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Monday, February 14, 2011

EDITORIAL 14.02.11

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  media watch with peoples input                an organization of rastriya abhyudaya



Month February 14, edition 000754, collected & managed by durgesh kumar mishra, published by – manish manjul


Editorial is syndication of all daily- published newspaper Editorial at one place.


























3.      THE PROOF



















































































1.      MORE TEETH

2.      HATED LOVE
















1.      PEOPLE'S POWER  









5.      FROM 9/11 TO 2/11 - BY ROGER COHEN



















































































The military has always been the bulwark that has supported Egypt's civilian Government and things have been no different in the days following the resignation of President Hosni Mubarak who was overthrown by an 18-day long popular uprising after three decades in power. The Supreme Council of the Egyptian military — a group of senior Generals — which was left in charge of the affairs of the state by Mr Mubarak before he left Cairo unannounced on Friday, has since handed the reins of the state back to the civilian Government. This new administration was appointed by Mr Mubarak only days before his resignation and is essentially a group of military men who are considered to be loyal to the former President. In a statement broadcast over state television on Saturday, an Army spokesman said that the current civilian administration, led by Vice-President Omar Suleiman, would manage the country's affairs until a new Government following fresh elections takes its place. A welcome affirmation of civilian control, the announcement was the military's first cautious steps towards defining a nation without Mr Mubarak at the helm. It is seemingly one that has been taken in the right direction and hopefully in the right spirit. It merits mention that though the Army spokesman emphasised the importance of a "a peaceful transition of power" that would allow "an elected civilian state to rule the country for building a free democratic state", he refrained from laying out a time-frame for the present administration. For now, Egyptians have their hopes up for presidential elections in September, but it is still unclear how long the current Government will stay in power. Saturday's statement also made it clear that Egypt's new administration would honour all international agreements, including the peace accord with Israel — a gesture that has gone a long way to soothe frayed nerves in Tel Aviv and Washington, DC. The 1979 Peace Agreement between Egypt and Israel, a defining element of Anwar Sadat's political legacy inherited by Mr Mubarak, has been an important constituent of the peace process in West Asia. Once Mr Mubarak's position was threatened, there were widespread fears in the region as well as in the US that a new administration might repudiate the deal. The military's announcement puts those fears to rest but it must also be noted that the accord is strongly supported by the Army since it guarantees about $1.4 billion in American aid every year.

Additionally, the Army spokesman also goaded citizens, including thousands of protesters who have been camping out at Tahrir Square for more than a fortnight, to return to work. This emphasis on a return to normalcy is indeed a heartening development. Weeks of turmoil have dealt a heavy blow to the Egyptian economy as shops and businesses have remained closed, foreign tourists — the country's economic mainstay — were evacuated and a large section of the population stayed home. Labour strikes have also plagued several industries and a call for everyone to return to work is definitely the need of the hour. For now, it seems like the Army is making all the right moves, or at least all the right noises. But it is imperative that the military ensures that political reforms are carried out and the process is not hijacked by Islamist radicals, namely the Muslim Brotherhood. If that were to happen, the revolution would prove meaningless.







The Rashtriya Swayamsevak Sangh has done well to categorically state that the so-called saffron elements accused of terror activities are not just enemies of the nation but also the organisation's opponents. The RSS cannot be held accountable if some of its wayward members — most of the accused had long ago parted ways with the organisation — have resorted to dubious deeds. After all, the organisation as a unit has neither endorsed nor encouraged such activities. And how could it, since it has been one of the most vocal opponents of terrorism? The fact that many of the accused had over time drifted away from the RSS demonstrates that they were upset by the organisation's refusal to countenance anything remotely violent. Indeed, from all they have said so far during their interrogation there is nothing to suggest that they were supported or helped by the RSS in their activities under the scanner. The letter recently written by senior RSS leader Suresh Soni to the Prime Minister demanding action against such people, should, therefore, be seen in that context and not as an attempt by the organisation to deflect criticism from itself. Of course, the fact that there is absolutely no evidence to link the Sangh to some of the recent terror attacks — whether it is the Samjhauta Express or the Ajmer Sharif blast — has not deterred opponents of the RSS from continuing to demand action against the organisation. In doing so, they vainly wish to shift focus from their own failures to contain jihadi terror, including the homegrown variety. They also hope to achieve the other purpose of mollifying Muslims who have been led to believe by pseudo-secularists that the RSS and its affiliates have been targeting them because of their religion. This is ridiculous and informed Muslims are not going to bite the bait because they know the battle is with terrorism and not against Islam.

This is not the first time that rivals of the RSS have launched a smear campaign against it. The organisation has even faced bans enforced by over-zealous Congress regimes, but those only served to strengthen the RSS and dent the credibility of its rivals. The sad thing is that the latest motivated attacks on the Sangh are serving as fodder to the Pakistani establishment that has shown no signs of regret over terror attacks emanating from that country. Ideological opposition to the RSS is both understandable and legitimate in a functioning democracy like ours which respects divergence of views and opinion. The RSS has its own ideology and views but even if some were to find reason to cavil against them, none can question the organisation's commitment to the nation. Hence, criticism should not degenerate to a level where it can be exploited by India's enemies.









As change sweeps through Arab countries, it's time for India's Muslims to wake up to the need for reforms. Maulana Vastanvi could lead from the front.

Inspired by the uprising in Tunisia, which saw the country's long-ruling President Zine El Abidine Ben Ali flee to Saudi Arabia, a wave of popular protest is sweeping through several Arab countries, grabbing the world's attention. It all started in Tunisia when a jobless 26-year-old graduate set himself on fire to protest against the seizure of his vegetable cart, his only means of earning a livelihood, by officials, triggering countrywide protests. Now, the three-decade-old regime of Egyptian President Hosni Mubarak has come to an end. Sudan, Jordan, Algeria and Yemen are also witnessing protesters taking to the streets against the entrenched regimes. The anger is also threatening to scorch Lebanon where Najib Mikati, a Hizbullah politician backed by Syria and Iran, has been installed as Prime Minister.

What remains to be seen is whether the House of Saud feels the heat and what direction the course of events in Tunisia and Egypt takes. In both countries, Islamists have become active once again. If the present political upheaval goes the Iranian way, it is bound to be a cause for concern for the entire world with radical Islamists coming to power in Arab states.

After the assassination of Salman Taseer, Governor of Punjab Province in Pakistan, there has been a surge in Islamic orthodoxy, threatening the civilian Government in Islamabad. In the Soviet era, communist states would view dissent as deviation from ideology. In the 21st century, dissidence is being equated increasingly with blasphemy in Islamic countries. For instance, in Pakistan, at least 30 people are reported to be on the death row for alleged violations of the tough anti-blasphemy laws of that country.

While Indian secularists remain silent over Pakistani clerics' hailing the murder of Salman Taseer and calling for the killing of all those who demand amendments to the blasphemy laws, such incidents are happening in India too. In the town of Sopore, which is the heart of the separatist movement in the Kashmir Valley, militants dragged two sisters from their home and shot them dead. The hardliners in the All-Party Hurriyat Conference issued a mild condemnation only after Chief Minister Omar Abdullah expressed his indignation over the silence of the separatist leaders. There are no prizes for guessing what would have been their reaction had the killings been perpetrated by security forces.

What would happen if in an environment of Islamic orthodoxy eminent Muslims were to raise their voices in favour of reform and modernisation? We have recently seen that at Darul Uloom, Deoband where Vice-Chancellor Ghulam Mohammed Vastanvi is under assault from fanatics. Eminent Muslim scholars elected Maulana Vastanvi as the Vice-Chancellor of this seminary in Deoband. His election itself was a surprise. Till recently he was not known outside western India, but his call for changes in the curriculum of the education offered by seminaries has catapulted him to the national scene.

This Muslim scholar from a lower middle-class family of farmers in Gujarat is a self-made man who is interested not only in theology but also modern education. After earning an MBA, he moved to Akkalkuwa on the Gujarat-Maharashtra border to set up a seminary and a modern educational institution to give free education to the poor people of his community. A whopping 1.7 lakh students have enrolled at this institution, named Jamia Islamia Ishataul Uloom, as compared to 3,000 at Darul Uloom, Deoband.

For Maulana Vastanvi — his surname comes from his native village of Vastan in Gujarat — an off-hand remark that Gujarati Muslims are not discriminated against and that "all communities" have prospered in Gujarat has landed him in trouble. The students at Darul Uloom, Deoband, as well as orthodox Muslims elsewhere, have demanded his immediate resignation from the Vice-Chancellor's post.

What is most surprising is the deafening silence of secularists and liberals in other communities. Why are they not coming forward to support this little spark of reform? Why are they not standing by Maulana Vastanvi in his battle against those who want Muslims to remain tied to the past and neglect modern education? Is it because they realise that if Muslims break free of the past and embrace modern education they will no longer remain a captive vote-bank?

In Bihar, the JD(U)-BJP Government, has successfully reached out to Muslims. As a result, they gave communal propaganda during the recent Assembly polls a thumbs-down and voted in favour of NDA candidates to register their support for development, education and eradication of poverty and crime. This contributed to the overwhelming mandate for the NDA in last year's election.

Maulana Vastanvi, who found Muslims in Akkalkuwa "illiterate and poor", did not blame others for the sorry state of affairs. Instead, he set up a modern educational institution in that little town. "The idea," he says, "is to be present in those areas that have no educational or health facilities to provide education to Muslims in Islamic atmosphere." Though he acknowledges that Darul Uloom, Deoband, is differently conceived, he believes in learning English and computer science. "The next thing I would like to do," he says, "is to ensure employment for every student who passes out of Darul Uloom, Deoband."

But jobs don't come easy in this era. Students have to acquire competitive skills to be employed in the industrial, services or retail sectors. If Muslims in India are willing to accept this reality, they should also applaud the Maulana-dominated Shoora for electing this reformer against one of their own kin.

When the electoral council of Darul Uloom, Deoband, meets later this month, will it ask Maulana Vastanvi to go ahead with his vision of uplifting the community and helping it to embark upon a journey that will take them to a brighter future? Even as the small flame of hope flickers, our so-called secularists would like blow it out lest Muslims see the reality and decide to get rid of their ghetto mentality. It seems they want Muslims to remain prisoners of the past. No wonder these secularists have not condemned the murder of Salman Taseer or the killings in Sopore but are busy demonstrating elsewhere.







What has been most striking about the protests in Tunisia and Egypt is their non-ideological character. Nonetheless, there will be heated debates over the proper role of religion in public life

If the last half of the 20th century was the hour of the big man in Arab politics and the first decade of the 21st was the hour of the extremist, we are now witnessing on the streets of Cairo — to steal a phrase from the late Lord Ralf Dahrendorf — the hour of the citizen. Three waves of democratisation have swept the globe in modern history, it has been argued, and each has bypassed entirely the Arab world. With the sudden collapse of authoritarianism in Tunisia and Hosni Mubarak's regime teetering on the brink, a fourth such wave may be taking shape, with the Arab world at its epicenter.

It's worth pondering what a fourth wave of democratisation might look like, drawing upon what happened two decades ago in the former East bloc.

First, it's unlikely that the autocracies of the Arab world will all topple quickly like dominoes as we saw in Eastern Europe. Protest movements will undoubtedly emerge in other Arab countries, other regimes may fall, but many Arab authoritarian Governments are likely to be with us for a while longer. The Communist regimes of Eastern Europe were all propped up artificially by Soviet military power; when it became apparent that Gorbachev was unwilling to intervene any longer in their internal affairs, these regimes collapsed quickly in the face of popular protests. Oil and natural gas have been the props supporting a number of Arab regimes (though it's been American aid in the case of Egypt and Jordan), and these natural resources and the wealth they generate are unlikely to disappear anytime soon. Moreover, while the states of the Arab world share a common language and history and many cultural characteristics, they differ importantly in the nature of their regimes, the degree to which they have been open in the past to the outside world, the level of education of their citizens, and the strength of their civic institutions. What has happened in Egypt, the most populous Arab state, will embolden citizens throughout the region to make their voices heard, but most probably with varying results because of these very differences.

Second, political change will come in many forms, not just street protests. The events of recent weeks have put Arab leaders on notice. Many will now take steps to forestall any possible political unrest. We have seen this already in Jordan, where King Abdullah announced a new Government in an effort to preempt the growing protests in his own country. Some of these changes are likely to be genuine, responding to the changed power dynamic in the region, and some merely cosmetic (as we saw in many of the successor states of the former Soviet Union) — changes meant to simply distract or buy time in the hopes that the public fever for change will eventually dissipate.

Third, political change will not always mean democracy. The Obama Administration has been justified in its concerns about the rapid collapse of authority in Tunisia and Egypt. It will likely be a long and perilous road from the political openings we have seen in the last weeks to genuine democracy. Caretaker Governments will have to be formed, Constitutions rewritten, free and fair elections held, and new democratic political institutions crafted. These new institutions will be but paper creations if publics do not remain constructively engaged so as to ensure they function according to the will of the people. As the experience in Eastern Europe and the former Soviet Union shows, there will be many opportunities during this extended transition process for former regime insiders, extremists, political opportunists, and even criminal elements to co-opt these popular revolutions for their own purposes. Of the 28 countries in the former Soviet sphere, only 13 are today categorised by Freedom House as "free" and another eight "partly free". As with the former East bloc, the nature of each society will matter significantly in terms of which Arab countries succeed in making the transition to democracy and which do not. Well-educated, highly networked societies that have been relatively open to the world are likely to fare better than others. Fourth, the political battles ahead in these societies are likely to revolve more around bread-and-butter issues than around ideology, but unlike in the former East bloc, the role of religion is likely to be a hotly contested issue.

What has been most striking about the protests in Tunisia and Egypt is their non-ideological character. The protesters have had very simple and pragmatic demands focussed on ending dictatorship and the corruption that accompanied it and improving basic rights and material living standards. To the extent their cries have verged on the ideological, it is greater freedom and democracy, and not Islam, that they have been calling for as way out of their current woes. For years, many western commentators have asked, often unfairly, where are the moderates? Well, here they are, marching peacefully in numbers larger than had ever been seen in the Arab world. In Egypt, the Muslim Brotherhood was late to the party, joining the demonstrations in large numbers only on the fifth day of the protests. More importantly, they do not appear keen on swiping the entire punch bowl for themselves. Nonetheless, there are likely to be heated debates ahead over the proper role of religion in public life, which remains an unresolved question in the Arab world. Better this battle be waged peacefully, though, within the context of democratic institutions, than violently on the streets.

Fifth, the collapse of authoritarian regimes in Tunisia and Egypt may well bring about a fundamental shift in geopolitics, akin to the realignments occasioned by the fall of the Berlin Wall, and the attacks of 9/11. Already we have gotten a foretaste of this in the shift in world media coverage over the last weeks — from covering suicide attacks by extremists in Afghanistan and Pakistan to the protests of ordinary citizens in Tunisia and Egypt. For the foreseeable future, the energies and attentions of the US and other major powers are likely to be consumed by political change in the Middle East. They will find themselves scrambling to keep up with the heightened expectations of newly empowered Arab publics — cajoling existing political leaders to get ahead of the curve by implementing meaningful reforms, managing peaceful political transitions, helping craft democratic political institutions and, above all, seeking to ensure stability as citizens clamor for regimes whose legitimacy derives not from force but from the will of the people.

Finally, a fourth wave of democratisation could potentially spread well beyond the Arab world. It is conceivable the scenes from Tunisia and Cairo could eventually serve as a rallying cry for a reenergised Green Movement in Iran. Chinese dissidents might find inspiration to challenge more aggressively the political monopoly of the Communist party. And with presidential elections looming in Russia in 2012, democracy could perhaps have another chance there. These could indeed be interesting, if perilous, times ahead.


..The writer is the director, US Relations with the Islamic World, The Brookings Institution







It will be interesting to watch how Arab states and Iran react to a new regime in Cairo, if there's going to be one. The Saudis and Jordanians will be nervous if ElBaradei comes to power as he may push for regime change in other states

In a move that simultaneously caught the world by surprise and yet indicated the regime's strategy, Egyptian President Hosni Mubarak announced his resignation the day after refusing to resign.

It is impossible to believe that the military, to whom Mr Mubarak handed power, changed its mind and plan in the last 24 hours due to continued demonstrations that it made no attempt to stop. So what is going on?

It is possible that Mr Mubarak went beyond the agreement he had made with the Army on what he was going to say in his speech. But that also seems unlikely.

What is most probable is that this was all agreed upon in advance: Mr Mubarak retained his dignity and can say (though few care) that he quit on his own terms. Perhaps, then, US President Barack Obama's jubilation yesterday might have been a premature expression of what he knew was going to happen.

So Mr Mubarak is gone. The first point is that while this is huge in psychological terms, it is less important in strategic terms. Either health or the end of his term in September would have taken the 82-year-old President out of office soon any way.

The immediate effect is to set off celebrations throughtout Egypt. On one hand, this benefits the regime, which has now removed its most hated symbol. On the other hand, since the revolutionary movement can take credit for Mr Mubarak's fall it is going to be seen as gathering momentum.

So, now the regime faces the opposition. What is it going to offer? If the terms laid out in Mr Mubarak's speech still prevail, the answer is not very much. Or will it go back to its original offer of parliamentary elections, a convention to draw up a new Constitution, and then presidential elections? Is the military ready to go out of the governing business and make a deal with the Opposition in order to preserve its own privileges? Here are the issues to watch:

·  Will there be talk about dissolving the Parliament and holding new parliamentary elections?

·  Will the regime seek a new Constitution?

·  According to the existing Constitution, there must be an election within 60 days. Is this going to happen?

·  Will the demonstrations die down now that Mr Mubarak is gone or will the pressure be kept up?

·  Will the Army, seeking popularity, continue to avoid interfering against demonstrations, or perhaps to limit them mainly to Tahrir Square?

·  Who will run for President? The Muslim Brotherhood will not run by itself but will support Mohamed ElBardei. What Opposition will there be to him, if any? Given the short time available, would anyone be able to organise a party except for the ElBardei-Brotherhood coalition?

If that last point is true, then we have to go back to all of our previous discussion regarding Egypt's future. For, after all, if Mr ElBaradei is going to be the President, the Army doesn't object, and his main ally is the Muslim Brotherhood, the next Government is likely to be a coalition that gives it an important (but not necessarily prominent) role.

There will be much cheering but one should remember the following facts:

·  Mr ElBaradei is totally untested and has no prior political or governing experience.

·  His views are relatively radical as will be his colleagues on foreign policy. There is an interesting question about how grateful he would be to Mr Obama, to whom perhaps he feels he partly would owe his position. That might be a mitigating factor.

·  Note that Mr Obama said that the US would do everything possible to help a democratic Egypt. Is he going to propose an international aid consortium or raise current levels of US aid? Given the economic situation that is hard to believe.

·  It will be interesting to watch the reactions of Iran and of Arab Governments to the new regime, if there's going to be one. Will Iran and Syria be enthusiastic — which would be the smarter move — or reserved, viewing Mr ElBaradei as an American puppet. The Saudis and Jordanians will be nervous, wondering whether Mr ElBaradei would support regime change in their countries. The Jordanians have the additional concern since their main opponent at home is the Jordanian Muslim Brotherhood, ally of one of Mr ElBaradei's main supporters.

·  What would the new regime do on the Egypt-Gaza Strip border? One might speculate that they would open the — a tremendously popular move in Egypt — and insist to the US that the Egyptian Army will keep out weapons. I don't believe this. Hamas, too, will be celebrating. In a sense, Hamas would have the ability to create a major regional crisis by attacking Israel since it can presume a degree of Egyptian support.

...The writer is director of the GLORIA Center, Tel Aviv, and editor of the MERIA Journal.








From start to finish, it has taken just 18 days for the lynchpin of the Arab world to change beyond recognition. Egyptian president Hosni Mubarak's three decades of rule has come to an end, an outcome which even a month ago would scarcely have been thought possible. And in that - the nature of the Egyptian revolution, almost entirely peaceful save for a few clashes between the protesters and Mubarak's supporters - lies the key to understanding why the Middle East is approaching a state of flux. It has laid bare the folly of the cultural determinism that says the Arab people and democracy don't go together.

This has not been a revolution inspired by leaders. For all his international cachet, Mohamed ElBaradei doesn't have much of a following in the streets of Egypt. Rather, it has been powered by youth. That makes for an instructive contrast to the 1979 Iranian revolution, in several ways. Not only was that a more violent upheaval, its most prominent face was that of an ageing patriarch and religious cleric, Ayatollah Khomeini. By contrast one of the most prominent faces of the Egyptian revolution is Wael Ghonim, a 31-year-old Google executive and blogger. This has been a push for democracy ignited and sustained by economic frustration and modern communications technology. Authoritarian regimes can still buttress their rule with petro-dollars and by playing upon sectarian divisions, but it no longer seems a strategy guaranteed to ensure rule in perpetuity.

Not that the revolution in
Egypt has succeeded yet. The military is in power now with the defence minister, Field Marshal Mohamed Hussein Tantawi, and chief of staff of the armed forces Lt Gen Sami Hafez Enan holding the reins. It has played an important and positive role so far. It must continue to do so by presiding over a transition to full democracy, as it has promised. It must also ensure the preconditions of democracy - such as an independent judiciary, an independent election commission, a constitution that guarantees political freedom, minority rights and full equality for women - are in place before the holding of free and fair elections.

That's a large task, and it is up to the US and the international community to both nudge Egypt in this direction and provide aid wherever needed. A new constitution and free and fair elections are areas where the international community can help. Egypt has shown that the imperative of stability cannot trump the aspirational value of democracy indefinitely. The Egyptian people have started the process of change; now this needs to be sustained by all well-wishers of Egypt. That is the true route to stability.







The tablet war in India is well and truly underway. The recent India launch of the iPad has left aficionados begging for more. And tech companies are more than willing to oblige. With 2011 all set to be the year of the tablet, stiff competition is expected to see prices drop and products become more versatile. The end result: value for money for customers. Just ahead of the iPad launch, many of its competitors dropped prices dramatically. Given India's 730 million strong mobile market - a solid base for tablets - companies would not want to miss out. Telecom companies have already announced dedicated 3G plans for the iPad. Greater innovation in software will add to customer choice. Google's much-touted Android 3.0 is expected to usher in a whole new range of application programmes designed specifically for tablets.

Touch-sensitive tablets, with their intuitive feel and easy portability, mark a significant conceptual leap in IT technology. Coupled with cloud computing that allows for an internet-based data delivery and storage system on a pay-per-use model, it has the potential to bridge the digital divide between rural and urban India. Last year, the human resource development ministry unveiled a tablet prototype priced at just Rs 1,500. Commercial production and marketing of such a device has revolutionary implications for education, farming and business. The challenge is to produce low-cost tablets catering to customised needs. And India's massive consumer base should provide enough incentives to domestic and international players. A new era of computing technology beckons.








No water, no future; no food, no future; no energy, no future; no environment, degraded future. Thus might one with a penchant for the pithy explain the nexus between these essentials and the gravity of the emergent global crisis. The world is indeed entering an era of scarcity. Water, food, energy and the environment have got intertwined in a spiral of decline and degradation. The challenge is to slow the spin and reverse the direction. How and through whom, is the question. The present structures of decision-making and governance do not facilitate strategies that are holistic and which adequately address such interrelationships.

Water faces an endemic global shortage. One report has estimated that people consume 10% more water annually than nature can replenish. Moreover, global warming is melting glaciers and receding snowlines. The impact is visible. Seventy rivers have stopped flowing into the sea; aquifers are depleting and there is mounting concern that water will be a flash point for political, social and economic turmoil.

Food security has also reappeared on the international agenda. Inflation is currently more of a worry than physical availability. There is no one explanation but a contributor has certainly been the 'fuel for food' policies pursued by some governments. In the US for instance, the price of corn has surged because of the incentives provided to farmers to shift to ethanol. Similarly, in parts of Europe and Southeast Asia, the quest for biofuels has taken land out of the agricultural cycle and altered cropping patterns. Water shortage and salination has also impacted productivity.

The energy question has seldom been out of the news. But today with North Africa in turmoil and oil prices crossing into triple digits, it is on the front pages. The problem is familiar. Demand is surging, supply is not keeping pace and the environment is under stress. Demand is growing because of increasing population and rising prosperity. China, India and (to a lesser extent) the Middle East are the drivers of this demand growth. Supply, on the other hand, is under pressure. Coal is an abundant resource but it is a dirty fuel; it faces infrastructural bottlenecks and is not a substitute for gasoline and diesel - the transportation fuels that account for 60% of total energy consumption. Oil is also not in short supply but it is no longer easily accessible. The 'era of easy oil' has in effect ended. This means that whilst new large accumulations are available they are mostly in harsh and logistically complex regions (viz deep offshore, Siberia, the Arctic) and as such difficult to locate, and once located, problematic to develop on a commercial basis. Renewable energy - nuclear, solar, wind and bio - has undoubted potential but it faces (currently) the hurdle of competitiveness and infrastructure. Renewables cannot be scaled up unless and until the existing distribution and transmission infrastructure is radically overhauled ('smart' grids, redesigned retail pumps etc). Renewables also do not offer a credible and competitive transportation fuel.

The fourth leg of this quadrilateral conundrum is environment. It is impacted by everything that happens in the other three sectors and it is in turn impacted by them. There is an inextricable linkage. The gravity of the crisis stems from the fact that the natural balance between them has been disrupted. Copenhagen and Cancun notwithstanding, most people now accept that unless and until this balance is restored, the reality of sustainable development will remain a chimera.

The question is how. Where in the interstices of public governance are matters like the compounded impact of such an imbalance addressed? Where are questions such as 'What is the full cost-benefit of producing diesel or biofuels?' debated? (it takes 9,200 litres of water to produce one litre of diesel; 4,200 litres for one litre of biofuels). Where do issues of water and land rights get coalesced? Who in government has accountability for optimising water and energy usage?

The answer appears to be nowhere and no one. There is no institutional framework that facilitates a coordinated approach. Most governments tend to look at these issues through a narrow compartmentalised eyeglass. In India, for instance, there are separate ministries for food, water, environment and energy. In fact, the energy sector is handled by four ministries (coal, petroleum & natural gas, non-conventional and atomic. Not to speak of the ministries responsible for major energy consumers; power, steel and fertilisers). Each of these ministries has a political boss; each a phalanx of civil servants, each a set of public sector entities and each a complex of vested interests. Their objective is understandably to protect turf and not to pull together the threads that bind one ministry to another.

The situation clearly demands that strategy be framed within a holistic framework. It requires that institutions be created to enable the execution of such strategy. The problem is that such demands push against conventional wisdom and vested interests. They are therefore difficult to meet. Nature will not, however, wait on man's inertia. The crisis will deepen over time, and unless action is taken, the risks of a 'no-future' future will become alarmingly real.

The writer is chairman of the Shell Group in India. Views expressed are personal.







G eorge Jacob is an internationally recognised museum professional, interned at the Smithsonian, and was educated at the Birla Institute of Technology & Science, University of Toronto and Yale School of Management. In his 24-year museum career spanning 11 countries, India-born Jacob has been the founding director of three institutions, including the Nasa-funded astronomy and cultural centre in the US. Visiting New Delhi, he spoke to Rema Nagarajan about museums in India and the need for a comprehensive national museum policy:

Why are public-funded museums in such a poor state in India?

There is an obvious problem of inadequate resource allocation. But more than the money, the problem's with the lack of proper training of staff, often stemming from a systemic vacuum in informed leadership and creative vision to bring about transformative change. Short-term programmes to train bureaucrats and administrators who are already in charge of these facilities - to bring them up to speed on the best practices internationally - has to happen in conjunction with a more rigorous and long-term training for a new generation of cultural resource professionals who will take over the running of museums in the future.

Why do you think the government is finding it so difficult to find someone to head the prestigious National Museum in Delhi?


I think some of it could be attributed to remuneration and retention issues. Most recently, four posts of additional director general and deputy director general were announced at the National Museum with annual salaries of Rs 13.5 lakh and Rs 10.5 lakh respectively. This level of remuneration on a one-year contract does not reflect on a long-term vision to attract, relocate and retain talent, to bring about a generational shift for sustainable change

in our cultural institutions. Further, with similar sounding job descriptions, there is the likelihood of inadvertently adding four more layers of red tape to the process. The second problem is the degree of autonomy and the organisational structure under a transient bureaucracy, often unwilling to delegate.

Why are we not producing competent museum professionals in India?

There are several diploma and degree programmes in museology, conservation and art history in India. But most of these are not in sync with the times. Plus, the feeling that there aren't really good professional opportunities out there, makes it less attractive to the younger generation. The expertise for core functions in museums is missing given the monumental scale of collections and assets spread across India. These are long-term human resource issues that need serious consideration through a well drafted comprehensive museum policy and implementation strategy.

How important is a museum policy for the country?

It's quite vital. For instance, Canada, where national museums are run as autonomous corporations, has a comprehensive museum policy, embedded in multiculturalism that has been built into governance. This is an adaptable model for India given our diversity. Museums are collective souls of civil societies that have the capacity to transform our perceptions, shape our identities and affect our lifestyles. With a comprehensive museum policy there could be a museum revival, a cultural renaissance that could be an economic driver. The policy has to be tied to tourism, commerce and education policies for it to be really effective. It will need active planning and resource projections, moveable and immoveable assets, accessions, collections management, cultural repatriation, investment in staff, museum assessment programmes, public-private partnerships and so on. If everything falls into place, it could significantly change the perception and use of museums and our understanding of our identity as a united diverse nation.








Familiar mnemonic sequences sometimes need updates. For instance, i can remember learning Every Good Boy Deserves Fudge when i was 12. The initial letters of the words, E, G, B, D, F, represent the names of notes on the five lines of the treble clef staff in western musical notation. Alas, however, i got it into my head that Every Good Boy Deserves Apples rather than Fudge. Worse yet, since i wasn't a boy, i tried to provide Every Girl (with) Big Delicious Apples. The resulting confusion effectively brought my musical career to a quick and screechy end.

But mnemonic devices have never ceased to fascinate me. Even as i grow more absent-minded with each birthday, my yearning to know the names of the nine Muses or the progression of taxonomic categories in biology becomes ever more intense. Particularly in the middle of the night. There is nothing so dismal as to lie awake at 3 a.m. with the planets from Mercury to Jupiter spinning around the sun in an orderly fashion, but Pluto, Uranus, Neptune and Saturn milling about in disarray at the outer fringes of the solar system. It doesn't help that their initial letters form the handy, but incorrect, acronym PUNS, or that Pluto was declassified as a planet in 2006. The familiar mnemonic, My Very Energetic Mother Just Served Us Nine Pizzas has had to be altered and the new suggestions are all a bit disturbing. They range from My Very Eccentric Mother Just Served Us Nothing to My Very Evil Mailman Just Showed Up Nude. At 3 a.m., the last thing you want is to be fretting about pizza-free mothers and evil, naked mailmen.

I used to think VIBGYOR was the accepted mnemonic for the colours of the rainbow. Despite the fact that the colours are reversed and the word is an ungainly earful, i honestly believed this was how the English-speaking world remembered the sequence Violet, Indigo, Blue, Green, Yellow, Orange and Red. So it's a rude shock to discover, via Wikipedia, that it's been Roy G Biv all along! Not only that but in the UK, the preferred formula is Richard Of York Gave Battle In Vain. This is hardly useful to those of us who might turn into dangerous colour-blind insomniacs as we churn about in bed, reciting Richard Of Gere Battling Various Irksome Yokels instead.

Sometimes, the only solution is to find one's own mnemonic. For instance, i have secured the Muses in memory by placing their names in alphabetic sequence. This yields Calliope, Clio, Erato, Euterpe, Melpomene, Polymnia, Terpsichore, Thalia and Urania - a very easy-to-recall sequence of CC-EE-MP-TT-U. Needless to say, it works particularly well for me because my initials are MP. Taxonomic categories? Not a problem: Dear Kilroy, Please Come Over For Gay Sex stands for Domain, Kingdom, Phylum, Class, Order, Family, Genus and Species. So i was doing okay with the late-night frets until i came across this one: Camels Often Sit Down Carefully. Perhaps Their Joints Creak? Possibly Early Oiling Might Prevent Permanent Rheumatism. It's for the Earth's geological periods: Cambrian, Ordovician, Silurian, Devonian, Carboniferous and so forth. But its imagery is much too complicated. I get to the Permian, Triassic, Jurassic and Cretaceous without mishap. Then the Paleocene begins and i'm lost in a hopeless tangle of Oily Masseurs and Rheumatoid Perverts.

So when i found a small book called The Order of Things by Barbara Ann Kipfer, i thought i was saved. I kept it by my bedside and slept peacefully for several weeks. Until the night when i happened to glance elsewhere in the book and noticed something terrible: the graphic for silverware shows a cheese knife in place of the fish! My confidence in the book is shattered. Herds of arthritic camels hobble enthusiastically across my pillows once more and the Duke of York eats pizzas every hour. And no, that's not a mnemonic for anything.







It is Valentine's Day. You have got a large pink envelope with a lurid red heart on the cover. Clearly, you are in the game and there is many a lad or lady, as the case may be, who is keen on securing your affections. Your heart beating a little faster you tear it open. It is schmaltzy in the extreme, asking you to be 'my Valentine'. Delirious, you look down at the name of the sender. If this message has come to you on your phone, you scroll down eagerly to know who thinks that you are worth a bit more than you thought. You discover to your mortification that it is your grocer, or your friendly colleague, or your hairdresser, or your florist, or the pesky individual who is trying to get your custom at the bank.

Ah, well, as with all great traditions, this way goes Valentine's Day when only those in or wishing for an intimate relationship addressed the other person to ask whether or not that individual would be their Valentine. Please don't get us wrong, we believe in celebrating all occasions, howsoever inappropriate. So we send Halloween's greetings in a joyous manner even though that festival is very much darker than that. It is our wont to celebrate all days, whether or not they are tinged with sorrow or not. We feel that we should not be such conformists and we should devise our own celebrations. For example, at the risk of getting the pink slip on Valentine's Day, we could observe every other Monday as a day of contemplation of things to come, something we editorial writers direly need.

This could be given a suitable name by a clever marketing ferret and could even make us productive and rich. But don't let us spoil it for you. Your local gym instructor may not quite be smitten by your looks when he or she sent you that card. As long as their heart is in the task at hand, why should you complain? Everything goes in the heart mart now. Happy Valentine's Day.







Egypt's jasmine revolution has all the elements of a political fairy tale. Spontaneous popular protests that saw elderly and children on the streets. A day of heroism with anti-government protestors holding off determined attacks by armed bad guys. Finally, a despot who seemed destined to rule until the time he felt his son was ready to take over was toppled. And all this in 18 days. Unsurprisingly, this has proven so inspirational that the Tahrir Square revolt has had a ripple effect across the Arab world - and even triggered the odd protests in Africa and Europe.

Without detracting from the moment, it's useful to lower expectations regarding the jasmine effect. Egypt won't become a liberal democracy overnight. At best, it will begin a long and difficult journey towards creating, first, representative government and, second, an open society. The first goal is likely to be accomplished within months, as the constitution is amended to allow for free parliamentary and presidential elections. But expect it to come with one statutory warning: the Egyptian military is likely to remain autonomous. The military is wary of the country's Islamicist parties and will retain the right to intervene against them. The second goal is far more problematic. Genuine democracy is likely to result in the growth of conservative religious influence in Egypt. The hope: over a period of several years Egyptian voters will come to appreciate the benefits of secular principles, free expression, religious and social toleration. This is a slow process of popular self-education. It won't come quickly and may not come naturally.

The future of the jasmine revolution may also be more circumscribed. Let there be no doubt, a movement that's toppled the forever regimes of Tunisia and Egypt has already made history. But there are many barriers to the revolution spreading to other countries of the region. The foremost reason is the petroleum-rich Arab countries, which, horrified at the idea of democracy, are doling out money to defuse the economic problems that have driven poorer Arabs into the streets. Second, the militaries of countries like Syria, Yemen and Algeria are far less encumbered by concerns about shooting their own people. People's power succeeds best if they are sympathetic soldiers. The next act is less about revolt and more about reform. Egypt and Tunisia now have the political and economic evolution, gradual and non-violent, that will make them showpieces for the benefits of democracy. If they succeed in the coming years they will ensure that jasmine will permanently mark the Arab environment.










Many of my economist colleagues think that foreign aid in any form is a bad idea. I don't agree - except when it comes to so-called strategic aid, ie aid that is given explicitly to buy the allegiance of the recipient country government for some strategic cause of the donor's. Egypt is the world's single-biggest recipient of strategic aid (unless we count Israel), that it gets for being nice to Israel. It is a sizeable amount: in 2010 it amounted, according to one calculation, to $20 for every child under five in sub-Saharan Africa, the poorest region in the world. Egypt is one of the richer countries in Africa, with a per capita GDP slightly less than twice that of India's.

That money, well spent, could have done a lot for Egypt too, of course. Did it? Well this is one of those questions that can never be taken entirely beyond the realm of pure speculation because who knows what would have happened to Egypt had that money not showed up. What we know is that GDP growth did not go up after 1979 when the aid flows started, not only relative to the 1970s - when the Egyptian economy was booming thanks to the oil boom and the jobs it created in the Gulf for Egyptian immigrants - but also compared to the 1960s. That is still not hard proof that the aid did not help since other things also changed in 1979 - oil prices went up sharply again, which should have helped Egypt, but the world economy also went into recession - but clearly there is no evidence of an aid-fed growth miracle.

My suspicion deepens when I hear what experts seem to be saying about what ails the Egyptian economy - the word oligarchy comes up a lot in particular. A smallish number of wealthy families, along with their friends (and family) in the government and the military, seem to have a finger in every pie in the country. This was how things had always been in Egypt - Nasser spoke out against it in the 1950s - but the inflow of aid money almost surely did not help. Most of it went to the military and the paramilitary forces in order to buy their support. That meant a lot of new contracts with little oversight (most countries, including the US, have a lot of trouble with regulating military contracts). Moreover, the donor stayed away from asking too many questions about where the money went lest it offended its friends in government.

It is said military contracts are the main reason how Mubarak's family fortune got to be many billions of dollars, and no doubt he was not the only beneficiary. The money also paid for a lot of jobs. In particular there were many jobs in the armed forces - Egypt, with a 80 million people, has a million people in the armed forces - which served the dual purpose of buying support and helping to intimidate potential dissenters. All of this made sure that there was never (before the last few weeks) too much questioning of the right of the elites to hold on to the many economic goodies that they had usurped.

This view of what happened in Egypt is admittedly speculative, but it fits well with what happened in another US strategic ally, and one that we in India know much better. Coincidentally, the big jump in US munificence to Pakistan, like in Egypt, was also in 1979, prompted in this case by the Soviet invasion of Afghanistan. A part of the money went to the armed forces, a part for the training of Islamic militias to fight the Soviets and a part for buying political support for President Zia's unelected regime. Later, when it turned out that the Islamic militias were the problem rather than the solution, there was more money for the army and more money to buy the support of whoever happened to be in power. Pakistan has historically had an oligarchy (Mahbub ul Haq, the famous Pakistani economist, used to refer to the '20 families' who control Pakistan), which has now expanded to include the army: It is said that the armed forces in Pakistan own everything from banks to bakeries and that the total revenues on these assets may be as much as 10% of the GDP.

This means that any push towards really democratising the political system (or the economy) has a set of powerful enemies, who worry that this would end up making them face scrutiny or competition (or both). It is no wonder that Pakistan never seems to be able to get a stable genuinely popular government (though democratic pretenders are tolerated as long as they are sufficiently corrupt that they would have no incentive to genuinely reform the system).

Egypt now has a rare chance to break out of all this and to create a genuinely democratic society and economy. For that to happen many things will have to go right: in particular, the US will need to show a great deal of forbearance. It will be tempted to use Egypt's dependence on US aid as a threat ('play ball with Israel or else') but that can only backfire. No real democrat in the current middle-eastern political climate can survive the taint of being bullied (or bought) by the US. Therefore, any such push by the US will only serve to make the establishment more reluctant to compromise with the democrats (because they fear the loss of the US gravy train) and at the same time empower the anti-US constituency among the democrats. The aid needs to be given as a genuine gift, from one democratic people to another, help for building a real democracy.

Abhijit Banerjee is Ford Foundation International Professor of Economics and Director, Abdul Latif Jameel Poverty Action Lab, MIT. The views expressed by the author are personal






The UPA will face its toughest test next week when Parliament reconvenes and takes up a whole lot of issues including the scams and acts of omission and commission by the government and the Congress's key functionaries. While there are ample indications that the government, after its bitter experience during the winter session, may agree to the Opposition's demand for a joint parliamentary committee probe into the 2G scam, there are many Congressmen who are sure to resist such a move.

Amid this confusion, the onus of coming out clean rests with the government. The manner in which some of its ministers are conducting themselves in public, particularly those who have made a lateral entry into politics, has only added to the perception that there is no cohesion within the ruling combine. The fact that the Congress core committee, which takes decisions on important issues, does not have any member from its coalition partners has only strengthened this impression. In other words, the UPA does not seem to be following the coalition dharma in its true spirit. Instead, it is dependent on a handful of leaders for major decisions. This has led to a power struggle within the Congress and this is hurting the government as well as the party.

Congress president Sonia Gandhi has been caught in the crossfire and appears confused while dealing with important matters. Her weakness is that she wants to maintain a status quo and this stems from her inexperience. The enthusiasm with which she had started her political innings seems to be diminishing thanks to the power play within the Congress and the UPA. It seems she is slowly losing control.

Equally dangerous is the fact that several bureaucrats have assumed more power than is permissible in a democratic set-up. They are playing a proactive role in the decision-making process but have no accountability. This has emboldened the judiciary to give directions in areas that it used to leave alone.

The result of all this is that at one level, the executive is either a prisoner of indecision or is oblivious of the many wrongdoings. The legislature is indifferent or has not been able to make any impact on decision-making due to the nature of coalition politics. Naturally, the judiciary has become proactive. Politics thus is the biggest casualty and politicians are bearing the brunt. The agenda of the Congress to strengthen itself in the Hindi heartland lies unfulfilled because of three reasons: first, some deliberate activities of some of its key players; inability of Gandhi's advisers to give her sound guidance; and the failure to comprehend the ground realities accurately.

At one level, the Manmohan Singh government is functioning on the lines of the PV Narasimha Rao government. It's allowing things to drift and the party to weaken. Perhaps this is a key to its survival. The coalition partners are either under attack (A Raja and now Sharad Pawar) or unhappy the way Mamata Banerjee keeps on expressing her disenchantment with some decisions. To add to the misery of this government is the growing belief - rightly or wrongly - that differences between the top two leaders of the government and the party are growing in these troubled times.

This session is crucial for the future of this government and the coalition. It is in everybody's interest that the UPA as a coalition and as a government exhibits greater cohesiveness and speaks in one voice. The two top leaders must bury their differences, if any, and lead from the front. The errant leaders should be strictly dealt with. Otherwise the writing is on the wall for all to see. Between us.








Even a revolution without a leader can sweep away an unreformed dictator, when the gathering masses generate enough momentum to tip the scale beyond the point of no return. It took less than 24 hours to turn the disappointment of Thursday night — which had followed hours of certainty and weeks of hope — into a historic triumph for the people. In Egypt's five millennia of history, the people had never chosen their nation's path, let alone their government. By toppling the 30-year Hosni Mubarak regime and, thereby, dismantling Gamal Abdel Nasser's system, the people of Egypt did just that. However, as sobriety kicks in, it is always time to do a reality check.

Part of the reason why the unthinkable happened in Egypt is the weakened state and the distance maintained by America. Yet, without the Obama administration's correct reading of the situation and calling for a transition, it is debatable how far the Egyptian military would have pressured Mubarak to step down. What the military does now will define how smoothly and quickly Cairo gets a new, democratic government and the wrecked economy begins to find its feet. There are tensions already visible between the people and the men in uniform about the details of that transition. It is wholeheartedly hoped, nevertheless, that the military will realise the folly of trying to check the pace of change. This is a people who have thrown out the regime. They cannot wait very long for the redress of their grievances.

But there is the larger world outside and a smaller one in the neighbourhood that's watching every bit of what's happening. Egypt had been the heart of the post-colonial Arab world, and at the vanguard of Arab liberalism. Now that Cairo has got its sense of agency back, it is this legacy that must be mined, and the Middle East — lacking for so long in good governance and liberty — should be encouraged by an Egypt on the progressive path. That's precisely what autocratic and semi-autocratic rulers in the Arab world fear — Egypt's revolution is very easily replicable in their capitals. That is also what Israel fears in terms of a new security dynamic. Mubarak is gone, the exact fate of Egypt will take a while to take shape, but they must accept the new geopolitics and prepare for a democratising Middle East. Egypt's revolution was its own. But in the way forward, Cairo could do with some sincere advice and unconditional help. There's a message there for New Delhi to engage with the people in Cairo too.







The central vigilance commissioner, P.J. Thomas, recently threw down the gauntlet at the Supreme Court, asking why he was being conspicuously singled out for scrutiny, despite the fact that his "impeccable integrity" had been endorsed by the Central Vigilance Commission when he was selected as secretary to the Central government. He observed that as civil servants rise in their careers, such tarring is largely inevitable, and should not affect their postings. He also claimed that he was being unfairly picked on, given that fact that 28 per cent of our MPs have such charges on their record.

However, it turns out that the CVC clearance cover is also riddled with holes. File notings between the Department of Personnel and Training (DoPT) and the CVC convey that, despite vigilance clearance, reservations about Thomas's suitability continued to niggle, throughout the empanelment process. The DoPT had, in fact, recommended waiting until the palmolein import scandal, which has shadowed his career for 19 years now, was finally settled by the Kerala high court.

This is not to say that Thomas is necessarily compromised, but that the pending charges against him make him unsuitable for the job he has been picked for, where trustworthiness is everything. Given its symbolic importance and its primary mandate of implementing the Prevention of Corruption Act, the slightest appearance of impropriety can dent the dignity of the office. Thomas has had a stint as telecom secretary and therefore, has had to offer to cut himself out of the biggest corruption scandal in recent times. However, this situation is less problematic than the chain of decisions that led to his appointment, and an arrogant government that stuck by its hasty choice despite everything. This case goes beyond the individual at the centre of it, and should be a cautionary example for self-willed governments. It has exposed the weak links in the appointments process, and slap-dash methods that can accompany critical official appointments.






The introduction of biometric identification at the Jipmer medical entrance test is a sign of tech-initiated order in the sprawling and cumbrous Indian education sector. A quick-and-easy fingerprint scan is used to verify the identity of candidates and weed out impostors, the possible Munnabhais — those who could, with a great amount of slyness and some forged documents, make it past the clearly faulty verification processes that have been and still are entrenched in our system. The absence of a credible mechanism of identification has been a headache to administrators, and the new alternative is welcome and in tune with the times.

Our higher education sector is especially vulnerable to misuse by impostors, because of the skewed demand-supply numbers, and the kind of significance that middle-class India invests in medical-engineering jobs. The Jipmer entrance figures — 15,000 candidates for a mere 120 postgraduate seats — are just a pointer to the intense, high-stakes competition these exams have turned into. In such a situation, it is necessary to be tech-savvy in plugging the loopholes in admissions and examinations, and the Jipmer instance shows how institutions, at a micro level, are trying to be innovative in dealing with the problem. But we need to also look into correcting the greater fault-lines in our higher education sector that create and sustain the glaring gap between the number of candidates and the number of available seats, an anomaly in a country that does not have enough medical professionals.

Jipmer's local experiment will eventually be replaced by the grand national venture — the Unique Identification Number (UID) — but both reveal how technology can impose some order in our chaotic systems.










Do you often find yourself staring at the ceiling into the wee hours wondering about the price of onions when you're 70? Presumably many salaried employees, who're parking nearly a quarter of their incomes with the Employees' Provident Fund Organisation or EPFO, must frequently sacrifice sleep in favour of retirement-related introspection, especially when faced with this nagging thought: if their PF earns 9.5 per cent, and if inflation is at 11 per cent, does that not imply that their retirement savings are actually shrinking by 1.5 per cent a year?

The good news is that none of these people is suffering from paranoia. The bad news is that this is all quite true. EPFO forces salaried workers to save roughly a quarter of their monthly incomes; around two-thirds of which is put into their PF accounts and is expected to give back a large enough lump sum to meet their expenses for the rest of their lives. And since most Indians will live for nearly 20 years after retirement, they would certainly need a fairly hefty lump sum. For instance, if a person wanted to buy a life-long pension of (say) Rs 25,000 per month when she is 60, she would need a PF corpus of roughly Rs 40 lakh. This would be unlikely if she were depending on EPFO, since most of its customers have less than Rs 40,000 in their accounts when they retire, barely enough to buy a monthly pension of Rs 200. For such customers, sleep deprivation is perhaps understandable.

If you're sitting with a calculator as you read this, you've probably raised an eyebrow (or two) at the average PF corpus of an EPFO customer. After all, if a person earns Rs 10,000 per month, and puts roughly Rs 1,700 (or 17 per cent) of this into her PF month after month over 30 years, and if her savings grow at 9.5 per cent, she should end up with nearly Rs 32 lakh.

These numbers will appear unrealistic to the average EPF customer — but fairly modest to managers and investors of index mutual funds. The NSE NIFTY has delivered a compounded annualised return of above 25 per cent over the last decade. Not surprisingly, some of the largest pension funds in the world routinely invest the savings of their customers in Indian capital markets.

The EPFO, on the other hand, seems to have missed the bus (and is certainly missing the point). First it insists on investing its customers' savings in government bonds that give very modest returns. And then it permits customers to withdraw and consume their retirement savings before they retire.

To correct this, the finance ministry has repeatedly and rightly — recently, again — urged the EPFO to rethink its investment strategy. And to stop permitting pre-retirement withdrawals. But, as usual, the EPFO has refused, saying it does not want to risk the old-age savings of its customers or refuse them access to their own money. At many levels, however, the EPFO's concerns ring hollow, especially when their typical customer retires with less than Rs 40,000.

To effectively resolve this problem, the EPFO will need to simultaneously address both issues — of investments and withdrawals. Since it delivers poor returns, it tends to force its customers to make very high contributions. Were returns higher, its customers could achieve meaningful retirement outcomes even with a modest savings rate. And, since its customers are saving a quarter of their incomes for old age, they probably can't afford to save additionally for their other expenses and are forced to dip into their PF. And as the EPFO has a liberal attitude towards pre-retirement withdrawals, most people do.

The main risk in stock market investments is the risk of volatility — the markets may crash when you're 58 and cause you to lose a large part of your savings. While this is a valid concern, it is fairly easy for the EPFO to adopt a life-cycle investment approach, as do most mature pension systems, where the share of equities in a customer's portfolio gradually shrinks as she grows older. This could provide EPFO customers with all the upside of capital market returns while effectively insulating them from the volatility risk.

In this situation, the EPFO should consider reducing its contribution rate to (say) 12 per cent from the current 24 per cent.

It should then simultaneously adopt a more updated and liberal investment policy and ban pre-retirement withdrawals. This would help its customers to build a meaningful retirement corpus, while saving the other 12 per cent for other expenses.

As things stand however, EPFO customers urgently need a comprehensive retirement plan to make up for the comprehensive retirement plan they're getting through EPFO. And if its customers have to stop worrying about their old age and sleep peacefully, someone at the EPFO has to wake up and stay awake. And realise just how much the lives and needs of its customers have changed since 1952.

The writer is director of a Noida-based micro-pension agency







Nepal's endless quest for political stability hit another wall on Thursday when the Maoists decided not to be part of the Jhalanath Khanal government. Many had felt that cracks would surface soon enough, but few had thought this grand left alliance would start giving way within days of Khanal's election as prime minister, which materialised solely because of Maoist support. The Maoists may have now agreed to provide support from the outside for the time being, but the fact is that Khanal already looks weaker.

At the heart of the problem is an inability to achieve a security matrix that complements the political ambition of Nepal to become a genuine democratic republic.

Let's consider the details of this latest spat between the Maoists and the Communist Party of Nepal-UML. A seven-point secret agreement, reached between Khanal and Prachanda, provided the basis for this alliance. It formalised the commitment to a socialist economy, rotating the prime ministership in the long term, drawing up a common minimum programme — but what became the contentious issue was an understanding to form a "separate force" from among the PLA combatants. The moment details of this seven-point agreement began being leaked to the local media, there was a furore even within the CPN-UML — let alone other parties like the Nepali Congress. The argument was that this amounted to retaining the Maoist PLA at government expense.

The plan, as it turns out, was even more dangerous. The Maoists, who had been floating this idea of a separate force for a while, had intentions of converting the PLA combatants into a paramilitary force meant to guard Nepal's borders — something on the lines of the BSF, or even Bangladesh's BDR or the Pakistani Rangers. This obviously raised security concerns in New Delhi, because such a force on the open Indo-Nepal borders would have all kinds of implications for India — starting with support to Naxal elements here and then, of course, the Gorkhaland movement, coupled with the smuggling of fake Indian currency notes among several other issues.

It was an understanding that was not acceptable to any other political formation, including the Madhesis, besides the fact that it would have had a destabilising influence on relations with India. The Maoist intentions came to fore when they demanded the home ministry portfolio during talks on government formation. They also argued that the CPN-UML had held charge of this ministry when Prachanda was head of government. But soon it became clear that, having burnt their fingers with the armed forces last time, the Maoists were gunning for the home ministry purportedly to raise this paramilitary force in the name of reintegrating erstwhile PLA fighters. The Nepal army, it may be noted, is committed to reintegration in a phased manner.

Given that the seven-point agreement also envisaged bringing as many parties as possible into the alliance's fold, Khanal realised that having a home minister from among the Maoists would only take him and his government away from other political parties and remove any possibility of broad-based political support. He had also given his word to his Indian interlocutors that he would not act against India's security interests. The talks, therefore, broke down over the home ministry portfolio with the Maoists squarely blaming India for being the obstacle.

The problem, however, seems larger. Regardless of whatever other trouble, Nepal has rarely seen itself at odds with India's security concerns. It's a different matter that a lax security apparatus may have allowed anti-Indian forces to use Nepal to meet their ends, but this has never been the ethos of Nepal's own security outlook.

The Maoists, on the other hand, repeatedly seem to place themselves at odds with India's security needs — and that's the potential game-changer, a serious cause for worry. The more the Maoists position themselves against India's security priorities, the more India will be compelled to push the envelope — and that, in effect, will have the undesirable outcome of framing Nepal increasingly in security terms.

Further, the Maoists' ploy to play the China card against India has gained them nothing. Instead, it has helped justify the hardening of positions in New Delhi, which does not augur well for the relationship. Interestingly, China's primary objective in Nepal is to stop Tibetans from using it as a staging ground to quietly move in and out of Tibet; and for this it has been asking for more support from Nepal's home ministry.

Mutuality of security interests has been fundamental to Indo-Nepal relations. And even when India gave up its twin pillar approach — monarchy and multi-party democracy — and welcomed the formation of a republic with the Maoists at the helm, this principle remained vital. It has broad support among all political formations and the excellent state of the bilateral military relationship shores it up.

However, over the past few years, the Maoists have sought to consciously undermine this security logic and sought to replace it with one that imbibes the ethos of the Maoist PLA. Anything short of that has not been acceptable to the Maoists. This explains why the integration of PLA cadre has not moved at a desirable pace; and also why it was so important for Prachanda to take on Nepal's army chief, and now to break off talks on joining the government over the CPN-UML's refusal to part with the home ministry.

The Maoist ambition of controlling and transforming Nepal's security apparatus has virtually put at stake what it had achieved in the first place — the rechristening of Nepal as a republic. There is a compelling argument that the end of the republican phase is near, and the Maoists would return to their trenches. This may sound far-fetched for the moment, but what is truly worrying is the sheer unwillingness on the part of the Maoists to align themselves with Nepal's national security interests.

Needless to say, if security priorities are not sorted, governance is bound to be the first casualty and that's why Khanal — the fourth PM in three years — has more than just a coalition to handle.







As mentioned in 'East of Suez' (IE, January 24), the overlap of the Anglo-French-Israeli invasion of Egypt over the nationalisation of the Suez Canal and the suppression of the Hungarian uprising by Soviet troops caused Jawaharlal Nehru much embarrassment. His reluctance, indeed refusal, to equate the two outrages exposed him to criticism for adopting "double standards" both abroad and at home. However, he held his ground, and eventually silenced his critics.

The story is intensely complex but Nehru's reasoning, though widely disputed, was clear. In the case of Suez, the issue was manifest: Egypt was the victim of brazen aggression. On Hungary, the main source of information was the Western press that was perhaps exaggerating the "Soviet intervention" made possible by the Warsaw Pact. Until the facts were established, Nehru was not prepared to condemn the Soviet Union out of hand though he did state that foreign troops must withdraw and the Hungarian people should be allowed to decide their future.

While Nehru had passionately denounced the perpetrators of the Suez War, the Eisenhower administration in the United States had broadly gone along with him. On Hungary, however, he declined to associate himself with the US move to raise the matter in the United Nations. This invited prompt and sharp censure, most notably from Jayaprakash Narayan, better known as JP. "If you do not speak out" he wrote to the prime minister, "you will be held guilty of abetting enslavement of a brave people by a new imperialism more dangerous than the old because it masquerades as revolutionary". JP's usually cordial relations with Nehru, who treated the younger man with affection, lent a sharper edge to the missive.

Nehru's iteration of his opposition to intervention by foreign troops in any country, his expression of sympathy for the Hungarian people and his criticism of the Soviet "conduct" — in a speech to the UNESCO annual conference in New Delhi on November 5 and in a letter to President Eisenhower two days later — did not help. One reason for this was Krishna Menon, leader of the Indian delegation to the UN General Assembly. Acting on his own, Menon had abstained from voting on a resolution "condemning" the Soviet Union, defended his action in abrasive speeches, and at one stage even declared that events in Hungary were a "domestic affair". Nehru defended Menon publicly but remonstrated with him privately.

However, when all is said and done, the fact remains that a certain amount of ambivalence in Nehru's statements on the brutal suppression in Hungary continued until a very late stage when he did speak out. On November 7 in his letter to Eisenhower he seemed to concede that there was "little to choose between Suez and Hungary". But it was in relation to Suez only that he pressed for "American action".

By this time Parliament had reassembled for its winter session. During it, Nehru faced a fusillade of criticism along the lines of JP's letter. In a lively and often heated debate in the Lok Sabha that I covered, prominent opposition members, such as Acharya Kriplani, H.V. Kamath, Asoka Mehta, H. N. Kunzru et al, were united in condemning the government for voting against a UN resolution condemning the Soviet Union over Hungary.

For once, Nehru did not lose his temper despite provocative interruptions but argued gently that the country had no option but to do what it did. The UN resolution, he explained, was voted on paragraph by paragraph. On all other paragraphs India had abstained. But it had voted against the paragraph demanding elections in Hungary under the UN supervision. When the resolution as a whole was put to vote, India had to vote against to maintain its fundamental objection to UN-supervised elections.

Indeed, Nehru devoted quite some time to tell the still unconvinced members that any acceptance of "foreign supervised elections" would set a "bad" and "dangerous" precedent that might be used for "intervention of this kind in other countries". He did not mention Kashmir in this connection but his meaning was clear. He and other Indians may have been disinclined to talk about Kashmir, but the Soviets were not.

While rejecting the UN-supervised elections in Hungary, Nehru had urged Janos Kadar, who had replaced the deposed and deported Imre Nagy as Hungary's prime minister, as well as Soviet premier Bulganin to allow the UN secretary-general to visit Hungary. Promptly, the Soviet ambassador in New Delhi called on Nehru to discuss neither Hungary nor Suez but of all things, Kashmir. His purpose was to remind India of the Soviet support over Kashmir and to hint that it could be withdrawn.

This had precisely the opposite of the desired result. Nehru cast aside his past vacillations and declared that it was now established that the Hungarian uprising was "popular and widespread and had the backing of the army and even the communists". The Hungarian people, he added, would "ultimately triumph" and felt that the "immediate setback was to the Soviet government". There was much more in this vein in his extempore speech that virtually disarmed his critics. The BBC commented that this "tremendously significant speech" showed that Nehru was "as deeply involved emotionally in the fate of Hungary as he had always been in that of Egypt". From the Kremlin, however, Khrushchev and Bulganin again reminded Nehru of Kashmir and stated that Hungary was as important to the Soviet Union as Kashmir was to India. In fact, at the UN the Soviet Union abstained from voting on a Western resolution on Kashmir, but soon reverted to vetoing resolutions unacceptable to India.

Interestingly, during the revolt in Hungary, K. P. S. Menon Sr. was Indian ambassador to both the Soviet Union and Hungary. Because of illness he was immobile in Moscow. A young diplomat, M. A. ("Ishy") Rahman, who later retired as ambassador to West Germany and is now no more, was therefore rushed to the Hungarian capital. In Parliament Nehru praised his "good work" more than once. During the revolt he had befriended a rebel, Arpad Goncz, who became president of Hungary in the 1980s. Every time President Goncz visited India he made it a point to call on "Ishy".

The writer is a Delhi-based

political commentator







Just as the average human carries around the remnants of a prehistoric tail and a useless appendix, the tools we use also bear marks of the evolutionary process from which they arose.

Digital cameras produce a reassuringly retro but artificial shutter snap when you push the button to take a photograph; cellphones have keyboards with layouts originally meant to keep typewriters from jamming; and blue jeans have pockets that are a throwback to a time when watches dangled from chains.

Add to that list Amazon's e-reader, the Kindle, which will now supplement its "location numbers" with page numbers that correspond to physical books. The change, announced last week, does have a practical purpose — especially for book clubs, whose digital readers presumably will no longer have trouble looking up the same page as analogue readers.

But there is also a sense of absurdity here. E-books, by definition, do not have pages. Depending on which size font someone uses, she may have to advance the screen many times before "turning a page." Then there are the questions of how to approach books with many physical editions, or texts that exist only in digital space. But decisions like Amazon's are not based on practicality alone. "The location numbers on a Kindle are rational, and they make sense for the medium—- but they don't correspond to the emotional expectations of what a book is," said Adam Greenfield, managing director of Urbanscale, a New York-based urban design practice, and author of Everyware: The Dawning Age of Ubiquitous Computing.

Designers in all fields are regularly confronted with versions of this choice: whether to incorporate cues to keep people grounded in what has come before, or scrap convention completely. In transportation, for instance, the power of steam engines was initially described in relation to that of horses, a practice that has continued to the present day. Automobile designers have incorporated visual cues suggesting carriages; for example, adding nonfunctional spokes on wheels. Today, electric cars, which can operate with unsettling silence, are being designed to make more noise, largely for safety reasons.

Such design is also common in the digital world. The basic interface for personal computers was designed as a desktop with a series of folders and a trash can in the corner because it allowed users to work in the way they were used to doing in the physical world.

But referencing the past can serve to dampen the imagination of designers working on disruptive products, said Bill Moggridge, the director of the Cooper-Hewitt National Design Museum, and the author of Designing Interactions, a history of digital design. "The tendency is to use a form of conservatism," he said. "You just make it look like what was there before. But if you want to create something truly innovative, the utility of that starts to fade."

This tension is palpable in many efforts to create new digital media experiences. The Daily, Rupert Murdoch's publication designed specifically for tablet computers, incorporates video and interactivity into what is essentially a newspaper. At the same time, it is designed to show up on a reader's digital doorstep once a day, a concept that seems as old-fashioned as pocket watches when compared with Web sites that are updated continually.

Apple, probably the best symbol of the march into a new digital era, also encourages designers to incorporate analogue references in its devices. On the iPad, users enter appointments into a calendar that is encased in an on-screen leather ledger, scrawl notes on what looks like a legal pad and advance through digital books by swiping their fingers across the screen, prompting an animation that actually looks like a page being turned.

Such superfluous references to the past are known as skeuomorphs (from the Greek words for tool and form), and Apple's fondness for them on the iPad has provoked criticism from some designers. "It drives a lot of designers batty because it is so skeuomorphically heavy," said Craig Mod, a designer for Flipboard, a magazine for the iPad.

Amazon, by contrast, has faithfully recreated the experience of book reading by building on its innovations with the Kindle, said Mod. Because the screen is not backlit, and the battery can last for a month, and it is small and light enough to get lost in a pile of papers, the Kindle does seem like a fresh take on the idea of a paperback book, he said.

Of course, there are tradeoffs. Shopping for books in the device's store consists of scrolling through listings of titles, an experience that feels more akin to searching a database than browsing in a bookstore. But if this means that Amazon's customers are less likely to judge e-books by their covers, at least some readers would consider that to be true progress.

The New York Times







 "We must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex." So said President Dwight D. Eisenhower in 1961. Americans understood this warning to refer to the incestuous relations between high-ranking military officers and the arms industry.

In the Arab world's military autocracies, the industrial side of this complex is not arms manufacturing. The officer corps reaches into every profit centre in the country. Hosni Mubarak has now stepped down. His handing over the country's government to the Supreme Council of the Egyptian Armed Forces, however, is not likely to threaten the economic ties that connect the army officer corps with the business world — ties that have been an almost continual feature of Egyptian society, and Arab society more generally, since the year 1250. Vice President Omar Suleiman may negotiate constitutional changes, but he will never agree to a restructuring of Egyptian politics that diminishes the privileges of the military.

Portrayals of the Egyptian military during the Egyptian standoff as a potential balancing force between an unyielding president and an angry street missed the underlying dynamic of rule by army officers in most Arab countries. The army rank and file live in barracks, but the officers enjoy the good life and are deeply committed to their relatives and cronies in the business community. Yemen offers a clear example. Relatives and business partners of President Ali Abdullah Saleh, the general who has been in power even longer than Mubarak, play major roles in oil exploration, petroleum services, heavy equipment, highway building, cement production, banking and many other enterprises.

For Egypt, one must multiply the Yemeni example many-fold and look not just at one family, but at the top officer ranks in general. Big business and military privilege are intimately intertwined, and businessmen who do not have the right contacts encounter many obstacles. Thus the stake of the Egyptian officer corps and its relatives and cronies in any transition to democracy is not limited to military matters.

In Iran in 1979, the colonels and generals appointed by the shah, and the business people who obsequiously served his tyranny, fled the country. But that was a true revolution. The new government seized the property of the exiles and completely overturned the economic order. Only now is the Islamic Republic's Revolutionary Guards Corps creating the same sort of military-industrial collusion that has long been standard in the Arab world.

Egypt's protesters and their well-wishers hope for a soft landing, not a revolution. Some also hope for an open economic and political system that will encourage a new generation of entrepreneurs and elected officials to dig the country out of its mire. But the livelihood of millions of others depends on a continuation of the status quo. Or at least on a slow and orderly conversion to a new system.

Given the size, strength, and popularity of the Egyptian army, it is impossible to imagine a democratic transition in which the military command structure does not play a leading role. By the same token, it is impossible to imagine an orderly transition that does not in some way accommodate the economic interests of that command structure and its allies.

Hosni Mubarak was no Dwight Eisenhower. Instead of warning against his country's military-industrial complex, he embodied it. The question now is whether the order he represented will still prevail under a (slightly) more democratic constitution.

Look at Turkey as an example of how long it takes to turn an officer-dominated ship of state in a positive direction. The first free election after Mustafa Kemal Ataturk's rule took place in 1950. Ten years later the army evicted those leaders in a coup. It staged further coups in 1971 and 1980. A more credible democracy did not arrive until the election of the AK Party in 2002, and even now there are periodic warnings of a fresh military coup. Similarly, it may take 50 years for Egypt to overcome centuries of subservience to its army officers. But with Mubarak gone, it is the time to take the first step on that long and difficult road.

The New York Times







Up to 80 per cent of women, once they become sexually active, are likely to be infected with the human papillomavirus (HPV) at least once in their lifetime, usually in their teens, 20s and early 30s. These infections are generally asymptomatic and clear spontaneously within a few months. However, in some women the infection persists and is strongly correlated with the development of pre-cancerous cervical lesions, which unless detected and removed, can later develop into full-blown cancer.

Those at high risk are usually adolescents because the virus can more easily penetrate an immature cervical epithelium (cell lining of the cervix), a reason why perhaps cancer of the uterine cervix is today considered a disease of rural women who marry early and have multiple pregnancies. In urban India, on the other hand, it is argued that breast cancer is the greater danger to women's health. While this may be true to some extent, we would be foolhardy to give in entirely to such an argument. There is reason to believe that while adolescents in cities may not marry as early as their rural counterparts do, they are initiated into sex at an early age, albeit before marriage.

For these young women, the best protection is to be vaccinated while they are still children — from the age of eight onwards. The current HPV vaccine targets strains that cause cancer of the uterine cervix over time and can therefore be considered a preventive measure. Remember also that it is highly unlikely that these young people will go for regular investigations such as Pap smear tests so that abnormal cell changes in the cervix can be picked up early and cancer can be nipped in the bud, so to speak. They surely will not want to be asked if they are married, and on answering in the negative, be judged as morally deficient people. Moreover, what if a high-minded doctor decides that he has an obligation to inform the parents, confidentiality be damned?

It is a matter of concern, therefore, as to why the HPV vaccine for preventing cancer of the uterine cervix is still a matter of dispute and unease among medical professionals in India. What I hear time and again from friends and colleagues is that they have been told by their doctors, mainly gynaecologists, that the vaccine is unsafe and that they should not vaccinate their young daughters with it. This is totally untrue and against the evidence to which they undoubtedly have access.

The data that is available from clinical trials worldwide makes it quite clear that no serious adverse reactions have been reported so far following immunisation with the HPV vaccine. A closer look at the facts surrounding the death of two women who were supposedly administered the HPV vaccine in India has also revealed that they died of unrelated causes (they committed suicide). And yet the scare persists among the informed. How else can one explain the halting of the HPV vaccination campaign in its tracks by the Indian Council of Medical Research (ICMR)?

The answer may well lie in the fact that middle-class society in India is, by and large, reluctant to face facts and talk openly about sexuality with anyone, especially children. They do not want to either educate themselves or their children on these matters, as they fear the repercussions. Parents have strenuously opposed sex education in schools even as evidence mounts that more and more young adolescents, including girls, are becoming sexually active. There is a reluctance to face this issue squarely and engage with it as it threatens the middle-class values with that they have grown up with, and which has defined their moral behaviour thus far. They would rather bury their heads in the sand and pretend that all is as usual rather than accept that they are entering territory, where new measures are needed to keep their children safe and that the HPV vaccination is one such measure.

A strategy which uses the HPV vaccine and current screening methods to prevent cervical cancer is a must in a country such as India. We should not only look at factors such as cost and access to facilities, but also discover a way of making people, especially the middle class, from where the majority of doctors come, feel at ease.

Advocating that young girls be administered the vaccine early may well be an unpalatable reminder for many that their daughters are likely to be more sexually active than they would like and that too, possibly before marriage.

Providing facts and information is not enough; our middle class norms too need to be handled.

The writer is president, CanSupport








Make a check list of the top economic issues we need to sort out soon. Budget time is a good occasion to make out such a list. Shorn of numbers, each Budget is also a list the government draws up to tell the economy and the rest of the world what it plans to do the next fiscal. The basis of the list is what are the most important things the government must do in a year that just can't be delayed further. Using this yardstick, here is our idea of the top must- dos for the economy in no particular order. This includes introduction of the goods and services tax, the direct taxes code, getting pension and insurance funds to invest in the stock markets, rapid reform in the agricultural supply chain by amending the APMC Act and finally a clear-cut energy policy that includes plans for coal mining, gas grid and diesel price decontrol. Tick off each against the chance that any one of them will move anywhere substantively in Budget 2011-12. We do not mean general statements re-emphasising how important these are. We know they are important, which is why they figure in our laundry list.

The question remains, will anyone of these see any substantive move forward in terms of implementation? The answer is a resounding no. In that case, how significant will be the list finance minister Pranab Mukherjee will present to the country on February 28. And taking the question forward, how significant then will the Budget exercise be for the economy at this point in time, if these do not figure there. The finance minister had, of course, set a time table of April 2010 for the introduction of both the DTC and GST. But the way some of the states have dug in, there is hardly any forward movement taking place in any of these reforms, for quite some time. Both also require extensive legislative changes and the time to undertake them is running out fast. Both to raise long-term funds to finance infrastructure and to create depth in the stock markets it is essential to get the insurance and pension funds freed from the shackles of investing here. This is not the same as the IPO of insurance companies, for which Irda is formulating guidelines. The huge spurt in inflation has conclusively demonstrated the need for reforms in agriculture, including its marketing, but the Centre will obviously blame the states for lacking the necessary will to carry it through. And are we kidding ourselves that we can continue to grow at above 8% without a clear idea of how we get the fuel to run the economy?





The fall in the IIP to 1.6% in December should set alarm bells ringing at the highest levels of the government. The fall has been steep, with industrial growth slumping from 16.1% in April to just about one-tenth the levels now. It stands in sharp contrast with the trends in the previous year when the IIP had accelerated from 1.1% to 18% in the first nine months. Optimists can, of course, point to the base year effect and hope that the 8.1% industrial growth projected in the advance estimates of the national accounts for 2010-11 will hold. But it would be unwise to ignore the medium-term trends, which indicate that growth of the IIP has decelerated steadily from 12% to 9.1% and further to 5.5% over the last three quarters. And it is the manufacturing sector that accounts for almost 80% of the IIP, which is the primary cause of the slump, with the numbers for December dipping down to just 1%. The real reason for worry is that the production of both the investment goods and a large part of the consumption goods segment has plunged in the recent months. The worst hit has been the capital goods sector, where growth plummeted sharply from a high 64% in April 2010 to negative levels with output shrinking by 13.7% in the most recent month.

This trend reflects the larger picture highlighted in the national accounts statistics, which show that corporate sector investments have been stagnant and that gross fixed capital formation has even been decelerating for the second consecutive year. Though the consumption goods sector has only been partially affected, with the production of day-to-day consumables contracting for the second consecutive month, the implications are much broader, as consumables or consumer non-durable goods account for more than a quarter of the IIP. And with production hit badly so soon after the start of the kharif crop marketing season, one can hope for a significant recovery in this segment only after the start of the rabi marketing season in the next financial year. The only consolation so far is that though the production of the consumer durable goods has slowed down from the high 32.1% in April this year, it is still registered a respectable 16.5% growth in the most recent month. But with the central bank still focused on the efforts to contain inflation, the outlook seems indeed ominous for industry.





The day after the government put out its advance estimate of GDP growth for the year at 8.6%, the perennially optimistic chief economic advisor Kaushik Basu said a 9% growth for 2011-12 was "well within target". Whether the government believes this, of course, will soon be apparent once Pranab Mukherjee comes out with this Budget on February 28—there is, of course, some room for fudge since the GDP deflator is never explicitly spelt out in the Budget even while giving the nominal GDP numbers for 2011-12.

At this point, though, it has to be said it is difficult to see how Basu arrives at this number. India Inc is in the grip of a huge fear, the government has no time for taking any kind of tough policy decisions, there is virtually no money to pick up in the markets and even a very small sum taken out by FIIs (around $1.5 bn since January) has made the market fall by 15% since the beginning of the year.

And, yes, it does look as if corporate India will continue to suffer some heartburn for a while—Sebi's order on the RIL insider-trading investigation is expected soon; the CAG report on RIL's capital expenses in the K-G basin gasfields could be out in a few months; the CAG report on the purchase of planes by Air India will almost certainly raise political temperatures; the Supreme Court will start hearings on the Tata petition against the government on the Sasan power plant next month. The JPC on Raja, almost a certainty now, will ensure the government is put under a new form of pressure every day ….

Data for the first half (April to September 2010) of 2010-11, contrasted with the advance estimates for the year that came out last week, makes it clear we're in the middle of a slowing. And mind you this is the period before scam season really hit us, so corporate India was still a lot more bullish than it is today. Investment levels (gross fixed capital formation) in the second half of this year (October 2010 to March 2011), even the government projections in the advance estimates suggest, are likely to grow just 2.6% as compared to 14.9% in the year's first half. Given how it is the surge in investment levels that has driven GDP growth in recent years, it's obvious why the economy has slowed—as compared to 8.9% in the first half of the year, GDP in the second half is likely to grow at around 8.3%.

As a proportion of GDP, the ratio of gross fixed capital formation (at 2004-05 prices) has fallen from 33.6% in 2007-08 to 32% in 2009-10—while this is projected to fall a bit more to 31.6% in 2010-11, the fall is projected to be exceptionally sharp in the second half of the year. Though it is true the data gets distorted by 'errors and omissions', the current data suggests that the ratio of gross fixed capital formation to GDP was 34.7% in the first half of the year and is likely to fall to 29.1% in the second half.

Foreign direct investment, the other leg of overall investment, has also fallen, from $41.2 bn in 2008 to $34.6 bn in 2009 and to a mere $24.0 bn in the first 11 months of 2010. The import numbers also suggest all isn't as hunky dory as is made out to be—they fell 11.1% in December 2010 over that a year ago, and while there was a fall of 16% in oil imports, non-oil imports fell 9%. Industrial production for December, data out last week, suggests the same moderating of growth story—on a 3-monthly moving average (3mma) basis, Citi India suggests IIP growth has decelerated to 5.5% from around 9% a few months ago and the double-digit levels seen at the beginning of the financial year—there are the usual problems with the indices, but high inflation appears to be hitting household expenditure, which slowed from 8.6% in the first half to 7.9% in the second half.

Investments, of course, can always revive but there are several issues here. Immediately, there is the issue of inflation and managing that. Rising costs of raw materials, we've seen, are affecting the growth in sales and profits of corporate India; and the need to increase interest rates by RBI will dampen the investment outlook.

There is then the larger issue of investor confidence which, it is obvious, has taken on a larger than life dimension right now. Banks, for instance, are wary of investing, given what's happening to their telecom lending and the Supreme Court-ordered probe into it; bureaucrats are certain to be that much slower about taking decisions that are even slightly controversial; though Jairam Ramesh looks a lot more open to granting clearances, the ease with which decisions are made is surely worrying—a Lavassa can be told to stop work at a moment's notice and legitimate deals like Cairn-Vedanta are being made into a huge populist football.

FII investments are probably the last leg of this story. Right now, FIIs are still bullish since the sums withdrawn are not that large. If the current stalemate on policy continues, and if the US growth story remains on track, FIIs could well take the view that larger exits may be a better idea. The Sensex's fall means it is now trading at a more reasonable 14.5 times one-year forward earnings, and this is a positive since it means India is no longer as expensive as it was some months ago.

So it's not exactly crisis time, but some more months of policy paralysis, and things could well start looking different. The onus of ending the policy stalemate, of course, is not just on the BJP—till the time the government indicates it is really interested in cleaning its stables, as opposed to pointing fingers at the BJP, a stalemate seems pretty much par for the course.





In all my recent meetings, I have been asked about the expectations of the IT industry from the Union Budget 2011. The typical demand of this industry every year is to extend the tax holiday benefits for the Software Technology Park (STP) units. The DTC is expected to come into effect starting April 1, 2012, and is focused on eliminating most of those exemptions, including the STP benefits. But, when you look deep into it, I think, what the industry wants is more certainty and clarity in the tax regime coupled with simplification of the time-consuming appeal process.

The IT industry in India has come a long way. In the early 1990s, the industry was small. It required a lot of support from the government to grow. The STP scheme was a killer. It allowed small companies to flourish and expand, it enhanced their competitive advantage and gave them the resources to reinvest and grow. Over the years, the industry has become larger. This year the total software exports from India could be close to $60 billion. While the industry becomes larger and larger, the argument for continuation of the tax holidays becomes weaker and weaker.

However, the software industry is still very divergent. As per industry estimates, close to 80% of the companies are small and medium sized with a turnover of Rs 200-300 crore. As per the budget documents, the revenue forgone due to tax sops under Section 10A for STP units was Rs 14,651 crore in 2009-10. It could easily grow to Rs 20,000 crore in 2011-12, if the STP tax holiday is extended by one more year. These are large sums for a government that is scrambling around for resources to fulfil its social obligations.

As a country, the government requires enormous amount of resources to fulfil its social programmes and to build out massive infrastructure required for growth. For a developing country like India, the case for supporting a highly profitable and mature industry like software looks weak. However, there is a strong case for continuing with the tax support for small and medium sized companies with a group turnover of up to Rs 500 crore. Those companies still require support to be competitive in the global markets. The case for extension of the STP tax sops for larger companies is out of place and lacks economic justification.

I think more than the tax sops, what the industry wants is greater certainty and clarity in the application of laws. The classic case is the current service tax regime in the country for software exporters. While software exporters have been exempted from output service tax on their exports, they are required to pay the input cenvat on the services they procure. Subsequently, they can seek a refund from the government. In order to accelerate the cenvat refund process, the government had simplified such cenvat refunds based on a chartered accountants certificate. The administrative officers on the field reject such refund requests for frivolous reasons. This is despite the fact that some of the issues were decided in favour of the assessee at various appellate levels. As a result, there is a massive backlog, running into crore of rupees of cenvat refunds held up at various levels. It is an administrative nightmare. The government could have exempted the software exporters from any payment of cenvat taxes on inputs used towards software exports.

Similarly, Section 10A of the Income Tax Act related to exports done under STP scheme is riddled with too many interpretations at the field level. In the whole process, the assessing officers do not understand the business model, do not appreciate the economic intent of the legislation and raise unreasonable demands on software exporters. Corporates are then required to spend enormous amount of time and energy in the appeal process, which takes years to decide. Even matters that were decided at the appellate levels were disregarded by the assessing officers in their quest to collect more taxes.

Similar situation also prevails in the tax benefits under Section 10AA relating to the SEZ. Here again, the interpretation of the law is such that it defeats the whole intent of the law. The clarifications and instructions of the ministry of commerce, which is the nodal ministry for administering the law, is totally discarded and not considered at the field level. This is a classic example of two arms of the government working at cross purposes. There is a big disconnect between the intent of the law and the application of law and a lot of misinterpretation of law at the field level. The whole appeal process is time consuming and taxing for the corporates. There should be clear directions to the field on the intent and interpretation of the law and accountability should be fixed at the field level. This will increase the business confidence, accelerate the velocity of business and improve tax collection and efficiency.

While the continuation of tax support for smaller companies will provide them space to grow into bigger companies, the larger companies will be happy to pay taxes as there is greater certainty and clarity on the application of the law. Certainty always commands a much higher value in the corporate world.

The author is CFO of Infosys






President Hosni Mubarak's decision to resign his office constitutes a momentous event in modern Egyptian history. After 18 days of nationwide mass protest, this dictator of 30 years' standing finally acted on the truth he had seemed incapable of seeing: his entire regime had lost all possible public assent, not to mention what little legitimacy it still possessed after years of rigged elections, rampant corruption, and savage torture. Mr. Mubarak's resignation was greeted with jubilation. In Cairo's Tahrir Square, Muslims and Coptic Christians prayed together, civilians embraced soldiers, and even some of the hated police found protesters willing to make friends with them. The outgoing government has handed over to the Supreme Military Council of the Armed Forces, headed by the Defence Minister, Field Marshal Mohammed Hussein Tantawi. The military have made several explicit promises: they guarantee "free and transparent" elections; they will end the 30-year-long state of emergency; they will ensure a peaceful transfer of power leading to a "free democratic society"; and they will not be a substitute for the "legitimate will of the people."

The fact remains that Egypt has moved from dictatorship to martial law; many senior military officers were also part of the now-deposed power elite, with long records of corruption and suspect business links. Secondly, the United States may well have played a part in the replacement of Mr. Mubarak with a military government and not an elected one. The statements from Washington and other western capitals calling for stability amounted to support for a brutal regime, and the caution of their latest reactions stands in sharp contrast to their crowing triumphalism over the collapse of the Soviet bloc two decades ago. Thirdly, Israel, having backed the ousted President, has done no more than express the platitudinous hope that "peaceful" Israeli-Egyptian relations would continue. What cannot be denied, however, is that 80 million Egyptians have spoken. Their right to democracy cannot be annulled; nor can their demand for it be resisted. It is Egypt's neighbours who know that best. In Algeria, protesters are defying bans on rallies. In Yemen, the people have won the President's assurance that there will be no father-son handover. In Jordan, the King has appointed a new government with orders to introduce major reforms. Half a century ago and seven thousand kilometres south of Cairo, a leader of another time said the wind of change was blowing through Africa. Today, that wind is blowing through West Asia. Its consequences in the region, long known for foreign-supported and despotic rulers, cannot be predicted, but they will be of immense importance to the whole world.





Yes, the wheels of justice grind slowly, but should they move at such an excruciatingly sluggish pace? The sense of satisfaction that the law does catch up with the high and mighty, exemplified by the Supreme Court of India's conviction of former Kerala minister R. Balakrishna Pillai for graft in the Idamalayar dam corruption case, is severely tempered by the fact that justice was done two decades after the initiation of prosecution. While sentencing Mr. Pillai to one year of rigorous imprisonment, the Supreme Court itself drew attention to this indefensible delay by directing the special courts to dispose all corruption cases against public servants expeditiously. The two-member Bench held that High Courts, having a supervisory role over trial courts, are expected to monitor the progress of these cases and may "even call for a quarterly report from the court concerned for speedy disposal."

The Supreme Court's observations closely follow Law Minister Veerappa Moily's promise to put in place, within the next three months, a system under which corruption cases are fast-tracked so that "no [such] case should exceed three years." How this is going to be achieved is unclear considering that the law's built-in delays have been an intractable problem. However, it is commendable that the government has earmarked a sum of Rs.20,000 crore for developing judicial infrastructure, which needs overhauling particularly at the level of the lower courts. Most of the estimated three-crore-plus cases pending are in the lower courts, which under the E-courts project, need to be urgently computerised. Since more than two-thirds of pending cases involve the government, it is important that it quickly change from being a compulsive litigant to a responsible one. The National Litigation Policy unveiled last year, which aims at bringing about such a transformation in government attitude, must be implemented with a sense of mission. Any serious attempt to tackle a judicial backlog of such proportions will require coordinated action on multiple fronts. These include raising the judge-population ratio, which compares very poorly with that of other countries, to at least 50 per million as recommended by the Supreme Court in 2002. There is also a case for streamlining the time-consuming elements in the Civil and Criminal Procedure Codes and improving the functioning of alternative dispute resolution mechanisms. Speed and efficiency are vital not only to the credibility of any justice delivery system but also to the very well-being of any democratic society.






In contrast to many other nations, Russia reacted with extreme discretion and caution to the turmoil in Egypt. Following the ouster of Hosni Mubarak, President Dmitry Medvedev said Egypt should hold legitimate elections and respect religious rights. In the first official reaction, the Russian Foreign Ministry released a statement asking Egyptians not to resort to violence and to strengthen democratic structures. The Kremlin earlier warned outside powers — presumably the United States — against wading into the crisis with "ultimatums."

Moscow's restraint was prompted, among other things, by concerns that the wave of unrest sweeping the Middle East and North Africa could lead to the radicalisation of the region — a major source of militants and money for Islamic insurgency in Russia's North Caucasus in the mid-1990s and early 2000s.

It took Russia a decade of bloody war to curb separatism in Chechnya, but militancy in North Caucasus has been on the rise again sending deadly ripples across Russia. Three weeks ago, a suicide bomb attack on Russia's largest Domodedovo Airport in Moscow killed 36 and wounded 180 people. It was the second attack in the Russian capital in less than a year. In March 2010, two "black widows" blew themselves up in the Moscow metro within minutes of each other killing 40 and wounding 80 people. Notorious Chechen rebel leader Doku Umarov claimed responsibility for both attacks. In a video posted on a rebel website, he vowed to make 2011 a "year of blood and tears" for Russia and carry out attacks "monthly and weekly."

In recent years, the low-intensity insurgency has spread from Chechnya to neighbouring territories in North Caucasus and undergone a transformation from a nationalist and separatist movement to pure jihadist movement that feeds on the radical strains of Islam.

In 2007, Umarov dissolved the self-proclaimed separatist "Chechen Republic of Ichkerya" and announced the establishment of a "Caucasus Emirate" appointing himself the "Emir of Caucasian Mujahidin." Umarov embraced global jihad, pledging to fight a jihad against not only Russia but also the United States, Britain and Israel. "Our brothers are fighting today in Afghanistan, Iraq, Somali and Palestine," Umarov said. "Everybody who attacks Muslims wherever they are will be our common enemy."

It was a dramatic change of strategy. While separatist rebellion in the Caucasus has a long tradition dating back to the 18th century, religious extremism was never its driving force.

Historically, North Caucasus has been dominated by moderate Sufi Islam. However when the war broke out in Chechnya, Arab preachers and militants financed with Saudi money streamed into the region bringing with them the fundamentalist Wahabbi/Salafi strain of Islam. The seeds of radical Islamism sowed by Arab jihadists and Arab money have now sprouted across North Caucasus, which is the most depressed and corruption-ridden region in Russia. Unemployment among the young is as high as 80 per cent. Corruption is absolute. Millions of dollars poured into the region under federal programmes to uplift the local economy are stolen on a regular basis. "Official" muftis have discredited themselves by endorsing corrupt authorities. All this provides fertile soil for Islamic radicalism.

"Jihadisation" of the rebel movement helped Umarov take his war of terror from Chechnya, which has been largely pacified under the iron rule of former militant Ramzan Kadyrov, to neighbouring Muslim regions under the banner of radical Islam. The strategy paid off. Umarov reinvented the concept of a multiethnic Islamic state in the Caucasus that was popular during Russia's wars for control of the region in the 19th century. The "Caucasus Emirate" united militant groups, jamaats, operating in the region's ethnically defined Muslim autonomies — Dagestan, Ingushetia, Karachevo-Cherkessia, Kabardino-Balkaria, and Adygeya.

Terrorist activity in North Caucasus has sharply increased since the establishment of the virtual "Caucasus Emirate." In 2010, for example, the region saw a fourfold rise in terror attacks, according to Russia's Prosecutor General Office. Terrorists staged more than 900 attacks in North Caucasus last year, killing and wounding about 800 police and military personnel as well as hundreds of civilians.

"Russia is facing a far higher terrorist threat than Israel," says Major General (retd.) Vladimir Ovchinsky, former head of the Interpol office in Russia. "In Israel, the warring sides are divided by a wall, whereas in Russia there is no fence between North Caucasus and the rest of the country."

Foreign militants, predominantly Arab natives trained in al-Qaeda camps in Pakistan, have been active in North Caucasus since the early days of the Chechen war. Last year alone, the Russian security services killed two al-Qaeda emissaries in Umarov's entourage — Mohmad Mohamad Shabaan and Abu Haled, both of Arab origin. More Arab militants were killed in Chechnya in the earlier years, including Khattab, Abu Walid, Abu Dzeit and Abu Omar Safs.

"The Caucasus Emirate is a branch of the al-Qaeda and part of its project of setting up a global caliphate," says Dr. Alexander Ignatenko, president, Institute of Religion and Politics. There are strong fears in Russia that foreign support for insurgency in North Caucasus may grow if radical Islamic groups, such as the fundamentalist Muslim Brotherhood, gain power in Egypt and other Arab countries. "There are no guarantees the radicals will not come to power in Egypt and Yemen," warns Konstantin Kosachyov, head of the Foreign Affairs Committee of the State Duma, the lower house of the Russian Parliament. "This, in turn, could have destabilising consequences for the situation in a much broader region." The rise of radical Islamists "is a threat to the entire region's security that can resonate in the Caucasus and even Tatarstan [a Muslim region in central Russia]," echoes Viktor Kremenyuk, deputy head of the U.S.A. and Canada Institute.

The Egyptian Muslim Brotherhood, or al-Ikhwan al-Muslimun, has long renounced violence and its leaders deny they ever provided any financial or other assistance to rebels in North Caucasus. However, Russian security services believe that the Muslim Brotherhood has long-standing links with Russian Islamists and has funnelled millions of dollars to Chechen separatists through various charity foundations, such as the now defunct al-Haramain Islamic Foundation based in Saudi Arabia. The charges were recently confirmed by a U.S. court. In September 2010, the Oregon Court convicted the al-Haramain co-founder Sedaghaty for smuggling out $150,000 to Chechen rebels in 2000. (Al-Haramain, registered in Oregon, was investigated for suspected involvement in the 9/11 attacks.)

In 2003, Russia's Supreme Court banned the Muslim Brotherhood along with its more radical splinters like al-Gama's al-Islamiyya and Egyptian Islamic Jihad, 12 other Islamist groups for their role in promoting extremism in Russia. The court accused the Muslim Brotherhood of pursuing "armed jihad without any territorial bounds" in the name of "re-creating the Great Islamic Khalifat in predominantly Muslim territories, including Russia and other former Soviet countries."

"Russian regions with majority Muslim populations, especially North Caucausus, are very much on the radar screens of the Muslim Brotherhood," attests Elena Suponina, a Russian expert on the Arab world.

The influx of Arab militants to North Caucasus has recently thinned out, partly thanks to the efforts of the Russian security services, but also thanks to Moscow's success in establishing dialogue and understanding with the Arab world. The Egyptian government led the way in controlling the illegal flow of young militants to Russia and cutting off the links between Russian Muslim students at Egyptian universities and local radicals. The main credit for this turnaround goes to Egypt's intelligence service chief Omar Suleiman, appointed Vice-President after the start of the unrest.

However, "destabilisation in the Middle East could bring a new wave of jihadists to North Caucasus," warns Ms Suponina. This would be a nightmarish scenario for Moscow as it struggles to curb terrorism that may pose a grave threat to major international sports events Russia is set to host — the 2014 Winter Olympics in Sochi, next to the violence-hit North Caucasus, and the 2018 World Football Cup, which will be held in a range of cities from Kaliningrad to the Ural Mountains. The suicide bombing in the international arrivals of the Domodedovo airport that killed several foreigners may be an indication that Russian jihadists are also gearing up for the approaching world games.






I was awakened early one morning recently by someone who said he was enormously enjoying my on-going debate on economic growth in India. I was very pleased that I had given someone some joy, but I also wondered what on earth he could be talking about, since I have not been involved in any such debate. As it happens, I am getting a steady stream of telephone calls and electronic communication about this alleged debate. Since I could not generate the memory of any such debate, I tried to recollect any solitary remark on economic growth in some other context that I might have made in the last few months. I managed to resurrect the memory of having said in passing, in a meeting of TIE (The Indus Entrepreneurs) in Delhi in December, that it is silly to be obsessed about overtaking China in the rate of growth of Gross National Product (GNP), while not comparing ourselves with China in other respects, like education, basic health, or life expectancy. Since that one-sentence remark seems to have been interpreted in many different ways (my attention to that fact was drawn by friends who are more web-oriented than I am), I guess I should try to explain what that remark was about.

GNP growth can, of course, be very helpful in advancing living standards and in battling poverty (one would have to be quite foolish not to see that), but there is little case for confusing ( 1) the important role of economic growth as means for achieving good things, and ( 2) growth of inanimate objects of convenience being taken to be an end in itself. One does not have to "rubbish" economic growth — and I did not do anything like that — to recognise that it is not our ultimate objective, but a very useful means to achieve things that we ultimately value, including a better quality of life.

Nor should my remark be taken to be a dismissal of the far-reaching relevance of comparing India with China. This is a good perspective in which to assess each of the two countries and a lot of my past work — on my own and jointly with Jean Dreze — has made use of that perspective. It is of some historical interest that comparing India with China has been the subject matter of discussion for a very long time. "Is there anyone, in the five parts of India, who does not admire China?" asked Yi Jing (I-Tsing, in old spelling) in the seventh century, on returning to China after being in India for ten years, studying at the ancient university in Nalanda. He went on to write a book, in 691 AD, about India, which presented, among other things, the first systematic comparative account of medical practices and health care in these two countries (perhaps the first such comparison between any two countries in the world). He investigated what China could learn from India, and what, in turn, India could assimilate from China. Comparisons of that kind — and more — remain very relevant today, and I have discussed elsewhere the illumination we can get from such comparisons in general, and in comparative medical practice and health care in particular ("The Art of Medicine: Learning from Others," Lancet, January 15, 2011).

What goes wrong in the current obsession with India-China comparison is not the relevance of comparing China with India, but the field that is chosen for comparison. Now that the Indian rate of economic growth seems to be hovering around 8 per cent per year, there is a lot of speculation — and breathless discourse — on whether and when India may catch up or surpass China's over-10 per cent growth rate. Despite the interest in this subject, comparable to that in the race course (the betting comes from the West as well as Asia), this is surely a silly focus. This is so not merely because there are so many elements of arbitrariness in any growth estimate (the choice of prices for weighting is only one of the problems, as any serious economist knows), but also because the lives that people are able to lead — what ultimately interest people most — are only indirectly and partially influenced by the rates of overall economic growth.

Let me look at some numbers, drawing from various sources — national as well as international, in particular World Development Reports of the World Bank and Human Development Reports of the United Nations. Life expectancy at birth in China is 73.5 years; in India it is still 64.4 years. Infant mortality rate is 50 per thousand in India, compared with just 17 in China, and the under-5 mortality rate is 66 for Indians and 19 for the Chinese. China's adult literacy rate is 94 per cent, compared with India's 65 per cent, and mean years of schooling in India is 4.4 years, compared with 7.5 years in China. In our effort to reverse the lack of schooling of girls, India's literacy rate for women between the ages of 15 and 24 has certainly risen, but it is still below 80 per cent, whereas in China it is 99 per cent. Almost half of our children are undernourished compared with a very tiny proportion in China. Only 66 per cent of Indian children are immunised with triple vaccine (DPT), as opposed to 97 per cent in China. Comparing ourselves with China in these really important matters would be a very good perspective, and they can both inspire us and give us illumination about what to do — and what not to do, particularly the glib art of doing nothing.

Higher GNP in China has certainly helped it to reduce various indicators of poverty and deprivation, and to expand different aspects of the quality of life. So we have every reason to want to encourage sustainable economic growth, among the other things we can do to augment living standards today and in the future. Sustainable economic growth is a very good thing in a way that "growth mania" is not. We need some clarity on why we are doing what (including the values we have about our lives and freedoms and about the environment), and getting excited about the horse race on GNP growth with China is not a good way of achieving that clarity.

Further, we have to take note of the fact that GNP per capita is not invariably a good predictor of valuable features of our lives, for they depend also on other things that we do — or fail to do. Compare India with Bangladesh, where, as Jean Dreze pointed out in an article many years ago, "social indicators" are "improving quite rapidly" ("Bangladesh Shows the Way," The Hindu, September 17, 2004). In terms of income, India has a huge lead over Bangladesh, with a GNP per capita of Rs.3,250, compared with Rs.1,550 in Bangladesh, in comparable units of purchasing power parity. India was ahead of Bangladesh earlier as well, but thanks to fast economic growth in recent years, India's per-capita income is now comfortably more than double that of Bangladesh. How well is India's income advantage reflected in our lead in those things that really matter? I fear not very well — indeed not well at all.

Life expectancy in Bangladesh is 66.9 years compared with India's 64.4. The proportion of underweight children in Bangladesh (41.3 per cent) is a little lower than in India (43.5), and its fertility rate (2.3) is also lower than India's (2.7). Mean years of schooling amount to 4.8 years in Bangladesh compared with India's 4.4 years. While India is ahead of Bangladesh in male literacy rate in the youthful age-group of 15-24, the female rate in Bangladesh is higher than in India. Interestingly, the female literacy rate among young Bangladeshis is actually higher than the male rate, whereas young females still do much worse than young males in India. There is much evidence to suggest that Bangladesh's current progress has much to do with the role that liberated Bangladeshi women are beginning to play in the country.

What about health, which interests every human being as much as anything else? Under-5 mortality rate is 66 in India compared with 52 in Bangladesh. In infant mortality, Bangladesh has a similar advantage, since the rate is 50 in India and 41 in Bangladesh. Whereas 94 per cent of Bangladeshi children are immunised with DPT vaccine, only 66 per cent of Indian children are. In each of these respects, Bangladesh does better than India, despite having less than half of India's per-capita income.

This should not, however, be interpreted to entail that Bangladesh's living conditions will not benefit from higher economic growth — they certainly can benefit greatly, particularly if growth is used as a means of doing good things, rather than treating it as an end in itself. It is to the huge credit of Bangladesh that despite the adversity of low income it has been able to do so much so quickly, in which the activism of the NGOs as well as public policies have played their parts. But higher income, including larger public resources, will enhance, rather than reduce, Bangladesh's ability to do good things for its people.

One of the great things about economic growth is that it generates resources for the government to spend according to its priorities. In fact, public resources typically grow faster than the GNP: when the GNP increases at 7 to 9 per cent, public revenue tends to expand at rates between 9 and 12 per cent. The gross tax revenue, for example, of the Government of India now is more than four times what it was in 1990-91, at constant prices — a bigger rise than GNP per head.

Expenditure on what is somewhat misleadingly called the "social sector" (health, education, nutrition, etc) has certainly gone up in India, and that is a reason for cheer. And yet we are still well behind China in many of these fields. For example, government expenditure on health care in China is nearly five times that in India. China does, of course, have a higher per-capita income than we do, but even in relative terms, while China spends nearly two per cent of its Gross Domestic Product (GDP) on health care (1.9 per cent to be exact), the proportion is only a little above one per cent (1.1 per cent) in India.

One result of the relatively low allocation to public health care in India is the development of a remarkable reliance of many poor people across the country on private doctors, many of whom have little medical training, if any. Since health is also a typical case of "asymmetric information," with the patients knowing very little about what the doctors (or "supposed doctors") are giving them, the possibility of fraud and deceit is very large. In a study conducted by the Pratichi Trust, we found cases of exploitation of the poor patients' ignorance of what they are being given to make them part with badly needed money to get treatment that they do not often get (we even found cases in which patients with malaria were charged comparatively large sums of money for being given saline injections). There is very definitive evidence of a combination of quackery and crookery in the premature privatisation of basic health care. This is the result not only of shameful exploitation, but ultimately of the sheer unavailability of public health care in many localities around India.

The central point to seize is that while economic growth is an important boon for enhancing living conditions, its reach depends greatly on what we do with the fruits of growth. To be sure, there are large numbers of people for whom growth alone does just fine, since they are already privileged and need no social assistance. Economic growth only adds to their economic and social opportunities. Those gains are, of course, good, and there is nothing wrong in celebrating their better lives through economic growth, especially since this group of relatively privileged Indians is quite large in absolute numbers. But the exaggerated concentration on their lives, which the media tend often to display, gives an incomplete picture of what is happening to Indians in general.

And perhaps more worryingly, this group of relatively privileged and increasingly prosperous Indians can easily fall for the temptation to treat economic growth as an end in itself, for it serves directly as the means of their opulence and improving lifestyles without further social efforts. The insularity that this limited perspective generates can even take the form of ridiculing social activists — " jholawalas" is one description I have frequently heard — who keep reminding others about the predicament of the larger masses of people who make up this great country. The fact is, however, that India cannot be seen as doing splendidly if a great many Indians — sometimes most Indians — are having very little improvement in their deprived lives.

Some critics of huge social inequalities might be upset that there is something rather uncouth and crude in the self-centred lives and inward-looking temptations of the prosperous inner sanctum. My main concern, however, is that those temptations may prevent the country from doing the wonderful things it can do for Indians at large. Economic growth, properly supplemented, can be a huge contributor to making things better for people, and it is extremely important to understand the relevance and role of growth with clarity.

(Amartya Sen, who won the Nobel Prize in Economics in 1998 and was awarded the Bharat Ratna in 1999, is Professor of Economics and Philosophy at Harvard University. He is Founder and Chair of the Pratichi Trust, which he started with his Nobel money.)





Riot police officers stifled a protest in Algeria's capital on Saturday by hundreds of people voicing the same demands for change that have helped topple two of the region's autocratic governments over the last month.

Gathering in the central May 1 Square, demonstrators in Algiers chanted "Bouteflika out!" referring to President Abdelaziz Bouteflika, who has ruled Algeria with a tough hand since 1999, maintaining power through elections that opposition figures say were rigged. The rally's organisers said thousands had taken part but news agencies and the government gave vastly differing figures.

Witnesses said thousands of riot police officers with clubs had blocked the demonstrators from carrying out a planned march in the centre of the whitewashed seaside capital, which was otherwise tense and deserted on Saturday. By late afternoon, with the last of the demonstrators gone, the square was still sealed off by police officers, and dozens of armoured police vehicles remained in the neighbourhood.

It was unclear on Saturday what, if any, long-term implications the protest would have for Mr. Bouteflika's government; outbursts of civil unrest have been frequent here for decades. But the large-scale deployment of the police and recent concessions — Mr. Bouteflika has promised to lift a longstanding state of emergency — show the government is wary of the contagion of unrest in neighbouring countries. Many demonstrators were arrested, although there were also conflicting numbers for those detained.

The government news agency minimised the "unauthorised" demonstration's significance, quoting the police as saying that only 250 had taken part. But one of the organisers, Said Sadi of the opposition Rally for Culture and Democracy, said that Saturday's event was a "great success" and that it would not be the last such demonstration. "When you mobilise 30,000 police in the capital, that's a sign of weakness, not strength," he said. The figure could not be independently verified. But witnesses suggested the police far outnumbered the protesters.

With the police still out in force, knots of men watched them silently from doorways in the chill dusk. Among them were suggestions that persistent grievances of large-scale unemployment, reports of government corruption, heavy-handed police tactics had not been mitigated by the demonstration's suppression.

On Friday, several people were wounded outside the office of the main opposition group by security forces as they were celebrating the resignation of President Hosni Mubarak of Egypt.

In Algeria, several antigovernment protests broke out in early January, including some in which demonstrators clashed with members of the security forces. The protests began after prices rose sharply. In 2009, there were riots in Algiers over high unemployment and housing shortages. Algeria's government has operated under a state of emergency for nearly two decades. Its battle with Islamic militants reached a peak in a civil war in the 1990s, in which as many as 200,000 people were killed. That conflict began after the military-backed government cancelled elections that an Islamist party appeared poised to win.

In Yemen on Saturday, a small antigovernment protest in the capital, Sana, quickly drew several thousand supporters before they were attacked by pro-government forces, witnesses said. The protests began when a group of Sana University students gathered in front of the campus, writing banners in support of the Egyptian uprising, said Faysal al-Namsha, an opposition supporter who was there. When the crowd grew to 3,000 people, Namsha said, men in plain clothes believed to be security forces attacked the demonstrators with clubs and sabers. The students later marched toward Tahrir Square, where supporters of President Ali Abdullah Saleh, some carrying his picture, attacked them again.

Several Arab leaders also made their first public comments on the revolt in Egypt, a day after mass demonstrations forced Mr. Mubarak to resign. Saudi Arabia, which has been outspoken in its defence of Mr. Mubarak, said it welcomed a "peaceful transition of power" in Egypt, and expressed "hope in the efforts of the Egyptian armed forces to restore peace, stability and tranquillity." In Bahrain, Al-Watan quoted the government as saying that the kingdom was interested in developing its relationship with Egypt and was confident in the ability of the Egyptians to establish stability. King Hamad Bin Isa al-Khalifa of Bahrain, who is facing street protests planned for Monday, decided to give the equivalent of $2,560 to each Bahraini family. He is expected to announce reforms soon.

In Tunis, the cradle of the revolution, hundreds turned out on Friday and again on Saturday to celebrate Mr. Mubarak's ouster. Many said they hoped Algeria would be the next to fall. On Friday evening, young people in Tunis sang an Algerian soccer chant: "One-two-three, Algerie!"

(Nada Bakri contributed reporting from Beirut, and Thomas Fuller from Tunis.) — New York Times News Service




The stirring events in Egypt, culminating in the end of the hated and venal Hosni Mubarak dictatorship, have held the world in thrall and gladdened democratic hearts everywhere. There are questions about what the armed forces, which have taken charge during this time of transition, will do when serious democratic political reform gets under way. But the answer to that can apparently ?ait and meanwhile the popular mood in Egypt and much of the west Asian region is one of elation.

As the Egyptian drama unfolded, western newspapers like The New York Times and The Guardian, CNN and the other major American television networks, and of course the BBC stepped up their coverage in a big way. Al Jazeera played a sterling role, often being first with breaking stories and providing a refreshingly different, independent west Asian perspective on what was happening.

But how did the Indian news media cover one of the biggest political and human interest stories of recent decades?

In general, the response was slow and indifferent as the people's uprising started gathering force across Egypt. The Hindu, which sent its Dubai-based west Asia Correspondent, Atul Aneja, to Cairo, was an exception. It was quick off the block and Mr. Aneja started doing lively, first-hand, insightful coverage from Tahrir Square before other Indian journalists got there. Next came the news television channels and some other mainstream English dailies. But the lack of background knowledge of the region and of Egyptian affairs proved a handicap in most cases.

Gradually, the news coverage, supported by analysis and comment, picked up. The Hindu published three insightful editorials in less than three weeks, besides Mr. Aneja's analyses and also a number of syndicated articles. The first editorial (January 31, 2011 analysed the causes of the "mass rage" against Mubarak's despotic rule, which brought Egyptians on to the streets to voice their demand for the restoration of democracy. These causes ranged from "long-term structural unemployment through rising and apparently uncontrollable food prices to rampant corruption and the brutality of the notorious security agencies." The editorial also noted that "Tunisia's brave people, who recently ended Abidine Ben Ali's 23-year rule, may well have inspired Egyptians."

The paper gave credit to the influential role played by " Al Jazeera — the standout voice of aggressive, independent journalism in the Arab world" — in channelling popular discontent through the region." Furthermore, popular anger against the Mubarak regime was related to its abject dependence on the United States and its allies. The second editorial perceived an interesting shift in the stand of the Obama administration and the third one analysed the unfolding political scenario as the Mubarak regime was fading into history.

In its editorial of February 3, 2011 ('Choose Egypt, not Mubarak'), The New Indian Express looked at another issue relating to Egypt. It strongly criticised the Indian government's "equivocation" in extending support to the people of Egypt in their time of crisis. "For a nation with ambitions of becoming a permanent member of the U.N. Security Council, India's response has been far from confidence-inspiring," the editorial commented.

Noteworthy feature

A noteworthy feature of the international news coverage was the way participants in the mass protests at Tahrir Square, local journalists, and bloggers influenced the mainstream media and helped change perceptions of what was unfolding. For instance, in the course of an interview on CNN, Mona Elthawy said that the situation was most accurately described as an "uprising" or a "revolt", not as "chaos" and "unrest." According to The New York Times, soon after the interview, CNN's banner headline was changed from "Chaos in Egypt" to "Uprising in Egypt." When thuggish supporters of Mr. Mubarak started attacking peaceful demonstrators at Tahrir Square, the channel's headlines said, "protests turn violent"; and the deadly attacks were called "clashes" between groups. But such characterisations were corrected thanks to accurate reporting by Al Jazeera and inputs from local journalists and bloggers.

Another significant development was that when foreign journalists arrived and began covering the massive agitation, the authorities started intimidating them. The hated regime issued new orders requiring visiting journalists to get accreditation from the Ministry of Information, which ordinarily is a complicated process that takes several days. This effectively prevented many media organisations from covering the demonstrations. As the coverage became more free-ranging and aggressive, several journalists were stopped or taken into custody. Cameras, mobile phones, recorders, and tapes were seized. Al Ajazeera was specially targeted. Journalists had to use every bit of ingenuity to beat a failing system and many of them, including some Indian journalists, succeeded.

These actions only served to isolate the Mubarak regime further, with several western governments condemning the targeting of journalists. The Egyptian authorities were forced to apologise to the media for these repressive actions.

The international news coverage did well to bring to public attention scholarly concerns and anxieties over the fate of the millennia-old civilisational treasures in Egypt's celebrated National Museum in Cairo after vandals broke into the building and did some damage. It was moving to see television images of Egyptian citizens forming protective human chains around the museum and other major cultural sites, including the rebuilt Library of Alexandria. The fears were allayed only after the head of Egypt's Supreme Council of Antiquities assured the world that the National Museum was safe, and that the cultural artefacts damaged by vandals could be restored.

So all's well that ends well, at least for now. The Egyptian people's magnificent, predominantly peaceful struggle, packed into three weeks that shook the world, was carried powerfully to every corner of the globe by newspapers, radio, television, and the Internet. Hopefully, this interest will be sustained and the next stage of this political transformation will be covered seriously.









Finally, faced with 18 days of awesome people power, Hosni Mubarak had to eat humble pie. There are many battles that lie ahead for the Egyptian people, but the present moment is the one to savour and to marvel at the persistence and resilience of Egyptians of all walks of life and various hues refusing to be diverted by the regime's thugs and the ambivalence of the Army to retain their non-violent vigil for change in the appropriate setting of the Tahrir (Liberation) Square in Cairo.

There are lessons to be learned from the Egyptian people's triumph. First, even a region as numbed as the Middle East and North Africa — West Asia for us — by decades and centuries of autocratic rule is not immune to the virus of freedom. The propitious factors that brought about the Egyptian triumph were a complex mix: the Tunisian example showing that people can overturn a long oppressive Arab regime, prevailing economic hardships combined with high food inflation, the Internet revolution and the social network sites enabling a young savvy generation to subvert the control mechanisms of the state, the Al Jazeera satellite television channel in Arabic with its bold reporting transforming the Arab world and a sense of humiliation of an oppressed people who could feel the air of freedom in the world.

The brave Tunisians showed the way, but the fall of the Mubarak regime represents a tectonic shift in the Arab world. US President Barack Obama said that Egypt would not be the same again; indeed, the Arab world will not be the same again. Egypt, the most populous Arab nation and the traditional leader in the region, has been punching below its weight because the compact it made with the US meant that it had sold itself for $1.3 billion in military aid each year to protect Israel and the peace treaty it signed with Jerusalem. It had lost the headquarters of the Arab League after it signed the peace treaty and it took Cairo much diplomatic footwork
and long years to rehabilitate itself.

It was, indeed, a curious fact that West Asia was the only region of the world, with the exception of Israel and an Iran whose revolution was transformed into a theocracy, that seemed immune to the winds of change. First Tunisia and now Egypt have changed that sorry state, and the reaction of other regional states shows how nervous they are. Israel was rooting for Mr Mubarak because he was seen as the guarantor of the peace treaty and helped stymie the Palestinians through an inhuman blockade and pretended there was a peace process. Other countries such as Saudi Arabia and Syria have their own anxieties. But two crucial factors that helped maintain the autocratic nature of Arab states were America's need to buttress the Israeli state in continued occupation of Palestinian land since 1967 and exaggerated fears of Islamic fundamentalism if the strong men would go. Western interest in the region, of course, stemmed from its oil and gas riches.

Circumstances vary from country to country, but it will now be very difficult for other rulers of the ilk of Mr Mubarak to ward off what began in Tunisia. Some have already tried to give sops to their people, others promise of greater breathing space. But the atmosphere in the region is brittle and any spark can unleash people power, which has proved so effective in upsetting long-ruling autocracies.

The strong men have no answer to the new menace, as they view the tsunami that has hit their old comfortable worlds. One must distinguish between the Gulf monarchies and the other states. Gulf rulers, flush with oil and gas money, have a compact with their subjects: cradle to grave welfare in exchange for their quiescence in the political field. For others, economic problems and rising inequities are ticking bombs waiting to blow up their regimes.

Apart from Israel, some other Arab states pressed Washington, itself torn between political prudence and a pitch for democracy, to let Mr Mubarak stay. The US administration was divided between those in favour of Mr Mubarak and others opposed to his continued rule, given the nature of the protests. Strangely, President Obama's special envoy to Mr Mubarak publicly supported the defrocked President remaining in charge till the planned September handover. Having relied on autocrats for so long for reasons of state, the US could hardly jettison them,

the Israeli issue always trumping America's West Asia policy.

A black chapter in the drama preceding Mr Mubarak's fall concerns the attitude of UN Secretary-General Ban Ki-moon. He publicly endorsed Mr Mubarak's presidency during the transition process, accenting stability above everything else, very similar to the vocabulary US secretary of state Hillary Clinton was using at that time. As Mr Ban's distinguished predecessor, once removed, Boutros Boutros-Ghali, has revealed in his book after the US had blackballed him for the usual second term, the head of the UN administration must maintain his equation with the organisation's most important member. But there is a difference between accommodating the US and being subservient to it. It is a tragedy for the UN that its highest functionary should choose to please the US and vote against freedom and justice.

But this is Egypt's moment of glory and no one can take it away from the Egyptian people. If Tunisia showed the way, Egyptians demonstrated that an entrenched dictatorship underpinned by a ruthlessly efficient secret police apparatus — America's favourite for the rendition of suspected terrorists from Afghanistan — can be brought down in two and a half weeks.






There was a time when an almost constant topic of discussion in political, intellectual and education circles, and in homes, was the problem of "brain-drain" from India. Everybody held forth on how facilities, research and otherwise, were so difficult to obtain in India that reaching foreign shores to pursue education or to find a career appeared to be the golden dream.

A vast majority of people in India and elsewhere believed that the United States was the land of milk and honey, that the streets there were paved with gold. Also, many believed the words written on the Statue of Liberty at Ellis Island proclaiming the US as the land which "welcomes your tired, your poor, your huddled masses yearning to breathe free" spoke directly to them and reaching the US was their life's ambition.
Around 2007, there were roughly 80,000 students from India in the US, in 2009 they were 94,000, and today the number apparently stands at 100,000.

When US President Barack Obama visited India last year, he vowed to "increase exchanges between our students, our colleges and our universities which are among the best in the world". Well, today, the reaction in most of India is "no, thank you". The outrage and fury in India over radio tagging students from the bogus Tri Valley University in California is neither an over-reaction nor is it what some have argued to be the typical Indian penchant for dramatising routine events.

We are told that this is normal procedure in the US, to radio tag. US state department spokesperson P.J. Crowley declared: "This is the standard procedure for a variety of investigations… it does not imply guilt or suspicion of criminal activity". Wow. That was a great comfort for those approximately 1,555 students, 95 per cent of whom were Indians (mostly from Andhra Pradesh) and many of whom were victims of a fraud perpetuated by a US educational institution which should have been regulated by US federal authorities. Also, the very same department of immigration which has now clamped ankle monitors on students gave them valid visas to enter the US and study.

Should the ankle monitors therefore be clamped upon those US officials who gave visas to students? Or upon the education regulatory authorities in the US who allowed such a sham university to function for so long, the scamsters, who set up this university and, essentially, perpetrated the scam? Or should the ankle monitors be clamped upon the students who were really the victims of a gigantic fraud perpetrated upon them and are even now staring at a bleak and uncertain future?

The state department spokesperson has not elaborated upon these issues.

However, Juliet Wurr, an officer in the US consulate at Hyderabad, had plenty to say. She said it with a twinkling smile upon national Indian TV. She said that ankle bracelets were "hip and happening" and the other choice was to "wear an orange jumpsuit and sit in jail". She said a lot of other things but concluded with what she thought was the ultimate recommendation for ankle monitors: "Even Hollywood celebrities wear them!" Sure they do. Those Hollywood celebrities who have committed crimes or arrested for drunk driving have to be constantly monitored by the police. Well, we have our own Bollywood, Kollywood, and Tollywood celebrities, and are happy to report that not a one has been ever asked to wear an ankle monitor. And it is really of little consequence to over one billion Indians what Lindsay Lohan wears on her ankle. Many of us felt that perhaps the lady herself should suggest that all Americans living or visiting India could wear ankle bracelets, or neck braces with radio tags, just to make sure that their safety and security in this country are constantly monitored. One article suggested that perhaps, if they were such a fabulous fashion accessory, Juliet Wurr could suggest to her superiors, that orange jumpsuit be made office wear for US embassy officials.
The lady has since apologised and has graciously conceded that she should not have offended the sensibilities of Indians. Too right.

But the problem is much larger than one lady with unfortunate articulation or an odd sense of humour. Till today the radio tags have been taken off from only two students from Tri Valley. The rest are wearing those ankle monitors and probably will be scarred for lives by the experience and the sheer shame of it.
At the crux of the matter lies the question of discrimination. Why the radio tags only for the students and not for those who gave them the visas or set up the university in the first place? Is it US policy to punish victims? The US government needs to address these questions. Remember that this is not one issue which has been blown out of proportion. Apart from the very real discrimination against students which is apparent in this case, we should not forget the racially motivated attacks against Indian students living in the US and elsewhere, where little has been done to address the problem with sensitivity and seriousness.

It has to be conceded by those like me who fume over this treatment meted out to our students that there may be several or many who just got into Tri Valley on a student visa ostensibly to study but soon left for distant locations to work and earn, thereby violating US laws. Those students certainly deserve punishment and deportation or whatever else the law mandates. However, the US needs to take action against those education and university authorities who created this fraud and look into why the Immigration and Customs Enforcement gave these students visas in the first place.

At any rate, ankle monitors are both unnecessary and insulting. They are certainly not "standard procedure" as the US may like us to believe.

Enquiries in the US suggest that ankle monitors are actually being tested as an alternative to keeping criminals in jail because of the high cost of detention. Some even darkly suggest that radio tagging is part of a US attempt to track aliens, much like we in India track wild animals in their natural habitat by radio tagging them. The Government of India has taken a serious view of this issue and taken follow-up action and the US needs to respond with gravity and concern.

Jayanthi Natarajan is a Congress MP in the Rajya Sabha and AICC spokesperson. The views expressed in this
column are her own.







The Supreme Court's (SC's) three judgments in the past fortnight that mere association with a banned organisation isn't an act of terror and that confession extracted by police is not evidence unless there's corroboration has brought political parties together.


Particularly the judgment which said a law is bound to be scrapped if any of its provisions is not in consonance with the fundamental rights has hurt them most.


But Justice Markandey Katju and Justice Gyan Sudha Misra thoroughly examined judgments of different top courts abroad before arriving at the said conclusions.


"The doctrine of 'guilt by association' has no place here," US SC justice Douglas had ruled in 1966.


Later, he distinguished between active and passive association. "There must be clear proof that a defendant specifically intends to accomplish the aims of the organisation by resort to violence. A person may be foolish, deluded, or perhaps merely optimistic, but he is not by this statute made a criminal," Douglas held.


When Nato faced trial under the English parliament law in 1799 for outlawing certain societies because they were engaged in "a traitorous conspiracy" and teaching communist theory, a serious crime in the US until the Cold War was over, justice John Marshall Harlan observed: "The mere teaching of communist theory is not the same as preparing a group for violent action."


There must be some "substantial direct or circumstantial" evidence of a call to violence "now or in the future" which isboth "sufficiently strong and sufficiently pervasive" to lend colour to the otherwise ambiguous theoretical material regarding communist teaching.


When the practice of outlawing parties and various public groups begins, no one can say where it will end.


The threat is not that serious for India. Yet, the Katju-Misra judgments do pose a challenge to the investigating agencies that take the courts for granted







Rising US treasury yields and flight to safety by investors is helping the greenback.


Financial markets were driven by inflation concerns particularly in the emerging markets, interest rates and geopolitics last week.


Market participants navigated through a move of further tightening by China and the resignation of Egypt's president, as well as a re-emergence of eurozone debt fears.


Equity markets in the US and Europe struck two-and-a-half-year highs, even as their emerging market counterparts traded around two-month lows and headed towards their worst weekly performance since May.


Underpinning the shift away from emerging market assets has been the fear that mounting inflationary pressures in many economies, particularly from food prices, will force central banks to raise interest rates — putting growth at risk.


China last week increased its benchmark rates by 25 basis points, the third such move since October.


Meanwhile, eurozone debt concerns came back to market focus once again as the yield on Portugal's 10-year government bond touched a euro-era high, prompting the European Central Bank to intervene in the markets.


In the currency markets, the US dollar advanced last week as rising US Treasury yields, worries over emerging-market inflation and continued turmoil in Egypt boosted the greenback.


The rise in US Treasury yields reflected rising optimism over the US economy. The expected improvement in US growth helped prompt a steepening of the Treasury yield curve.


The yield on 10-year Treasuries hit its highest level since April. This helped lift the US dollar against the low-yielding yen and the Swiss franc in particular, as carry trade investors switched away from funding their purchase of high-yielding riskier assets through greenbacks.


Over the week, the US dollar climbed 1.5% to a one-month high against the yen and rose 1.9% to a four-week peak against the Swiss franc.


The greenback also rose 0.6% against the pound over the week and climbed 0.3% against the euro, with the single currency coming under pressure as fears over peripheral eurozone debt resurfaced.


Fears that Portugal might be forced to seek international financial assistance weighed on the euro.


Also supporting the US dollar were concerns over rising inflation in emerging markets, which were highlighted as China raised interest rates for the second time in just over six weeks.


This, along with continued uncertainty in Egypt, prompted market participants to continue to withdraw funds from emerging markets, with repatriation flows lifting the greenback.


This shift hit commodity-linked currencies, which have benefited from robust emerging market demand for raw materials. Over the week, the Australian dollar dropped 1.1% against the US dollar, while the New Zealand dollar dropped 1.1%.


In the local inter-bank market, the rupee weakened a tad against the US dollar. The Indian unit was under pressure from the sliding stock market and FII outflows.


The BSE Sensex slid by 1.6% over the week and FIIs remained net sellers of Indian stocks and bonds by $467.7 million. The rupee however, tracked the US dollar movements against major currencies closely.


The Indian unit gained value as the greenback fell overseas in the first half of the week. Later in the week, as the US dollar recovered the rupee too lost value. Over the week, the rupee-dollar pair traded in the range 45.23-45.78 over the week and the rupee lost 0.2% value against the greenback.


This week a slew of key US economic data releases and the subsequent event risk promise considerable volatility in the currency markets and financial markets at large.


Advance retail sales data (a gauge of the strength of US consumer), Federal Open Market Committee (FOMC) minutes of the last meeting, and consumer price index inflation figures could spark substantive market reactions on any surprises.


Markets continue to speculate on whether the US Federal Reserve will soon move to reduce extensive monetary

policy stimulus amidst encouraging signs for growth.


Recent rhetoric from Federal Reserve chairman Ben Bernanke made it clear the Fed has little intention to reduce extraordinary quantitative easing policies amidst sluggish employment growth.


It will be interesting to watch whether Thursday's consumer price index based inflation figures will put pressure on the Fed to act on growing price pressures.


Any strong surprises on the higher side would embolden the hawkish minority within the policy-setting FOMC.


The US dollar otherwise seems to be at somewhat of a crossroads. After falling sharply into early in during last week, a substantive later reversal suggests that the beleaguered currency may have set an important low against the Euro and other counterparts.


This week of important data would decide whether this reversal can hold going ahead.


In the local market, rupee would continue to track the movements of the US dollar overseas. Importantly, there was some disconnect visible between the stock market movements and the rupee-dollar pair last week.


It remains to be seen whether this persists, as rupee has been closely tracking the movements in the stock market in recent years.


Otherwise, improving momentum in exports is encouraging as that would help reduce the merchandise trade deficit going ahead.


Exports registered 32.5% y-o-y growth in January on the back of improving global growth conditions. Robust external demand would help the rupee in the medium term.


Over this week however, the rupee can continue to trade with some depreciation bias, as the greenback can maintain some strength in the overseas markets. The rupee-dollar pair is likely to trade in the range of 45.40-46 over the week.









The discovery of more than 750,000 US dollars in foreign currency equivalents in the administration office of the 17th Karmapa Lama, Tibetan Buddhism's third highest religious leader, has been used to badly tarnish what heretofore has been a heroic golden story. After two weeks of unrelenting media hype projecting the Karmapa in many dark colours, an official statement has come from the Himachal Pradesh chief secretary exonerating him of all allegations and giving him a clean chit. Many see the Karmapa, Ogyen Trinley Dorjee, as a living Buddha as well as the next world Buddhist leader and political successor to the Dalai Lama. The latter defended the 25-year-old lama, telling reporters in Bangalore that "The Karmapa is an important lama, a spiritual leader. People from different parts of the world including many Chinese, come to seek his blessing and offer money." However, the Tibetan leader said, "The foreign and Indian currency should have been deposited in a bank and not kept in cash at the monastery." Officials in Dharamsala held a press conference Sunday to say the money, in nearly two dozen different foreign currencies, was given by the Karmapa's followers in connection with a land deal with an Indian businessman. Reportedly a Dharamsala-based businessman is being questioned after Rs10 million (US$ 217,800) was found in his possession. An official said the money was a payment made by the Karmapa's trust to buy land near Dharamsala. However, even if the money came from followers, there are questions whether the foreign currency violates India's foreign currency laws. Indian intelligence officials quizzed the Karmapa for hours, seeking details of the source of the foreign currency. Reports have emerged that he was questioned over whether he has connections with the Chinese government as a large part of the currency seized was in Chinese yuan, in wads of successive serial numbers. In December 1999 the then-14-year-old Dorjee, who was anointed by the Chinese government as the true Karmapa, pretended to go into seclusion but instead slipped out from a window of the Tsurpu Monastery in Tibet with a handful of attendants. He began a daring 1,450-kilometer winter trip across some of the most forbidding terrain on the planet by foot, horseback, train and helicopter to Dharamsala, making world headlines and embarrassing Beijing. He was given refugee status by India in 2001. How the freedom of press is misused in this country to shamelessly malign even a distinguished person is to be found in Karmapa case. The Tibetan religious leader was accused of spying, money laundering, tax evading, misappropriation and what not. He was arrested, dragged to the court and treated like a criminal. Electronic media projected him nothing less than a culprit held in custody. Nothing was left to speculation and no chance was given to television watchers to think that what was being projected could be gross exaggeration bordering on willful maligning of a person. Nothing was said of his background, the story of his flight from Tibet under the threat from Chinese illegal occupiers of Tibet and the circumstances in which Karmapa proceeded on self-imposed exile. Perhaps the timing of unearthing the money with Karmapa coincided with a situation in which the print media was engrossed in hyping mega scams like the Commonwealth Games, Adarsh high-rise building and 2 G Spectrum fraud. Thinking that it was going to add another feather to its hat, the media clubbed the Karmapa money unearthing with the above mentioned episodes and thus tried to paint all of them with one brush. Such was the intensity of anti-Karmapa propaganda in Indian media that pleadings of no less a person than the Dalai Lama besides the former Indian Ambassador to Mongolia made no impact. Yet with all this media hype let loose, the Karmapa did not lose his cool and bore the humiliation with fortitude. This sort of treatment meted out to a special person is unacceptable and against the shining traditions of our country. We incurred the displeasure and even enmity of China for giving asylum to the exiled Tibetan Buddhists and their supreme leader the Dalai Lama. It was done to maintain continuity of our tradition of hospitality. But unfortunately we have done something in the case of the Karmapa that makes us hang our head in shame. We did not behave as we should have.







National Panthers Party has strongly supported the demand of contractual employees of the state government for regularization of their services. The support is not only on humanitarian grounds and the premise that ours is a welfare state. Equally important is the fact that there is an Act of the State Legislative Assembly by virtue of which all contractual employees have to be regularized if they have completed seven years of service in the government. As a matter of fact, the regularization should have happened automatically and there should not have been any need for the employees to make a stir for the same. Why that is not happening, is a mystery. The fact that the services of contractual employees were needed is in itself a proof that for efficient governance, man power has to be recruited and utilized. Having done that, the government should not behave like a contractor employing daily wagers and then winding up the shop and asking them to go home. We are passing through very hard times when inflation has almost crushed the backbone of weaker sections of society. Government cannot take shelter behind the argument that it has paucity of resources. Governments do not plan for months or decades; it needs to have a vision and foresight. A welfare state always thinks positively. Thousands of families are involved in the case of contractual employees. They should not only be regularized but their rights have to be given to them, which means full pay scale, arrears and other perks in addition to pensionery benefits and other concessions. Seven years is a long period for gaining experience in any trade or skill, and as such, they are entitled to the benefits that accrue to them by virtue of class of labour they are associated with. A humanistic view can help resole their case.








The World Bank has estimated in the recently released 'Global Economic Prospects' report that the growth rate of developed countries is likely to increase from present 2.2 percent to 2.5 percent in 2012. Growth rate of the developing countries is likely to remain firm at the respectable 6 percent. The Bank, in the same breath, has cautioned that the problem of government debt of the developed countries can become dangerous. Other analysts have expressed concern that inflation in the developed countries can become a major problem. We thus have two contradictory scenarios before us. Economic growth rate is slated to rise but debt and inflation problems loom on the horizon. The question is which of these tendencies will be dominant?
We must examine the reasons of the global economic crisis of the last three years in order to unravel this question. The developed countries were growing robust before the crisis hit in 2008. Wages of their workers were high. An unskilled worker in the United States earns about Rs 4,000 a-day against Rs 300 earned by his Indian counterpart. People of the developed countries were consuming large amount of goods on the back of these high incomes. Developing countries were supplying goods for their consumption-China was supplying footwear, toys and electronics while India was supplying basmati rice and software. New technological developments like personal computer, internet and hybrid cars were being commercialized by the developed countries. The developed countries were earning huge amounts by selling these high-tech goods to the developing countries. They were paying high wages to their workers on the strength of these incomes.
This happy circumstance of the developed countries has come under severe pressure during the last few years because commercially profitable advanced technologies have been few and far apart, if at all. The last such technology, perhaps, was the internet. No major profitable technology has been developed thereafter. The problem has been further aggravated by the developed countries speedily transferring their advanced technologies to the developing countries through Foreign Direct Investment. Hybrid cars, for example, are now being manufactured in India. The special advantage enjoyed by the developed countries has, therefore, eroded. Developing countries are producing the same goods as them cheap because the wages are low. Result was migration of entire industries to the developing countries. Textile mills, for example, have totally closed down in the United States. Financial and software services are also being increasingly outsourced to the developing countries. The developed countries have little left to compete with in the global markets. They are being forced to reduce the wages of their workers as seen in the recently concluded agreement entered into by General Motors with its workers. These wages will have to decline much more for the developed countries to reestablish their competitiveness vis-à-vis the developing countries in the global markets. This lack of new technological innovations and the consequent reduction in incomes of the developed countries is the fundamental reason of the global economic crisis of the last three years.

Leaders of the developed countries have failed to grasp this underlying tendency of wage reduction. They thought that they will be able to maintain their competitiveness on the strength of new technologies or better management and infrastructure. It is doubtful if such will happen. The developing countries are fast imbibing advanced management practices and making first class infrastructure. One sees no difference whatsoever between Heathrow and IGI Terminal 3 airports.

The developed countries ignored their lack of competitiveness at their peril. They anticipated that somehow their incomes will rise again. They implemented huge stimulus packages and encouraged people to continue with their high levels of consumption. They borrowed heavily from the world financial markets for providing loans to their people. They also loosened the purse strings. They printed notes to support the already bloated government expenditures. They printed more money to make up for the tax cuts given in the stimulus packages. This printing of money has led to inflation. The developed countries are now mired in the double problem of debt and inflation. This policy would have been successful if a major technological innovation-say, a personal helicopter-had happened. The same policy has become their undoing in absence of such innovation.
The outlook for 2011 can be made on this background. The pressure on wages in the United States and United Kingdom will persist. They will have to withdraw their stimulus packages because of increasing inflation and debt. This withdrawal will further exacerbate the downward pressure on wages. Citizens will be up in arms. These countries will have to adopt protectionist policies. But this will not provide them much relief because they are dependent on imports of textiles, oil, food and minerals from the developing countries. This will push them into a deeper crisis. The unanswered question is exactly when the withdrawal of the stimulus package will begin. It is possible this may happen in 2012. In that case situation in 2011 will remain as it is.

Problems of Europe are deeper. United States and United Kingdom have allowed the wages of their workers to decline in tandem with global pressures. Mainland Europe has done less of this. As a result their economies are being eaten away from the inside as seen in the crises of Greece, Ireland and Portugal. It is likely that this problem will make inroads in the leading countries of Germany and France. This will put the very existence of the European Union at stake as countries clamour to find and implement different solutions to their predicament. It must be repeated that this scenario may unfold in 2012, not in 2011.

Situation of China, India and other developing countries will be, relatively speaking, better. They will face two opposite pressures. Deepening crisis in the developed countries will push them down. Foreign capital may frighten and seek to fly back. Exports of the developing countries will be down. On the opposite side, there will be a positive impact. Their goods will become more competitive in the world markets as the stimulus packages in the developed countries are whittled down. The price of a car made in the United States has been lowered, for example, by the soft loans provided by the U.S. Government under the stimulus package. Withdrawal of the stimulus package will make the goods produced by developed countries expensive and thereby improve the competitiveness of the developing countries. This positive impact will be somewhat mellowed by the adoption of protectionist policies in the developed countries. But the fundamental tendency will be of improved competitiveness of the developing countries.

In conclusion the outlook for the developed countries is negative for 2011 while that for the developing countries is positive.








In the modern world, a general awareness has developed among the people about their health. Each day, more and more people are being made aware of the importance of health care by many public health service organizations. Many of these organizations are privately owned non-profit organizations; however, some organizations are run by the government to ensure public health like IDSP Project in Jammu and Kashmir. IDSP-It is intended to detect early warning signals of impending outbreaks and help initiate an effective response in a timely manner. It is also expected to provide essential data to monitor progress of on-going disease control programme and help allocate health resources more efficiently.

Objective of IDSP

* To establish a decentralized system of disease surveillance for timely and effective public health action
* To improve the efficiency of disease surveillance for use in health planning, management and evaluating control strategies.
The provision of health services has become very easy in the modern urbanized world. However, people are still facing many problems relating to health services in the rural areas of many countries, especially the third world countries. These countries are unable to provide medical services to their people effectively as they lack the funds necessary for such tasks and also lack trained personnel for the job. Many developed countries of the world are taking initiatives to help these poor countries provide medical services to their people and delegations and teams of public health services providers are sent to these countries regularly to aid them in all possible ways.

World Health Organization (WHO) defines health services as the provision of all kinds of services dealing with diagnostic and treatment of diseases and maintenance of health. WHO has also provided certain regulations which are to be followed by the all the countries which fall under it. These regulations ensure the proper provision of health services and also ensure quality and standard of health services being provided to the people.
Health services are very important because without them the world's population would surely die of diseases, plagues and many other such factors. Therefore, every individual must play his part to promote the growth and provision of health services on a large scale so that every individual would be able to benefit from these services.

Apart from their adequacy in terms of availability to every individual, their cost should also be controlled and initiative should be taken to ensure the provision of these services to individuals at very low costs. Many companies have started charity work in the field of health service provision and are continuously donating to make provision of health services better in under developed countries. These organizations and companies are also working to control the growth of disease and prevent the epidemics in underdeveloped and well as developed countries. Many vaccinations and medicines are manufactured and provided to the public at very low cost or no cost at all to prevent the wide spread of many diseases across the globe.

Last year, Govt. has taken a good step and sent few Doctors for Public Health Management Training at Delhi. Among them few Public Health Experts have been deputed at right places but few have not been utilized by the Health Department yet. Moreover, Government of Jammu & Kashmir should produce more Public Health Managers rather than engaging practitioners as BMOs or CMOs etc. As the practitioner Doctor is always busy with his private practice and is not able to do the justice with his job to which he has been assigned and it has been proved that the practitioner Doctor cannot deliver better services in as an administrator. The Health Department should find Public Health Managers to improve the Health Care System in Jammu & Kashmir.
(The author is District Nodal Officer, IDSP Baramulla)








Reflections from prolonged deliberations on reversal of 20 years of forced exile of Kashmiri Pandits indicates that it is more of a rhetoric than honest attempt on the part of both the parties. Their return indeed is a difficult task. There are contradictions in the minds of migrants on the prospects of this predicament. Their plight is miserable after two decades of their exit. It was tormenting for them to bid goodbye to their sacred soil, dales and the gushing springs. It is more tormenting to see land, properties and business gone under the hammer. Various conventions held in this aspect of migration indicate that diaspora is suffering from neophobia and needs remedies. Every sensitive and insensitive heart bleeds on the misery forced on them at the point of gun. Since partition, there has been no such precedent seen or heard in the sub continent except perhaps of Tibetans exodus.

Smooth return is possible after the militancy is defeated, communal mindset checked and J&K Police getting the law and order under control. The present unabated tide of fanaticism and with so many agencies and vested interest intersecting at cross purposes this does not seem likely soon. But the tide of the world opinion is against religion based secessionism and hence we have the chance of defeating Pak aided and abetted insurgency. Pakistan got to be told that it had to wash its hands off East Pakistan because it tried to take Kashmir militarily. It may lose Balochistan or Karachi if it muddles in Kashmir affairs any more. (though not easy to say so now after Prime Minister's commitment at Shermal Sheikh, but such commitment can be obtained from Pakistan in return). It is difficult to guess a time line for the demise of militancy; enabling respectable return of Pandits to their homes and hearths.

Various organizations of the migrants feel that confluence of Hindu-Muslim brotherhood which was demonstrated during the Tribal invasion of 1947 despite the communal holocaust South of Kashmir during the partition is thing of the past. J&K being a Muslim majority state and following prevalent political and democratic practices it will always be ruled by Majority Community. Therefore one thing is certain that under no circumstances they can go back and lead normal, privileged and happy lives as before. They will have to reconcile to mutual and shared co-existence with Muslims in Kashmir whether liked or not. If they genuinely wish to return, they must understand that ethnic and communal tensions are prevalent in almost every province in India. Once they decide to return voluntarily, they can demand some statutory share in the political structure and administrative set up as per their population and capacity, in which case they may have to live with anti India tirade and be part of it if required.

Under no circumstances secession of Kashmir is acceptable in the interest of our secular credentials. But if the Kashmiri Muslims do not wish to accommodate Pandits, even after the normalcy is restored, then the minority community has every reason to seek a well defined geographical area as a separate home land.
This demand would be justified on the same principal as Muslim sought Pakistan as a separate home land for Muslims. As a corollary to this demand, demand of Azadi by a segment of majority community as well as self rule by a political party gets weightage and comes in the way of separate home land. But should a fanaticism ridden segment of majority community like to go with Pakistan with a well defined geographical area and will of the people respected under our democratic set up or under internal / external compulsions, then the claim of separate home land will be fully justified. If however the state is trifurcated in subsequent years to come, on geographical and economical grounds and wishes of the people in this regard respected and the situation normalizes; a separate home will still not be given because of Indian secularism. This may sound a wish full thinking; any thing can happen can not also be denied. Can they wait till the cows return home?
It is heartening to know that Interlocutors are keen to see that Pandits return to the valley for which they have started a dialogue with diaspora world over. Mr Padgaonkar has announced that return of Kashmiri Pandits is their top priority. Hence extra efforts must be made to create conditions conducive for their return and rehabilitation. It is now incumbent on the part of Pandits to take initiatives to supplement other's efforts for their return. If they don't get involved in the process of return, they may miss the bus; filter away in thin air and leave the Kashmiriat buried in the pages of history books. Under the circumstances separate home land is neither viable nor desirable and return to existing homes and hearth is not practicable. The last; not the least option may be to look towards South and Western World for safe heavens and leave the land of inheritance to the oppressor. Kashmiri Pandits are very wise and are expected to make a firm resolve in this aspect if they have not done already. Time is a big healer. It is still hoped that with the passage of time many wounds will get healed; anguish of the majority community diminished and Kashmiriat restored and that is why the efforts must continue towards their respectable return.
(The writer is a columnist, political analyst)







Year 2010 has been a year full of impediments for the medical students whether they be MBBS doctors or dentists or recently physiotherapists. Government attitude towards medicos with its policies and decisions could be perhaps taken as a routine approach whereby they first thrill the public by stretching over the maximum capacity in the medical courses despite an already limping infrastructure. As far as the grilling component is concerned it has been well illustrated by the events that happened in the passing year. Marked by massive protests and strikes by the medicos starting from the strike launched by the Junior Doctor Association(JDA) regarding their pay anomalies in the 6th pay commission and the post graduation stipend while the government looked quite helpless and kept putting forth the lack of funds as an excuse. After the issue was some how clenched by the government the new cracker that erupted was concern of De-Recognition of Govt. Dental College Jammu due to massive deficiency of teaching infrastructure and astonishing as it may sound , non availability of a Principal for the college ,the post was kept waiting for a full time principal for a long period.
As soon as it subsided, the unfortunate and limping health and medical infrastructure was marred by another protest of physiotherapists who were facing wrath of unemployment, thanks to the false assurances of the Government and their senseless recruitment of hundreds of physiotherapy students despite scanty posts for their absorption. There is hardly any doubt that the politics driven system played with the emotions of the common student by first permitting massive admissions to physiotherapy colleges despite knowing that our state had meager resources to absorb the same, a step which was purely subject to vote bank politics and then getting their hands up when it came to answer their ill deeds. One may question the policy makers to justify the issue of such medicos with respect to the production-absorption equilibrium.

Now when one could have asked for no more professional blunders by non professional political brains, another missile stood ready to be launched by increasing seats for MBBS and PG courses in the medical colleges of the state. The political think tanks are all set to repeat history of physiotherapists under the roof of medical colleges just to win public applaud.

It is hard to believe how the medical colleges who are constantly at threat of De-Recognition by Medical Council of India due to lack of adequate teaching staff and or infrastructure could bear the load of more perhaps double the strength that it is carrying at present. Our medical education system which is hardly sufficient to support current strength of the batches of MBBS and post graduation courses and in fact needs much more to bring it to the optimum level is going to be overloaded and believing that it will function smoothly without hampering the quality of medical studies is something hard to take in.

Perhaps the drivers of medical education system who are far from related to the profession are unable to make out that what is needed more desperately is improvement in quality of medical education and that quantifying the problem is going to fetch more trouble.

As far as the common man is concerned, he is not concerned about finding a doctor as much as he is concerned about finding a proficient doctor. It is high time for the Government to understand that increasing the burden on an already rickety structure can deteriorate the situation. Health setup of every state is its lifeline and playing with it can have disastrous implications .it is imperative for any developing organization to rectify the loopholes and deficiencies in its existing setup and try to optimize it before taking the next leap forward.




******************************************************************************************THE TRIBUNE





Pakistan's revamped Cabinet, which has only 22 members today, does not show that the intended purpose has been served. When President Asif Ali Zardari asked Prime Minister Yousuf Raza Gilani-led 65-member Cabinet to resign so that it could be reconstituted, the exercise was meant to show the tainted ministers the door. But that is not exactly what has happened. Only one minister known for being corrupt to the bone, former Water and Power Minister Raja Pervez Ashraf, has not be re-inducted in the Cabinet. Almost all others with a tainted past have been retained. They have not been touched because of their closeness to the Pakistan President. The losers are mostly those trusted by the Pakistan Prime Minister and the Army. Foreign Minister Shah Mahmood Qureshi, who had developed a good equation with the leadership of the armed forces, has been eased out because of his resistance to US pressure on Islamabad to set free US Lahore Consulate employee Raymond Davis, facing murder charge in Pakistan.


The Cabinet revamping exercise has demonstrated that President Zardari holds the commanding position. Prime Minister Gilani has been reduced to doing political firefighting for ensuring the supremacy of Mr Zardari. The roundtable conference of all political parties called to discuss the problems being faced by Pakistan is Mr Zardari's idea. He also seems to have taken the wind out of the sails of PML (N) leader Nawaz Sharif. He has scuttled the former Prime Minister's plan to attack the government with his 10-point demand for taking Pakistan out of the morass it finds itself in today. All the issues that he had threatened to raise may now be discussed at the coming roundtable conference.


It seems Mr Zardari is being quietly helped to strengthen his party's position in preparation for the next general election, which may be held a little early. The Pakistan Army cannot afford to allow Mr Sharif's party to capture power because of his closeness to the religious right. The PML (N)'s victory will boost the morale of the extremist forces, which will mean more trouble for Pakistan from within the country.









THE flipflop in Himachal Pradesh on the Karmapa issue is intriguing. On Friday, Chief Secretary Rajwant Sandhu gave him a clean chit and categorically stated that Karmapa Ogyen Trinley Dorje is "the religious head of a sect and he is not involved in any kind of illegal activity like money laundering and benami land deals. As such, there is no question of the state making a recommendation to the Centre to deport him. He is a religious leader and free to undertake his religious activities, in which the state government will not interfere in any way". She also added in good measure that the state had not received any communication from the Centre to go slow in the matter and the government was acting on the basis of the investigations being carried out by its own agencies.


But the very next day, Chief Minister Prem Kumar Dhumal said in Dharamsala that the matter relating to the foreign currency, including a large amount of Chinese yuans, was being investigated by the central and state investigating agencies. He hastened to add that he had neither pronounced the Karmapa guilty nor given him a clean chit. Not only that, he also said that "the benami deals of the Tibetans are also being probed". His response was in line with his earlier statement that the recovery of the Chinese currency was a serious matter and he would take up the issue with the Centre to probe the Chinese links. But the Chief Secretary said quite the opposite. One does not know whether to believe the Chief Minister or the Chief Secretary.


Everyone is curious to know whether Chinese followers visit the monastery in such large numbers that they can donate millions of yuans. If the money was "donated" by only a few people in large volumes, then it is all the more necessary to find out their names. There is also the question of several benami land deals. Even if the Karmapa was not in the know about these, his close aides certainly were and if they broke the law, they are liable to punishment.
















WHEN Punjab Chief Minister Parkash Singh Badal announced recently that he would devote the last year of his government to completing unfinished projects, one thought he was serious, especially when the Shiromani Akali Dal proposed to seek votes in the coming elections on the issue of development. But the news report that the task of counting suicides by debt-ridden farmers in the state, entrusted to three universities at the behest of the Chief Minister himself, has been hit by a fund crunch speaks volumes about the widening gap between the ruling coalition's promises and performance.


There is no doubt that the issue is important. Farmers constitute the Akali Dal's vote bank. The party boasts of championing the cause of farmers and provides them free power at a huge cost to the exchequer. Since the survey has not even begun in earnest, there is no question of the SAD-BJP government providing compensation to the bereaved families before its term ends. In fact, there is no tradition in the state on compiling data on important issues. The number of unemployed youth is anybody's guess. No one knows how many jobs are created or lost during the tenure of the present government.


The problem is not lack of money, but lack of sense about how to use the state's limited resources for public welfare or development. The government has enough money to splurge on ministerial luxuries, including trips abroad. Deputy Chief Minister Sukhbir Singh Badal claims a sharp increase in tax collections. Disregarding the basic rules of planned expenditure, the Chief Minister distributes cash at his "sangat darshan" (meet-the-people) programmes. In the absence of any credible data about distressed farmers, the state got no relief from the Centre's offer to waive farmers' debt totaling Rs 60,000 crore made in the Union Budget for 2008-09. The Akali leaders keep alleging discriminatory fund allocation by the Centre but fail to get or use Central funds available to all states on the basis of clearly laid down preconditions.









Finally, the uprising in Egypt has led to mighty Hosni Mubarak becoming history. The end came rather suddenly for Mr Mubarak who even 24 hours before his resignation was claiming that he won't be leaving office anytime soon. But after 18 days of public protests, the military made it known that they can't be seen as supporting the tyrannical regime. And so Mr Mubarak was off to Sharm el-Sheikh after turning over power to the military and Egypt entered a new phase, a phase that remains undecipherable at the moment.


The Arab world is undergoing momentous changes and the US is coming to grips with a weakening of its hold over the region. The scale of the crisis in Egypt took Washington by surprise and intelligence once again was found wanting. As demonstrations continued at the Tahrir Square in Cairo for weeks, the main Egyptian opposition groups initially seemed to be easing on their insistence that the Egyptian President step down immediately.


The Obama Administration was also working on a plan with Egyptian officials that would allow President Mubarak to resign and turn over power to a transitional government headed by Vice-President Omar Suleiman with the support of the Egyptian military. The Vice-President had already held talks with a broad array of opposition groups, including the Muslim Brotherhood, in an attempt to open up the country's electoral system to bring about free and fair elections in September. However, much to the chagrin of the protesters, there was no indication that either the Vice-President or the Egyptian military was willing to abandon Mr Mubarak, who himself remained determined to stay until the elections.


The Obama Administration has signalled that if another strongman replaces Mr Mubarak without any movement toward democratic elections, the US Congress might freeze military aid to Cairo. The guarantor of state stability in Egypt is the nation's armed forces, which are expected to ensure that Mr Mubarak's fall does not lead to a collapse of the existing order. With tensions spreading throughout the Middle-East, Washington has reaffirmed its support for other Arab allies facing popular unrest, welcoming the Yemeni President's reform measures and the new Cabinet announced by the King of Jordan.


The US policy in the Middle-East has tended to maintain a balance between strong relations with autocratic Arab states and democratic allies such as Israel. However, the policy ended up supporting political stability in Arab autocracies and fighting terrorists while turning a blind eye to oppression and corruption. Lack of political reforms in the Arab world led to popular support for extremist groups such as Hamas in Gaza, Hezbollah in Lebanon and the Muslim Brotherhood in Egypt. It is amply clear that in a post-Mubarak Egypt, the most popular political force will be the Muslim Brotherhood. It is the oldest and largest Islamist movement in the world. The US has acknowledged its own limits in influencing the shape of the government that might emerge after Mr Mubarak's exit.


The US standing in the Middle-East is under threat. With a perception gaining ground in recent years that the US is more interested in looking inwards, major powers in the region have also been looking elsewhere. With China's rising economic profile and the US not acting proactively against Iran's nuclear drive, Saudi Arabia has moved rapidly to develop closer ties with emerging powers such as China, Russia and India to counterbalance relations with the West.



The US influence in the Middle-East has been diminishing gradually and there is a looming uncertainty about America's future in the region. The Obama Administration's initial, tepid response to the crisis, with Secretary of State Hillary Clinton calling Mr Mubarak's regime "stable" and Vice-President Joe Biden declaring that he didn't regard Mr Mubarak as a dictator, did little to endear Washington to a region that has been clamouring for political reforms for decades. Though Washington's tone changed soon after it realised that things were moving out of its control in Cairo, the Arab street is yet to be convinced that the US is on its side. Elsewhere too Washington is becoming increasingly irrelevant. In Iraq, the new government could only be installed in December after Iran intervened to break months of deadlock, underlining its rising influence in the region. In Lebanon, the Iranian-sponsored Hezbollah wrested control last month from the pro-Western government propelled to power by the 2005 Cedar Revolution, in which millions of Lebanese forced the departure of Syrian troops with the backing of the US.


India, too, will have to change its attitude towards the events unfolding in Egypt. After days of silence, the only response that the Indian government could muster was of "closely following" the developments in Egypt and hoping "for an early and peaceful resolution of the situation without further violence and loss of lives". In many ways, this reticence is understandable. The region has been witnessing a highly unpredictable situation and the government was taking its time to think through the implications. Moreover, for New Delhi to comment on events unfolding in Egypt would have been hypocritical, given how seriously India takes the principle of non-interference in the internal affairs of other states.


But it is equally the case that India has a substantive interest in the Arab world where its stakes are expanding. The tumult in the Arab street will have enormous implications for India's rapidly growing interests in the region. A new order is unfolding in the region and New Delhi will soon have to spell out how it wants to respond to the new ground realities. As a new era unfolds in the Arab world, India should be on the right side of history.


The writer teaches at King's College, London








LOVE is in the air these days, much more expressively than in my younger days, but I must admit to have written a love letter or two. The objects of this rather public confession were intensely private missives, ones that seemed at that time to express the deepest feelings that I had for the person they were addressed to. You know, it took time, and a lot of guts: "Pyar ka pehla khat likhne mein, Waqt to lagta hai, Naye parindon ko udne mein, Waqt to lagta hai."



Before you launched your missive, you crafted it. Sometimes your emotions simply poured out on paper, many, many sheets of ruled notebooks, spotless sheets of shining white paper and sometimes scented stationery. The message, the medium, and the whole experience sought to convey much more than mere words could.


I have never spoken or written about these love letters, and now would be as bad a time as any to discuss them or their contents. Yet, I am doing so, and the reason for this somewhat uncharacteristic indiscretion is an advertorial that I have just seen. Something called the "Google Docs: A love letter", which over two lakh viewers have already watched on YouTube.


Call it a generation gap or whatever, I am simply appalled, amazed is a politer term, at the very idea of someone sharing his or her most intimate thoughts with others. At least in my days, when we wrote a love letter it was (ideally) meant to be strictly personal between the two of us. When you bared your soul, you would be accorded the courtesy of privacy, at least that was the presumption. Sometimes you hit a very wrong number and became an object of ridicule, but for most of us, privacy was an essential part of such an exchange.


Of course, for some this opportunity was simply not available, since they were not educated. In came the 'Dakiya daak laya, daakiya daak laya' option. The somewhat educated and definitely literate postman was used by the masses to convey their message of love to those in distant lands, often he also acted as the scribe.


Before I deride Google Docs on the corroborative issue, it must be admitted that this is hardly a new idea. In college, I remember one time when a college mate tried out the collaborative route.


The amorous young man asked some Dada friends to help him out with snagging a date. The only thing, which these worthies had in common, was their absolute ignorance of the fairer sex. It is not that they could not talk to girls. It was a matter of record that they could say a 'Hello!' Beyond that, they became tongue-tied.


Yet, they were more than up to the task of telling others what to do. This poor chap followed their advice. His flowery presentation left her unmoved and she shared the experience with others. The affair that had hitherto been confined to his head now made him the laughing stock of the university.


Now, to be fair to Google, they have taken a diametrically opposite route. Michael writes out a long, elaborate, and flowery letter, quoting Shakespeare, throwing in a bit of French, and even including an elaborate list of possible date activities.


He asks his friends to help and they collaborate to produce the perfect letter for Jessica, whom Michael has met at the beginners' French class. They do so by pruning the unnecessary flourishes and emotions in Michael's letter to make it a simple request to meet after class. In the process, someone has included Jessica, too, by saying: "I know that I shouldn't be showing you this, but this is so cute..."


Jessica accepts the request for coffee after the class, but with the proviso that next time he should ask her in person. Now, isn't that simple! If only my friend in college had known not to seek advice but follow the dictates of his heart by directly addressing the girl, he might well have succeeded.









WAY back in 1969 when Begum Akhtar was visiting Karachi, the Gramophone Company of Pakistan (later EMI) arranged a musical evening with her on their sprawling lawns.


Only hardcore lovers of ghazal and semi-classical music were glued to their seats in the post-dinner session. Faiz was sitting in the first row and Begum Akhtar, noticing his presence, enthused "Faiz Saheb hamare Hindustan mein, khas taur par shumali Hindustan mein aapka kalaam barre shauq se suna jaata hai" (In India, particularly in northern India, your poetry is listened to with great enthusiasm). The next moment she burst into "Sham-i-firaaq ab na poochh".


It was, and still is, an honour for any singer to render Faiz, just as it is to sing Ghalib. From Ustad Barkat Ali Khan to Mehdi Hasan and from Farida Khanum to Hadiqa Kayani, not to speak of the thrush-throated Firdausi Begum, almost every singer of repute has interpreted Faiz musically in his or her own manner.


Some film-makers included songs based on his poems, the most famous of all was Noor Jahan's "Mujh se pehli si muhabbat", which she used to sing in small concerts but later rerecorded it for the movie "Qaidi".


Then there was the "hijacking" of "Gulon mein rang bhare", which the Gramophone Company recorded in the voice of Mehdi Hasan, who had been rendering it in concerts.


Director Khaleel Qaisar had recorded and filmed the same ghazal in the voice of Naseem Begum for his movie Farangi but when he heard the Gramophone Company's recording, he insisted on "buying" it for his movie. His persistence bore fruit.


In Shaheed, an earlier movie, he had got Masood Rana to render a Faiz nazm, "Nisaar mein teri galiyon ke aye watan" but the song could not click. Maybe Mehdi Hasan or Ahmed Rushdi could have done a better job. In India, Muzaffar Ali got Khayyam to record the famous "Faiz nazm Kab haath mein tera haath naheen" for his off-beat movie "Anjuman".


The movie could not be released commercially and one reason was that the score of Ali's film did not appeal to the masses. The second odd thing was that the filmmaker and the composer did not get professional singers to record the songs for the movie, only one of which was a Faiz poem.


Incidentally, the nazm has been sung by Tina Sani for the album which was released last week to mark the birth anniversary of the great poet. The cover version is an improvement over the original.


Iqbal Bano's repertoire consists of at least two highly applauded Faiz poems "Dasht-i-tanhai" (so beautifully tuned by Mehdi Zaheer) and the revolutionary "Ham dekhen ge".


Farida Khanum had earned her reputation rendering the ghazals of Dagh, and later Faiz, whose "Chand nikle, Sab qatl ho ke, Na ganwaon navak-i-neemkash" and "Yoon saja chand" are priceless numbers.


When Talat Mahmood came on a private visit to Karachi in the early 1960s he recorded two Faiz numbers for the Gramophone Company, one of which "Donon jahan teri muhabbat mein haar ke ranks among the singer's best non-film numbers.


No discussion on the musical exposition of Faiz's poems can be complete without mentioning the priceless album "Nayyara sings Faiz", which had brilliant compositions by Arshad Mahmud and Shahid Toosy. It was rehearsed and recorded in a matter of days.


EMI produced the long play record to present to Faiz on his 65th birthday. The sequel which was to be released the following year—1977—was delayed. Now, 34 years later, it is being released, with some numbers having been rerecorded by Arshad Mahmud.


— By arrangement with Dawn









Pakistan's relations with the US have come under considerable strain as a result of the Raymond Davis issue. The situation has got a new twist with the Lahore High Court remanding Davis in 14-day judicial custody after the police refused to accept the theory that Davis, "an employee of the US consulate in Lahore", shot down two motorcycle-borne persons in self-defence. A third person lost his life after being run over by a speeding US Embassy vehicle on a mission to help Davis. Another death, the fourth one, related to the incident occurred when the wife of one of the victims reportedly committed suicide.


That the police has launched legal proceedings against Davis shows that the US claim that he enjoyed diplomatic immunity has been apparently ignored. The police has described the killings as "cold-blooded murders".


Can Pakistan continue with this course, particularly when its survival depends, to a large extent, on US military and economic aid? Why has it decided to reject the US appeal despite much pressure from Washington DC to release Davis unconditionally? Denials by Islamabad notwithstanding, the US has suspended all official engagements with Pakistan. A Business Recorder report quoted an official of the Pakistan Foreign Ministry as saying that it has received a US State Department letter informing Pakistan that the US has suspended visits by all high-level delegations to Islamabad. There is another unconfirmed report that Pakistan Ambassador in Washington DC Hussain Haqqani has been threatened with expulsion if Davis is not set free soon.


Rightist pressure


Another kind of pressure on the Pakistan government has been from the religious right, which wants no concession to be given to the US national. Islamabad succumbing to US pressure is bound to inflame passions in Pakistan, which continues to have a strong anti-American sentiment. As Daily Times has commented, "After weeks of rallies by religious outfits in support of the blasphemy laws, which are now gradually losing wind in the face of a firm denial by the government that any move (to dilute these laws) is afoot, releasing Raymond Davis may add fresh fuel to their reactionary agenda."


Hence the recourse to take help from the judicial system, which is not difficult to use to suit the government plans. Some people believe that the Pakistan Foreign Office may present the needed documents in the court so that Davis is declared a US diplomat stationed in Pakistan. Once the court accepts his diplomatic status, he will be allowed the advantage of diplomatic immunity, leading to his departure from Pakistan as a free US citizen. The opponents of this course may raise their voice against it, but the government will be able to wash its hands off the case, citing the court verdict.


However, is it so easy to handle the situation? Most newspapers have carried well-argued articles, saying that Islamabad should stand firm on its ground on the Davis issue. It should go strictly according to the law of the land. This will indirectly help the US, too. Those who are always in search of an opportunity to inflame anti-US passions will be denied of an issue that suits their negative thinking. 


The people who have been arguing on these lines say that the "so-called 'strategic dialogue' or 'strategic partnership' between the two countries is not under threat". Both the US and Pakistan need each other for protecting their interests in the Af-Pak region. As Asif Yezdi, a former member of the Pakistan Foreign Service, says in a newspaper article, "It is not for the love of Pakistani people that the US is providing military and economic assistance to us. The Americans are doing so to serve their own national interests."


The options before the Pakistan government are too tricky to accept. It is like choosing between the devil and the deep sea.



******************************************************************************************BUSINESS STANDARD




There are two ways of looking at the Telecom Regulatory Authority of India's (Trai's) recommendation of a hefty six-fold-plus increase in spectrum prices for operators offering 2G services. One, that it is recognising the scarcity value of a resource that incumbent operators have so far enjoyed at significantly lower costs. Therefore, in recommending that 2G prices contracted up to 6.2 MHz at Rs 10,972.45 crore for a pan-India licence (up from Rs 1,658 crore) and a one-time entry fee for every additional MHz of spectrum at Rs 4,571.87 crore on an all-India basis, Trai is following a principle that it had reiterated in an earlier report. Two, by suggesting that these recommendations apply with effect from April 2010, it is changing the goalposts for operators just as heightened competition and tapering growth are squeezing margins. For the government, the choices range between the Scylla of perpetuating defective policy by rejecting these recommendations and the Charybdis of incurring the wrath of incumbent operators by raising their costs significantly. Judging by Telecom Minister Kapil Sibal's statements and the growing pressure on the government from an unexpectedly united Opposition on former minister A Raja's licensing peccadilloes, the latter option looks likely. More so since Mr Sibal has also hinted that newer operators may have to pay "market prices" for spectrum above the start-up amount of 4.4 MHz.

It is true that there is an urgent need to correct what was a patently inefficient pricing policy for spectrum. It is also true that incumbent operators were expecting some sort of new impost — especially those that hold spectrum above the 6.2 MHz contracted in the original licences. Even so, the recommendation of retrospective application for the higher prices, however, is probably unfair on two counts. First, it is unreasonable to penalise operators for bad policy on the government's part. They did not, after all, steal the extra spectrum; they were given it by the government on an admittedly inefficient subscriber-linked criterion. In that sense, they could not have been expected to look a gift horse in the mouth. Also, the opportunity to correct the skewed pricing for these players would have presented itself in four or five years when the 20-year licences come up for renewal and when a new pricing is entirely in order. It is also worth noting the new operators, which are waiting for the remaining 1.8 MHz of spectrum, are also unhappy. They see the policy as legitimising an inequitable policy. But there is much more hanging on the government's acceptance of this policy than just the comfort or discomfort of operators and political parties. The predilection for chopping and changing policy on natural resources is hardly a desirable signal for the investment community, domestic or foreign. As with the Cairn-Vedanta deal where the government is seeking to arbitrarily impose a change in royalty payment norms that would impact valuations or in its reneging on its residual stake sale deal with Sterlite on Balco or the policy flip flops on Posco's project in Orissa, or indeed the latest case of ISRO, Antrix and Devas, where private parties are being asked to pay a price for governmental flip flops, the signals from Raisina Hill are scarcely reassuring. The task of evaluating Trai's recommendations, thus, should be seen from that prism.








The $315 million AOL-Huffington Post deal follows about half a dozen others, including Newsweek-Daily Beast and AOL-TechCrunch deals, in 2010. All of them indicate two happy things. One, mainstream media's hopes from the Internet are still alive. Newsweek's owner Sidney Harman bought the beleaguered magazine for a token $1 from The Washington Post Co. He reckons that being in a 50:50 joint venture with Tina Brown's Daily Beast, a popular news site, will revive its fortunes. Two, Internet firms continue their struggle to master professionally generated content. AOL has been working hard to become a one-stop online shop for specialised content. So, while Huffington Post is about news, TechCrunch is a specialised new media site. These are among the 13 acquisitions that AOL has made in 2009 and 2010 under CEO Tim Armstrong.

Think about it. It is no coincidence that Tina Brown was the editor of New Yorker magazine, acknowledged globally as an excellent read. She understands what journalism and good writing is about and that is why The Daily Beast is a success. Nor is it a coincidence that Mr Armstrong who took over as CEO of AOL in 2009 is an ex-Google man. He knows that ultimately being an aggregator can get you only so far. To hit the really big time on audiences, revenues and profits, the Internet's ability to get audiences has to be married with old media's ability to keep them there and charge a premium for it. For very long, Internet companies sneered as newspaper publishers felt the heat of dwindling audiences. But what has been evident over the last decade is that while people leave newspapers or watch less TV news, they do not necessarily spend the same quality and quantity of time on news online. They skim, surf and consume it in bits, bytes and hyperlinks. So, they are loathe to pay for or subscribe to online news options.


The stickiness for which advertisers pay a premium to newspapers, magazines or cable stations, is something that the Net as media lacks. The only time there is stickiness is when there is professionally generated content on offer. So, while aggregators such as Google are the doorway through which millions of users enter, what they eventually settle down to is a good, old-fashioned read. Of the top 20 news sites in the US, 17 come from old media companies. But while the same reader gets 14 times as much in ad rates offline, online he becomes less precious. So, both Internet companies' ability to get them and old media's ability to keep them there need to be combined if the industry wants to make money.

The AOL-Huffington Post deal and others are part of the fumbling for the right business model. It means that the trial and error that could lead to large-scale profits for online news media, a la newspapers and TV stations, continues. How many dotcom bubbles later will the marriage of professionally generated content and online media happen is a billion dollar question.







Economic policy is a 20th century idea that we owe largely to John Maynard Keynes. For Keynes, "policy" had two principal objectives — first, to deal with the problem of uncertainty and instability; second, to deal with the problem of inequity.


 Indeed, all policymaking is about governments trying to address these two objectives in the most rational manner possible, within a given political framework. Keynes was deeply committed to democracy, but equally to institutions that were guided by rationality. The central bank, in his view, ought to be a "professional" body guided by rationality, while "government", in a democracy, is expected to be a political entity that has to balance the rational with the popular, if not the populist.

Keynes' greatest biographer, Robert Skidelsky, tells us that when Keynes found the economy caught in a downward spiral, he took the view that "the short-run instability of capitalism was a greater threat to the social order than any long-run inequity in the distribution of wealth and income". (Robert Skidelsky, John Maynard Keynes, Volume 3: The Economist as Saviour, 1920-1937. 1992. Page 223).

Every finance minister faces the dilemma of addressing the twin concerns of instability and inequity in crafting his budgetary strategy. If policies aimed at reducing instability and uncertainty also have the added benefit of reducing inequity, or policies aimed at reducing inequity have the benefit of reducing uncertainty, the finance minister of the day can go to bed early and sleep well.

When the Manmohan Singh government chose to waive farmers' loans, step up funding for social welfare programmes and undertake a range of public investments as part of its "fiscal stimulus" agenda in 2008-09, it also improved the climate for economic activity and dealt with the challenge of uncertainty. It was a classic Keynesian policy intervention.

The dilemma that Skidelsky refers to, between the imperatives of reducing short-run instability and uncertainty and addressing the long-run challenge of social and economic inequity, did not manifest itself as clearly then as it does now.

Reading the large number of columns published across the financial media in the run up to the Union Budget this year, one dominant fact comes through. Almost every known economist, be it a former policymaker, or a scholar in a think tank or an analyst with a private firm, almost everyone (and certainly all Business Standard columnists who have appeared in these columns in the past fortnight) is convinced that the big message that Union Finance Minister Pranab Mukherjee must send out through his budgetary strategy for 2011-12 is one that would impart stability to the Indian growth process.

The three dimensions of growth stabilisation that the macroeconomic strategy underpinning the Union budget is expected to address in the current context are: a lower rate of inflation, lower revenue and fiscal deficits and a lower current account deficit.

Equally, the political leadership in a democracy would want any budgetary strategy to also meet the demands of social and economic equity.

Is there a conflict between the economics of stabilisation of growth and the politics of inclusive growth? In a developing country like India with a large number of poor and unemployed there need be no such conflict. Pro-growth policies can be pro-poor. Indeed, that is the essence of the strategy of "inclusive growth".

However, if the government's idea of "pro-poor policies" is to spend more money on social sectors and subsidies, then it remains to be seen how it will address the immediate challenge of improving its fiscal balances, of reducing inflation and bringing down domestic and external debt. The space for social sector spending can get constrained.

A classic Keynesian response to such a situation would be to raise taxes on the rich to pay for the spending on the poor. But no one expects a reversal of the liberal tax regime that has been put in place, though the introduction of a goods and services tax (GST), in the way it is likely to be structured, would help raise the tax to gross domestic product (GDP) ratio.

If the choice before the finance minister is a stark one — of fiscal stabilisation vs social spending — what should his response be? The overwhelming professional economics opinion seems to be that there is no immediate political pressure to step up revenue expenditure (without a proportionate increase in revenues collected), while the most important policy signal that must be sent out is one of fiscal responsibility that would contribute to economic stability.

Keynes had once famously said, "Perhaps the chief task of economists at this hour is to distinguish afresh the Agenda of government from the Non-Agenda; and the companion task of politics is to devise forms of government within a democracy which shall be capable of accomplishing the Agenda." (Emphasis in original, Skidelsky, page 226).

Keynes strongly believed in the innate dynamism of private enterprise, viewing governments as facilitators rather than obstructers. His focus on the "animal spirits" of enterprise — "a spontaneous urge to action rather than inaction", as he put it — underscores the importance today of policy that stabilises the growth process and keeps these animal spirits alive.

There is growing concern all around that in the past year political developments and political management in the country have increased the level of uncertainty and have dampened entrepreneurial "animal spirits".

Taken with the concerns of economists about instability caused by inflation, rising deficits and debt, this environment of uncertainty can be debilitating if it is not nipped in the bud.

Dealing with the sources of economic instability and political uncertainty is vital to the stabilisation of the growth process. That is the macroeconomic and political challenge facing the Union finance minister this month.







The World Economic Forum — the gathering of power glitterati each year in Davos — has assessed the top risks the world faces in 2011. According to this analysis, climate change is the highest-ranking risk the world will face in the coming years, when its likelihood and impact are combined. What's even more important is the interconnections between climate change and the other top risks: economic disparity (ranked three), extreme weather events (ranked five), extreme energy price volatility (ranked six), geopolitical conflict (ranked seven), flooding and water security (nine and ten).


 This is not a past or future scenario. This is the present. The Food and Agriculture Organisation (FAO) says world food prices this January hit a "historic peak". The food price index, collated by FAO, averaged 231 points in January, which is the highest since 1990, when it started measuring food prices globally. The reasons for the spike are not just the traditional, ranging from greedy speculators to faulty future markets and rising demand. They are newer: extreme weather events, floods and droughts, heat and frost waves. And they suggest a threat even more difficult to contain.

Just consider the year gone by. In August and September, two separate grain-growing regions of the world were being impacted by extreme weather — bitter cold and frost in Canada and searing heat, fires and drought in Russia. Add to this the floods in Australia and now winter drought in China's main wheat-growing northern regions. All this has meant global wheat production is down and prices are high.

In India over the past two months, paddy ready to be harvested was damaged because of unseasonal rain in Andhra Pradesh and Orissa; chilli crop was hit in Tamil Nadu; frost and extreme cold destroyed crops in Madhya Pradesh, Rajasthan and Punjab. Farmers have committed suicide over crop failures. There are many more cases of damage to crops because of changing weather.

Last year, several parts of India witnessed floods. This year, vast parts of Africa are facing floods. Droughts and floods add to the cycle of destitution because they destroy the gains of development.

We know no single weather event is because of climate change. But their growing intensity and frequency certainly is. We must begin to understand the connection between bad weather, increased food prices that add to poverty and the spilling global unrest. It was the spike in food prices that led to the first spark of protest in Tunisia and has now spread across Egypt and other parts of the Arab world.

Clearly, increasing food demand, driven by growing population combined with crop losses because of weather-related events, and exacerbated by poor governance will be the tinderbox of the future. These will add to the destitution of the poorest and make global disparity even starker.

Then why do rich men still have their head (and heart) buried in the sand as far as solutions to climate change are concerned? Why is there no progress to reduce emissions? In fact, why in the world is movement backward when it comes to this top-ranking risk?

The world has touched rock bottom as far as progress on an effective agreement on climate change is concerned. In Cancun, we know there was a deliberate and successful move to dismantle the agreement to set targets to cut emissions that threaten the world's present and future. The cost of the agreement, stitched to please the US and its coalition of the willing, is that world leaders are now under no pressure — legal, moral or financial — to take the hard steps needed to reduce emissions. In Cancun, every party but one (Bolivia) agreed to do nothing. It is not in the interest of anyone.

Worse, since Cancun the world has moved further back on its commitment to limit emissions. Japan has crossed the line saying it will not and cannot do more; the US is currently contemplating how it can get rid of the puny little action it was taking to monitor carbon dioxide as a pollutant; Europe and the rest want to find new trade tricks to do little at home. The world is precariously placed: on the one hand, the crisis is growing and becoming evident; on the other, the response is weakening and losing urgency.

The answer to my question is not far to find. The Davos glitterati's assessment of global risks contains a fatal error. There is no mention, let alone appreciation, of the role of the same powerful economic game, set and system as the cause of the world's present danger. The men who run the world (it is now accepted that the club has limited membership) do not even begin to join the dots that point towards their complicity in not addressing the problem.

This is the most obvious and fatal disconnect of our times. We will all pay for this. Big time.







One corollary of China's growing importance as a global economic and financial power is the purposeful way in which it is encouraging the use of the Chinese currency in global markets. As seems to be its wont, once a strategic decision is taken, it is pursued relentlessly and rapidly, if only in a step-by-step fashion.


 A few years ago, a pilot programme was launched permitting trade transactions by companies in five cities to neighbouring countries to be invoiced in the yuan. In July 2009, the pilot programme was extended to all importers and exporters in 20 provinces and to all trading partners. Reports suggest that the authorities are targeting for 50 per cent of China's trade to be invoiced in the domestic currency over the next five years. Given that the currency has only one way to go, namely up, Chinese exporters have an obvious incentive to quote prices in the yuan rather than the dollar. It may be recalled that many of the power plants for which orders have been placed with Chinese suppliers by Indian companies have been contracted in the Chinese currency. And, it seems the importers were encouraged to agree to yuan pricing by offering them a discount over the dollar price. In the context of the restrictions on non-residents entering the domestic foreign exchange market, hedging for such transactions seems to be getting done in the off-shore, non-deliverable forward (NDF) market. In order to facilitate invoicing and settlements in the yuan, the Chinese central bank has also entered into bilateral swap facilities with east-Asian central banks.

Overall, it seems, in internationalising its currency, China is closely following the Japanese model. In the 1950s, most of India's trade with Japan, both imports and exports, was denominated in the US dollar. In the 1960s, Japanese exporters, particularly of capital goods, started invoicing their exports to India in yen. By then, Japan had started accumulating current account surpluses, with every prospect of currency appreciation — this is exactly the situation in China today.

One major advantage China has in internationalising the yuan is the existence of a leading global financial centre, namely Hong Kong, next door. Although, technically, it is a Special Administrative Region (SAR) of China, Hong Kong has its own currency. This allows the Chinese authorities great flexibility in creating an off-shore market in the yuan, even while keeping a tight control on the exchange rate in the domestic market. The issue of yuan-denominated bonds in Hong Kong was first permitted in June 2007, but these issues were restricted to financial institutions. The Asian Development Bank and the International Finance Corporation have made yuan-denominated bond issues both in the domestic and Hong Kong markets. Recently, the Chinese government made a yuan bond issue in the SAR. The market has also been extended to commercial, non-financial entities. In Hong Kong, the issue of yuan-denominated insurance policies and mutual funds has been encouraged. The first yuan-denominated equity issue of a Chinese company was recently floated in Hong Kong. There is a rapidly growing market in yuan-denominated deposits with the Hong Kong banks — the latest estimate of such deposits is almost ¥ 300 billion. Apart from Hong Kong, the yuan has been freely circulating in some neighbouring countries like Mongolia, Korea, Vietnam, Laos and Myanmar. More recently, an agreement has been reached with Taiwan to make available yuan currency notes to Taiwanese residents and travellers to the mainland.

Along with an off-shore capital market, Hong Kong also has a rapidly growing foreign exchange market in the yuan. Recently, the process of squaring net yuan purchases in the Hong Kong exchange market has been liberalised considerably. Overall, the strategic direction and goal are very clear. Reports suggest that most Hong Kong residents would prefer the domestic currency to be de-linked from the US dollar and pegged to the yuan. For some time, the Chinese authorities have been making noises that it is high time the US dollar's role as the principal reserve currency was taken over by a basket of currencies, like special drawing rights (SDR). They are likely to find a sympathetic ear in the French president who has recently taken over as the head of the G20 for the current year. (The French have long believed that the dollar's status as the principal reserve currency gives it an exorbitant privilege and huge seigniorage gains.) But this apart, it is high time the yuan became a part of the SDR basket.

As for the Indian rupee, is it not yet time we allowed it to be used in the duty-free shops at airports? — after all, the currency is convertible for all current account transactions. Again, press reports suggest that when Iran recently offered to accept payment for oil in rupees, we were not agreeable. Surely, this is a better, if only temporary, solution rather than a stalemate? But, this apart, the latest Bank of International Settlements data, also quoted in the Reserve Bank of India's Financial Stability Report, suggest the huge trading volumes in the Indian rupee in the NDF market abroad.  







Hopefully, in the Budget on February 28, the government will see the driver of current inflation for what it really is: an unsurprising consequence of loose monetary and fiscal policies stretching the economy beyond its capacity. If it does that and gives up the misplaced faith in miracle harvests and base effects, it will also do the right thing: pull back the massive fiscal stimulus that has been in play since the global economic crisis.

Why is this important? Think back to January 25. The market had fully priced in a 25 basis point rate hike by the Reserve Bank of India (RBI) and some were bracing for a higher increase. The RBI delivered a 25 basis point hike. But instead of a relief rally, the equity market has bled relentlessly since then.


 Not tightening is not always pro- growth or pro-investment. Investors are turning shy today owing to a loss of confidence rather than the high cost of funds. Since the crisis, investment outside of infrastructure has been dormant despite capacity being stretched. At first, what held back investment was the fear of a global double-dip. When this passed, India-specific concerns about regulatory uncertainties and corruption surfaced. And now questions about the ability of macroeconomic policies to rein in inflation have emerged.

To restore confidence, the government and the central bank need to assure investors that they plan to get ahead of the curve rather than stay behind. By letting food inflation fester, the government has allowed inflationary expectations to harden, which are now threatening to ignite a generalised inflation. In December, the monthly momentum of core inflation – which excludes food and fuel – was running at over 11 per cent and that of the narrower non-food manufacturing inflation at 8 per cent, having risen from 1 per cent six months ago!

Remaining behind the curve doesn't help investment. Instead, it deters investment owing to a heightened fear of a hard landing. To minimise this eventuality, inflationary expectations need to be brought under control and that means sacrificing near-term growth. So we are left with just one choice: sacrifice a little now or a lot later.

Although there are several things the government can do to rebuild investor confidence, my guess is that these will be parsed over the course of the year as and when politically feasible.

The Budget will be an accounting exercise with minimal policy changes. On the surface, the Budget 2011 numbers will look good aided by the spectrum sales revenue and higher taxes collected. The deficit should be 5.2 to 5.3 per cent of GDP, much better than the budgeted 5.5 per cent. If the government runs oil subsidy arrears as it did last year, the cash balance could also be sizeable. Also, chances are that a significant portion of the two supplementary Budgets will not be spent. The government will parade that it brought the deficit down from 6.8 per cent of GDP in the financial year 2010 by 1.5 percentage points while still keeping growth at 8.5 per cent.

But beware of claims that are cosmetic. The spectrum sale was a one-off. Exclude this and the deficit will barely decline from 6.8 to 6.7 per cent of GDP. If the government fully compensates oil companies this year, the adjusted FY11 deficit will be even higher.

And this is where the problem lies. It was one thing to provide stimulus in the financial year 2010 when the economy was staring at the possibility of 6 to 7 per cent growth, but to continue doing so when growth was touching 9 per cent in FY11 questions macroeconomic judgment.

The FY12 Budget gives the government an opportunity to correct this. The FY12 deficit target is likely to be 4.8 per cent of GDP. But achieving this will be a tall order, since it will mean bringing down the deficit from its underlying level of 6.7 per cent of GDP by an unprecedented 1.5 percentage points.

The government will try several options. Some tax bases (direct and indirect) are likely to be expanded such as those for education, health and new properties. Income tax exemption may be raised in line with the next year's Direct Taxes Code, but this won't be a major revenue drag. Disinvestment targets will be set higher since the unfinished initial public offerings of this year will be added. And a partial rollback of the excise tax cuts during the crisis may be on the agenda.

On spending, the Budget will use the space provided by the unspent supplementary budget to show only a modest increase. Oil subsidies will again be severely underestimated and the new big subsidy item, the Right to Food Security, will not be budgeted since it has not been passed by Parliament. It will likely be added through a supplementary budget later in the year. The gross borrowing will amount around the same level as this year, but with lower redemptions the net borrowing will be higher. This won't upset the market much since the cash surplus will be seen as a buffer.

Separately, the government may lower the withholding tax on bonds to develop the corporate bond market to help investment in infrastructure. The Budget will also set a new date for the implementation of the unified Goods and Services Tax (GST) — probably April 2012. But don't hold your breath. Nothing fundamental is holding up GST, it is just political obstinacy and that isn't going away anytime soon. Oh! I nearly forgot. There will be lots of sound and fury signifying nearly nothing about black money.

Will these be enough to restore investor confidence? Not really, but the tightening will be a big first step and it will buy the government time to reform the agricultural sector and address regulatory uncertainties and corruption. But the market won't be patient for too long. In a world awash with liquidity, there are many other places to fish.

The writer is India Chief Economist, JP Morgan The views expressed are personal










The Supreme Court's direction to the CBI to treat the big fish among the corporate beneficiaries of the telecom scandal exactly the same as the nameless middle-level pawns has hit the nail upon the heart of the matter. At one level, this is about following the simple logic of the law. At a deeper level though, the observations go to the very core of the debate about corruption: the seething anger at a basic system of inequity that allows a handful of well-connected elites to manipulate it with impunity.


For the middle classes, this shatters the mythology and the illusion of a meritocratic and just society. For those below them on the social scale, it gets subsumed within a larger narrative of everything being loaded against them, especially at a time when prices are rising spectacularly and the government seems powerless to do anything.


A sense of unfairness is particularly palpable in a society where the inequalities are rising. It feeds existing malcontents and the fact is that for all our growth rates, India today is a much more unequal society than even 10 years ago.


The most common economic method of measuring inequality is the ubiquitous Gini coefficient which operates on a scale of 0 to 1 (0 being a perfect score where everyone earns equally). The higher the Gini coefficient, the higher is the disparity and India's Gini coefficient has risen from 0.32 in the mid-1980s to 0.36 in the mid-2000s.


With inflation at an all-time high, it is no solace that most other big economies are facing the same problem of rising income disparities. The American Gini co-efficient, for instance, has gone up from 0.34 in the mid-1980s to 0.38 and China from 0.28 to 0.4.


Even so, it was by no means inevitable that we should have been following the same broad trend. Brazil, for instance, is among the few that has been doing something right and has seen the opposite trend, with income inequalities actually reducing in the same period.


The problem of equity is not just a moral issue of doing the right thing. When wealth gets disproportionally concentrated in the hands of few, it has catastrophic consequences. The current global economic crisis, which originated from the US, coincided with its most inequitable time in recent decades. According to the economists Emmanuel Saez and Thomas Picketty, the top 1 per cent of American households earned as much as 18.3% of national income in 2007. Their share had never been higher than 10% from the 1950s to the 1980s. Tellingly, the last time things were so unequal was in 1929, just before the Great Crash.


The IMF's former chief economist Raghuram Rajan has even argued that such inequalities directly led to the current financial crisis because politicians tried to paper over social divides by backing cheaper credit to those who couldn't afford it.


And it doesn't need a Sherlock Holmes to deduce that the wider the wealth disparities in a society, the worse off it will be on social indicators, from life expectancy to crime. The global bestseller 'The Spirit Level', written by two British epidemiologists, crunches mountains of data to show how inequality affects everyone, in surprising ways. Human beings are such social animals that the feeling of being inferior causes chronic stress, leading to a range of pathologies when they find themselves at the bottom of the pyramid.


For example, a study of British civil servants found that messengers, doormen and those with lower status were much more likely to die of heart disease and some cancers and had much worse health than others. Inequality undermines social trust and corrodes societies as a whole in obvious ways but also in unseen ways that we are just beginning to fathom.


This is why we should be as worried about our deteriorating Gini coefficient as we are about 8% growth. And this is why the Supreme Court is absolutely right in reiterating that everyone is equal and no one – Forbes list millionaires or otherwise – should be considered above the law.








India should welcome the momentous developments in Egypt and express solidarity with the people of the country. It is not quite a revolution yet, but the uprising that has swept a swathe of Arab lands, toppling a couple of potentates and sending others in the region into a tizzy, has been stunning. But the key issue is whether the old autocratic dispensation will give way to a new, democratic one. Or whether the regimes will merely seek to change figureheads, and try to maintain decisive sway over power equations. For now, the Army seems to have taken over direct control in Egypt, with the prospect of a national council of sorts, working with an interim constitution, steering the country towards eventual elections and the primacy of Parliament over the Presidency. It also seems that pro-democracy protestors, Opposition leaders, including the Muslim Brotherhood (MB), are inclined towards that incremental, but steady, progress. And that may, actually, be the best way forward on making the transition from a dictatorial state-structure to a democratic one without any strife.
Three significant issues will determine that process in Egypt. One, while it seems accepted that the Army will play a pivotal role, there will necessarily, at some point, be a need to undo some of the decades-old enmeshing of the armed forces and the administrative set-up. Second, and allied to the first, is how far the foreign policy element of the 'regime change' (mainly, the stance on Israel, or even, in a localised context, on the siege of Gaza, in which the Mubarak regime was a participant) will be manifest and affect extant paradigms. The third factor is what role the MB will play, given that — not least due to the fact of it being the only organised, deep-rooted, opposition outfit after years of the emasculation of all other forms of Opposition — any new power equation can hardly bypass the Brotherhood. These, surely, are days of rejoicing for Egyptians and those committed to the cause of democracy in the region and beyond. But it will take patience, not to mention vigilance, to enshrine the largely secular, democratic spirit of the protests as the foundational principle of a new Egypt.







India's move to consider sanctions against countries that refuse to share information on suspected tax evaders is wholly welcome. Sanctions will raise the cost of doing business with these countries and remove the sheen for potential tax evaders to stash their wealth in such jurisdictions. The government needs legal backing to impose sanctions. It should empower itself under the law to identify countries that shield tax cheats. The proposal on sanctions has come from an internal government panel set up to recommend a tool-box of measures fight tax evasion. Two measures — charging a higher withholding tax on payments made to companies in offending countries and bringing transactions with entities in such countries under transfer-pricing regulation — will curb tax haven abuse. A higher tax burden will raise transaction costs for Indian taxpayers with business links in non-cooperative jurisdictions. Multinationals often use transfer-pricing to under-report income in India and shift profits to countries with zero or low tax rates. However, the government cannot lift the corporate veil and establish audit trails in many of these transactions when tax havens do not share information. The answer is to deem any transaction with a company in the offending country as a related party transaction and bring it under transfer pricing scrutiny. The government should amend the income tax law to make this possible. Again, this will raise the compliance cost for Indian taxpayers and make tax havens lose their sheen. Both policy initiatives will check future black money generation.


However, the government should not give up its efforts to trace the past flight of capital to offshore tax havens. India has a legislative framework to secure information on suspected tax evaders. It should negotiate better treaties on information exchange to obtain information even for past cases. The government should also simplify tax laws and lower tax rates to reduce the cost of compliance. However, the most fundamental reform is to have a system of transparent funding of political activity, to remove the need for companies to generate black money.







The honourable judges of the Supreme Court who pronounced that "no person living in India is safe" when hearing the case of tapping of Amar Singh's phones last week, need to be commended for their prescience. Even if their remarks were not aimed at the more obvious if mundane dangers faced by the public — rising crime rates, potholed roads, adulterated food, etc — the idea that thanks to "master forgers" and "experts in fabrication of records" all sorts of eavesdroppers can have their evil way over the conversations of innocent citizenry should shock everyone. However, the learned justices should perhaps have been told by the telecom companies of all the checks and balances that they have incorporated into their systems to protect millions of customers from snooping by Big Brothers. For instance, the lack of sufficient bandwidth and the inadequate number of cell towers, particularly in the high-powered environs of central Delhi, lead to such frequently dropped calls and perpetually bad reception that all but the most reprobate phone-tappers probably find it difficult to persist with piecing together fragmented conversations without going mad with frustration — just like their targets. The latter can at least hang up abruptly; the snooper has to listen to every syllable.
As if the erratic nature of calls in India are not deterrent enough, the content of many of the calls are guaranteed to wear them out long before they gather enough 'actionable' information, given that a sizeable portion of the precious spectrum is occupied by the mindless blather of mass text messages and cold calls. The real danger is that exasperated tele-meddlers may actually get swayed by the promotional bumpf peddled by telemarketers. That would be sweet revenge indeed for the unsafe Indian.





The first issue in food security is India's Hunger index. The Global Hunger Index released by International Food Policy Research Institute (IFPRI) places India 67th in rankings with a score of 24.1, far below China and below Sri Lanka, Pakistan and Nepal. According to FAO, about 25% of world's undernourished live in India. The proposed Food Security Act is seen as the key instrument of intervention to remedy this situation.
The Global Hunger Index of IFPRI is calculated as an average of (1) proportion of the population that is undernourished (in %), (2) prevalence of underweight in children under five (in %) and (3) proportion of children dying before the age of five (in %). For India, the respective numbers are 22, 43.5 and 6.9 . Some of these assumptions can be questioned and there are strong arguments against the methodology as well. Let us leave these for the time being. The short point is that the proportion and the number of undernourished people in India are unacceptably high. It is also well accepted that progress needs to be made on all three counts whatever be their comparative weights in the equation. The most important, of course, has to be undernourishment.
Given the fact that the government has given a commitment to introduce a Food Security Bill (FSB) in Parliament, thereby giving the citizens an enforceable right to food, what are the key issues to be addressed?
A 'right' to citizens is an 'obligation' for the government. The government will have to ensure that people get safe and nutritious food, and preferably food of their choice, at all times. Ensuring the overall availability of food has remained the responsibility of the government (in the perception of state governments, that of the Union government) even without the FSB. Given the progress made in agricultural production over the past few decades and the continuing levels of hunger and malnutrition, economic access to food has become the critical issue and thereby exists the strong case for subsidised food for poor people. The debate so far, at least in the mainstream media, has been about the quantum, extent and the subsidy implications. These are, clearly, important issues that need to be debated. But should the debate stop here? It is now well established that 'the delivery deficit' is the main problem plaguing the public distribution system (PDS). Be it errors of inclusion or exclusion, theft or diversion, or poor quality, consistent efforts to make any significant change in the performance of PDS have failed to make a dent. It is almost axiomatic that the proposed legislation should address the 'delivery deficit' and place specific responsibilities on the administrative machinery, be it panchayat, district or state. How is this to be done?


 strong technology-based intervention and a well defined monitoring system will have to be put in place as part of the Act itself . For example, a biometric identification should form an integral part of the distribution system. As has been pointed out by many experts , this will eliminate most of the proxies providing a window of self selection. In municipal areas (with the exception of food deficit areas) a food coupon/conditional cash transfer (also based on bio-metric identification) may be the best option. Along with technology, adequate decentralisation will have to take place.


Another important concern is the capability for procuring enough grains for distribution. In case physical delivery of grains is insisted upon for eligible categories, all states (with a few exceptions) will have to make a clear commitment to procure a certain minimum level of foodgrains. Failure to do so will place the responsibility at the doorstep of the Union government and create problems of distortion in the market. Also, the states should agree to procure and distribute millets in their PDS. Millets should form a compulsory part of the entitlement for all citizens covered under the scheme. Given the problems relating to the shelf life of millets, these will have to be procured and distributed locally. This brings us to the issue of decentralised procurement. The present structure of decentralised procurement has to undergo a major transformation. It is probably the right time to move towards a scheme of "purchase for progress" (P4P) articulated by the World Food Programme. A decentralised purchase and distribution programme at the district level (if possible at the tehsil/block level) will not only enthuse the farmers of the region, but may also take care of the possible adverse impact on agriculture. However, in such a programme, strong monitoring systems have to be put in place to prevent "recycling". While an enforceable right is "power" in the hands of the people, the objective of the government should, rightly, be to set up efficient mechanisms to deliver on the promises without fail. Litigation in this case is best avoided.

If this is to happen, effective delivery and convergence of programmes at the operational level have to be the top priority. The implementation module will have to provide for effective choices to implementing agencies on the mode of delivery and management of the programme. A strong coordinating and monitoring system, preferably on the Brazilian model, will help. The outcome, viz., a better health index should logically be the parameter for evaluation.

But the vexed question remains: what can the government of India do if leakages continue unabated even after many evaluation reports and exhortations, and the health index does not show any sign of improvement?








As environment minister in the Portuguese government, Humberto D Rosa has been a leading negotiator at important conferences including the UN Convention on Climate change in Bali in 2007, the Copenhagen conference in 2009 and the recent Cancun Summit. In the context of the Portuguese presidency of the council of the European Union, his role at Bali was quite significant. Rosa was in Delhi recently for the sustainable development summit and met with India's high-profile and proactive environment minister Jairam Ramesh. Going forward, Rosa sees the scope for MoUs between the two countries on clean technology, renewable energy and waste management.

The old-fashioned way of looking at economic growth is now a thing of the past and no one understands that better than an environment minister in Europe. Rosa, who started his career as an academic, teaching graduate and undergraduate courses in various topics including biodiversity, functional biology, embryology, histology and environmental ethics, sees environmental issues becoming central to the economy of all nations.
"Sustainable development is now the key word across diverse sectors including food, oil and climate change. The old-fashioned way was when economic growth was discussed without talking about sustainability. But now the transition to sustainable growth is happening all over the world and environment as a whole is closely linked with the economy," says Rosa, who now teaches at the University of Lisbon.

And as such links become stronger; he sees a huge opportunity for governments and people around the world to become more pro-active. "There will be more benefits, jobs and investments being created through sustainable development," he says. In Portugal, the economy is ahead of Kyoto Protocol targets on the environmental front, Rosa proudly says.

"The targets are demanding but our thrust on renewable energy has helped at the national level and we have a lower level of emissions per GDP than required by the Kyoto Protocol," he adds. And looking beyond the disappointment of the Copenhagen climate meet in 2009 to what he considers the breakthrough at Cancun, Mexico, last year, he feels that bilateral agreements between different countries will work much better towards easing out political difficulties that come in the way of a larger and global climate treaty.

"Bilateral co-operation between different players including developed and developing economies and industry and governments is the way ahead. In the new landscape, India is a major player for us when it comes to renewable energy, biogas and waste management. In the backdrop the recession that the world has been facing and the journey towards recovery, green economic development is increasingly important," Rosa says.
Portugal's historic relationship with India has now become significant in view of the economic crisis that many of the EU nations are facing. "Since Portugal held the presidency of the council of the EU in 2007, we have been giving special attention of our ties with India, both on the political and economic front. The political goodwill between the two countries has been there for many years and now we are working towards translating that into economic cooperation in areas such as pharma and bio-tech. We are also looking at building stronger links through sports, culture and tourism," the minister says. Joint environment projects in biodiversity, water management and forestry could help both the governments in creating jobs, he reckons. Portugal has a large population of people of Indian origin because of the historic links between the two countries. While there are over 60,000 PIOs in Portugal, there are another 7,000 Indian passport holders who live and work in the country. "The Portuguese of Indian origin are a community who are very successful and our government is open to Indian culture in a big way. Now there are emerging opportunities for skilled Indians to find jobs in our country and there's room for investment both ways," Rosa says.

And in the brand-new sector of environment-friendly transport management he sees a lot of scope for co-operation between India and Portugal. "Portugal is ahead of most countries in terms of mobility programmes for electrical and solar powered transportation. We already have national grids in place to charge solar-powered vehicles and tax policies ready that will help in adoption of the new transport systems. On the renewable energy front, the Portuguese government is working with an industry consortium on a pilot project. We have also engaged with other countries such as Israel, Japan and Denmark. And now, there's a lot of scope for working with India," Rosa says.










The new Companies Bill 2009 must facilitate sound and genuine corporate planning, structuring and finance operations. The Parliamentary Standing Committee on Finance has made certain recommendations that merit reconsideration, given their impact on the business environment and the competitiveness of companies. Overly restrictive regulatory norms could jeopardise their global aspirations and the impressive growth of the economy.
Among the committee's recommendations, there is concern over the proposals to restrict a subsidiary company from having subsidiaries of its own and allowing each company to have only one investment company. This could severely restrict managing, controlling and restructuring businesses. Step down subsidiary is a vehicle for structuring large businesses. Forming multiple level subsidiaries is a well-accepted global practice. No significant country has imposed restrictions on establishing step down subsidiaries.
Such a measure in India will put domestic companies at a disadvantage vis-à-vis international competitors by restricting corporate structuring and impeding mergers and acquisitions, formation of joint ventures, special purpose vehicles, etc.

Large conglomerates, in an effort to diversify their risks, have business interests in varied industries/sectors/geographies for which they set up entities in collaboration with partners to leverage strengths unique to that company. It is useful that each of them has a separate identity while being part of the business group so that financial interests are well protected. Each sector has its own nuances and to manage the operations efficiently and effectively, it is sometimes essential that separate entities be formed. This facilitates deploying the right resources both in terms of managerial skills and capital. It could sometimes be a regulatory requirement to segregate regulated businesses. It also provides huge advantages for better monitoring of operations and financial reporting. Corporates would face substantial difficulties due to these restrictions which may cause a set back to expansion plans at this crucial phase of their evolution as global players.
Separate entities are also required for expanding into foreign countries. Countries have different laws and regulations that need to be complied with, which is best accomplished with step down subsidiaries; this also de-risks the Indian parent company. Step down subsidiaries are also formed for acquiring new businesses given that the structure and nature of the acquisition at times is dissimilar to the existing operations, making it essential to keep the identity of the new business separate and distinct. Separate entities are also useful when divestments are being considered. It facilitates ease in valuations as also continuance of operations post divestment.

Limiting the number of investment companies would take away commercial flexibility. Isolated instances of misuse of these structures should not result in doing away with these very important business models for investment and corporate planning.

There is, therefore, a strong case for not imposing restrictions on the number of investment companies and step down subsidiaries. From a regulatory and compliance perspective, since each entity is registered separately, the government has full view of each business component. Further, there are sufficient disclosure requirements set out under the existing Companies Act viz. mandating consolidation of financial statements and transacting with related parties at arm's length that ensure transparency and objectivity. Further, holding companies are required to annex annual accounts of their subsidiaries. Additional disclosure requirements are also set out for listed companies under clause 49 of the Listing Agreement.

Another issue is permissibility of issuing shares with differential voting rights (DVR). Shares with DVR, public deposits and secured debentures provide funding flexibility. DVRs are useful for raising capital and bringing in a class of investors who are only interested in the economic benefits and not in participating in the operations and management of a company.

It allows investors to acquire shares at lower prices with prospects of higher dividends in return for surrendering their voting rights. In fact, the government could also use DVRs to retain control while divesting shares in strategic PSUs. All public companies should also be permitted to issue secured debentures, as recommended by the Parliamentary Committee, to increase the avenues for secured investments. Public deposits are a simple instrument used by retirees and others who have no stomach for mutual funds or the stock market, to earn fixed income regularly. The suggestion to securitise public deposits is well meaning, but it would alter the instrument's nature — high yield balancing the risk associated with its unsecured nature. Credit rating will bring in comfort regarding payment of principal and interest and thus, obviate the need to convert public deposits from unsecured to secured instruments.

(The author is director-general at CII)








It is common observation that one who is clear within (with regard to his priorities, objectives and concepts) is also one who obtains around him those situations, persons and things which contribute to peace, order and effectiveness. The converse is also true because all those who generate such positive vibrations around have within them this inner clarity. The whole process is thus a virtuous cycle.

Those who discover for themselves this virtuous cycle are therefore those who also discover that supreme power (paramatman), which too resides within. The Bible (Luke: XVII, 21) conceives of this as, "The kingdom of God is within you". Harnessing this evolved power, the person concerned (jivatman), with all his infirmities, is enabled to prevail over the retarding forces within.

Applied practically to dynamic living and effective time management, the entire process thus centres on rescripting and remoulding one's personality through observation, analysis, inference and application to obtain felicitous reorientation of things around. This, verily, is also shaping and fashioning one's destiny. Like flowers, having something to give attracting bees, these authentic persons also get around them worthwhile seekers.
Through identifying and isolating the 'enemies within', such persons obtain that needed clarity within. This acquisition leads on to other virtues too. This also is the art of preempting mistakes, in line with the concept of "inside-out".

Indeed, that which is within us is reflected in all aspects without too!






                                                                                                               DECCAN CHRONICAL





In the end, US President Barack Obama made a hugely important but unintended contribution to the democracy revolution in Egypt. Because the Obama team never found the voice to fully endorse the Tahrir Square revolution until it was over, the people in that square now know one very powerful thing: They did this all by themselves. That is so important. One of the most powerful chants I heard in the square on February 11 night was: "The people made the regime step down".

This sense of self-empowerment and authenticity — we did this for ourselves, by ourselves — is what makes Egypt's democracy movement such a potential game-changer for the whole region. And in case other autocrats haven't picked up on that, let me share my second favourite chant from the streets of Cairo after President Hosni Mubarak resigned. It was directed at the dictator next door, Col. Muammar al-Gaddafi of Libya, and it went like this: "We're not leaving Tahrir until Gaddafi leaves office". Hello, Tripoli! Cairo calling.

This could get interesting — for all the region's autocrats. Egypt's youthful and resourceful democrats are just getting started. Up to now, the democracy movement in the Arab world was largely confined to the US-led liberation of Iraq, which, because it was US-led, has not been able to serve as a model for emulation. If, and it remains a big if, Egypt can now make the transition to democracy, led by its own youth and under the protection of its own armed forces, watch out. The message coming out of Cairo will be: We tried Nasserism; we tried Islamism; and now we're trying democracy. But not democracy imported from Britain or delivered by America — democracy conceived, gestated and born in Tahrir Square. That will resonate among Arabs — and in Iran.

Some people worry, though, that the Egyptian Army will strangle this Egyptian democracy movement in its crib. Personally, I think the Army leadership is a little afraid of the Twitter-enabled Tahrir youth. The democracy movement that came out of Tahrir Square is like a tiger that has been living in a tiny cage for 30 years. Having watched it get loose, there are two things I would say about this tiger. One is that anyone who tries to put it back in that little cage will get his head bitten off. And, two, any politician who tries to ride the tiger for his own narrow interests, not for the benefit Egypt, will get eaten by it as well. Iran, the other day, issued a declaration urging the Tahrir youth to make an "Islamic revolution", and none other than Egypt's Muslim Brotherhood told Tehran to get lost because the democracy movement here is pan-Egyptian and includes Christians and Muslims.

But here's the big question in Egypt now: Can this youth-led democracy movement take the power and energy it developed in Tahrir Square, which was all focused on one goal — getting rid of Hosni Mubarak — and turn it into a sustainable transition to democracy, with a new Constitution, multiple political parties and a free presidential election in a timely fashion? Here, the movement's strength — the fact that it represented every political strain, every segment and class in Egyptian society — is also its weakness. It still has no accepted political platform or leadership.

"It is essential that the democracy movement now form its own leadership and lay down its own vision and priorities which it can hold the government to. Otherwise, all this effort can be lost", cautioned Rachid Mohamed Rachid, the liberal former minister of trade and industry, who declined to continue serving in Mubarak's Cabinet before the revolt happened. "They have to have a vision of what Egyptian education should be, about agriculture policy and human rights. Getting rid of Mubarak was not the only hope. That ultimate goal is to have a new Egypt".

Ever since this revolt started, America, Israel and Saudi Arabia seemed to hope that there were two choices here — one called "stability" that would somehow involve Mubarak, and the other called "instability", which was to be avoided. Well, let me put this as plainly as possible: Here in Egypt, stability has left the building. For which I say: good riddance. Or as Ahmed Zewail, the Egyptian-American Nobel Prize-winning chemist, put it to me: Egypt was stable these past 30 years because it had no vision, no aspiration and was "stagnating". That kind of stability couldn't last.

That's why today Egypt has before it only two paths, and both are unstable. One is where this democracy movement falters and Egypt turns into an angry Pakistan, as it was under the generals. And the other is the necessarily unstable, up and down transition to democracy, which ends stably with Egypt looking like Indonesia or South Africa.

This will be hard. Many tough days lie ahead, but they will be made much easier thanks to the self-confidence bred here among Egypt's youth the past three weeks. Watching so many Egyptians take pride in their generally peaceful birth of freedom — to listen to them say in different ways to themselves and each other, "I am somebody" — was to witness one of the great triumphs of the human spirit.






Finally, faced with 18 days of awesome people power, Hosni Mubarak had to eat humble pie. There are many battles that lie ahead for the Egyptian people, but the present moment is the one to savour and to marvel at the persistence and resilience of Egyptians of all walks of life and various hues refusing to be diverted by the regime's thugs and the ambivalence of the Army to retain their non-violent vigil for change in the appropriate setting of the Tahrir (Liberation) Square in Cairo.

There are lessons to be learned from the Egyptian people's triumph. First, even a region as numbed as the Middle East and North Africa — West Asia for us — by decades and centuries of autocratic rule is not immune to the virus of freedom. The propitious factors that brought about the Egyptian triumph were a complex mix: the Tunisian example showing that people can overturn a long oppressive Arab regime, prevailing economic hardships combined with high food inflation, the Internet revolution and the social network sites enabling a young savvy generation to subvert the control mechanisms of the state, the Al Jazeera satellite television channel in Arabic with its bold reporting transforming the Arab world and a sense of humiliation of an oppressed people who could feel the air of freedom in the world.

The brave Tunisians showed the way, but the fall of the Mubarak regime represents a tectonic shift in the Arab world. US President Barack Obama said that Egypt would not be the same again; indeed, the Arab world will not be the same again. Egypt, the most populous Arab nation and the traditional leader in the region, has been punching below its weight because the compact it made with the US meant that it had sold itself for $1.3 billion in military aid each year to protect Israel and the peace treaty it signed with Jerusalem. It had lost the headquarters of the Arab League after it signed the peace treaty and it took Cairo much diplomatic footwork and long years to rehabilitate itself.

It was, indeed, a curious fact that West Asia was the only region of the world, with the exception of Israel and an Iran whose revolution was transformed into a theocracy, that seemed immune to the winds of change. First Tunisia and now Egypt have changed that sorry state, and the reaction of other regional states shows how nervous they are. Israel was rooting for Mr Mubarak because he was seen as the guarantor of the peace treaty and helped stymie the Palestinians through an inhuman blockade and pretended there was a peace process. Other countries such as Saudi Arabia and Syria have their own anxieties. But two crucial factors that helped maintain the autocratic nature of Arab states were America's need to buttress the Israeli state in continued occupation of Palestinian land since 1967 and exaggerated fears of Islamic fundamentalism if the strong men would go. Western interest in the region, of course, stemmed from its oil and gas riches.

Circumstances vary from country to country, but it will now be very difficult for other rulers of the ilk of Mr Mubarak to ward off what began in Tunisia. Some have already tried to give sops to their people, others promise of greater breathing space. But the atmosphere in the region is brittle and any spark can unleash people power, which has proved so effective in upsetting long-ruling autocracies.

The strong men have no answer to the new menace, as they view the tsunami that has hit their old comfortable worlds. One must distinguish between the Gulf monarchies and the other states. Gulf rulers, flush with oil and gas money, have a compact with their subjects: cradle to grave welfare in exchange for their quiescence in the political field. For others, economic problems and rising inequities are ticking bombs waiting to blow up their regimes.

Apart from Israel, some other Arab states pressed Washington, itself torn between political prudence and a pitch for democracy, to let Mr Mubarak stay. The US administration was divided between those in favour of Mr Mubarak and others opposed to his continued rule, given the nature of the protests. Strangely, President Obama's special envoy to Mr Mubarak publicly supported the defrocked President remaining in charge till the planned September handover. Having relied on autocrats for so long for reasons of state, the US could hardly jettison them,

the Israeli issue always trumping America's West Asia policy.

A black chapter in the drama preceding Mr Mubarak's fall concerns the attitude of UN Secretary-General Ban Ki-moon. He publicly endorsed Mr Mubarak's presidency during the transition process, accenting stability above everything else, very similar to the vocabulary US secretary of state Hillary Clinton was using at that time. As Mr Ban's distinguished predecessor, once removed, Boutros Boutros-Ghali, has revealed in his book after the US had blackballed him for the usual second term, the head of the UN administration must maintain his equation with the organisation's most important member. But there is a difference between accommodating the US and being subservient to it. It is a tragedy for the UN that its highest functionary should choose to please the US and vote against freedom and justice.

But this is Egypt's moment of glory and no one can take it away from the Egyptian people. If Tunisia showed the way, Egyptians demonstrated that an entrenched dictatorship underpinned by a ruthlessly efficient secret police apparatus — America's favourite for the rendition of suspected terrorists from Afghanistan — can be brought down in two and a half weeks.





Health insurance portability, due to begin from July 1, will be a boon to those who have health cover but are dissatisfied with the quality of service by their existing insurer. The new facility will enable them to switch to another provider without losing anything. This is a landmark development benefiting consumers, and is likely to set new benchmarks in service standards and delivery mechanisms across all insurance providers. It will be particularly helpful to those with pre-existing illnesses and those eligible for bonuses who felt compelled to continue with their existing provider in order not to lose any benefits. Those with pre-existing illnesses would earlier, on switching to a new firm, be no longer covered for these diseases. This was a major inhibiting factor no matter how bad the service was. Now people will not have to wait as their existing policy would simply be transferred automatically to the new provider. This facility will also be particularly useful to someone moving to a different city or state where their current insurer does not operate; or when, on leaving a job with a group insurance policy, he or she will not have to sacrifice the premiums paid thus far. It is necessary, however, for this progressive facility to be fine-tuned in the coming months by the Insurance Regulatory and Development Authority so that standard procedures are in place across all players in this sector by July 1. Many companies, for instance, do not give bonuses for period when a claim is not made. Certain companies allow the benefit of extra coverage for the same premium amount when an insured person does not make any claim for a year. But not all. In order, therefore, to enable portability, the insurance "product" will have to be standardised. It could be started with a few basic products to start with, and then gradually expanded. It is expected that portability will encourage more people in this country to take out health insurance — for themselves and their families. Only two per cent of Indians currently have health insurance, which constitutes only 20 per cent of the overall insurance business — low by world standards. Just as banks prefer to loan large sums to the rich, insurance companies always like to issue policies to healthy people. They say that health insurance claims in India are extremely high compared to other countries. This is an irony as it is those in poor health who are in greater need of health insurance. This could be one reason why the insurance firms don't really push health-related policies as aggressively as other kinds, and why health premiums remain so high. Once portability is operational and glitches smoothened out, the government should also consider some kind of regulation of hospitals, where medical bills have spun completely out of control of late.







There was a time when an almost constant topic of discussion in political, intellectual and education circles, and in homes, was the problem of "brain-drain" from India. Everybody held forth on how facilities, research and otherwise, were so difficult to obtain in India that reaching foreign shores to pursue education or to find a career appeared to be the golden dream.

A vast majority of people in India and elsewhere believed that the United States was the land of milk and honey, that the streets there were paved with gold. Also, many believed the words written on the Statue of Liberty at Ellis Island proclaiming the US as the land which "welcomes your tired, your poor, your huddled masses yearning to breathe free" spoke directly to them and reaching the US was their life's ambition.

Around 2007, there were roughly 80,000 students from India in the US, in 2009 they were 94,000, and today the number apparently stands at 100,000.

When the US President, Mr Barack Obama, visited India last year, he vowed to "increase exchanges between our students, our colleges and our universities which are among the best in the world". Well, today, the reaction in most of India is "no, thank you". The outrage and fury in India over radio tagging students from the bogus Tri Valley University in California is neither an over-reaction nor is it what some have argued to be the typical Indian penchant for dramatising routine events.

We are told that this is normal procedure in the US, to radio tag. The US state department spokesperson, Mr P.J. Crowley, declared: "This is the standard procedure for a variety of investigations… it does not imply guilt or suspicion of criminal activity". Wow. That was a great comfort for those approximately 1,555 students, 95 per cent of whom were Indians (mostly from Andhra Pradesh) and many of whom were victims of a fraud perpetuated by a US educational institution which should have been regulated by US federal authorities. Also, the very same department of immigration which has now clamped ankle monitors on students gave them valid visas to enter the US and study.

Should the ankle monitors therefore be clamped upon those US officials who gave visas to students? Or upon the education regulatory authorities in the US who allowed such a sham university to function for so long, the scamsters, who set up this university and, essentially, perpetrated the scam? Or should the ankle monitors be clamped upon the students who were really the victims of a gigantic fraud perpetrated upon them and are even now staring at a bleak and uncertain future?

The state department spokesperson has not elaborated upon these issues.

However, Ms Juliet Wurr, an officer in the US consulate at Hyderabad, had plenty to say. She said it with a twinkling smile upon national Indian TV. She said that ankle bracelets were "hip and happening" and the other choice was to "wear an orange jumpsuit and sit in jail". She said a lot of other things but concluded with what she thought was the ultimate recommendation for ankle monitors: "Even Hollywood celebrities wear them!" Sure they do. Those Hollywood celebrities who have committed crimes or arrested for drunk driving have to be constantly monitored by the police. Well, we have our own Bollywood, Kollywood, and Tollywood celebrities, and are happy to report that not a one has been ever asked to wear an ankle monitor. And it is really of little consequence to over one billion Indians what Lindsay Lohan wears on her ankle. Many of us felt that perhaps the lady herself should suggest that all Americans living or visiting India could wear ankle bracelets, or neck braces with radio tags, just to make sure that their safety and security in this country are constantly monitored. One article suggested that perhaps, if they were such a fabulous fashion accessory, Juliet Wurr could suggest to her superiors, that orange jumpsuit be made office wear for US embassy officials.

The lady has since apologised and has graciously conceded that she should not have offended the sensibilities of Indians. Too right.

But the problem is much larger than one lady with unfortunate articulation or an odd sense of humour. Till today the radio tags have been taken off from only two students from Tri Valley. The rest are wearing those ankle monitors and probably will be scarred for lives by the experience and the sheer shame of it.

At the crux of the matter lies the question of discrimination. Why the radio tags only for the students and not for those who gave them the visas or set up the university in the first place? Is it US policy to punish victims? The US government needs to address these questions. Remember that this is not one issue which has been blown out of proportion. Apart from the very real discrimination against students which is apparent in this case, we should not forget the racially motivated attacks against Indian students living in the US and elsewhere, where little has been done to address the problem with sensitivity and seriousness.

It has to be conceded by those like me who fume over this treatment meted out to our students that there may be several or many who just got into Tri-Valley on a student visa ostensibly to study but soon left for distant locations to work and earn, thereby violating US laws. Those students certainly deserve punishment and deportation or whatever else the law mandates. However, the US needs to take action against those education and university authorities who created this fraud and look into why the Immigration and Customs Enforcement gave these students visas in the first place.

At any rate, ankle monitors are both unnecessary and insulting. They are certainly not "standard procedure" as the US may like us to believe.

Enquiries in the US suggest that ankle monitors are actually being tested as an alternative to keeping criminals in jail because of the high cost of detention. Some even darkly suggest that radio tagging is part of a US attempt to track aliens, much like we in India track wild animals in their natural habitat by radio tagging them. The Government of India has taken a serious view of this issue and taken follow-up action and the US needs to respond with gravity and concern.

- Jayanthi Natarajan is a Congress MP in the Rajya Sabha and AICC spokesperson. The views expressed in this
column are her own.






Questioner: Why do human beings suffer more than the animals?

Sadhguru: Animals suffer physically if things go wrong. Human beings suffer because there is a discretionary intellect. Human beings suffer much more than the other creatures because most of their suffering is mental and mental suffering is self-created. S/he suffers more because s/he is a much better expert at creating suffering for himself or herself and for others.

Of all the creatures on this planet, human beings create the maximum suffering for themselves and for all other creatures, isn't it? This is because they have a discretionary mind. They can choose to be lead the life anyway they want. At any moment one can either make himself or herself joyful or miserable.

Your mind is not a solid state, it is a fluid. You can make it acquire any shape right now. You can look at a tree and say "Oh! God is living there, wonderful", or you can look at the tree in terror and say "Maybe devils are hanging around there". There is no end to the mind. You can make just about anything with your mind — you can make ecstasy out of it or misery out of it. Most people have learnt how to make misery out of it because they are exercising this discretionary dimension of mind unconsciously.

The source of human suffering is just that s/he has a choice. So right now s/he is suffering his or her freedom, not the bondage. If you are suffering your bondage, it's okay, but if you are suffering your freedom it is a tragedy, isn't it? Right now, that's the tragedy that a human being has made himself to be. But if you wish, this moment you can make your life heaven or hell. The choice is yours.

There is a very beautiful story. There was a yogi who was aged and nearing his death, so he went about telling everybody that he is going to heaven. So all the other yogis just looked at him and they thought, "How does he know that he is going to heaven?" As the yogi was very confidently telling everybody in the town, so all of them gathered one day and asked him, "How do you know you will go to the heaven? You do not know what's on God's mind whether he wants to send you to heaven or hell". The yogi replied "I don't care what's on God's mind, I know what's on my mind, I'm going to heaven and that's all". In reality, that's all it is.

Sadhguru Jaggi Vasudev, a prominent

spiritual leader, is a visionary, humanitarian, an author, poet and internationally-renowned speaker. He can be contacted at [1]






Being an ex-serviceman is a matter of pride in Rajasthan politics. Both the ruling Congress and the opposition Bharatiya Janata Party (BJP) have many retired majors and colonels among its leaders.

So it was no wonder that the BJP central leadership chose to depute Kaptan Singh Solanki to Rajasthan to bring party in order. Interestingly, Mr Solanki has nothing to do with the Army, but his first name fit the tenor of Rajasthan politics.

However, despite being a "Kaptan" he could not resolve the issue of choosing a leader of the Opposition and appointing district presidents. "It is not easy to make netas agree to give up their self interest", said a BJP insider.

Another leader quipped to good measure, "We did not listen even to Major Jaswant Singh, so why should we listen to this Kaptan?"

Danger all around

Karnataka ministers are living dangerously, facing threats both natural and supernatural. The Chief Minister, Mr B.S. Yeddyurappa, thinks Opposition leaders are practising witchcraft against him and has blurted out that he was not sure whether he would even reach his home, half-a-km from Vidhana Soudha, every day.

His Cabinet colleague, Ms Shobha Karandlaje, says she has received death threats from racketeers involved in the bogus ration cards racket after she issued an order that people should produce their identity card or their electricity bills to prove they were who they claimed to be.

The newly-inducted minister for medical education, Mr A. Ramdas, too has been bitten by the "threat" bug. He had caught nursing students copying in an examination and later claimed that the gang who supplied answers to the students had threatened him.

According to the state home minister, Mr R. Ashok, at least 90 per cent of MLAs, no matter which party they belong to, have been provided security. Some have been given more than one gunman. In fact, "threat perception" has become a fashion of sorts for politicos that ordinary people are taking all these claims with a pinch of salt.

Taming the media

Bogged down by hostile media, the ruling Congress government has embarked upon an ambitious plan to appease mediapersons in Assam.

It started with the Chief Minister, Mr Tarun Gogoi, who promised land (for a housing project) and laptops to all accredited mediapersons of the state. Many of the journalists have, however, refused to take the laptop.

Despite Mr Gogoi's sops, the media continued to be hostile, grilling the government for rampant corruption in the state. With the Chief Minister's attempt failing, parliamentary affairs minister, Mr Bharat Chandra Narah, resorted to new tactics. On the last day of the Assembly session, he called reporters to a tea party where he complimented them their creative role of Opposition.

"In democracy, the Opposition has a significant role but they have failed", he said. "In fact, the media played the role of Opposition and kept us on our toes." What the minister did not realise was that his words would only inspire reporters to attack the government even more fiercely.

Glued to Egypt on TV, Mamata jubilant

The Railway minister and the Trinamul Congress chief, Ms Mamata Banerjee, is elated at the exit of President Hosni Mubarak from power in Egypt.

A close Mamata aide revealed that the firebrand leader was glued to the television set on the fateful night of Friday, watching intently the cataclysmic developments unfolding at Tahrir Square in Cairo.

She was jubilant when the Egyptian vice-president, Mr Omar Suleiman, read out the brief announcement about Mr Mubarak's stepping down.

"Look, even the people of Egypt who were desperate for a change have got rid of the tyrannical 30-year-old regime of Mr Mubarak. The people of this state are also reeling under the oppressive over three-decade-long Left Front rule. I am sure that a paribortan in this state will come sooner than later", she told her close aide. Will it be premature to say: "Mubarak Mamata?"

Maya's umpteen troubles

Bureaucrats seem hell-bent on adding to the troubles of the beleaguered Uttar Pradesh Chief Minister, Ms Mayawati.

On the first day of the Budget session of the Uttar Pradesh Assembly, a load of books, titled Six Years of UPA government, got "accidentally distributed" among journalists, thanks to some careless official.

As soon as the journalists started flipping through the book, they realised that it contained details of money sent by the Centre for various schemes to Uttar Pradesh — a fact that Ms Mayawati had been trying to deny all along.

When one scribe pointed out the faux pas, all hell broke loose. The journalists were requested to return the copies that had been "accidentally distributed", but no one was ready to oblige.

Ms Mayawati is obviously worried since the contents of the book demolish all that she has been claiming credit for. She is now looking for a suitable head to put on the chopping block for this major faux pas.








THE 126-year-old Indian National Congress seeking a merger with the three-year-old Praja Rajyam Party led by the Telugu superstar, K Chiranjeevi, shows the desperation of Sonia Gandhi to safeguard the minority government of Kiran Kumar Reddy in Andhra Pradesh. The debilitating split in the state Congress brought about by YS Jaganmohan Reddy, son of the former Chief Minister YS Rajasekhara Reddy, has reduced the strength of the Congress Legislature Party from 155 to 131 in the 292-member Assembly. Out of the 18 PRP members two are with Jaganmohan. The merger would, no doubt, ward off any immediate threat to the Congress government but its long-term effect could be disastrous for the party. Chiranjeevi launched his PRP in August 2008 essentially to fight the YSR Reddy government which he had described as the most corrupt the state ever had. YSR was the icon of the Congress till his untimely death in a helicopter crash a little over a year ago.
  The Kapu community of Chiranjeevi had a long-standing grievance against the Congress for not giving its due share in politics. It rallied behind him in the last Assembly election, but is disappointed at his decision to join the Congress, which was called a "looters' party." Shorn of his community support, Chiranjeevi's influence is restricted to his film following. The PRP, unlike the Telugu Desam founded by NT Rama Rao, another superstar, never took roots in Andhra. Chiranjeevi was on the verge of winding up his party and returning to films when the Congress gave a new lease of life to his political ambitions. While the merger is described as 'unconditional', he is assured of a senior position in the State Congress and five ministerial berths for PRP legislators. Workers of neither the Congress nor the PRP are happy with the merger decision taken by Sonia Gandhi and Chiranjeevi without consulting them. In the Congress, a highly hierarchical party, cadres are worried the merger would put a cap on their upward mobility. Chiranjeevi, the superstar, is not used to playing second fiddle. He is the boss in his party and expects the same in the state Congress. The Congress candidates, who lost to PRP candidates in 2009, now have no chance of seeking party tickets again in 2014 as the sitting PRP MLAs cannot be denied re-nomination. The disgruntled Congressmen will find in Jaganmohan Reddy's party welcome refuge. The Congress leaders from the Telangana region are unhappy because Chiranjeevi has come out in support of united Andhra Pradesh. For the sake of propping up Kiran Kumar Reddy, the Congress leadership has embraced Chiranjeevi, its staunchest critic till the other day. It is strange that Sonia Gandhi bestowed more confidence on him than on her own party leaders. She has succeeded in putting the last bastion of the Congress south of the Vindhyas on a slippery slope.




MILITARY wish-lists are generally insatiable, often the result of imaginary re-runs of the great battles of history that history itself has ensured are unlikely to be repeated. Yet a recent suggestion ~ probably yet to crystallise into a formal acquisition proposal ~ from an unnamed naval officer that amphibious aircraft, or what in layman's terms are called 'seaplanes', would prove handy in an anti-piracy role merits consideration. Maybe short-term leasing of a few from the "international market" could be explored. It is possible that the officer has been overly-impressed by recently introduced seaplane island-hopping services in the Andamans; yet given the need for immediate, direct, surface action to follow-up aerial "detection" of pirates' vessels, the seaplane appears to fit the bill. While, obviously, there would be contrary schools of thought and financial issues to be examined, one merit of the suggestion is that it reveals a welcome change in military thinking ~ an appreciation of the reality that Indian land and sea forces have to reorient themselves to tackle "live" low-intensity yet serious threats. What also must be recognised is that if pirates can pass themselves off as fishermen so can terrorists: every terror action might not involve a "landing" as in Mumbai on 26/11, but who can deny that the off-shore oil rigs are vulnerable. If professional evaluation backs the theory that seaplanes can plug a gap, then no time should be lost in getting them under the most expeditious arrangements. The two successful anti-pirate operations off Lakshadweep ~ commendable as they were ~ must not induce any thinking that the menace has been countered. Things might not always pan out so favourably.

What also triggers worries is that thus far it appears the Navy/ Coast Guard are tackling piracy on their own. There is no evidence of a comprehensive strategy that takes all maritime agencies "on board". What is the legal position when pirates are detected outside the territorial waters? Are the Navy or Coast Guard authorised only "second strike" action? Why not specific piracy-related legislation (an ordinance if necessary) so that those taken into custody recently face stringent punishment? Even as the threat has extended from "Indian" shipping (and that includes a vast number of Indian seamen serving on foreign-flagged vessels) on the high seas to close to the western seaboard, New Delhi's "sea-blindness" persists.




IT is a bitter irony of the reservation regime that it should hobble the implementation of the Right to Education Act in the government's own institutions, pre-eminently the 1000 Kendriya Vidyalayas. Quite plainly, the 25 per cent quota for "disadvantaged groups" has not been distinctly defined, as with many other parameters of public policy.  It thus comes about that Central school authorities have given their convenient spin to the proposal; the overall quota will include Scheduled Castes, Scheduled Tribes and the "disadvantaged". This broad sweep has been stridently condemned by social activists not least because it will leave very few seats for the government's new category of "disadvantaged". In real terms, the KV regulations will provide for the existing 15 per cent for SCs, 7.5 per cent for STs and the remaining 2.5 per cent for children with disabilities and those from the "weaker sections".  The stipulated quotas for the listed classes, in force since Independence, have been merged in the government's quota regime under the Education Act. The central school authorities can't actually be blamed as the HRD ministry has left the reservation clause delightfully vague. For all the concern over the welfare of the "disadvantaged", this crucial segment has clearly lost out in the bargain. Was the 25 per cent reservation intended exclusively for the "disadvantaged"? The matter calls for far greater clarity than has been in evidence. The chaos is bound to intensify should government schools in the states also follow the Kendriya Vidyalaya formula. The states were not taken into confidence on the issue.  Quite obviously the Centre didn't envisage a sub-quota within the overall construct. A 25 per cent reservation for the "disadvantaged" is to be welcomed in terms of social welfare; the provision ought to have been matched with a suitable expansion in infrastructure and a clear enunciation of the percentage of quotas for the three categories. Hundreds of thousands of children are involved. The glaring loophole in the legislation has prompted the Kendriya Vidyalayas to work out their own break-up, one that takes care of SCs and STs but is unlikely to benefit the "disadvantaged". And that precisely is the express purpose of universal education.








THE rate of inflation has been rising continuously for the past three years. But in the last few months it has started to gallop and the common man is the worst affected. The key to controlling inflation lies in improving supply and controlling demand. Theoretically, the supply can be improved by increasing production of goods and services or through imports.

Experience shows that growth has been fairly impressive in terms of industrial production, notably that of consumer goods. However, the rate of growth in agricultural production has been poor; in certain years it has been negative.  Shortage of agricultural products has led to an increase in food prices, especially onions and tomatoes.

The Reserve Bank of India has been trying to curb inflation through monetary measures to control demand. The objective is to control the supply of credit and money. Theoretically, the country's central bank can adopt measures, including changes in interest rates and the cash reserve ratio, and thereby control the supply of credit. A restriction can thus be imposed on demand. If this policy is effective, prices could be brought under control.
To lessen the impact of global recession, the RBI reduced the interest rates and reserve ratios in order to boost demand. The policy to keep the demand high did produce results; despite a slight fall in the export demand, the domestic demand was able to offset the impact of  recession.  Thus despite the slowdown, India could achieve a growth rate of 7.2 per cent. The country is now absolutely free from the effects of recession; rather an increase in demand has led to hyper inflation.

How is credit controlled? Over the past few months, the Reserve Bank has been following a tight monetary policy. On 25 January,  the repo rate and reverse repo rate were hiked to 6.5 and 5.5 per cent respectively. This is the seventh hike in the current fiscal year. Earlier, RBI had increased the CRR of banks in two installments. In this fiscal year, it has hiked the repo rate and reverse repo rate by 1.25 and 1.75 per cent point respectively and CRR of the banks by one per cent. This policy reduces the capacity of the banks to lend money on the one hand and increase the cost of credit on the other. It reduces the flow of credit and demand.

The RBI is said to have 'sucked in' liquidity to the extent of Rs 50,000 crore by hiking the CRR by one per cent in two installments. Since 25 January, the Sensex of Bombay  Stock Exchange nosedived by 1150 points till 4 February. This signals nervousness amongst the market players about future prospects.

Experience over the past 10 years shows that  there has not only been a significantly high rate of growth; the rate has been faster than ever before. But the major problem relates to agriculture; the rate of growth has either come down or it has been negative. The high rate of growth is rooted in the expansion of the service sector and the fairly satisfactory performance of the manufacturing sector. It is because of this high rate of growth that prices could be kept under control in the first six/seven years of this decade. Interest rates started coming down as a result of stable prices. Falling interest rates gave a boost to the demand for homes, cars and other consumer goods as sufficient credit was available at relatively lower interest. These purchases were well within the reach of the people. Increase in the effective demand in the economy gave a boost to house-building and production of consumer durables in general and automobiles in particular. Lower interest rates helped develop infrastructure as the companies started getting loans at affordable rates for investment.

 As a result of this phenomenal all round growth, India came to be rated as the world's second fastest growing economy after China. But since 2008-09, rapidly rising prices led to  an upward revision in interest rates. For a short spell starting from the year 2009, RBI effected a lowering of interest rates to counter global recession, and it did produce the desired results. The country achieved more than 7 per cent growth at a time when the global GDP was shrinking by approximately one per cent.

The lowering of interest rates is a major factor behind India's economic growth. The  price rise in the current financial year is likely to result in an increase in interest rates on two counts. First, to keep inflation under check, the Reserve Bank has been adopting a tight monetary policy. It has also been effecting an  increase in the repo rate and reverse repo rate. RBI has also been trying to raise CRR and is reducing the capacity of banks to lend more. This induces them to raise the interest rates. Second, the hike in interest rates is needed to compensate for the inflation so that depositors are ensured of a positive and reasonable rate. Say for example the rate of inflation is 8 per cent; a 12 per cent rate of interest rate would mean a real interest rate of only 4 per cent.

To beat the inflation, the RBI will certainly have to increase the interest rates. But this is likely to affect growth adversely, causing a chain effect in the form of further inflation. Thus there is need to address the root cause of inflation. We must realise that to curb inflation we must overcome the shortage in the supply of agricultural products. Policy-makers cannot afford to be indifferent towards agriculture. This will serve two  objectives. On the one hand, it will help keep inflation under check; on the other, food will be available to the poor at affordable prices.






The European Union has recently gone through a number of crises. Two of its members, Ireland and Greece, went bankrupt and had to be rescued; fears of a similar fate for Italy and Spain have made financial markets reluctant to lend to them. These tremors were not a part of the Union's plans. As far back as in 1997, its member countries had signed a growth and stability pact which, if it had been adhered to, would have made the insolvency of individual members virtually impossible. It was a pact to control fiscal deficit; restraint of them would have ensured control on debt-to-gross domestic product ratios, and would have been sufficient to ensure that the member states could service their debt. But it was a voluntary pact. There was no reason for any country to adhere to it; in fact, there was an implicit guarantee that if a country went bankrupt, the Union would bail it out, for not doing so would have led to the country's exit from the Union and the collapse of the grand design. And the costs of saving bankrupt countries had to be borne by the senior members, Germany and France, since the Union had no central budget, no assured revenue and hence no capacity to service debt. This is an unsustainable situation, for the citizens of these countries are bound to ask why they must bear the burden of rescuing feckless countries.

So the European Commission has taken an initiative in ex-ante policy coordination — as it calls it; it has started an annual growth survey which would outline priority policy areas. This year it has stressed 10 fields, including fiscal correction, recapitalization of banks, making work more attractive and unemployment less so, moving away from defined-benefit to contribution-based pension systems, removing restrictions on trade in services, floating of infrastructure bonds and integration of energy markets. The survey illustrates the convolutions of policy-making in a federation of sovereign states: the plan is too long since it has to contain something for every country, and couched in obscure officialese to avoid offence. Representatives of the member countries will have convivial meetings in Brussels in which they will unanimously agree on the Commission's plan, and then go home and forget about it.

It may have been fear of something like this happening that led the leaders of the two biggest countries — Angela Merkel and Nicolas Sarkozy — to come together and announce their own six-point plan, including end of wage indexation, mutual recognition of educational qualifications, unification of corporate taxation, making pension systems self-supporting, crisis management plans for banks, and writing debt management into national constitutions. This is a more focused and relevant list than the European Commission's, although there is considerable overlap between the two. It has a better chance of being effective. But for that, the two leaders also need to put some teeth into it.






What would outfits like the Sri Ram Sene have done without Valentine's Day? The only way they can claim their proprietary right to "Indian culture" is by destroying paintings and beating up young people out to have a good time. They succeeded too well with M.F. Husain, whose departure has left them with very little to tear down or break up. But now it is Valentine's Day again and the outfit is campaigning in Delhi colleges to "persuade" students that the day of love is nothing but a conspiracy of multinational companies. Expressing love openly is against Indian culture. Lovers should get married or stay at home to kiss and fondle. Why do they not celebrate Basant Panchami instead?

All this would have been too stupid to matter if the culture thugs were not allowed to use violence. Whether or not Valentine's Day is a triumph of commerce is not the issue here; it can be argued that the supply would have petered out had there been no demand. The point is that such gangs can get away with violence. No democracy can support the expression of one group's opinion at the cost of the peace and security of others. So how far are governments complicit in the violence? However much India pretends to be a democracy, it is clear that those who run the country aspire to appease the lowest denominator, common or not: the unreasoning narrowness of the majority community. No light of education, or generosity of thought, touches these eddying depths. It is on the preferences of this majority that political parties' fates depend. So the Sri Ram Sene is welcome to harass women every Valentine's Day. If it captures private moments on spycams and puts the pictures on the web, as it has threatened to do, it will probably get away with it again. Civilization is not India's strong point. Yet.






"The people of South Sudan, for the first time since 1898, are going to determine their own future," declared Barnaba Marial Benjamin, southern Sudan's information minister, before last month's referendum on the region's independence. "In fact, it will be the last-born state on this continent of Africa." If he meant that no more African countries will split up, however, he was probably wrong.

It's natural to be suspicious of referendums that produce 'yes' votes of almost 99 per cent, but in this case it was a genuine expression of southern opinion. The new state will become independent on July 9, and so far it looks like the erstwhile government of undivided Sudan will accept the outcome peacefully. After decades of war between the Muslim, Arabic-speaking north and the very different south, where most people speak local languages and are Christian, division makes sense. But it also creates a precedent.

That fount of wisdom on geopolitical affairs, Libyan strongman Muammar Gaddafi, warned a meeting of African and Arab leaders last October that southern Sudan's independence would spread like a "disease… to all of Africa.... With this precedent, investors will be frightened to invest in Africa." But the African Union has blessed the split, while emphasizing that this is a special situation and an exception.

It is a very special situation. About two million people have been killed in Sudan's 43 years of civil war, the majority of them southerners. As a result of the endless fighting, southern Sudan is one of the least developed regions in the world. The southerners deserve their independence — but the implications are vast.

Etched in blood

If it's okay to split up Sudan, what's to stop other secessionist groups from launching wars of independence, knowing that if enough people are killed they will probably get their way in the end? How about Nigeria? The oil-rich southeastern region (Biafra) has tried that once already. The Congo? There was once a war, backed by Western mining interests, for the independence of the province of Katanga.

The rot has already spread beyond Africa. The decision in 2008 by the Nato countries and some others to recognize the independence of Kosovo, which was still legally a province of Serbia, created a similar precedent in Europe. In fact, it is an even more sweeping precedent, because the Serbian government, unlike the Sudanese, did not assent to the separation. If Kosovo's independence can be recognized without Serbia's agreement, why can't Turkish-majority northern Cyprus become legally independent without the permission of the Greek Cypriot- dominated government in Nicosia? Why can't the breakaway bits of Georgia be recognized as independent states? Why can't there be an independent Kurdish state?

Why not hold the long-denied plebiscite in divided Kashmir, and let the local people decide whether they want to be part of Pakistan, or part of India, or independent? Why can't the western half of New Guinea separate peacefully from Indonesia? Why can't Tibet and Xinjiang hold referendums on independence from China?

The sum of human happiness would probably be increased if these ethnically distinct areas got to choose their own futures, and it is not necessarily true that changing the borders would be a bloodier business than keeping them frozen in place. Conflict is still possible between Sudan and South Sudan, especially over the sharing of the oil revenue. Most of the oil is in the south, but the pipelines take it out through the north. So far, however, both sides are behaving in a very grown-up way, and together they are an advertisement for the virtues of letting borders change.






"No one predicted this, but everyone could explain it afterwards". Said of another revolution, as true of this one.

"To be honest, we thought we'd last about five minutes," recalls one of the organizers of the original January 25 protest which began this Egyptian revolution. "We thought we'd get arrested straight away." If they had been, if Hosni Mubarak's security forces had once again murdered the foetus in the womb, the worldwide web would now be filled with articles by experts explaining why "Egypt is not Tunisia". Instead, the web is abuzz with instant, confident explanations of what no one anticipated. Such are the illusions of retrospective determinism.

So, before we go any further, let us make two deep bows. First, and deepest, to those who started this, at great personal risk, with no support from the professedly freedom-loving West, and against a regime that habitually uses torture. Honour and respect to you. Second, hats off to Lady Luck, contingency, Fortuna — which, as Machiavelli observed, accounts for half of everything that happens in human affairs. No revolution has ever got anywhere without brave individuals and good luck.

One leathery old victim of this revolution, at whose death we should rejoice, is the fallacy of cultural determinism — and specifically the notion that Arabs and/or Muslims are not really up for freedom, dignity and human rights. Their 'culture', so we were assured by Samuel Huntington and others, programmed them otherwise. Tell that to the people dancing on Tahrir Square. This is not to deny that the religious- political patterns of both radical and conservative Islam, and specific legacies of modern Arab history, will make a transition to consolidated liberal democracy more difficult than it was in, say, the Czech republic. They will. Maybe the whole thing will still go horribly wrong. But the profoundly condescending idea that 'this could never happen there' has been refuted on the streets of Tunis and Cairo.

While we are talking determinisms, let's dispense with another one. In tags like 'Facebook revolution', 'Twitter revolution' and 'Al-Jazeera revolution', we meet again the ghost of technological determinism. Talking to friends in Cairo, I am left in no doubt that these media did play a major role in organizing and multiplying the popular protests that began on January 25. As I have been writing this column, I have been watching the growth of the Facebook page set up by Egyptians to 'authorize' Wael Ghonim, the Google executive recently released from prison, and a newly anointed hero of the revolution, to speak in their name. When I first visited it, at 0851 on Wednesday morning, it had 213,376 people following it; as this article goes to press (and what a gloriously arcane phrase that is!) it has 296,604. Ghonim had been the pseudonymous organizer of an earlier Facebook page which contributed to the protests, and now has more than 600,000 followers.

As in Tunisia, it is the interaction of online and mobile social networks with the older superpower of television that creates the catalytic effect. Al-Jazeera TV has produced a compelling narrative of liberation struggle, drawing on blog posts and blurry footage from mobile phone cameras. Ghonim became a popular hero because soon after his release from prison he appeared on an Egyptian TV programme, thus reaching a wider mass audience for the first time. So these old and new technologies of communication matter enormously — but they did not prevent popular protest movements from being crushed in Belarus and Iran, they do not determine the outcome, and the medium is not the message.

Then we have the historical analogies. I have lost count of how many articles I have seen (including, I hasten to add, one by myself) asking whether or not this is the Arab 1989. "The Arab world's Berlin Wall moment," shouts one headline. "This is no 1989 moment," cries another. The comparison may not, in the end, tell us all that much about what is happening in Egypt, Tunisia or Jordan — but it certainly tells us something about 1989. There is no longer any doubt that 1989 has become the early 21st century's default model and metaphor for revolution. Forget 1917, 1848 or 1789.

A close runner-up, in the analogy stakes, is Iran in 1979 — and the prospect of radical, violent Islamists coming out on top. Roger Cohen of The New York Times, who has produced some splendid reported columns from Tunisia and Egypt, follows the first law of journalism ("first simplify, then exaggerate") when he writes that the "core issue" in Egypt is "are we witnessing Tehran 1979 or Berlin 1989?" To which one answer is: what we are witnessing in Cairo in 2011 is Cairo 2011. I mean this not in the trivial sense that every event is unique, but in a deeper one. For what characterizes a true revolution is the emergence of something genuinely new, on the one hand, and the return of a suppressed human universal on the other.

New in Cairo 2011 is that it is now Arabs and Muslims standing up in large numbers, with courage and (for the most part) peaceful discipline, for basic human dignity, against corrupt, oppressive rulers. New in 2011 is the degree of decentred, networked animation of the demonstrations, so that even the best informed observers on the spot struggle to answer the question "who is organizing this?" New in 2011 is the extraordinary underlying pressure of demography, with half the population in most of these countries being under 25.

Old in Cairo 2011 — as old as the pyramids, as old as human civilization — is the cry of oppressed men and women, overcoming the barrier of fear and feeling, however fleetingly, the sense of freedom and dignity. My heart jumped for joy as I watched the footage of the vast, celebrating crowds in central Cairo on Tuesday. But when we have finished humming the prisoners' chorus from Beethoven's Fidelio, we must remind ourselves that these moments are always transient. The hard grind of consolidating liberty is all ahead.

This is where historical comparisons come into their own. They are no substitute for first-hand, informed analysis of the unique circumstances on the spot. What they do offer, however, is an extensive tool-kit of experience, showing the many ways in which a revolution can go wrong and the rare combination needed for it to keep going right.

Neither on the opposition nor on the official side do I yet see a vital ingredient for it going right: the organized, credible partners for a negotiated transition. Some proto- organization has clearly emerged on Tahrir Square. In Ghonim, the protesters have a symbol who might yet become a leader. But we seem still to be a very long way from any alliance of opposition forces that could funnel popular pressure to the negotiating table. On the official side, Hosni Mubarak and his vice-president must give way to an interim government, headed by someone acceptable to all (or at least, most) sides — someone like the wily old Amr Moussa, the secretary-general of the Arab League. Only when those two things happen may we begin to have confidence that the Egyptian revolution is on the right road.

The author is Professor of European Studies at Oxford University, a Senior Fellow at the Hoover Institution, Stanford University, and his most recent work is Facts are Subversive: Political Writing from a Decade Without a Name THIS PIECE WAS WRITTEN BEFORE HOSNI MUBARAK'S RESIGNATION




******************************************************************************************DECCAN HERALD




People's power has ousted another unpopular, authoritarian Arab ruler. If a month ago it was Tunisia's President Ben Ali who was forced to flee the country, this time it was the turn of Egypt's much-hated President Hosni Mubarak. Mubarak tried every trick in the book to hang on to power. But weeks of relentless street protests forced him to step down. A 30-year-rule marked by brutal suppression of political dissidence has come to an end. People are celebrating Mubarak's exit in Egypt, indeed, across the world. However, it is still too early to interpret Mubarak's resignation as a victory for democracy as a Supreme Military Council is now in control of the country. What has happened, therefore, is a bloodless — and immensely popular — military coup. Defence Minister Mohamed Tantawi, a little-known figure once derided as 'Mubarak's poodle', heads the new government, which is made up almost entirely of senior generals. The military has said that this arrangement is temporary. But experience across the world indicates that generals are rarely willing to let go of political power.

A political tsunami in the form of protests swept Mubarak out of power. But this is not a revolution. Power remains with the same elite. A social revolution with regard to capital and property has not occurred. What Egyptians can expect, if the military does indeed step aside, is perhaps more freedom of expression, unionising and political activity. The new Egypt can be expected to be a more democratic place than it ever was.

The ground is shifting in West Asia at a dizzying speed. Egypt has reaffirmed what Tunisia signaled a month ago — that the masses even in the Arab world can oust unpopular rulers. Arab leaders are watching developments in Egypt with anxiety if not alarm. Some are handing out money to the public to buy calm. Bahrain's King Hamad bin Isa Al Khalifa has granted each Bahraini family nearly $2,700 in a bid to calm tensions. Others are promising reforms. Is this enough or will the people press ahead with protests, seeing the reforms as empty gestures coming too late? Events in Egypt could have a cascading effect in Bahrain, Kuwait, Yemen and Saudi Arabia. With Mubarak gone, a critical domino in the Arab world's long list of authoritarian rulers has fallen. This has great significance for the US and Israel, whose Middle East policy hitherto hinged on Mubarak. The ground beneath their feet is slipping rapidly.








The latest report of the International Maritime Bureau has shown the utter failure of international efforts to check piracy off the coasts of Somalia. Though naval vessels from many countries are patrolling the vulnerable region, capturing ships and demands for ransom have actually increased. According to the bureau's estimates, there was a 10 per cent increase in the number of attacks on shipping in 2010. Forty-nine vessels were captured, 1,016 crew members taken hostage and millions of dollars were paid in ransom. The incidents have been increasing in the last four years and have touched a record now. Hundreds of sailors are still in captivity. The maritime watchdog has sounded a note of alarm.

Pirates are now using captured ships as bases for attacks on other vessels. They have improved their tactics and are using the latest technologies in their operations. They also operate in a wider area than earlier. Apart from loss of lives and untold mental tension for families of captured sailors, this is causing shipping costs to escalate, because of higher insurance premiums and delays in delivery of goods. Twenty-eight vessels and 638 sailors were being held in captivity at the time of the report. This is when the best navies of the world are considered to be on alert and in action in the area. There is no co-ordination among these naval vessels and there is no effective anti-piracy plan being followed by them. There was a proposal to put in place a contingent like a UN peace-keeping force under a single command but it has reached nowhere. There is also no agreement on the legal action that can be taken against captured pirates. There is a view that the problem can be solved only if the political situation in Somalia improves or is made normal through intervention. But this is impractical and amounts to an acceptance of failure. The international community should take more effective steps to ensure that the shipping lanes are safe.

Indian shipping is also affected and the threat has moved closer home with the expansion of the pirates' operations. A coast guard station has been set up in Lakshadweep in response to the situation. The Chinese navy is more active in the area than Indian war ships and this is a source of greater discomfort to India. Therefore, it is in India's strategic interests also to curb piracy in these waters.








'When a dictator falls in Cairo, every other Humpty Dumpty gets a nervous breakdown.'

Salahuddin Ayyubi, more familiar as Saladin, would have understood what was happening in Cairo 2011 perfectly. When, eight centuries ago, he set out from Damascus to recapture Jerusalem, he headed not towards any Crusader state dotted across the map of Arab Asia, but marched instead to Cairo to destroy the rotting regime that had infected Egypt with smug impotence. Saladin knew, and said, that an Arab victory was impossible without the mobilisation of the heart of the Arab world. The epicentre had shifted from Baghdad with the decay of the Abbasids, and there it lies still. When Europe began its colonisation project, Napoleon headed for Alexandria, for he knew that the strategic route to both Ottoman Constantinople and British India lay through Egypt.

When the British decided it was time to intervene, they sent Lord Cromer to Cairo.

When a dictator falls in Cairo, every other Humpty Dumpty gets a nervous breakdown. All the various kings' horses, and all the many despots' men, cannot put them together again. It is now a matter of time, and time has shifted its loyalty from dictators to democrats. It is a trifle awkward to quote from one's own book, but one of the themes of 'The Shade of Swords' (published in 2002) was that most of the Arab world was between 10 to 15 years away from its French revolution. There are, fortunately, no guillotines, because the 21st century has rediscovered the power of Gandhian non-violence as the ultimate mass weapon against the might of the state. There is no blood on the Nile, there is no stain on the Sphinx, and the people are in power in Cairo.

True, transition is still a work in progress. It would be illusory to declare a premature victory. The dust is still rising in Tunisia, where the ancien régime is fighting a rearguard battle to protect what it has seized from the people over so many decades. Such temptations will doubtless be visible in Egypt as well. But if the elites deny Egypt its liberation, then the anger of today will turn into the rage of tomorrow.

For six decades the consistent strain in the western discourse has been praise for Israel's democracy, and castigation of the moribund, when not monstrous, dictatorships of the Arabs. This was a valid, if not fully adequate, explanation for the limited economic and social progress among Arabs. Why then is Tel Aviv on the edge, and the West apprehensive at the prospect of this democratic revolution?


Because democracy does not travel alone. It is always accompanied by nationalism. You can have nationalism without democracy, but you cannot have democracy without nationalism. The West does not really fear the rise of a Muslim Brotherhood as an alternative to dictators, since that is a socio-political movement that can be contained in a crunch. It is worried about an explosion of governments that place the people's interest above that of sectional regimes at home and their mentors abroad. It was this worry that prevented the West from intervening even when dictators looted their own nations. We do not yet know how much Hosni Mubarak salted away in Swiss and other banks, but rumour puts the figure at a staggering high. Details of Tunisia's Zine el-Abidine Ben Ali's family are public knowledge. The mass of companies owned by his family is evidence of the power of patronage. Most interestingly, his family controlled the banking system. His brother-in-law Belhassan Trabelsi owned the Bank of Tunisia; his daughter Nesrine had Zitouna Bank and Al Tijari Bank; his second daughter Cyrine owned the Arab International Bank of Tunisia, and his third daughter Ghazoua the Mediobanca. Why go to Switzerland when you have your own bank?

The difference between a dictatorship and a democracy is not very complicated. Governments are vulnerable in the former, but the country is free and stable. Despots seem permanent but under them the nation seethes in below-the-surface turmoil. How long can you keep the lava boiling inside the volcano?

The point may be stretched but is still worth making: is there anything in common between contemporary Cairo and Kolkata? In both cities, one on the knee of the Nile and the other at the foot of the Ganges, the citizen wants the government out after three decades in power. After this the differences begin. The Communists of Bengal have ruled in a democracy, while the army-backed regime in Cairo has thrived through a cocktail of fear, fraud and ferocity. Cairo's young cannot trust those who have cheated them for so long, and want change now. Kolkata's young have no problem whatsoever in waiting for the hour appointed by the Election Commission. There is no need for a jasmine uprising. A democracy is a continuous peaceful political revolution.

Egypt has found its destiny and its destiny will change the world around it.







Bush focused on democracy as a goal after the invasion of Iraq found no weapons of mass destruction.
The cheers of Tahrir Square were heard around the world. But if you listened carefully, you might have heard cheering from another quarter 7,000 miles from Cairo as well, in Dallas.

The revolution in Egypt has reopened a long-simmering debate about the 'freedom agenda' that animated George W Bush's presidency. Was he right after all, as his supporters have argued? Are they claiming credit he does not deserve? And has President Obama picked up the mantle of democracy and made it his own?

The debate in Washington, and Dallas, tends to overlook the reality that revolutions in far-off countries are for the most part built from the ground up, not triggered by policy made in the halls of the West Wing. But the lessons of the Egyptian uprising will ripple through American politics, policymaking and history-shaping for some time to come.

Bush, after all, made "ending tyranny in our world" the centrepiece of his second inaugural address, and, although he pursued it selectively, he considers it one of his signature legacies. The very notion of democracy promotion became so associated with him, and with the war in Iraq, that Democrats believed that it was now discredited. Never mind that Republican and Democratic presidents, from Woodrow Wilson to Ronald Reagan, had championed liberty overseas.

Only preaching

Obama was seen by some supporters as the realist counterbalance who would put aside the zealous rhetoric in favour of a more nuanced approach. He preached the virtues of democracy in speeches, but did not portray it as the mission of his presidency. When Green Movement protesters of Iran took to the streets of Tehran, Obama's relatively muted response generated strong criticism.

By contrast, foreign policy specialists said, Obama's embrace of the Egyptian protesters in the last couple of weeks, if cautious at times and confused by conflicting signals from others in his administration, seemed to suggest a turning point.

"He got on the right side of this thing when a lot of the foreign policy establishment was cautioning otherwise," said Robert Kagan, a Brookings Institution scholar who long before the revolution helped assemble a nonpartisan group of policy experts to press for democratic change in Egypt.

For Obama, the challenge may be to define the spread of liberty and democracy as a nonpartisan American goal, removing it from the political debate that has surrounded it in recent years. Democrats who have long worked on the issue have expressed hope that he can shed the goal's association with Bush, while framing it in a way that accounts for the mistakes of the last administration.


Finding the right balance has never been easy. Bush focused on democracy as a goal after the invasion of Iraq found none of the weapons of mass destruction reported by American intelligence agencies. He elevated it to a central theme in his second inaugural address, according to advisers, to infuse the war on terrorism with a positive mission beyond simply hunting down terrorists.

But there was always an internal tension in his administration. Former Defence Secretary Donald H Rumsfeld makes clear in his new memoir that he thought the emphasis on democracy was misplaced, given the difficulties of transplanting western-style institutions in regions accustomed to autocracy. Then, in 2006, the election of a Palestinian government led by Hamas quieted some of the administration's ardour for democracy.

Matt Latimer, a former Bush speechwriter, recalled in a recent column that he prepared a ringing speech on democracy for the president to deliver while in Egypt in his final year in office, only to have it watered down at the last minute.

Still, in recent days, former Bush advisers like Elliott Abrams and Peter Wehner have written columns recalling the former president's calls for change, and crediting them with setting the stage for what would come later in West Asia, a region that skeptics often said would never move toward democracy. Whatever the final language of the 2008 appearance in Sharm el- Sheikh, they said Bush spoke to democratic ideals. Not everyone sees it that way, especially in the Obama White House, where the assertion rankles deeply. "How many democratic transformations like this took place when he was in office?" scoffed one Obama advisers.

Several, actually, in Ukraine, Georgia, Lebanon and Kyrgyzstan, where popular risings also toppled entrenched ruling systems. But later events in those countries also showed that such first steps did not necessarily point in a straight line to lasting Jeffersonian democracy. Similarly, the change in Egypt has only begun, as Obama pointed. Its final destination is still very much up in the air.







I have found kids sensible and sensitive in their own ways.

Do you remember the ghastly incident of school children burning to their deaths on the premises in Kumbakonam a couple of years ago? The video of that devastating episode was shown to an assorted set of middle school children in Bangalore recently for some 'study purpose'. The students sat through the 10 minute soundless video without so much as batting their eyelids. Some of them were staid and the rest were indifferent to the footage. When the 'observers' interacted with them to gather their impressions and opinions on the subject, a few of them wondered why was the video shown to them, while the others said the 'show' was not very interesting.

They were sent away and the experts in the subject and everyone who mattered agreed that 'insensitivity' had set in as the order of the day and the blame was squarely laid on media and entertainment.

Cartoon shows, which show characters beings hacked, quartered, sliced, hammered, wrung out of shape in the name of fun, are apparently responsible for making children insensitive to the pain of others. Besides, newsbytes, movies and serials highlighting violence have made kids get used to the repugnant side of life without arousing their subtle emotions or evoking valid questions. The general urban life of rat race and stress and nuclear families were not discounted as some of the reasons.

Their conclusions were certainly logical but they appeared very lopsided to me. I have spent a good deal of my life interacting closely with kids of all age groups and social standing. I have found them sensible and sensitive in their own ways. I felt compelled to share my viewpoint on the subject and narrated a recent incident of a four-year-old daughter of a security guard who always watches animal shows with me.

The feline family fascinated us the most and we were never tired of watching re-runs. We had named every single animal and were familiar with every twitch and twirl of their bodies.

I would change channels once the wild cats started hunting in order to spare both of us from experiencing the trauma of seeing so much bloodshed and brutality.

One day she happened to watch her favourite cat as a predator when I was momentarily preoccupied. She gasped loudly, her jaws dropped and her eyes dilated and she categorically cried out, "cheetah bura hai."

I put off the television immediately but was not able to put out her response. I decided to talk to her about the 'ways of nature' sometime later.

But the aftermath of the video session made me decide not to violate her innocence for I am sure she will learn sense as she is bestowed with sensibility.









On Friday, Hyderabad police caught small-time film producer Murali Srinivas, brother of well-known Telugu film actress Jeevitha. He was allegedly buying cocaine from one P Bhanuchander alias DJ Nash, a Nigerian national named Daniel Fernandes alias Simba, and one P Rambabu. The three were allegedly selling cocaine to Murali in the city's posh Jubilee Hills area. Police say the trio had in their possession a massive 305 grams of cocaine.

For a drug peddler, Bhanuchander is not quite the down-and-out type. He comes from a respectable middle class family. His father is a retired Indian Forest Service (IFS) officer. But ever since he dropped out from Hyderabad's Mahatma Gandhi Institute of Technology (MGIT) for lack of attendance, Bhanuchander has been working as a DJ, spinning discs at various pubs, first in Hyderabad and later in Goa, and calling himself 'DJ Nash'.

But why are we telling you this story? That's because it is one of those very familiar cases, which link Goa with drugs. DJ Nash, say the Hyderabad police, started taking up pub assignments in Goa just six months ago. It seems his agenda was not just trance music, but trances of a completely different kind.

During a press conference held to announce the seizure, Hyderabad Police Commissioner A K Khan told the media that many pub owners in Goa are "hand-in-glove with peddlers". DJ Nash had no problem finding his way deep into the drug network here, and he allegedly began supplying the stuff to 'friends' back home in Hyderabad. They were selling cocaine for Rs4,000 per gram to an 'A' list clientele that apparently included a number of prominent Tollywood personalities (as the Telugu film industry is called). Hyderabad police, the Commissioner said, had been waiting for an opportunity to catch film producer Murali ever since they found his name in the mobile phone contacts list of a known drug peddler.

DJ Nash and his Nigerian associate Simba have revealed that they bought their cocaine from members of a "foreign drug ring" in Goa. The duo says they usually had the drugs delivered to them by bus from Karnataka, though this time they carried the stuff themselves on a Goa-Hyderabad bus.

Even if they are wealthy high-flyers, drug peddlers, say the Hyderabad police, rarely move their contraband by plane. Instead, they go from place to place by bus or travel Second Class by train, where there is little likelihood of an anti-narcotics check. The cocaine is packed in small packets with a tiny quantity in each, so that it is easier to conceal.

Obviously, Goa Head Constable Arun Dessai's case (caught with 26kg of 'charas' in his car in Belgaum) is not an isolated one. Time and again, drug peddlers caught in Mumbai, Bangalore, Hyderabad, Mangalore and even Kerala say that they sourced their drugs from Goa. These cases get reported in national newspapers. We give them publicity in 'Herald' too. But has the Goa Anti-Narcotics Cell (ANC) ever sought custody of these suspects or sent a team to interrogate them about where they sourced their drugs from in Goa?
When the Belgaum cops caught Dessai and Co, they lost no time in interrogating them. They then promptly raided some premises in Goa, including a nightclub at Colva. If Goa's ANC personnel showed the same alacrity every time a drug peddler caught in some other state confesses that (s)he sourced the stuff in Goa, they would be able to bust Goa's drug 'mafia' in no time at all.

But they don't…

While this in no way is evidence of a 'nexus', at very least, does it not indicate a strange and curious disinterest among these cops about doing their duty to the best of their abilities?







An international conference, gathering 30 scholars from various nationalities and continents, debated the "Christianity in History: Encounters, Engagements and Experiences" during three days (2-4 February 2011). It was organised at the Centre of Historical Studies of the Jawaharlal Nehru University (JNU) in New Delhi. It may be regarded as a positive expression of the secular approach that is loudly touted in India, but not always so successfully practiced.

Organised by Dr Joy Pachuau, and her colleagues, the major themes covered in 11 sessions, which included: Class, Caste and Christianity, Ethnic Mobilisation and Identity Construction, Heterogeneity in Faith and Praxis, Roberto De Nobili and Cultural Dialogue, Folk Traditions and Popular Christianity, Local Voices and the Expansion of Christianity, Missionaries and Images of the Other, The Inquisition: Perceptions and Reality.
One main objective of this conference was to help developing a historiography that could be liberated from the near-monopolistic domain of a few 'religious' and western experts, who focused largely on the origin and nature of mission societies from their metropolitan countries, the personnel that were involved, the numbers that were converted, and how much charity was exercised or hunger relieved.

My keynote address, entitled  "Christianity in Asia and its Historiography in the Postcolonial Context: A Review and Challenges" took into account the expressed objectives of the conference and focused on the postcolonial context, risking obviously the displeasure of some western participants and their accusations of simplifying the issues.

I saw no need to be led by the  agendas aimed at completing an "unfinished business", an expression that opens  the Introduction to the Missions and Empire (OUP, 2005) by Norman Etherington, edited as Companion Series for the oxford history of the British empire. It seeks to impress upon the international community (aimed particularly at the ex-colonies) and remind us how the missionary sons and daughters of the western colonial powers promoted the spiritual and material welfare of the colonised and converted Asians, helping to break away from the injustices of the local cultures. The general tendency in such historiography is to eschew handling the complexity of the process that bred new forms of injustices that the colonial west exported to Asia, under the guise of modernity and civilizing mission.

I chose to remind the audience that empires had not disappeared altogether, and that colonial hangovers persist on both sides of the divide. There is no reason otherwise, why the European scholars should find fault with 'postcolonial studies' as vague and undefined, but still seek to appropriate them to their advantage. Is it an acquired habit of the orientalists and their pretensely superior models of scientificism, which fail to recognise other forms of knowledge and perception? The washing of guilt feelings often takes the form of resorting to contra-factual history, which affects the ongoing re-evaluations of the mission history as constructed in the West.

It is curious to note how the above mentioned Missions and Empire denounces the aphorisms that popularised the relationship between evangelisation and imperial expansion. The frequent use of such aphorisms is attributed to spokesmen of anti-colonial nationalisms. We are told that it hardly corresponded to reality, where the missionaries were more often seen as a nuisance and even barred from interfering into imperial schemes. Then it goes on to uphold Christian Mission in the Twentieth Century (Cambridge, 1994) by Timothy Yates as a good model of postcolonial historiography of Christian missions, because it studies the Christian missions in our times, as predominantly non-Western, and more importantly, the book contains only five references to imperialism, two references to British, and none to colonialism.

The missionary strategy of cultural adaptation was a sort of a generous concession to the Asian cultures. In postcolonial Asia, the FABC (Federation of Asian Bishops Conferences) documentation does not contain any recrimination or resentments against past colonial experiences. It is a positive signal and could be the basis of all postcolonial challenges: To sublimate, without bypassing or ignoring, the colonial experiences.
Since we were hosted by Jawaharlal Nehru University, I thought it proper to recall the advice of Pandit Jawaharlal Nehru, in his Glimpses of World History: "Our study of history has shown us that life is often very cruel and callous. To get excited over it, or merely to blame people, is foolish and does not help. It is much more sensible to try to understand the causes of poverty, misery and exploitation, and then try to remove them."

[OUP, New Delhi, 1997 (12th ed.), p. 435]

Referring to Jesus and Christianity in Ch 31 of his Glimpses of World History, Pandit Jawaharlal Nehru lamented that despite much similarity in all religions, they are often distorted by intolerant bigots, and served as handmaiden to politics. He also expressed his surprise at how the poor and non-violent Jesus was preached by loud-voiced followers, with their imperialism and armaments and wars and worship of wealth: the Sermon on the Mount and modern European and American Christianity – how amazingly dissimilar they were!

The JNU Conference on the Christianity in History brought into debate variety of sources, including novels and oral traditions, that could help giving voice to the Dalits and tribal people. Paul Jenkins (Basel Mission), John Webster (USA), Shashi Joshi (IIAS, Shimla), S Karmegam (JNU), Joy Pachuau (JNU) were among the participants who emphasised these aspects. Ines Zupanov and Margherita Trento (EHESS, Paris) analysed the traditional missionary Jesuit linguistic contributions. Goa was very well represented by Savio Abreu, SJ (IIT, Mumbai), presenting facts and figures about shifting religious, caste and gender equations in postcolonial Goa.
The last session on the Inquisition chaired by me drew immense interest: Pius Malekandathil (JNU) showed how the Portuguese settlers in Cochin used the Inquisition to destroy their rival merchants, the Portuguese Jews converted to Christianity. The older resident Jews benefitted from the protection of native ruler in Mattanchery.


Célia Tavares (Brasil) described her ongoing research project of creating a database of the documentation on Goa Inquisition available in Rio de Janeiro. She promised to make it available online in the near future. Paolo Aranha (Rome) disclosed a different adaptation of Christianity in the context of the English settlement at Fort St George (Madras). Unlike De Nobili's concern about the Hindu customs, the Capuchin Fr Ephrem de Nevers sought to respond to the Anglican challenge with a Catholic recognition of the legitimacy of Anglican priesthood and sacraments, and by renouncing the Catholic practices of veneration of images. The Capuchin Friar won a rare victory in his conflict with the Goa Inquisition over the tridentine Catholic ecclesiology.
The historians gathered in the JNU Conference were successful in pointing to new ways of re-writing the history of Christianity in the postcolonial context. The space limitation permits me only to say that we hope to see soon the published proceedings to appreciate better this commendable exercise.







Had it not been for the 18-day endurance of a repressed people as Egypt's as they revolted — mind it, peacefully — against the dictator who ruled them for 30 years with an iron hand, Hosni Mubarak would still be calling the shots. That he has been forced to step down despite his intransigence, reflects on the power of mass desire and aspiration, as well as on how revolutions succeed when there is a spontaneous people's outburst against suppression. As Mubarak relinquished power last week and the Supreme Council of the Armed Forces stepped in to run the affairs of the Arab world's most populous nation, the sea of protesters at Cairo's Tahrir Square erupted in joy, most in tears and celebrating the beginning of a new era of freedom. What has been significant during the past fortnight is that the Army has backed the people, which might have implications in regimes supported by armed forces against the just cry of people for freedom. Without the Army's endorsement of the revolution staged by a tenacious Egyptian populace, the winds of such change would not blow.

However, there is need for great caution. Mubarak's exit is only a beginning of a process that is as precarious as it is revolutionary at the moment. Reckoned as a secular shield against the fanatic strand of Islam by the West, Mubarak, it must be admitted, had successfully kept the extremists out of all power modes. What now? The al-Qaeda has already given a clarion call to the people of Egypt to reject democracy and secularism and strive for a government based on ''Islamism'' as the fanatic would construe. Can the moderates, wedded to the values that a democratic secular culture epitomizes, overwhelm the extremists in their midst? What role will the Muslim Brotherhood — an Islamist transnational movement and the largest opposition group in many Arab states — play? Will the transition to democracy be as smooth as the Tahrir Square protesters desire, or will it be marked by a dangerous contest between liberals and Islamist hardliners? Whose power will eventually win? The liberals must win for the post-Mubarak Egypt to don a pro-people, 21st-century sheen.

India has rightly welcomed the change of guards at Cairo. Noting that the country has had traditionally close relations with Egypt, External Affairs Minister SM Krishna has wished the people of that country peace, stability and prosperity. This can happen only if their successful revolution paves the way of a secular democratic regime capable of tackling and defeating fanaticism.






T he Egyptian crisis has exposed American hypocrisy more starkly than ever before. In a classical case of a confrontation between autocracy and freedom, which the upsurge in Egypt represents, the dithering of the land of the free and home of the brave on which side to support is yet another confirmation about how the US has always been equivocal about democracy outside its own shores.

It is supportive of the concept, but only if it was in consonance with its global policies. Otherwise, Washington had no compunctions about trashing it and even undermining it to install a despot, as in Iran in 1953 when the autocratic Mohammed Reza Shah Pahlavi replaced the democratically elected government of Mohammed Mossadegh in a coup which was suspected to have been engineered by the Central Intelligence Agency (CIA).

In pursuing this cynical line, the Americans never had any dearth of excuses. Throughout the Cold War, it propped up totalitarian regimes wherever it could on the plea of countering Soviet communism. Although the US was aware that these dictatorships were the obverse side of the oppressive Communist regimes it was supposed to be fighting, American presidents like Franklin D. Roosevelt justified them by the celebrated explanation in favour of an America stooge: he may be a son of a bitch, but he is our son of a bitch.

This succinct and, to be fair, candid elucidation of American double-speak was in reference to Nicaragua's Anastasio Somoza Garcia. But it applied virtually to all the tyrants who were in the US anti-Communist camp — the Pakistani military rulers Ayub Khan, Yahya Khan and Zia-ul Haq, Syngman Rhee of South Korea, Ferdinand Marcos of the Philippines, Saddam Hussein during his war against the Iran of the Ayatollahs, the Saudi Arabian potentates, the apartheid regime of South Africa, the tin pot dictators of North Africa, including Egypt, the Latin American despots, of whom Augusto Pinochet of Chile and the Duvaliers of Haiti, ''Papa Doc'' and ''Baby Doc'' were the most notorious.

But it is not only the support for the authoritarian rulers which is noteworthy. What is even more significant is that the Americans did not confine themselves only to favouring them but at the same time castigated democracies such as India's as functioning anarchies, to quote John Kenneth Galbraith who was the US Ambassador in New Delhi in the early 1960s.

The explanation for criticizing Indian democracy while singing paeans of praise for Ayub Khan and Yahya Khan was American anger against India's pursuit of non-alignment to maintain equidistance from Washington and Moscow.

The Egyptian successful uprising against Mubarak's three-decade hard-fisted rule has disproved the self-serving assumption to America's discomfiture. For once, it is as pure an expression of popular discontent against decades of oppression as can be expected, with the middle class playing a seminal role.

It is clear that the Egyptian revolution deserves the wholehearted support of all genuine democracies. But if America continues to vacillate, it is because it prefers to deal with those who kowtow to them rather than those who have their own views, as democrats usually do.

(The writer is a political analyst)






Only last week Hafiz Mohammed Sayeed announced that Pakistan would take Kashmir from India even if it meant a nuclear war. Who should we talk to then?

As someone who believes that India has no choice but to reopen dialogue with Pakistan, I applauded when our foreign secretaries met last week and decided that it was time to begin talking to each other again. In retrospect it was not a wise decision for the Government of India to have broken off dialogue after 26/11 because it achieved nothing. Had we continued the process of dialogue we might have been more successful in forcing at least the civilian half of Pakistan's government to acknowledge that the ISI played a role in the attack on Mumbai. Even if Pakistan's civilian leaders had hesitated to acknowledge this publicly, they might have been an important source of information in sessions of private dialogue. This did not happen and in the end the fault line between civilian and military aspects of Pakistan's ruling establishment were obliterated and today more than two years after the worst terrorist act on Indian soil Pakistan remains as far from punishing the men who did it as it was in November 2008.

       Meanwhile, what we like to think of as 'civil society' in our neighbouring Islamic republic has shrunk to a frighteningly small collection of frightened people. In Davos this time I met many old Pakistani friends and, inevitably, we talked mostly about the change that has overcome their country. They were defensive. The daughter of an old friend who was in Davos as a TV reporter said that she worked for an Urdu channel and that whenever she expressed her 'liberal' analysis of a particular event she noticed that the TRPs were good. An old army man, who had once been close to General Pervez Musharraf, said that he did not think it was possible to understand what was happening in Pakistan from the safety of India. Yet another friend blamed the Americans for everything that had gone wrong. He said that if the Americans left Afghanistan he had no doubt at all that Pakistan would go back to being that happy, optimistic country that I had seen when I first took that short flight from Delhi to Lahore on a balmy evening in 1980.

       It made me sad to listen to my friends because it confirmed that the people who could make a difference and help retrieve Pakistan from the brink of Islamist hell remain in denial about what has happened to their country. I first noticed this in the summer of 2001 when I went to Lahore and Karachi to do a series of stories for Aaj Tak called ''Safarnama''. My going was a last minute decision on the part of Aroon Purie. The Pakistani government was being stingy with visas because General Musharraf was coming to Agra to talk to Prime Minister Vajpayee and they did not want any adverse advance publicity. It happened that I already had a visa to attend a friend's daughter's wedding and so it was decided that I should go.

There was no time to make hotel reservations. So I stayed in Lahore with a friend and used a Pakistani television crew because there was no time to bring an Indian one. All day I wandered about the streets of Lahore with my Pakistani crew interviewing ordinary people and everywhere I went, including in some neighbouring villages, I met people who spoke the language of radical Islam. They objected to my not covering my head, to my working with strange men and to my wearing a sleeveless kameeze. It was mostly women who berated me for not 'respecting Pakistani culture' and the rules that had been made for Muslims by the Prophet of Islam. In Lahore's most famous nihari restaurant I got into an argument with the owner, whose family were migrants from Delhi, because he said that television was forbidden in the Koran. When I asked him how this could be possible since television did not exist in the time of the Prophet, he said, ''The Koran forbids the creation of images of human beings. Only Allah has this right.'' When I came home in the evenings and told my friends the stories I had heard, they did not believe them.

       Since then whenever I have met them in Delhi or London or Davos, I have noticed their determination not to acknowledge that their country was changing beyond recognition. And, that it was changing because of Islam. All the institutions of government including the police, the army, the judiciary, the legislature and the executive are now manned by people born long after 1947. They believe that if Pakistan was created in the name of Islam, then Islam has to be the solution to all their problems. They have been bred in schools that have taught them to hate India, to think of Hindus as evil and sly, and to believe that there can never be peace between their 'land of the pure' and our land of happy infidels. The hostility against India runs deep and manifests itself in the violence of the jihadi groups that attack us on a daily basis online verbally and in more violent ways in real life. Only last week Hafiz Mohammed Sayeed, who we believe was the mastermind of 26/11, announced that Pakistan would take Kashmir from India even if it meant a nuclear war.

       So should we talking to him instead of General Kayani or President Zardari? Our Foreign Secretary has dismissed him as a 'man of no intelligence' but he is a man who wields enormous power. He started the Lashkar-e-Tayyaba, with the help of the Pakistani Army, and he now runs an Islamic charity called the Jamaat-e-Dawaa which everyone knows is just a Lashkar front. If General Kayani cannot control him from making hate speeches, is there any point in talking to General Kayani? Yes, there is but we must find out who else we should be talking to.

The stalemate since 26/11 has achieved nothing. So we have nothing to lose by dialogue. But we need first to establish the groups in Pakistan who really matter and not waste time talking to those who do not. What is even more important is that we state in the clearest terms what it is we seek to achieve from this new process of dialogue. An important achievement of this new peace process could be just to find out who really controls Pakistan today.

Tavleen Singh

(Follow Tavleen Singh on Twitter@tavleen_singh)




******************************************************************************************THE NEW YORK TIMES



The 1996 Defense of Marriage Act is indefensible — officially sanctioned discrimination against one group of Americans imposed during an election year. President Obama seems to know that, or at least he has called on Congress to repeal it. So why do his government's lawyers continue to defend the act in court?

The law, signed by President Bill Clinton, denies married same-sex couples the federal benefits granted to other married couples, including Social Security survivor payments and the right to file joint tax returns. When December's repeal of the noxious "don't ask, don't tell" law goes into effect, gay, lesbian and bisexual Americans will be able to serve openly in the military but may not be entitled to on-base housing or a spouse's burial in a national cemetery.

Attorney General Eric Holder and Justice Department lawyers have sought to distance the administration from Congress's justifications for the marriage act, one of which was to "encourage responsible procreation."

But just last month, the department appealed two rulings by Joseph Tauro, a federal trial judge in Massachusetts, who found that the law's denial of benefits to married same-sex couples could not pass constitutional muster. We did not agree with some of the judge's reasoning. He said the marriage act exceeded Congress's powers and infringed on the state's right to regulate marriage — an approach that could undermine many of the biggest federal social programs, including the new health care law.

But the department's appellate brief also recycled the flimsy argument that the law had a plausible purpose in trying to maintain the federal status quo while states debated the issue of same-sex marriage. This argument was peculiar since the law overturned the federal status quo, which was to recognize all legal marriages.

Two new lawsuits, filed in Connecticut and New York, challenging the Defense of Marriage Act now offer the president a chance to put the government on the side of justice. We urge him to seize it when the administration files its response, which is due by March 11. The executive branch's duty to defend federal laws is not inviolate. This one's affront to equal protection is egregious.

As in the Massachusetts cases, there are two crucial questions here. The overarching one, of course, is whether it is constitutional for the federal government to deny benefits to some people who are legally married under their state's laws. Much also depends on the standard of review. How should courts evaluate claims that a law discriminates against gay people?

On the merits, this should be an easy call. A law focusing on a group that has been subjected to unfair discrimination, as gay people have been, is supposed to get a hard test. It is presumed invalid unless the government proves that the officials' purpose in adopting the law advances a real and compelling interest. That sort of heightened scrutiny would challenge the administration's weak argument for upholding the act. It would also make it more difficult to sustain other forms of anti-gay discrimination, including state laws that deny same-sex couples the right to marry.

By now, such blatant discrimination should be presumed to be unconstitutional, and the Justice Department should finally say so. If conservatives in Congress want to enter the case to argue otherwise, so be it.





The new financial regulation law gave the Securities and Exchange Commission a big new job to police hedge funds, derivatives dealers and credit agencies — some of the main culprits in the financial meltdown. It authorized raising the commission's budget to $2.25 billion, over five years. Now Congress is threatening to deny the S.E.C. the necessary financing to carry out its duties.

What makes this even more absurd is that the S.E.C. doesn't cost taxpayers a dime. Its budget, like that of other financial regulators, is covered by fees assessed on Wall Street firms. While the other regulators decide their own financing needs, Congress sets the S.E.C.'s budget.

The agency's budget was due to rise $200 million this year to $1.3 billion, but hasn't because of the across-the-board freeze in discretionary spending. If House Republicans get their way and roll back spending to 2008 levels, the S.E.C. budget would fall to $906 million.

Mary Schapiro, the chairwoman of the S.E.C., warns that more budget cutting will hamstring its ability to carry out its usual duties of policing increasingly complex securities markets — let alone discharge its new responsibilities. A group of lawyers representing the financial companies regulated by the S.E.C. sent a letter to lawmakers urging them to increase the commission's budget. Otherwise, they warn, the markets will lose investors' trust. "The regulator of our capital markets is running almost on empty," they wrote.

The S.E.C. needs better technology and more employees. S.E.C. officials have pointed out that it took the commission three months to understand what happened during last May's "flash crash," because it took that long for its computers to handle all the trading data. The number of investment advisers that the S.E.C. must police has grown by half over the past decade and trading volume has doubled. In the years running up to the financial crisis, the commission's staff declined.

Ms. Schapiro planned to hire 800 employees this year to beef up enforcement and meet the agency's new duties. Those plans are on hold. The commission has also started cutting back on investigations and is considering canceling technology upgrades, including new data management systems and a new digital forensics lab.

The S.E.C.'s recent record was tarnished by its failure to uncover Bernard Madoff's gargantuan Ponzi scheme, and it was caught off guard by the collapse of Bear Stearns and Lehman Brothers. The Bush administration's lax approach to regulation should bear much of the blame. But a lack of qualified investigators was also a big problem. If the commission is to do its job right, it needs the resources to do it.





Last year, the Obama administration permanently banned oil drilling in Alaska's Bristol Bay, America's richest salmon fishery and the heart of a $2.2 billion regional fishing industry. One huge threat to this extraordinary ecosystem remains: a proposed gold and copper operation known as the Pebble Mine. If built, it would affect a huge area of clear-running headwater streams and wetlands that feed the bay.

Responding to urgent requests from nine native tribes that depend on the headwaters for subsistence, the federal Environmental Protection Agency has now announced that it will assess the risks to the bay from mining and commercial projects in general.

This is very good news. The agency obviously cannot prejudge the study's outcome, but its announcement pointedly called attention to Bristol Bay's "extraordinary importance" as a salmon fishery and source of food and income for local residents. It also called attention to its obligation under the federal Clean Water Act to block any project that would have an "unacceptable adverse effect" on water quality and wildlife.

Anglo American, the London-based multinational powerhouse behind the project, says it can extract the minerals safely. But historically the mining industry has done a sloppy job of protecting the environment. Mining residues, like sulfide-laced rock, are toxic. No matter how hard the company tries to sequester them — it proposes to build a 740-foot-high dam to contain the waste — an earthquake or other disturbance can jar them loose.

The people of Alaska came close to blocking the project themselves in a 2008 referendum. Three former governors, including two Republicans, and Senator Ted Stevens spoke out against the mine. Industry, however, spent $12 million on advertising about the mine's economic benefits; that, plus a last-minute pro-mining push by Gov. Sarah Palin and her administration, turned the tide in industry's favor.

The E.P.A. is right to do this study. We are certain it will find that the mine presents unacceptable risks and should not be allowed to proceed.








Berkeley, Calif.

The party space wasn't perfect. There were no wandering dogs or children, no grass or worn linoleum underfoot. Nobody had pushed benches to the walls to make room for dancing. Nobody was shoeless, shirtless or visibly intoxicated, though the man of honor did seem drunk with delight.

It should have been a backyard in the bayou or barrio. But a cozy theater was still a fine place to celebrate the last 50 years of Chris Strachwitz's life.

Mr. Strachwitz is the founder of Arhoolie Records, a little label in El Cerrito, just north of Berkeley, dedicated to America's roots: blues, bluegrass, Mexican, Tex-Mex, country, Cajun, zydeco, Hawaiian, gospel. If it was homegrown and honest Mr. Strachwitz found it, captured it and shared it.

Mr. Strachwitz, 79, left Germany at 13 and has been discovering America ever since. Arhoolie's 50th anniversary celebration this month went three nights, each one a tribute to his life's work, but also to the geniuses who made America an immigration nation.

The lineup told the story:

There was a Mexican-American from San Antonio, singing in Spanish with a squeezebox, an instrument brought by Germans and Poles to the Rio Grande borderlands and adapted by Mexicans there with wild abandon. And a white guitarist from Santa Monica who grew up idolizing old black bluesmen, playing a song about bagels, and also "Wooly Bully," accompanied by a thumping sousaphone and young Mexican-American women stomping out the beat on a wooden box.

A Mexican-roots band played in the son jarocho style, to the clacking rhythm of a quijada, a donkey's jawbone. A bluegrass musician channeled Bill Monroe. A Cajun guitarist did a riff on Hawaiian slack-key. An all-women's string band led the folkie-dokie singalong "Goodnight Irene," and ended everything with "I Bid You Goodnight," a lullaby from the guitarist Joseph Spence, of the Bahamas.

That was just the first night. Still to come were the jazz combo, the New Orleans brass band, the blues chanteuse and the long unanticipated reunion of The Goodtime Washboard 3.

Each night had a melancholy undercurrent. Roots music, uprooted, loses its essence. American regionalism has died out as strip malls have buried farms, ranches and dance halls. The fear that the people's music is doomed to end life as a PBS special, looped over and over, was the joke behind "A Mighty Wind" — a good one, because it's mostly true.

But not completely. Barbara Dane, a Bay Area blues singer since the early '60s, still has pipes of polished brass. Ry Cooder sang a new song about evil bankers and combined two old ones — "Vigilante Man" by Woody Guthrie and "Across the Borderline" — adding spy planes and Dodge Ram trucks, for a fresh commentary on today's immigration lunacy.

Mr. Strachwitz, who was due for hip replacement the minute the anniversary folderol was over, beamed from the edge of the stage, dancing, waving his cane and giving out hugs. He doesn't record anymore, but he's busy: he has the largest collection of Mexican-American border recordings anywhere, and is digitizing them all. The concerts were a fund-raiser to finish the project.

And there's still tomorrow to look to, thanks, as always, to new immigrants. It was the Mexicans — the people of the future, Mr. Cooder calls them — who supplied the most potent doses of immediacy and urgency. The youngest act by decades, Los Cenzontles, is based in an arts center in a strip mall in San Pablo, a gritty Bay Area town troubled by gangs and poverty but also energized by newcomers: Filipinos, Southeast Asians, Chinese.

The group's founder, Eugene Rodriguez, invited the audience to come up from Berkeley to visit, to discover an America still being reborn.




FROM 9/11 TO 2/11



Perhaps the most effective antidote to 9/11 will prove to be 2/11, the day Hosni Mubarak conceded the game was up with his 30-year-old dictatorship and left town under military escort for the beach.

We've tried invasions of Muslim lands. We've tried imposing new systems of government on them. We've tried wars on terror. We've tried spending billions of dollars. What we haven't tried is tackling what's been rotten in the Arab world by helping a homegrown, bottom-up movement for change turn a U.S.-backed police state into a stable democracy.

This is the critical opportunity Egypt now presents. Islamist radicalism has thrived on the American double standards evident in strong support for the likes of Mubarak's regime. It has prospered from the very brutal repression that was supposedly essential to stop the jihadists. And it has benefited from the reduction of tens of millions of Arab citizens to mere objects, shorn of dignity, and so more inclined to seek meaning in absolutist movements of violence.

If Westernized Egyptians and the Muslim Brotherhood can coexist in Egypt's nascent Second Republic, and if a long-subjugated Arab people can show that it's an actor of history rather than its impotent pawn, the likelihood of another Mohamed Atta walking the streets of Cairo will recede.

In 18 riveting days, Egypt has become a key to the unresolved 9/11 conundrum, the one President Obama promised to tackle by building bridges to the Muslim world, before Afghanistan diverted him.

"If we get Egypt right, it could be the best medicine to get rid of radicalism," Mohamed ElBaradei, the Nobel Prize-winning opposition figure, told me.

In the Middle East you expect the worst. But having watched Egypt's extraordinary civic achievement in building the coalition that ousted Mubarak, having watched Tahrir Square become cooperation central, and having watched the professionalism of the Egyptian army, I'm convinced the country has what it takes to build a decent, representative society — one that gives the lie to all the stereotypes associated with that dismissive shorthand "The Arab Street."

In fact, post-Tahrir, let's retire that phrase.

Speaking of streets, I watched them get cleaned the morning after the revolution. All the sweeping, dusting and scrubbing tempted me to suggest that there was no need to get carried away and try to turn the glorious metropolis of dust, Cairo, into Zurich. But Marwa Kamal put me right.

Kamal, 26, looked proud in her purple hijab. She was next to a sign saying, "Sorry for disturbance, we build Egypt." I asked why she swept. "All the dirt's in the past," she said. "We want to clear out the old and start clean."

A retired chemist, Mahmoud Abdullah, stepped in: "This is a very precious generation," he told me, pointing at her. "They did what we failed to do."

Right now Egypt has no president, no vice president, no constitution, no parliament and no significant police presence on the streets. But it has the meeting of generations between these two Egyptians; and it has a new sense of nationhood forged through countless other barrier-breaking discoveries of 18 shared revolutionary days.

Perhaps it was a good thing that, cocooned with his yes men, Mubarak proved so stubborn, locked in the prison of his formal Arabic and his hubris while language and nation unloosed themselves. I think it was over once the army declined to shoot. But by lingering, Mubarak gave Egyptians time to get to know each other.

Revolutions, like wars, have their interludes of boredom. They were filled with chat. And what did Egyptians find? Here's one scene: Marwa Kassem, 33, Westernized, living in Geneva, talking to bearded Magdy Ashour of Muslim Brotherhood sympathies. She'd rushed to Cairo after the uprising began. He'd joined the protests after a friend was killed. If they'd passed each other in the street a month ago, each would have pulled back from the other, divided by fear.

He tells her he was arrested at regular intervals. How often? Sometimes twice a month. And? Ashour's 14-year-old son is watching. He asks him to leave, saying "I want to show him freedom, not my cowardice."

A frisson of tension stirs. Ashour stands up. They stripped me naked, he says, blindfolded me. He links his hands behind his back: this is how Mubarak's security goons shackled him. They hung me from a hook on the wall, he says. Then came the electric shocks: to his toes, nipples, genitals.

There are tears in his eyes now. There are tears in Kassem's, too. He pulls up his pants to his knee, revealing a terrible black scar on his calf. She cannot look. Why this treatment? "They wanted to know if I knew Osama bin Laden."

What they both want now, this secular woman and this religious man, these two Egyptians, is a state of laws and rights.

Overcome 9/11 through 2/11: the road to reconciliation leads not through Baghdad or Kabul but through Tahrir.

Ross Douthat is off today.






On Friday, House Republicans unveiled their proposal for immediate cuts in federal spending. Uncharacteristically, they failed to accompany the release with a catchy slogan. So I'd like to propose one: Eat the Future.

I'll explain in a minute. First, let's talk about the dilemma the G.O.P. faces.

Republican leaders like to claim that the midterms gave them a mandate for sharp cuts in government spending. Some of us believe that the elections were less about spending than they were about persistent high unemployment, but whatever. The key point to understand is that while many voters say that they want lower spending, press the issue a bit further and it turns out that they only want to cut spending on other people.

That's the lesson from a new survey by the Pew Research Center, in which Americans were asked whether they favored higher or lower spending in a variety of areas. It turns out that they want more, not less, spending on most things, including education and Medicare. They're evenly divided about spending on aid to the unemployed and — surprise — defense.

The only thing they clearly want to cut is foreign aid, which most Americans believe, wrongly, accounts for a large share of the federal budget.

Pew also asked people how they would like to see states close their budget deficits. Do they favor cuts in either education or health care, the main expenses states face? No. Do they favor tax increases? No. The only deficit-reduction measure with significant support was cuts in public-employee pensions — and even there the public was evenly divided.

The moral is clear. Republicans don't have a mandate to cut spending; they have a mandate to repeal the laws of arithmetic.

How can voters be so ill informed? In their defense, bear in mind that they have jobs, children to raise, parents to take care of. They don't have the time or the incentive to study the federal budget, let alone state budgets (which are by and large incomprehensible). So they rely on what they hear from seemingly authoritative figures.

And what they've been hearing ever since Ronald Reagan is that their hard-earned dollars are going to waste, paying for vast armies of useless bureaucrats (payroll is only 5 percent of federal spending) and welfare queens driving Cadillacs. How can we expect voters to appreciate fiscal reality when politicians consistently misrepresent that reality?

Which brings me back to the Republican dilemma. The new House majority promised to deliver $100 billion in spending cuts — and its members face the prospect of Tea Party primary challenges if they fail to deliver big cuts. Yet the public opposes cuts in programs it likes — and it likes almost everything. What's a politician to do?

The answer, once you think about it, is obvious: sacrifice the future. Focus the cuts on programs whose benefits aren't immediate; basically, eat America's seed corn. There will be a huge price to pay, eventually — but for now, you can keep the base happy.

If you didn't understand that logic, you might be puzzled by many items in the House G.O.P. proposal. Why cut a billion dollars from a highly successful program that provides supplemental nutrition to pregnant mothers, infants, and young children? Why cut $648 million from nuclear nonproliferation activities? (One terrorist nuke, assembled from stray ex-Soviet fissile material, can ruin your whole day.) Why cut $578 million from the I.R.S. enforcement budget? (Letting tax cheats run wild doesn't exactly serve the cause of deficit reduction.)

Once you understand the imperatives Republicans face, however, it all makes sense. By slashing future-oriented programs, they can deliver the instant spending cuts Tea Partiers demand, without imposing too much immediate pain on voters. And as for the future costs — a population damaged by childhood malnutrition, an increased chance of terrorist attacks, a revenue system undermined by widespread tax evasion — well, tomorrow is another day.

In a better world, politicians would talk to voters as if they were adults. They would explain that discretionary spending has little to do with the long-run imbalance between spending and revenues. They would then explain that solving that long-run problem requires two main things: reining in health-care costs and, realistically, increasing taxes to pay for the programs that Americans really want.

But Republican leaders can't do that, of course: they refuse to admit that taxes ever need to rise, and they spent much of the last two years screaming "death panels!" in response to even the most modest, sensible efforts to ensure that Medicare dollars are well spent.

And so they had to produce something like Friday's proposal, a plan that would save remarkably little money but would do a remarkably large amount of harm.






THE stock market has been big news in recent days. Last week's report that Deutsche Börse, a giant German exchange, intends to buy the New York Stock Exchange, creating a company worth some $24 billion, arrived shortly after the Dow broke the 12,000-point barrier for the first time since before the financial crisis.

These developments drew headlines because they seemed to exemplify significant trends in the American economy. But look at America's stock exchanges more closely, and there's less to them than meets the eye. In truth, the stock market is becoming increasingly irrelevant — a trend that threatens the core principles of American capitalism.

These days a healthy stock market doesn't mean a healthy economy, as a glance at the high unemployment rate or the low labor-market participation rate will show. The Tea Party is right about one thing: What's good for Wall Street isn't necessarily good for Main Street. And the Germans aren't buying the New York Stock Exchange for its commoditized, highly competitive and ultra-low-margin stock business, but rather for its lucrative derivatives operations.

The stock market is still huge, of course: the companies listed on American exchanges are valued at more than $17 trillion, and they're not going to disappear in the foreseeable future.

But the glory days of publicly traded companies dominating the American business landscape may be over. The number of companies listed on the major domestic exchanges peaked in 1997 at more than 7,000, and it has been falling ever since. It's now down to about 4,000 companies, and given its steep downward trend will surely continue to shrink.

Nor are the remaining stocks an obvious proxy for the health of the American economy. Innovative American companies like Apple and Google may be worth hundreds of billions of dollars, but most of them don't pay dividends or employ many Americans, and their shares are essentially speculative investments for people making a bet on how we're going to live in the future.

Put another way, as the number of initial public offerings steadily declines, the stock market is becoming little more than a place for speculators and algorithms to compete over who can trade his way to the most money.

What the market is not doing so well is its core public function: allocating capital efficiently. Apple, for instance, is hugely profitable and sits on an enormous pile of cash; it is thus very unlikely to use its highly rated stock to pay for any acquisitions. It hasn't used the stock market to raise money since 1981, and there's a good bet it never will again.

Meanwhile, the companies in which people most want to invest, technology stars like Facebook and Twitter, are managing to avoid the public markets entirely by raising hundreds of millions or even billions of dollars privately. You and I can't buy into these companies; only very select institutions and well-connected individuals can. And companies prefer it that way.

A private company's stock isn't affected by the unpredictable waves of the stock market as a whole. Its chief executive can concentrate on running the company rather than answering endless questions from investors, analysts and the press.

There's much less pressure to meet quarterly earnings targets. When the stock does trade, the deals can be negotiated quietly, in private markets, rather than fall victim to short-term speculation from the high-frequency traders who populate public markets. And companies love how private markets allow them to avoid much of the regulatory burden of being public.

That burden comes largely from the Securities and Exchange Commission, which was created in the wake of the 1929 stock-market crash to protect small investors. But if the move to private markets continues, small investors aren't going to need much protection any more: they'll be able to invest in only a relative handful of companies anyway.

Only the biggest and oldest companies are happy being listed on public markets today. As a result, the stock market as a whole increasingly fails to reflect the vibrancy and heterogeneity of the broader economy. To invest in younger, smaller companies, you increasingly need to be a member of the ultra-rich elite.

At risk, then, is the shareholder democracy that America forged, slowly, over the past 50 years. Civilians, rather than plutocrats, controlled corporate America, and that relationship improved standards of living and usually kept the worst of corporate abuses in check. With America Inc. owned by its citizens, the success of American business translated into large gains in the stock portfolios of anybody who put his savings in the market over most of the postwar period.

Today, however, stock markets, once the bedrock of American capitalism, are slowly becoming a noisy sideshow that churns out increasingly meager returns. The show still gets lots of attention, but the real business of the global economy is inexorably leaving the stock market — and the vast majority of us — behind.

Felix Salmon is the finance blogger at Reuters.







The Free Press editorial page for years has been among the judges for the Media Research Center's annual compilation of the most blatant liberal bias in the news media. The recently announced "winners" of those dubious "honors" confirm again that the American people have good reason to believe there is a pervasive liberal bent in the mainstream media.


Here are a few of the quotes the Media Research Center compiled in 2010 (with the rest available on its website,


* After a guest pointed out that radical Muslims kill people in expectation of rewards in heaven, Tavis Smiley, a host on a PBS show, remarked, "But Christians do that every single day in this country." He cited the massacre at Columbine High School in Colorado — though the killers' motives were never thought to be related to Christianity.


* New York Times columnist Frank Rich likened opponents of ObamaCare socialized medicine to Nazis after some Democrat congressmen alleged they were subjected to racial slurs around the time of the ObamaCare vote. But no one produced evidence that the slurs took place, which is highly unusual since the incident supposedly happened outside the Capitol, with lots of news media and hundreds of people nearby. Another Democrat, Rep. Heath Shuler of North Carolina, specifically denied hearing racial slurs.


* After Democrats had huge losses in the 2010 midterms, CNN and MSNBC contributor Bill Press used a vulgarity to refer to voters, and called them "a bunch of idiots."


* In one of the strangest remarks documented by the MRC, Terry Moran of ABC News declared, "The stimulus worked" and labeled it one of the Obama administration's "major accomplishments." In fact, the $862 billion stimulus massively added to our national debt, and the money generally went toward government jobs rather than the private-sector jobs that the president had said the money would create. Unemployment was not supposed to exceed 8 percent if the stimulus passed, but it soon rose to nearly 10 percent and is still a painful 9 percent today.


* MSNBC's Keith Olbermann said the grass-roots tea party movement supports "hanging union organizers" and wants to "end this democracy." In reality, it's a group of patriotic, peaceful Americans who are alarmed by the threat to our economy of back-breaking debt and limitless government spending, and by the erosion of our liberties through big new programs such as ObamaCare.


* Former New York Times reporter Linda Greenhouse called Arizona a "police state" after it enacted a sensible law to stem the costly tide of illegal aliens into the state.


* Highlighting the media's hostility toward former Alaska Gov. Sarah Palin, MSNBC's Chris Matthews suggested she is illiterate. "I'm dead serious about this," he said. "Have you ever seen her reading words on a piece of paper?"


* Sarah Spitz, who often contributes pieces to National Public Radio, said that if she saw conservative radio host Rush Limbaugh dying, she would "laugh loudly like a maniac and watch his eyes bug out."


It is naive to think that journalists don't have personal views on politics. But at least among those who claim to present the news impartially, it is appalling that many seem comfortable promoting a political agenda.







Not long ago, there was lots of panicky talk about Wal-Mart gaining "too big" a share of the retail market and destroying practically all of its competitors. That led, in some cases, to efforts to block construction of the stores. But nowadays you don't hear so much about the "dangers" of Wal-Mart. Why? Because fears of near-total dominance by Wal-Mart just didn't pan out.


The Associated Press pointed out as much in a recent article: "Three years ago, Wal-Mart ruled for convenience, selection and price. But today it is losing customers and revenue, and smarting from decisions that backfired."


Though Wal-Mart is certainly not on its deathbed, other retailers — from dollar stores to larger facilities — have pulled away many customers with convenience or competitive prices. In other words, consumers — through their free-market decisions about where to spend their money — are deciding for themselves how "big" Wal-Mart should be.


Author and scholar Thomas Sowell noted a similar scare decades ago about the huge A&P grocery chain. But, he wrote, A&P shrank over time to "a shadow of its former self" — again because of consumers' choices.


The free market is amazingly self-regulating and productive, if only government resists the temptation to substitute its judgment for the decisions of the American people.






Those of us who were raised in stable, loving, two-parent families should be grateful. But many children today are raised by single mothers, with minimal influence by their fathers. Others are in families burdened by drug and alcohol abuse.


Fortunately, many churches, charities and individuals of good will reach out to youths from troubled backgrounds to put them on the path to a good life. We noticed an unusual but productive example of that in a recent issue of the Times Free Press. It's a group called the Westside Boxing Club, and it gives youngsters a wholesome way to work off excess energy and the frustrations they feel — and to learn discipline that will benefit them all through their lives.


The club, in a converted firehouse engine bay on Central Avenue in Chattanooga, has coaches who train many youngsters and a few older folks in boxing and give them a good workout — for free. Amazingly, the club can claim 25 national boxing championships, five world championships and a bronze medal from 2010's Junior Olympics! That's quite a record for a group that has existed only since 1999.


But head coach Andy Smith told the newspaper that the main goal is to help children.


"The most important thing is they take the things they learn in this gym and use it in their everyday lives," he said. "Very few of them will be national champions or world champions, and even a smaller few of them will ever be Olympic gold medalists, but all of them are gonna be citizens in our communities. All of them are gonna have jobs and families, so we want to teach them all the things they learn here to use in their life."


He added, "If they do the right thing here and in their own personal life, then success is gonna follow. That's just life in general."


It certainly is, and Chattanooga is fortunate to have people who work to instill that lesson in our youth.







The U.N. alarmingly claimed in 2007 that certain Himalayan glaciers would melt away by 2035 — presumed victims of "global warming." It later retracted that absurd claim.


Now a study by scientists at the University of California at Santa Barbara and the University of Potsdam, Germany, says most glaciers in the Karakoram range of the Himalayas are stable or getting bigger. It seems the mighty Himalayas shed debris on the glaciers, insulating them and preventing melting.


While glaciers in other areas of the Himalayas have shrunk, "Our study shows that there is no uniform response of Himalayan glaciers to climate change," the authors wrote in the journal Nature Geoscience.


That's something to remember when environmental activists insist that the science of "global warming" is "settled."









In recent weeks you have broken many a stereotype and successfully challenged the expectations of experts everywhere. Further, you so courageously broke the backbone of a dictatorship, leaving the world in awe. Accordingly, we at the Hürriyet Daily News & Economic Review decided in our news meeting yesterday to break a few rules of our own. Today we dedicate our daily editorial space to you. All hundreds of thousands of you.

From our offices in Istanbul and Ankara, we followed your every step, cheering you on with hope for your aspirations while often fearing the worst as we sat riveted before our computer and television screens.

In short: You did it. And your revolution is all the more meaningful in that you did so without anyone's help, without violence and all in the face of daunting odds. The American and Europeans essentially sat on their hands, frozen in the face of their own atrophied attitudes and reflexes. Our own leadership in Turkey waffled as well, leaving no profiles in courage for us to share. So a few thoughts from reporters and editors gathered around a conference table Sunday morning:

- Your embrace of non-violence, discipline and mastery of technology is an inspiration to us. On Thursday night, many of us went to bed fearful of what we would see the following morning in the wake of Hosni Mubarak's intransigence. You stayed the course, filling us with pride.

- One editor who spent much of the protest's duration following you on Twitter had this to say: "You not only overthrew Mubarak, you overthrew the tired journalism of Fox and CNN. The Western press was constantly seeking the 'Islamic boogeyman.' He never appeared."

- In a similar vein, one reporter remarked on the ecumenicism of your work. The priest and the iman at Tahrir Square, the solidarity with the movement of the Copts, the Muslim Brotherhood itself telling Tehran "no thanks" to its call to make this an "Islamic Revolution."

- While we will join any call for collaboration in the future, please ignore the nonsense you'll read in the Western media about the "Turkish model." We seek to be nobody's model, example or reference point. Our own struggle for democracy is incomplete. We can learn as much if not more from you as you can learn from us.

- It is all, as one of you told an agency, "not the end, but just the very beginning." The construction of new institutions will take years, if not decades. Questions and challenges too many to ponder remain. But as we bear witness to your present, we are confident of your future.

- Lastly, a bit of advice from one in our midst whose family hails from North Africa and knows your politics well: "Keep your guard up. Hussein Tantawi is no angel, neither are the rest of those at least nominally in control today."

But you knew that, along with all else we write here today from distant Istanbul. Stay safe. Stay brave.

The views expressed in the Straight represent the consensus opinion of the Hürriyet Daily News and its editorial board members.






A critical result of the crisis in Egypt for Turkey is that Ankara, for the first time, has stepped in to demand democracy in a political crisis breaking out in an Arab country.

I might say, with this, that we are about to see a new doctrine in Turkey's Middle Eastern politics.

Democracy message at the Islamic Conference

In fact, it is not the first time that Turkey has mentioned democracy in front of Islamic countries. Representatives of the Justice and Democracy Party, or AKP, government have been, for some time, referring to some ideals such as democracy and law in various forums organized by Islamic countries. Then-Foreign Minister Abdullah Gül made such a call during May 28, 2003, Islamic Conference in Tehran.

Gül, in his speech, referred to freedom, democracy, good governance, transparency, accountability and gender equality while stressing the fact that the Muslim world needed a new vision based on such terms. What is different in the latest development is that democracy, this time during a hot crisis, is being referred to as a concrete demand to change the end result, rather than a general principle.

A speech by Prime Minister Recep Tayyip Erdoğan during a parliamentary group meeting on Feb. 1, 2011, is also a critical reference in the days to come as far as Turkey's position is concerned.

Demand for democracy in the entire Islamic World

Erdoğan's remarks, "If we demand democracy, prosperity, justice and freedom for ourselves, we want them for our brother peoples as well," are in fact a way of asking for democracy not only in Egypt but also for the entire Islamic world.

In the very same speech, Erdoğan's call to Egyptians to support change toward top-level freedoms and democracy and other comments – "This is your democratic right. Democracy is not a charity but a right" – reflects Mr. Prime Minister's genuine demand for a real democracy of the highest standards, rather than asking for merely a sham democracy in the Middle East; at least verbally…

In the area of foreign policy, principles and moral responsibilities contradict national interests and the requirements of Realpolitik. The general principle "not to intervene in the internal politics of a country" often urges others to ignore the practices of authoritarian regimes.

In the Egyptian crisis, however, Turkey's attitude is not seen as though its principle and moral responsibilities are outweighing the general principle "not to intervene in the internal politics of others;" the adoption of such a change in policy doesn't devalue Turkey's stance on the Egyptian crisis, even though it came after Washington decided to keep Egyptian President Hosni Mubarak and after it's been understood that Mubarak can no longer remain in his seat.

Will Erdoğan be able to act consistently?

Elevating the level of principles in foreign politics has become a consistency test for Turkey and for Erdoğan in particular. In other words, Turkey from now on is taking side with peoples who demand change and democracy in the Middle East, not with oppressive regimes.

In every possible regional crisis, eyes from now on will be on Ankara to see whether or not it fulfills its obligations. For instance, will Ankara be able to adopt a bold attitude in favor of democracy with new demands for change likely to emerge in Iran in the near future?

Or will Turkey side with the oppressive regime as was the case when Erdoğan was among the first to congratulate Mahmoud Ahmadinejad's presidency following an unjust election in 2009?

We'll see this in the next period…

If consistency is the matter, it is the subject of another article to talk about the consequences of moving away from democracy, such as with the ill treatment of protestors and the suppression of press freedom in Turkey.








Technically, it would not be Saint Valentine's Day massacre, unless you have decided to inhabit the uninhabited Baker and Howland islands.

Other than these two atolls fourteen hours behind Turkey, the Central Bank of Turkey's, or CBT's, rate decision will come the day after Saint Valentine's Day. Moreover, the lira's massacre would have materialized only if the CBT were to cut the policy rate again and signal of more cuts to come.

The Bank is unlikely to follow that route, as the conditions that justified its foray into the unconventional policy mix of cutting the policy rate and increasing required reserve ratios have changed significantly. For one thing, the "wall of money" into emerging markets that started with the Fed's Quantitative Easing II, and prompted the CBT to act, is slowing down sharply.

This means that capital inflows are likely to become selective, and I would expect to see some differentiation between countries with current account deficits and surpluses. The lira, the currency of the archetypical deficit country, is likely to feel some pressure.

Besides, the Bank has been quite successful in weakening the currency, although I am not sure it is the result of its policies, or what I deem as constructive ambiguity, i.e. confusing markets on the direction of monetary policy. The lira has depreciated around 10 percent against the dollar-euro basket since November. To try to weaken it more by cutting the policy rate could lead to a sharp correction.

Inflation does not paint a rosy picture, either, even though it is at a historical low. Even without reversing base effects, the inflation outlook is quite challenging, thanks to the possibility of pass-through from import and producer prices as well as the upward trend in global food and energy prices. In addition, demand pressures are building up, as the latest industrial production figures confirm.

Perennial optimists still believe that the government will support the CBT with tight fiscal policy. The January budget, to be released on the same day as the rate decision, could give them false hopes, if last week's cash budget is any guide. But counting on fiscal policy before the June elections, especially given that the ruling AKP is aiming for constitutional majority, would be unrealistic.

Adding all this together, you realize that it would make sense for the Bank to put a stop to the rate cuts. However, despite some claims otherwise, the full effect of the policies on credit has yet to be felt. For one thing, the Bank's latest reserve hikes won't be in effect until Friday. Besides, when taken in conjunction with the rate cuts, the net effect of monetary policy so far is only a slight tightening.

Without additional support from the banking regulator or the government, reserve hikes of at least a couple of more percent would be needed for loans to decrease meaningfully, especially if the Bank would continue with providing liquidity through auctions and unsterilized foreign currency interventions. The CBT would then probably start hiking rates during the second half of the year.

Therefore, without ruling out some more weakness in the short-term, the lira's prospects look good over the longer run. Interestingly enough, markets have not fully priced in this policy shift at the moment. Longer-maturity dollar-lira bets look especially attractive, and several, like dual currency deposits, are accessible to the average investor. In fact, I will have got some as you read these lines.

But that doesn't mean you should, too: Doing exactly the opposite of what economists are saying, especially of those with little market-savvy like your friendly neighborhood economist, is often a great strategy.

Emre Deliveli is a freelance consultant and columnist for Hurriyet Daily News & Economic Review and Forbes as well as a contributor to Roubini Global Economics. Read his economics blog at






The popular uprising in Tunisia and the fall of Hosni Mubarak's authoritarian regime in Egypt has resurrected an old but important debate revolving around the question of whether Turkey could become a model for Muslim countries.

 To my pieces on the recent developments in both countries, for instance, I have received a couple of inspiring comments from my Muslim readers maintaining that what both Egypt and Tunisia need is a political party similar to that of Justice and Development Party, or AKP.

This perspective seemed to be supported in the near past by the newly emerging notion of "a leading state for Islam." Such arguments were particularly fashionable among some intellectual circles in the U.S. Paul Kennedy, for instance, the mastermind behind the famous theory of the clash of civilizations, pointed out "the Muslim option" in a lecture given to a Turkish audience in Istanbul a couple of years ago.

Such assumptions need to be approached carefully since every historical phenomenon must have its foundations in the conditions that preceded it and its results, therefore, cannot be completely unrelated to what went on before. Hence, any generalization with regard to the dynamics of the Muslim world will definitely be misleading. At present, the Muslim world consists of seven differing as well as competing subsystems: the Far East, Central Asia and the Caucasus, Turkey and the Balkans, Shiite Middle East, Sunni Middle East, North Africa and the diaspora in the Western world.

Particularly in the Middle East, which constitutes the center of the Islamic realm, there is an urgent need for change. The center, in turn, not only resents change but also attempts to influence and transform the periphery. It is the Middle East, whether Sunni or Shiite, that seeks to impose its own version of supremacy. This version is based on the assumption that Islam has been more concerned with religious duties rather than civic rights. Yet this understanding is in total contrast to what the AKP is trying to do in Turkey.

Here arises an important question: What might be the real drive behind Turkey's fairly moderate understanding of religion? Is it the outcome of Turkey's Kemalist secular system, which is so much criticized both externally as well as domestically? Or the unique character of Turkish Islam, the roots of which go back to our pre-Islamic past?

There are several other factors and it is a combination of all, of course. Elaborating them in detail is beyond the scope of this article. One factor, nevertheless, is of vital importance and needs to be emphasized over and over again: The Turkish Muslims, first and foremost the AKP, have learned how to play within the rules of the game. That has not only forced them to respect democracy but also to cling to it. It is precisely for this reason that the AKP, despite its obvious deficits in that regard, has become the pioneering force of reform in Turkey. Actually, this is a trait that needs to be praised and encouraged rather than to be endlessly questioned or criticized.

Having said that, if there is anything related to the AKP that needs to be presented as a model to the rest of the Muslim world, it is how to play within the rules of the game. Yet those who vividly oppose the AKP in Turkey, or the Muslim conservatives or radicals in the Muslim world, must learn how to play within the rules of the game as well. Assumptions similar to those Mubarak reportedly made on the phone to Israeli Benjamin Ben-Eliezer, that the result of this process will be "extremism and radical Islam," are worthless. They must be approached very cautiously.

Otherwise, each development or election result in the near future will disappoint them more!






I do not remember who used this metaphor recently but it fits perfectly. He or she had said that Turkish society (and presumably its political life) is like moving on two opposing axles, one turning in one direction while the other one is turning in exactly the opposite direction.

I thought of that brilliant concept when I was trying to interpret side-by-side two very important developments that are taking place at the same time and are closely related to Turkey. One is the "revolution" in Egypt and the other one is the "rebellion" in northern Cyprus. For the first one, the Turkish prime minister followed a very clear line. When things started to go wrong for the aging Pharaoh and the American administration chose to sacrifice him, Recep Tayyip Erdoğan was the first leader from the Muslim world – although not himself an Arab – who advised Mubarak to listen to the "voice of the people" and retire gracefully. It was a dramatic almost philosophical speech with moving overtones about the accountability of one's life and the unavoidable fate of death. That speech on Feb. 1, which, after all came not only from a fellow Muslim leader but also from a democratically elected leader of a functioning secular republic, sent an additional important message. That given the trend of events in the shaky region of the Middle East, what the global policy makers were coming to agree was that the most viable political solution for the region would be a "Turkish model", i.e. a type of administration which would be based on a majority parliamentary system albeit with a high electoral measure to keep minor opposing voices out of the parliament. A system which would keep its religious roots on a "mild" Islam but look at the West for business and trade and with which the West – but also the East – would be happy to cooperate. The dramatic "appeal" of the Turkish prime minister to the people of Egypt was meant to elevate him in the eyes of the rebelled Egyptians and ultimately in the eyes of all the suppressed members of Muslim societies suffering under corrupt autocrats supported till now by the West, as a modern Muslim leader who believes in democracy and accepts the will of the people. And as if to confirm about where things would go, Erdoğan sent another strong message last Friday after the final exit of Mubarak and the passing over of power to Egypt's Supreme Council of the Armed Forces. He asked for "a new administration, to be formed through fair and free elections, in the shortest possible time and a transition to a constitutional democracy, shaped by the will of the Egyptian people." After the fall of Ben Ali and Mubarak – likely to be followed by other Middle Eastern autocrats – this Turkish alternative model expressed by this democratically elected popular leader seems to be fast gaining ground among a perplexed West that is mainly caring to continue keeping its interests in the region safe. 

However, there is the counter-turning axle, too. And it made itself apparent almost simultaneously in a similar dramatic way. In his incisive commentary published in this newspaper under the title "Tahrir Square? Don't overlook Inönü Square in Nicosia," Cengiz Aktar talks about the dangerously worsening situation in Northern Cyprus after the protests on Jan, 28 of tens of thousands of Turkish Cypriots against Ankara's new austerity imposed program on the north. If the Egyptian people, who started gathering in Tahrir Square initially to protest against their low income, unemployment and rising food prices, deserved for their voice to be heard and their feelings expressed, then one could only see the case of the Turkish Cypriots as an expected domino-effect action. After all the official political rhetoric used so far by Ankara had been that whatever they have done from the 1974 military operation to the Annan Plan was to defend the Turkish Cypriot people. However, as it turned out, Turkish Cypriots and Egyptians are not to be seen as similar social groups hence they did not get the same support by the Turkish prime minister. While the Egyptians were right to rebel, the local Turkish Cypriots were ungrateful to the people who feed them, i.e. the motherland Turkey. In fact there is a serious difference. If Egyptian rebels were the majority voice of the new Egypt, the indigenous Turkish Cypriots have now found themselves to be in a position of a minority of around 80,000, of whom 42,846 held EU passports by 2009 and 60,108 held identity cards issued by the Cyprus Republic. Against a total population of 200,000 or 400,000 according to various calculations and a strong presence of the Turkish army, it is not strange that the locals from the north would feel hostage to a policy of "the motherland" which also sees them more ready to look to the "south" or even become tools of it. 

In his recent interview to the Turkish channel NTV, the Turkish Cypriot leader Derviş Eroglu – himself an immigrant from Turkey – tried to keep equal distances from Ankara and from his people and described how much the Turkish Cypriots were "hurt" by the statements made against them by Ankara and warned of "unforeseen social explosion" lying ahead.

The Cyprus issue has been a complex problem for Turkey, Greece and Cyprus for very long time. It has multiple parameters and every one of these countries stumbles upon it with their every move. During the last few weeks, a new parameter was added, which seems to be more Ankara's problem than anybody else's. And while Ankara will require some new creative policies to deal with the known problems with Brussels regarding the Cyprus issue per se, the consequence of the recent tough talking by Erdoğan and the Justice and Development Party, or AKP, government towards the Turkish Cypriots may also become a validity test for the proclamations of democracy by the AKP administration. 





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