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.