent of questions that go well beyond the sector. It's too early to be talking of answers. Seems like this dish is going to be on the menu for some time to come.

No, That's No Good Either

3 years late:

Shimla: Senior BJP leader L.K. Advani on Monday admitted that the party’s “India Shining” slogan during the 2004 Lok Sabha election was a “mistake.”

“India Shining slogan was a mistake. The better slogan would have been India Rising,” Mr. Advani, who was the Deputy Prime Minister during the NDA rule when the slogan was coined, said here.

Of course, regular readers of this blog will be aware that our editorial stand on this topic is that the latter slogan is also quite a washout.

Politics & Facts

NR Narayana Murthy on fact-based decision-making (page 13):

Chennai: Infosys mentor N R Narayana Murthy on Saturday flayed politicians for taking “ego-centric” stand on several critical issues, including Indo-US nuclear deal, without properly studying the facts. “Most of our politicians do not have the details of the Indo-US nuclear deal. However, they are taking a stand”, he said speaking at a management seminar organised by the Great Lakes Institute of Management here on Saturday.

“When I ask them have you read the 123 agreement, please tell me what areas which you see are bad, very few of them are in a position to give facts. However, they have already taken a position,”

...Advising the students, he said, “please avoid taking decisions based on ego, based on perceptions and go for an analysis based on data and facts. In the end, everybody is happy.”

No one denies the merits of fact-based decision-making. And one respects NR Narayana Murthy immensely for doing what he has done with Infosys and for his 'High thinking and simple living', but there are some issues with the above formulation with respect to the nuclear deal.

1. The other party involved in this deal is not fact-based. It's record on Iraq, Iran, Kyoto/global warming, Pakistan - and all this in the very recent past that I remember - speak of a singular contempt for fact and a love of self-interest above everything else. Do we want to deal with such an entity without closing all loopholes in the agreement?

2. There are some salient facts quite apart from the text of the 123 agreement itself which should make one reject the deal.

• The record of the UPA government in being pressurised by the US on account of the deal, into acting quite differently from how it would have normally is quite poor. The Iran vote, the IPI gas pipeline, removing explicitly pro-pipeline Mani Shankar Aiyer from the Petroleum Ministry, cooling off of relations with Russia - all these are examples.
  
• The Hyde Act which everyone agrees is quite disagreeable, and the fact that there is no explicit clause which prevents the US from taking recourse to its domestic laws (e.g., the Hyde Act) to pull out of the 123 agreement - though such a clause is explicitly mentioned in the 123 agreement with China.

3. Politics and foreign policy cannot be entirely driven by fact. If it were, the West would not need to be dragged kicking and screaming to sign the Kyoto deal. Hundreds of thousands would not have lost their lives in Iraq. The courts would not be required to force, say, the Delhi government to make CNG compulsory in vehicles. I think that is why politics is called the art of the possible.

4. Forget politics, even some corporate policies are based on some vague thoughts without any basis in facts. Take for example, the matter of clothes in some IT based companies. Some of them require formal clothing on almost all days. This includes wearing of ties on certain days, which meets with lots of natural chaffing at the bit given the day-time temperatures in many Indian cities. Some companies going to the extent of advising their female employees not to forget to use dupattas! What are the possible reasons for such a policy?

• Productivity? Google among other highly productive companies don't have formal clothing rules. In fact, I believe Googlers/googlies are allowed to bring their pets to the office!
  
• Making favourable impressions on visiting clients? Has any fact-based study been made on whether clients give more weightage to clothes that their vendors' employees wear compared to the quality of deliverables. I've not heard of any such study.
• Getting employees used to wearing formals and getting the tie-knot just right? But a training session (or sessions) before the employee flies to the land of formality would probably be just as effective - have any facts been gathered on the efficacy of the two methods?

Where are the facts on whos basis this policy exists?

5. Sometime ago, NR Narayana Murthy called for a road on piles to Electronics City in Bangalore to reduce commute times. The government jumped to it promptly and the road is coming up. I have not come across any facts about the cost of the road, what its benefits are compared to the costs, what alternatives were considered, how exactly it would help when the rest of the city is still jamming away like Jimi Hendrix, etc. What does one say about that?

Of course, one would also love to know how many of the deal's supporters have read the 123 agreement in full.

Freedom

...it's sights and sounds are so sweet:

"Each prisoner has in his cell a carpet measuring 1.2 m by 2.5 m. And they spend 23 hours a day sat on it, in silence. If they speak, they are chained to the ceiling for 20 minutes and black visors are put on them so they can't see and protectors are put on their ears so they can't hear. They are taken down to the basement once a week, in groups of five or six, to shower them. It's done to drive them crazy. I almost went crazy", recalls Corsetti. Apart from those normal cells, in the basement of the prison there are six isolation cells, plus two rooms for who the former soldier describes as "special guests".
...
And the cries, the smells, the sounds, they are with me all the time. It is something I can't take in. The cries of the prisoners calling for their relatives, their mother. I remember one who called for God, for Allah, all the time. I have those cries here, inside my head".
...
An important subject was that of psychological torture, administered by psychiatrists. "They tell them they are going to kill their children, rape their wives. And you see on their faces, in their eyes, the terror that that causes them. Because, of course, we know all about those people. We know the names of their children, where they live - we show them satellite photos of their houses. It is worse than any torture. That is not morally acceptable under any circumstances. Not even with the worst terrorist in the world"

On Pot

Would you believe this - growing pot to repay homeloans (via Atrios)!!!

Sheriff's Office narcotics detectives reported raiding three houses where hundreds of marijuana plants were being grown.
...
The investigation, which started 18 months ago, has led to a total of six raids at five addresses -- including the houses searched Thursday -- Carney said. Detectives have confiscated almost 2,000 plants, worth $2.4 million to $3.6 million on the street. The other houses are in South County and one has been busted twice by drug officers, Carney said.

The same group of people bought all the houses in 2005 and allegedly set up the grows, according to detectives. Investigators think the owners were using the marijuana grows to pay the mortgages on the homes.

And why is the country which has ganja as its biggest cash crop (via CR) so keen on Afghans destroying their opium? Talk about pot calling the kettle black.

Benazir-speak

Of course, when I say fair and free elections I mean elections that allow me to become PM. Just saying.

Go On, Get On With It

Nothing more to do here:

There may have been no overt violence in the last five years and both communities may repeatedly express a desire to look beyond 2002 and “get on with their lives”. But beneath the surface calm, the communal divide in Gujarati society has become much deeper; the polarisation of differing worldviews almost complete.

For the average Gujarati Hindu, the Muslim remains a figure of fear and loathing and will be tolerated only “if they behave themselves”.

Padma Desai (name changed), an educated and articulate Vadodara schoolteacher, is all praise for the “development” under Modi. But when we finally broach the subject of the Godhra aftermath, she says: “We all feel really bad about it. But frankly, something like that was needed to show the Muslims their place.”

It is a common sentiment. Taxi drivers in Ahmedabad will routinely tell you that it was impossible to enter Muslim areas before and no girl could walk safely on the streets at night for fear of the marauding Musalman. All that has changed because Modi “taught them a lesson”.

And that, more than the violence and the abysmal condition in the relief camps, is what hurts the ordinary Muslim most. “We can forget what happened after Godhra, but the BJP has convinced every Hindu that all Muslims are terrorists, goondas, pro-Pakistan. They have made Hindus view us with suspicion. Tell me madam, if there is an Indo-Pak war, do you think their bombs will spare us?” asks Abdul Qadir.

Climate Change

Why the hell don't we make enabling nuclear energy for India a pre-condition for us to take steps towards reducing emissions instead of bleating about it?

Godmen And Indian Classes

Rahul Dravid (skip to page 12). And note the headline : Blessings Before Big Series!

What is it with these people - politicians, cricket stars, movie stars? Does popularity, fame and wealth addle the brain? Or do they become so insecure?

From The Pens Of Babes & Sucklings

Is this what we would have in India if we allow radio news on private FM channels, foreign ownership of newspapers and FOX news?

I have now received three (3) student papers that discuss Iraq’s attack on the Twin Towers on 9/11. All three papers mention it as an aside to another point. I’ve had two papers on the virtue of forgiveness that argue that if we had just forgiven Iraq for the 9/11 attacks, we wouldn’t be at war right now. I just read a paper on the problem of evil which asked why God allowed “the Iraq’s” to attack us on 9/11. The thing that upsets me most here is that the the students don’t just believe that that Iraq was behind 9/11. This is a big fact in their minds, that leaps out at them, whenever they think about the state of the world.

Scary thought.

In Other Words

We don't have a clue is what this poll seems to be telling us!

Is She Right?

Vidya Subrahmaniam seems to be saying here and here that Modi is not all on a sleeping beauty in Gujarat. She got the pulse of UP right, is she on to something again?

Prevention Better Than Cure

This editorial explains why and how we are not following that dictum in India.

Good Advice

Good advice

The latest NIE opens a path for the UPA government to once again step on the gas — by all accounts, negotiations on the Iran-Pakistan-India pipeline project have reached the stage where a deal is fully within grasp, provided Dr. Singh is willing to invest the kind of political capital with the Iranians that he so readily deploys with the U.S. Two years ago, India scored a politically costly own goal to appease the Bush administration’s drive to sanction and isolate Iran. It is now time to repair the damage.

But will Dr Singh take off his blinkers and take it?

Bush's Brain

Bush thinking out aloud on the Saudi incident in which a rape-victim was sentenced to six months in jail :

"My first thoughts were these: What happens if this happened to my daughter? How would I react? And I would have been ... I would have been very emotional, of course.

"I'd have been angry at those who committed the crime. And I would be angry at a state that didn't support the victim.

Now we know why he didn't get emotional about, say, Abu Ghraib - he doesn't have any sons.

Kill Him, Kill Him!

Our peace-loving countrymen:

It was vintage Modi in his campaign speech at Mangrol: "Sonia Gandhi spoke of terrorism. But she has no right to talk of this. Till today, those who attacked Parliament haven't been sent to the gallows. Congress in Gujarat is raising its voice on the Sohrabuddin issue. But, it should explain to the people what should be done to a man who stored illegal arms and ammunition. You tell me, what should have been done to Sohrabuddin?"

The rally echoed with shouts of "Kill him, kill him." Modi responded with: "Well, that is it. Do I have to take Sonia Gandhi's permission to do this?"

No Threat To Sovereignty, But

Sometimes, we need to act in a certain way to please you know who uphold certain important moral principles. Like acting against friends and leaving other friends without a clue.