‘The middle class wants development backed by authoritarianism’

on Monday, June 30, 2008

Amid rows of books in the Delhi office of political psychologist Ashis Nandy is a painting that’s striking in its sordidness: the head of a dead politician enveloped in a floppy garland, surrounded by numerous tags displaying his numerous identities. Ever the political dissenter, Nandy is back in news after the Ahmedabad- based National Council for Civil Liberties filed a case against him for his article, Blame the Middle Class, published in The Times of India in January, analysing Gujarat Chief Minister Narendra Modi’s victory in the Assembly elections. The charge against Nandy is “promoting enmity between different groups on grounds of religion, race, place of birth and language”. Some 178 academics and intellectuals have signed a statement to protest the case against Nandy (http://www.sacw.net/FreeExpAndFundos/ defendNandy16June08.html). In an interview with TUSHA MITTAL, Nandy explains how modernity is devastating India.

How has your understanding of India changed over the years?

Like every other Bengali from Calcutta, I had a political edge to everything I did, but little empathy for the world outside the cities. Theoretically, I might have been committed to the people of India, but in practice they were an abstract category. Things began to change dramatically when I came to the Centre for the Study of Developing Societies. We studied politics empirically, and I realised its pervasive presence in Indian social life, how much of a pace-setting agency it really is. A second major change came with the Emergency. Neither my political studies nor my understanding of Indian politics had prepared me for it. It was a shock. Then, I began to look for new ways of looking at Indian politics. My discovery of Gandhi happened at that time. I had always disliked Gandhi: his allegiances had looked primordial; his style a deviation from our idea of cosmopolitanism; his politics anti-modern. But I rediscovered Gandhi. I became more sceptical of the Indian state, which was modelled on the colonial state that had ruled us. I saw that the categories that dominated Indian politics had no openness to the experiences of a majority of Indians. Often, as with terms like ‘secular’, they could not even be translated into vernacular languages.

Would you say the secular project in India has failed, that we have failed to merge ground realities with our idea of liberal secularism?

Absolutely! Secularism is a tool to achieve certain goals of tolerance and amity. It has not been able to touch the heart of most Indians, who have found it flawed, an abstraction used for political purposes only. I think we would gain much more if we entered it through the various cultural and religious traditions of India to confront the forces fomenting communal conflict. They are actually anti-Hindu and anti-Islam. They will destroy these faiths in the arrogant belief that they can defend them. We don’t defend faiths; faith defends us. In fact, the people often called religious fanatics usually did not care about religion. They were modernists who wanted a European- style nation state in India. They considered Gandhi primitive because he brought into politics ideas such as fasting and nonviolence. Gandhi was the counter-modernist who said that modernism was an intrusion in Indian culture and could only devastate India culturally, economically and socially, [that] it is intrinsically hostile to India’s environment, local knowledge systems and diversity. Ethnic and religious conflict is a pathological expression of modernity, not of tradition. The way modernisation is conceptualised leads to genocides; an enormous degree of violence; the demolition of civilisations.

Can you give an example?

I did a major study on sati, the first in contemporary times. I showed that sati epidemics primarily occurred when a community was under attack. For example, sati in late 18th and early 19th century was a direct product of the colonial political economy, the kind of collapse of traditional norms then taking place in India, the monetisation of the economy and human relationships. Half the cases of

Photo: Shailendra Pandey

Sati took place in Calcutta and its slums not in villages.

In your article, ‘Gujarat: Blame the Middle Class’, you talked about how development has de-civilised society, leaving only a shrinking space for the life of the mind.

This is a product of democratic processes. The people entering the middle class do not have middle-class values. They only have middle-class incomes. They have neither the traditional nor the modern concept of cosmopolitanism. They have just risen in the social hierarchy. They have only middleclass consumption.

What are these middle class values?

Some degree of tolerance and the ability to live with minority views which are different from yours; some acceptance that you do not protect divinities, that divinities can protect themselves.

You have used the term ‘cultural desert’ for Gujarat.

Gujarat has produced an intellectual culture where some of the finest minds, thinkers, writers, artists don’t feel comfortable at all. Perhaps it is not America but Singapore that is their utopia, at least in the short run. They want Singapore-style development. Even though they won’t admit it, they are looking forward not only to Singapore-style malls but also to Singapore-style authoritarian prime ministers. Large numbers of the middle class are now perfectly willing to sacrifice large sections of the society for the sake of development. In most countries, spectacular development has been associated with spectacular authoritarianism. Not only Singapore, China is a very good example. The enormous diversity of India has always troubled modern Indians. They think some degree of homogenisation imposed from above is the perfect remedy for India’s ills. They think they are the strict school teachers who can teach the rest of India how to behave when the government takes away land for SEZs, when it builds mega dams. They want to shut their eyes to what development really means. They are its beneficiaries and feel it must be protected at all costs.

What is your idea of a post-secular world?

Everybody predicted the demise of religion in the 19th century. Yet, at the beginning of the 21st century, we find religion stronger than ever. It has re-emerged from its isolation and marginalisation in a big way, taking advantage of the democratic process. Unless we learn the language of religion and enter the people’s mind through that path, we have no way of truly influencing their choices. That’s why one of the most creative persons of our time, Gandhi, said that people who say religion and politics have nothing to do with each other understand neither religion nor politics. Other creative persons who may or may not call themselves Gandhian follow that method. The Dalai Lama, Nelson Mandela, Desmond Tutu, Martin Luther King — they have all used religion very creatively. In India, people like Baba Amte and Sunder Lal Bahuguna never attacked religion; Swami Agnivesh has never put away his saffron robes. When you talk of saffronisation, it offends most Hindus. Saffron is not the colour of extremism. It is the colour of renunciation — sanyasis wear saffron. Extremists have hijacked it because we allowed them to; they have hijacked it even when they don’t believe in it themselves. [VD] Savarkar was an atheist. He didn’t believe in Hinduism but produced the bible of Hindutva. Hindutva is a political ideology while Hinduism is a form of faith. Ideologies enter when faiths become weak and do not have a meaning for people. Hindutva is a way of using Hindu sentiments politically to push towards the development of a Hindu nation state. The concept of a nation state is not Hindu. It is a 19th-century European concept, but Europe is moving away from it while we continue to cling to it. As Rabindranath Tagore once said, India trying to build a nation is like Switzerland trying to build a navy.

What prompts people who were once part of the Left to turn to the BJP?

Psychologically, the Leftist and the Hindutva ideologies are not far from each other. They offer the same kind of closure, the feeling of having reached an absolute truth by which to live. People who have faith don’t usually have strong ideologies. But many Indians also have blind faith in ideologies because they feel if they don’t have the support of an ideology, the meaning of life will collapse.

What about young Indians?Are they clinging to ideology as a means of security?

Like our politicians, the young are increasingly getting de-ideologised. They don’t understand Hindutva but they have picked up its slogans as ideology. They cling to it with the passion of a lover because without that clinging, they feel they will not be able to call themselves Hindu, because otherwise they are going out and downing beef hamburgers. Alternatively, they are moving towards a new, generic version of Hinduism obtained from gurus. This flooding of the market with gurus has also come from this need. You could be a Malayali working in Himachal Pradesh. You have no access to your own village gods and goddesses, to the Malayali version of Hinduism with which you have lived — it doesn’t even make sense to you anymore. Then you take a generic version of the faith [from the gurus]. Somehow it gives you solace, a feeling that you are part of the Hindu community.

So are we losing Hinduism’s diversity?

Hinduism is becoming a faith in the way that Christianity in many parts of the West is a faith. That wasn’t our concept of religion. Today, there are many in India willing to fight for the cause of India to the last Indian. Exactly as in Islam: they are many willing to fight for Islam until the last Muslim. They despise Muslims for not participating in the struggle and don’t care how many of them die. Because they have very little compassion for Muslims, their compassion is reserved for the vague idea of Islam. Similarly, in India you will find a lot of people who have a vague idea of what India is — they have a statist, mechanical concept of India and of Hinduism, and they are willing to sacrifice a million people to achieve that end. But the Indian state is the Indian culture and that extends from South Vietnam all the way to the borders of Persia.

What about Islam in India? How has it changed over the years?

We are seeing an Arabisation of Islam in India. At one time, Indian Muslims were proud that their Islam represented the best of the world’s traditions. But they are increasingly losing that confidence, as a direct product of 19th-century European scholars who claimed that West Asian Islam was the real Islam while other strands were influenced by local religions. These scholars endorsed fundamentalist Islam as the real Islam. The hijab, for example, was introduced in Indonesia by Western-educated women because they felt the Islam of their parents was not good enough. The same thing is happening in India. Muslims are virtually in uniform with skull caps and kurta-pyjama.

What are some of the biggest challenges India is to face?

How do we stop the fact that our economic and social vision is very close to writing off the bottom 10 percent of our society. We would be happy if they were all dead. How do we find people who will use the language of religion to re-enter the public imagination, someone who will re-enter as a person, articulating principles in direct continuation with his or her religion, without practising the dominant slogans of the pack. There are many, even our finance minister, who seem to believe that “development” and industrialisation are the way out of poverty, as that is the only model of social change they have learnt. America consumes 30 percent of the world’s resources with only six percent of its population. But we are not six percent of the world’s population. To become America we will have to kill off everybody else in the world and consume all the world’s resources and even then we will not have the American standard of living. According to a prediction, the Ganga will die out in 28 years. Something like that will probably awaken the consciousness of the people.

Why is the space for dissent shrinking?

Their own conviction in their being right is so small. Because they are themselves not convinced that what they are doing is right, they look at all dissent as an attack, not only on their ideas but on them directly. You are planting the idea in their mind, making them think that they could be wrong — that is their fear.

You’ve called history an overrated discipline. Why?

Every community of India has its own history, not only in terms of jati puranas but their own mythic history: memories handed down for generations. There are many ways of constructing the past, history is only one of them. But with this passion for history that came to India in the 19th century, everything has been “historised”. That, I think, has diminished us. Today, history is a major part of the knowledge industry, but that no longer enhances us. This search for truth about the past closes many pasts.

From Tehelka Magazine, Vol 5, Issue 26, Dated July 05, 2008

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By Tusha Mittal
With a case filed against him for publishing a critical analysis of Modi's victory in Gujarat, Ashis Nandy explains how modernity is destroying India READ »

Excess speculation or excess money?

on Sunday, June 29, 2008


From ancient times, Indian rulers have always blamed inflation on the perfidious bania. That is happening globally today. Politicians everywhere are blaming speculators for high inflation.
Actually, inflation occurs when too much money chases too few goods. Today, no great shortfall in goods is evident. World oil production is rising, though slowly. Mineral and metal production is up. The FAO predicts a record global harvest in 2008.
But the world has long been awash in money. The US kept interest rates at just 1% for years after the 2001 recession. This encouraged Americans to spend more than they earned, creating a huge US trade deficit and corresponding trade surpluses in China and other Third World exporters. Initially, this flood of dollars lifted all global boats — world GDP grew at record rates in 2004-08. Inflation was kept down by rising productivity, and by outsourcing manufacturing and services respectively to low-wage centres in China and India.
Money supply expanded fast in Third World countries too (including India). This was partly because central banks bought up dollars in forex markets rather than let their currencies appreciate.
Alas, a flood of money cannot for long lift production alone. Soon it
starts raising prices. First the excess money raised housing prices, and everybody was happy. Then it raised stock market prices, and people were very happy. Finally, the flood of money raised consumer prices, and suddenly people are very unhappy.
When world growth is so high that spending outpaces commodity production, commodity prices will rise to signal that growth needs to slow down. But this is politically unpalatable. Slower growth hits jobs and incomes. Rather than permit this, governments everywhere try to stimulate the economy with even more money.
The US Fed has not
only slashed interest rates to 2% but provided hundreds of billions of dollars to the stricken financial sector to help it escape the consequences of its excesses. This new dollar flood has worsened inflation.
World commodity prices have shot up in the last two years, spilling over into higher consumer prices. Politicians globally are looking for culprits, and finding them in speculators. Hundreds of billions of dollars have gone in recent years into two investment areas. First, purchases in forward com
modity markets — contracts for delivery of commodities at specified future dates. Second, commodity index funds — mutual funds that mimic the price of a group of commodities by buying and selling futures. Such funds have attracted $240 billion in recent times.
Has this sent commodity prices skyrocketing? Very doubtful. Yes, investors are buying forward contracts worth billions. But for every buyer of contracts, hoping for rising prices, there
has to be a seller, hoping for falling prices. Speculation is necessarily a two-way street. Besides, every contract expires and is settled at the due date, so such speculation is self-terminating.
Forward trading is mostly paper trading, and must not be mistaken for hoarding. World commodity stocks today are generally low by historical standards. Massive forward trading has not translated into hoarding.
Academic studies have long attempted to find whether forward trading causes a rise in current prices. No clear link has ever been established. Price manipulation is possible in thin, weakly regulated markets. It is not evident in
big commodity markets. The US has just enacted legislation limiting the size and financing of forward trades in oil. Past experience suggests this will have a marginal impact at best.
There is hardly any forward trading in iron ore, yet its price is up 76-95% in new contracts. By contrast, huge forward trading in sugar has left world prices low. Nickel futures are down from a peak of $60,000/tonne last year to just $22,000. Wheat futures once spiked to $13/bushel but are now
down to $9/bushel. There is no clear link between forward trading and skyrocketing prices.
When the interest rate is lower than the inflation rate — economists call this a negative real interest rate — money supply is definitely excessive. India, the US and many other countries have negative real interest rates today. A recent Merrill Lynch study suggests that a 1% fall in the real interest rate increases commodity prices by 17% in 10 months. If this is even partially true, the main culprits have been not speculators but governments printing excess money. Worse, this excess money was often used to subsidise oil prices, stoking demand further.
Today, at last, governments across the globe are reluctantly reducing oil subsidies and starting to fight inflation through a monetary squeeze, even if it means slowing growth. Squeezing money in India alone will produce only limited results. For good results, central bankers of the world should get together for coordinated action. But no such initiative is in sight.
Politicians are quick to take the credit when the economy does well, and to blame others when things go wrong. They must take the responsibility for bad as well as good policies. Banias may be quick to grasp the inflationary potential of bad policies, and profit from it. But the root cause of rising prices lies elsewhere.

The Rabid Optimist

on Tuesday, June 24, 2008

One apocalyptic night and 23 years on the battlefield. Satinath Sarangi is still not ready to stop. ANASTASIA GUHA profiles a poet-warrior

MORNING HAS BROKEN over Delhi but the clouds block out the sun, casting the city in a pervasive gray. Outside Jantar Mantar on a stretch of pavement, under a canopy of rags, in front of a banner that counts the number of days he has been on hunger strike, Satinath (Sathyu) Sarangi, 54, is tying his trademark turban. Today it is red, the colour of revolution, matching his long khadi kurta. A tall, striking man with a lush beard, he looks every inch the warrior. And like a warrior, the core of Sathyu’s life is built on a certitude. “There is no gray, the facts are all black and white — the rights and wrongs of this issue are more than apparent,” he says. The Union Carbide gas leak killed 15,000 people in 1984; today the killing continues through a cycle of pollution, contamination, corporate crime and government neglect.

But Sathyu’s story did not start with Bhopal: he is not a survivor of ‘that night’. Unlike the others camping with him on a Delhi pavement, he does not have nightmares about ‘that night’. Born in Jharkhand, Sathyu went to 10 schools in 12 years, as his father who worked for the central government was transferred around the country. Books were his succor from the staccato nature of those years. He particularly loved stories of Indian revolutionaries and their fight against social injustice. “I was a child of the 60’s, surrounded by Naxals. You would have to be utterly dumb, or utterly insensitive, not to become radical,” he says. Hostel life at Benares Hindu University (BHU) matured the anarchist fantasies of his youth into a conscious political sensibility.

A gold medallist several times over from BHU, Sathyu gave up the comfort of life as a metallurgical engineer, lived out in some pristine research laboratory, for a life of tougher purpose. It has had its renumerations. “Most of my batchmates are CEOs of corporations or own companies, and we have alumni meets all the time. When they are drunk, they say, ‘Hey man, all I can say to my kids at the end of the day is that I have produced X tones of steel’,” he laughs.

Bhopal was meant to be merely a punctuation in his life. He went there the day after the gas disaster, intending to stay a week. 23 year later, he is still there. “I realised fairly early that I had a skill set that I could deploy very effectively. I spoke English, which was needed to take the issue to the international world, and I had spent enough time in organisations to know what does not work,” Sathyu says. This is typical of him. No dramatic stories of transformative moments, no stories of compassion and rage, nothing to explain why a week’s visit changed to a lifetime’s work — although clearly they lie somewhere beneath this telling. Instead, a cold, almost hard, rationality — his friends say the only time he gets angry is when other Bhopal activists lose their cool under pressure.

And then there is the integrity: no window displays for that either. You’d have to be utterly dumb, or utterly insensitive, though not to get a measure of it when you hear that he has lived among the people he serves, in a tiny room in a particularly squalid part of town, sharing their poverty, eating the same poor diet, drinking the same pollu - ted water. Or that he has lived on Rs 1,000 a month for years, subsidised occasionally by friends and family. He has now graduated to a monthly honorarium of Rs 6,500 from Sambhavana, a clinic he helped set up. Booker-nominated author and activist, Indra Sinha says it took considerable armtwisting to get him to accept even that.

ON APRIL 5, 2008, 50 Bhopalis reached Delhi after a gruelling 800 km Padyatra from Bhopal to Delhi. For eight weeks, the survivors waited in vain for the Prime Minister to meet them. Finally, on June 9, they decided to protest outside the PM’s house, chaining themselves to his gate. All of them — women and children included — were arrested, beaten, and jailed. Now, as the city continues about its business, 9 of the survivors have started an indefinite fast in Delhi, joined by 10 others around the world. “The PMO offered us a meeting with the PM but we did not want a photo op. We want answers,” Sathyu explains.

There have been many dark moments in the struggle and one of the darkest was on 26 July, 2006. Sunil Kumar — a dear friend and activist, a smiling, courageous man — was 12 when he lost his parents and 3 siblings. He fought for justice for 22 years, often surviving on Rs 4 a day to bring up his remaining two siblings. When they lifted Sunil down from the ceiling fan from which he had hanged himself, he was wearing a T-shirt that said, “No More Bhopals”. It is a slogan under which Sanjay, his younger brother, sleeps every night as he continues fasting, right next to Sathyu.

“In my darkest moments, what gives me strength are these survivors,” says Sathyu. “They fight the government; they fight for their livelihood and for their family’s health and they surround me all the time; they are my support, so I don’t go crazy with all this.” Perhaps another thing that stems the madness is his gift for irreverent, playful poetry, which he recites at the drop of a hat with rueful smiles and a stirring passion.

There are also the sudden shots in the arm. Meeting Sinha in 1993 was a watershed moment in Sathyu’s life. “A sense of helplessness had started to gnaw at my soul. I was seeing all these families trying to get treatment at the local hospitals and getting nowhere. By the time I met Indra, I was very low.” Sinha himself — then a highly successful ad-man in London — was deeply moved. He created an ad asking for funds for a health clinic for the Bhopal victims. The British public responded by giving over 50,000 pounds. The Sambhavana trust and clinic was started with this.

The clinic is clearly a source of great pride for Sathyu: a tangible crown atop the shimmering pain of the struggle. It has given free medical care to more than 30,000 people, developed new therapies and conducted ground-breaking research, using a combination of alternative therapies and modern medicine to treat people with multiple chemical sensitivities

But for all of that, Sathyu wears his years at war lightly. It’s almost as if by giving up one kind of life, he has sprouted an armour against “wanting things”. Yet there are glimmers of the other life, the one he did not live. Sinha says Sathyu adores children, that there’s a sadness to him that he does not have his own. Indeed, ask Sathyu about children and the armour slips a little. “I do want to have biological children. This may sound politically incorrect but I want to hear their heartbeat while they are still in the womb. I would like to spend a lot of time with the baby.” Almost defensively, he adds, “Perhaps my level of involvement will change. But then, bringing up a good person is an act of political activism as well. The child will be for society so I will not feel selfish.” The dream of a blade of grass, pushing through the hard pavement on which he has chosen to fast.

Yet, Sathyu is a rabid optimist. Even as he struggles to bring the behemoth Dow Chemicals to book, his life is redeemed by small pleasures. He loves to cook for friends and look after his long thick hair (he says he wants to look good). His love for table tennis is borderline obsessive. And then there are his friends. “I am not rich in anything except friends”, Sathyu says. Sinha recounts a party in Fran - ce where Sathyu imbibed rather a lot of potent redwine and lay down to rest, only to sit bolt upright every few minutes to greet passers by with “bonjour monsieur”, “bonjour madame”, to much hilarity.

All of this could be a different tale though. Sathyu could have led the Bhopali survivors to a violent struggle, burned a bus or two, called bandhs, blocked public highways. Every day they are confronted by the greater efficacy of that route. Instead, shrouded in a glowing righteousness, taking an inured society and an insensitive government in his stride, he leads the fast into its ninth day. “The hunger has given way to a curious sense of peace,” he says. “I feel satisfied because so many things we are working for in Bhopal are not just about Bhopal. This place is a microcosm for everything that is wrong with the world. That is what we are fighting to save.” •

From Tehelka Magazine, Vol 5, Issue 25, Dated June 28, 2008

Thinkers Thoughts on Thinking

on Sunday, June 22, 2008

Thinkers Thoughts on Thinking

The true sign of intelligence is not knowledge but imagination.
Albert Einstein

Sometimes I think the surest sign that intelligent life exists elsewhere in the universe
is that none of it has tried to contact us.
Calvin from "Calvin and Hobbes" (Bill Watterson)

Belief is the death of intelligence.
Robert Anton Wilson

The test of a first-rate intelligence is
the ability to hold two opposed ideas in mind at the same time
and still retain the ability to function.
F. Scott Fitzgerald

Two things are infinite:
the universe and human stupidity;
and I'm not sure about the the universe.
Albert Einstein

My mother used to say to me, ...
"In this world, Elwood, you must be oh, so smart, or oh, so pleasant."
For years I was smart. I recommend pleasant. You may quote me.
Elwood P. Dowd in the play "Harvey" by Mary Chase (1907-1981)

Many highly intelligent people are poor thinkers.
Many people of average intelligence are skilled thinkers.
The power of a car is separate from the way the car is driven.
Edward de Bono

To me, being an intellectual doesn't mean knowing about intellectual issues;
it means taking pleasure in them.
Jacob Bronowski, American scientist, author, philosopher

People who are smart get into Mensa.
People who are really smart look around and leave.
James Randi

It has yet to be proven that intelligence has any survival value.
Arthur C. Clarke

The trouble with the world is that
the stupid are cocksure and the intelligent full of doubt.
Bertrand Russell, 1872-1970, British Philosopher, Mathematician, Essayist

It is not clear that intelligence has any long-term survival value.
Stephen Hawking, British Theoretical Physicist

The intelligent man finds almost everything ridiculous,
the sensible man hardly anything.
Johann Wolfgang Von Goethe

Intellectual brilliance is no guarantee against being dead wrong.
David Fasold

The best intelligence test is what we do with our leisure.
Laurence J. Peter

Man had always assumed that he was more intelligent than dolphins
because he had achieved so much -- the wheel, New York, wars, and so on,
whilst all the dolphins had ever done was muck about in the water having a good time.
But conversely, the dolphins believed themselves to be more intelligent than man for precisely the same reasons.
(from "The Hitchhiker's Guide to the Galaxy")

Do we get the politicians we deserve?

One of the striking details about the now-certain nomination of Barack Obama as the Democratic Party’s candidate for President of the United States is that he is the 10th nominee of the two major parties (Republicans and Democrats) in the past twenty years to have graduated from either Harvard or Yale. That statistic, remarkable in itself, strikes one as all the more astonishing when you realize that in these last 20 years the two parties between them have in fact only had 12 nominees altogether. In other words, only two major candidates in all this time did not attend one of America’s top two universities — and this in a country whose higher education system, with over a thousand top-class universities and colleges to choose from, is second to none.
The evidence is startling: look at the winners of the Presidency in the last two decades, and every single one of them (George H W Bush in 1988, Bill Clinton in 1992 and 1996, George W Bush in 2000 and 2004) has had a degree from Yale. (As the father of twin boys whose birthday happens to be today, i suppose i should admit they both went to Yale too, but their politics are closer to that of Barack Obama, even if he graduated from Harvard Law School in 1991). There are also Yalies amongst the defeated candidates — Bush senior in 1992, John Kerry in 2004 — and, for that matter, Harvard men as well (Michael Dukakis in 1988, Al Gore in 2000). The current President, George W Bush, actually has degrees from both these pillars of the Ivy League, his credentials embracing both Yale University and the Harvard Business School.
This year, Harvard’s Obama will square off against John McCain, whose alma mater is the US Naval Academy in Annapolis, Maryland. Many of us expected his likely opponent to have been another Harvard man, Mitt Romney, who has degrees from both the law and business schools; but then we also expected Romney was more likely to be facing Hillary Clinton, who — you guessed it — graduated from Yale Law School. But even without the pair of them, it is extraordinary indeed that, as the columnist Michael Medved recently pointed out, Yale and Harvard degree-holders make up “less than two-tenths of 1% of the national population, but (have won) more than 83% of recent presidential nominations”. Medved sees this development as evidence of a growing inclusiveness by those two institutions, which have drawn their students from a much wider talent pool than in the past. My own concern, as an Indian, is somewhat different: how is it that America elects its President from amongst the products of that country’s finest educational institutions, whereas we in India are saddled with politicians of, to put it politely, considerably lower educational attainment?
Without wishing to disparage in any way the fine men and women of our current Cabinet — who include degree holders from Harvard, Oxford and Cambridge universities, and even two from St Stephen’s College — it is a sad fact that in general, the products of India’s better colleges and universities do not go into politics. In America, a Michael Medved can write that the skills and determination required to get into a Harvard or Yale are in themselves indicators of suitability for high office — “the driven, ferociously focused kids willing to expend the energy and make the sacrifices to conquer our most exclusive universities are among those most likely to enjoy similar success in the even more fiercely fought free-for-all of presidential politics.” In India, the kids who “conquer our most exclusive universities” would for the most part consider it beneath themselves to step into the muck and mire of our country’s politics. The attitude of most Indians is that if you’re smart enough to get into a good university, you can make something better of your life in a “real” profession. Politics, it is generally muttered amongst the middleclass, is for those who aren’t able to do anything else. And the skills required to thrive in the world of Indian politics have nothing to do with the talents honed by a first-class education.
As a Stephanian myself, i remember the ethos of the institution being one of diligent preparation for the IAS and IFS examinations as the summum bonum of career aspiration for anyone with the brains to pass those gruelling civil service examinations. And yet i have never forgotten a speech delivered at a college dinner in my final year, 1974-75, by a distinguished Stephanian of royal descent, an additional secretary to the Government of India and a civil servant known to be well-connected to the ruling family. He surveyed us, 17- to 22-year-olds with bright eyes and scrubbed faces, and chose to express a candour none of us was accustomed to from Indian officialdom. “I look at you all,” he said bluntly, “the best and the brightest of our fair land, smart, honest and able, and my heart sinks. Because i know that most of you will do what i did and take the civil service examinations, little realising that if you succeed, your fate will be to take orders from the dregs of our society — the politicians.” He could see the shock on the faces of his audience as he went on: “Don’t make the mistake i did. Do something else with your lives.”
The speaker was Natwar Singh, and he undid his own “mistake” by resigning from the government before he could attain the foreign secretaryship that most of his peers considered inevitable, and entered politics instead, rising to the foreign ministership. Another Stephanian diplomat, Mani Shankar Aiyar, followed his example; he serves in the Cabinet alongside a Stephanian who eschewed the services for the law, Kapil Sibal. But they are very much the exception to the norm. Isn’t it time more well-educated Indians stepped into the political fray, as India seeks to carve out a place for itself in the 21st century world? And if more of them don’t, don’t we only have ourselves to blame if we get the politicians we deserve?


Elimination of nuclear weapons will not happen in a hurry

Let’s Get Real
Kanwal Sibal

How seriously should the prospects of elimination of nuclear weapons be taken? Two newspaper articles by four former US State Department and Pentagon chiefs — George Schultz, Henry Kissinger, William Perry and Sam Nunn — visualising the distant possibility of such elimination have revived hopes of progress towards the goal. If some see the conversion of these diehard realists to such a ‘peacenik’ position as the beginning of a strategic change in thinking within the US security establishment, others see it as a tactical ploy to further tighten the non-proliferation regime under cover of a notional commitment to an effectively unrealisable goal.
A rational case for elimination exists. Nuclear weapons are in effect unusable. If during the Cold War one nuclear-armed ideology posed an existential challenge to the other, no such confrontation exists today. The Non-Nuclear Weapons States (NNWS) are incapable of posing ‘a threat of last resort’ to the Nuclear Weapons States (NWS) for which these weapons of last resort are required by them. If the NWS do not regard each other as ‘enemies’ any longer, only friends or competitors locked into a tight economic embrace or politics of engagement in an interdependent globalised world, then nuclear deterrence loses its raison d’etre.
The end of the Cold War presented an opportunity to adopt an agenda of elimination, but instead an agenda of consolidating the privileged position of the NWS by tightening further the non-proliferation regime for NNWS and attempting to freeze the nuclear capability of non-Non Proliferation Treaty (NPT) countries like India was adopted. The NPT was extended permanently, without amendment, in 1995. The Nuclear Suppliers Group tightened its guidelines, the International Atomic Energy Agency its safeguards regime. Robust counter-proliferation strategies were enunciated. The Comprehensive Test Ban Treaty (CTBT) and the Fissile Material Cut-off Treaty (FMCT) were inscribed on the agenda not with disarmament but with non-proliferation in view.
But the implementation of this agenda got derailed. India and Pakistan conducted weapon tests in 1998. Counter-proliferation policies produced defiance, with North Korea abjuring the NPT and claiming possession of nuclear weapons. Iran insists on its right under the NPT to enrich uranium, fuelling suspicion that it is acquiring the technology and ingredients to make nuclear weapons. The NPT consensus has floundered because the NWS refuse to discuss any timetable for elimination of nuclear weapons while insisting that the NNWS accept increasingly stringent conditions for peaceful nuclear
cooperation for non-proliferation reasons.
Mistrust between NWS and a bid for strategic ascendancy, rather than proliferation concerns, prevent elimination. The US Senate has rejected the CTBT. FMCT negotiations are blocked in the conference on disarmament in Geneva because the US rejects verification provisions and the Chinese insist on linking them to those on non-weaponisation of outer space. The US unilaterally abrogated the Anti-Ballistic Missile Treaty and began developing a National Missile Defence System. US-Russia arms control negotiations have in effect broken down. The US decision to install missile defence components in East Europe is seen as a strategic threat by Russia. Together with NATO’s extension into Russian strategic space, these threats have prompted Russia to announce the development of new ballistic missiles and advanced nuclear submarines. China too is developing new Inter-Continental Ballistic Missiles and a more potent nuclear submarine fleet, besides an antisatellite capability. Talk of the US developing newer, more reliable warheads and micro-nukes runs counter to any idea of elimination.
Who will then take the elimination agenda forward? Not the NWS who are locked up in their mutual insecurities and suspicions. Most even reject no-first-use as a confidence-building measure. They consider reductions as fulfilment of their pledge to disarm under Article 6 of the NPT. Not the NNWS who have no means of pressure left after the permanent extension of the NPT. Civil Society then? In reality, public concern about the danger of nuclear war was stronger during the Cold War than it is today. There is no discernible public movement for elimination in Russia and China; in other western countries it is muted.
Elimination of nuclear weapons is an inordinately complicated issue in which national security, vested interests, prestige, power play, fear, realism, idealism, human nature, ethics, morality, all have a part to play. A world unable to solve less complex problems is ill-equipped to solve this gargantuan one.
Where should India position itself in this exercise? On June 9, 1988, India had proposed at the UN the blueprint of a nuclear weapons-free world. India is tempted to claim ownership of the idea as it resurfaces again in the US strategic community. But India is now a nuclear weapons state and should be cautious about too big a gap growing between its elimination rhetoric and its own nuclear reality. The more India espouses the cause, the more pressure it can invite for taking intermediate steps to prove its credentials, dented by the 1998 tests, by either signing the CTBT or making a binding commitment not to test, besides unilaterally ceasing production of fissile material. Our nuclear deterrent is as yet incomplete, and because elimination is a faraway prospect, we should not get trapped into assuming commitments prematurely. We should, of course, join the debate as a responsible country for protecting our interests.

Do N-deal with China

on Thursday, June 19, 2008

Jug Suraiya

By now the so-called Indo-US nuclear deal has become a shaggy dog story: a prolonged bad joke that goes on and on with no end or punchline in sight. It is obvious to any but to the most wilfully rosy-eyed that the deal — enormously advantageous as it is for India, in terms of international status and access to nuclear material and strategic dual-use technology — is not going to happen. The Indian Left, particularly the CPM, will not let it happen, on threat of withdrawing support to the Congress-led UPA government. And the Congress, clinging on to office with all the desperation of a man dangling over a bottomless abyss by his fingernails, is too frightened to call the CPM’s bluff. (Does the CPM really want elections right now, caught up as it is with the Gorkhaland agitation and the backlash of the Nandigram/Singur fiasco? For that matter, is the BJP — the CPM’s strange ally in opposing the nuclear deal — any readier to face the electorate, what with its internal dissensions and its hard line/soft line waffling over the whole Hindutva package, beginning with the mandir?)
In any event, the Congress is too tenacious of office to chance its arm. So it seems that the nuclear deal is doomed to fizzle out like a damp squib. Or is it? With the BJP increasingly nuancing its opposition to the deal considering that closer Indo-US ties are broadly favoured by its urban middle-class constituency, the main stumbling block is the CPM. However, the CPM’s visceral opposition to the Indo-US nuclear deal is not because of the nuclear component but because of the US component: nuclear power (for peace or otherwise) is now fine; it’s the US that is the great bogeyman.
The Indian communists, who had earlier decried Pokhran I and II, are now so gung-ho about the country’s nuclear programme that one of their objections to the nuclear deal with the US is that it might compromise India’s autonomy to conduct Pokhran III, IV, V, VI and VII. No, the comrades are now all for nukes. But they can’t be nukes which are in any way ritually contaminated by American association.
But there is another supply of nuclear know-how and hardware much nearer to India geographically and much closer to the CPM ideologically: China. Indeed, while New Delhi is dithering over the deal with the US, Beijing is reportedly eager to home-deliver nuclear capabilities of various sorts (it’s called proliferation) to an already nuclear-enabled Islamabad, as it had done earlier to Pyongyang. In fact, it was largely through Chinese help that Pakistan cut its nuclear teeth as a response to India’s Pokhran I.
What the CPM should now do is to talk Beijing into doing a nuclear kutti with Islamabad and establishing nuclear links with New Delhi instead. The CPM’s cuddliness with Beijing is well known and Comrade Karat and Co should not find it beyond their powers of blandishment to inveigle the Middle Kingdom into becoming India’s nuclear sugar daddy. Of course, if New Delhi were to fall into Beijing’s nuclear embrace, the rest of the international community might well make its displeasure felt by imposing trade and other embargoes. So what? The CPM has made it quite clear, with regard to Tibet and other issues, that the whole world were well lost if only China were gained.
But how to gain China? To begin with, the CPM should unilaterally concede to all Beijing’s demands regarding Arunachal Pradesh, a portion of Sikkim, and other parts of India which China claims for itself. To further sweeten the deal for China, the Marxists might also consider ceding the would-be Gorkhaland to Beijing, thereby getting shot of an awkward domestic problem created by people whom Bengal’s transport minister has described as ‘foreigners’.
In fact, in order to demonstrate its patriotic credentials the CPM might be tempted to cede itself to Beijing, hammer, sickle and all. Such a move would, once and for all, demonstrate the CPM’s patriotic credentials. To China, of course. Who else? For unlike in India where we let them hang around, in China they simply hang their traitors.

The Philosopher King, Almost

on Tuesday, June 17, 2008

N FEBRUARY 13 this year, as Democratic presidential hopeful Barack Obama rounded off nine days of sweeping primary victories smashing Hillary Clinton across more than half of America’s 50 states, a key strategist of the Republican nominee, John McCain, quietly announced he would retire rather than work against Obama. “I would simply be uncomfortable being in a campaign that would be inevitably attacking Barack Obama,” McCain adviser Mark McKinnon said in an interview with the non-profit National Public Radio in Washington DC. While insisting he disagreed with Obama on “very fundamental issues” and would still back McCain “100 percent”, McKinnon said: “I met Barack Obama. I read his book. I like him a great deal.”

On May 20, two days after an astounding 75,000 supporters rallied to hear Obama at Portland in the northwest state of Oregon, McKinnon — who masterminded the advertising campaigns of George W. Bush’s 2000 and 2004 presidential bids — resigned from the McCain campaign even as results of the Democratic primary contest in that state were coming in. Later that week, Washington Post op-ed columnist Michael Gerson revealed that McKinnon had last year given him Obama’s 2006 bestseller The Audacity of Hope to read, confiding in Gerson that he won’t join the Republican campaign should the youthful African-American indeed turn out the Democratic nominee. In his column, Gerson faulted Obama’s ideology and temperament on the basis of his stated positions — that he will meet leaders of “enemy” countries such as Iran, Syria, Cuba, North Korea and Venezuela “without preconditions”, and will withdraw US forces from Iraq. Yet, wrote Gerson, McKinnon’s step “is a reminder of something that Republicans… should not forget or underestimate. Obama is a serious, thoughtful, decent adult who will attract the sympathy of other serious, thoughtful, decent adults. He has evident flaws, but the inspiration he evokes is genuine… His story is not a scam.

Reluctance of opponents such as McKinnon’s to duel with Obama is the stuff that has paved the 46-year-old Democrat’s unbelievable rise in a 12-year political career that is now at the cusp of history: he is a moment away from possibly becoming the world’s most powerful nation’s first-ever black president. In politics, Obama has repeatedly emerged the sweepstakes winner as an evident underdog; always the less favoured by the bookies, yet almost always the dark horse. In 1996, Obama won a seat on the Illinois senate beating a Republican when he wasn’t even the favourite in the Democratic primary at the start. Eight years ago, Obama gate-crashed the Democratic convention at Los Angeles that cheered Al Gore’s nomination, but, not being a delegate, miserably found it hardest to break into the seniors’ club and returned home midway. Four year later, in 2004, Obama was the keynote speaker at the Democratic convention at Boston, chosen by the party’s nominee, John Kerry, himself. Obama’s passionate speech that he called ‘The Audacity of Hope’ invoked powerful imagery from America’s past, such as those of slaves singing around a fire. He won thunderous applause not just in the convention centre but across America; instantly, political pundits marked him as a future challenger for America’s most coveted job: the presidency. And now, in August, Obama will indeed lead the Democratic convention at Denver, having won the closet primary race in the party’s history, beating Hillary Clinton who seemed everyone’s favourite just a year ago.

So what makes Obama this extraordinary once-in-a-lifetime phenomenon? The answers are to be found in his 2006 bestseller that has moved McKinnon and millions others to make the leap of faith beyond traditional politics and believe in Obama’s powerful message of hope and change. Indeed, Obama’s politics — as reflected in his countless votes in 12 years as state and national senator, and as enumerated in the detailed social, economic and political analyses and prescriptions of his book — has stood out as principled without being doctrinaire, dignified yet humble, uncompromising yet pragmatic and, most importantly, inclusive. Obama fashions himself in the manner of the philosopher king, a non-partisan seer with an overarching vision who seems convinced of his ministry to secure social justice and equity to the largest number of people, not just in the US but across the world. And all those who accuse Obama of being all rhetoric need take a closer look at his book’s chapters titled Opportunity (economic and social), Race, Faith (including longstanding issues such as gay marriages and abortion) and The World Beyond Our Borders.

OBAMA’S DIRECT post-racial messages clearly underlie his appeal across classes — Obama won votes of the ‘white working classes’ and the Latinos in several, though not all, states, despite the Clinton campaign’s suggestion that he totally failed with those voting segments. Obama is a rare African- American politician who readily admits that the welfare-based affirmative action programmes that paid dole to the (overwhelmingly black) people who didn’t work — programmes that were restructured by the Clinton administration in the previous decade — “sapped people of their initiative and eroded their self-respect”. “Any strategy to reduce intergenerational poverty has to be centred on work, not welfare,” writes Obama in The Audacity of Hope, “not only because work provides independence and income but also because work provides order, structure, dignity, and opportunities for growth in people’s lives.” Just which black leader in America would so directly reject welfare? Unlike the dyed-inthe- wool politician, Obama doesn’t pander to populism: he slammed suggestions by both Clinton and McCain last month that a tax on gasoline be suspended in the face of rising global prices. And yet, Obama bats clearly for the disadvantaged and the poor. Last week, Obama announced he would set up a foreclosure prevention fund of $10 billion to help the 1.5 million Americans who face losing their homes, and many have indeed lost, for failure to pay their mortgages.

“For eight long years, our President sacrificed investments in healthcare and education, and energy and infrastructure on the altar of tax breaks for big corporations and wealthy CEOs – trillions of dollars in giveaways that proved neither compassionate nor conservative,” Obama thundered in his speech.

Yet, integral to Obama’s politics is his eagerness to harness bipartisanship for the Common Good. In the middle of his frenetic campaign tour, Obama teamed up with Republican senator Tom Coburn on June 3 to introduce a new Bill in the Senate that seeks to totally throw open details of government spending through federal grant, contracts and loans, as well as competitive bidding and violations and criminal activities. The new bill will radically streamline www.USASpending. gov, a pioneering website created last December following the successful passage of another Obama-Coburn transparency law in 2006. It is indeed Obama’s push for greater ethics in Washington, to break down the stranglehold of lobbyists, wheeler-dealers and power-mongers that appears to have caught the popular imagination across America.

Perhaps the boldest words from Obama have been on America’s controversial foreign policy, as he admits his country’s penchant for shoring dictatorships the world over for narrow, selfish gains. Obama’s opposition to the war in Iraq is well documented. But writing in his 2006 book, Obama chronicles how the US administration in 1965 supported the overthrow of President Sukarno’s democratic government in Indonesia and the military takeover by General Suharto, whose rule led to the “slaughter” of up to one million people. It is equally astonishing that a mainstream politician such as Obama, who must have known his desire to aim for the US presidency even as he wrote the book, speaks unequivocally about the “Western-dominated” IMF whose prescriptions triggered riots and demonstrations in Indonesia.

Certainly much of Obama’s ability to preach and practice people-oriented politics that is at once radical and compromising is because he is the quintessential outsider: born of a black non-American father and a white American mother, spending ten years of his childhood in Hawaii and Indonesia, never seeing a father and being raised at times only by his maternal grandparents, graduating in international relations and political science at New York’s University of Columbia but turning to faith and community work back in Chicago, moving to Harvard Law School — where he became the first-ever African-American president of the Harvard Law Review — yet returning to Chicago with his black wife, a trained lawyer herself, to teach law and do more community and grassroots political work such as organising successful voter registration drives among African-Americans.

In the end, though, Obama may disappoint his supporters by failing to break the gridlock that sleaze and slime have on Washington. What they will want for sure is for him to try his hardest while on the job — if he gets it. •

From Tehelka Magazine, Vol 5, Issue 24, Dated June 21, 2008

Breaking The Race Barrier

Obama did not require quotas to reach where he has
Ramesh Thakur

Waterloo (Ontario): Months ago, the field of presidential nominees for the Democratic Party narrowed to Barack Obama, an African-American, and Hillary Clinton, a woman. Both are highly qualified, having graduated from the world’s most prestigious colleges and universities and then worked their way up through the world’s toughest and most competitive political system. Both are US senators. Neither became credible presidential candidate through quota politics. Now, finally, Obama has defeated Clinton to assume the mantle of party leader and presidential standardbearer for the Democrats.
The most important point of policy relevance for India lies in the significance for our growing burden of quota politics that pose a threat to merit, initiative and national integration. When a group like the Gujjars — and they are not the first and nor shall they be the last — launches mass protests demanding to be inscribed on the list of “disadvantaged” groups, it is clear that, the reality of historical grievances notwithstanding, membership of these groups brings significant advantages in modern India. Not only do the lists of scheduled castes and tribes still exist. Their membership has continually expanded since 1950, the scope of public and private activities that they regulate — such as preferences in college admissions, job placements and promotions — has periodically been extended, and the benefits intended to offset inherited group disadvantages have been increasingly captured by the powerful and the wealthy creamy layers instead. All this is testimony to the biggest public policy failure since our Constitution came into being.
Indians today are more conscious of their different caste identity than at independence. Caste is as salient a determinant of life choices based on public policy in modern India as it was in ancient India based on religious and social reality. And it threatens long-term economic prosperity, social cohesion and political unity alike.
Obama is the embodiment of the American dream that anyone with talent, aptitude and the work ethic can aspire to the highest office in the land and the most powerful position in the world. By contrast, quotas mean that merit and hard work can be and repeatedly are trumped by sectarian identity. This has a doubly pernicious consequence. On the one side, it reinforces the sense of victimhood and group entitlement for initial entry and subsequent advancement. I fail because of historical discrimination, not owing to any personal shortcomings. I deserve this job and
upward career mobility as a Dalit or a tribal, and it is your duty to give me these. I see no point to improving my qualifications, skills or productivity, as these are irrelevant to professional advancement and rewards.
On the other side, it has a terribly demoralising and disincentivising effect on those who lose out because they are a member of the historically forward but modern disadvantaged groups. What do we think the effect is on a poor, studious, bright and hardworking Brahmin child who sees scholarships awarded to a less intellectually able, less diligent, son or daughter of a “backward” IAS officer or cabinet minister?
The sense of disenchantment, alienation and disaffection ripples outwards. Even if admissions and jobs were to be awarded competitively, owing to scarcity, for every successful candidate, hundreds would be disappointed. Thus for every successful candidate in a quota-based system, there would only be one replacement successful candidate in an open merit-based system. The hundreds of unsuccessful candidates would fault their own inadequacies in an open system but end up nursing grievances against the system and the polity in a quota-based system. The pool of the resentful is thus hugely bigger.
The resentments, grievances and national divisions would not be growing and multiplying if the preferences were based on household income whereby the genuinely needy could indeed be helped without antagonising the able and the meritorious. But of course this would not help the lucrative careers of the professional caste politicians whose leadership skills are limited to mobilising caste vote banks. Nor would it provide convenient alibis for failures of public policy to politicians of all stripes and states. If we had full employment, if the public and private sectors were competing to recruit and retain the best talent in a thriving economy, and if multiple educational institutions of genuinely world-class faculty, facilities and curricula were also competing to attract the best students, then quotas would be obsolete.
Obama’s success (and of others like Bobby Jindal) will provide unmatched incentives to people of all colours and races in America to apply themselves to improving their lot in life through quality education, hard work and high ambitions. It will help to attenuate the suspicions and hostility of blacks towards whites, for Obama could not have succeeded without millions of whites voting for him. The twin Obama-Clinton achievements mean that the double glass ceiling has been well and truly broken. Future generations can experience the shards of glass cascading over their shoulders as they look to and aim for the sky.
The writer is with the University of Waterloo, Canada.

Apple IPhone launch in India

on Tuesday, June 10, 2008

Its confirmed India's Bharti-Airtel will be launching 3G IPhone in India.Bharti is said to have signed the deal with Apple in May.The dual carrier business concept by Apple will permit another Indian contender for the bringing the 3G iPhone in India.The probability is Vodafone as it had announced earlier but with no later confirmation.With the IPhone priced in US at $199 for a 8GB model it won't be surprising if it launched in India with a price tag of around Rs 10000 range giving tough competition to Sony and Nokia phones.With the stylish looks and the cool touchpad with a 3.5 inch screen and the enterprise applications it won't be surprising if it builds up a huge fan following among college and office goers alike within a short period.
With the cellular market in India growing at a phenomenal rate and the festive season starting in September it won't be surprising if India is one of the countries where IPhone will be launched on July 11,2008.No tentative dates have been given by Apple with regards to its launch in India.

The only disadvantage seems to be IPhone sticking to one or two carriers as there are more than 5 major carriers with a huge subscriber base.

Well, its about time the Apple fever catches up in India.
And maybe Steve Jobs comes again to India as he had done in his youth for spiritual solace but this time to give tech crazy people like me some solace.
Till then Ciao.

We’re really subsidising Opec

on Sunday, June 8, 2008

Crude oil costs $135/barrel globally, but Indian prices of petroleum products have long been linked to barely $60/barrel. This has meant underrecoveries — explicit and implicit subsidies to consumers — of a whopping Rs 2,45,000 crore.
So, the government has reluctantly increased the price of petrol by Rs 5/litre, diesel by Rs 3/litre and cooking gas by Rs 50/cylinder. These timid increases will plug barely one-tenth the implicit gap. Even this has been cushioned by cuts in excise and customs duty by the centre, and in VAT by state governments.
Yet, political parties have launched agitations in protest. Politicians cynically pretend that high oil prices are the fault of the government, not Opec or global trends.
Back in 1974, when Opec first sent oil prices skyrocketing, India had no giant consumer subsidies or agitations against oil prices. The price of petrol doubled overnight, inflicting much pain. India was very poor then. Today, it is much richer, and better able to pay the full world price. Yet, that prosperity has also brought the capacity to subsidise on an unprecedented scale.
Five years of near 9% growth have yielded a revenue bonanza — central tax receipts have risen by over Rs 100,000 crore per year. Instead of spending this bonanza on cash transfers to the poor, and beefing up our pathetic infrastructure and social sectors, the government has chosen to provide implicit or explicit oil subsidies worth over Rs 200,000 crore. To put this folly in perspective, the main anti-poverty scheme, the employment guarantee scheme, spends just Rs 16,000 crore/year.
Critics argue that estimates of subsidies are grossly exaggerated. Central and state governments have long taxed petroleum products, and oil companies have been making good profits. So, the critics declare, the common man must be protected at a time when inflation is already high. The same critics castigate the West for global warming, yet wish to subsidise India’s own emissions.
Resistance to raising domestic prices is common across developing countries. Rich countries have let prices rise in line with market trends. But many developing countries have raised prices only partially and haltingly. After a long price freeze, Malaysia has just hiked its prices by 41%, and Indonesia by almost 30%. Oil exporting countries have maintained exceptionally low prices: petrol in Venezuela costs Rs 2/litre.
Politicians say higher oil prices will hurt the poor. Yet, an IMF study of five emerging economies showed that the richest 20% of people got 42% of oil subsidies, and the bottom 20% less than 10%. Even this analysis misses the big picture. The main beneficiaries of these subsidies are not the local rich, but the oil exporting countries.
The price of oil is determined by supply and demand. When prices go up, consumers reduce demand, and eventually this leads to a fall in prices. We see this upand-down price cycle in many commodities.
But much less in oil. Why? Because many governments subsidise oil consumption, and so keep demand artificially high. This then keeps world oil prices artificially high. Each developing country believes it is virtuously subsidising its own consumers. But when many developing countries do so, notably highly populated ones like China and India, they push up global demand for oil, and so push up global prices high too. They become victims of their own subsidies.
Back in the 1970s, rich countries cut domestic taxes and imposed price controls to protect consumers after Opec quadrupled prices. This kept oil demand (and prices) high. Only when the US abolished price controls progressively after 1979 did imports crash, and later world prices crashed too. It was a signal lesson on the folly of trying to shield consumers from the reality of high oil prices.
Rich countries have learned from history, but developing countries have not. The demand for oil in rich countries is slowing today with rising prices. Petrol consumption has fallen in the US as the price has risen to $4/gallon. US demand for gas-guzzling large cars has collapsed, and General Motors wants to sell its Hummer brand, the largest car of all. All these positive outcomes flow from passing on the burden of Opec to the consumer.
But China, India and many developing countries have tried to keep oil prices artificially low. Thus, they have kept demand artificially high (they now account for a big chunk of world demand). And that is why Opec is able to sell oil at $135/barrel, despite a global slowdown.
Ideally, India should pass on the full cost to consumers, as it did in 1974. But for politicians who view high subsidies as electoral necessities, here is a proposal. First, abolish all implicit and explicit subsidies on oil. Use the money saved to cut excise duties on other items of common consumption and provide cash to poor families. Overall inflation and government revenue will be unchanged. Yet, the poor will benefit, and high oil prices will encourage energy-efficiency. India’s oil use will fall, helping lower Opec’s prices. That will be better than today’s policy, which ends up subsidising Saudi Arabia.


Apple WWDC poem


Standing in the rain, with his head hung low
Couldnt get a ticket, it was a sold out show;
Heard the roar of the crowd, he could picture the scene
Put his ear to the wall, then like a distant scream

He heard one Steve Jobs, just blew him away
He saw stars in his eyes, and the very next day
Bought a beat up iPod
Touch in a secondhand store
Didnt know how to use it, but he knew for sure

That one iPod, felt good in his hands
Didnt take long, to install the SDK
Just one iPod, slung way down low
Was one way ticket, only one way to go.

So he started hackin
Aint never gonna stop.
Gotta keep on hackin
Someday he's gonna make it to the top.

And be a WWDC hero, got stars in his eyes
He's a WWDC hero
He took one iPod, WWDC hero, stars in his eyes
WWDC hero, he'll go live tonight

In a room without a light, in a heavy downpour
Thought he passed his own shadow, by the coldroom door;
Like a trip through the past, to that day in the rain
And that one Steve Jobs made his whole life change

Now he needs to keep hackin
He just can't stop
Gotta keep on hackin
That boy has got to stay on top

And be a WWDC hero, got stars in his eyes
He's a WWDC hero, got stars in his eyes
Yeah, WWDC hero, got stars in his eyes
With that one iPod he'll go live
Go live tonight!