August 14, 2009
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EDITORIAL
Month August 14, Edition 000271, collected & managed by durgesh kumar mishra, published by – manish manjul
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THE PIONEER
1. STRIKING A RIGHT BALANCE
2. ANYTHING FOR RATINGS
3. EUROPE DREADS ISLAMIC SURGE-SUNANDA K DATTA-RAY
4. TV CONTENT NEEDS SIEVING-MC JOSHI
5. TOUGH TIMES FOR UPA-KALYANI SHANKAR
6. DEATH OF A RIVER-ANURADHA DUTT
7. TIME FOR A SYSTEMIC REDESIGN-VINAYSHIL GAUTAM
8. SOCIETY’S TOLERANCE LEVEL IS WEARING THIN-CS THAPA
THE TIMES OF INDIA
1. CHANGE THE CODE
2. URGE THE GENERALS
3. BEING INDIAN-
4. 'INDIAN REGULATIONS CAN BE STIFLING FOR SOCIAL INVESTING'
5. DEARTH IN VENICE-JUG SURAIYA
6. WE MAY HAVE A WINNER-
HINDUSTAN TIMES
1. LESS OUTGO ON YOUR INCOME
2. DON’T STAND UP TO IT
INDIAN EXPRESS
1. THE LADY WON’T VANISH
2. OPERATION SHUTDOWN
3. DRAFTING THE BENEFITS
4. THE DRAGON’S RUMBLE-PRATAP BHANU MEHTA
5. FAREWELL TO ARMS?-V. P. MALIK
6. CHILDREN OF THE SAME GOD-MITHU ALUR
7. SIGNING AWAY SOVEREIGNTY
8. LAW COMMISSION AND POLYGAMY
THE FINENCIAL EXPRESS
1. READING THE RAINS
2. THE ELEVEN COMMANDMENTS
3. WHAT’S IN STORE?-ALOKANANDA CHAKRABORTY
4. TEA, COFFEE, NUTS AND A BIG SCARE-P RAGHAVAN
5. A TAX CODE THAT ISN’T TAXING FOR US-JAIDEEP S KULKARNI
THE HINDU
1. LEARNING FROM TWO POET-SAVANTS
2. CRISIS MANAGEMENT AND BEYOND
3. TAKING GOALS OF NREGA-I FORWARD -MIHIR SHAH
4. THE UNVARNISHED FACTS ABOUT SWINE FLU -RAJ B. SINGH
5. HEALING SCARS OF KENYAN VIOLENCE -WILL ROSS
6. WHY PEOPLE LOVE A GOOD HEIST -ERWIN JAMES
7. THE SISTER WHO INSPIRED EUNICE KENNEDY SHRIVER -JON HENLEY
8. WHITE HOUSE RETREATS ON BANK PAY CURBS -ANDREW CLARK
THE ASIAN AGE
1. A CODE TO MAKE LIFE LESS TAXING
2. THE ‘IFS’ OF PARTITION-NITISH SENGUPTA
3. CHECKMATE, RUSSIA-S. NIHAL SINGH
THE TRIBUNE
1. EXPANDING THE TAX BASE
2. FUDGING AT SHOPIAN
3. DEFUNCT LOKPAL
4. TRAINING DIPLOMATS- SURENDRA KUMAR
5. NUCLEAR THREAT FROM IRAN-BY DORE GOLD
6. A QUARTER-LIFE CRISIS AFTER GRADUATION-BY LINDSAY MINNEMA
THE ASSAM TRIBUNE
1. DEPLORABLE VERDICT
2. STATE’S INDUSTRIALIZATION
3. HONOURING THE TRICOLOUR-RUPAM BARUAH
THE ECONOMIC TIMES
1. DIRECT TAXES CODE: AN IDEA WHOSE TIME HAS COME-SUDHIR KAPADIA
2. IIP NUMBERS SHOW RECOVERY
3. AN EQUITABLE TAX POLICY
4. TRADE BALANCE & FOREX MANAGEMENT-MANOJ PANT
DECCAN CHRONICAL
1. A CODE TO MAKE LIFE LESS TAXING
2. 1947: A story with a gruesome gender bias - By Urvashi Butalia
3. CASH FOR CLUNKERS: A STIMULUS THAT WORKS - BY JAMES DORAN
4. THE ‘IFS’ OF PARTITION - BY NITISH SENGUPTA
5. CHECKMATE, RUSSIA - BY S. NIHAL SINGH
6. THE ART OF LIVING -BY SARAH STANDING
THE TELEGRAPH
1. ACTIVE CALM
2. OUT OF THE WAY
3. THE INDIAN MIDDLE CLASS AND THE NEW AFGHAN WAR - ASHOK MITRA
4. TIME TO BELL THE CAT - MALVIKA SINGH
DECCAN HERALD
1. CAN SANCTIONS AGAINST IRAN WORK?-BY DAVID E SANGER: THE NEW YORK TIMES
2. ART OF SURVIVAL-BY A N SURYANARAYANAN
THE STATESMAN
1. CHINESE ANALYSES SCRUTINISE, DON’T SHIVER
2. FORWARD MOVEMENT TOWARDS A SETTLEMENT IN DARJEELING
3. NAGA PEACE TALKS PM HAS TO BREAK IMPASSE
THE NEW YORK TIMES
1. IRAQ’S SUNNIS
2. CHINA AND THE W.T.O.
3. LOCKING UP FEWER CHILDREN
4. ONE SPECIAL OLYMPIAN -BY LAWRENCE DOWNES
I.THE NEWS
1. FINDING CELEBRATION
2. BEYOND BORDERS
3. FILM CRAZY
PAKISTAN OBSERVER
1. WE HAVE A LOT TO CELEBRATE
2. ATTAINABLE TEXTILE TARGET
3. SWINE FLU IS ACROSS EASTERN BORDER
THE INDEPENDENT
1. PRIVATE UNIVERSITIES
2. SCATHING REMARKS BY MUHITH
3. CRIMINAL HALLUCINATION
4. VIOLENT CRIMES BY DRUG ADDICTS
5. SNEEZING AND THE SWINE FLU...!
THE AUSTRALIAN
1. DON'T RUSH, REFLECT
2. MCCLELLAND PROTECTS CHECKS AND BALANCES
THE SYDNEY MORNING HERALD
1. CHINA SHIFTS, JUST A LITTLE
2. STATE LIBERALS NEED RENEWAL
THE GUARDIAN
1. LOCKERBIE BOMBING: STILL SEARCHING FOR TRUTH
2. A NEW POLITICS: WAGES OF WHITEHALL
3. IN PRAISE OF… THE LANGA SINGERS OF RAJASTHAN
JAPAN TIMES
1. SMOOTH START TO NEW TRIALS
2. PARTY LEADERS OUT OF THE GATE
THE KOREA HERALD
1. YANGON SANCTIONS
2. DRUNK DRIVERS
3. ANOTHER ROUND OF STIMULUS REQUIRED -JOSEPH E. STIGLITZ
4. SEXUAL, POLITICAL SHENANIGANS COULD SINK BERLUSCONI -ARNOLD CASSOLA
THE GAZETTE
1. CANADA LETS DOWN ANOTHER CITIZEN ABROAD
2. LEFT-WING TACTICS WORK JUST AS WELL FOR THE RIGHT IN A RIGHT-WING
CHINA DAILY
1. USE OF DONOR FUNDS
2. GIFT OF HINDSIGHT
3. WHAT MAKES A GLOBAL FINANCIAL CENTER
4. AHMADINEJAD HAS A REAL JOB ON HAND
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THE PIONEER
EDIT DESK
STRIKING A RIGHT BALANCE
DELHI SHOWS THE WAY
In what can be termed as a welcome surprise, Delhi has registered a sex ratio of 1004 females against 1000 males for the year 2008. This positive development earns the national capital the distinction of being only the second State in the country to notch up a pro-female secondary sex ratio, the first being Kerala where the figures are 1058 females per 1000 males. Sex ratio is the ratio of the number of females per 1000 males in a given population. It is the sex ratio at the time of birth or secondary sex ratio that is of importance for gender and sociology studies to gauge a society’s mindset towards the girl child, and thereby, infer the social status of women in general. In Delhi’s case the secondary sex ratio was 848 females per 1000 males in 2007. Then, as per records, it made a dramatic turnaround and witnessed the registering of 19,000 more female births a year later. During this period the number of female births in hospitals increased from 1.11 lakh in 2007 to 1.17 lakh in 2008. Correspondingly, domiciliary female births increased from 36,725 to 50,166.
Delhi’s seeming gender revolution comes in the backdrop of the fact that it is part of a region in the country — which includes States like Haryana and Punjab — that is infamous for registering poor sex ratios year after year, and where the menace of female foeticide still looms large. The fundamental problem being the trenchant patriarchal mindset that exists in north India that sees the birth of a male child as auspicious given the prevalent norms and responsibilities of inheritance. It is this mindset that has been responsible for denying equal opportunities to women as compared to their male counterparts. Confirming this is the fact that women in north India lag behind men in almost every indicator of social development such as literacy, access to healthcare, economic opportunities, etc. It is this that makes Delhi’s improvement in its secondary sex ratio truly praiseworthy. The turnaround could be attributed to several factors. On one hand, credit must be given to the State Government for initiatives like the Ladli Scheme. The scheme, which was launched last year, seeks to promote the welfare of the girl child and fight selective abortion and female foeticide by providing financial assistance for girls who are born to economically weak parents.
On the other hand, credit must also be given to the various NGOs operating in the National Capital Region, that have been striving hard to create awareness regarding the pitfalls of gender discrimination. Nonetheless, one thing that must be kept in mind while considering Delhi’s commendable showing in the sex ratio department is that the national capital has a sizeable migrant population many of whom have come from parts of the country such as south and east India where the birth of a girl child is as much an occasion for celebration as a male child. It is perhaps here that Delhi has an edge over Punjab or Haryana. That said, Delhi has every reason to be proud of its achievement. Perhaps it can now inspire neighbouring States in the region to boost up their respective sex ratios. However, it must be remembered that having a healthy female sex ratio is only half the battle won. It must now be ensured that girls are not denied quality opportunities so that they can become empowered women of tomorrow.
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THE PIONEER
EDIT DESK
ANYTHING FOR RATINGS
TV REDEFINES ‘REALITY’ AROUND US
In this age of a multitude of television channels competing for the same viewers, it is not surprising that most of them should have adopted the motto that they are willing to do anything and go to any extent to pick up ratings, upon which is dependent the inflow of advertising revenue. There was a time when television adaptations of Mahabharat and Ramayan held the masses in thraldom. Then came Santa Barbara which set the trend for maudlin soap operas based on fantastic yarns spun around ‘families’ that exist in the realm of fevered imagination. Our desi versions were as riveting as those televised abroad; alas, saas-bahu tales and adulterous lifestyles too ran out of steam and became boring for an audience demanding instant gratification. That demand was met for a while with song-and-dance competitions which varied on the theme of Strictly Come Dancing. And when these too began to turn stale, producers devised ‘reality’ game shows that went beyond the rough-and-tumble of WWF’s late night shows. Darwin’s theory of survival of the fittest was reinterpreted to pander to the lowest common denominator — lo and behold, television had an audience once again! It’s not for nothing that the treacly concern expressed by our parliamentarians and the outrage of the anti-loose morals brigade have not had any impact on the ratings of shows like Sacch ka Saamna which mock at those who still believe that dirty linen is not meant to be washed in public.
From hosts entrapping unsuspecting women into admitting that they fantasise about men other than their husbands to murdering drug lords and assorted criminals so that their channels are the first to report the ‘crime’ and show the most graphic footage is but normal progression. Or so it would seem from the details of a bizarre story unfolding in Brazil where a legislator and television crime show host, Mr Wallace Souza, has been accused of ‘commissioning’ at least five murders to boost the ratings of Canal Livre. Mr Souza, of course, has denied the allegation and insists that the charge is a canard spread by organised crime syndicates whom he has been fighting. The truth, as a BBC promo in the days of black-and-white television would proclaim, comes in shades of grey. So, unless investigators are able to stack up evidence overwhelmingly against Mr Souza, we can only suggest that there’s some truth in both what he and his detractors have to say. The issue, however, is not about upholding the truth, no matter how harsh. For, this is a principle that was laid to rest with the advent of the audiovisual medium. Infotainment, we must not forget, is neither information nor knowledge; both, some would say tragically, no longer command a premium.
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THE PIONEER
EDIT DESK
EUROPE DREADS ISLAMIC SURGE
SUNANDA K DATTA-RAY
It seems far-fetched to depict Afghanistan’s rocky terrain as the ramparts of Western Christendom. Yet the invention of a composite word, ‘Eurabia’, suggests that Europe is fighting for its future in that land of warlords, fierce tribes and $ 3.4 billion narcotics industry, scheduled to elect a new President next Thursday. Ominously, several military strategists in Britain and the US feel the war cannot be won.
“Islam is a magnificent religion that has also been, at times over the centuries, a glorious and generous culture,” a leading Western journalist, Christopher Caldwell, wrote. “But, all cant to the contrary, it is in no sense Europe’s religion and it is in no sense Europe’s culture.” He added that “in the middle of the 20th century there were virtually no Muslims in Western Europe”. Now there are more than 15 million, including five million in France, four million in Germany and two million in Britain. Others suggest a higher figure, claiming that France’s nine million illegal Muslims are not included, and that the community’s higher fertility recalls Col Muammar Gaddafi’s boast that Europe will become “a Muslim continent within a few decades”.
A Princeton historian, Bernard Lewis, articulated this prospect in July 2004 in an interview with the conservative Hamburg-based daily Die Welt. Echoing Col Gaddafi, he thinks that “current trends show that Europe will have a Muslim majority by the end of the 21st Century at the very latest”. That thought has animated European politics ever since, reactions being both defensive and placatory.
Britain is placatory. London police stations display posters reading, “STOP ISLAMOPHOBIA. Don’t Suffer in Silence.” British school curricula are being revised out of deference to Islamic sensibilities. Though bigamy is forbidden, Muslims can claim tax benefits for all four wives. The Lord Chancellor and the Archbishop of Canterbury, heading Britain’s judicial and religious establishments, both condone the sharia’h courts for divorce, family disputes, forced marriage, domestic violence and commercial matters that were set up in 1982. There are now 85 courts and the Muslim Arbitration Tribunal will establish 10 more by December as part of a plan to triple their number and streamline operations. No wonder there are reportedly more imams than pastors and disused churches are being converted into mosques.
The rest of the European Union is by no means as accommodating. President Nicolas Sarkozy’s refusal to countenance the burqa in France was discussed in these columns in early July. The resistance elsewhere to immigration from Asia and Africa and the rise of extreme Right, even neo-fascist, political organisations is partly impelled by fears of a Muslim takeover. It explains Europe’s discomfiture at the prospect of Turkey joining the EU, and the uproar when Mr Frits Bolkestein of the Netherlands, a former European Union competition commissioner, cited Mr Lewis at the University of Leiden to warn the EU would “implode” if it expanded too quickly.
Mr Bolkestein was sceptical about the EU’s multi-national aspirations described by the German Günter Verheugen, commissioner for expansion. He compared the EU with Europe’s most recent multi-national power, the Austro-Hungarian empire, which was culturally confident, prosperous and proud but had only eight million Austrians. Once the empire expanded to absorb 20 million Slavs, it had to decide between allowing the new subjects to rule themselves and preserving Austria’s own culture.
If the EU accepts Turkey, Mr Bolkestein argued, there would be no logical reason to reject European countries like Ukraine and Belarus. He also warned that Europeans would soon be in a minority in several great cities, including Amsterdam and Rotterdam, and that the entry of 83 million Muslim Turks would further the Islamisation of Europe. “Current trends allow only one conclusion,” he predicted. “The US will remain the only superpower. China is becoming an economic giant. Europe is being Islamicised.”
Mr Bassam Tibi, a Syrian immigrant who is described as Germany’s most prominent moderate Muslim and has spent much of the past decade arguing for sensible Islamic institutions in Europe, agrees. “Either Islam gets Europeanised, or Europe gets Islamised,” he wrote in Welt am Sonntag. In the latter event, Mr Bolkestein reflects, “the liberation of Vienna (from Turkish armies) in 1683 will have been in vain.” He might also have added the conquest of Granada, the last of Spain’s Moorish kingdoms, by Ferdinand and Isabella, the Catholic monarchs of Aragon and Castile.
It was revealed two days after Mr Bolkestein’s Leiden speech that the outgoing EU commissioner for agriculture, Mr Franz Fischler, an Austrian, had privately warned his fellow commissioners, that “there remain doubts as to Turkey’s long-term secular and democratic credentials. There could … be a fundamentalist backlash”. He feared that Turkish Islam could one day take the route introduced in Pakistan by Gen Zia-ul-Haq and eventually one day match the orthodoxy that the Taliban espouses and which led to a young girl being horrendously lashed in Swat. Ominously for the rest of the world, this encourages the suspicion that the secular modernism that Kemal Ataturk espoused in Turkey, and which Gen Pervez Musharraf supposedly admires, can never be Islam’s permanent character. It is at best a transient stage that must ultimately be overtaken and overwhelmed by fundamentalism.
Mr Lewis described the West’s confrontation with Al Qaeda as “a long process” whose “outcome is by no means certain.” He compared militant Islam to Communism “which appealed to unhappy people in the West because it seemed to give them unambiguous answers. Radical Islam has the same force of attraction.”
Not that an Islamicised Europe would be an historical contradiction. Spain’s Moorish kingdoms flourished for nearly 800 years. Muslim Bosnia and Kosovo are remnants of the Ottoman Empire which ruled a swathe of south-east Europe for more than 600 years. Another relic, Albania, is 90 per cent Muslim. Intriguingly, Mr Lewis compares Europe’s reservations about the US which has outstripped it with Islamic resentment against Europeans who defeated them. “Europe,” he predicted, “will be part of the Arabic west, of the Maghreb.” Hence Eurabia.
But that may not be the principal threat. “The problem is not whether the majority of Europeans is Islamic,” Mr Tibi says, “but rather which Islam — sharia’h Islam or Euro-Islam — is to dominate in Europe.” While ‘Euro-Islam’ is still only an idea, ‘sharia’h Islam” is the grim reality that the Nato forces are battling in Afghanistan.
sunandadr@yahoo.co.in
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THE PIONEER
EDIT DESK
TV CONTENT NEEDS SIEVING
MC JOSHI
The views expressed by Devi Cherian in the article “Falsity of reality shows” (Foray, August 9) second the aam admi’s feeling. Her comments on the controversial game show Sacch Ka Saamna, in which participants are asked intimate questions, are a bleak reminder that an autonomous television regulatory authority is very much required. Even politicians, cutting across party lines, expressed dismay over the contents of certain television programmes that give an impression that promiscuous behaviour and infidelity are common. Such programmes, apart from being against our cultural mores, have an adverse effect on the mental health of our children who are taught moral values at home but are exposed to contrary beliefs on television.
It is appalling that TRP-driven television channels offer obscenity, crime and violence without failing to realise where to draw a line. Television programmes are undoubtedly trivialising our cherished cultural, social and family values in the name of freedom of expression and individual choice. It is even more unfortunate to see debates on control of television content being mischievously twisted by vested interests. Such debates question the Government’s authority to regulate television content. But that authority is not questioned in case of cinema.
It is the Censor Board which limits the depiction of violence, obscenity and other such content in films which may offend the sensibilities of individuals or the society in any manner. Without the Censor Board’s clearance, no movie can be publicly exhibited in India. Why should then the case of television channels be different, particularly when the reach of television media is wider than cinema? For watching a film one has to first go to a cinema hall and then shell out money for tickets. But on an average, every household has a television and the entire family watches it together which makes programmes like Sacch Ka Saamna an embarrassment.
The regulation of television content is, therefore, much more necessary than that of films. Television channels in the past too failed to self-regulate. Thus, it is time for the Government to step in and set up an autonomous regulatory body for monitoring television content in close consultation with the media houses so that television channels adhere to higher norms of responsibility and public decency, and at the same time the freedom of expression is not muzzled.
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THE PIONEER
OP-ED
TOUGH TIMES FOR UPA
THE GOVERNMENT FINDS ITSELF CONFRONTED BY A LOOMING DROUGHT ACROSS THE COUNTRY, GALLOPING RISE IN PRICES OF ESSENTIAL COMMODITIES AND, TO TOP IT ALL, A DEADLY SWINE FLU PANDEMIC. THE CONGRESS MAY BE TRYING TO PUT UP A BRAVE FACE, BUT IT KNOWS THAT THERE ARE NO EASY SOLUTIONS TO ANY OF THESE PROBLEMS
KALYANI SHANKAR
The Congress has identified three issues — drought, price rise and swine flu — for the UPA Government to tackle in the next few months. The party is aware that Assembly elections in Maharashtra, Haryana, Jharkhand and Arunachal Pradesh are round the corner and the Opposition can take advantage by making these poll issues. Ironically, the party is also trying to distance itself from the Government, expecting it to handle these issues on a war-footing.
When the UPA began its second term, the Congress was upbeat after a creditable victory in the Lok Sabha election. Riding to power on the slogan of ‘aam admi’ , the party and the Government are now in a quandary as how to deal with price rise and drought which directly affect the common man. Adding to the Government’s woes is the recent observation of the Supreme Court which has described the situation as “terrible” and wanted the Government to tackle it effectively. While the wholesale price index remains negative, prices of essential commodities have shot up in the past few months. The Reserve Bank of India, while updating the monetary policy for the fiscal year, has warned that the inflation could even slip further due to lower monsoon.
Rising prices of food items dominated the just concluded Parliament session when the Opposition gheraoed the Government over the issue. The proverbial ‘dal, roti’ is no more within the reach of the common man as prices of pulse, sugar and other commodities and vegetables are touching sky. No Government can afford to ignore this situation.
The Government should not only think of short-term measures to contain price rise but also chalk out a long-term strategy. In spite of high gross domestic product growth, the production of essential commodities have not gone up. Pulses and sugarcane have showed severe shortage of supply. The production of vegetable oil and paddy are also causing concern.
What should the Government do? First of all, If only the Government had begun importing food grains in June itself when it was known that there could be a gap, things would not have been so bad. Now the international prices have also gone up and the country will have to shell out more for importing food grains. Measures like a selective ban has already been imposed on exports and future trading on food grains. Besides that, permitting import of lentils and sugar by state-run firms at zero import duty may ease the situation.
Second, the Government should use its stick to punish the unscrupulous hoarders. Third, market intervention where necessary could help. Fourth, the public distribution system should be strengthened and proper channelised to better help the poor.
Drought is the next worrisome issue. A total of 141 districts has already been declared drought-affected. Official figures reveal that a deficit of more than six million hectares had been reported in paddy cultivation. The kharif crop cannot be salvaged on account of the failure of the monsoon but the Government can concentrate on the rabi season. An assessment by the Morgan Stanley shows that 48 per cent of the cropped area has already been hit by the deficit in rain.
Although Finance Minister Pranab Mukherjee has said that “there is no point in pressing the panic button,” panic has already spread. Putting on a brave face, Mr Mukherjee is optimistic about the RBI’s figure of six per cent economic growth rate.
The Government is slowly gearing up to face the challenge by offering subsidised diesel and additional power to farmers, yet much more needs to be done. Farmers need smooth loans. The contingency plans for crops, drinking water, human and animal health and fodder should be launched immediately. Alongside, long-term measures to increase the production of pulses and oil seeds should also be taken. In addition to the buffer stock, the Government will do well to deal with the needs of small and marginal
farmers.
While Prime Minister Manmohan Singh has assured that there is enough cushion on account of bumper food grain production in the last two years, he has also cautioned that the reduced kharif crop may have an inflationary impact on prices of many commodities.
Swine flu is going to be the third chronic problem for the UPA Government. Already 18 deaths have been reported in the country and the panic is spreading fast with the media blowing it up. The Government has to ensure that there is no panic and that the country is fully prepared not to let this menace go out of control.
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THE PIONEER
OP-ED
DEATH OF A RIVER
AFTER SUPREME COURT RULING, LITTLE HOPE LEFT FOR YAMUNA
ANURADHA DUTT
The recent Supreme Court judgement rejecting the plea that construction of the Commonwealth Games Village on the Yamuna bed posed an environmental threat, has been greeted with dismay by activists, struggling hard for many years to revive the historic river and protect its environs.
Magsaysay Award winner Rajinder Singh, among those who tried unsuccessfully to stymie concretisation of part of the riverbed and flood plains via court intervention, was quoted by the media as having said that the ruling would allow “Governments to change land use policy on rivers”. He is also reported to have observed that “anything that is not in favour of people and is against rivers and the environment cannot be a court ruling”. Aggrieved petitioners find the apex court ruling that the games village is not located on the riverbed and floodplains as flawed. Prof Vikram Soni of the National Physical Laboratory explains that “after 20 million years of flooding, that area today has 40 metres of sandbank”. It is conclusive proof of the games site being a floodplain.
They also object to the court’s dismissal of their plea on the ground that they took legal recourse after “inordinate delay”, without reasonable explanation. Their defence is that they first wrote missives to the city’s administrators — Chief Minister and other senior functionaries authorised to take decisions in this regard — before being forced by their indifference to move the Delhi High Court in September 2007. After the court passed an order to appoint an expert committee to review the construction, Government counsels approached the apex court for relief. Its verdict, allowing the games village to be constructed in the river environs and nullifying the High Court direction to set up an expert committee to monitor the work, may serve as an impetus to speedy completion of the project.
But pro-river campaigners have resolved to press for review of the verdict, and if even that fails to rectify what they see as a wrong, try other legal remedies. They will not give up the battle to save the city’s lifeline, now on the verge of extinction. Melting of the Himalayan glaciers which feed the Yamuna, Ganga and other water systems nourishing the northern plains on account of global warming, is just one of the factors threatening their survival. Others are also man-made, and calculatedly so. For, not only have these rivers become dumps due to human waste and toxic industrial effluents that choke their flow but their environs have turned out to be prospective real estate.
While the games village is cited by opponents as one such venture, the hare-brained scheme to develop a concrete waterfront along the Yamuna as it passes through Delhi is seen to be another. The Thames experiment in London is said to be the inspiration for the plan. However, experts point out that if implemented, Delhi would become vulnerable to massive flooding, since unlike the Thames the Yamuna swells through heavy seasonal rainfall. Accumulated water would break through embankments to flood nearby colonies.
The need of the hour is to save and conserve the rivers, not commercialise their environs. It is a measure of Government ineptitude that all well-intentioned efforts, such as the action plans to revive the Yamuna and Ganga, have been defeated by counter-impulses to build on the beds and floodplains. Thousands of crores of rupees assigned for these projects seem to have disappeared into a bottomless dark hole, with nothing to show for the massive investment. Delhi Chief Minister Sheila Dikshit has gone so far as to admit that it would not be possible to clean up the Yamuna by next October, when the games are slated to take place. Cynics point out that the river may never be cleaned up as it may die before that, given the quantum of waste injected into its waters as well as concrete encroachments on its recharge area.
Considering that the capital is sustained by the Yamuna, the administrative disregard for the imperatives of reviving the river is criminal. Do the city planners have an option to it? None at all, with the Ganga too polluted and indiscriminate damming on its upper reaches. Satellite pictures of the Himalayas show the river’s flow to have disappeared across long stretches. Thankfully, the Allahabad High Court has put on hold the Uttar Pradesh Government’s 1,047 km-long Ganga Expressway project, linking Noida to Ballia, and passing through 19 districts along the banks of the river. Petitioners have objected to the effluents that are proposed to be discharged into the river by factories that will come up parallel to the expressway. One can only hope that it is not a temporary reprieve.
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THE PIONEER
OP-ED
TIME FOR A SYSTEMIC REDESIGN
THE ROLE OF THE FINANCIAL SECTOR NEEDS TO BE REDUCED AND WAYS OF DOING SO HAVE TO BE DEVISED. WE NEED TO PUT IN PLACE A SYSTEM THAT ENSURES PEOPLE GET THE GOODS AND SERVICES THEY WANT
VINAYSHIL GAUTAM
One of the interesting aspects of financial analysis which often gets slurred attention is the potency of business cycles, which affect the financial systems. Business cycles are characteristic of every developed economy as we are only beginning to realise this in India. Say, typically till 1991, we talked of only the domestic rate of growth. Since 1991 we have had the second cycle.
In developed countries, business cycles have been quite accentuated and have been actually enlarged by the financial system because there has been a very strong mutually reinforcing loop between real sector and the financial sector. That is one of the reasons leading to the sub-prime and the housing slump crisis in the US. There the US mortgage industry, in order to keep itself floating, came out with various innovative products. The concerned industry predictably was pressed to keep itself at a profitable level, but the gap between the desire and the actual was large.
However, being based on credit, sustaining the real sector in effect meant reaching their objectives by lowering the credit standards. The fallout was a situation where many people who could not be considered creditworthy otherwise were actually given money. It was predicated on principles and premise that the house prices will continue to rise. This would have been expected to mean that their own equity contribution of that margin component would actually keep growing, as the house prices went up steadily. This did not happen in the real world.
On the hindsight the message is simple: The role of the financial sector needs to be reduced and ways of doing so have to be devised. Prominence needs to be given to the real sector so that people can get the goods and services that they want. The financial sector remains relevant to its relationship with other sector and this needs to be thought through. It should be important for the sake of finance only.
It is important to observe that this sector through its working methods generated so many instruments. These include a range of derivatives, the CDOs and more. These instruments were sometimes driven more by the spread that merchant investment bankers wanted rather than the real need of the borrowers. This trend needs to be faced and responded to and there are indications that it’s happening.
Combination of a very likely regulated financial sector and an unregulated real sector can be quite explosive as the post-industrial West has grown to discover. In the US, the regulations are wide and as of today there is increasing movement towards re-regulation. The fundamental question is, how does one bring it back? The possibility of a super regulator emerging is very real.
Consider the UK, for example. When Mr Gordon Brown as Chancellor for Exchequer set up the Financial Services Authority, it was considered a gesture with a wide reach because there already was one regulator dealing with monitory policy and inflation. The actual institutional oversight and the regulation of the capital market in the insurance company were given to the FSA. The FSA operated on a principle which totals up to saying that they will look at only those financial firms which have high systemic risk. This has a special meaning in London because it has several foreign firms with huge assets booked out of London. A large number of corporates have their regional offices or headquarters there and there is always a competition between New York and London. What was not adequately being realised was that because of these ramifications the regulations were getting diluted. When troubles appeared, UK Financial Sector was one of the worst affected. The situation made it obvious that the agency which is the lender in the last resort would be the worst affected. In this case it was Bank of England.
In India, the funding is provided by the Reserve Bank through the banking system by way of certain facilities, under what is called the liquidity adjustment facility, done at the repo rate.
One has to ask some basic questions in the operation of financial system. One has to reflect on whether the regulation of the banking system as well as being the lender of the last resort and being a controller of the monetary policy should all be tasks rolled in one for one institution! Ultimately, a systemic redesign will have to follow.
gautamvinay@hotmail.com
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THE PIONEER
OP-ED
SOCIETY’S TOLERANCE LEVEL IS WEARING THIN
IT WON’T PAY TO ADOPT THE LINE OF LEAST RESISTANCE WITH EITHER PAKISTAN OR CHINA, WRITES CS THAPA
The tolerance level of the civil society against terrorism is gradually wearing thin. In this regard our foreign policy has of late come under the scanner and this is a healthy sign for a mature democracy like ours. People are asking tougher and tougher questions from their leaders and they expect concrete answers as they are the sufferers of terrorist attacks. Thus the level of tolerance which normally is left for a Government to respond is likely to be influenced by public opinion, keeping in mind a strong opposition and also a vast segment of society.
Our level of tolerance has been severely tested from the Kargil war onwards. Kargil was a war that was fought between two nuclear-armed nations, and we were the aggrieved. We proved two things to the international community: First, we would protect our frontiers but act only in self-defence under extreme provocation. Second, we would walk the talk as far as being a responsible nuclear-armed state is concerned.
But on the flip side, we firmly established our level of tolerance though this may not be the only reason of terrorism against India which has grown bolder with more and more terrorist attacks.
The attack on Parliament was responded by mobilisation of Army, but thereafter followed a strategic withdrawal. Thus we responded on predictable lines. A series of bomb attacks and again we responded on predictable lines. Then happened the 26/11 attack on Mumbai , and yet again we responded on predictable lines. Though the intensity of the diplomatic pressure applied on the harbour of perpetrators of the attack this time increased and gave us some success but the threats remain even after 10 years of the Kargil war.
We are quick to point out that Pakistan has three centres of powers yet we time and again only address the political setup and lament about the ill-will of the Pakistani Army. We know that the Army holds its grip on the Pakistani Government, hence merely lamenting about it even after 60 years does not show us as a nation in good light. Our situation is further compounded by the fact that in China too the centre of gravity is the party and the Army, and they are inextricably linked. Hence, we have a peculiar problem for which there are no templates and we have to find an indigenous answer. Why have we failed for 60 years when we tend to preach globally?
Force is not the only way to respond to an army. Do armies respond to diplomatic chatter? An army may have various ways and a host of other technology-driven capabilities to demonstrate its superiority over its rival. But the level of tolerance of one’s neighbour remains unknown. The Americans have tested it on their Western borders by repeated UAV attacks and it just proves a point —that the Pakistani Army will only listen to force. As far as India is concerned, Pakistan’s nuclear threshold is debated; is it an imaginary line on a map, or Kargil where a section of media during the Kargil war had stated that Pakistan was ready to use atomic bomb, or the Pakistan psyche, or silently turning a Nelsons’ eye and passing it on to a terrorist. As far as China is concerned, we do not have the foggiest idea.
One of the facets of responding diplomatically is that a country is free to respond in a manner that it seems correct, thereby implying that we now will be able to justify a more offensive form of response. But have we prepared ourselves for that? In modern times hot chase does not mean crossing the borders; it could well mean a single well-directed salvo at a militant camp, provided we have the will and necessary wherewithal in place.
Another aspect of all this is dealing with China. Suddenly, we hear reports of China taking a harder and tougher line on Arunachal Pradesh. Could it be that they too are drawing lessons from the templates and levels of tolerance which we are showcasing while dealing with Pakistan?
The level of tolerance in our society has definitely undergone a change. Our Government has stated so in the past. The Opposition and a large segment of society also clearly recognise this. Our response should be out of box that keeps others guessing if anything untoward happens and for that, as a nation, we need to take tough decisions. Peace can only be ensured when we are ready for war.
The writer is a retired Brigadier.
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THE TIMES OF INDIA
EDITORIAL
CHANGE THE CODE
The promise of a modern direct tax code is that lower taxes and simpler rules ensure compliance and more revenue. Its provisions should avoid complicated clauses, sub-clauses and caveats. Tax rates should factor in earning profiles. Also, successful tax rationalisation involves weeding out unnecessary exemptions and bad taxes. The draft of a radically new direct taxes code unveiled by the government scores in all these areas. And it should engender less litigation than the 1961 law, a jungle of rules expressed in inaccessible bureaucratese.
The tax authorities' definition of 'high income' has remained out of touch with India's post-reforms economic realities in terms of the middle class's changing face, transformed income levels and cost of living. Recognising this, the draft code substantially reduces individual and corporate income tax liability. But there's a case for a higher cut-off for tax application than the proposed Rs 1.6 lakh annual income. Reducing the corporate tax rate brings it in line with rates in many major economies. There will be heartburn over removal of exemptions, including home loan tax breaks. The draft code's larger premise, however, is unexceptionable. Not persisting with incentives for pre-selected economic activities, it seeks to put more money in people's hands to be spent or invested on the basis of choice rather than nudging.
Enhancing the tax deduction ceiling on savings is pocket-friendly. But feelgood may be offset by the exempt, exempt, tax (EET) regime extended to all approved social security investments. True, this addresses the anomaly of EET applying only to the New Pension Scheme. But it's debatable if withdrawals should be taxed, given the precariousness of our social security structures. Some investments as in provident fund are mandatory. So people would effectively be taxed on forced savings. If EET does kick in, all social security savings should be a matter of choice. Also, more thought needs to be given to ensuring the economic security of senior citizens.
The minimum alternate tax is to apply to assets, not book profits. This obligation is in line with international practices. But the 2 per cent tax rate seems excessive and could negatively impact loss-making companies and capital-intensive businesses. As for taxing foreign firms, should bilateral tax treaties be overturned, it can have a bearing on foreign capital. While foreign companies should be taxed like any other business, taxmen shouldn't appear to change rules agreed upon mutually. Overall, the draft code is welcome, more so when taken along with the goods and services tax (GST) that's to kick in by 2010. GST is work-in-progress and the new income tax code has a 2011 deadline. Should these dates be kept, India's direct and indirect tax system will soon be revolutionised. Here's hoping for a smooth road to implementation.
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THE TIMES OF INDIA
EDITORIAL
URGE THE GENERALS
The world community had hoped that Aung San Suu Kyi's trial in Myanmar would end with happy news, and that the pro-democracy leader would be set free. But that was not to be. Charged with violating the terms of her house arrest by entertaining an American, Suu Kyi was slapped with a three-year imprisonment sentence by the trial judges. However, that was subsequently reduced to 18 months of further house arrest.
For the record, Suu Kyi has spent almost a decade and a half under house arrest, following her victory in the 1990 elections. Her latest stint in detention was supposed to have ended on May 27 this year. But just as that date drew close, the junta slapped fresh charges against her. It was a move, her supporters say, to prevent her from taking part in elections scheduled to be held next year in that country. But not releasing Suu Kyi will also severely undermine the credibility of the elections.
Predictably, there has been outrage in the international community at the turn of events. Suu Kyi is a potent symbol of the democratic aspirations of the people of Myanmar, which have been ruthlessly repressed by the junta for several years now. Some world leaders have called for tougher sanctions against Yangon, which is already cut off from most of the world. It would, however, be counterproductive to tighten the screws through more sanctions, as they would add to the miseries of the civilian population there. The situation in Myanmar could only get worse if the generals were pushed further into the corner.
Over the years we have seen that taking on the generals has yielded very little result. If anything, they have only become tougher, and frankly do not care for the censure heaped on them by either the UN or influential countries such as the US and Britain. It might, therefore, be worthwhile to engage with the establishment in Yangon and prod it to loosen its grip, and eventually make way for a democratic set-up. That's the policy that the ASEAN countries seem to favour. India has trade links with Myanmar and receives assistance in countering insurgents in the north-east. New Delhi should join ASEAN in engaging the generals and persuading them to release political prisoners, in order to smooth the transition to a broad-based and popular rule.
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THE TIMES OF INDIA
BEING INDIAN
After the opening session of parliament of a united Italy, Piedmontese painter, politician and patriot Massimo observed: "Now that we have created Italy, we must start creating Italians." To every Indian today there must be a familiar ring to this observation.
However we may like to write our history books, there can be no argument about the fact that over two centuries from the mid-18th century onwards different regions were brought under their suzerainty by the British, piece by piece, to create a political unit called India. The concept of India had existed from two millennia ago but this was the first time a political entity called India was formed.
The fight for the governance of that political unit by sons of the soil began from the end of the 19th century. Nearly half a century of struggle in many different forms forged a nation conscious of itself as being "Indian". To this nation came the supreme moment on August 15, 1947. It is a pity that on that night, amongst the many historic and brilliant orations in the Parliament, nobody expressed a hope similar to the Piedmontese patriot. It is quite possible that, in that euphoric moment, the need for such a thought did not even arise in anyone's mind. It is also significant that the newly independent country continued to call itself India a word of foreign coinage not found in any of the languages of the subcontinent.
The heightened momentum saw us safely through the adoption of a path-breaking Constitution. But cracks began to appear, thanks to the Congress being hoist by its own petard of promises made as a part of the struggle for independence. It began with the fast unto death of Poti Sriramulu, which led to the creation of Andhra Pradesh in 1956. Nevertheless, as long as the near monolithic hold of the Congress existed at the Centre, loyalty to old-time political bosses kept the situation manageable.
After Lal Bahadur Shastri, the Congress's reversal at the polls in 1967 saw the opening of a Pandora's box. Adherence to religion, region, caste and even sub-caste became more important in the democratic process of the election of our political representatives at all levels. Fortunately, the Centre has held together though badly scarred by fissiparous pressures. Parliament proceedings, even when they are allowed to take place, spend enormous amounts of time discussing issues inimical to the interests of Indianness.
Today we have a positive situation inasmuch as the central government, which has to play a pivotal role, is stronger. There are people in power who will value the quest for being Indians first. There are institutions and societies where merit and acceptability play the only part in choosing an Indian as an employee, friend or mate, a recipient of trust. To begin with, there is the corporate sector private or public which despite a few aberrations help, particularly when they engage in multi-state operations. There are inevitably complaints of community-based partiality but they are smoothed over.
Teaching institutions are another area for fostering Indianness. We have in the field of higher studies the IIMs, IITs and national law universities in various places which show we are capable of producing excellence through an admixture of Indians. This process has to be reinforced. Also there are quite a few privately funded institutions in the field of management studies which compete closely with the IIMs. In the field of technology we have several institutions at the state level which have a glorious history. They need to pull themselves up further and after self-improvement gain a public perception to this effect. Although they are state-run there should be a large quota for students from outside the state. Central universities have a big role to play in having a mixed range of students and faculty.
A familiar spectacle in all our educational institutions is "ethnic" groups sticking together. Majority groups must be made to be more interactive. Alumni activities to bring together past students from all over the country can play a useful part. Faculties in all central universities must come purely on merit, and other things being equal, those from outside a state should have preference.
We have no single dominant group in India today. We, therefore, will not suffer the fate of the manifestly Russian USSR or of Yugoslavia, which the autocratic Serbs helped disintegrate. Coping with plurality and striving for unity in diversity have been the significant features of our nation. Although our political unity is historically recent, although the manifold diversity of and within our regions is great, there has been for millennia an underlying binder amongst the people.
In every great national movement the lead necessarily comes from the educated public. Civil society is what matters. What we need above anything else is an abiding belief in the intelligentsia, and the media. We have everything going to forge an effective bond excellent telecommunication, television, air, railway and road connections, an influential cinema industry and media. Why need we feel disparate at all?
The writer is a retired corporate executive.
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THE TIMES OF INDIA
'INDIAN REGULATIONS CAN BE STIFLING FOR SOCIAL INVESTING'
HAROLD ROSEN FOUNDED THE GRASSROOTS BUSINESS INITIATIVE (GBI) OF THE WORLD BANK'S INTERNATIONAL FINANCE CORPORATION IN 2004. IN 2008, GBI SPUN OFF INTO THE NON-PROFIT GRASSROOTS BUSINESS FUND, WHICH, AMONG OTHER THINGS, LOOKS AT FUNDING SOCIALLY RELEVANT PROJECTS IN INDIA. ROSEN SPOKE TO ATUL SETHI ABOUT THE POTENTIAL OF SOCIAL ENTERPRISE FUNDING IN INDIA :
What makes you want to invest in India?
India's world-class, cost-effective skilled labour force cannot be denied, and it can easily help bring business to the bottom of the economic pyramid. India has a large pool of social investors and entrepreneurs who have started to look at rural and underserved markets as systems-integrated business groups. Due to its scale, India can be viewed as an incubator for developing and testing business models through institutions and world-class business groups to drive social development. Once tested, these models can then be exported to other countries facing similar challenges. India's legal and regulatory regime complicates foreign investment dealings with organisations such as ours. Indian government has the same regulations for social and mainstream investors, many of which serve important functions in mainstream investing, but can be stifling for social investing. Social investing is in its nascent stages in India, and like every industry we expect some chaos as the industry moves from the invention phase to the growth phase.
Is there a model of social enterprise funding that India can adopt from other countries?
Considering how much activity there is in India's social investment space, i'm confident that every model of funding we've come across is at play somewhere in the subcontinent. However, beyond finding the right funding model, we believe it is critical to deploy funding in the highest leverage investments. For example, we strive to build capacity in "umbrella-type" organisations that will use our resources to empower large amounts of individual entrepreneurs. In addition to investing in intermediaries that allow us to reach large numbers of entrepreneurs through a single investment, our work also focuses on providing high levels of technical assistance with every investment to help investees gain financial self-sustainability faster than they would have been able to achieve with cash alone.
What role can the government play to help the social investment community?
Over the last 10 years, the Indian government has taken some significant steps to promote and support social investment. But it can still be a challenge to navigate through regulations and start investments. It would be extremely beneficial to both non-profit investors as well as to the social enterprise sector in India to bring the regulatory and legal regime in line with foreign investment practices. It would help if India were able to distinguish between non-profit investors and larger ones, and allow an increase (and perhaps more flexibility) in direct investments to non-profits. It would be a shame if investors lose interest in the country due to technical and regulatory complications.
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THE TIMES OF INDIA
COUNTERVIEW
DEARTH IN VENICE
JUG SURAIYA
All the guide books warned me: in Venice i'd have to mind my pees and queues. The reason was that while Venice with its waterways instead of roads and its palazzi (Italian for palaces) which outnumber those on Malabar Hill and Race Course Road combined is indeed a city to marvel at, as far as loos went it tended to be niggardly. Public conveniences in Venice were few and far between, and those that were there charged an exorbitant 1.50 euro a go. Which as far as i was concerned was a no-go. Pay the equivalent of Rs 90-plus to do what the citizenry in Bharat Mata (the male citizenry at least) do for free against convenient trees and public buildings? No way.
Unlike Bharat, Venice has strict laws about such things. There are notices everywhere: It is not permitted to sit or lie down anywhere in St Mark's Square. It is not permitted to eat or drink, sitting or lying down in St Mark's Square. It is not permitted to be bare-chested in St Mark's Square. The notices did not specifically prohibit the doing of pee-pee in St Mark's Square, or anywhere else in Venice. But i figured it would be a no-no with the authorities. And you can't blame them. As it is, Venice seems to be perennially in danger of sinking into the water of its own canals. And if tourists like me were by acts of public incontinence to add their wee mite to this already perilous liquidity, Venice might be engulfed in a watery grave sooner than you could say Apres soo-soo, le deluge.
Caught between a bedevilled bladder and the deep blue sea, so to speak, what was one to do? The answer, it seemed, was to buy a Toilet Pass. A week-long Venice Toilet Pass, consisting of 10 coupons, cost 8 euro. With the aid of my trusty pocket calculator i worked that out to be 80 cents (about Rs 50) a coupon, each of which entitled one the use of a public loo. Eighty cents a pee was still scandalous, but not as scandalous as the full Monty of 1.50 euro which you were charged if you didn't have a Toilet Pass.
So, at my insistence, before we got to Venice, Bunny and i had with us two internet-bought Toilet Passes. Now let my damned bladder do its worst. I was prepared for it. Then Bunny pointed out a small arithmetical snag. Each Toilet Pass contained 10 coupons. Spread over a week, which was the length of our Venetian stay, that gave each of us 1 3/7 of a toilet visit per day. Was a rationed quota of 1 3/7 enough to appease my bladder and keep it in good humour? I wasn't sure. Nor was i sure of what exactly constituted 3/7th of a loo visit.
Bunny told me that if i ran out of coupons from my Toilet Pass, i could always use some from her Toilet Pass. But far from reassuring me, this only added to my anxiety. But then you'll run short, i pointed out. What we'll have to do is use our Toilet Passes very sparingly, i told her.
And that's just what we did. Every time we needed to use a loo, instead of expending one of our Toilet Pass coupons, we'd pop into a cafe or a bar and use their facilities for free. Except of course they weren't exactly free. For in order to use a cafe or bar toilet you had to buy an espresso or a glass of wine. Which generally cost 2 or 3 euros a pop. And with all the coffee or wine sloshing around inside me, pretty soon i'd have to find yet another cafe or pub, where i'd buy yet another cup of coffee or a glass of wine in order to use their loo. The end result was that we saw a lot of Venetian cafes and bars, or at least their loos, but precious little else. And we've come back with both Toilet Passes intact. But what the heck. It's not a dead loss. I'm selling my unused Toilet Pass on eBay. Genuine parties only need apply. Merchants of Venice and other brokers please excuse.
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THE TIMES OF INDIA
NOBEL PEACE
WE MAY HAVE A WINNER
Although February 1 is the deadline for nominations for next year's Nobel Prize for Peace, some names are already being tossed about. Michael Jackson's is one. How a man who, without any redeeming reason, messed himself up physically, can even be considered for such an award is beyond comprehension. But then, even Hitler, Mussolini and Stalin were nominated at some time or the other. Candidates can be proposed by any among certain categories of people which include judges, national legislators and academicians in certain disciplines.
And 'peace' is understood in the sense of not only cessation of hostilities, active or otherwise, but also includes work done for the general betterment of society. Consistent record spread over long years of service earns greater appreciation. Individuals as well as organisations can be awarded the honour. The Red Cross, several UN agencies, Grameen Bank of Bangladesh and the Intergovernmental Panel on Climate Change are some of the recipients of the prize in the past. For the one to be announced in October this year, the Nobel Peace Prize Committee in Oslo, Norway, has received 205 nominations, out of which 33 are for institutions.
Along with alleviation of poverty and spread of healthcare and education, empowering people with the right to choose their government is also a concomitant of world peace. For facilitating the exercise of this right consistently over several decades, culminating this year in the largest ever free election of a government anywhere, the Election Commission of India (ECI) surely deserves this prize.
Despite an odd incident of violence or peripheral controversy, and in spite of limitations set by our laws, this institution has, in a process fine-tuned over the years by a succession of commissioners, defied all forecasts of collapse of democracy in India and enabled us to elect our government in a manner that even our critics have come to admire. By conducting a poll in a country as bewilderingly diverse as India (having more electors than US and Europe put together), with its known levels of poverty and illiteracy, through 8,28,804 polling stations, among 700 million voters, the ECI has orchestrated what one foreign newspaper headlined as 'The recurring miracle of Indian democracy'. It is now up to the nominators to do their bit.
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HINDUSTAN TIMES
EDITORIAL
LESS OUTGO ON YOUR INCOME
Over the next two years, India will have equipped itself with a spanking new tax regime that sheds much of the baggage it had acquired over half a century. A common goods and services tax next year and a simpler tax on income and wealth the year after should take the stress out of paying the sovereign its due. The new code for direct taxes, authored by P. Chidambaram and tabled by Pranab Mukherjee, has gone back to first principles to make the system more equitable, transparent and competitive. Those despairing of seeing a reformist streak in the United Progressive Alliance will take heart from the mature decision-making on display in the very act of seeking views from taxpayers on what they will have to cough up.
Which, it appears, is far less than what they are paying now. By widening the slabs, income tax will be more progressive in 2011 than it is today. Lower tax incidence permits the government to take the axe to a jungle of exemptions that has grown around the Income Tax Act, 1961, with the passage of budgets every year. Giveaways have crazily distorted the way India taxes alternative streams of income; phasing them out is a return to horizontal equity. The withdrawal of exemptions will not be painless, but is well worth the effort if tax revenue afterwards is less leaky and, therefore, not exerting a continuous upward pressure on rates. The taxpayer can be made to realise that the tax benefits he loses on savings schemes are more than offset by the lower income tax he pays overall.
Critically, 2011 will mark a turning point in our journey to a rule-based tax system. Although we are far from the tax apparatus in the West, where rates change rarely, if at all, India needs to get there if it is serious about being a “well-regulated free market”. Discretionary distinctions like that between short- and long-term capital gains and easy-to-collect revenue like the securities transaction tax have wisely yielded to a more formulaic approach to taxation. The assumption behind lower rates and fewer exemptions is more people pay taxes if they are reasonable, and stable. The lower peak rate of tax on corporate profits brings us on a par with China. High time too if we hope to catch up with a country where a Han dynasty emperor first imposed a tax on income 10 years after Jesus Christ was crucified.
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HINDUSTAN TIMES
EDITORIAL
DON’T STAND UP TO IT
We editorial writers are no strangers to insults. Every day we have irate readers writing in demanding to know which lamebrain produces the gems that you read on our page. Does this perturb us? Immensely. So it comes as a great relief to know that a study by a university in Texas has found that people handle insults better if they are lying down. So we’ve decided that we too will take things lying down though this might then require acrobatic skills to churn out our pieces.
This also raises several worries. What if your boss is tearing a strip off you? Do you say, hang on, let me adopt a prone position before you carry on? It might help you take it on the chin better but is also sure to speed up the old pink slip. In India, a breeding ground for insults is the road. Perhaps car manufacturers could come up with seats that automatically recline on feeling the insultee’s anger levels go up. There is nothing in the study that says that even those lying down will forget the insult once they assume an upright position. So, it is possible that your well-aimed barbs might result in your getting crowned at a later date.
Now the study goes into a whole lot of gobbledygook about activities in the prefrontal cortex of the brain and so on. But we suspect that the person flat out on his back is able to manage his anger better because he is either half asleep or had a drop too much to really care. And for those of our trenchant critics, we have a piece of advice. Next time you open the paper and go to this page, do make sure that you are in a horizontal position. You’ll find that you’re less prone to work yourself up into a lather over our less than perfect prose.
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INDIAN EXPRESS
EDITORIAL
THE LADY WON’T VANISH
Certain outcomes are, unfortunately, too predictable. The prospect of Aung San Suu Kyi walking out a free woman from the notorious Insein Prison in Rangoon will have to be consigned to the domain of fantasy. The reality Suu Kyi faces is that of further imprisonment, in her barbed wired house on the lake where she has spent 14 of the past 20 years under house arrest. Her latest crime has left the world dumb-founded: that an unknown, eccentric stranger trespassed onto her property, spent the night uninvited, and hence violated her forced isolation has encouraged the junta to sentence her to three years of hard labour. But behold, there is a stage-managed twist: Than Shwe, authoritarian leader of Burma, has come to her rescue and cut her term short.
The erratic behaviour of the regime is in keeping with its paranoia of Suu Kyi. Her presence and protest, after all, serve as reminders of the democratic mandate that was gained by the National League for Democracy in the 1990 elections, and which the generals continue to deride. Burma heads to the ballot box next year,
in an extravagant display of democracy organised by the junta. Naturally behind this façade exists a very obvious fear: should Suu Kyi be granted her right to take part in the political process, their power could be seriously challenged.
Within this ambit lies the influence of the international community. Repeated and systematic humanitarian abuses and disregard for international norms have forced countries to place sanctions on Burma. There is much talk now of renewing these sanctions and strengthening the existing ones is order to coerce the junta into engaging. This approach has as yet not worked; in fact, unless the junta is brought to the diplomatic table it will continue thriving through bilateral relationships it enjoys with its neighbours. Engaging with the junta through an international concerted approach is the reality we face, and one which will benefit not just Suu Kyi but also the people of Burma.
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INDIAN EXPRESS
EDITORIAL
OPERATION SHUTDOWN
Mumbai is temporarily on hold. The state government has ordered schools and colleges to shut for a week. Cinemas have been told to suspend operations for three days, and shops requested to postpone discount offers, to avert a crush of customers eyeing a good bargain. Two months after the World Health Organisation declared that the rapid global spread of the H1N1 (swine flu) virus qualified it as the first flu pandemic since 1968, the jury is still out on best practices to isolate outbreaks. In fact, in July WHO termed the spread of H1N1 “unstoppable”. Since then, to the timeline of the flu’s toll have been added projections of when the vaccine could be developed and made ready for widespread use. Now, a week after the flu claimed its first confirmed victim in India, it is evident that there is no one-size-fits-all contingency plan by public health officials.
When the H1N1 outbreak was first reported in Mexico City, officials reacted with a prohibitory plan, shutting down offices and restaurants. It is unclear whether it’s desirable to now enforce such blanket shutdowns to limit the outbreak locally as so many individuals may have already got and spread the virus. For public health personnel and administrators, the H1N1 epidemic poses a big challenge in what balance to strike. Heightened awareness is key. People need to know what symptoms require them to seek medical aid. But a hyper-alert can also induce panic, which can overwhelm health workers and yet do little to mitigate outbreaks. The equation is further complicated by indications by epidemiologists that laboratory-confirmed cases of swine flu may not convey the extent of its prevalence, with many more people getting through milder manifestations of the flu.
With research being updated so rapidly, and with predictions of the dreaded second wave of the flu still fluctuating, it is pointless to forecast how the pandemic will play out. By all indications, it will severely test the health care system in this country in coming days. And given the still crude understanding in other countries on how to cope, administrations must battle panic along with the flu itself.
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INDIAN EXPRESS
EDITORIAL
DRAFTING THE BENEFITS
The finance ministry has made important progress on the policy process in three respects. First, the unveiling of the direct tax code for public comment has taken place well before it would be operationalised as law. This gives time for public discussion and debate. It also helps shape the planning of the private sector which is given a sense of the evolution of policy. Second, the draft legislation has been released alongside a rationale document, and both these documents show high quality drafting. The rationale document emphasises concepts and principles, and is tightly interlinked with the draft legislation. The high quality of drafting is particularly interesting when we consider that this was done by finance ministry staff, and should set an internal standard. Third, it indicates a break with gradualism. Indian economic policy has been bedevilled by gradualism. All too often things that are blindingly wrong are tinkered with over a generation, and problems are never quite solved. As an example, the Reserve Bank of India Act is a 75-year-old dinosaur which remains riddled with mistakes in drafting which have never been solved. The direct tax code represents a clean break, with a fresh drafting based on economic principles.
India would rapidly acquire coherence in its policy formulation if these three elements of the process were applied to all aspects of fiscal, financial and monetary institution building. One instance that has these three characteristics is the Jahangir Aziz report on the establishment of the Debt Management Office. The finance ministry needs to kick off such policy efforts in a series of battlefronts in the transformation of fiscal, financial and monetary institutions which are urgently required in India today.
Turning to the substance of the ideas embedded in the direct tax code, there is clearly a lot of progress on removing longstanding mistakes and inconsistencies. As an example, the differential treatment of pension products depending
on whether they are dealt with by PFRDA, EPFO, or IRDA is proposed to be removed. The key area of concern lies in the treatment of capital gains. From India’s point of view, the path to economic development lies in “capital deepening”. It is good for the country if the rich save and reinvest at a high rate. What should be taxed is the consumption of the rich and not their capital formation. Capital gains taxation near zero per cent is a strategy a developing country must seriously debate.
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INDIAN EXPRESS
COLUMN
THE DRAGON’S RUMBLE
PRATAP BHANU MEHTA
Despite the commitment of Manmohan Singh and President Hu Jintao to keep the India-China relationship on track, there is a widespread acknowledgment in both countries that the relationship is becoming increasingly contentious. The border issue is unlikely to yield any significant breakthrough in the near future. The economic relationship is also fraught: the rising number of anti-dumping cases, charges of a Chinese conspiracy to falsely implicate Indian companies in a fake drugs scam and China’s attempts to block a loan to India at the ADB are adding fuel to anxieties in some quarters in India about how to deal with China. The level of vitriol in the public sphere in both countries is reaching unprecedented levels. In India great concern has been expressed about an editorial in the People’s Daily castigating India, and arguments emanating from a Chinese think tank about strategies to dismember it. The trust deficit seems to be widening.
It is important to contextualise public discourse. Even in China opinion is not as monolithic as we assume, and it is important not to over-interpret articles. Most China observers agree on three propositions. There seems to be a more general hardening of China’s posture towards most other powers in recent months, whether it is Canada or the European Union or other Asia-Pacific nations. India is not an exception to this trend. Second, a more hardline external posture is directly related to China’s sense of internal vulnerabilities. Paradoxically, the world probably has less to fear from a strong China than a weak one. China had witnessed, over the years, a relative degree of internal intellectual openness. There are signs that there might be greater clamping down on internal debate. The events in Xinjiang and Tibet have created a greater sense of vulnerability. It is very important for the self-identity of Chinese elites that the trigger for these events is always projected as emanating from abroad. There is often a belief that Xinjiang, Tibet, in addition to Taiwan, will be fishing ground for anti-China foreign powers. For all the immense power China has, including leverage over the United States, it still has not got over the idea that it remains a target for outsiders. Third, there is in all likelihood also more intra-elite uncertainty about the direction China should take. Chinese policy may not be as nimble as we often assume; certainly on Af-Pak and North Korea it is more likely that the Chinese persist with the status quo because they don’t know quite how to move, rather than because they have a supremely well-thought-out policy. Its hardline may be a default way of coping with hesitation.
But in the case of India there are three other complicating factors. The first, perhaps minor, one is simply that there is no incentive for China to settle the border issue quickly. But in part this is fuelled by a perception that the domestic political economy constraints on both sides will not allow for an easy settlement. Arguably, the Tibet issue is only likely to become more potent in coming months. As an aside, it will be interesting to see if President Obama grants the Dalai Lama an audience and what the consequences of that might be. China is certainly not going to give up any claims in a hurry.
But there is also a perception in China that no Indian leadership will be able to politically deliver on a border settlement. The dominant narrative of China as an aggressor in 1962 is still so ingrained that when it comes down to the wire no Indian government will be able to make a credible offer.
The second is that the Indo-US relationship is perceived to be explicitly some part of a design to contain China. India can argue with some justification that the China-US relationship is much closer and more consequential, that improving relations with the US and China is not a zero sum game, and the possibility of serious Sino-US conflict is remote. But this argument does not seem as compelling to many Chinese for two reasons. First, many of them rate the possibility of Sino-US tensions increasing higher than what Indians normally do. So whose side you are on matters to them. Second, while they are happy with bilateral relationships, placing the relationship with the US in a broader quadrilateral arrangement involving Japan and Australia has not exactly gone down well. It has fed into their encirclement syndrome.
But the final and perhaps most important issue is this. The simple fact of the matter is that India’s success poses a challenge for the Chinese regime. So far it was easy to sustain an argument that if you are a large developing democracy, you will end up in a pathetic position like India. India still has huge challenges, but there is a sense in which it now genuinely offers a different path to development. The interesting thing about the two pieces of anti-India writing quoted in the Indian press was not their belligerence. It was the fact that they spend so much time impugning the India story — India is economically weak and backward, it cannot cope with diversity, it is artificial and so forth. The message was more to throw cold water on the Indian model, than belligerence in a classical security sense. In a strange way this confirms what some Chinese academics have been saying informally: India may pose a threat to some sections of the regime, not by its power but by its success.
The India-China relationship was always complicated. Here are two civilisations trying to get all the trappings of a nation state, each dealing in its own way with colonial legacies on borders, and with little domestic room for manoeuvre. On top of that there is an overlay of differing perceptions of geo-politics, in part made more complicated by a China that is more edgy in the last few months than ever before. A robust economic relationship was supposed to be an antidote to these tensions. But that has its limitations. Although Indian industry is more confident, the fear of Chinese over-capacity and pricing mechanisms remains. Cooperation in other multilateral forums, while it has immense possibilities, will be hampered by bilateral suspicions. India and China’s discourses about each other are complicated, because they are tied to their complex processes of self-discovery. There is not going to be an easy way to allay the trust deficit. While vigilance is important, it is equally important to throw some cold water on the paranoia building up.
The writer is president, Centre for Policy Research, Delhi
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INDIAN EXPRESS
COLUMN
FAREWELL TO ARMS?
V. P. MALIK
Each civilisation, social or technological revolution gives rise to its own way of conflicts, wars and strategies. Prussian military thinker Clausewitz had noted, “Each age has had its own peculiar forms of war. Each therefore, would also keep its own theory of war.”
The industrial revolution ushered a new dimension of mass-produced weaponry. The strike capability of
combat forces focused on reach, mobility, and destructive power. The length of the sword, the range of the aircraft or missile, the number of combat forces, how fast they can be committed, how deep they can be sustained, and what total damage they can cause on the adversary: all these became key combat capabilities affecting the outcome in a conflict. Such capabilities reached their near total extreme in the last half-century. This also brought about the likelihood of ‘mutual assured destruction’, if any nuclear power ever decide to go for an all out war.
A distinctive feature of the current strategic and security-related environment has been the unprecedented change in the paradigms, concepts and complexities of national security. There are several reasons for this. Firstly, the rapid advances made in science and technology, particularly in the field of information technology. Secondly, globalisation, multilateralism and regionalism are replacing bilateral international relations and a straitjacketed concept of sovereignty. Thirdly, a more liberal approach to security — there is greater focus on peace, development and cooperative security, thus a greater awareness of the comprehensive nature of security. Fourthly, close monitoring of conflicts and conflict situations by the media. This ensures greater public accountability of the governments. And fifthly, the high cost of maintaining standing armed forces, costly new weapon systems and equipment, and the likelihood as well as abhorrence of very high civilian and military casualties and destruction.
International opinion is strongly against re-drawing of national boundaries through forcible means. Besides, destruction of the enemy’s military potential and occupation of large foreign territories: these are not easily attainable military objectives even when an armed conflict is asymmetrical, as we have seen in Lebanon, Iraq, Afghanistan and Palestine.
Armed conflicts around the world have been gradually moving towards the paradigm of intensity as well as inclusivity. Total war, even a conventional war, has yielded to ‘limited wars’, ‘proxy wars’ and other types of low-intensity conflicts. ‘Terrorism’ is the latest form in this list. At the 11th Asian Security Conference, Defense Minister A.K. Antony called it a “Frankenstein” which has now become a threat to democracy, stability and peace’.
The revolution in military affairs is shifting the character of armed conflict capabilities to a new form. It enables precise surgical strikes on command and control nodes, strategic facilities, combat reserves, and combat support facilities in depth. It also enables getting at the adversary’s nerve centres with precision attacks or through electronic warfare and cyber attacks.
Has a war, even a conventional one, become impossible between two nuclear nations? One would like to believe that. But as realists like Admiral J.C. Wylie stated: “Despite whatever effort there may be to prevent it, there may be a war”, and more recently like Ashley Tellis, who said: “I believe that limited war should be viewed not as a product of the proclivities of the state but rather as a predicament resulting from a specific set of structural circumstances”, we can not rule this out. In fact, such a situation is more likely in an ongoing proxy war or a stability-instability paradox. During and after the Kargil war, we had to find an answer to such a challenge. Was there a space below the nuclear threshold? The Pakistani initiative and our own reaction gave that answer. How small or large is this space? That will always be a matter of circumstances, conjecture and debate. It will be more exploitable when one is reacting to a serious security threat and fighting a politically legitimate righteous war.
What is becoming more obvious is that all conflicts and wars now require (a) much greater political justification, political will, and careful identification of political and military objectives (b) a government’s ability to generate public support and international understanding (c) limited time, scope, space and force levels (d) ‘escalation dominance’ and ability to control the ‘escalatory ladder’ by very close politico-military oversight, and (e) a comprehensive and synchronised information campaign.
It seems that all forms of conflicts ranging from low-technology to high-technology intensive warfare will continue to exist simultaneously in our region, depending on the societal and technological stage that nations find themselves in. Sun Tzu, who held that ‘the most successful General was one who achieved his ends without a battle’ (No Contact War) and Clausewitz, who stated that “a war is an act of violence pushed to its utmost bounds,” will remain relevant along with Liddle Hart, Beaufre and Che Guevara. In such a scenario, war planners and preventers, both face unprecedented complexity. And with such a shift in the nature of security and conflicts, the military has a much tougher job than ever before.
I do not believe that conflicts and wars make the state and that states exist only to make wars. No one in their right senses wants to have a war on one’s hands. Least of all democracies like India; and people like me who have studied, participated, and had to conduct a war. But the armed forces have to be prepared for all possible conflict and war contingencies.
The writer is former Chief of Army Staff. He is currently President, ORF Institute of Security
Studies, New Delhi
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INDIAN EXPRESS
OPED
CHILDREN OF THE SAME GOD
MITHU ALUR
Congratulations to the UPA government for passing the historic Right to Education (RTE) Act. However the fate of 30 million children who are disabled or differently-abled remains uncertain.
They are not explicitely characterised as “disadvantaged” children in the Act, and so will not have the right to 25 per cent reservation in private schools. For many of us who have spent our lives working for the education of disabled children, and have shown that people with disability are in special need of education, we are in a state of shock and disbelief to find that the RTE had not included them in the key definition. Prime Minister Manmohan Singh assured us that they would be included, so did UPA Chairperson Sonia Gandhi. Human Resource Development Minister Kapil SibalSibal gave verbal assurances in Parliament, but to be legally binding, these assurances need to be put into the legal statute.
The other problem with the Right to Education Act is the definition of “disability.” HRD Minister Kapil Sibal mentioned in Parliament that all disabled children, as defined by the Persons with Disability (PWD) Act, would get free and compulsory education. But the PWD’s mandate does not give children with disability the fundamental right to free and compulsory education as does the RTE Act. It does not guarantee the 86th amendment to the Constitution which mentions that education for all means children with disability as well which took us three decades to do, when the amendment was tabled in Parliament! Besides the PWD Act has no clear and specific guidelines for implementation with effective dates, deadlines, alternate arrangements, temporary relief etc.
The right to education is specially required for children with disabilities, who suffer from abysmal enrollment and attendance rates in schools. (see Graph ‘B’, below)
The World Bank Report 2006 states that educational attainment of all persons with disability, especially children, is far below national averages. 38 per cent of disabled children, aged 6-13, are out of schools. Almost all children with severe disabilities (75 per cent) are illiterate and do not attend school. Close to one third of all children with mild disabilities (30 per cent) are not in school.
The bulk of schools under Sarva Shiksha Abhiyaan (SSA) are not accessible for disabled children — nearly all in some states. (see Graph ‘A’ , below) Physical inaccessibility is a major barrier. The entrances to the schools are narrow and children with mobility difficulties find it difficult to go to schools. There is no proper light or ventilation in the classrooms, neither is there suitable furniture. A lack of infrastructural support and funding has ensured a micro-level coverage of 2 per cent and a macro-level exclusion from the government’s programme showing institutionalised discrimination. And now exclusion from this Act! The child with disability has fallen between the Persons with Disability Act and the Right to Education Act, and is once again left orphaned without a right.
Based on the assurances made in Parliament by the HRD minister, an amendment of the RTE Act could be done through an ordinance (as Parliament is not in session). This amendment needs to bring the words ‘including children with disability’ into the definition of “child from disadvantaged group.” This will remove all ambiguities in the RTE Act. It would also clearly establish the right of an aggrieved disabled child to seek recourse from the National Commission for Protection of Child Rights.
It is time for the government to make a clear and unambiguous statement that ‘all’ (disabled and non-disabled) children have a right to education under Section 3 of the RTE Act. Merely adding categories to the ‘disability’ definition is obfuscating the issue. Any disability category that is not included would agitate, and amendments needed again and again.
The RTE Act incorporating the above will also be in line with the UN Convention on the Rights of Persons With Disabilities (UNCRPD) that has been ratified by Parliament. The UN Convention on the Rights of the Child, and the UNESCO ‘Education for All’ commitments had reiterated that ‘all’ children with disabilities have a right to education. India has been a signatory to all international declarations but has not yet got its house in order.
The time has come to bring children with disability into the purview of education where they rightly belonged till 1960 when they were wrongly clubbed with Scheduled castes and tribes and removed from the Ministry of Education to the Ministry of Welfare, where since then they have suffered massive exclusion from education. The prime minister has said that the “government stands committed to inclusive education for all children. I give you my assurance that they will be included so that they have a right to free and compulsory education.” Those words were like manna from heaven for us. Implementing that will be a new beginning in the lives of 30 million children and their families.
The writer is founder of the Spastic Society of India (Mumbai). She is also member of the CABE and the National Executive Mission, SSA
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INDIAN EXPRESS
OPED
SIGNING AWAY SOVEREIGNTY
Secretary of State Hillary Clinton said in Kenya last week that it is a “great regret” that the United States is not a member of the International Criminal Court, the international tribunal established in The Hague to prosecute war crimes, genocide and crimes against humanity. The Bush administration was vilified by the international community and by human rights groups for a perceived hostility toward the court during its first term, but US reservations about the ICC predated President George W. Bush and are likely to continue under President Obama. Although the Obama administration will undoubtedly make greater efforts to engage with the court, the United States is unlikely to join the ICC anytime soon.
The Clinton administration tried to have it both ways. Its officials helped negotiate the Rome Statute — the 1998 treaty that created the ICC — but were unable to persuade other countries to address concerns of the US military that its members might be subjected to politicised prosecutions. President Clinton ultimately authorised US signature of the Rome Statute on Dec. 31, 2000 — the last day the treaty was open for signature — but said, “I will not and do not recommend that my successor submit the treaty to the senate for advice and consent until our fundamental concerns are satisfied.”
US policy toward the court evolved significantly during the Bush administration. In May 2002, Bush, noting his objections to the ICC’s purported coverage of US nationals, authorised the “un-signing” of the Rome Statute. He later signed the American Servicemembers Protection Act, which criticised the ICC and cut off foreign assistance to its members. ICC supporters blamed Bush for this harsh legislation, but it was drafted by House Republicans and supported by many Democrats, including then-Senator Hillary Clinton.
In its second term, the Bush administration pursued a more pragmatic approach toward the ICC, first agreeing to the UN Security Council’s March 2005 referral of the Darfur atrocities to the court for investigation and later offering support to the ICC prosecutor. The president waived the statutory restrictions on foreign assistance to ICC members, and last fall Secretary of State Condoleezza Rice even threatened to veto efforts by some Security Council members, including China and France, to defer the ICC’s arrest warrant for Sudanese President Omar Hassan al-Bashir, earning plaudits from human rights groups.
The Obama administration has done little so far to engage with the court, to the disappointment of ICC supporters who had hoped that Obama would immediately reverse the “unsigning” of the Rome Statute. This inaction may change as more political appointees are confirmed. But it may also reflect Obama’s cautious approach toward an international court that could be used to prosecute US soldiers during a time of war.
Obama can support the court in ways that would not involve joining the Rome Statute, such as participating in its governing bodies and providing diplomatic, intelligence and logistical support for the court’s ongoing prosecutions of egregious war crimes and human rights atrocities in Darfur, Northern Uganda, Congo and the Central African Republic. Such support would demonstrate US leadership in international justice and human rights. The administration should immediately begin participating in the ICC working group that is drafting the definition of the crime of “aggression,” an offense within the court’s jurisdiction that was left undefined in the Rome Statute.
The thorniest issue for Obama will be how to approach the Rome Statute Tenth Anniversary Review Conference scheduled for next summer in Uganda. The president almost certainly has to take the position that the United States is not prepared to join the ICC unless the treaty is amended in some way that provides stronger protections for Americans. Secretary Clinton is right that US non-participation in the ICC is regrettable, especially given the long-standing U.S. commitment to international justice. Yet non-participation also reflects an unfortunate but deep-seated American ambivalence toward international institutions that the Obama administration, despite its support for international law, is unlikely to be able to change.
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INDIAN EXPRESS
OPED
LAW COMMISSION AND POLYGAMY
The view expressed by the Law Commission in its unanimous 227th report presented to the government that “traditional understanding of Muslim law on polygamy is gravely faulty and conflicts with true Islamic law in letter and spirit,” has attracted the ire of the ulema and editors of Urdu newspapers alike. Many eminent religious scholars have described the report as “mischievous” and “condemnable”, and have asked for its withdrawal. In a statement to Delhi-based Hindustan Express (August 10), Vice President of All-India Muslim Personal Law Board, Maulana Mohammad Saalim Qasmi, says that “the issue of Muslim Personal Law is not under the area of control of the Law Commission and members of this Commission have no right to express any view regarding any law of Islam. This report of the Law Commission is extremely mischievous. We reject it totally and very soon a protest will be lodged with the authorities of the Law Ministry .”
Many others have, in their statements, argued that “polygamy is an established reality through Quran and traditions of the prophet. And what has been permitted (in Islam) and practised for the last 1400 years, is not going to be prohibited by any statement of the Law Commission.”
The same paper, in its editorial entitled “‘New Islam’ of Law Commission,” (August 8) writes: “The only sources of Islamic teachings are Quran and Hadees (traditions of Prophet Mohammad) without which the very concept of Islam is impossible, and when elaboration and explanation with regard to polygamy has been given in Quran and the life of the prophet is an ideal for Muslims to emulate, the question naturally arises as to what spirit of Islam the experts of Law Commission are talking about?”
Rashtriya Sahara, in a front page report on August 9, carries the statement of Member of the Law Commission, Dr Tahir Mahmood, by way of clarification, that states: “The recent report of the Commission is solely concerning those non-Muslim married men who, violating their law, play the farce of converting to Islam for solemnising a second marriage (qubool-e-Islam ka dhong rachatey hein). Neither the issue of Shariat concerning polygamy has been touched upon in it, nor is there even a slight hint about any need for enacting any new law concerning Muslims.” Significantly, the statement also adds: “In this regard, mentioning, with the fullest respect, the Shariat law, it has only been stated that under this law, permission for polygamy is not absolute or unconditional and is subject to the condition of staying with the wives and according impartial and just treatment to them, which obviously cannot be fulfilled by throwing out the first wife and marrying a second one.”
SWINE FLU: GOD’S CURSE?
The spread of H1N1 flu in different parts of the world, including India, has created panic among the people. This has given rise to a tendency to introspect and think of instances in the past when similar infections caused large-scale deaths and damage to public health. Delhi, Lucknow, Mumbai and Dehradun-based daily Sahafat, in an editorial on August 7, recollects that the law of 1987 that was enacted to meet the situation arising out of the spread of plague in Pune has been taken out of the archives and re-enforced to meet the H1N1 scourge. The paper says that the strong steps now taken by the government of Maharashtra could have been taken earlier and not only after the death of Rida Sheikh.
Noted columnist specialising on Islamic issues, Maulana Nadeem-ul-Wajedi, in his column in Delhi-based Hamara Samaj (July 29) entitled, “Swine flu ya azaab-e-ilahi?” (Swine flu or curse of God?), writes that “the spread of swine flu has proved that the description of filth and dirtiness of swine (in Quran) is not without reason and hidden wisdom.”
ADVANI’S URDU PUBLISHER
“Advani could not get an appropriate Urdu publisher but well known intellectuals of Urdu were found for the release (of the Urdu translation of his book, My Country, My Life),” says the headline of a front page anchor in Hindustan Express (August 7). According to the paper’s report, BJP leader, Mr L.K. Advani, wanted to publish the Urdu translation of his book well before the Lok Sabha elections. But the publication was delayed for six months because of the failure to get an established publisher for the book. A well-known publisher, who was offered the book, returned the manuscript after two weeks. Ultimately, another renowned publisher of Delhi was persuaded to publish it but under a new banner of ‘Khan Publishers’, instead of his company’s banner, according to the paper’s report. But, the release function of the book brought together well known intellectuals associated with Urdu journalism and writing, including Maulana Waheeduddin Khan and journalists M.J. Akbar and Aziz Burney, says the paper.
Compiled by Seema Chishti
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THE FINANCIAL EXPRESS
EDITORIAL
READING THE RAINS
The Finance Minister has now officially scaled down GDP growth figure to 6% in 2009-10. This is in line with what independent forecasters have said, lowering projections to between 5.5% and 6% consequent to drought. The loss isn’t that much, as would be expected since the contribution of rain-fed agriculture to GDP isn’t that much. What about the drought itself? Some qualifications are in order, because a lot of scare-mongering is going on. First, it is still a hydrological rather than economic drought, since impact on kharif sowings won’t be known until September. Second, more than overall deficiency of rainfall by 25%, what is pertinent is its spatial and geographic distribution. For instance, Crisil’s DRIP (deficient rainfall impact indicator) shows that drought is not as severe as in 2002 and is concentrated mostly in UP, MP, Maharashtra, AP, Bihar and West Bengal. Without in any way downplaying the importance of resultant human tragedy in these states, traditional irrigated Green Revolution areas are insulated. Therefore, both in terms of production impact and indirect loop of reduced farm prosperity curbing demand for manufactured goods, reduction in GDP growth is unlikely to be severe. As we said, 0.5 percentage point sounds about right. Third, rabi production often tends to compensate. Fourth, while forecasts are always uncertain, questions should be raised about IMD’s capacity to predict, notwithstanding a newer model and investment in supercomputers.
Drought relief? Reports about drop in cultivation are collected at sub-district levels and wind their way up to central ministries. This is a colonial method that ensures a big time lag between distress and action. Why do we still follow this? There are sufficient foodgrain stocks, but PDS distribution isn’t efficient. And these stocks don’t cover pulses and coarse foodgrains, both rain-fed crops. Delivery of right to food legislation is uncertain and so are contours of the revamped NREG. While the original NREG reduced migration from villages, drought is likely to lead to renewed migration pressures. With recent scams on exports and imports and government controls on both, trade policy isn’t a flexible instrument for handling shortages. No doubt, there will be demands for hikes in minimum support (read: procurement) prices, benefitting large farmers and millers in richer agro-climatic zones and contributing to further increase in food subsidies. This won’t help drought-hit farmers or tax paying public. Farming needs big reform to reduce its vulnerability. But bet on big reform not happening.
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THE FINANCIAL EXPRESS
EDITORIAL
THE ELEVEN COMMANDMENTS
The Direct Tax Code was a Budget promise and it can also be interpreted as the 45-day action plan promised by the finance ministry. At the moment, this is a Discussion Paper, designed to invite inputs, and will result in a Direct Taxes Code Bill, perhaps in the winter session. Most reports on the code have focused on gains to personal income tax payers, such as changes in threshold levels and slabs and increased deductions for savings. However, while important, that’s not really the point. The key is overall direction of direct tax reform, focusing on a simplified and harmonised system, with low rates and broader base, thereby reducing compliance costs and increasing direct tax-GDP ratio. While these reform directions have been known for a long time, UPA-I deviated from the agenda and indeed retreated, in the sense of making the tax structure more complicated. If this Bill is passed, UPA-II will bring the tax reform agenda back on track. The key elements are the following.
First, abolition of securities transaction tax. Second, scrapping of distinction between short- and long-term capital gains. Third, unification of compliance procedures, eventually leading to a single unified taxpayer reporting system. Fourth, simpler language, reducing need for provisos and explanations and curbing possible litigation. Fifth, stability, by de-linking from annual Finance Acts. Sixth, reduction in corporate tax rates, making domestic and foreign companies almost on par. Seventh, reductions in corporate exemptions and deductions, with switch in focus from profit-linked to investment-linked incentives. Exemptions have been the biggest hole in taxation. Eighth, shift in base of MAT from book profits to value of gross assets. Ninth, for personal income tax, a shift in the way savings are treated to EET (exempt, exempt, tax).There will be grumbling about this. But why should social security be preferred to, say, education or health. Tenth, an increase in the wealth tax thresholds. Eleventh, a change in powers of Central Board of Direct Taxes. If discussions concentrate on immediate monetary gains and losses, they are likely to get bogged down in trivia like taxation of interest on savings from 2011 (which is when the code is expected to be in force) or increase in tax liability of companies because of change in MAT base. Instead, the thrust of reform should be discussed and debated, including a point about whether the new code does need 256 pages. The fewer the number of pages and the fewer lawyers and chartered accountants, the better. But, so far, good job, Mr Pranab Mukherjee.
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THE FINANCIAL EXPRESS
COLUMN
WHAT’S IN STORE?
ALOKANANDA CHAKRABORTY
Strange bedfellows? Maybe, but with a sluggish business environment and dwindling margins, big retailers in India are planning to come together to forge a coalition of sorts to share resources. Future Group, Spencer’s Retail and Reliance Retail are talking of sharing private labels, logistics and warehouses, among other things, on a transactional payment basis. They expect such collaborative initiatives to improve operating margins by 2-3%.
The idea of coopetition—when a business cooperates with competitors to grow in cut-throat markets—is really not new. High-tech companies—including Microsoft, Netscape, Apple—have done it. Closer home, in 2006 when the aviation sector wasn’t under the kind of stress that it is today, private airlines were thinking of getting together to share engineering resources, technical manpower and training requirements, to slash costs of operations.
Then there was the much touted grand alliance under the Efficient Consumer Response Framework of 1999 when several big names including Hindustan Unilever, Procter & Gamble, RPG Retail and Pantaloon agreed to work together to make their respective sectors more responsive to consumer demand and remove unnecessary costs from the supply chain. Of course, it didn’t take too long for the partners to realise that such a thing was easier said than done. The point is, for such an arrangement to work companies need to clearly define where they are working together, and where they are competing. In other words, where does competition end and coopetition begin?
If tech companies vigorously pursue collaboration, they are doing so because of the rapid convergence of many hi-tech industries. But for value retailers, such an arrangement may work against the basic premise on which the competition among them is based—cheaper sourcing that gives them competitive edge .
Granted, the economic slowdown has pooped the party for consumers and retailers alike. But it will take some time before these partners figure out how rivals can compete for market share on the one hand, and cooperate to grow the overall pie on the other.
aloka@expressindia.com
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THE FINANCIAL EXPRESS
COLUMN
TEA, COFFEE, NUTS AND A BIG SCARE
P RAGHAVAN
In Bangkok yesterday, a trade treaty was signed that took six years to negotiate and some of the fiercest opponents came from a small Indian state. Why? Why was there so much opposition to the India-Asean FTA from Kerala? And why was Kerala wrong?
The treaty will eliminate import duties on about 80% of the goods traded over the next eight years. Kerala felt there will be a deluge of plantation products and spices from Asean producers. The fear was that New Delhi was willing to barter away the interests of plantation crop and spice growers, in return for easy access for India’s industrial goods, and later for services. The FTA right now is restricted to goods only.
Let’s look at Kerala’s argument. It accounts for 45% of national plantation crop production. This business provides livelihood to about one fifth of Kerala’s population. The share of commercial crops in Kerala’s net sown area was 84% by the beginning of this decade.
But this story is changing. Kerala’s plantation crop business is affected by declining productivity. Large gains are being made by competing states. The market share of Kerala in crops like coconut and areca nut has remained stagnant since the early nineties. And the state has lost out in products like tea, rubber and cashew. The only market share increase posted in a major plantation crop was coffee. The spice story is similar. Kerala has managed to retain its overall share of output in condiments and spices, but thanks mainly to cardamom. It has lost market share in important products like pepper, ginger and turmeric.
The story is clearer when we look at productivity numbers. Per-hectare productivity has declined, if one tracks figures for a decade up to 2004-05, the last year for which reliable figures are available. Here are some numbers: pepper, 358 kg/hectare to 315 kg/hectare; cashew, 801 kg/hectare to 743 kg/hectare; coffee, 833 kg/hectare to 642 kg/hectare; tea, 2,003 kg/hectare to 1,413 kg/hectare. Only, in rubber and ginger has Kerala made productivity gains.
Productivity decline is why Kerala is losing out to other states in terms of market share. And, sure, as Asean imports come in, the decline in market share will increase. But Kerala’s approach won’t work—you can’t block competition and improve.
What will happen with this strategy is that Kerala agriculture will get caught in a low productivity trap. Gains for both farmers and farm labour will be limited. Indeed, farm income in Kerala is already demonstrating this. The most recent NSSO farmer survey shows that average monthly income from cultivation per farmer household in Kerala is Rs 1,120. Forget rich states, that’s lower than Chhattisgarh (Rs 1,164).
So, what should Kerala do? The Asean FTA provides for an 8-year adjustment period till tariffs are fully reduced. Now, a commission the state government set up under MS Swaminathan had recommended that the state give itself 5-10 years to adjust to liberal farm trade. Plantation crops and spices are seen by experts as requiring a longer adjustment period than cereals and pulses. The committee recommended limited protection and additional investment support during this adjustment period. The state government had accepted this report. Hence, the 8-year period offered by the Asean FTA should be adequate for Kerala to become competitive in its main farm products.
Why did Kerala not constructively lobby for more support for its competitive capability and spend time trying to block the FTA? The Swaminathan Commission had recommended the restructuring of the various commodity boards so that they can be better catalysts for the productivity and quality. Shouldn’t this have been the focus?
Kerala could have also sought support for strategies compatible with the multilateral trade agreements. This, too, was recommended by the commission. Another constructive lobbying effort would have been to set up a revolving fund to start a major plan for replanting and rehabilitating all major perennial crops like coconut, cashew, rubber, tea, coffee and cardamom.
Again, for farm productivity improvement, extension services—providing professional advice on seeds, irrigation, fertiliser, etc— are crucial. Providing this requires money. That’s what Kerala should have lobbied for.
Even more strangely, Kerala ignored its own success stories. Some innovative farmers have adopted methods of developing and adopting perennial annual crop farming systems. These have been declared as maximising both profits and ecological benefits. These numerous small success stories should be made into a bigger story. Consortia of smart farmers can spread best practices faster than even diligent official efforts.
Had Kerala done all this and not just lobbied to block the Asean FTA, it could have probably used the treaty as a starting point for a long overdue agricultural transformation. There’s still time. The treaty, thankfully, is done. But Kerala can still change if it stops being upset.
p.raghavan@expressindia.com
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THE FINANCIAL EXPRESS
COLUMN
A TAX CODE THAT ISN’T TAXING FOR US
JAIDEEP S KULKARNI
We eagerly waited for the Direct Tax Code, and we weren’t disappointed. But there are some problem areas: in savings, tax treaties and short-term/long-term treatment. However, the positives, of which there are many, first. The existing Income Tax Act, 1961, fearsomely complex and out of date with today’s dynamic business environment, needs replacing. The new code is a meticulous attempt by the government to achieve equity in the Indian tax system, and it also provides an insight into the government’s long-term vision on tax matters.
So, what were the taxpayers’ expectations from the code? It should be simple, unambiguous and most importantly, should bring certainty in the administration of tax law. It should also address issues such as rationalisation of tax rates, ease in compliance, faster dispute resolution, etc. By rationalising tax rates, expanding the tax base and taxing the real income of the taxpayer, the government has proposed a cohesive tax system. It has also succeeded in capturing some of the best international practices.
The code has a simple structure—the confusing maze of provisions and explanations, which is present in the current Act, has been done away with. Examples and illustrations have been incorporated into the code wherever possible. The net result is a user-friendly code.
The peak tax rate for individuals has been retained at 30%. But income tax slabs have been rationalised, bringing significant relief to individual taxpayers. However, the shift towards the exempt, exempt, tax (EET) regime where withdrawals from PF, PPF would be considered taxable is bound to fuel a lot of debate. The abolition of interest deduction on self-occupied house properties could be a dampener for individuals looking to purchase houses.
There is reason to cheer for the corporate sector with a reduction in the corporate tax rate to 25%. This makes India’s corporate tax rates comparable to its Asia-Pacific neighbours such as Singapore and Hong Kong and lower than most developed countries such as the US and the UK.
Rationalisation of tax rates has been coupled with a shift from the present ‘profit’ based incentives to ‘investment-linked’ ones. While this marks the end to an era of tax holidays and exemptions, it would really help reduce unnecessary tax litigation. Companies would be able to carry forward business losses for an indefinite period, a very welcome step. On the flip side, applicability of minimum alternate tax (MAT) would now be based on percentage of the ‘gross value of assets’ and is likely to raise concerns from capital intensive sectors such as infrastructure, real estate, oil & gas. Further, this would be a final tax with no right to carry forward the tax credit.
Moving on, the disparity in the tax rate applicable to foreign companies vis-à-vis Indian companies has been removed. To bring parity with Indian companies which pay the dividend distribution tax (DDT), branches of foreign companies will now have to pay an equivalent branch profit tax.
The taxation of foreign companies is bound to witness a paradigm shift under the code, given the narrow definition of ‘resident’ which has been introduced. A foreign company having part of its management in India could end up being treated as a resident company liable to be taxed on its global income.
India has a wide tax treaty network with over 70 foreign jurisdictions. It is a settled position in law that provisions of the tax treaty override provisions of the domestic tax laws. The code intends to bring the provisions of the tax treaty and the code to the same level and in case of a dispute, the latter provisions would prevail. Does it mean that all the existing treaties are redundant or need to be renegotiated, since the provisions of the code would be introduced at a later point in time?
On the international tax and transfer pricing front, the longstanding demand for an advance pricing mechanism, which would bring certainty to transfer pricing issues, has been accepted. Stringent anti-avoidance measures, which are in line with globally accepted practices, have been introduced and this would give teeth to the tax administration.
Removal of the securities transaction tax will cheer markets. But removal of the distinction between long-term and short-term capital assets and withdrawal of the long-term capital gains tax exemption could discourage long-term investors.
Overall, the code is poised as a transformational law keeping pace with the changing economic realities and has the right intentions. What is now needed is an effective administrative machinery to implement the code in its right spirit. The code has now been released for public debate.
Let’s debate it energetically. We will get a tax law we deserve.
The author is a tax partner with Ernst & Young, India
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THE HINDU
EDITORIAL
LEARNING FROM TWO POET-SAVANTS
Symbolic acts can build great practical value. By installing the statue of Tamil poet-saint Thiruvalluvar in Bangalore on August 9 and that of Kannada savant Sarvajna in Chennai on August 13, the Chief Ministers of Tamil Nadu and Karnataka have gone beyond cultural symbolism. They have begun a process of good neighbourly engagement that can be helpful towards a resolution of inter-State issues, notably the Cauvery river waters dispute, on just and sustainable lines. For 18 long years, those who claimed to be partisans of Kannadiga interests erected roadblocks against the unveiling of the Thiruvalluvar statue in Bangalore — not because they had any dislike for his celebrated couplets on ethics and practical living, but because they saw him as a Tamil icon, and therefore as a symbol of the interests of Tamil Nadu. At a time when the Cauvery water dispute was raising political temperatures in both States, Thiruvalluvar, the beloved master of Tamil ethical poetry, became a subject of political contestation. Later, Kannada partisans linked the issue to the installation of a statue of Sarvajna, who was known for his pithy tripadis or three-line sayings on various aspects of human life. What links the two poetic voices is their open-mindedness, humanism, practical wisdom, and equanimity; their non-sectarianism; their opposition to obscurantism and the pursuit of unreason; their gentle humour; and the clear-glass felicitousness and accessibility of their ethical messages.
To the credit of Tamil Nadu Chief Minister M. Karunanidhi and Karnataka Chief Minister B.S. Yeddyurappa, they showed the political will to break free from the trappings of the past and go for reciprocal installations at a congenial time. The step was proposed nine years ago but held up because the political atmosphere, which was dominated by the river water disputes, was not right. Now that the symbolic gestures are over, the time is ripe for addressing the inter-State issues with the fairness, balance, and good-natured give-and-take practicality that both Thiruvalluvar and Sarvajna favoured. The real significance of the statue installation functions in Bangalore and Chennai will lie in the success of such a conciliatory process, and not in the satiation of literary-cultural pride on both sides. As they did on the issue of the statues, Tamil Nadu and Karnataka should build seriously on the value of reciprocity and find common ground on more challenging issues. Whenever hurdles come in the way of sensible and sustainable solutions based on give-and-take, when ‘to-do-or-not-to-do’ vacillations arise, political leaders in the two States need look no further than the Kural and the Tripadis for sage ethical and practical guidance.
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THE HINDU
EDITORIAL
CRISIS MANAGEMENT AND BEYOND
Although there are some definite signs of recovery in many countries, it might be premature to conclude that the global economic crisis has ended or is even near its end. There is little doubt that, but for the extraordinary policy interventions through monetary easing and fiscal stimulus packages, the crisis would have assumed far more menacing proportions. There is a growing consensus that these measures cannot remain in place indefinitely but the question is when the re versal of course should begin. Central banks and governments have been articulating the need for a planned exit from the policy positions, whose continuance might push their indebtedness to unacceptable levels or stoke inflation. In India, after three fiscal stimulus packages, the government thinks there is no need for additional ones. The huge increase in the budgetary outlays on social sector programmes is expected to sustain rural demand. Significantly, the Finance Minister has said he would return to fiscal consolidation as soon as it is feasible. On the monetary side, the Reserve Bank of India Governor has said the special monetary accommodation needs to be rolled back, subject to two conditions being fulfilled. First, a road map for fiscal consolidation is put in place and, secondly, there are more definite signs of recovery.
With the threat of a further deterioration in the global economy abating, attention is turning to the inherent contradictions between monetary prudence and fiscal deficits that have surfaced, despite the governments and central banks coordinating their actions closely. Central banks have lowered their policy interest rates substantially, to near zero in many countries. However, monetary transmission, in times of crisis, is simply not adequate. Central banks responded through a slew of measures, described variously as quantitative and credit-easing. Since even these failed to revive credit markets, governments were forced to intervene through large fiscal packages. Financing them has not been a problem so far: the extreme risk aversion has triggered a flight of investors to the safety of government securities. RBI Governor D. Subbarao has said there could be a price to be paid for the large expansion in the balance sheets of central banks. In India too, there is need for a judicious balance between short-term compulsions and medium-term sustainability. Large fiscal deficits will fuel inflation even if that may not be an immediate worry. The challenge is to maintain liquidity while anchoring inflation expectations.
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THE HINDU
LEADER PAGE ARTICLES
TAKING GOALS OF NREGA-I FORWARD
ENVISIONING NREGA-II IS IMPORTANT TO REALISE THE UNFULFILLED DREAMS OF NREGA-I, WHICH HAS FAILED THUS FAR TO BREAK FREE OF THE SHACKLES OF A DEBILITATING PAST.
MIHIR SHAH
The National Rural Employment Guarantee Act (NREGA) promises a revolutionary demand-driven, people-centred development programme. Planning, implementation and social audit by gram sabhas and gram panchayats can engender millions of sustainable livelihoods following initial rounds of wage employment. But NREGA-I has had to battle against the legacy of an ignominious past. Rural development programmes over the last 60 years have been dependent on the munificence of the state . They have been implemented top-down, using labour-displacing machines and contractors who have customarily run roughshod over basic human rights.
NREGA is poised to change all that. And there is no doubt that its promise has charged the hearts and minds of the rural poor with unprecedented hopes and expectations. But the first three years of the programme have also shown that NREGA suffers from many ills — leakages and delays in wage payments, non-payment of statutory minimum wages, work only for an average of 50 days per annum as against the promised 100 days, fudged muster rolls, few durable assets and even fewer sustainable livelihoods.
Envisioning NREGA-II is important to realise the unfulfilled dreams of NREGA-I, which has failed thus far to break free of the shackles of a debilitating past. At least seven key elements need to characterise NREGA-II. One, strengthening the Panchayati Raj Institutions (PRIs) by providing them requisite technical and social human resource so that plans can be made and implemented genuinely bottom-up. Without a cadre of social mobilisers or lok sewaks (at least one in every village), it is difficult to convert NREGA into a truly demand-driven programme, where works are undertaken in response to the needs and aspirations of a fully aware citizenry. Otherwise, the current practice of works being imposed from above will continue unchecked. And without much greater technical support to the PRIs, it will be hard to stop the backdoor entry of contractors.
Two, there needs to be a renewed focus on improving the productivity of agriculture and convergence to engender allied sustainable livelihoods. NREGA is not the usual run-of-the-mill relief and welfare programme of the past. It is not merely about transferring cash to people in distress. It is about creating durable assets that will ultimately lead to a reduced dependence of people on NREGA. The percentage of agricultural labour households in India who own land is around 50 in Rajasthan and Madhya Pradesh, 60 in Orissa and Uttar Pradesh and over 70 in Chhattisgarh and Jharkhand. And if we focus on Adivasis, the proportion shoots up to as high as 76-87 per cent in Chhattisgarh, Jharkhand and Rajasthan. Millions of our small and marginal farmers are forced to work under NREGA because the productivity of their own farms is too low to make ends meet. NREGA will become really powerful when it helps to rebuild this decimated productivity of small farms and allows these people to return to full-time farming, thereby also reducing the load on NREGA.
What would accelerate this strengthening of small and marginal farming is the proposal to allow assets creation through NREGA on farmers’ lands. This is element three of NREGA-II and would help the poorest who constitute 80 per cent of farmers in India. It is not entirely clear why certain sections of civil society are opposed to this idea, which will also mitigate the apparent conflict perceived by some Gandhians between small farmers and NREGA. Especially given the just demand for extending the work guarantee of 100 days to every person (as promised in the Congress manifesto), there is need to extend the scope of NREGA to small and marginal farmers’ lands. This remarkably inclusive provision can potentially transform Indian agriculture, which is crying out for greater public investment.
Apparently there is an apprehension that if work is allowed on poor farmers’ lands, the provision will be misused by powerful rich farmers in the village. Let me begin by stating that Magsaysay award winner Deep Joshi believes that NREGA should actually be used for assets creation on all lands, much as in a watershed programme, so that plans can be made and implemented on a watershed basis. I disagree with him only because I feel priority must be given to the poor. But I fail to understand opposition to work on farms of the poor themselves. Misuse of NREGA provisions is a genuine fear but that should be addressed with element four of NREGA-II — strengthening social audit.
Here we have two possible ways forward, what I call MKSS-I and MKSS-II. The Mazdoor Kisan Shakti Sangathan (MKSS) blazed the trail of social audit in Rajasthan. MKSS-I, a process that has been fraught with violent opposition from vested interests, and by the MKSS’ own admission, has been less than successful. MKSS-II refers to the social audit pro-actively promoted by the government of Andhra Pradesh and guided by the MKSS that has achieved unprecedented success. However, this remains a predominantly top-down approach with relatively weak roots. What we need to do is to combine the strengths of MKSS-I with those of MKSS-II, because social audit is undoubtedly the weakest link of NREGA so far, even though it was hailed initially as its most attractive differentia specifica. Pramathesh Ambasta, National Coordinator, Civil Society Consortium on NREGA, is working on a blueprint of a National Authority for NREGA, which should become a matter of serious reflection and debate if we are to strengthen social audit, evaluation and grievance redress, by making them independent of the implementing agency.
Element five has to be more of creative use of information technology (IT), which can greatly strengthen social audit and reduce chances of fraud and leakage. As in Andhra Pradesh, computer systems need to be tightly integrated end-to-end so that any work registered in the system is alive, status-visible and amenable to tracking. Delays at any stage can thus be immediately identified and corrected. The system keeps track of the work from the day the work-ID is generated and flags delays in the payment cycle as soon as they occur. Because the network secures all levels from the ground up to the State headquarters and data are transparently and immediately available on the website, a delay at any stage is instantly noticed by the monitoring system. Free availability of this information on the website also facilitates public scrutiny, greater transparency and better social audit.
IT has one more new dimension. Ever since it was decided to make payments only through banks and post offices, NREGA-I has run into serious trouble caused by delays and corruption in payments. Workers, especially in remote rural India, find it very hard to travel long distances to get money. This promotes a nightmarish variety of malpractices. It is now imperative that we roll out the banking correspondent model using handheld computer devices and mobile phones to all gram panchayats in India by the end of the Eleventh Plan period. The government needs to commit the support required to make this happen in a time-bound manner to achieve unprecedented financial inclusion on the doorstep for our poorest people living in distant hinterlands. The demand-driven, pro-poor unique ID project can play a key role in this regard and also greatly benefit from the demand created by this exercise.
Element six of NREGA-II is a reformed schedule of rates (SoRs). The commitment to pay real (indexed to inflation) wages of Rs.100 a day can never be fulfilled if we continue to use antediluvian SoRs that were meant to serve the “contractor-machine raj.” Using these rates will inevitably underpay labour, especially women. We need gender, ecology and labour-capacity sensitive SoRs that are themselves indexed to the real minimum wage, undergoing revisions with each revision in the statutory wage. Otherwise, complaints of underpaid labour will never cease.
Finally, element seven — the role of civil society, which is crucial in making NREGA realise its potential. Whether it is grass-roots activists assisting PRIs in social mobilisation, developmental NGOs building capacities of panchayats and supporting them in planning and implementing NREGA works, academic institutions helping to improve the standards of evaluation or eminent citizens acting as ombudsmen, there is an urgent need to mandate civil society action in strengthening NREGA. On its part, civil society needs to adopt a strategy of dialogue and support to make NREGA a success. Revamped and revitalised CAPART (Council for People’s Action and Rural Technology) and NIRD (National Institute of Rural Development) based on vibrant partnerships with civil society could help facilitate this change.
Each of these seven elements was part of the original NREGA vision. What NREGA-II will do is to place renewed emphasis on key aspects of this vision and build new strategies to help the programme realise its true potential. It is good that the Ministry of Rural Development is engaging in detailed discussions with various stakeholders as also the Central Employment Guarantee Council before unfurling the NREGA-II blueprint.
(The writer is Member, Planning Commission. Views expressed are personal.)
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THE HINDU
NEWS ANALYSIS
THE UNVARNISHED FACTS ABOUT SWINE FLU
SWINE FLU (H1N1 S-OIV) IS ONE AMONG MANY INFECTIONS CAUSED BY VIRUSES AND BACTERIA. THE CHALLENGE NEEDS TO BE FACED SERIOUSLY BUT MASS HYSTERIA AND PANIC LEAD TO INAPPROPRIATE AND USELESS ACTIONS.
RAJ B. SINGH
‘Swine’ is not a nice word. We use it in a derogatory sense to describe people we don’t much like. ‘Pig’ on the other hand is fairly neutral. It could indicate a likeable animal. ‘The three little swine and the big bad wolf’ somehow does not seem appropriate. Hence it is not surprising that the influenza pandemic, which no one can help but hear about, has been labelled ‘swine’ and not ‘pig’ flu.
It is caused by a virus that originally infected pigs and was labelled ‘H1’. This occasionally infected humans but, importantly, did not spread from person to person. As most of us are less likely to meet a pig than another human being, this meant the virus had a limited chance of spreading.
Viruses, which are one of the most basic of living beings, essentially consist of strings of DNA or RNA, which are the building blocks of all life. Viruses can change their DNA (or RNA) sequence fairly easily during replication, helping them evade the immune system of their hosts. This change can sometimes alter the character of the virus. The H1 virus, which infected mainly pigs, did just that. The new avatar had the important characteristic of spreading from human to human; this change was of sufficient importance for it to acquire a new addition to its label.
Thus was born the H1N1 virus. Its DNA sequence is a mix of DNAs from three different viruses, affecting birds, pigs, and humans. Occasionally a human could infect a pig with H1N1 but the infection is predominantly among humans. The first time the H1N1 virus infected humans was in 1918. Over the years, several epidemics have occurred by similar strains, which were also called Human Influenza A (seasonal) and were also H1N1. The current pandemic probably resulted from cross transmission from pigs again, the first case occurring in a 17-year-old in Wisconsin, USA in 2008. This strain is sometimes referred to as S-OIV.
Viruses produce a wide range of diseases. Influenza, common cold, polio, small pox, chicken pox, encephalitis, rabies, and measles are some of the well known ones. Many viruses are yet to be identified and named but can still cause serious disease. Hundreds and possibly thousands of children die every day in India from acute respiratory infections and acute gastroenteritis, often caused by viruses. Overcrowding, poor hygiene, and malnutrition increase the chances of not only getting infected but also dying of it.
The swine flu, like most flu, affects mainly the respiratory system. This facilitates its spread as the viruses travel through droplets dispersed while sneezing or coughing. The typical symptoms are fever, cough, body pain, lethargy and, in severe cases, mental obtundation and respiratory failure. When the patient dies, the virus dies. Hence, over time, the more virulent strains die out and subsequent infections are milder. The flu viruses generally spread, almost inevitably, to infect large sections of the population in the course of a few months unless effective vaccines are developed and deployed quickly for the entire population. But vaccines can cause problems and the occasional fatality too.
For milder infections like the common cold and the milder forms of flu, it may be better to allow the spread of sub-clinical or mild infection for natural immunity to develop in the community. The H1N1 (S-OIV) virus is estimated to have infected about 2.5 million people in the United States. Previous epidemics of similar viral infections have left behind sufficient innate immunity in many, protecting them from fresh infection with the current pandemic.
Antibiotics have no effect against viruses. Specific anti-viral agents, namely Ostelamivir (Tamiflu), are effective against H1N1 if used early, preferably within the first two days. However, as early symptoms are non-specific, potentially millions of people with ordinary viral infections like the common cold will have to be tested and/ or treated with anti-viral agents. Such a strategy may be impractical and without established benefit.
Swine Flu (H1N1 S-OIV) is one among many infections caused by viruses and bacteria. Many of these infections are more infectious and dangerous than swine flu in India. TB kills a thousand people in India every day.
1. Most cases of swine flu are likely to recover with or without Tamiflu.
2. The virus may get less virulent with time.
3. Many may already have natural immunity against the virus.
4. In course of time, a significant proportion of the population will test positive for swine flu due to swine flu infection without disease. Because of this, there may be a danger of misdiagnosing many other conditions for swine flu.
Possible beneficial outcomes:
1. Greater awareness of the nature of infections and their spread. Better hygiene and preventive methods for all infections may evolve.
2. Preventive methods may curb the spread of other infections like TB.
3. The government and the public may become more aware of the lacunae in health care delivery and corrective steps may be taken.
Possible deleterious effects of excessive publicity:
1. Mass hysteria and panic, leading to inappropriate and useless actions.
2. Diversion of scarce funds from other badly needed areas to activities with little benefit.
3. False expectations of medical interventions from doctors and institutions.
(Dr. Raj B. Singh, MD FRCP FRCP(G) FCCP, is Chief Respiratory Physician, Apollo Hospitals, Chennai.)
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THE HINDU
NEWS ANALYSIS
HEALING SCARS OF KENYAN VIOLENCE
KENYANS PIN THEIR HOPES ON THE INTERNATIONAL CRIMINAL COURT.
WILL ROSS
In view of the vast polythene-domed flower farms on the edge of Naivasha town, Rift Valley, Kenyans gathered in their hundreds of thousands.
It was a three-day outdoor church service and a controversial self-proclaimed prophet, David Owuor, said he was performing miracles with a little help from God. The man with a dreadlocked beard has a huge following in Kenya and so the government has a sked him to assist with reconciliation — the country needs it badly. People have been asked to bring along any weapons they used during last year’s post-election violence plus any items they looted.
The result looks like a macabre car boot sale; a vast array of kitchenware, mattresses, roofing sheets, milk churns, a photo of the French 1998 World Cup winning team, a guitar, a stack of machetes and poisoned arrows, plus an evil-looking club with nails sticking out of it.
“I’ve come to repent and return my weapons,” said Willis Onyango, after handing over a machete which he said he had bought to defend himself but never used, and a bicycle pump.
It is not yet clear what will happen to all these weapons but Willis has an idea.
“I want my machete to be given to the displaced people so they can use it for farming.”
More than a year and a half since the end of the violence several thousand people are still displaced — still living in tents, fearing to return to the communities from where they were chased.
VICTIMS OF VIOLENCE
An hour’s drive along the Rift Valley in a small, beautiful village where a church once stood there are now 36 graves.
Each is marked with a simple white cross on which the letters R.I.P have been painted in black.
Many of them are marked “UNKNOWN,” as the people who were seeking refuge in Kiambaa’s church were burnt beyond recognition.
Two of the graves are for Edith Githuku, who was 44, and Samuel Githuku, who was just four.
“I can forgive but I cannot forget that they did bad things to me,” says Joseph Githuku, who is still struggling to come to terms with the loss of his wife and son.
He says some of his other children survived by escaping through a church window and they have since seen some of the men who torched the church in the village.
Joseph’s family is Kikuyu and he lives in a Kalenjin community.
Despite the horrors of January 1, 2008 he says he has no choice but to stay.
“This country is ours and the constitution says a person can live anywhere in Kenya. The community says it is their land but we bought it from the white settlers after independence. So we can’t run away to a place where we have nothing. I have nowhere to go. I will be here until I die.”
Whilst he says he can forgive, Joseph also wants justice. Especially for the politicians who, he says, instigated the post-election violence.
But Joseph has little faith in Kenya’s judiciary. “This country is for the rich, but the poor have no justice because of the corruption. So we as Kenyans would like these people to be taken out of the country so that justice can work and the truth can be seen,” he said, suggesting that briefcases full of money might influence the courts. Some of the residents still feel tense, fearing the same violence could erupt again.
“When we talk we are not free with each other. The warm relationship we used to have is not there now,” said Elizabeth Wangui, whose son was badly burnt in the fire.
“They have not cleansed their hearts or sought forgiveness and so I still have a lot of fear,” she added, before saying that if she had somewhere else to move to she would leave the village immediately.
In a nearby village, Tabitha is barefoot, extremely muddy and full of smiles now that her home is no longer a tent.
She is rebuilding the house which was burnt and looted with mud, sticks and metal roofing sheets.
Her new home was made possible not by the Kenyan government but by the International Organisation for Migration with Japanese funding.
“I feel perfectly safe now. We live in harmony and we are even able to borrow salt from each other,” said Tabitha, pointing to a new wall that her neighbours from the rival ethnic group had helped her build the previous day.
Tabitha also wants there to be justice.
“I would like to see the law upheld. But I would rather see it happen in The Hague than here,” she said, referring to the home of the International Criminal Court.
“In Kenya it would be sidetracked and then disappear.”
Like many Kenyans, Joseph and Tabitha believe the big fish could all too easily get off the hook in Kenya, and they pin their hopes on the ICC.
Locked in a vault there is an envelope containing a list of the key suspects — the result of a commission of enquiry into the post-election violence.
Although the list has been kept a secret it is widely believed to include powerful businessmen and cabinet ministers.
“In matters of justice when the offence has been committed you must face the music, you must dance to it
— whoever you are,” Kenya’s Justice Minister, Mutula Kilonzo, told me before admitting that he believed some of his fellow ministers were themselves running away from justice.
Mr. Kilonzo argued that referring the case to the ICC would have been an admission that Kenya was a failed state and so he had wanted to convince his cabinet colleagues to set up a local tribunal with international judges sitting on it.
Cabinet rejected the idea and instead chose the local courts in which the Kenyan public has so little faith.
Back in Kiambaa village Joseph Githuku struggles on his own to bring up his surviving children. He sets off for work with a drum full of anti-mosquito spray strapped to his back. He is helping his neighbours from the rival Kalenjin tribe in the fight against malaria and seems determined to build bridges.
“We are trying to show them how to live together to make peace between the Kikuyus and the Kalenjins,” said Joseph.
When I suggested that he was a peacemaker, Joseph replied with a smile and a laugh: “I’m a peacemaker with a certificate.”
Kenya needs more peacemakers like Joseph. The country has not healed.
Unless some people face justice for last year’s horrific events, the fear is the violence could all too easily erupt again. — © BBC News/Distributed by the New York Times Syndicate
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THE HINDU
NEWS ANALYSIS
WHY PEOPLE LOVE A GOOD HEIST
THE SHEER GUTS OF THE £40M LONDON JEWEL ROBBERS INSPIRES ADMIRATION, HOWEVER MISPLACED.
ERWIN JAMES
It is tempting to admire the perpetrators of London’s latest jewel robbery from high-end London jewellers Graff, the £40m super-heist captured on video by a bystander. Like the U.K.’s £53m Securitas raid and the £26m Brinks Matt bullion raid before it, the Graff affair harks back to an earlier time, when audacity and sheer nerve were the key qualities necessary for those aspiring to acquire rapid criminal wealth.
Some old-timers in criminal circles still look back through rose-tinted glasses to the “golden age” of armed robbery — the 70s and early 80s — when blaggers, as armed robbers were known, were king, and numerous firms operated with what seemed like military precision.
Sometimes wearing disguises, or just plain boilersuits, they would storm banks and hijack cash-in-transit wagons. Working mainly in and around London, they netted hundreds of thousands in used notes — and occasionally the odd million or three. But the stakes were high — sentences were draconian for those caught, often after being “grassed up” by colleagues who had turned “supergrass” — and got even higher when robbers began regularly to be shot by SO19, the specialist police firearms unit.
In the 90s, more sophisticated players emerged, who realised there was less risk and bigger cash returns to be had in top-end drug dealing — and shrewd investment of the proceeds. Many former bank and money-van robbers, usually the more intelligent, got stuck into this new way of “grafting.” It brought an end to the mask-and-shotgun era — and introduced the concept of large-scale, U.S.-style organised crime to the U.K. for the first time.
Shady underworld shenanigans, largely hidden from view and steeped in intrigue, are far less understandable to the man in the street who is struggling to pay the bills — and therefore far less acceptable. The armed robbers of yore were up front and in your face. It may be cowardly, in one sense, to terrorise security guards and cash workers, but it takes some courage, too, to go up against society in such a flagrant manner. A quick vault over the counter waving a gun and shouting, “Fill the bag!” may appeal to even the most law-abiding citizen in desperate financial straits (so long as nobody gets hurt). Few would consider carrying out such a crime, however. Not just because it is wrong, but also because they probably would not have the bottle. Hence the vicarious satisfaction from the actions of those such as the Graff bandits.
Despite the obvious terror such events inflict on the innocent — in this case, a Graff employee was taken
out of the shop at gunpoint and passersby were panicked by shots fired into the ground — the fact is
armed robbery still has the power to inspire admiration, however misplaced. The images of the sharp-suited Graff raiders walking purposefully into the shop make for compelling viewing. Like Johnny Depp’s Dillinger strolling into the First National Bank in the recent gangster epic Public Enemies, they walk past the guard, cool as you like, acting as if they own the place. Away from the camera, the plunder begins. With mesmerising swiftness they scoop up the booty — a record haul including watches, rings, brooches and necklaces worth up to £1m each — and in less than three minutes they are gone, leaving behind just a small cloud of gun smoke and a whiff of cordite. (Dillinger, as played by Depp, boasted that he could rob a bank in, “About a minute . . . 40 seconds . . . flat.” A fully fledged public hero, he was shot dead in a police ambush.)
The trouble is that the majority of the perpetrators in the most spectacular heists are unprepared for the scale of the booty they find. Disposing of tens of millions of pounds Sterling in gold, cash or jewellery is a complicated business. As in most high-profile cases, those responsible for the Brinks Matt robbery and the Securitas raid were soon captured and received decades behind bars for their efforts. Odds on it will be the same in the Graff case. Nothing about that to be admired. — © Guardian Newspapers Limited, 2009
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THE HINDU
NEWS ANALYSIS
THE SISTER WHO INSPIRED EUNICE KENNEDY SHRIVER
EUNICE KENNEDY SHRIVER, WHO DIED ON TUESDAY, SPENT HER LIFE CHAMPIONING THE RIGHTS OF PEOPLE WITH MENTAL DISABILITIES. THIS IS THE TRAGIC STORY OF THE PERSON WHO INSPIRED HER, HER SISTER ROSEMARY.
JON HENLEY
The death this week of Eunice Kennedy Shriver, who fought most of her life for people with mental disabilities, has focused attention once more on perhaps the least-known of all Joe Kennedy Sr’s children: Rosemary, confined to an institution at the age of 23 after an operation that went disastrously wrong. Eunice told the world of her sister’s condition in 1962 in a moving magazine article that is now widely seen as a turning point in the way society treats the developmentally disabled. It was essentially because of Rosemary, many believe, that Eunice founded the Special Olympics.
But Eunice makes no mention in her article of the operation Rosemary underwent in the autumn of 1941, referring to her sister throughout as “retarded” and insisting that she has now “found peace.” In fact, it now seems likely that Rosemary was suffering from deep depression in the runup to the operation. In any event, it was to cure this condition that she underwent a prefrontal lobotomy — a procedure whose results were so disastrous that she spent the rest of her life in a care home in Wisconsin. Famously ambitious for his clan, Joe Kennedy refused to tolerate any sign of weakness; he would subsequently tell journalists that his daughter taught retarded children. Later, the family described Rosemary as “mentally retarded” or “handicapped,” which was apparently less embarrassing than “mentally ill” (and far less embarrassing than “victim of a failed lobotomy”).
Rosemary Kennedy was born in 1918, the third child of Joe and Rose Kennedy. She was always seen as slower than her siblings, but was sweetly good-natured and in her teens could write perfectly correct letters, keep a diary, and do arithmetic. According to Ronald Kessler, author of The Sins of the Father: Joseph P. Kennedy and the Dynasty He Founded, at the age of nine Rosemary could compute 428x32=13,696, meaning her IQ was well above the 75 usually used as the threshold for defining mental retardation in schoolchildren. When Joe was ambassador to London, she was presented to King George VI and Queen Elizabeth.
Soon after the family’s return to America, however, Rosemary became increasingly assertive, and subject to violent mood swings. Her parents gave permission for a new, cutting-edge surgical procedure aimed at calming such behaviour, and then being pioneered in the U.S. by Dr. Walter Freeman. The first lobotomies — a procedure involving drilling holes in the skull to remove of part of the brain’s frontal lobes or sever neural fibres connecting the frontal lobes to the part of the brain that govern emotional response — had been performed by a Portuguese neurologist, Antonio Moniz, in 1935; he won the 1949 Nobel prize for it.
The procedure was seen by some as the solution to a wide range of mental disorders, ranging from depression to schizophrenia and quite mild retardation. Some saw it as a way of dealing with misfits such as communists, gay people and disobedient children. Freeman, who went on to perform between 3,500 and 5,000 of the 50,000 or so lobotomies carried out in America until the early 1960s, used an icepick and rubber mallet to go through the top of the eye socket. It took 10 minutes; he eventually was doing it in a travelling van, his lobotomobile, and allegedly even in hotel rooms. He called the procedure “soul surgery,” and claimed it relieved suffering — which, in some cases, it undoubtedly did.
Not for Rosemary Kennedy, though. Freeman and a colleague, James Watts, operated on her before they developed the eye-socket technique. “We went in through the top of the head,” Watts told Kessler. “I think she was awake. She had a mild tranquilliser.” As Watts cut down into the brain tissue with an instrument “like a butter knife,” Kessler quotes Watts as saying, Freeman asked her to recite the Lord’s Prayer, or count backwards: “We made an estimate on how far to cut based on how she responded. He talked to her. He would say, that’s enough.” It was immediately plain the operation was a disaster: it stopped Rosemary’s violent behaviour but left her with the mental capacity of a two-year-old; incontinent and unable to speak intelligibly.
Kessler argues that what followed was one of the great cover-ups in medical history: no one in the family referred willingly to Rosemary; Joe made donations to philanthropic causes for the developmentally disabled; Eunice founded the Special Olympics. Today, the lobotomy has largely been superseded by antipsychotic drugs, and is widely seen as barbaric. But it in a dozen or so countries, including the U.S. and Britain, the procedure — infinitely refined, and now called NMD, or neurosurgery for mental disorder — remains a treatment of last resort for persistent severe depression, anxiety and obsessive-compulsive disorder.
Two hospitals in Britain, in Cardiff and Dundee, have carried out up to 10 operations a year over the past decade or so. In 2006, a neurosurgeon at Cardiff described the practice as “not a panacea,” but added that in patients for whom all other treatment had failed, if it works well, “it transforms their lives.” — © Guardian Newspapers Limited, 2009
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THE HINDU
NEWS ANALYSIS
WHITE HOUSE RETREATS ON BANK PAY CURBS
DESPITE THUNDERING RHETORIC FROM PRESIDENT BARACK OBAMA ABOUT THE “SHAMEFUL” AND “OUTRAGEOUS” SIZE OF WALL STREET BONUSES, THE WHITE HOUSE HAS LARGELY BACKED DOWN FROM IMPOSING TOUGH RESTRICTIONS ON PAY IN THE FINANCIAL INDUSTRY.
ANDREW CLARK
New York’s Attorney-General, Andrew Cuomo, recently reported that America’s nine biggest banks handed out $32.6bn in bonuses last year despite running up aggregate losses of $81bn. But after early threats to cap pay at $500,000 at banks in receipt of state aid, the U.S. Treasury Secretary, Timothy Geithner, has been an influential voice in the administration urging a more laissez-faire approach.
Senior bankers have lobbied hard to keep their golden pay cheques, arguing that restrictions would put the U.S. at risk of a flight of talent to financial centres in Europe or elsewhere in the world. Giving evidence to lawmakers on Capitol Hill in February, Morgan Stanley’s chief executive, John Mack, said the mere threat of curbs for U.S. firms had already led to European banks poaching his mid-level investment bankers: “Some of the European banks have already gone out and put packages and multi-year guarantees in front of them.” His counterpart at Bank of America, Ken Lewis, said: “It is okay to do the things that are being talked about at the very top, but if you start to go too low in the organisation, you will run off key talent.”
A few modest measures are under way. The Obama administration is supporting a bill in Congress which will introduce British-style “say on pay” votes at annual meetings, giving shareholders a chance to approve or disapprove of boardroom remuneration arrangements. — © Guardian Newspapers Limited, 2009
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THE ASIAN AGE
EDITORIAL
A CODE TO MAKE LIFE LESS TAXING
The proposed new direct tax code promises to usher in a hassle-free tax era, and as both finance minister Pranab Mukherjee and his predecessor Palaniappan Chidambaram (considered the architect of the code) pointed out, the idea is to make tax filing simple, transparent and uncomplicated, while reducing the plethora of exemptions. The language is simple, so any individual should be able to file his annual return without having to seek the help of a chartered accountant. Hopefully, one of the best things that this new code will do is to cut down and eliminate litigation. Today billions of rupees in revenue are held up due to pending court cases. As Mr Mukherjee noted, the existing system is a "feast for lawyers". The new one does away with hackneyed landmine-like phrases such as "notwithstanding this and notwithstanding that." These only opened the lid of Pandora’s box, not to mention the avenues for palm-greasing. Every section is dependent on another, and yet another... There is not a section that is independent, and often the references are contradictory. If one tried to do the tax filing on one’s own, one would be going back and forth the tax handbook without getting anywhere.
The new code is a boon for almost everybody, from the individual taxpayer — women, senior citizens, entrepreneurs, investors — to corporate bodies. In fact, the Indian corporate sector was always taxed at rates lower than their counterparts in Britain and the United States — at 30 per cent in contrast to 35 and 40 per cent in the US and Britain respectively. Now the tax is being brought down to 25 per cent. What’s more, cesses and surcharges will be done away with. The new code will give a fillip to investment and to entrepreneurs as incentives will be linked to investment and not to profits. The tax rates in various slabs for an individual will also be lower than, say, Hong Kong. For those earning incomes between Rs 1.6 lakh (the new threshold) to Rs 10 lakhs, the tax rate will be 10 per cent, against the 15 per cent threshold rate in Hong Kong. Of course, "income" will now include the value of perquisites, gifts, profits in lieu of salary and capital gains. Income from farming will, however, continue to remain exempt. This leaves a huge gaping hole because today even a filmstar is able to show his occupation as a "farmer".
Equity is one of the underlying principles behind the new code. While modest-income-earning Indians have been given many sops, the rich have been taxed more, but even this has been tempered as the incidence of tax has been lowered. For instance, the wealth tax threshold has been raised to Rs 50 crores and taxed at just 0.25 per cent. There are some murmurs already over the fact that shares are included as assets of the wealth tax payer. The distinction between the long-term capital gains and short-term has been done away with, and the securities transaction tax, which was the bugbear of the stock market, has been abolished. One measure that isn’t likely to go down too well is the EET (exempt-exempt-tax). This means, for instance, that when you withdraw your provident fund, you will have to pay tax on it.
The new code is expected to come into effect from April 1, 2011, and a bill is likely to be introduced in the coming Winter Session of Parliament. Till then, the draft of the new code has been put up on the finance ministry’s official website for debate and suggestions. One is sure there will be a rich harvest of both. But the larger picture is that the bold and revolutionary new code will unshackle the individual from the clutches of chartered accountants and lawyers. At least one hopes so.
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THE ASIAN AGE
OP-ED
THE ‘IFS’ OF PARTITION
NITISH SENGUPTA
With India getting ready to celebrate its 62nd Independence Day, this is an appropriate time to look at the momentous events of the years immediately before 1947 and to analyse whether things could have taken a different course. August 15, 1947, was a day of both triumph and tragedy. Independence came at the cost of Partition. But could we have had an Independent and an undivided India?
The point to emphasise is that the Muslim League adopted the Pakistan Resolution in 1940, seven years before 1947, and this became a serious issue only during the two years preceding 1947. If the British rulers had agreed to Home Rule after World War I or in the ’20s or ’30s, there may have been no Partition.
During World War I, the Congress and the Muslim League held their respective sessions at the same place and adopted identical resolutions. Both had common members, including Muhammad Ali Jinnah, the founder of Pakistan. The Non-Cooperation Movement and the Khilafat Movement also shared a common track. Paradoxically, Jinnah opposed both. In the Non-Cooperation Movement, like Rabindranath Tagore and Ashutosh Mukerjee, he opposed Mahatma Gandhi’s call to students to abandon universities, colleges and schools. He also opposed the Khilafat Movement because it was obscurantist.
Even as late as the Second Round Table Conference of 1930, Jinnah had described himself as a "nationalist Muslim". But, interestingly, Jinnah was never offered the Congress presidentship despite his long years of association with the Congress. This position was, instead, offered to proclaimed communalists, the Ali brothers.
Partition could have been avoided if the Congress, after the 1937 provincial Assembly elections in Uttar Pradesh, did not dump the Muslim League with which it had jointly fought the elections. The Muslim League screamed breach of faith and went ahead to appoint a committee, headed by the Nawab of Pirpur, to report on the atrocities committed on Muslims in the Congress-ruled provinces. The tendentious Pirpur Report and the resultant agitation claiming that this was a foretaste for Muslims in Independent India accentuated the bitterness.
In Bengal, the Krishak Praja Party of A.K. Fazlul Haque (40 in a House of 250 seats) offered coalition to the Congress (with 59 seats). This offer was spurned on the ground that the Congress would not form a government unless it had complete majority. Fazlul Haque then approached the Muslim League (with 39 seats), which accepted the offer. Within a short time, Haque joined the Muslim League (ML) and moved the Pakistan Resolution in the ML’s Lahore Session, 1940.
Before that "Pakistan" was a faint cry. If the Congress had played its cards well, going along with the Muslim League in Uttar Pradesh and with Haque’s party in Bengal, history would have been different.
It is not known to many that even after Suhrawardy — once a lieutenant of Deshbandhu Chittaranjan Das — led the ML to victory in the 1946 elections, his first thoughts were to enter into a coalition with the Congress. But this proposal was spurned.
These elections proved that 95 per cent of the Muslims of India considered Jinnah as their leader. And yet, instead of allowing Jinnah to nominate all the Muslim members in the interim Cabinet in Delhi, the Congress insisted on nominating the Muslim Congress leaders. Jinnah took this as a challenge and nominated J.N. Mondal as the Muslim League nominee only to prove that the Congress also did not represent scheduled caste Hindus.
The "Pakistan" slogan was a bargaining counter which Jinnah never felt he would achieve. He eventually did achieve it because the forces of hatred and violence unleashed by his actions and utterances, and of several other leaders, went far beyond the original intention and got the better of reason.
Historians will tell you that it was an unfortunate casual comment by Jawaharlal Nehru, in the course of a press conference in Bombay in June 1946, that perhaps finally convinced Jinnah of his call for Partition.
Both the Congress and the Muslim League had accepted the three-tier formula of the Cabinet Mission of 1946. There was to be a Central Government controlling foreign affairs, defence, currency and a few other subjects and three regional governments: the first, over and above the Muslim-majority provinces of the northeast; the second, over Bengal, Assam (including present-day Bangladesh); and the third, over all other provinces with Hindu majority. Maulana Azad’s term was over and Nehru had just taken over as the president of the Congress. In the habit of thinking aloud, he suddenly announced at a press conference that notwithstanding Congress’ acceptance of the three-tier formula, the Centre would reserve the right to intervene in the affairs of the regional government whenever it felt necessary. Jinnah took this as a breach of faith, a treachery. How could the Muslim-majority regions trust the bona fides of the Congress if, even before Independence, the Congress leadership was going back on its commitment to the three-tier formula? Jinnah had his own problems with the extremist Muslims and was seeking an opportunity to wriggle out of his commitment to the Cabinet Mission formula. Nehru’s stray comment gave him this opportunity.
The Muslim League called upon Muslims to observe August 16, 1946 as Direct Action Day, and the the rest of the story is too well known to bear repetition.
Originally, transfer of power was to take place in June 1948. Lord Mountbatten came to the stage in March 1947 and announced that the British would withdraw on August 15, 1947, i.e. in five months’ time.
The resultant apprehension felt by the Muslims in East Punjab and the Hindus and Sikhs in West Punjab led to the Punjab holocaust that hardened attitudes. Had the transfer of power proceeded according to the original schedule, there would have been a lot more discussion in a sober atmosphere. The opposing parties might have been able to preserve some links. But Lord Mountbatten’s military commander’s haste to accomplish a task (to leave India) foreclosed that possibility.
Nitish Sengupta, an academic and an author, is a former MP and aformer secretary to the Government of India
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THE ASIAN AGE
OP-ED
CHECKMATE, RUSSIA
S. NIHAL SINGH
As Georgia and the breakaway region of South Ossetia last week observed the first anniversary of the Georgian-Russian little war a year ago in contrasting ways, the bitter exchanges between Moscow and Tbilisi make one point crystal clear. Georgia, together with Ukraine, is the new faultline in Russia’s relations with the West, in particular the United States. If Berlin was the trip wire in the days of the Cold War, these countries serve the same purpose today.
Not long ago, Georgia’s "rose revolution" in 2003, followed by Ukraine’s "orange revolution" a year later and Kyrgyzstan’s "tulip revolution" in 2005, were heady days for Western strategists hoping to bring these former Soviet states into their fold. The Ukrainian and Georgian governments’ ambition to belong to the North Atlantic Treaty Organisation (Nato). Nato was vociferously supported by Washington over the protests of Moscow.
South Ossetia and the Black Sea region of Abkhazia had broken away from Georgia, which gained independence with the break-up of the Soviet Union in the early 90s. But the telegenic and impetuous President of Georgia, Mikheil Saakashvili, bit off more than he could chew by getting his forces to attack South Ossetia’s capital on August 7 last year provoking a devastating Russian response. It was, in fact, to promote his macho image that he thought he could reintegrate the region.
The war lasted five days killing more than 500 people and displacing many. Indeed, Mr Saakashvili’s gamble misfired badly because he had misread the signs of the times and Washington’s freedom of action. For one thing, he had forgotten that the United States had encouraged the breakaway Yugoslav province of Kosovo to declare independence, ignoring dire warnings from Moscow that changing European borders by force — flouting the new holy grail of the post-war world — was playing with fire.
Russia, somewhat unwisely, sought to drive the point home by recognising the two breakaway regions of Georgia and South Ossetia as independent states, recognised thus far only by Moscow and Nicaragua. The measure was as much to tell the West that two could play the game of changing borders as to claim Russia’s "privileged interest" in its "near abroad", the former Soviet space. US vice-president Joe Biden gave his riposte during his visit to Tbilisi, "We don’t recognise, and I want to reiterate this, any sphere of influence".
Ukraine and Georgia have become the touchstone of Russia’s relations with the West because Moscow has drawn a red line as far as their entry into Nato is concerned, despite seeing Washington demolish previous red lines by taking in the Baltic states and Poland. After the debacle of the break-up of the Soviet Union, eight years of Vladimir Putin presidency and high energy prices have made Russia more confident and capable of fighting for its interests. The European heavyweights are more conscious of the stakes involved than Washington and successfully stalled the two countries’ Nato membership.
The American misfortune is that both Ukraine and Georgia are involved in internal power struggles, are divided over their future and are no paragons of democracy. Ukraine’s President Viktor Yushchenko is involved in a bitter battle for power with his Prime Minister, the attractive Yulia Tymoshenko with her trademark peasant braid, while the nation is almost equally divided between a Russian-inclined East and a pro-US West.
It is a marvel that Mr Saakashvili remains Georgia’s President. Thousands of demonstrators had taken to the streets to seek his resignation last April. Despite American fondness for him, it is no secret that he has diligently set about closing opposition newspapers and television channels and wishes to rule his country as a little dictator.
The truth is that the colour of the so-called colour revolutions has faded and beyond the slogans of democracy and wishing to "belong to Europe", a code for joining the European Union and Nato, the two countries are undergoing painful transitions. These are defined more by personal struggles of power and the desire to receive massive Western assistance than issues of ideology. Georgia was pledged $4.5 billion after the nasty little war, of which it has received only a third.
In "resetting" relations with Russia through his own visit, US President Barack Obama was careful to send his vice-president to Ukraine and Georgia to make the point that he had not forgotten them. While Mr Biden gave his country’s support to the two countries’ aspirations leavened with mild lectures, he was careful not to suggest a time frame for their membership of Nato. Washington recognises that the Continental heavyweights remain opposed to provoking Russia by embracing Ukraine and Georgia as Nato members soon.
The problem for the West is somewhat complicated by the fact that oil and gas routes dear to the West run through Georgia and skirt South Ossetia. Energy supplies and how to reduce European dependence on Russia lie at the heart of the new political chess game being played by all sides on the European continent and Central Asia. Turkey, seen by Washington as the saviour in this battle as the hub for Central Asian gas avoiding Russian territory, has just played host to Russian Prime Minister Putin to agree to a Russian-sponsored oil and gas route.
The danger, of course, is that Ukraine and Georgia will end up being pawns in a larger game being played by Russia and the West. In any event, their internal problems give them reduced leverage in seeking gains for their countries. The division between East and West Ukraine is so sharp that, unless handled wisely, it could lead to a break-up. And if Mr Saakashvili chooses to promote his authoritarian tendencies further, he would merely embarrass his American backers although Washington is often flexible in defining democracy.
While Ukraine must await the next presidential election, Georgia faces the reality of losing the regions of South Ossetia and Abkhazia, perhaps for good. It is advantage Russia in the sense that it has acquired the valuable Abkhazian Black Sea coast for stationing its strategic forces on friendly soil. The United States has been training and arming Georgian forces but must calibrate its next moves with an eye on their impact on its relations with Russia.
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THE TRIBUNE
EDITORIAL
EXPANDING THE TAX BASE
NEED TO MAKE IT MORE SIMPLE
The proposed direct tax reforms are welcome since their over-all thrust is to cut taxes, expand the tax base, ensure better compliance and simplify the tax structure by phasing out cumbersome exemptions, which are a source of much litigation. Such an overhaul of the direct tax system has been long overdue. The major gainers will be the taxpayers in the Rs 3-10 lakh annual income bracket. The sufferers will be home loan takers currently getting tax relief. The corporate tax has been reduced from 30 to 25 per cent. However, the individual and corporate beneficiaries will have to wait for two more years as a Bill has to be passed by Parliament to make the new tax code effective from April, 2011. Why the system moves so slow is not understandable, however.
It is well known that only 3 per cent of the 1.1 billion-plus Indians pay income tax. Most of them are the salaried people, who are like sitting ducks for finance ministers. FMs in India are known for giving with the left hand and taking it away with the right. This practice continues in the new tax code. Tax-avoidance through saving instruments will stand discouraged. Provident fund withdrawals will become taxable under the principle known as the EET (exemption on contribution, exemption on its accumulation, but tax on withdrawals). Stocks and fixed deposits will become part of wealth and liable to tax.
India’s tax system is so cumbersome that it has been designed, it seems, to enrich tax lawyers. Simplification efforts by successive finance ministers have not been fruitful. One FM introduces a tax, often hurriedly, which is scrapped by him or his successor in the next budget. No one questions him about the mess he creates. After the cash withdrawal tax, the securities transaction tax is now set to go. Corporates and rich individuals find loopholes to avoid or minimise taxes and, if cornered, find refuge in litigation. Helpless FMs raise money by taxing the honest taxpayers more. The new code needs to take care of such ground realities.
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THE TRIBUNE
EDITORIAL
FUDGING AT SHOPIAN
IT’S NOW FOR CBI TO FIND THE TRUTH
The investigations in the infamous Shopian rape and murder case were conducted in such a shoddy manner that they ended up adding more confusion by the day. The onus has now fallen on the CBI, with the state government making this announcement on Wednesday. The high-profile special investigation team of the Jammu and Kashmir police had not gathered any worthwhile evidence and the investigations conducted by it were falling flat at every level. But the fatal fall came when it was discovered that samples submitted by the SIT to the Central Forensic Sciences Laboratory in New Delhi for DNA tests did not belong to the slain Aasiya and Nelofar who had been found dead near a stream in Shopian town in May 30, a day after they went missing from their orchard.
The CBI has a tickling job on hand, considering that it would have to untangle the mess created by the SIT. There is a lot of false propaganda also to be sifted through, which had been bandied about by those wanted to discredit the state government. For instance, in testimony to a local TV station, one victim’s husband claimed that her wife had called him late on the night of May 29, saying that she was being pursued by CRPF personnel. That is what led to the uproar that police or paramilitary personnel had raped and then murdered the women. Later, the husband admitted before the Justice Muzaffar Jan Commission of Inquiry that he did not receive any call and that his wife did not possess a phone.
As such, the probe will have to virtually start afresh. Gathering evidence – whatever is left of it — will take time and considerable effort. But then as Chief Justice Bharin Ghosh of the Jammu and Kashmir High Court has said, it is not an individual case but pertains to all people of the state. The truth must come out, even if it is late.
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THE TRIBUNE
DEFUNCT LOKPAL
WHY MAINTAIN THE FAÇADE?
A Lokpal is meant to be an ombudsman to which people with grievances can go even if they have a grouse against the high and mighty of the land — politicians and public servants. Indeed, the public has any number of complaints against those who govern. To that extent, the Punjab Lokpal should have been up to his neck in work. But facts are quite to the contrary. In the entire 2007, the state Lokpal received only two complaints, down from a dozen complaints received in the previous year. Even 12 is ridiculously low; two is simply laughable. So where is the catch?
The ugly truth is that the government is not serious about the institution — which to some extent makes it accountable — and discourages its functioning in every way that it can. Ever since the constitutional post came into being in 1995, it has remained mostly vacant — from December 1996 to August 1997, and then from December 1999 to December 2000 and for over three years from December 2002 to March 2006. A single advertisement is put out each year and as such many people are not even aware that such an office exists which can be approached for redress.
But to look into these scarce complaints, the whole paraphernalia has to be maintained. The Lokpal and his staff work from two offices — the Lokpal’s courtroom in the mini secretariat and an office in Sector 17. These offices require Rs 6 lakh per month to run. It is unethical to maintain this pretense only for form’s sake. If the government is not serious about an ombudsman, who can embarrass it by its independence, why maintain this façade? In the neighbouring Haryana also, the Act under which a Lokayukta has been appointed has been drafted in such a way that it makes him more or less powerless. Essentially, the issue is who does a citizen approach when bureaucrats and politicians in power become unresponsive and indifferent.
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THE TRIBUNE
OP-ED
TRAINING DIPLOMATS
THE IFS HAS LOST THE SHINE
BY SURENDRA KUMAR
The training of the Indian Foreign Service officers is an issue which agitates many serving and retired Indian diplomats. But it can’t be seen in isolation; it has to be looked from the angle of recruitment, role of the Foreign Service Institute, adequate administrative and financial decision-making autonomy and the need for compressed and intense training with a maximum exposure to diverse viewpoints interspersed with on the desk experience.
For years the Foreign Service Institute has been treated like a parking lot and a dumping ground for officers who couldn’t be accommodated elsewhere. They were always looking for opportunities to get back to the South Block and had no interest in training the budding diplomats.
The Dean, even when he was the second seniormost officer in the MEA after the Foreign Secretary, was not a member of the FSB or DPC who could be of any assistance in terms of cushy foreign postings or promotions. He wasn’t associated with major decisions of the MEA and was seldom invited to receptions/dinners for the visiting dignitaries.
The professional course for foreign diplomats run by the Foreign Service Institute has been a successful tool of training diplomacy and won admiration from several friendly countries. Several Presidents and PMs have requested our PM from time to time for organising special courses for their diplomats.
Unlike Rio Bronco Institute in Brazil and its counterparts in Mexico where the Diplomatic Institute also recruits diplomats of tomorrow, the FSI has no role or say in the recruitment. Instead it is expected to train whosoever is given to train as the fresh recruit of the IFS.
Over the years the background of the young men and women joining the IFS has undergone a sea change. At one time, engineers, doctors and agriculture scientists couldn’t become diplomats. Today they can. In the past you have to have a good command on the English language,but now candidates can write some exams papers in their mother tongue and, if they score well, can land up in the Indian Foreign Service. This raises the problem of articulation.
In the last few batches roughly 80 per cent of the IFS officers hadn’t given IFS as their first choice. Every batch has around 40 per cent officers from medical, engineering and agriculture background! Some have done even MBA. What draws them to the IFS? The lost shine of the IFS!
In an increasingly consumerist society even the young, intelligent and educated people crave for a high lifestyle, comforts and money. Some relish a sense of power and authority. The IFS is not for those who look for money, power and authority. Foreign travel is no more an attraction.
Barring some 25 capitals in the world, the living standards are not much better in foreign postings compared to India. The opening of the Indian economy has also opened new career openings. All these factors have eroded the earlier glamour and halo of the IFS and led to a drift to other careers.
The argument that intellectual standards of Indian diplomats have gone down on account of affirmative action of the government is invalid. Ability to transform into a consummate diplomat is not anyone’s monopoly, so many gold medalists, university toppers have come out as croppers as diplomats as they couldn’t adapt to the requirements of the service and never learnt the craft of diplomacy.
Based on my own experience as the Dean and keeping in mind what I learnt from my interaction with several diplomatic institutes, I feel a good diplomat should have or acquire or inculcate the following attributes:
(a) A knack for making friends and curiosity to know about different religions, races, peoples, political and economic systems, social values, cultures, thoughts, ideas, mindsets, ways of life, arts, literatures, music, dance, cuisines, dresses and everything which connects with different peoples.
(b) Adaptability: one day one might land in Washington from Tripoli or vice versa. Without quick adaptability and adjustment a diplomat is doomed. One must keep improvising in different surroundings without getting one’s output affected adversely. Innovative and imaginative ideas are the survival kits for a diplomat.
(c) Ability to articulate verbally and in writing in a logical, coherent, friendly persuasive and convincing manner.
(d) Ability to listen and appreciate others’ viewpoints.
(e) Patience in every sense (in negotiations, interaction, inter-personal dealings with foreign counterparts…)
(d) An eye for details, ability to read between the lines.
(e) Hard work, good stamina, mature and responsible negotiating skills and a pleasant demeanor are positive attributes needed in all services, including the IFS.
(f) Good reading habits to keep abreast with the fast-changing world and also be informed about one’s own country as well as the country one might happen to be in.
(f) Flair for public relations and high standards of hospitality, many foes have been turned into friends, thanks to the hospitality at the residences of Indian ambassadors.
The training includes lectures by JNU professors, retired Indian diplomats, attachment with divisions in the MEA, other ministries, trade promotion organisations, IDSA,IIM Bangalore and Army training.
To streamline training and make it more productive and focussed, I had formed the Abid Hussain Committee in 2007 which has already submitted its report to the ministry. It has made some valuable recommendations. Maybe, the MEA will implement some of them some day.
Each FS tries to keep the FSI under his/her thumb. In my view, the FSI should have a high profile and be given maximum possible functional autonomy and administrative and financial decision-making.
Shyam Saran had issued an order introducing some very positive steps to strengthen and expand the role of the FSI when he was the Foreign Secretary. He wanted it to be a training institute and also to emerge as a credible think tank with facilities for an in-house research centre. Unfortunately, his successor didn’t agree with those ideas and never implemented them.
All knowledge and wisdom doesn’t reside in South Block and JNU alone. In today’s fast-changing globalised world, multi-layered and multi-dimensional training is essential for creating a multi-tasking, multi-faceted diplomat coping with complexities of the 21st century.
Making it possible for academics, scholars, economists, successful entrepreneurs to join the diplomatic career at the mid-level is not a bad idea. But it should be to enrich the service rather than to diminish the role of career diplomats.
The writer is a formerly Dean, Foreign Service Institute.
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OP-ED
NUCLEAR THREAT FROM IRAN
BY DORE GOLD
Defying history and logic, the idea that the West should diplomatically engage with Iran still commands an important following. Despite the massive waves of demonstrators across Iran who charged their government with rigging the June 12 presidential elections, there still are officials in the Obama administration who seem to believe that engagement with the Islamic Republic should “remain on the table,” as columnist Roger Cohen put it in The New York Times Magazine this week.
Javier Solana, the European Union foreign policy chief, agrees: “We would like very much that soon we will have the possibility to restart multilateral talks with Iran on the important nuclear issues,” he said on June 24.
But they’re wrong, just as they have been from the start. Indeed, there are plenty of reasons to be skeptical about sticking to engagement. The main one is that it has already been tried — and utterly failed. Iran has consistently used the West’s willingness to engage as a delaying tactic, a smoke screen behind which Iran’s nuclear program has continued undeterred and, in many cases, undetected.
Back in 2005, Hassan Rowhani, the former chief nuclear negotiator of Iran during the reformist presidency of Mohammad Khatami, made a stunning confession in an internal briefing in Tehran, just as he was leaving his post. He explained that in the period during which he sat across from European negotiators discussing Iran’s uranium enrichment ambitions, Iran quietly managed to complete the critical second stage of uranium fuel production: its uranium conversion plant in Isfahan. He boasted that the day Iran started its negotiations in 2003 “there was no such thing as the Isfahan project.” Now, he said, it was complete.
Rowhani’s revelation showed clearly how Iran exploited the West’s engagement. Moreover, the Iranians violated their 2004 agreement with the EU and brilliantly dragged out further negotiations that followed. Equally important, they delayed Western punitive moves against them, keeping the U.N. Security Council at bay for years.
Mohammed Javad Larijani, a former deputy foreign minister and brother to Rowhani’s successor as chief negotiator, admitted the logic of diplomatic engagement from the Iranian side: “Diplomacy must be used to lessen pressure on Iran for its nuclear program.”
Advocates of engagement with Iran often use an unfair argument to advance their case: Their cause, they claim, is opposed mainly by Israel, which is pushing its own narrow agenda. True, Israel is a target of Iran, whose leadership calls for the “elimination of Israel from the region” — to quote the supreme leader, Ayatollah Ali Khamenei, who said this years before President Mahmoud Ahmadinejad. So that there would be no confusion about Iranian intent, Khamenei’s words were hung from a Shahab 3 missile in a military parade in 2003.
But Israel is not Iran’s only target. If that were the case, the Iranians would have had no reason to develop missiles that fly well past Israeli territory to Central Europe and beyond.
Arab officials don’t need prompting from Israel. Their common fear is that a nuclear Iran will embolden groups such as Hezbollah, which will feel it enjoys a nuclear sponsor protecting it from any retaliatory action. Unlike their Western counterparts, these Arab officials are savvy enough to distinguish between status quo states that just want to assure the security of their borders and ideologically driven revolutionary powers like Iran with expansive aims.
An Iran with hegemonistic aspirations will not be talked out of acquiring nuclear weapons through a new Western incentives package. Only the most severe economic measures aimed at Iran’s dependence on imported gasoline, backed with the threat of Western military power, might pull the Iranians back at the last minute. Until now, U.N. sanctions on Iran have been too weak to have any real effect.
It is critical to understand that an Iran that crosses the nuclear threshold after repeated warnings that doing so is “unacceptable” would be even less likely to be deterred in the future. It would provide global terrorism the kind of protective umbrella that al-Qaida never had back on 9/11, including Hezbollah cells located at present in Central Europe and Latin America. Some Arab states, like Qatar, have already been largely “Finlandized,” to borrow a Cold War term for states that make their foreign policy subservient to the wishes of a powerful neighbor. But as Iran’s nuclear program continues unopposed, more Arab states will follow, changing the Middle East entirely.
Halting the Iranian nuclear program is a global imperative; acquiescing to a nuclear Iran in the hope that it will pragmatically understand the limits of its own power would be a colossal mistake.
By arrangement with LA Times-Washington Post
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THE TRIBUNE
A QUARTER-LIFE CRISIS AFTER GRADUATION
BY LINDSAY MINNEMA
Armed with a degree in political science from Northeastern University, Heidi Buchanan came to Washington in June 2006 to find her dream job in public policy. What she found instead was that life after college wasn’t all she had hoped it would be.
There was the job she didn’t like, the new city in which she had no friends and the nostalgia she felt for the happiness of her college years. Put them all together, and what Buchanan had was a severe case of post-graduation blues.
Call it a quarter-life crisis, the 20-something version of a midlife crisis, in which sufferers struggle to establish their sense of identity and purpose. It’s not a new phenomenon, but today’s young people seem to experience it more acutely than the young people who came before them. And with the tumultuous economy and job market meltdown of the past year, recent grads are getting a double helping of quarter-life anxiety.
Unlike young adults of generations past, many of whom were married and settled in their careers by their mid-20s, today’s college grads experience a longer period of transition to the settled-down stage, said Jeffrey Jensen Arnett, a research professor of psychology at Clark University in Massachusetts and author of “Emerging Adulthood: The Winding Road From Late Teens Through the Twenties.”
“It is a unique time of life when people are not entirely dependent on their parents ... but they don’t have a stable life structure with marriage and parenthood and stable work,” Arnett said. “They go in a lot of directions, change jobs a lot, change love partners. They go through a long period of figuring out who they are and how they fit in the world.”
Arnett believes this transition period can be positive, with its opportunities for growth and adventure. But for some people, the turmoil brings worry, fears of failure or of being trapped by responsibilities, or depression.
In the case of Buchanan, who is now 26, her job made her unhappy because she didn’t know what she really wanted out of her career. Then in March this year, the bad economy made her decision for her: She was laid off. Suddenly she found herself having to re-examine her life.
“Maybe I want a career totally out of the ordinary — say like being a flight attendant,” she wrote on her blog, Life in Pink. “I’d love to travel and meet new people. But to be honest? I just ... don’t know. At all.”
Lauren Kellar, a counselor at the Center for Well Being in Falls Church, Va., has seen many of her quarter-life clients laid off or facing pay cuts. Some have to ask their parents for help with paying bills, and some even have to move back home — a big blow to the self-esteem, she said.
In a recent online survey by CollegeGrad.com, a job search Web site, 68.9 percent of the more than 2,000 respondents said they would move back with their parents after graduating from college and stay there until they found a job. That is up from 64.6 percent in 2008 and 62.6 percent in 2007.
Even those with jobs sometimes feel stuck doing something they don’t enjoy because they fear they have
no other options. “They want to go back to school for a master’s or MBA, and they’re not doing it because they’re already in debt,” Kellar said.
“Kids are changing their dreams,” said Leslie Seppinni, a marriage and family therapist and doctor of clinical psychology in Beverly Hills, Calif. They are “going for things more pragmatic in terms of earning a living and getting a job later. Kids are now thinking about what is the safe thing to do to get a paycheck.”
But the anxiety over the future and the disappointment in not landing passion-fulfilling jobs makes the quarter-life depression worse. At the same time, Seppinni said, technology is breeding a generation of online sulkers. No longer limited to sharing their woes at the family dinner table or while hanging out with friends, quarter-lifers have countless opportunities to brood in blogs and on Twitter and Facebook — anytime, anywhere. And finding fellow victims to commiserate with is never more than a click away.
by arrangement with la times-washington post
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THE ASSAM TRIBUNE
EDITORIAl
DEPLORABLE VERDICT
Dictatorial regimes have often attempted to disguise their intentions in childish ways that may seem laughable had the end results not been so insidious. The verdict issued after the ‘trial’ of Myanmar’s pro-democracy leader Aung San Suu Kyi falls into this category. It may be recalled that Suu Kyi had been arrested in May this year and put on trial under provisions of “Law Safeguarding the State from the Dangers of Subversive Elements” for giving shelter to an unwelcome guest. An American, John William Yettaw, had swum across the Inya Lake in order to reach her house and spent a couple of days there, in spite of its occupants pleading with him to leave. The episode had given the junta an excuse for arresting Suu Kyi just two weeks before her last term of six years under house arrest was set to expire. The trial itself had been a travesty of justice and a ‘guilty’ verdict was always on the cards. But the bleak comedy lies in the fact that the junta has tried to showcase the blatantly unlawful and deplorable verdict as an act of mercy! The original verdict had been three years of hard labour, but the chief of the military junta, General Than Shwe, commuted her ‘punishment’ to 18 more months of house arrest, as a gesture of ‘mercy’ towards a frail and ailing opponent!
The period of 18 months is significant because it will effectively keep Suu Kyi away from direct involvement in the General Elections scheduled to be held next year. For the ruling military the experience of the1990 elections, which were comprehensively won by Suu Kyi’s National League for Democracy, remains too fresh in memory to risk her release. The scheduled elections themselves are in deference to international opinion, in particular that of China, and an endeavour to exhibit to the world the democratic pretensions of Myanmar’s rulers. These pretensions had already been exposed by the stage-managed constitutional referendum held last year and the world will not be taken in. However, so far the punitive measures imposed upon Myanmar appear to have had little impact on the junta. That despite international condemnation Suu Kyi has had to spend 14 of the last 20 years under house-arrest testifies to the impotence of bodies like the UN. The harsh reality is that if genuine democracy is to return to Myanmar, it would not be through international pressure, but the will of the people of Myanmar themselves. The junta well knows that Suu Kyi is an impediment in their attempt to perpetuate a controlled form of ‘democracy’ and the values she embodies the biggest threat to its survival. In shutting her away they would be insulating the people of Myanmar against their greatest motivator, thereby enabling them to wield total control over the elections.
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THE ASSAM TRIBUNE
EDITORIAl
STATE’S INDUSTRIALIZATION
With the prospect of almost whole of South-East Asia being covered under free trade agreement (FTA) after India has signed up the same with BIMSTEC nations comprising Bangladesh, India, Sri Lanka, Thailand, Myanmar, Nepal and Bhutan togetherwith the impending finalisation of FTA with ASEAN (Association of South-East Asian Nations) ten countries and also South Korea, the possibility of trade and industrialisation of North Eastern region, the gate-way to India, has certainly brightened. Assam being the biggest State of the region with vast deposits of natural resources, obviously, has an added reason to be happy with its future possibility of industrialisation. Though much should not be expected of large industries coming up in this region, a fact which has already been experienced several times with the latest example of how even the special incentives of North East Industrial and Investment Promotion Policy of 2007 failed to attract big industrial projects in this part of the country, there are certainly vast possibilities of micro, small and medium industries that could be realised, provided of course, adequate incentives, government patronage, strict accountability, public-private partnership and, above all, political determination are forthcoming. There is still another aspect of preference for the small scale sector to large scale industries in that the region is heavily over-burdened with unemployment and the small scale sector is employment-generating because its units are labour-intensive industries.
It is heartening that this aspect has been brought to the fore by the new industrial policy of Assam, announced on July 15, 2009. The small scale investors in the State so far faced much harassment and hurdles in securing land allotment and inordinate delay in supply of electricity and clearance from State Pollution Control Board in the way of starting their ventures. The land-bank scheme securing land allotment to intending investors alongwith hassle-free door way to industrial fuel subsidy and support to Pollution Control Board’s no objection in addition to other incentives like interest subsidy, exemptions of tax and capital expenditure, etc. promised in the new policy will certainly attract small investors and enterpreneurs to set up their ventures in the State. Some results have already started forthcoming in the areas of small and medium industries. Thus, the mega handloom and textile cluster project, the second of the kind in the country with three components of pre-loom, on-loom and post-loom sections looking after all aspects from skill formation to marketing, is all set to come up in Sivasagar. Again, a leading company of Thailand is now busy with its feasibility study near Nagaon to invest nearly $ 25 million in aquacultural sector which has a vast success-possibility and employment potential. Apart from this, a State level PSU of Assam has signed an agreement with a private firm to set up a 2 million-tonne cement plant in Assam. While a Korean company and a leading Japanese firm have shown keen interest in ginger imports from Karbi Anglong hills, an MoU is signed between Bodoland Bamboo Development Board and a Chinese international network to establish a bamboo shoot processing centre. There are many more scope for industrial ventures in various resource fields particularly in the areas of natural resources and sericulture sectors in the State.
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THE ASSAM TRIBUNE
EDITORIAl
HONOURING THE TRICOLOUR
RUPAM BARUAH
During the Freedom Struggle, our patriotic ancestors always tried to hold the honour and prestige of the National Flat high, because it symbolised the spirit of a nation that was fighting for Independence from the clutches of the British imperialism. The patriots even laid down their lives if it became necessary to do so far the honour of the Tricolour.
When the ‘Quit India’ movement started in 1942, the freedom fighters all over the country took out rallies and processions to defy the authority of the alien rulers with Tricolours in their hands. In all the patriotic programmes the National Flag was the subject of the highest esteem. Let us remember the martyrdom of young Kanaklata Barua. She was at the forefront of a procession that went ahead to hoist the Tricolour at the Gohpur police station. The British police tried to stop the people and asked them to go back. The police even tried to dishonour the flag. But the young girl unflinchingly went forward holding the Tricolour high and chanting ‘Vandemataram’. The police fired and killed her instantly. So Kanaklata gave her life for keeping the honour of the Tricolour. But the British could not kill her great patriotic spirit. Young Mukunda Kakati, the next man to her in the procession took the flag from her and stepped forward. He was also shot and killed. But the process of keeping the flag high continued with more sacrifices, and at last the sole aim of the procession succeeded when another young patriot Ramapati Rajkhowa hoisted the Tricolour atop the police station.
Martyr Bhogeswari Phukanmani also gave her life for the same cause. She was also a martyr of the ‘Quit India’ movement during 1942. In Bahrampur, she marched at the forefront of a procession along with her grand daughter Rantamala. Both were holding Tricolours in their hands. A British sergeant snatched the flag from Ratnamala and threw it away. Bhogeswari Phukanani was so furious that she struck the sergeant with the pole of her flag. The sergeant shot at her. Vandemataram-shouted the old lady and while still trying to hold the Tricolour high, felt to the ground and died.
Tilak Deka was another such martyr of 1942 who sacrificed his young life to protect the honour of the National Flat. At Borpujiya, he was given the responsibility to keep eyes on the Tricolour planted by the village people. He was asked to blow a horn to alert the villagers, if he saw any British agent come to remove the flat from there. When Tilak saw a force of military police advancing to the spot, he started blowing the horn. The British sergeant forbade him to do so showing a revolver. But the brave young hero went on with his duty to alert the villagers and thus became a martyr as the sergeant shot and killed him.
These are a few examples of many such incidents throughout the country during our Freedom Struggle. People then fought shoulder to shoulder with a common goal to achieve– a united independent India. In that struggle Assam, Bengal, Bihar, Punjab, Maharastra and all others became one in spirit. So Kanaklata, Kushal Konwar or Tilak Deka’s sacrifice was not for Assam only, but for the freedom of entire India. Likewise, Khudiram, Bagha Jatin or Surya Sen did not die for Bengal alone. Bhagat Singh, Udham Singh or Chapekar brothers also did not lay down their lives for Punjab or Maharashtra alone. They all sacrificed their lives for an independent and united India of which we are the proud citizens today. Out of that united struggle for freedom against the British imperialism was born the great Indian nation of today.
On the two very special days (15 August and 26 January), related to our freedom-struggle. We hoist and salute the National Flag to pay heartfelt homage to those countless patriots and martyrs who suffered and laid down their lives for motherland’s freedom. Because of their sacrifice we live today a free people. So on these two special days an indebted nation remembers the heroes and martyrs of the Freedom Struggle. By hoisting the Tricolour we actually remember their immense sacrifices for the future generation. So to boycott the days related to the memory of our freedom struggle means humiliation or dishonour of the National Flag. And the humiliation of the National Flag is to disrespect those martyrs who sacrificed their all to make us an independent people.
But in Assam or in the eastern most region, presently, a bunch of anti nationals and terrorist elements are engaged in a plan to destablise national unity. These seperatists have joined hands with the foreign forces inimical to our national security. In fact these antinational elements have become mercenaries or stooges of either the anti-Indian lobby of Bangladesh or Pakistani ISI who have a longstanding gameplan to secede Brahmaputra and Barak Valleys from India. It is now a known fact that the anti-Indian fundamentalist force in Bangladesh has a grand plan of making a greater Bangladesh of which Assam would, according to their gameplan, also be a part. The conspiracy has been going on for quite some years to put the fertile Assam plain into the map of their dream project. Documents relating to this conspiracy have also been unearthed by the intelligence department. On the otherhand, since its birth Pakistan always wants India to be disintegrated and destabilised. Therefore anti-national elements of this region have become a great help for both Bangladesh and Pakistan. Some such elements get support from China also as this hostile neighbour of ours, not happy with the idea of a strong India, has some definite plans over our Himalayan areas. So Assam or this eastern region now-a-days is in a very critical situation. It has become a venue of the secessionists engaged in the making of India’s disintegration. But the patriotic and right thinking people of this region know well that India’s disintegration or peril would lead to the disaster for the Assamese people also. Those who have the proper knowledge about history and civilization of Assam admit that Assam’s safety and security lies with the integrity of the Indian nation. The saga of the great sacrifices by the martyrs in our freedom struggle has bound all the Indian people with a commom thread– a common cultural heritage, and the National Tricolour is the symbol of our common strength.
This time also on the eve of the Independence Day the armed anti-nationals have warned the unarmed people of this region to boycott August 15. But the patriotic people of Assam should defy this diktat by uniting themselves under the Tricolour. Don’t we have a moral duty and responsibility to pay tribute to our patriot forefathers? So, let us hoist the Tricolour boldly to remember and salute our great heroes and martyrs.
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THE ECONOMIC TIMES
EDITORIAL
DIRECT TAXES CODE: AN IDEA WHOSE TIME HAS COME
SUDHIR KAPADIA
The freshly unveiled direct taxes code (DTC) is an idea which was overdue and whose time has perhaps never been more appropriate. There seem to be three key objectives behind the introduction of the DTC: simplification of language, resulting in lesser litigation; a law which promotes inclusive growth and yet retains the incentives for businesses to make profits; and allow businesses to function in the free market economy but with proper regulations. This article attempts to analyse some of the key provisions of the DTC in the light of the above objectives.
Taking a leaf out of the Chinese tax code, the DTC pegs the corporate tax rate to 25% which is clearly a very attractive rate compared to prevailing rate elsewhere. This, of course, comes with the removal of profit-linked incentives. We now have investment-linked incentives in specific sectors (infrastructure, power, exploration and production of mineral oil, etc) to incentivise capital formation and to remove the incentive to shift profits from “taxable units” to “exempt units”. We also now have capital assets deployed in the businesses (e.g., plant and machinery) to be treated as business assets and any profits arising on sale of these assets to be treated as normal business income and not as capital gains.
In practical terms, a company will now be subject to the same uniform rate of 25% tax on gains from transfer of such business capital assets as against the current rate of 20% for long-term capital gains on transfer of all capital assets. The downside in these provisions is the fact that a loss arising on such a business transfer will not be allowed to be written off in one year but will be amortised like depreciation over a period of time. This provision seems to be inconsistent with the treatment of gains as business income in the year when the gains arise.
However, there is a significant dampener to this feel-good story in the form of the new basis of levy of minimum alternate tax (MAT). The MAT will now be levied at 2% of the value of gross assets in the case of all companies except in the case of banking companies (tax at 0.25% for banking companies). This shift in the MAT base from book profits to gross assets is sought to be justified on the grounds of encouraging “optimal utilisation of the assets and thereby increased efficiency”. This measure, however, seems to run counter to the objective of encouraging capital investment for productive growth. For e.g., in the case of an infrastructure company where the pay back on the investments is longer, on the one hand we have the investment-linked capital allowance reducing taxable profits significantly, on the other hand is the imposition of MAT calculated at the same base of capital investments.
To make matters worse, there is no provision for reducing liabilities incurred for acquisition of assets, i.e., MAT is to be calculated on value of gross assets without corresponding reduction in borrowings incurred. This could result in a kind of “punitive tax” on capital-intensive companies including public sector companies as well as chronically sick companies making consistent losses.
A very significant shift is sought to be made in the area of capital gains taxation. Since 1991, capital gains on sale of shares and securities has always been accorded preferential tax treatment to encourage investment in equity market. The DTC now proposes to remove the distinction between short-term and long-term capital gains on all classes of assets, thereby taxing any gains on transfer of capital assets at normal rates of tax.
Thus individuals in the higher tax bracket of 30% would be more adversely affected than companies, as companies would pay taxes at a uniform tax rate of 25% on similar gains. This also means that the abolition of the Securities Transaction Tax (STT) will be more than made up by a levy of normal tax on all stock market transactions, be they short term or long term. Further, gains on transfer of immovable property which at present is at 20% if property is held for more than three years will now be taxed at the normal rate of 30% for individuals in the higher tax bracket and 25% for companies.
Some very significant changes are proposed in the international tax area. A time-tested principle of characterising a foreign company as a resident Indian company on the basis of the foreign company being wholly controlled and managed from India is sought to be substituted by a more stringent and arguably a more subjective rule, i.e., a foreign company partly controlled and managed from India will also be regarded as an Indian resident company. In its present form, it would appear that overseas subsidiaries of Indian companies would be subjected to taxation in India on their worldwide income solely on the basis of them being “partly controlled and managed from India”. This seems to be an unintended onerous outcome which needs to be corrected.
An elaborate provision spelling out the general anti-avoidance rule is proposed. While it has features of comprehensiveness, it seems ripe for several different interpretations in respect of features like “commercial substance”, “round trip financing”, “accommodating party”, etc. It is further provided that the general anti-abuse rule will override the provisions of any tax treaty. Thus, for example, the current controversy on the use of Mauritius DTAT will get further ammunition as the Revenue will now seem to invoke the general anti-abuse rule in specific cases to override the provisions of the Mauritius treaty. If the intent behind the code was to eliminate litigation and simplify provisions of law, this particular provision certainly does not stand anywhere close to achieving that objective.
In continuation of the introduction of the Alternate Dispute Mechanism in Budget 2009, the DTC seems to now extend this benefit to all taxpayers and not restrict it to foreign companies which is a welcome move and will help the entire tax community. Also, there is a proposal to introduce advance pricing mechanism on transfer pricing which has been a long standing request by multinational corporations. All in all, the idea of the DTC is great, many of the provisions are well intentioned and most importantly time has come to embrace, adapt and run with the DTC as early as possible.
(The author is Partner, Tax & Regulatory Services, Ernst & Young Pvt Ltd)
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THE ECONOMIC TIMES
EDITORIAL
IIP NUMBERS SHOW RECOVERY
The 7.8% increase in industrial growth in June should help shed remaining doubts about the economic recovery underway. However, poor monsoon could somewhat upset the gathering industrial momentum if farm incomes drop drastically and high food price inflation forces adjustments in consumption. All the three industrial sectors — mining, manufacturing and electricity — have pulled their weight in delivering the highest growth since February 2008. Within manufacturing, the recovery is broad-based with 12 out of 17 sub-sectors reporting positive growth. While the smart 11.8% jump in the production of capital goods suggests that investment activity is picking up, the near 10% growth in key intermediates such as metals and alloys underscores the underlying consumption demand. The continued buoyancy in production of consumer durables, largely attributable to the government stimulus and the pay commission award, bears this out.
However, the manufacturing sentiment could sour quickly if farm production is hit severely due to poor monsoons., though it has been amply demonstrated in recent years that overall growth has partially got delinked from agriculture. The continued weakness in the production of consumer non-durables — -4.6% in April-June 2009 — has already raised questions about the robustness of the rural economy. A poor monsoon could not only affect rural incomes but cause discretionary consumption to shrink due to food inflation. The government would do well to use its food stocks to shore up rural purchasing power as far as possible. This may help in maintaining the industrial growth momentum. Lastly, there is no sign of pick up in exports though the global economy appears to have bottomed out. And this is something the government will have to live with as no amount of incentives can increase exports if there is no improvement in overseas demand. Therefore, the government would do well to keep greater focus on domestic demand. The government must continue to use all policy instruments to maintain a positive investment climate and a healthy growth momentum.
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THE ECONOMIC TIMES
EDITORIAL
AN EQUITABLE TAX POLICY
The draft direct taxes code is a brave attempt by the income tax department to clean up the maze India’s
income tax laws had become with innumerable — over 3,300 — amendments carried out in the past three decades. There is no better way to usher in a new direct taxes code than rewrite the whole thing from scratch, and that is precisely what the department has successfully done in a little more than three years. Amending the existing Income Tax Act, 1961 with clause by clause changes would have only made the law more unwieldy. The proposed code appears easy to interpret and hopefully will lead to fewer litigation. We welcome the basic principle to do away with exemptions and move to moderate tax rates, both for corporates and individuals. We have always argued tax rates should be low to moderate and exemptions withdrawn; exemptions are distortionary in nature. And surely, no one will dispute that the proposed tax slabs for individuals — with incomes up to Rs 10 lakh paying only 10% tax — will provide a big relief to the salaried class. The tax for corporates proposed at 25%, after scrapping all exemptions, is in line with the effective rate of tax for majority of the companies. The proposal to replace minimum alternate tax with a 2% levy on gross assets on balance sheet is welcome, and it will bring all companies enjoying various tax holidays, including those in SEZs, into the tax net.
Putting out the draft direct taxes code for discussion before the Bill is moved in Parliament is a commendable move, but there is the danger that several interest groups will lobby for changes in the draft code to retain sectoral benefits. Only meritorious suggestions must be accepted. The government must not compromise on the basic philosophy of simplicity and transparency underlying the new tax code. There will be gainers and losers as exemptions are phased out. Some losers will protest. The finance ministry must not pay heed. Lower direct tax coupled with removal of distortionary exemptions will neatly complement the other equally critical project of implementing GST after April 2010. The two are clearly linked. Together, they will usher in an era of optimal equity in India’s tax policy.
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THE ECONOMIC TIMES
EDITORIAL
DIRECT TAXES CODE: AN IDEA WHOSE TIME HAS COME
SUDHIR KAPADIA
The freshly unveiled direct taxes code (DTC) is an idea which was overdue and whose time has perhaps never been more appropriate. There seem to be three key objectives behind the introduction of the DTC: simplification of language, resulting in lesser litigation; a law which promotes inclusive growth and yet retains the incentives for businesses to make profits; and allow businesses to function in the free market economy but with proper regulations. This article attempts to analyse some of the key provisions of the DTC in the light of the above objectives.
Taking a leaf out of the Chinese tax code, the DTC pegs the corporate tax rate to 25% which is clearly a very attractive rate compared to prevailing rate elsewhere. This, of course, comes with the removal of profit-linked incentives. We now have investment-linked incentives in specific sectors (infrastructure, power, exploration and production of mineral oil, etc) to incentivise capital formation and to remove the incentive to shift profits from “taxable units” to “exempt units”. We also now have capital assets deployed in the businesses (e.g., plant and machinery) to be treated as business assets and any profits arising on sale of these assets to be treated as normal business income and not as capital gains.
In practical terms, a company will now be subject to the same uniform rate of 25% tax on gains from transfer of such business capital assets as against the current rate of 20% for long-term capital gains on transfer of all capital assets. The downside in these provisions is the fact that a loss arising on such a business transfer will not be allowed to be written off in one year but will be amortised like depreciation over a period of time. This provision seems to be inconsistent with the treatment of gains as business income in the year when the gains arise.
However, there is a significant dampener to this feel-good story in the form of the new basis of levy of minimum alternate tax (MAT). The MAT will now be levied at 2% of the value of gross assets in the case of all companies except in the case of banking companies (tax at 0.25% for banking companies). This shift in the MAT base from book profits to gross assets is sought to be justified on the grounds of encouraging “optimal utilisation of the assets and thereby increased efficiency”. This measure, however, seems to run counter to the objective of encouraging capital investment for productive growth. For e.g., in the case of an infrastructure company where the pay back on the investments is longer, on the one hand we have the investment-linked capital allowance reducing taxable profits significantly, on the other hand is the imposition of MAT calculated at the same base of capital investments.
To make matters worse, there is no provision for reducing liabilities incurred for acquisition of assets, i.e., MAT is to be calculated on value of gross assets without corresponding reduction in borrowings incurred. This could result in a kind of “punitive tax” on capital-intensive companies including public sector companies as well as chronically sick companies making consistent losses.
A very significant shift is sought to be made in the area of capital gains taxation. Since 1991, capital gains on sale of shares and securities has always been accorded preferential tax treatment to encourage investment in equity market. The DTC now proposes to remove the distinction between short-term and long-term capital gains on all classes of assets, thereby taxing any gains on transfer of capital assets at normal rates of tax.
Thus individuals in the higher tax bracket of 30% would be more adversely affected than companies, as companies would pay taxes at a uniform tax rate of 25% on similar gains. This also means that the abolition of the Securities Transaction Tax (STT) will be more than made up by a levy of normal tax on all stock market transactions, be they short term or long term. Further, gains on transfer of immovable property which at present is at 20% if property is held for more than three years will now be taxed at the normal rate of 30% for individuals in the higher tax bracket and 25% for companies.
Some very significant changes are proposed in the international tax area. A time-tested principle of characterising a foreign company as a resident Indian company on the basis of the foreign company being wholly controlled and managed from India is sought to be substituted by a more stringent and arguably a more subjective rule, i.e., a foreign company partly controlled and managed from India will also be regarded as an Indian resident company. In its present form, it would appear that overseas subsidiaries of Indian companies would be subjected to taxation in India on their worldwide income solely on the basis of them being “partly controlled and managed from India”. This seems to be an unintended onerous outcome which needs to be corrected.
An elaborate provision spelling out the general anti-avoidance rule is proposed. While it has features of comprehensiveness, it seems ripe for several different interpretations in respect of features like “commercial substance”, “round trip financing”, “accommodating party”, etc. It is further provided that the general anti-abuse rule will override the provisions of any tax treaty. Thus, for example, the current controversy on the use of Mauritius DTAT will get further ammunition as the Revenue will now seem to invoke the general anti-abuse rule in specific cases to override the provisions of the Mauritius treaty. If the intent behind the code was to eliminate litigation and simplify provisions of law, this particular provision certainly does not stand anywhere close to achieving that objective.
In continuation of the introduction of the Alternate Dispute Mechanism in Budget 2009, the DTC seems to now extend this benefit to all taxpayers and not restrict it to foreign companies which is a welcome move and will help the entire tax community. Also, there is a proposal to introduce advance pricing mechanism on transfer pricing which has been a long standing request by multinational corporations. All in all, the idea of the DTC is great, many of the provisions are well intentioned and most importantly time has come to embrace, adapt and run with the DTC as early as possible.
(The author is Partner, Tax & Regulatory Services, Ernst & Young Pvt Ltd)
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THE ECONOMIC TIMES
EDITORIAL
TRADE BALANCE & FOREX MANAGEMENT
MANOJ PANT
Ever since 1991, the issue of exchange rate management has become important. Countries like India still manage their exchange rate even though for all practical purposes foreign exchange is freely tradable (except for long-term capital transactions). It is now well known that the Reserve Bank of India periodically “convinces” the largest foreign exchange trader, the State Bank of India, to intervene to keep the exchange rate within a manageable band.
The idea is mainly to keep export pricing “competitive”. But here two issues are important to keep in mind. First, what is the equilibrium exchange rate? Has the RBI “aimed” correctly at this rate? Second, the trading activity is largely done by private traders who are also the principal demanders of foreign exchange. The sole exception to the latter issue is oil where government purchases dominate. Has the RBI kept this in mind and not distort incentives?
On the first issue there exist fairly complicated models which attempt to “predict” what the equilibrium exchange rate is (“Exchange Rates, Trade Balance and Unemployment: A Producer Theory Approach”, S K Das and Pant. S K Das, Journal of Asian Economics, V8, 1997). However, a simpler (though heuristic) procedure is to take off from standard trade theory. Here there is no money exchange rate as the argument is that the only purpose of exports is to import.
In other words, through exports a country (its traders) reveals its demand for imports. Since exports merely constitute a demand for imports, in equilibrium planned imports must equal planned exports. The argument is that exports are a “sacrifice” by a country in giving up what it is efficient in producing to import what it cannot produce efficiently at home. To take the argument to its logical extreme, if a country only exported a lot and imported little this might make for good nationalism (a large trade surplus) but would constitute bad economics. We now know that this “mercantilism” has little support today in conventional economics. More intuitively, it makes little sense to work hard to produce a whole lot of goods and services and only improve through exports the well being of consumers in other countries without getting a reasonable amount of imports in exchange.
This argument is not just a theoretical curiosity as this is precisely how most Asian economies (China, in particular) have behaved by running huge trade surpluses to finance the large US trade deficits — exporting large amounts to the US while getting little in return. It is not surprising, then, that the US till today remains the country where standards of living have improved the fastest. In this barter world of trade theory, the exchange rate defined as the number of units of exports exchanged for one unit of imports must be generally in equilibrium over a reasonable period of time (say one or two years). In an effective barter world, the exchange rate is fully flexible and no long-term disequilibrium is possible. Coming to the real world, it is the introduction of money that complicates matters and raises the issue of equilibrium exchange rates. It is useful to do a quick test of exchange rate management in India using the above reasoning.
How efficient has the RBI been in exchanging rate management? Has it correctly aimed at an equilibrium rate? Trade theory would suggest that this rate is one which would have kept the autonomous trade balance roughly zero over a period of time. As a quick check I have traced this trade balance in the accompanying graph. In the last few years about 33% of our import bill consists of oil. Since this is a resource traded in a cartelised world market and demand is generally price inelastic in the short run, theory would suggest that this be excluded in our calculations. In addition, monopolistic government purchases implies that oil demand may not be subject to market discipline in the short run.
From the graph it seems that till about 2004, the RBI has managed the exchange rate fairly well with the two curves being quite close to each other even after exchange rate liberalisation after 1991. However, after 2004 or so, this management seems to be not too efficient and the rupee would seem to be overvalued (we are importing too much).
It is clear that the situation after 2004 is not sustainable. First, inflation will bridge the gap between exports and imports as the real effective exchange rate (Rs/$) goes up. Second, and possibly more important in our “pure trade theory” world, a country can only import what it pays for via exports and import compression will invariably follow export downturn: remember, it is traders who demand foreign exchange and they cannot run indefinite deficits.
The RBI would be wise not to attempt to outguess or fool the market too much.
(The author is professor, Centre for International Trade and Development, JNU)
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DECCAN CHRONICAL
EDITORIAL
A CODE TO MAKE LIFE LESS TAXING
The proposed new direct tax code promises to usher in a hassle-free tax era, and as both the finance minister, Mr Pranab Mukherjee, and his predecessor Mr Palaniappan Chidambaram (considered the architect of the code) pointed out, the idea is to make tax filing simple, transparent and uncomplicated, while reducing the plethora of exemptions. The language is simple, so any individual should be able to file his annual return without having to seek the help of a chartered accountant. Hopefully, one of the best things that this new code will do is to cut down and eliminate litigation. Today billions of rupees in revenue are held up due to pending court cases. As Mr Mukherjee noted, the existing system is a “feast for lawyers”. The new one does away with hackneyed landmine-like phrases such as “notwithstanding this and notwithstanding that.” These only opened the lid of Pandora’s box, not to mention the avenues for palm-greasing. Every section is dependent on another, and yet another... There is not a section that is independent, and often the references are contradictory. If one tried to do the tax filing on one’s own, one would be going back and forth the tax handbook without getting anywhere. The new code is a boon for almost everybody, from the individual taxpayer — women, senior citizens, entrepreneurs, investors — to corporate bodies. In fact, the Indian corporate sector was always taxed at rates lower than their counterparts in Britain and the United States — at 30 per cent in contrast to 35 and 40 per cent in the US and Britain respectively. Now the tax is being brought down to 25 per cent. What’s more, cesses and surcharges will be done away with. The new code will give a fillip to investment and to entrepreneurs as incentives will be linked to investment and not to profits. The tax rates in various slabs for an individual will also be lower than, say, Hong Kong. For those earning incomes between Rs 1.6 lakh (the new threshold) to Rs 10 lakh, the tax rate will be 10 per cent, against the 15 per cent threshold rate in Hong Kong. Of course, “income” will now include the value of perquisites, gifts, profits in lieu of salary and capital gains. Income from farming will, however, continue to remain exempt. This leaves a huge gaping hole because today even a filmstar is able to show his occupation as a “farmer.” Equity is one of the underlying principles behind the new code. While modest-income-earning Indians have been given many sops, the rich have been taxed more, but even this has been tempered as the incidence of tax has been lowered. For instance, the wealth tax threshold has been raised to Rs 50 crore and taxed at just 0.25 per cent. There are some murmurs already over the fact that shares are included as assets of the wealth tax payer. The distinction between the long-term capital gains and short-term has been done away with, and the securities transaction tax, which was the bugbear of the stock market, has been abolished. One measure that isn’t likely to go down too well is the EET (exempt-exempt-tax). This means, for instance, that when you withdraw your provident fund, you will have to pay tax on it. The new code is expected to come into effect from April 1, 2011, and a bill is likely to be introduced in the coming Winter Session of Parliament. Till then, the draft of the new code has been put up on the finance ministry’s official website for debate and suggestions. One is sure there will be a rich harvest of both. But the larger picture is that the bold and revolutionary new code will unshackle the individual from the clutches of chartered accountants and lawyers. At least one hopes so.
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DECCAN CHRONICAL
EDITORIAL
1947: A story with a gruesome gender bias
By By Urvashi Butalia
Tanveer Ahmed, a young Pakistani, spent over four years trying to get an India visa for his grandmother so that she could come to India and meet her brother whom she last saw in 1947. Tanveer’s grandmother remembers little of that time, except that, in Kashmir, where she then lived with her family, there were attacks by Pathans who came from across the newly-formed border. Her family was killed and she was taken away by a young man who later married her. She converted to Islam and has since then lived in Pakistan-administered Kashmir.
Her grandson Tanveer, however, moved to England. A chance encounter with someone in England some years ago led to the realisation that all members of his grandmother’s family had not been killed and that her brother still lived across the border, in “Indian Kashmir”. Tanveer made it his mission to bring his grandmother to meet her brother and last month he finally succeeded, and the Hindu brother and Muslim sister, separated by a few kilometers cut through with an international border, were able to meet after a gap of 62 years. Tanveer’s grandmother’s story is only one among the hundreds of thousands of Partition histories that still survive in India and Pakistan today.
And yet, few histories of Partition even make a mention of women, let alone look squarely at their experiences. But if you just scratch the surface of the historical narratives that we do have, a whole range of what we might call “hidden histories” begin to emerge. This isn’t something that is unique to Partition — every such traumatic moment in the history of different countries contains multiple narratives — but the writing of such histories generally offers up only the mainstream narrative which is almost always about, and written by, men. No surprise then that women remain absent.
Let’s just look at the facts of Partition history. A million deaths is what is usually talked about — most of those killed in riots, ambushes or attacks on caravans of people. In all of these, it is usually the most vulnerable who are attacked — women, children, old people. A hundred thousand abductions and rapes, again a figure that relates largely to women and female children. Hundreds of thousands of children orphaned, and of those offered up for adoption the first choice for everyone was always a boy child — and so, little is known of what happened to the girls. Thousands of lives disrupted, examinations cancelled, marriages deferred or permanently postponed… and all of these affect both men and women. And so the list goes on, but none of this finds a mention in mainstream histories — perhaps because women are not seen as principal actors in these.
But why is this? Women don’t necessarily go out to fight wars — although even that is not true any more. It is not as if they are not participants in history. And yet, it is true that recovering their stories is not easy. Many years ago, when I first began collecting oral narratives of Partition, I found it was virtually impossible to speak to women. At first, families, mainly their husbands or sons, would not allow them to talk. And if they did, they would insist on being there — their presence was a major constraint. If a woman had been raped, for example, would she speak about it in front of men?
Today we know that of the thousands of women who were raped and abducted, the Indian and Pakistani states managed to “recover” just a small percentage. They wouldn’t have been able to do even this much had they not had the help of women social workers like Damyanti Sahgal, Premvati Thapar, Mridula Sarabhai, Krishna Thapar, Anis Kidwai, Kamlaben Patel and others. Some of the accounts left behind by these women tell amazing stories of women who wanted to be recovered and reunited with their families and those who did not.
Satya, a woman said to have been bartered away by her Hindu family in exchange for freedom, refused to be “recovered” when the rescue team turned up for her. “Who wants your country anyway?” she asked her rescuers. Zainab, abducted and sold to one Buta Singh, who married her and with whom she had two children, was forcibly recovered. Promising to return, she left her husband with one of their daughters. Desperate, Buta Singh followed her to Pakistan, converting to Islam in order to do so, but once there, Zainab, now under pressure from her family, refused to accept him. Many others fell in love with, or were married to, or had children by, their abductors and did not want to have to face a second abduction, so they refused to be “recovered”.
But Partition stories are about more than just the abductions of women. In Hindu and Sikh families, the hidden stories of what are today mistakenly called “honour” killings, are commonly talked about. In many villages of Punjab, Hindus and Sikhs killed large numbers of women of their own families, fearing that they may be raped, abducted or forced to convert. Better, the men thought, to kill the women — never giving them a chance to choose whether they wanted to live or not. Whether it was in Thoa Khalsa, in Tihar, in Amritsar, in Ludhiana, or in Patiala, families were guilty of this shameful violence — indeed murder — that they disguised by calling martyrdom, shahidi.
As with every historical moment, if there are stories of violence and horror, there are also stories of hope. One of the things I remember hearing often in my interviews with women was how Partition opened up different kinds of job avenues for women: social work, for example, became something that many of them stepped into.
“It was a moment”, said one of them, “ where we were able to spread our wings”. Several women were unable to marry because their lives were so disrupted. But rather than let this affect them negatively, many went into jobs and made their lives differently. Ms Singh, a clerk in my old college at Delhi University, was one such — I remember her efficient and brisk behaviour, and the way in which she so proudly carried the responsibility for her family.
And Damyanti Sahgal told me a lovely story of a camp in which she had many abducted women who had been rescued. “We had to convince the government that all these women — of all ages — were below 28, so they could qualify for jobs. We cheated and lied and fudged records and finally we succeeded. They got jobs and their lives were made!”
Urvashi Butalia wrote The Other Side of Silence, a book based on interviews with survivors of the Partition. A feminist and historian, she is the director of Kali for Women.
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DECCAN CHRONICAL
OP-ED
CASH FOR CLUNKERS: A STIMULUS THAT WORKS
BY BY JAMES DORAN
America’s tortured love affair with the gas-guzzler is finally drawing to a close thanks to the Obama administration’s so-called “Cash for Clunkers” scheme. By promising anyone with a clapped-out old motor as much as $4,500 so long as they spend the rebate on a shiny new fuel-efficient model, the US President, Mr Barack Obama, has managed to do what a doubling of the price of petrol could not.
Cash for Clunkers was such a success when it launched in July that the initial $1 billion of taxpayers’ money devoted to the scheme ran out in a matter of days and a further $2 billion was hurriedly made available before Congress broke up for the holidays. In a little less than two weeks, so US government data shows, the programme led to the sale of 245,384 new vehicles. America’s embattled car dealers, meanwhile, are actually running out of cars to sell.
But Cash for Clunkers is far more than a nifty plan to boost car sales and give the laggardly US environmental movement a shot in the arm. The old-for-new scheme is the only truly visible success to emerge from the $787 billion economic stimulus package that was rushed through Congress in February. At a cost of just $3 billion, or 0.4 per cent of the total package, Cash for Clunkers has delivered value in spades. And so it should: the scheme meets all three of the sacred tenets of successful economic stimulus laid down by Mr Larry Summers, director of Obama’s National Economic Council. To be effective, Mr Summers said repeatedly last year, economic stimulus from the federal government must be “timely, temporary and targeted”. Cash for Clunkers was rolled out in record time and renewed almost overnight when the money ran out, so it was timely indeed. It will also be temporary: there are only so many “clunkers” out there to cash in. And it was certainly targeted towards one of the most depressed sectors in the American economy.
As a bonus, the scheme has also helped oil the wheels of the broken-down credit market. One of the biggest obstacles for Americans to buy new cars these days is the lack of available credit and the dramatic tightening of credit rules that exclude all but the most cash-rich customers.
The programme also offers consumers the choice of participating or not. This is not some mandatory scheme dictated from on high: nobody is forced to go out and buy a car. But should they want to, and meet the criteria, the government is prepared to help.
Unfortunately, the same cannot be said for the remaining $784 billion of stimulus money. “The rest of the stimulus violates all three of Mr Summers’ rules”, says Mr Vincent Reinhart, a former Federal Reserve official who is now a scholar at the American Enterprise Institute.
As part of its promise to ensure the stimulus programme is conducted properly, the White House has set up a website (www.recovery.gov [1]) where disbursements of federal cash are charted on a weekly basis. There is a nice graph with coloured lines, all pointing north, to show just how much money is being pumped into Mr Obama’s “shovel-ready” projects. On first glance it looks like more than $200 billion of the $787 billion has already been spent — but, so the graph’s key explains, this money has so far merely been “made available”. Another line shows actual cash paid out as of 31 July: $73 billion.
It is perhaps no surprise that the wheels of federal government move slowly, but to have paid out less than one-tenth of the stimulus fund in six months is far from the timeliness Mr Summers insisted was necessary. Much of the relatively small amount that has actually left the Treasury coffers has been devoted to assisting states to pay unemployment benefits to the millions who have lost their jobs this year, and to offer extra support for health insurance schemes. This is not the kind of targeting Summers had in mind: widening welfare budgets, while helpful to those out of work, does little to assist the wider economy.
The latest US unemployment data was hailed as a sign that the beginnings of a recovery are starting to emerge. The jobless rate dipped in July from a peak of 9.5 per cent to 9.4 per cent. While this is indeed a welcome sign, the rate is far above the eight per cent that Mr Obama’s advisers claimed the country would not breach if the stimulus package was passed. Gross domestic product data has also been more favourable of late, with the economy showing a contraction of one per cent in the second quarter of the year compared with 6.4 per cent in the first. This, too, is cause for celebration, but it has nothing to do with the $787 billion stimulus package. Consider the $73 billion the scheme has actually paid out in relation to the $14 trillion size of the US economy: in reality it is no more than a small drop in a vast ocean.
When Congress returns next month one of the first items it must consider is an emergency increase of the Federal debt limit, thanks largely to the Treasury’s need to hold $787 billion of stimulus money in readiness, even if it pays it out at such a glacial rate. Such a measure would be worth passing if the cash was actually helping America’s economic plight, but sadly so far it is not. Instead, it will be clunking around the system for years to come, long after the last gas-guzzler has been driven off the road.
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DECCAN CHRONICAL
OP-ED
THE ‘IFS’ OF PARTITION
BY BY NITISH SENGUPTA
With India getting ready to celebrate its 62nd Independence Day, this is an appropriate time to look at the momentous events of the years immediately before 1947 and to analyse whether things could have taken a different course. August 15, 1947, was a day of both triumph and tragedy. Independence came at the cost of Partition. But could we have had an Independent and an undivided India?
The point to emphasise is that the Muslim League adopted the Pakistan Resolution in 1940, seven years before 1947, and this became a serious issue only during the two years preceding 1947. If the British rulers had agreed to Home Rule after World War I or in the ’20s or ’30s, there may have been no Partition.
During World War I, the Congress and the Muslim League held their respective sessions at the same place and adopted identical resolutions. Both had common members, including Muhammad Ali Jinnah, the founder of Pakistan. The Non-Cooperation Movement and the Khilafat Movement also shared a common track. Paradoxically, Jinnah opposed both. In the Non-Cooperation Movement, like Rabindranath Tagore and Ashutosh Mukerjee, he opposed Mahatma Gandhi’s call to students to abandon universities, colleges and schools. He also opposed the Khilafat Movement because it was obscurantist.
Even as late as the Second Round Table Conference of 1930, Jinnah had described himself as a “nationalist Muslim”. But, interestingly, Jinnah was never offered the Congress presidentship despite his long years of association with the Congress. This position was, instead, offered to proclaimed communalists, the Ali brothers.
Partition could have been avoided if the Congress, after the 1937 provincial Assembly elections in Uttar Pradesh, did not dump the Muslim League with which it had jointly fought the elections. The Muslim League screamed breach of faith and went ahead to appoint a committee, headed by the Nawab of Pirpur, to report on the atrocities committed on Muslims in the Congress-ruled provinces. The tendentious Pirpur Report and the resultant agitation claiming that this was a foretaste for Muslims in Independent India accentuated the bitterness.
In Bengal, the Krishak Praja Party of A.K. Fazlul Haque (40 in a House of 250 seats) offered coalition to the Congress (with 59 seats). This offer was spurned on the ground that the Congress would not form a government unless it had complete majority. Fazlul Haque then approached the Muslim League (with 39 seats), which accepted the offer. Within a short time, Haque joined the Muslim League (ML) and moved the Pakistan Resolution in the ML’s Lahore Session, 1940.
Before that “Pakistan” was a faint cry. If the Congress had played its cards well, going along with the Muslim League in Uttar Pradesh and with Haque’s party in Bengal, history would have been different.
It is not known to many that even after Suhrawardy — once a lieutenant of Deshbandhu Chittaranjan Das — led the ML to victory in the 1946 elections, his first thoughts were to enter into a coalition with the Congress. But this proposal was spurned.
These elections proved that 95 per cent of the Muslims of India considered Jinnah as their leader. And yet, instead of allowing Jinnah to nominate all the Muslim members in the interim Cabinet in Delhi, the Congress insisted on nominating the Muslim Congress leaders. Jinnah took this as a challenge and nominated J.N. Mondal as the Muslim League nominee only to prove that the Congress also did not represent scheduled caste Hindus.
The “Pakistan” slogan was a bargaining counter which Jinnah never felt he would achieve. He eventually did achieve it because the forces of hatred and violence unleashed by his actions and utterances, and of several other leaders, went far beyond the original intention and got the better of reason.
Historians will tell you that it was an unfortunate casual comment by Jawaharlal Nehru, in the course of a press conference in Bombay in June 1946, that perhaps finally convinced Jinnah of his call for Partition.
Both the Congress and the Muslim League had accepted the three-tier formula of the Cabinet Mission of 1946. There was to be a Central Government controlling foreign affairs, defence, currency and a few other subjects and three regional governments: the first, over and above the Muslim-majority provinces of the northeast; the second, over Bengal, Assam (including present-day Bangladesh); and the third, over all other provinces with Hindu majority. Maulana Azad’s term was over and Nehru had just taken over as the president of the Congress. In the habit of thinking aloud, he suddenly announced at a press conference that notwithstanding Congress’ acceptance of the three-tier formula, the Centre would reserve the right to intervene in the affairs of the regional government whenever it felt necessary. Jinnah took this as a breach of faith, a treachery. How could the Muslim-majority regions trust the bona fides of the Congress if, even before Independence, the Congress leadership was going back on its commitment to the three-tier formula? Jinnah had his own problems with the extremist Muslims and was seeking an opportunity to wriggle out of his commitment to the Cabinet Mission formula. Nehru’s stray comment gave him this opportunity.
The Muslim League called upon Muslims to observe August 16, 1946 as Direct Action Day, and the the rest of the story is too well known to bear repetition.
Originally, transfer of power was to take place in June 1948. Lord Mountbatten came to the stage in March 1947 and announced that the British would withdraw on August 15, 1947, i.e. in five months’ time.
The resultant apprehension felt by the Muslims in East Punjab and the Hindus and Sikhs in West Punjab led to the Punjab holocaust that hardened attitudes. Had the transfer of power proceeded according to the original schedule, there would have been a lot more discussion in a sober atmosphere. The opposing parties might have been able to preserve some links. But Lord Mountbatten’s military commander’s haste to accomplish a task (to leave India) foreclosed that possibility.
Nitish Sengupta, an academic and an author, is a former MP and a former secretary to the Government of India
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DECCAN CHRONICAL
OP-ED
CHECKMATE, RUSSIA
BY BY S. NIHAL SINGH
As Georgia and the breakaway region of South Ossetia last week observed the first anniversary of the Georgian-Russian little war a year ago in contrasting ways, the bitter exchanges between Moscow and Tbilisi make one point crystal clear. Georgia, together with Ukraine, is the new faultline in Russia’s relations with the West, in particular the United States. If Berlin was the trip wire in the days of the Cold War, these countries serve the same purpose today.
Not long ago, Georgia’s “rose revolution” in 2003, followed by Ukraine’s “orange revolution” a year later and Kyrgyzstan’s “tulip revolution” in 2005, were heady days for Western strategists hoping to bring these former Soviet states into their fold. The Ukrainian and Georgian governments’ ambition to belong to the North Atlantic Treaty Organisation (Nato). Nato was vociferously supported by Washington over the protests of Moscow.
South Ossetia and the Black Sea region of Abkhazia had broken away from Georgia, which gained independence with the break-up of the Soviet Union in the early 90s. But the telegenic and impetuous President of Georgia, Mikheil Saakashvili, bit off more than he could chew by getting his forces to attack South Ossetia’s capital on August 7 last year provoking a devastating Russian response. It was, in fact, to promote his macho image that he thought he could reintegrate the region.
The war lasted five days killing more than 500 people and displacing many. Indeed, Mr Saakashvili’s gamble misfired badly because he had misread the signs of the times and Washington’s freedom of action. For one thing, he had forgotten that the United States had encouraged the breakaway Yugoslav province of Kosovo to declare independence, ignoring dire warnings from Moscow that changing European borders by force — flouting the new holy grail of the post-war world — was playing with fire.
Russia, somewhat unwisely, sought to drive the point home by recognising the two breakaway regions of Georgia and South Ossetia as independent states, recognised thus far only by Moscow and Nicaragua. The measure was as much to tell the West that two could play the game of changing borders as to claim Russia’s “privileged interest” in its “near abroad”, the former Soviet space. US vice-president Joe Biden gave his riposte during his visit to Tbilisi, “We don’t recognise, and I want to reiterate this, any sphere of influence”.
Ukraine and Georgia have become the touchstone of Russia’s relations with the West because Moscow has drawn a red line as far as their entry into Nato is concerned, despite seeing Washington demolish previous red lines by taking in the Baltic states and Poland. After the debacle of the break-up of the Soviet Union, eight years of Vladimir Putin presidency and high energy prices have made Russia more confident and capable of fighting for its interests. The European heavyweights are more conscious of the stakes involved than Washington and successfully stalled the two countries’ Nato membership.
The American misfortune is that both Ukraine and Georgia are involved in internal power struggles, are divided over their future and are no paragons of democracy. Ukraine’s President Viktor Yushchenko is involved in a bitter battle for power with his Prime Minister, the attractive Yulia Tymoshenko with her trademark peasant braid, while the nation is almost equally divided between a Russian-inclined East and a pro-US West.
It is a marvel that Mr Saakashvili remains Georgia’s President. Thousands of demonstrators had taken to the streets to seek his resignation last April. Despite American fondness for him, it is no secret that he has diligently set about closing opposition newspapers and television channels and wishes to rule his country as a little dictator.
The truth is that the colour of the so-called colour revolutions has faded and beyond the slogans of democracy and wishing to “belong to Europe”, a code for joining the European Union and Nato, the two countries are undergoing painful transitions. These are defined more by personal struggles of power and the desire to receive massive Western assistance than issues of ideology. Georgia was pledged $4.5 billion after the nasty little war, of which it has received only a third.
In “resetting” relations with Russia through his own visit, US President Barack Obama was careful to send his vice-president to Ukraine and Georgia to make the point that he had not forgotten them. While Mr Biden gave his country’s support to the two countries’ aspirations leavened with mild lectures, he was careful not to suggest a time frame for their membership of Nato. Washington recognises that the Continental heavyweights remain opposed to provoking Russia by embracing Ukraine and Georgia as Nato members soon.
The problem for the West is somewhat complicated by the fact that oil and gas routes dear to the West run through Georgia and skirt South Ossetia. Energy supplies and how to reduce European dependence on Russia lie at the heart of the new political chess game being played by all sides on the European continent and Central Asia. Turkey, seen by Washington as the saviour in this battle as the hub for Central Asian gas avoiding Russian territory, has just played host to Russian Prime Minister Putin to agree to a Russian-sponsored oil and gas route.
The danger, of course, is that Ukraine and Georgia will end up being pawns in a larger game being played by Russia and the West. In any event, their internal problems give them reduced leverage in seeking gains for their countries. The division between East and West Ukraine is so sharp that, unless handled wisely, it could lead to a break-up. And if Mr Saakashvili chooses to promote his authoritarian tendencies further, he would merely embarrass his American backers although Washington is often flexible in defining democracy.
While Ukraine must await the next presidential election, Georgia faces the reality of losing the regions of South Ossetia and Abkhazia, perhaps for good. It is advantage Russia in the sense that it has acquired the valuable Abkhazian Black Sea coast for stationing its strategic forces on friendly soil. The United States has been training and arming Georgian forces but must calibrate its next moves with an eye on their impact on its relations with Russia.
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DECCAN CHRONICAL
OP-ED
THE ART OF LIVING
BY BY SARAH STANDING
Oh dear. Nearly 80 years ago Dorothy Parker wrote a bleak poem entitled Resume. Back then she must have thought she’d been fairly comprehensive in covering all possible self-inflicted exit routes.
Razors pain you;/Rivers are damp;/Acids stain you;/And drugs cause cramp./Guns aren’t lawful;/Nooses give;/Gas smells awful;/You might as well live.
Times have changed — as indeed has the toxic cocktail of doom. Were Ms Parker alive today and living in England she might have felt the need to add a few revisions that attempted to embrace the withering wheels of misfortune that now precipitates not just our demise, but threatens to blight our very existence.
Conkers pain you:/Pools are damp;/Sunbeds stain you
And organics cause cramp./Cars aren’t lawful;/Botox gives; Cigs smell awful;/You might as well live.
Everything one does nowadays seems to come with a stark government health warning. From sun bathing to snacking, from smoking to overstressing, Big Nanny is just waiting to put you on the naughty step and insist you have a time out. The gilt has been striped off the gingerbread of pleasure and replaced with guilt. There seems to be an insidious drip-feed of potentially fatal consequences attached to simply everything we do — including a surreal, Utopian notion that if we’re really, really, really good and do as we’re told, death also will be reduced to yet another “option”.
Being given “guidelines of goodness” has turned into a lucrative industry as it cunningly feeds into our natural desire for immortality — yet were we to buy into all the warnings we’re bombarded with and act accordingly, we’d be hard-pushed to find time to live — let alone die. Not only is most of the information impossible to act upon — it’s relentless.
Last week I gleaned the following nuggets of knowledge: optimism lowers the risk of heart disease, multitasking can be detrimental to one’s health as it increases dangerous levels of stress hormones and adrenaline, men with symmetrical faces are less predisposed to mental decline, predictive texting makes children more likely to indulge in thoughtless behaviour and stroking an animal can lower one’s blood pressure. Skin cancer is rife, yet to avoid crippling osteoporosis in old age women need to build up reserves of vitamin D found in sunshine. In order to live well we must endeavour to avoid obesity, keep our body mass index (BMI) down, control cholesterol, not smoke or breathe other people’s smoke, have regular orgasms, never drink except in moderation, limit our consumption of red meat, stay away from fizzy drinks, raise our fruit and vegetable intake, exercise more, deal with stress better, take fish oils, sleep well, get married (and stay married), avoid wearing high heels, drink litres of water, down just enough organic espresso to fight Alzheimer’s, stroke stray dogs to combat loneliness, suck down statins and — I guess — try not to lose our minds remembering all of the above. It Ann’s easy.
I’ve spent the last week on holiday in an orgy of self-harm. I’ve seen too much sun, stayed up way too late, drunk wine at lunch time, eaten carbs at breakfast, forgot to take the fish oils and have foregone the exercise. I broke all the rules. It felt mighty good just to take the soft option and live.
By arrangement with the Spectator
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THE TELEGRAPH
EDITORIAL
ACTIVE CALM
During an epidemic, panic can be quite as contagious as the disease itself. Apart from being dangerous, panic is useless, having no preventive or therapeutic value. So, given the situation in the country with regard to swine flu, especially in Maharashtra, it becomes all the more important to keep one’s head. This is as important for the government, the health sector and the media as for ordinary people. Swine flu has to be managed efficiently and sensibly, and allowing irrational fears to disrupt the normal processes of everyday life is unlikely to make things any safer. But being informed, alert and efficient remains the best way to be careful. First, the health authorities in Calcutta will have to decide swiftly on how to involve the private health sector in its arrangements. This would involve preparing hospitals for properly segregated and equipped wards, as well as the accreditation of private laboratories for carrying out diagnostic tests. Delhi and Bangalore have both taken definite steps in this direction. Second, hoarding medicines and selling spurious drugs have to be prevented, just as the indiscriminate use of the medicines have to be checked. The government must be proactive and vigilant in dealing with, and preparing, medicine companies, private hospitals, laboratories and even the sellers of masks. Cautioning people against large gatherings is alright, but shutting everything down, including discount sales, could verge on the excessive.
There is no harm in recalling that about one per cent of those who get the flu die of it, and those who get it and survive it do not suffer significantly more than those who catch the common cold or ordinary flu. It is also important to remember that every year, all over the world, thousands of people die of the ordinary flu — a fact that rightly does not cause panic regarding the flu in ordinary times. Yet, this is also Calcutta’s, and Bengal’s, chance to get certain things in order in the public health sector — with regard to specific institutions like the Infectious Diseases Hospital in Beliaghata, and generally in its way of planning, deciding and keeping itself ready for unmanageable emergencies. Like panic, indecisiveness, sloth and inefficiency are useless and actively dangerous qualities in crisis situations. To learn to act quickly, clearheadedly and responsibly would not be a bad thing for the health department.
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THE TELEGRAPH
OUT OF THE WAY
The first information report filed against Pervez Musharraf at the order of a sessions court in Pakistan is intended to do more than strip the former president of the last vestiges of honour. The threat of arrest, which could lead to a three-year jail term, is bound to keep Mr Musharraf out of the country for a while. Similar threats and court cases have conveniently kept political rivals out of office and out of reckoning. The reason why the opening of a police file against Mr Musharraf became necessary two years after his presumed “crime”, and more than a year after his exit from office, has to do with the threat perceptions of the government. It is again under attack from the Opposition for allegedly ducking the trial of Mr Musharraf. Following last month’s supreme court decision to strike down the provisional constitutional order of Mr Musharraf, the Opposition sees no reason for the government to avoid proceeding against the former president for “high treason”. But it neither wants to dirty its hands in the process nor to lock horns with the army. In its calculations, the incumbent government, if pushed to act, would not only manage to do both, but would also tie itself up in knots. Trying Mr Musharraf for his actions of a specific period in 2007 is bound to raise questions about, and point fingers at, the current president as well. As expected, the government led by the Pakistan People’s Party has sought to deflect pressure by insisting on a parliamentary debate on the matter. More predictably, it has ensured that the steps it takes against Mr Musharraf neither feed into the Opposition’s allegations against it nor spoil its equations with the army. The army has made clear its unhappiness with the idea of putting a former general in the dock, together with his acolytes, who are now in important positions.
Like the supreme court order against the PCO, the FIR against Mr Musharraf does not immediately threaten the order of things in spite of being remarkable measures that add a shine to Pakistan’s fledgling democracy. The FIR would keep Mr Musharraf out of harm’s way in the United Kingdom, which is evidently delighted to have him as guest and is trying its best to smooth out his relations with his countrymen. The only trouble is that the Opposition leader, Nawaz Sharif, may not remain satisfied with merely making Mr Musharraf look like an ordinary criminal. Mr Sharif may want to march further ahead.
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THE TELEGRAPH
GENTEEL DEBATES
THE INDIAN MIDDLE CLASS AND THE NEW AFGHAN WAR
CUTTING CORNERS - ASHOK MITRA
The Congress will, of course, not say it. Not just because polite society has its own norms, the Opposition too has skirted round the real issue in the parliamentary discussions on the India-Pakistan joint statement. That the venue chosen for the statement was a Non-Aligned Movement gathering was neither here nor there; it was signed at the prodding of the United States of America. Its contents — interpreted in India as slightly tilting towards Pakistan on account of the reference to ‘threats’ in Baluchistan — were again something Foggy Bottom must have persuaded India to, please, go along with. Both subcontinental countries are now firmly launched as strategic partners of the US, courtesy demands that subsidiary partners offer, every now and then, a helping hand when the major domo encounters trouble
And the US, indeed, is in deep difficulties. It has been laid low by the worst economic recession in eight decades. Resources are being drained away by economic fire-fighting operations at home. 9/11 was a good enough pretext for George W. Bush to overrun Iraq and capture and kill Saddam Hussein. However, the American nation is convinced that that outrage was more the handiwork of al Qaida and its alter ego, the Taliban currently entrenched in Afghanistan. The Taliban must be destroyed. Crushing them is proving to be no easy matter though. Coming on top of the seemingly inexorable entanglement in Iraq, the expedition against the Taliban, who have meanwhile spilled over into Pakistan, calls for deployment of enormous further resources, including human resources. The recession-hit US is in a jam. The Western allies are most reluctant to send their troops to be ambushed and killed in Afghanistan. The Obama administration is also under pledge to the electorate to wind down the war in West Asia. In the circumstances, the allies in South Asia have to be called upon to bail out the US. The obvious first choice, Pakistan, abuts Afghanistan and, in any case, is already a hotbed of Taliban conspiracy.
But there have been problems. Pervez Musharraf, whom the Americans had lent full support in the beginning, was losing his grip over the country’s military establishment. He was careless enough to let the Taliban penetrate into the country’s Inter-Services Intelligence, and committed the equally grievous folly of allowing them both to take control of most of the country’s mosques and set up thousands of madrasas to indoctrinate Pakistan’s younger generation. He therefore needed to be replaced. The US administration preferred Bhutto’s Pakistan People’s Party to Nawaz Sharif’s Pakistan Muslim League as the former promised a firmer anti-Taliban stand. Still, Zardari cannot fight on two fronts; there must be some sort of détente with the traditional enemy, India, before Pakistan could give its undivided attention to the task of tackling the Taliban.
Americans, appreciative of Pakistan’s argument, have gone to work. The US has enough clout to nudge a reluctant India to the negotiation table with Pakistan. The emerging Indian middle class has not only nuclear ambitions; it has also begun to weave dreams to be China’s equal in military and industrial might. The US administration is willing to humour India along in the matter and supply the much-coveted weaponry, including the strategically most sensitive ones. It is, however, going to be a conditional willingness: the contours of New Delhi’s foreign policy must not stray beyond guidelines set by Foggy Bottom. Actually, Americans are in a position to drive home another advantage. While India’s merchandise exports are declining, close to 90 billion dollars accrue to the country from software exports to the US; another 60 billion dollars are coming in as remittances by expatriate Indians serving mostly as software technicians there. This total kitty of 150 billion dollars is sustaining the comfortable, often luxurious, living of India’s affluent class, who also happen to be the backbone of support for the ruling politicians.
The US administration is thus well placed to cajole the Indian authorities into seeing reason. Not that New Delhi has not done its own arithmetic. Given the overlapping class base of the two main political parties in the country, it is not difficult to persuade them to reach a tacit agreement to abide by American advice to go somewhat easy with Pakistan. Since one of the two parties constitutes the major Opposition, it has to make the standard noises alleging compromise of national interests embedded in the Sharm el-Sheikh statement. The reference to Baluchistan is irksome, but a balancing factor is Pakistan’s admission that 26/11 was perpetrated by its citizens, to apprehend whom the Interpol has been called in. Pakistan has also banned a number of terrorist outfits named by India. The greater cause — to be on the right side of the US — needs to prevail. It is for the sake of that cause too that the odious ‘arrangement’ on end-use inspection of sensitive weaponry and materiel shipped from the US has to be swallowed. Common sense must not be taken leave of: once you have signed the nuclear deal with the US, you have already accepted the cloying provisions of the Hyde Act.
So far, so good. The Americans, however, have yet other ambitions. It is their covert desire that India should also agree to recognize the Taliban as the principal threat to its own national security. Once that realization dawns, India too, the Americans hope, will agree to form a joint front with Pakistan against the Taliban. In pure vernacular, the US wants India to bear, sooner or later, sooner rather than later, a part of the burden of fighting the Taliban. For is it not a great noble cause? South Asia, along with the rest of the world, has to be made rid of those barbarians, the Taliban, who have been terrorizing India through surreptitious attacks organized by subsidiary outfits. India should not, must not, flinch from deploying its troops and security forces to the hilt to fight the common enemy. To optimize the effectiveness of the effort, India should also explore the possibility of joint action with Pakistan under the umbrella of the overall strategy mapped out in the Pentagon.
A century and a half later, India is no longer enslaved in the technical sense. But there is such a thing as enlightened self-interest; the country’s rising middle class might still agree to share, if not in full, at least in part, the burden of America’s Taliban war. It knows which side its class bread is buttered.
Someone, some day, will perhaps have the guts to tell the US that the problem is not the pestilential ‘common enemy’, the Taliban, representing global terror; it is the American establishment which is the problem. Their overarching aspiration is to establish a global hegemony; therefore wars have to be launched in different parts of the world, people have to be killed and civilizations destroyed. The Indian middle class will have no part in such plain-speaking, at least not at this juncture when they never had it so good. The Indian parliament, it follows, will only indulge in genteel debates.
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THE TELEGRAPH
TIME TO BELL THE CAT
BONA FIDE - MALVIKA SINGH
The ‘war’ between the Ambani brothers that has been chewing up television time for the last few weeks is the outcome of the unfortunate nexus of politicians, ministers, the administration and the corporate world that became entrenched in our life during the command economy years when restrictions dominated and entrepreneurship suffered. To survive, grow and generate wealth, deep, and often insidious, connections with those in power were required. With the dismantling of the license raj and the gradual opening of the economy, this protected oasis of personalized decision-making — where largesse was dispensed on the basis of who you knew in high places — was not replaced by good business ethics and a transparent corporate governance. The political class, now comfortable in this relationship, seems unwilling to agree to a divorce.
Today, in a new and dynamic millennium, Indian business people struggle to conduct their operations with dignity and honesty. Corruption and bad practice continue to rule, and the public comprehends, quite easily, why particular people are placed in certain ministries. ‘Who is whose man’ is common knowledge in India. It is also known who did what, when and where to put XYZ in the kursi. In any society in transition from being a closed economy to becoming an open and competitive one, contortions are bound to happen and it is the duty of the prime minister and his cabinet to ensure that the change in the operating system of government also takes place simultaneously. Nepotism, favouritism, veiled decision-making, and half-truths presented to the press, public and the government must be stopped decisively. We all know which minister is close to whom. It is the masala of the great oral tradition that has been the knowledge base of the Indian civilization over thousands of years.
FRESH START
To start a process of cleansing, to show with determination that nepotism will not be tolerated, requires a rejigging of portfolios to prove what is right and what is wrong. The favouritism shown to ministers by powerful corporates, or the placement of these ministers in key positions by chosen political functionaries, who manipulate their leaders with half-truths, must cease. Those playing such politics must be removed from trusted positions and an example clearly established to show that the government is non-partisan and willing ensure an even playing field for all. Party secretaries interfering with critical appointments, favouring one against the other, is unbecoming of political entities entrusted with ministries.
Surely, this government, with Manmohan Singh at the helm, can radically overhaul a negatively politicized system that has been insular and exclusive. The time has come to make all commercial matters that have dealings with the government transparent. The prime minister knows better than most how to cleanse the corroded system and establish transparent and inclusive parameters under which ethics and good practice would get priority instead of personal acquaintance. The Congress must back him in all possible ways. For the next generation to create and generate national wealth based on entrepreneurship and idealism, we need a radical and immediate change in attitude, form and norms. Let us not carry forward all living truths that presented India as a difficult place to conduct honest business in. The time is right to discard the old and unacceptable methods that drag India down on the world stage.
Imagine an entrepreneurial people being liberated from a closed, corrupt and personalized access system to a comprehensive set of norms and regulations essential for conducting honest business. Much needs to change, starting with the mindset of the political class and the bureaucrats. So who will pledge to bell the cat on August 15 this year?
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DECCON HERALD
EDITORIAL
CAN SANCTIONS AGAINST IRAN WORK?
OBAMA’S ADMINI-STRATION WORRIES THAT ISRAEL IS TRYING TO FORCE ACTION AGAINST IRAN TOO SOON.
BY DAVID E SANGER: THE NEW YORK TIMES
The Obama administration is talking with allies and US Congress about the possibility of imposing an extreme economic sanction against Iran if it fails to respond to President Barack Obama’s offer to negotiate on its nuclear programme: cutting off the country’s imports of gasoline and other refined oil products.
In a visit to Israel last fortnight, Obama’s national security adviser, James L Jones, noted that as many as 70 senators had signed on to legislation that would give Obama the option of taking action against companies around the world that supply Iran with 40 per cent of its gasoline, according to Israeli officials.
The White House has refused to confirm or deny the contents of Jones’ discussions with the Israelis. But other administration officials said that they believed his goal was to reinforce Obama’s argument that the Israeli government should stop dropping hints about conducting a military attack against Iran’s nuclear facilities if no progress is made this year, and to give the administration time to impose what Secretary of State Hillary Clinton calls “crippling sanctions” that might force Iran to negotiate.
The Bush administration considered, and rejected, trying to engineer a cutoff of gasoline to Iran, which produces oil but does not have enough refining capacity to meet its own needs for gasoline.
MONEY MATTERS
But enforcing what would amount to a gasoline embargo has long been considered risky and extremely difficult; it would require the participation of Russia and China, among others who profit from trade with Iran. Iran has threatened to respond by cutting off oil exports and closing shipping traffic through the Strait of Hormuz, at a moment the world economy is highly vulnerable.
White House is not ready to discuss the issue at all. Denis McDonough, a deputy national security adviser, said the administration would not comment on any of its private discussions with allies. But European diplomats confirm that in recent weeks they have held private talks with administration officials about whether to move toward such a sanction if Iran ignores Obama’s deadline to begin talks by the opening of the next UN session in mid-September.
Assessing how effective such a cutoff might be has been complicated by the political turmoil inside Iran. Some analysts have argued that the action could further destabilise a weakened regime; others say it could be exploited by President Mahmoud Ahmadinejad to change the subject from the still-contested presidential election to Iran’s confrontation with the West.
There’s a legislation in the House, and Representative Jane Harman, who is active in intelligence and national security issues, said that “most people think that this is how you really hurt Iran”. She predicted the bill would ‘breeze through’ both houses of Congress.
But easy passage would not make the sanctions any easier to implement. As the Bush administration discovered as it pushed through three mild sanctions resolutions at the United Nations, Iran has enormous leverage over companies and countries dependent on its oil production.
FRICTION FORESEEN
The legislation would impose sanctions on any company that sold or delivered gasoline to Iran, cutting them off from selling to the US government and seeking to interfere with their financing. But many experts fear that true enforcement would require patrols off the Iranian coast, and that could lead to confrontations with the Iranian Revolutionary Guard, which patrols the same waters.
The Obama White House has been extraordinarily tight-lipped about its Iran strategy, and has not publicly discussed the legislation. But already it has become part of the behind-the-scenes maneuvering with Israel. Israeli officials have argued in recent weeks that the American unwillingness to confront North Korea more forcefully as it develops a nuclear program was evidence that the United States might be willing to tolerate an Iranian nuclear weapons capability.
Obama’s aides, in return, worry that Israel is trying to force action too soon, by shortening the timetable until Iran may be able to manufacture a weapon. In fact, no one knows how quickly it might be able to do so, but it has already solved many of the key technological problems.
“The question we have to face,” one American diplomat said, “is whether any sanction at this point can really deter them, given how close they are now.”
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DECCON HERALD
EDITORIAL
ART OF SURVIVAL
HE WAS A SMART FELLOW, WHO KNEW HOW TO GET ABOUT IN MUMBAI.
BY A N SURYANARAYANAN
If your name is Ram Naresh, you must be an UP-ite. Doesn’t some Sena or the other trouble you?” I asked the driver of my friend’s SUV in Mumbai. He said he was from Jaunpur and explained.
Running away from home when nine, 19 years ago, he somehow landed by rail, in the city of opportunities; knew no one or the lingo; nor even where he was! Hungry and penniless, he requested a snack-vendor at Haji Ali for some food. That kind soul fed him and gave him work for as long as he wished. The snack-bar became his ‘home away from home’ for the next eight years. The ‘kind soul’ told him that to progress in Mumbai, he must pick up not only a regular job but possibly more. Soon he got into a five star hotel, for cutting vegetables. Increased wages and eight-hour-shift goaded him towards a driving licence, which he got at 18!
How to get a better job ‘without references’? With increasing pressure on parking space in and around five star hotels, he exploited the opportunity as a freelance ‘parking-valet’ for a few years. A Kannadiga took him as a driver and he worked for four years, besides continuing as a valet by night. The gentleman had to move to Bangalore and offered to take him; but he would not, as “opportunities galore were available only in Mumbai”! Luckily soon, he got a driver’s job with a bank official; but he was unhappy at not being treated well; the latter would not allow him inside his apartment; nor offer a cup of tea or even water. But he had his eyes and ears open!
My friend’s driver had to go to Kerala for two months; RN just moved to that opposite flat! That is when I found him, but the regular driver was due. RN was least worried: “Sahib, kuch na kuch mil jaayega; aapke dost se bhi sifarish ki chitti aur reference maanga hoon”. I advised him about a daily shave and presentable clothes and shoes, if he expects to work with a banker or MNC; he just clucked!
Didn’t he suffer with MNS’ anti-North-Indian drive? “Sahib, yeh dekhiye”: producing a Primary Membership Card of Shiv Sena in yellow colour, he gave it for my viewing and said: “Mee Marathi bolkar yeh card dikhata hoon; magic ho jaata hai”!
He knew how to progress but hasn’t picked up much Marathi in two decades; there I agree with Raj Thackeray!
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THE STATESMAN
EDITORIAL
CHINESE ANALYSES SCRUTINISE, DON’T SHIVER
JITTERY indeed was some of the reaction of the “intelligentsia” to a Chinese strategic analyst opining that his government should work towards fragmenting India into the several small states that obtained when European traders converted themselves into colonists. That near-panic was probably playing right into Beijing’s hands. The timing of that article’s publication on the website of the China International Institute for Strategic Studies (hardly reputed as an independent outfit) was a thinly-veiled pressure tactic to push the Beijing-line taken during the 13th round of the still-fruitless bilateral talks on the boundary issue. The Chinese always flex muscle to coincide with jaw-jaw in the conference room, and somehow India has never come up with a counter-punch. That is all the more reason for South Block and its host of apologists to have publicly ignored ~ while privately noting ~ the contents of the “offending” article.
The situation could be turned to a little advantage, India seeking a clarification on the mismatch between the CIISS suggestion and the official position of the Chinese government. Any official “distancing” might earn a few brownie points. Dealing with China has ever been complex, but maturity is vital ~ as the outgoing Navy chief has just elucidated. Or as the Prime Minister recently said in another context “trust but verify”. The external affairs ministry now has a “China-hand” at its cutting edge, but all too often it appears that the National Security Adviser (the point-man in the bilateral dialogue) does his own thing. Coordination is clearly critical, but not very evident: recall the air force’s swagger when deploying SU-30s in Tezpur, and then downplaying that. So also the denials of frequent Chinese incursions across the LAC; or their being written off as the outcome of “varying perceptions”. The present external affairs minister does not inspire confidence that a coherent China policy will be scripted.
New Delhi has also to decide how it will react to “think-tanks”: many a fuss has been made over what comparatively autonomous American or European institutes suggest. It is accepted that most of them either influence their governments, or articulate official thinking to help “test the waters”, so the response must be calibrated. Funny, the Capital is now littered with think-tanks of our own, but neither the relevant ministries nor the service headquarters give them much bhav. Nor have they ever stirred up a storm in a foreign teacup!
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THE STATESMAN
EDITORIAL
FORWARD MOVEMENT TOWARDS A SETTLEMENT IN DARJEELING
There is a profound symbolic significance of the women’s human chain formed in Darjeeling on Tuesday in support of Gorkhaland. It was organised in parallel with the equally critical official-level talks in Delhi, attended notably by the union home secretary, the Chief Secretary, Bengal’s home secretary and GJMM representatives, if not Bimal Gurung. The Hills may be no nearer to statehood, the consummation devoutly wished for by the Gorkha Jan Mukti Morcha; nonetheless, the decision to disband the Darjeeling Gorkha Hill Council marks a milestone break with that embodiment of state patronage and the likes of Subhas Ghisingh. The parting of ways comes after more than two decades, and must rank as a moral victory for the GJMM. Indeed, without elections and the support of the Hills people, the DGHC had been reduced to irrelevance, no more than just another administrative entity.
Terribly important too is the decision to drop the Sixth Schedule that envisages administrative autonomy in predominantly tribal regions. In Darjeeling’s case, it had been a tool to facilitate feet-dragging by the political class, ruling as much as the opposition, as well as Parliament. The GJMM had seen through the bluff, insisting instead on full statehood.
Its movement in early 2008, against Ghisingh’s continued domination without a popular mandate, had forced the government to dispense with the GNLF leader. By deciding to drop the Sixth Schedule, both the Centre and the state have abandoned the bait that it had held out to Ghisingh since 1986. For now, the red herrings along the trail to statehood have been removed. Both the GJMM and the governments, Central as well as state, have a clean slate before them.
The other decision taken at the Delhi conference relates to the appointment of an interlocutor. It is a salutary development that Tuesday’s package has been generally welcomed by the GJMM, with the hope that the scope for further negotiations towards statehood will be widened. The interlocutor will examine the demand and assess the ground realities. All in all, the meeting marks a forward movement towards a comprehensive exercise. Much will of course hinge on the political moves and counter-moves.
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THE STATESMAN
EDITORIAL
NAGA PEACE TALKS PM HAS TO BREAK IMPASSE
PRIME Minister Manmohan Singh has to break the impasse in the 12-year-old Naga peace talks if he has to keep his assurance to the Nagaland chief minister, Neiphiu Rio, that he will find a solution to the 62-year-old Naga issue during his current term. To achieve this, he may have to forego many a pressing engagement. NSCN(IM) chairman Isak Swu and general secretary, Thuingaleng Muivah, have so far held more than 50 rounds of talks in India and abroad but nothing substantial has emerged. Delhi failed to capitalise on the two leaders’ presence in Nagaland for more than a year. Swu left in October 2007 unannounced, rather disappointed, followed by Muivah some months later. After Swu’s departure, the NSCN(IM) split with the formation of the NSCN (Unification). The fratricidal killings that followed almost drove Nagaland to the brink but the timely emergence of a new reconciliation forum helped douse the flames to some extent.
The forum reportedly enjoys public support and is expected to become a rallying point for the unity every Naga is craving for. For one, no single party has the mandate to speak for Nagas, and for a final peaceful settlement all warring groups have to sink their differences.
The latest round of talks reportedly took place in Delhi last month and the NSCN(IM) team was represented by special emissary VS Atem and two others. They were told to seek their collective leadership’s opinion “on necessary constitutional changes to revolve the vexed problems”.
The NDA recognised the “uniqueness” of Naga history that they were never Indians and that they lived in their own homeland. When the UPA came to power in 2004, it included in its Common Minimum Programme a clause that it would not break any state to placate the Nagas.But when the NSCN(IM) objected to it, the government backtracked. Since the integration of all Naga-inhabited areas is the main demand of the NSCN(IM), there is no point in sidetracking the issue. After all, the outcome of the peace talks hinges entirely on this. Chief Minister’s role
;NIRMALENDU BIKASH RAKSHIT
THE CHIEF Minister occupies an exalted position in the structure of Indian democracy. Though our Constitution does not offer him enormous power, he is the real potentate in the Cabinet system. He is in a position to influence the destiny of his province. His role needs to be examined from several perspectives.
The first is the equation between the Governor and the Chief Minister. Article 164(1) of the Constitution provides that there shall be a Council of Ministers with the Chief Minister at the head to aid and advise the Governor. According to Article 156, the Governor is the head of the province. But in the parliamentary system, it is desirable that the Governor will instead aid and advise the Chief Minister. Thus, the Chief Minister is the de facto head of the state because the Governor, normally, acts as a nominal head.
But, a wise Chief Minister does not defy or dishonour the Governor who is, legally, superior to him.
The Chief Minister is the head of the Cabinet. He actually chooses his colleagues and distributes portfolios among them. Under Article 164(1), however, other ministers hold office “during the pleasure of the Governor”. Actually, however, it is the Chief Minister’s perception that matters. A minister, who differs with the Chief Minister, either resigns or is dismissed by the latter.
As head of the Cabinet, he is its principal spokesman. A policy may be a Cabinet decision, but it is the Chief Minister who, normally, spells it out on behalf of the Cabinet.
As the head of the executive organ, he guides the bureaucracy in administrative matters. If the CM is a dominant person, the bureaucrats toe his line.
MAJORITY PARTY LEADER
THE Chief Minister is the leader of the majority party. But an efficient CM never depends upon the brute majority ~ he usually keeps the opposition in good humour, and, in times of crisis, he makes a frantic bid to patch up differences with the other side.
Democracy can give way to autocracy if the government seeks to rule by sheer majority support and the opposition is compulsively destructive. The basic tenet of the parliamentary system is the realisation that the government has the right to rule and the opposition is entitled to criticise. A Chief Minister can deny the right to criticise only at his peril. Above all, he is the leader of the people of the state. But a prudent Chief Minister always strives to be the leader of the masses. If he can take the people into confidence, neither the Governor nor the opposition leader will be a deterrent.
Unfortunately, the Chief Minister of West Bengal lacks tact. His policy of occupying fertile land for the profit of some private industrialists only antagonised the peasantry. And the government mobilised its police to quell the dissent, leading to deaths in firing and rape. The Governor visited the injured in a Nandigram hospital, and asserted that forcible occupation of agricultural land could never work out to a proper industrial policy. He referred to the police action in March 2007 as “cold horror”. A Governor has seldom snubbed his government so severely. It implies that the Chief Minister has lost his confidence.
He has also failed to keep a number of ministers under control. Though the Cabinet’s responsibility is, under Article 164(2), collective in nature, some ministers have criticised the Chief Minister’s industrial policy and the random use of police to terrorise the people.
SHAKY CONTROL
AS THE government’s principal spokesman, he had officially declared that the CBI would inquire into the Rizwanur affair. But the Advocate-General clarified that his statement, and not that of the Chief Minister, reflected the actual stand of the government. Even his control over the bureaucracy is sometimes shaky. A former home secretary had remarked in the context of Nandigram that the Chief Minister’s statements did not corroborate the facts. Before long, he was transferred.
A government can learn more from the criticism of the opposition than from the eulogy of its supporters. Surely, the 230-30 ratio in the assembly is not enough for the government to suppress the opposition and pursue a policy which is detrimental to the public interest. Such an attitude obviously turns democracy into an autocracy.
Though the Chief Minister is supposed to be the leader of the people, he has alienated the vast majority by his “we-they” doctrine. The CPI-M’s debacle in the recent elections to Parliament, panchayats and municipalities has made it clear that repression does not pay. The police action in Nandigram was condemned by the High Court as “wholly unconstitutional”. The Jana Adalat, headed by Mr Bhargava, the former Chief Justice of Sikkim, and the National Human Rights Commission have come down heavily on such measures. The frequent use of Section 144 was also criticised by the High Court.
Democratic norms have generally been ignored with a sense of arrogance. But a wise Chief Minister ought not to forget TH Green’s oft-quoted remark: “Will, and not force, is the basis of the state.”
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THE NEW YORK TIMES
EDITORIAL
IRAQ’S SUNNIS
Sunni Arabs are a minority in Iraq, but for many years they enjoyed a privileged status. This was especially so during the cruel and paranoid rule of Saddam Hussein, who reserved an outsize share of lucrative government jobs, powerful army commands and professional positions for Sunni kinsmen. The Shiite majority, along with the Kurdish minority, were subjected to relentless deprivation and violent, systematic terror.
The Shiite-dominated governments that have followed since the 2003 American invasion have been determined to redress that imbalance. They have gone too far — marginalizing and discriminating against the Sunnis. And in the early years, Washington did almost nothing to restrain them. The civil war that nearly tore Iraq apart in 2006 and 2007 has receded, but the resentments have not.
In recent weeks, Sunni extremists have begun a new campaign of bloody attacks on Shiite mosques and civilians, looking to reignite sectarian warfare as American forces ratchet back their combat role. To their credit, Sunni political leaders have condemned these attacks, and Shiites have, thus far, refused to be provoked. But the unresolved tension between the two groups is a problem that Washington cannot ignore.
While most Sunnis are grimly reconciled to the new order, they remain suspicious that they will ever get a fair share of the country’s oil wealth or the basic services and security they need. If Iraq is to have a chance at peace and stability — and acceptance from its Sunni neighbors — Prime Minister Nuri Kamal al-Maliki will need to make a far more convincing effort to persuade Iraq’s Sunni Arabs that they, too, can thrive in the new Iraq.
Unfortunately, Mr. Maliki has found it politically useful — and all too easy — to shrug off good advice from Christopher Hill, the United States’ ambassador to Iraq, and Gen. Ray Odierno, the top American military commander. He needs to hear from President Obama that he is playing a very dangerous game.
With national elections set for January, Mr. Maliki must quickly decide whether he intends to provide national leadership or continue to inflame sectarian tensions. Here are some of the issues he needs to address:
• There is still no law guaranteeing that Iraq’s oil revenue will be shared equitably among Shiites, Sunnis (whose areas have the least oil) and Kurds. Washington seems reconciled to more delay. That is a dangerous course. It must press Mr. Maliki and the Parliament to complete action on this legislation this year.
• There is a law letting former Baath Party members reclaim jobs or pensions they lost after the American invasion. But it has not been carried out. This affects the Sunni professional class, since party membership was required for professional advancement. Mr. Maliki should order all government institutions — Iraq’s main employer by far — to end this discriminatory treatment.
• Many of the nearly 100,000 members of the Sunni Awakening Councils — the former insurgents who decided with American encouragement and support to come in from the cold — still have not gotten the pay and jobs in the security forces or civil service they were promised. Wooing the Awakening members helped choke off an incipient civil war. Not delivering on these promises could restart one.
Sunni political leaders tend to be ineffective and unrepresentative, even by Iraqi standards — a legacy of the Sunnis’ decision to boycott Iraq’s first free elections. Washington has become the main protector of the Sunnis, and it should use that influence to encourage the development of a new generation of politicians committed to solving current problems not re-fighting past wars.
Resolving these issues will take both high-level pressure and sustained daily involvement at a time when Washington’s influence is waning. Stephen Biddle of the Council on Foreign Relations notes that the American-brokered peace agreements with former Sunni insurgents did not rest on one blanket cease-fire but on scores of local agreements. These, like so much else in Iraq, will need vigilant tending.
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THE NEW YORK TIMES
EDITORIAL
CHINA AND THE W.T.O.
The World Trade Organization’s ruling against China’s stranglehold on the distribution of imported books, movies and songs may not unleash a torrent of new business for American entertainment industries, but it comes at exactly the right time for the world economy.
It should serve as a warning to the Chinese government to restrain its growing economic nationalism, which poses a serious threat to international trade and the chances of a global recovery.
Hollywood studios and other media companies currently must deal exclusively with government-run distributors. If the decision by the W.T.O. panel stands — China has the right to appeal — American and other foreign companies should be able to seek better, more lucrative distribution deals. Apple, which owns iTunes, and other companies should be able to sell music over the Internet. But other restrictions remain — only 20 foreign movies can be shown in Chinese theaters each year.
In the midst of the global recession, China has taken increasingly unfair steps to protect its industries. It has given tax rebates to exporters and barred government entities from buying foreign goods if there are domestic substitutes. It has again intervened heavily in currency markets to halt the rise of the renminbi.
The W.T.O. has ruled several times against China in recent years. By Sept. 1, China must comply with a W.T.O. ruling in a case brought by the United States against illicit taxes on imported auto parts. By March, it must comply with another ruling on a case brought by the United States about its lax enforcement of counterfeiting laws.
China has also increasingly turned to the W.T.O. to defend its interests. Last month, it challenged an American ban on Chinese poultry imports. It has another case against American anti-dumping policy. And there will be more. China has as big a stake as the United States in a well-functioning, lawful trading system. If it wants to protect its own rights, it will accept the W.T.O.’s rulings.
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THE NEW YORK TIMES
EDITORIAL
LOCKING UP FEWER CHILDREN
In the 1990s, states and localities began sending more and more children to juvenile lockups, often for months, while they awaited trial for nonviolent offenses or even noncriminal behavior like being “unruly.” This was a disaster. Children who spend time in detention are far more likely to leave school, suffer alcohol or drug abuse problems or commit violent crimes as adults.
A far better approach — for these young people as well as overburdened government budgets — is to lock up only truly dangerous children and enroll the rest in community-based monitoring programs.
The Annie E. Casey Foundation, which focuses on disadvantaged children, gave a boost to this approach by underwriting juvenile justice reform projects in five states in the early 1990s. The experiments showed that closely supervising young offenders, instead of incarcerating them, did not increase the youth crime rate or the risk to public safety. Similar programs have since been adopted in 110 jurisdictions in 27 states and the District of Columbia. According to a new study from the foundation, the results have been astonishing: Many jurisdictions have managed to cut the number of children in detention by half or more; in many, the youth crime rate has declined.
The programs invite collaboration among all of the major players, including prosecutors, probation officers and public defenders. Children who present no safety threat remain in custody for the shortest possible time. Meanwhile, new screening practices allow judges and other officials to decide more accurately and quickly which children require secure detention and which of them can be released to their families or to the care of community programs while they await their day in court.
Communities that have been most faithful to the new model have registered the most impressive results, with some districts locking up only about a quarter of the number of youngsters as before. These efforts show that it is possible to treat children humanely without compromising public safety and deserve to be replicated nationwide.
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THE NEW YORK TIMES
EDITORIAL
ONE SPECIAL OLYMPIAN
BY LAWRENCE DOWNES
I doubt my brother Peter knew who Eunice Shriver was, though she probably brought more joy directly into his life than I, an annoying younger brother, ever did. Peter had fragile X syndrome, a common cause of mental retardation. His passion was Mrs. Shriver’s creation: the Special Olympics.
My parents had two fragile X sons: Paul and Peter. Both participated in Special Olympics, though at opposite intensities. Paul, older and more sedate, did the softball throw. He would get out there, throw the ball and go sit down. Peter’s goal was to race and win. He ran track and was good at it. He was on the Hawaiian team at the first International Special Olympics in Chicago in July 1968. He was 18. I was 3. I think I remember Peter with his Windbreaker and Pan Am bag.
Peter didn’t win in Chicago, though he came home and ran in Hawaii’s games every year after for the rest of his life. Sometimes he won. Often he didn’t. Still, he got lots of medals and ribbons that he kept in his room, markers of achievement to match his siblings’ report cards, diplomas and scout badges.
His last games were in May 1983. I was in college in the Bronx. My sister called and said Peter had collapsed after running in a practice meet. It was a brain hemorrhage; he was on life support. He died before I got home. He was 33.
At Peter’s funeral, his fellow athletes filled several pews. He had no co-workers or classmates, but lots of teammates and friends. They mourned with quiet dignity. The games that year were dedicated to his memory.
Mentally disabled people don’t catch many breaks. The world isn’t made for children who grow old before they grow up. The slow spread of tolerance hasn’t outraced indignity and neglect. People have always mocked the retarded, especially those who like to take credit for their own intelligence.
But there is one island of inclusion: the Special Olympics. They are the pride and inspiration of millions. They exist because Eunice Shriver, who had a retarded sister she greatly admired, insisted on looking differently at disability. She offered love without pity, a chance to race and win, and to win just by racing.
After she died, I read on the Special Olympics Web site that the organization considers Chicago in 1968 the most important event in its history. That was when Mrs. Shriver’s idea went global. It gladdens me to think that my brother Peter was there, lending his spark of intensity to a fire that spread and lighted the world.
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I. THE NEWS
EDITORIAL
FINDING CELEBRATION
August 14 has rolled around again. A flurry of green and white flags flutters at roadside corners. Boys ready motorcycles for the noisy, silencer-less rampage through the streets that marks each such occasion. Office-goers plan for a holiday. But the question many ask is whether there is much to celebrate. Allegations of corruption coupled with rumours that the government's days are numbered add to the sense of instability that prevails everywhere. Nationalist passions flare in Balochistan. Despite a largely successful military operation in the north the threat of militancy has not completely receded. The economic slump continues and there is no sign yet of recovery. Relentless load-shedding has resulted not only in acute discomfort but also the loss of thousands of jobs. In this situation, it is not easy to find anything to celebrate. But if we look around, inch our way past the political bombast that marks all such occasions, there are things that bring both pride – and also a measure of sadness. The resilience of people, their willingness to make what they can of life despite the toughest of conditions and the good humour they exhibit in many cases despite the continuous trials of a hard life and their courage is something that needs to be appreciated. On this August 14, we, as citizens, must also ask what we have done to better the plight of our countrymen. The fact is that in the selfish culture we have helped create, every person is committed only to him or herself. To take just one example, the wealthy purchase generators and leave the poor alone to stand on the streets in protest. Perhaps if everyone had stood together we would not be in such a dismal place today.
Amidst celebrations it is often hard to forget how far we have fallen. Statistics that point to one of the highest rates of literacy in the world, rampant infant mortality and the fact that most people who live in Pakistan lack access to safe drinking water or sanitation is a reminder of how much needs to be done. A commitment to doing what we can to play a role in his should mark August 14th this year. It is true the main onus for this falls on government, but we also know, in our heart of hearts, that those who make it up lack the integrity and the vision to go about this. We must, as individuals and groups, aim to fill this gap. The potential of people in our country has not been tapped. Young people, in colleges, in universities and in workplaces possess immense zeal and enthusiasm. This passion must be utilized. There is a need to think creatively for genuine change. So desperate is the situation that there is no option but to use August 14 as the occasion for this task to be begun.
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I. THE NEWS
EDITORIAL
BEYOND BORDERS
The Khan of Kalat has become the latest to talk of the possibility of autonomy for Balochistan – or parts of the province. His words follow similar sentiments expressed by the controversial men who represent Baloch nationalism. These people are traitors for some, heroes for others. The fires fuelled by the nationalist quest though burn on in the province. The killing of two policemen in Quetta appears to be the latest act of violence stemming from these unfortunate motives. Under the present government there have so far been meaningless comments about beginning a reconciliation process there. Anger in the province has been on the rise in recent months as a result of several murders of key nationalists and comments made by people including the interior minister in the Senate.
A great deal of time has been lost. We simply cannot afford to lose more. More and more people in Balochistan say they are no longer willing to even consider a future within the frontiers of Pakistan. This is not a matter that can be taken lightly. Merely labelling such people traitors is not enough either. The reality is that there are many in the province who share their views. Our own history should have taught us that people cannot be held indefinitely by force. To survive any federation needs a measure of willingness by people to stay inside it. This willingness is what we need, somehow, to create in Balochistan. If we fail, the consequences could be dire.
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I. THE NEWS
EDITORIAL
FILM CRAZY
It is apparently necessary to have one's reality interface disconnected before taking up the position of MNA. Two of our parliamentary representatives who have had the necessary surgery are MNAs Bushra Rahman of the PML-Q and Maulana Fazlur Rahman of the JUI-F. This pair of stalwarts are practically frothing at the mouth over the screening of Indian films on cable TV channels, which will apparently lead to a wholesale breakdown in the nation's moral fibre, widespread rioting, the complete collapse of the national banking system and severe headaches. In order to avoid the implosion of civilization as we know it, they suggest that PEMRA - that well-known bearer of the chalice in which lies the very soul of national morality - should ban the transmission by the cable companies of all Indian films with immediate effect. Messrs Rahman and Rahman were at pains to point in their address to the National Assembly on Tuesday that the projection of Indian culture into the vulnerable minds of innocent Pakistanis was causing "grave concern among the public". As fine an example of parliamentary balderdash as we have seen in some years; and proof-positive that these parliamentarians are as much in touch with the mood of the public as is a tick on the back of a buffalo.
Film generally and Indian films specifically are the mainstay of what is left of our entertainment industry. The 'common man' has few choices when it comes to recreation and entertainment, and given our family-oriented culture where 'going out' to have ones fun is an option for very few then home-based entertainment has become the norm. We share many aspects of our culture with India. Film is one way of keeping a cultural bridge open, and if we censor that what are we left with? A cultural desert to match the one that covers much of our landmass. Rather than attempting to strangle the celluloid snake of Indian film our MNAs would be better employed lobbying for our own film industry, pushing for better-quality television and promoting the performing arts generally.
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PAKISTAN OBSERVER
EDITORIAL
WE HAVE A LOT TO CELEBRATE
THE nation is celebrating the 63rd Independence Day today in a full participatory manner with national flags fluttering all over from Torkham to Karachi. It is a singular and historic day for Pakistanis to celebrate their freedom and pay tributes to the leaders of the Independence Movement who under the leadership of Quaid-i-Azam Mohammad Ali Jinnah worked tirelessly for the attainment of their objective and succeeded in getting a separate homeland for the Muslims of the subcontinent.
The idea of a Muslim homeland took roots when the British occupied the area from 1745 to 1947. In March 1940, a resolution for the creation of a Muslim State was passed by the Muslim League Convention at Lahore. Seven years after the Convention, the world witnessed the emergence of the Muslim State on its map. It is however regrettable that on this historic occasion, some pessimists are questioning the celebrations on the ground that the country squandered opportunities and the dream of freedom has turned sour. What is more surprising is that those who attained highest positions and benefited a lot only and only due to Pakistan are raising such questions without admitting their guilt. While we agree that all is not well and the country is facing a number of problems and undergoing crisis after crisis but these are self-created due to failure of our rulers and the bureaucracy. If we minutely analyse the very birth of Pakistan, it was a miracle in the face of two hostile forces i.e. the British Empire and the Hindu majority. The whole struggle of Pakistan Movement under Quaid-i-Azam is a testimony and a lesson that if we have the will and sincerity of purpose, we can achieve the targets. Yes, we lost half of the country because of wrong policies of the leadership but at the same time there have been many achievements. With a population of around 170 million and a nuclear and missile power, Pakistan is recognized as an important member of the OIC and international community and its voice is given due weightage and these are no mean achievements. Difficult times and problems come in the way of all nations and so is the case with Pakistan for the present as it is faced with militancy, law and order and economic crises. But proud and determined nations sail through the tidal waves that come in their way. We must keep faith that Pakistan will ultimately overcome the problems and emerge as a strong nation as envisioned by the founding fathers. Of course to achieve this every Pakistani will have to contribute and let us on this historic day make a firm commitment to work with dedication and honesty to make Pakistan strong and prosperous.
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PAKISTAN OBSERVER
EDITORIAL
ATTAINABLE TEXTILE TARGET
THE firstever five-year textile policy, approved by the Federal Cabinet and announced by Minister for Textile Industry Rana Farooq Saeed, envisages $25 billion textile export target by 2014. It also offers about Rs 87 billion cash subsidy to the textile and clothing sector to boost exports besides commitment to launch a number of new initiatives to facilitate growth of the industry and exports.
Though some quarters are describing the target as ambitious in the backdrop of the power crisis that has crippled not only the textile but other industries as well yet we firmly believe that the target is achievable. In fact, the country has much more potential provided right kind of enabling environment is created on a sustainable basis. Textile is the backbone of our economy and a dominant contributor to foreign exchange earnings but regrettably it took us decades to announce a policy for the sector. This shows the casual attitude and the policy of adhocism that prevails in our decision-making circles. No doubt, the trade policy, announced every year, also focuses directly or indirectly on textiles and garments but it is for the first time that a five year policy has been prepared in consultation with all stakeholders with the objective of realising the true potential of the sector. There is rightly stress on research and development, value addition, skill development, branding and marketing and above all market access for our products that are becoming uncompetitive in the international market because of a host of factors but mainly due to rising cost of production and lack of ingenuity. It is regrettable that our products are selling cheaper than those of Bangladesh and countries like China, India and Thailand are edging out our textile goods from the market. We have been hearing since long different sorts of incentives and concessions for the textile industry but these couldn’t produce the desired results as either these were mere gimmicks or were widely misused by some unscrupulous elements. The Government has been providing R&D support worth billions of rupees to the textile and other industries but R&D seems to be merely on papers and its outcome is not visible. Similarly, the facility of duty drawback is also mainly misused and countless paper entrepreneurs have become millionaires overnight in collusion with corrupt tax officials. It has long been proposed that there should be no duty and no drawback but one wonders why the Government is not opting for this transparent mechanism. Anyhow, we hope that now that we have a full-fledged Textile Ministry, it would ensure each and every aspect of the new policy in letter and in spirit so that we regain the lost ground in textiles.
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PAKISTAN OBSERVER
EDITORIAL
SWINE FLU IS ACROSS EASTERN BORDER
THERE is panic across our eastern borders, as the spread of deadly swine flu has led to several fatalities. This has forced the Indian authorities to order closure of all schools and colleges in the vast city of Mumbai for a week. Public concern in India about the spread of the A (HINI) virus has mounted since the country’s first death from the disease on August 3 and as of August 12, 15 people infected by virus had died while more than one thousand had been tested positive.
The outbreak of Swine flu virus has alerted the health authorities the world over and different countries are taking preventive measures. As the world today has become a global village, the spread of a fatal disease in one part of the globe rightly rings alarm bells in other parts of the world as well. It was because of this that the Arab League Health Ministers had recently decided to harmonize their preventive programmes and as part of the plan a proposal was floated not to allow children below 12 years of age and people over 65 to perform Hajj, as they were more prone to the virus. So far, there was no emergent plan visible in Pakistan to meet the challenge but with a large number of people tested positive in our neighbourhood it has become a must for the authorities concerned to take necessary preventive measures. There has been a suggestion to issue travel advisory to Pakistani citizens not to visit certain countries for the time being but, as usual, our bureaucracy takes too much time in taking decisions. Health conditions in Pakistan are already fragile and the advent of rainy season has complicated the situation further. In this backdrop, the outbreak of swine flu virus could play havoc with the lives of the people. Therefore, there is urgent need to launch an awareness campaign and take preventive measures on the basis of experience of the European countries that have been tackling the problems during the last few months.
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THE INDEPENDENT
EDITORIAL
PRIVATE UNIVERSITIES
SCATHING REMARKS BY MUHITH
Finance Minister AMA Muhith has made some scathing remarks on the country’s private universities. Harsh and unpalatable though all these may sound, the finance minister is not off-target. Sure enough, barring a few exceptions, many of these ubiquitous educational facilities hardly qualify to be highest seats of learning. The glitzy advertisements they carry in both electronic and print media, claiming the high standard of education on offer attract mostly students without requisite qualification for admission to public varsities and medical colleges and, more, whose parents have plenty of money to buy certificates for their sons and daughters. In some worst cases, fake universities came up and enrolled students for higher studies in exchange for huge sums of money and thus the students got cheated.
Those days are over now but yet the University Grants Commission’s attempt to streamline the academic activities of the country’s 50-plus private universities has reached nowhere. Quite a number of private universities were found lacking in prerequisites and a few others were given time to make up for the lacking. Those considered unfit for the UGC’s approval however appealed for consideration of their cases and no decision on their fate could be taken as yet. The mess created in the absence of monitoring and supervision at the time of granting permission for private universities has only accumulated further with many of those offering what the finance minister terms ‘farcical’ courses. Since the UGC has no part in the funding of private universities, its control over them is next to nothing.
PRIORITY AREA FOR ADDRESSING
Maintaining quality of higher education at the private universities has been ignored since the private university act (PRUA), was enacted in 1992. This again has left some loopholes for many of these institutions to allegedly fleece students with poorer academic records. All this does not help the cause of raising the quality of higher education as offered by most of the private universities. Then the shortage of qualified teaching staff is a further stumbling block in the way of maintaining quality of education. This should be considered a priority area for addressing.
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THE INDEPENDENT
EDITORIAL
CRIMINAL HALLUCINATION
VIOLENT CRIMES BY DRUG ADDICTS
Yet another horrific story of killing by a drug addict featured in the country’s newspapers, this week. This time one Faruk of Sutrapur in the city went berserk, killing his 4-year-old niece with a billhook and injuring many others. When denied money for buying drugs by the members of his family, he reacted so violently.
Of late, violent crimes by drug addicts are being reported much too frequently. Not that there are no reports of nabbing of drug peddlers and recovery of drugs. In fact, big hauls of heroin and yaba tablet very often make screaming headlines. Yet the situation is far from satisfactory.
Sometime ago there was news of poppy cultivation in some areas of the country. This uneasy finding is evidence of the existence of local sources of drugs. Indeed, drug abuse has really assumed serious proportions in Bangladesh. According to a recent estimate, there are 50,000 drug users in the country, of whom 20,000 use syringe.
To eliminate the vice, the fight has to be taken to the source rather than at the market. Drug barons should be the prime targets. Sealing off the porous border with India and Myanmar can greatly reduce the chances of availability of drugs. Equally important is to ensure that local production is completely brought to an end.
REHABILITATION OF DRUG ADDICTS
Rehabilitation of the drug addicts is another important aspect of combating drug abuse. Well-equipped facilities should be created for treatment of drug addicts like Faruk of Sutrapur before they can repeat such crimes.
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THE INDEPENDENT
SNEEZING AND THE SWINE FLU...!
"AAATTCHHOOO! AAATTCHHHOOO!"
"What's wrong?"
"House dust!" I say angrily, "Why doesn't the maid dust the furniture!"
"She did!"
"She did? When?"
"Just now that's why you're sneezing! You shouldn't come into the room when she's dusting the furniture!"
"Aaaattchhooo! Aaattchhooo! I'll go down awhile, maybe the fresh air outside will do me good! Aaaattchhooo!"
"Maybe you shouldn't"
"Why notaaatthhooo!" I yelled, sneezed and walked down, eyes blood shot and nose running from my allergy to household dust, which the maid now with even greater zeal and total abandon was raising in my direction. The watchman was the first person I accosted, "Where is my driver?" I asked and then the tsunami of all sneezes built up in my nose, "Aaattchhooo! Aaattchhooo!" I watched aghast as the watchman ran away, sped down to his cabin and a few seconds later pushed his face out with a mask on it. I walked towards him. "Sir, please don't sir, I am a poor man with a family!"
"What are you talking about?"
"You sir!"
"Me?"
"Yes sir, please go away, go away!"
"I will report you to the Chairman!" I said, "Aaattchhooo!"
"Please keep away from the watchmen and all of us!" shouted the voice of the chairman of the housing colony behind me. "Aaaattchhooo!" I said. "Keep away I said!" insisted the chairman. "Aaaattchhhoo!" I said again. "Get away from us!" shouted the Chairman and the watchman as they both ran into the security cabin and closed the door. I saw the maid leaving my home and decided I'd go back and sit down for awhile, now that the dust at home, I'm sure must have settled down. "You okay?" asked the wife. "Perfect!" I said, "Nothing like a breath of fresh air, "Though the chairman and watchman acted a bit strange!"
"Strange?"
"Yeah they both ran into the security cabin when I went down!"
"I wonder why they did that?" asked the wife. "They shouldn't!" I said, "That's the best way of catching swine flu; hiding in closed, dingy places...!"
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THE AUSTRALIAN
EDITORIAL
DON'T RUSH, REFLECT
THE AUSTRALIAN PUBLIC MAY NOT GRASP THE FINE DETAILS OF THE GOVERNMENT'S PROPOSED CARBON MARKET BUT IT CERTAINLY UNDERSTANDS THE POLITICS.
Which is why Kevin Rudd and Climate Change Minister Penny Wong must get serious about negotiating with the scheme's opponents.Yesterday's defeat of the legislation in the Senate could end up being a win for the nation if the government uses the delay to improve the scheme.
Its apparent willingness to consider separating its renewable energy legislation from the Carbon Pollution Reduction Scheme is long overdue. The joining of these bills always looked like a manoeuvre to force opponents to vote for the contentious CPRS just to get the renewable project under way.
Now it must justify its decision to bring the CPRS back to parliament in November. There is no good reason -- other than domestic politics -- for this artificial timetable and no reason why Australia needs a framework in place before the world meets in Copenhagen in December. Both sides of politics have already committed to targets for Copenhagen.
The threat of a double-dissolution election if a divided opposition again votes against the CPRS has provided great sport for the Labor side of politics, but it smacks of hubris rather than responsible politics.
It may be the case that Treasury has been working on the carbon market plans for years. It may be that the Coalition and the Greens are wrong about the deficiencies of the scheme. The reality remains that the government has more work to do in proving that this is the best possible approach.
One issue it could address more closely in the next three months (or more) is the possible integration into
the carbon market of agricultural offsets such as soil sequestration of carbon. This is effectively excluded from the CPRS because of a government decision under Kyoto. The rationale for not ratifying a section of the treaty that would have allowed such offsets was that we do not yet have a reliable method of measuring carbon in soil.
The amount of carbon can vary because of drought and fire, for example, and the government argues that its decision has protected the agricultural sector from the costs associated with variable carbon levels. The idea is that by 2012 when the treaty can be revisited, the science will be much more accurate. But our position is in stark contrast to the US, where the Obama administration has included agricultural offsets.
The government has been good at the rhetoric on the CPRS, but the scheme's rejection means it must address the fine print. It may believe the public is detached from the detail and is ready for closure. But in truth, it has a responsibility to address the issues raised by its opponents in this significant policy area.
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THE AUSTRALIAN
EDITORIAL
MCCLELLAND PROTECTS CHECKS AND BALANCES
DESPITE THE LAMENTS OF CIVIL LIBERTARIANS, THE TOUGH COUNTER-TERRORISM LAWS PUT IN PLACE BY THE HOWARD GOVERNMENT IN THE WAKE OF THE SEPTEMBER 11, 2001, TERROR ATTACKS ON THE US AND THE 2002 BALI BOMBINGS HAVE SERVED AUSTRALIA WELL.
Those convicted, from Jack Roche to fanatical Muslim cleric Abdul Nacer Benbrika and six of his followers, posed a serious threat to security. In complementing the expertise of the security services and police, the laws have been an effective deterrent. Where problems have arisen, as in the case of Indian doctor Mohamed Haneef and the quashing of the conviction against "Jihad" Jack Thomas, bureaucratic bungling and procedural technicalities and not the laws themselves have been to blame.As last week's arrests of an alleged terror cell in Melbourne and the resilience of the Taliban in Afghanistan remind Australians, the war on terror is ongoing. It is reasonable to assume that counter-terror laws need review from time to time, and Attorney-General Robert McClelland has released a 450-page discussion paper setting out proposed amendments. In some ways, the proposals would strengthen the laws, giving police the power to search premises without a warrant where they believed there was material that threatened public health, such as explosives or biological agents. In other aspects, the changes would soften the laws, capping the length of time that police can detain terror suspects at nine days.
At this stage, opposition justice spokesman George Brandis is sceptical about the need for such a broad overhaul. Justifiably, he argues that the Howard government got the "balance right" between ensuring security and protecting liberties. He is yet to be persuaded that the laws are inadequate when the national threat assessment has not changed.
From the outset, Mr McClelland is to be commended for his sensible, principled stand in ruling out laws that would restrict the media's reporting of terror cases. Nor does he favour a cumbersome, time-consuming approach where authorities would take out injunctions on a case by case basis to block publication of stories relating to counter-terror operations. Prudently, the Attorney-General favours a protocol, or understanding, between media and police. Mr McClelland has acknowledged the co-operation and goodwill of The Australian in holding back publication of last week's exclusive story about Melbourne's terror raids, and honouring its agreement to do so with the Australian Federal Police. On Wednesday night, the minister said he wanted a protocol that recognised and achieved the kinds of arrangements "that have been entered into by the Australian Federal Police". The protocol also needed to recognise that where a media outlet did the right thing, it should not be prevented from publishing stories based on its information and benefitting commercially from doing so. Of necessity, many aspects of counter-terrorism operations must be secret, but Mr McClelland's important assurance about the role of the media is about more than the public's democratic right to know -- it goes to the heart of the media fulfilling its role as a public watchdog and providing checks and balances, the importance of which were evident when this newspaper exposed bureaucratic bungling in the Haneef case.
Consultations on the proposals are open until September 25, allowing vital debate. But if current laws are to be refined, the overall result should maintain the rigorous approach that has worked effectively.
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THE SYDNEY MORNING HERALD
EDITORIAL
CHINA SHIFTS, JUST A LITTLE
AT LAST some reality is creeping into the strange prosecution of Rio Tinto's Australian iron ore salesman Stern Hu and his three Chinese colleagues in Shanghai. The four have been in detention for the past six weeks as various Chinese spokesmen and officials built up an ominous but amorphous accusation of espionage on a grand scale, resulting in stupendous losses to Chinese interests. Now, when actual charges have been lodged by the Chinese police, the offence has been downgraded to one of obtaining commercial secrets through bribery.
That is still a serious offence in China, bringing a seven-year jail term, if the authorities want to press a case. So far they are doing that, although there can still be a long process of investigation between laying charges and acceptance of indictments by a court. Once a trial is started a conviction is practically inevitable in the Chinese judicial system.
However, the shift to alleged white-collar crimes takes the case away from the political police, the Ministry of State Security, and into the hands of the ordinary police, the Public Security Bureau. This opens the possibility of earlier access to legal help for the detained executives than in a state secrets case, and the option of challenging the secrecy of the information they are supposed to have stolen.
Their employer, Rio Tinto, has strongly rejected accusations that bribery is one of its business methods, and will throw its weight behind the defence if the case gets to court. Meanwhile the logic behind the case is falling apart. As an analysis in Hong Kong's South China Morning Post pointed out this week, about half China's recent iron ore imports have been bought on the spot market, where prices have been on average a third higher than contract prices from Australia. Rio Tinto has actually been offering China a discount. So far it appears none of the unnamed steel company executives allegedly bribed by the Rio Tinto four have been charged.
Cooler thinking seems to be prevailing in Beijing, and the momentum towards confrontation with the Australian Government is slowing. That is sensible from China's point of view: the country does not want a reputation for capricious, opaque and self-interested decision making if it is to engage fully in the globalised economy. But Hu is not yet off the hook, and Australia must insist on his rights to presumption of innocence and unhampered defence.
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THE SYDNEY MORNING HERALD
EDITORIAL
STATE LIBERALS NEED RENEWAL
THE news that the state Opposition Leader, Barry O'Farrell, is under pressure to refresh his frontbench with new, younger talent will not surprise anyone, although it may annoy some. The reaction to the Herald story this week has already included accusations of ageism. Yet O'Farrell's critics who want a newer, younger Opposition frontbench have a point.
It will seem unfair to those older, loyal MPs who may be asked to move aside. To be elbowed out just when the chances of winning power are increasing, and after spending most of their best years in opposition will seem a poor reward for loyalty and hard work. But that's politics. And advanced age does not automatically imply neglected talent. Those who have served long must show that they can continue to serve well - or move on and let someone younger prove themselves.
O'Farrell clearly prefers to keep his loyal supporters close by him, in senior positions. Yet his deputy leader, Jillian Skinner, should be moved aside. She has made some headway in a portfolio where the Government is particularly vulnerable, but as deputy leader she lacks authority. And at 65 she cannot realistically expect to be a minister for the two terms a Coalition government will need. The same can be said of Brad Hazzard. O'Farrell should steel himself, too, to ask other long-term supporters who have failed to impress to make way for younger replacements.
That raises the question of O'Farrell's own future. At 50, he is still relatively young, although his caution may make him seem older. He is hardly exciting, but he is probably the best candidate the Liberals have if they are to project an aura of stability and competence.
But just now O'Farrell has the look of the former federal Opposition leader Kim Beazley about him - so close to power that he has become anxious lest anything he does jeopardises his chance of success. Anxiety about giving offence becomes a trap: he can do nothing, and is seen by the public to do nothing, and so he changes from inoffensive to irrelevant, and then to unelectable.
O'Farrell's instinct for safety and loyalty may make him a stable leader in a party beset by factional difficulties in opposition, but it is, paradoxically, as dangerous as it was for Beazley when it comes to winning power. NSW is desperate for renewal, and the Coalition must show the public it is up to the task for the two full terms O'Farrell has rightly said it will take.
The Opposition Leader should take a risk, and rejuvenate his team.
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THE GUARDIAN
EDITORIAL
LOCKERBIE BOMBING: STILL SEARCHING FOR TRUTH
Mounting speculation yesterday that the Libyan convicted of the Lockerbie bombing could be released from prison next week has reopened old and painful wounds. Abdelbaset al-Megrahi is dying, in the final stages of prostate cancer, and the bereaved families of the 270 killed in the bombing of Pan Am flight 103 are deeply split. Some US relatives resist his release on the grounds that any compassion shown to a man who showed none for his victims is vile. Many British families, along with a growing body of lawyers, politicians and diplomats, believe Megrahi has been the victim of a major miscarriage of justice. It is essential for both groups that a court tests the evidence to emerge since his conviction.
But it is unclear whether this will happen. Only a fraction of the backroom dealing that has gone on over this case is ever revealed at any one time. Is justice being served, or are the commercial interests of BP the driving force behind a steady rapprochement between Britain and Libya? This is not an idle question. There are two legal routes for Megrahi's release: either on compassionate grounds, or under a prisoner transfer agreement that was signed by Tony Blair and Muammar Gaddafi. But for the latter to happen, all live legal proceedings would have to be halted first. Hence the suggestion yesterday that Megrahi might withdraw his appeal against his conviction, even though he has always protested his innocence. This might serve Colonel Gaddafi's sense of realpolitik. He has travelled some way since he was branded the "mad dog" that Ronald Reagan tried to kill. But it would not serve the interests of justice.
The second appeal was launched by the Scottish Criminal Cases Review Commission, a statutory body made up of senior police officers and lawyers. After three years of sifting through the evidence, it found that a major miscarriage of justice may have occurred. It rejected claims that evidence about the provenance of the bomb's timer may have been tampered with to implicate Libya. But the commission cast doubt on the reliability of the prosecution's chief witness, Tony Gauci, who identified Megrahi as the buyer of clothes found in the suitcase containing the bomb. There was no evidence that Megrahi was in Malta when the clothes were bought.
It is important that the appeal survives Megrahi's probable release. If he is released on compassionate grounds, an appeal could continue even after his death. For this is no longer just about the guilt or innocence of one man, but about the integrity of our courts, and their ability to withstand the buffeting of governments. The passengers on Pan Am 103 and the town of Lockerbie deserve no less.
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THE GUARDIAN
EDITORIAL
A NEW POLITICS: WAGES OF WHITEHALL
Like reviving a failing marriage, restoring the relationship between politicians and voters was always going to be an arduous task. Political leaders cannot be faulted for the energy with which they have approached the wooing of the electorate. Today the Guardian reveals that the Conservative leader David Cameron is considering swingeing cuts in ministerial pay. A fortnight ago, a report for Gordon Brown trailed the idea of outlawing all extra-parliamentary work for MPs. Politically, Mr Cameron's might be the smarter move. From the outrage yesterday at Alan Duncan's daft complaint that MPs "have to live on rations", secretly filmed at the House of Commons last month, it is clear that public forgiveness is some way off. A way back, as the marriage counsellors would say, must be found: it is vital to our democracy that politicians succeed in overcoming the deep scepticism of voters. The danger is that this, the biggest opportunity for reform since 1945, is squandered in a race for electoral advantage. What makes good politics is not necessarily good for politics.
Eye-catching initiatives are becoming such familiar events in the current dutch auction for political probity that it is tempting to dismiss this latest idea as a mix of political positioning and internal party chest-thumping. But when the median wage is less than £25,000 and a cabinet minister currently earns more than £144,000, there seems at the least room for movement. Even cutting, say, a quarter of the ministerial element of pay would still leave a cabinet minister earning around £120,000, comfortably in the top 2% of earners. That is easily enough to insulate them from the kind of concerns that keep their constituents awake at night. Almost like bankers, the politicians' dilemma is that to most people their pay is wildly out of line with their public status. It may be too much to suppose that such a pay cut would elicit sympathy, but it would indicate a degree of repentance. And if, privately, some aspiring ministers claim they would not be able to afford to serve more than a single term in office, that there will be a surge in ministerial turnover, there are plenty of people who would welcome more new brooms and fewer old hands around Whitehall. More problematically, it would mean a cabinet minister earning less than their permanent secretary or the chief executive of their local authority.
But politicians' pay is not only about the relationship with their voters. In this mood of new puritanism, it is worth observing that not since the 18th century has politics appeared an opportunity to get rich (although a few have succumbed to the appeal once there). Historically, the argument has been about widening opportunity, even if the idea of opportunity is relative. So an exchange during a debate in 1850 ("If the salaries of these offices were brought so low as to exclude the possibility of men of small fortune taking them," said the then chancellor of the exchequer, Sir Charles Wood, "I conceive it would do a most irreparable injury to the public service, and great injustice to such parties.") will, with syntactical modernisation, be repeated now. Labour, for whom parliamentary and ministerial salaries have always been financially more necessary, will claim that only rich Tories could afford to suggest cutting ministerial pay, while pointing out that some Labour cabinets have forgone pay increases. And Tories, two-thirds of whom have pay beyond their MPs' salary, feel that any ban on second jobs would be expressly aimed at them – although that has not stopped Mr Cameron ordering his shadow cabinet to shed their outside earnings. Deciding how and how much we value the political classes is at the heart of this crisis of politics. The danger is that the appearance that every proposal is weighed for its conspicuous contrition will undermine good ideas and make the chance of real reform look as distant as that other great missed opportunity, change in the City.
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THE GUARDIAN
EDITORIAL
IN PRAISE OF… THE LANGA SINGERS OF RAJASTHAN
As always, this Proms season is replete with big names: Martha Argerich, Bernard Haitink, Yo-Yo Ma. It celebrates Delius, Holst and (of course) Elgar. Yet one of the most exciting Proms events, taking place this weekend, will feature neither big stars nor canonical composers. And the audience will not even have to shell out. Performing opposite the Albert Hall on Sunday afternoon will be folk musicians and dancers from western India; all will be worth seeing, but the highlight is likely to be the Langa singers of Rajasthan. They feature in a piece in today's Film & Music section, but the truth is that they are worth a book, or a film. Umer Khan Langa and his fellow performers are part of a 10,000-strong caste of Langas who live in the Tihar desert, near India's border with Pakistan. While they also grow crops or raise livestock, the Langas' profession is to perform for their clusters of patrons – who are not kings, but mainly farmers. For weddings in their patrons' families, the Langas will turn up and perform for days at a stretch. Their songs can be romantic or rural in theme – about sleeping kings who must not be woken or husbands who have left the village for too long – and accompanied by a Sindhi sarangi – a high-pitched fiddle – and dholak drum. They pass their music down from father to son, and each musician has a repertoire in his head of 300-400 songs. This tradition is many centuries old; and for one afternoon, strollers in Kensington Gardens will be able to see it up close. Let us hope the rain holds off.
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THE JAPAN TIMES
EDITORIAL
SMOOTH START TO NEW TRIALS
The first criminal trial under the lay judge system ended in Tokyo District Court last week, and a second such trial wrapped up in Saitama District Court on Wednesday.
The first trial resulted in a 72-year-old Tokyo man being given 15 years in prison for stabbing to death a 66-year-old female neighbor; the prosecution had sought 16 years. The trial proceeded rather smoothly since the defendant had admitted his guilt. The main point of contention was the degree of his intent to murder. Even so, it is significant that the proceedings under the new system became much easier for the public to understand.
Maps, illustrations and photos were used for clarification, and the ruling was written in easy-to-understand language. Thus a first step was taken in making criminal trials more open to the public. Although a professional judge in the Tokyo trial at one point appeared to pose a question on behalf of the lay judges, all six lay judges eventually asked their own questions.
More effort appears needed to help the lay judge system take root in Japanese society. At present, a strict gag order under threat of punishment is imposed on lay judges. Restrictions should be eased to enable the public to understand what points the lay and professional judges made and how and why they reached their rulings. Allowing lay judges to speak more freely can help shed light on any problems in the lay judge system. If restrictions are eased, however, measures should be crafted to ensure the safety of judges.
To shorten the proceedings and help them run smoother, professional judges, public prosecutors and defense lawyers hold pretrial meetings to narrow down the main arguments and evidence in the case. Since the prosecution, as a state organ, is in a much stronger position than the defense, it should be legally required to present all the evidence it possesses at these meetings.
To prevent conviction on false charges, lay judges must carefully scrutinize the prosecution's evidence in an objective manner and not be swayed by the emotions voiced by crime victims or their relatives. Professional judges can play an important role in helping lay judges in these matters.
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THE JAPAN TIMES
EDITORIAL
PARTY LEADERS OUT OF THE GATE
Prime Minister Taro Aso and Democratic Party of Japan leader Yukio Hatoyama held their first election debate Wednesday. Mr. Aso strove to paint the DPJ as a party with no governing ability, and tried to sell his Liberal Democratic Party as the "responsible" one that implements policy based on a solid financial foundation, including an eventual hike in the consumption tax rate. Mr. Hatoyama criticized the ruling coalition of the LDP and Komeito for letting bureaucrats take the initiative in developing policy and turning Japan into a nation bound firmly by bureaucrats' vested interests. He noted that many people want a change of government.
Mr. Aso tenaciously attacked the DPJ for its security policy, saying that Japan's security cannot be left to a party that lacks a coherent security policy, a charge that Mr. Hatoyama failed to effectively parry. As for the Maritime Self-Defense Force's Indian Ocean fueling mission, which the DPJ opposed, Mr. Hatoyama said that if the DPJ takes power it will handle the matter realistically as demanded by consistency in diplomacy.
Mr. Aso said that the DPJ's proposals for child allowances, income compensation for farmers and toll-free expressways are irresponsible "money-scattering" measures that lack clear financial sources. Mr. Hatoyama said that necessary funds will be created through a reworking of the nation's ¥207 trillion budget, but he failed to show where actual cuts would be possible.
Mr. Aso placed top priority on economic recovery, but did not lay out a concrete path for economic growth. And while he said he would implement concentrated economic measures, he failed to explain how he would fund them.
Mr. Aso failed to address the troubled social security system or the weakening of local economies. Mr. Hatoyama, for his part, had a difficult time selling his "politics with a warm heart." Overall, the debate left viewers unsatisfied. It is hoped that in the runup to the Aug. 30 Lower House election, the party leaders will clarify the content of their party's policy platforms so voters can make a more informed choice at the polls.
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THE KOREA HERALD
EDITORIAL
YANGON SANCTIONS
A Yangon court found Myanmar's opposition leader Aung San Suu Kyi guilty of breaking the terms of her detention when an American man swam to her home in May and stayed there for two days.
The court sentenced her to three years of hard labor and imprisonment but that sentence was immediately commuted to 18 months under house arrest on a special order from the military ruler Than Shwe.
The guilty verdict, which had been widely expected, keeps Suu Kyi confined to her house ahead of next year's general election. Suu Kyi has been kept in detention for 14 of the past 20 years - the last period of house arrest began in 2003 and was scheduled to expire in May.
Suu Kyi was first put under house arrest from 1989 to 1995. She has not seen her two sons for about 10 years and was unable to leave the country when her husband, a British scholar, died of cancer in 1990.
Now, the symbol of Myanmar's struggle for democracy will be kept for another 18 months in isolation. The 64-year-old Nobel laureate is only allowed to listen to government-controlled radio and read the government mouthpiece newspaper. She has two female aides - who were also sentenced to 18 months under house arrest this week - and is allowed almost no visitors, except doctors and lawyers.
The military regime in Myanmar has ruled the country for almost five decades. It has done so impervious
to condemnation by the international community. In 1990, the military junta nullified the results of the general election in which Suu Kyi's National League for Democracy Party won a landslide victory. Next year's election would be the first since that time.
Suu Kyi's lawyers argued during the trial that she could not be held responsible for the actions of John Yettaw who testified that he swam to her house after receiving a message from God that he must protect Suu Kyi against a terrorist plot to assassinate her. The baffling case handed the junta a convenient excuse to keep her locked up for next year's elections.
Suu Kyi and her aides faced up to 5 years in prison under Myanmar law. The military government tried to appear lenient by giving them a three-year sentence and then immediately cutting it to 18 months under house arrest. However, the military leaders in Yangon are not fooling anyone.
Countries around the world have condemned the sentence. U.S. President Barack Obama said the sentence was "unjust" and called for the release of Suu Kyi and thousands of other political prisoners. "Suppressing ideas never succeeds in making them go away," he said.
The European Union said it would reinforce sanctions against the regime and the Association of Southeast Asian Nations, of which Myanmar is a member, issued an expression of disappointment, an unusual move for the regional group.
U.N. Secretary-General Ban Ki-moon, who has shown keen interest in getting the Mynamar government to release Suu Kyi, demanded her unconditional release.
Despite the condemnation of the sentence from around the world, Myanmar's state-run newspaper published a commentary telling foreign countries not to meddle in the nation's affairs.
However, basic human rights are held to be universal and authoritarian regimes' often used phrase "do not meddle in internal affairs" should not apply in the case of human rights abuses.
The U.N. Security Council should immediately adopt a statement of condemnation against the Myanmar junta which has flagrantly violated the rights of Suu Kyi and thousands of other political prisoners. China's defense of the junta - urging countries to respect the sovereignty of Myanmar - is shameful.
Myanmar, along with North Korea, has one of the worst human rights records in the world. The international community should come together in exerting greater pressure on the country to improve its human rights conditions.
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THE KOREA HERALD
EDITORIAL
DRUNK DRIVERS
More than 1.52 million people received a special pardon to mark the 64th anniversary of Liberation Day on Aug. 15. The government said that the mass presidential pardon is part of its efforts to help low-income groups and provide realistic assistance in the current economic downturn.
The logic behind this round of presidential pardons is that it would give small, first-time offenders who inadvertently broke the law while trying to earn a living a chance to start afresh. It is ostensibly in line with President Lee Myung-bak's recent pledge to help the poor.
While the goals are worthy, a close look at who are being pardoned is worrisome. More than 98.5 percent of those pardoned are traffic law violators. Of these, 82.2 percent are simple offenders who have accrued demerit points for breaking the traffic law. Having demerit points does not affect one's ability to make a living. So why erase these people's violation records? If the rule of law is to be upheld, strict application of the law is necessary. Mass presidential pardons do a disservice by diluting the strict application of the law.
Even more worrisome is the fact that people convicted of drunk driving have been pardoned. While the government has excluded people with two drunk driving offences in the past five years, those caught drunk driving without a license and drunk drivers involved in accidents in which people were hurt or killed, the fact that drunk drivers have been pardoned at all is regrettable.
Drunk drivers put not only themselves but innocent people at risk. By wiping the slate clean, the government sends the message that drunk driving is not a serious crime. The government, which should enforce strict rules against drunk driving, has reduced its own power to prevent drunk driving with the presidential pardons. Around the world, governments are stepping up restrictions against drunk driving. It is lamentable that the Korean government is issuing pardons to drunk drivers.
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THE KOREA HERALD
EDITORIAL
ANOTHER ROUND OF STIMULUS REQUIRED
JOSEPH E. STIGLITZ
NEW YORK - As the green shoots of economic recovery that many people spied this spring have turned brown, questions are being raised as to whether the policy of jump-starting the economy through a massive fiscal stimulus has failed. Has Keynesian economics been proven wrong now that it has been put to the test?
That question, however, would make sense only if Keynesian economics had really been tried. Indeed, what is needed now is another dose of fiscal stimulus. If that does not happen, we can look forward to an even longer period in which the economy operates below capacity, with high unemployment.
The Obama administration seems surprised and disappointed with high and rising joblessness. It should not be. All of this was predictable. The true measure of the success of the stimulus is not the actual level of unemployment, but what unemployment would have been without the stimulus. The Obama administration was always clear that it would create some 3 million jobs more than what would otherwise be the case. The problem is that the shock to the economy from the financial crisis was so bad that even Obama's seemingly huge fiscal stimulus has not been enough.
But there is another problem: In the United States, only about a quarter of the almost $800 billion stimulus was designed to be spent this year, and getting it spent even on "shovel ready" projects has been slow going. Meanwhile, U.S. states have been faced with massive revenue shortfalls, exceeding $200 billion. Most face constitutional requirements to run balanced budgets, which means that such states are now either raising taxes or cutting expenditures - a negative stimulus that offsets at least some of the Federal government's positive stimulus.
At the same time, almost one-third of the stimulus was devoted to tax cuts, which Keynesian economics correctly predicted would be relatively ineffective. Households, burdened with debt while their retirement savings wither and job prospects remain dim, have spent only a fraction of the tax cuts.
In the United States and elsewhere, much attention was focused on fixing the banking system. This may be necessary to restore robust growth, but it is not sufficient. Banks will not lend if the economy is in the doldrums, and American households will be particularly reluctant to borrow - at least in the profligate ways they borrowed prior to the crisis. The almighty American consumer was the engine of global growth, but it will most likely continue to sputter even after the banks are repaired. In the interim, some form of government stimulus will be required.
Some worry about America's increasing national debt. But if a new stimulus is well designed, with much of the money spent on assets, the fiscal position and future growth can actually be made stronger.
It is a mistake to look only at a country's liabilities, and ignore its assets. Of course, that is an argument against badly designed bank bailouts, like the one in America, which has cost U.S. taxpayer hundreds of billions of dollars, much of it never to be recovered. The national debt has increased, with no offsetting asset placed on the government's balance sheet. But one should not confuse corporate welfare with a Keynesian stimulus.
A few (not many) worry that this bout of government spending will result in inflation. But the more immediate problem remains deflation, given high unemployment and excess capacity. If the economy recovers more robustly than I anticipate, spending can be canceled. Better yet, if much of the next round of stimulus is devoted to automatic stabilizers - such as compensating for the shortfall in state revenues - then if the economy does recover, the spending will not occur. There is little downside risk.
Nevertheless, there is some concern that growing inflationary expectatio ns might result in rising long-term interest rates, offsetting the benefits of the stimulus. Here, monetary authorities must be vigilant, and continue their "non-standard" interventions - managing both short-term and long-term interest rates.
All policies entail risk. Not preparing for a second stimulus now risks a weaker economy - and the money not being there when it is needed. Stimulating an economy takes time, as the Obama administration's difficulties in spending what it has allocated show; the full effect of these efforts may take a half-year or more to be felt.
A weaker economy means more bankruptcies and home foreclosures and higher unemployment. Even putting asidethe human suffering, this means, in turn, more problems for the financial system. And, as we have seen, a weaker financial system means a weaker economy, and possibly the need for more emergency money to save it from another catastrophe. If we try to save money now, we risk spending much more later.
The Obama administration erred in asking for too small a stimulus, especially after making political compromises that caused it to be less effective than it could have been. It made another mistake in designing a bank bailout that gave too much money with too few restrictions on too favorable terms to those who caused the economic mess in the first place - a policy that has dampened taxpayers' appetite for more spending.
But that is politics. The economics is clear: the world needs all the advanced industrial countries to commit to another big round of real stimulus spending. This should be one of the central themes of the next G20 meeting in Pittsburgh.
Joseph E. Stiglitz, a professor of economics at Columbia University, chairs a Commission of Experts, appointed by the president of the U.N. General Assembly, on reforms of the international monetary and financial system. A new global reserve currency system is discussed in his 2006 book, Making Globalization Work. - Ed.
(Project Syndicate)
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THE KOREA HERALD
EDITORIAL
SEXUAL, POLITICAL SHENANIGANS COULD SINK BERLUSCONI
ARNOLD CASSOLA
ROME - Italian Prime Minister Silvio Berlusconi's political and sexual exploits make headlines around the world, and not just in the tabloid press. These stories would be no more than funny - which they certainly are - if they were not so damaging to Italy and revelatory of the country's immobile politics.
Despite the rampant scandals, "national Silvio" ("Il Silvio Nazionale") remains by far Italy's most popular and successful politician (though his approval ratings have now dipped below the 50 percent mark in opinion polls for the first time since his second return to the premiership in 2008).
Part of the reason for Berlusconi's longevity, despite his many stumbles, is cultural. As in other Latin or Mediterranean countries with a strong Catholic tradition, Italian society long ago learned to accept serenely a life of duplicity: on the one hand, a strong attachment to church and family values, and on the other a second life - often lived in plain sight - composed of mistresses and other "dubious" connections.
Today's Italian Catholic political leaders often embrace such a lifestyle. In recent years, aside from Berlusconi himself, other divorces like Centrist Catholic Party Leader Pier Ferdinando Casini and Parliament Speaker Gianfranco Fini could easily deliver passionate speeches in the morning on the importance of the traditional family unit and the sacredness of marriage, attend a touching audience with the Pope in the afternoon, and then rush off in the evening to their unmarried partners and mothers of their latest offspring.
Italian society's tacit acceptance of such behavior has become more openly acknowledged in recent years, thanks perhaps to Berlusconi and his vast media holdings. In the 1970s, the average Italian working-class family's major ambition for its children was for them to study, go to university, and become a doctor or a lawyer.
Since the late 1970s, and especially during the 1980s and 1990s, Berlusconi's three private TV channels have portrayed a false and illusory model of quick success, as seen in American soap operas such as "Dallas." Since the 1990s, his channels broadcast "Big Brother" and Italian variety shows dominated by male comedians, musclemen, and scantily clad young girls, popularly known as "veline."
In the space of just 30 years, Berlusconi's TV stations managed to impose this illusory portrait of success on Italian society. Today, the ambition of many working-class Italian mothers is to see their daughters become a successful scantily clad "velina" who, in turn, manages to hit the gossip columns by flirting with the latest muscleman-turned TV heartthrob or some budding young football player. Graduating as a doctor or a lawyer is no longer a mark of success.
Despite his lack of muscles and hair, Berlusconi is the embodiment of this form of success. The former cabaret singer who became one of the richest businessmen in the world, has also managed to become Italy's most powerful politician - and one of the world's most colorful. Until a few weeks ago, the average Italian viewed him as a role model, someone who had succeeded in many spheres of life.
That has now changed. People have become less admiring of Berlusconi, because the hypocrisy has gone too far. It may be trendy for an Italian politician to flaunt his Mediterranean macho image, but that image becomes hard to stomach when the prime minister launches a campaign to eradicate street prostitution, with possible jail sentences for clients, while sleeping with paid escorts.
Nor are Italians reassured to learn that Berlusconi fielded a number of candidates during the recent European Parliament elections whose only discernible qualification was that they were pretty young girls who had possibly spent some time in the prime minister's company at his Sardinian Villa or Roman Palazzo.
Today, it seems all but certain that Berlusconi will never be elected president of Italy, the post to which he has always aspired. Moreover, rumors are rife that he is now being attacked for his behavior by members of his own party. Indeed, some maintain that Berlusconi will be forced to resign as prime minister by the end of the year.
Such rumors may well turn out to be true, for the heart of the scandal now concerns the taped conversations between a paid escort and Berlusconi during their romps in his Sardinian villa on the big bed given to him by his Russian counterpart, Vladimir Putin. A downfall plotted to happen on a Kremlin-supplied bed would be a denouement that not even one of Berlusconi's TV channels could dream up.
Arnold Cassola is a former secretary general of the European Green Party and a former member of the Italian Parliament. - Ed.
(Project Syndicate)
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THE GAZETTE
EDITORIAL
CANADA LETS DOWN ANOTHER CITIZEN ABROAD
Maher Arar. Omar Khadr. Abousfian Abdelrazik. Huseyin Celil. And now Suaad Hagi Mohamud. These are all Canadian citizens who have been left in the lurch by Canada's consular services around the world.
We're not convinced there's a pattern to this, but we can see why some might detect one: All of these people are non-white, Muslim, first- or second-generation immigrants.
We would prefer to believe, dismaying though these conclusions are, one of these two theories: that the level of competence in Canada's consular offices overseas is at a terrifying low, or that security paranoia has gripped our government so hard that it chooses to brush aside citizens' rights.
Consider what happened to Suaad Hagi Mohamud. After visiting her mother in Kenya, Mohamud, 31, was stopped by a Kenyan airport official who thought she did not look enough like her 4-year-old Canadian passport picture. Fair enough: Mohamud apparently had lost weight recently.
To prove her Canadian citizenship, Mohamud then provided the following: an Ontario driver's licence, a health-care card, a citizenship certificate, a social-insurance card, a credit card, bank cards, a hospital card, a drugstore card, a note from her Toronto employer, and a recently-dated Toronto dry-cleaning receipt.
And yet officials at the Canadian high commission in Kenya chose to reject all her documents, voided her passport, and sent it to local authorities so they could prosecute her for using false travel documents.
Even as Mohamud offered to provide a DNA sample, Canadian officials insisted that it had carried out "conclusive investigations" showing that Mohamud was an imposter. But when the DNA results came in, they showed a 99.99 match between Mohamud and her 12-year-old son in Toronto.
What "conclusive investigations" did Ottawa carry out? What wasn't good enough about the long list of documents Mohamud provided? Even now, Ottawa is making things difficult for her. After leaving her to raise money among the local Somali community to get out of jail, Ottawa won't give her time to collect the bail money and settle her debts, insisting she leave the country immediately.
An aide says Public Security Minister Peter Van Loan has demanded an explanation of the case's handling from the bureaucrats of the Canadian Border Services Agency. That would be acceptable if this were an isolated incident, but under the circumstances, a more vigorous response is needed.
Not every Canadian abroad is an angel, and security concerns can be legitimate. But high-handed and arbitrary decision-making as in this case, Abdelrazik's, and others, suggest a serious problem.
Canadians abroad need to be able to count on our government to support us where support is appropriate. If Ottawa can treat one citizen this way, it can treat any citizen this way.
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THE GAZETTE
EDITORIAL
LEFT-WING TACTICS WORK JUST AS WELL FOR THE RIGHT IN A RIGHT-WING
For many Democrats in the U.S. Congress, this summer recess has become much less pleasant than the usual cycle of county fairs, corn roasts, and softball games. "Town hall" meetings across America are being disrupted by angry constituents denouncing "socialized medicine." Liberal Democrats claim to be shocked at the orchestrated tactics of their opponents, but older Americans will recall how closely these tactics copy those of left-wing activists a generation ago.
President Barack Obama has pushed Congress to do something about medical insurance, and the Washington debate is heated. No wonder: The U.S. spends far more than any other country for medical care, and while the wealthy have the best care on Earth, 40 million Americans have no medical insurance. For the whole population many medical outcomes - life expectancy, perinatal mortality, etc. - are much worse than in other countries.
This summer the debate has moved from D.C. to Main St. and angry chants - often "You work for us!" - drown out Democratic speakers. Many on the left, Democrats and liberal media alike, are shocked - shocked! - to find that these angry disruptors are organized nationwide by FreedomWorks, a conservative activist group. On the other side, Obama's pre-election support outfit, Organizing for America, has mobilized to organize summer events supporting a medical-insurance bill. When liberal groups do this, it's called "community organizing." When conservatives do it, it's a conspiracy.
The irony is that, as someone from FreedomWorks told National Public Radio, these tactics come straight from the playbook of legendary agitator Saul Alinksy, whose book Rules for Radicals taught a generation how to protest for left-wing causes. He championed, among other tactics, confrontation at "accountability sessions" such as town-hall meetings.
Democrat Nancy Pelosi, Speaker of the House, says drowning out opposing views "is simply unAmerican," and although the tactics she deplores have left-wing roots, she is correct. Democracy should be government by debate, not government by volume meter.
Fortunately, Canada has largely been spared this sort of more-heat-than-light politicking. Let's hope that continues to be true.
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CHINA DAILY
EDITORIAL
USE OF DONOR FUNDS
Who should have the right to control the use of the donors' money for the earthquake victims in Sichuan province last year? That 80 percent of the 76 billion yuan ($11.2 billion) donated for the earthquake victims was reported on Wednesday to be under the government's management has touched off this debate.
The Ministry of Civil Affairs (MCA) responded to the debate yesterday, saying that the country's non-governmental organizations (NGOs) do not have very good credibility, the feedback on their use of donor contributions is not transparent enough and hence, donors do not want them to handle the money.
The official from the MCA also said that the government faces a lot of pressure in managing such funds because of its financial system. Once the money has entered State treasury, a budget must be made for its use, and with a budget, it takes time to put the money to the right use. But it is not without merit for the donation to be kept in State treasury before being used. Strict audit will ensure that the money is not misappropriated or embezzled.
True, there were scandals about donor funds being misappropriated by NGOs in spite of the fact that the use of the donated money is believed to be much more flexible if it is under the control of NGOs. So, both the general public and the government do not feel reassured at such a large sum of money being put in the hands of NGOs.
Yet, will the money in the government treasury be 100 percent safe from being misappropriated or embezzled? Not necessarily. Misappropriation of funds allocated from the central government occurs every year as is revealed by the annual audit report.
But, the government is more trustworthy than the NGOs. That is why more than 60 percent of the respondents in an online survey prefer the government to NGOs when it comes to the question of who should hold the purse strings.
The core issue is how the donated money can be used in the right place and in the right manner. As far as efficiency, openness of financial accounts and information transparency are concerned, there is much to be desired in both cases.
There is no such belief of a NGO being more efficient, honest and clean than the government in allocating the donated money and materials. Everybody is fallible and can be corrupt when the power in his or her hands is under no effective supervision.
However, with China becoming more and more a pluralistic civil society, it is inevitable for NGOs as an increasingly important part of the social fabric to develop and take up a large part of social work such as raising donations or doing other social welfare jobs. Corresponding legislation is needed to put NGO activities on the right track. That is where the government should do a better job.
Now, when the government controls the majority of donated money, timely disclosure of information concerning its use and transparency of accounts is necessary for donors to know that the funds are used in the right place and in the right way.
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CHINA DAILY
EDITORIAL
GIFT OF HINDSIGHT
The controversial "Green Dam" software will "absolutely not be compulsorily installed on all computers" sold in China, says Minister of Industry and Information Technology Li Yizhong.
To date, this is the most welcome message regarding the controversial "Green Dam-Youth Escort" - a filtering software intended to keep youngsters from being exposed to unhealthy online contents such as pornography.
Something meant to protect our young citizens from harmful information is worthy of applause. Yet the "Green Dam" was stonewalled because of the fear that it would compromise people's privacy and right to know.
Now, Mr Li clarifies that we have all been mistaken about what was on their mind - they had no intention to monitor our online activities, nor did they want to impose the filtering device on all personal computers. Which is different from what we heard two months back. At the June 30 press conference we heard the ministry, for some reason, was only postponing forced installation of the software. And, sources in the ministry disclosed then that compulsory installation was only "a matter of time."
And, now, Mr Li assures us that the so-called forced installation was the result of a misleading impression, which itself was the outcome of awkward representation.
It is a pity that a well-thought-out public interest initiative turned into a public relations disaster for the ministry. And it is all about misrepresentation. Never again should something like this be repeated.
We appreciate the clarity Minister Li demonstrated yesterday responding to questions regarding the "Green Dam." Had there been such an unequivocal position at that time, there would not have been all the trouble.
We fully understand and endorse the ministry's good intention to help parents who worry about the negative impact of unseemly online content. We believe it is perfectly justifiable to install filtering devices on computers in schools and Internet cafes. It would have been a wonderful initiative had it stopped right there. There is no legal ground to force it on all personal computers.
It is good to know from Mr Li that it was only a false alarm.
Mr Li promises to listen to all interested parties about how to improve the project, show full respect for people's right of choice and handle the matter properly. Which is the only sensible way to do away with misunderstandings, and repair the ministry's damaged image.
But the result would have been better had this occurred to the ministry before that disputed decision was publicized.
Making public an ill-conceived decision is as bad as misrepresenting a good one.
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CHINA DAILY
EDITORIAL
WHAT MAKES A GLOBAL FINANCIAL CENTER
We grow up thinking the world is balanced - that good cancels out evil, that assets equal liabilities, that life is a simple bell-shaped curve. But that's not the case. There is a lot of inequality in the world. We like buying, but we do not sell that often, except when forced to. Risks in the financial world are similar. George Soros recently consolidated my belief in the saying, common sense is not so common.
Financial markets are dangerous because the risk of going long (only buying and not selling) is not the same as going short (selling or borrowing what you don't have). If you buy something and the price drops to zero, all you lose is your asset. But if you borrow or you go short on a product, you could not only lose everything you have, but also end up owing far more than you realize.
This is the common sense AIG failed to appreciate. If you insure cars or life, you are working with the law of large numbers. As long as your premium covers the estimated losses, you can still make money. But if you insure banks (which are highly leveraged institutions) or borrowers, exactly what AIG's derivative trading subsidiary did in London, the losses will be amplified by the embedded derivatives.
Imagine someone trying to insure the recent global bank losses of nearly $3 trillion. The banks lost a lot because they were highly leveraged institutions. The lower the price of assets that they hold, the greater their bankruptcy. So AIG needed more than $180 billion to bail itself out, compared with the initial request for only $10 billion.
This takes us back to the use of a country's currency as international reserve currency (which we discussed last week). When a currency circulates within the borders of just one country, it is a case of one citizen lending to another, or the left hand borrowing from the right. If someone does not pay his or her debt, there are laws to protect the lender. Even if the corporate sector over-borrows and collapses, the state can intervene by either nationalizing the debt or taxing the rest of the population to pay for the losses.
Asians have not forgotten that in the 19th century foreign debt was imposed on them through gunboats and military invasions. It is not good to have too much foreign debt because a central bank cannot print foreign currency.
So why should a country want its currency to be an international reserve currency? There are two basic reasons for that. The first is seigniorage, which means anyone who issues currency is actually borrowing money without interest. All central banks earn seigniorage by issuing currency. In a sense, it is the premium citizens pay to the central bank for safeguarding the value of their currency. Therefore, the country that issues a global reserve currency enjoys seigniorage from foreigners who hold its currency. This amount can be very large indeed, as in the case of the US.
But the actual benefits received for trade and commercial services when the currency is the reserve standard are larger. In the days of the British Empire, London benefited hugely from being the financial center for the pound sterling, as well as the trading hub for commodities, international loans and related legal and commercial services. Although the sterling lost its role as a major reserve currency to the US dollar, London became the center for the offshore euro-dollar market and also an important complement to New York. The biggest commercial banks, brokers, fund managers and insurance companies were located both in London and New York because they shared the same language and similar laws and business practices.
So what makes an international financial center? After working in Hong Kong, I finally understood that an international financial center must meet three basic conditions: protect property rights, have lower transaction costs, and have high transparency. The first condition is obvious and yet not so obvious. Most Western economists say London and New York have superior property rights because they have well-accepted common laws and excellent and fair judiciaries. But protection of property rights is more than just laws and enforcement. Protection of property rights also means political stability, and the absence of nationalization, predatory taxation and a strong military power. To put it bluntly, no successful international financial center operates in a war zone or a banana republic.
The second condition, of low transaction costs, is very important. No financial center will succeed if it is not convenient to do business there with low regulatory costs and good communications infrastructure. The best financial centers have excellent telecommunication and transport networks and living conditions. Transaction costs are associated with geography, too. It is no coincidence that New York dominates in the American time zone and London in the European and African time zones. Asia has no dominant financial center for reasons that I will discuss later.
High transparency is needed because markets thrive on information. If information is not accurate, timely and accessible, investors will not know how to protect their funds and make good decisions.
Next, I shall look at why Japan failed to make yen a dominant global reserve currency.
The author is Adjunct Professor in Tsinghua University, Beijing, and University of Malaya. He is a former chairman of Hong Kong's Securities and Futures Commission.
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CHINA DAILY
EDITORIAL
AHMADINEJAD HAS A REAL JOB ON HAND
Mahmoud Ahmadinejad began his second term as Iranian president last Wednesday, nearly two months after winning a disputed election. Iran has generally maintained political stability over the past four years, but Ahmadinejad now faces a series of new difficulties and challenges.
The ruling conservative party didn't face much of a challenge from reformists since they lost the presidential post and the parliament four years ago. But this year's election has greatly raised the reformists' confidence of winning back the presidency. Mirhossein Mousavi's high-pitched campaign in the election and the number of his supporters during the protests against the election results are pointers to their rising confidence.
The series of protests against the election results have consolidated the reformists, and even Akbar Hashemi Rafsanjani, former president and a moderate, supports their stance. As the mass trial of some opposition forces goes on, new protests are expected to erupt, heightening the political battle between the reformists and conservatives.
Ahmadinejad, it seems, has to devote more time to domestic politics during his second term because apart from the reformists, he also has to tackle his rivals who have emerged in the conservative group. What will make matters really difficult for the president is Ayatollah Ali Khamenei's half-hearted support because of his disagreement with the Ahmadinejad's Cabinet composition.
The president faces a number of tricky economic problems, from high unemployment to high inflation. Iran's official data show the country now has 2.7 million unemployed and its inflation rate grew by 22.5 percent in a year from March 2008. To top it all, the global economic crisis is likely to cause a drop of $38.7 billion in Iran's export volume this year - the expected $56.3 billion worth of exports would be the lowest since 2004.
So checking the high unemployment and inflation rates will be the top priority of the Ahmadinejad government.
The other great challenge for the government is finding a way to extricate Iran from the diplomatic row caused by its controversial nuclear program. The nuclear issue has long been a source of tension between Iran and the West. The long-strained Iranian-US ties have improved to some extent after Barack Obama assumed the office of the US president. But Obama's moderate diplomatic policy and the global economic crisis, which forced the US administration's attention toward domestic problems, are more responsible for that.
Nonetheless, as the world's largest economy bottoms out, the Obama administration will divert its attention to Iran's nuclear program once again, increasing the pressure on Teheran.
Despite the pressing domestic and foreign challenges, the new Iranian government is not expected to drastically change its hardline policies, as was indicated by Ahmadinejad in his inauguration speech last Wednesday. He said Iran would continue with its active and strong diplomatic stance and refrain from maintaining silence against illegal acts, foreign intervention, warmongers and the unfair treatment of his country. "We do need to build friendly relations with the outside world on a peaceful, fair and equal basis, but we will by no means tolerate any insult," the outspoken president said.
Iran's long established conservative domestic policy is not expected to see much change either, though Ahmadinejad said in his inaugural speech that the new government will effect sweeping reforms in various fields. Given his record during the first term, it seems unlikely that Iran's controversial nuclear program will see a peaceful solution.
It is not known whether Teheran will be encouraged to follow Pyongyang's example, though the international community's attitude and determination to settle Iran's nuclear issue peacefully will directly influence that decision.
Teheran's ties with Washington, too, are likely to remain uncertain during Ahmadinejad's second term. Obama's reaffirmation that the US would like to improve its ties with Iran through dialogue has not changed Teheran's stance that Washington's policies toward it are prejudiced. This shows an improvement in US-Iranian ties depends more on the length Washington is ready to go to engage Teheran in a dialogue.
The US and its allies are discussing the possibility of imposing the most severe economic sanctions on Iran, including cutting off exports of petroleum and other refined oil products to Teheran if Ahmadinejad fails to respond positively to US offers on the nuclear issue. If the US and its allies impose the sanctions, it would prove catastrophic for Iran. The sanctions will foil any efforts to improve US-Iranian ties, too. Hence, the onus for better US-Iranian ties lies more with Washington.
The author is director of the Institute of International Relations under the Jiangsu Provincial Academy of Social Sciences.
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