The Billion Dollar Question

Thomas Friedman asks the 110 Billion $ question:

When one looks across the Arab world today at the stunning spontaneous democracy uprisings, it is impossible to not ask: What are we doing spending $110 billion this year supporting corrupt and unpopular regimes in Afghanistan and Pakistan that are almost identical to the governments we’re applauding the Arab people for overthrowing?

Urging for a pullout from the Af-Pak quagmire, Friedman suggests a use for the 110 Billion USD:

The truth is we can’t do much to consolidate the democracy movements in Egypt and Tunisia. They’ll have to make it work themselves. But we could do what we can, which is divert some of the $110 billion we’re lavishing on the Afghan regime and the Pakistani Army and use it for debt relief, schools and scholarships to U.S. universities for young Egyptians and Tunisians who had the courage to take down the very kind of regimes we’re still holding up in Kabul and Islamabad.

PS: While on Pakistan, also read this hard-hitting piece by an op-ed editor at Pakistan’s Daily Times. Ms. Sarfaraz, the author of the piece, hopes for sane voices to arise from Pakistan.

Lest we Indians gloat over Pakistan’s descent into anarchy and chaos, let us remember that the killers in the various riots (1984 New Delhi, 1992 Bombay riots and 2002 Gujarat pogrom) not only roam free, but hold important central and state level posts. As a version of old wisecrack goes: if you kill one person, you might be arrested (assuming you are not a politician or related to one). If you organize the killings of thousands, you get to be a minister.

Cash transfers: who is right?

Cash transfers to the poor have long divided the opinion makers in India. This year’s union budget takes baby steps towards cash transfers to the poor. In a corrupt country like India, any government scheme is bound to be sucked dry by the corrupt administrators and the various mafia, so cash transfers seem to be the least damaging endowment policy. However, it has already raised the heckles of the left-leaning intellectuals. Members of the National Advisory Council, the most powerful decision-making body in the country today, are against the mechanism, citing various reasons from encouragement of free-market profiteering to wrong targeting. Right-leaning intellectuals, of course, are heavily in favor of cash transfers, saying it’s the only way a welfare scheme can survive the tsunami of corruption.

Here are two sane views from each sides: Jayati Ghosh argues against (while maintaining that the transfers should supplement, not replace public provision of goods and services), while Samar Haralankar argues for cash transfers (while building a solid case for having the necessary infrastructure like UID in place before the roll-out). Expect more heat and debates on the topic in the coming months and years.

Dummies at play

Ramchandra Guha laments the ‘absence of vigorous, credible, state-level leaders’ at the Congress party:

"Things were once otherwise. In Jawaharlal Nehru’s time, the Congress had strong, capable, and focused CMs — among them S Nijalingappa in Karnataka (then known as Mysore), K Kamaraj in Tamil Nadu (then Madras), BC Roy in West Bengal, and YB Chavan in Maharashtra. They successfully won elections and ran governments.

Now, in states like Karnataka, Maharashtra, and Madhya Pradesh, there is no one, identifiable, Congress leader. Five or six senior men jostle for position, their precedence varying from month to month depending on the winks and nods of the high command. In other states the situation is even more dire."

It is one of the ever-lasting ironies of Indian politics that the Congress party, run in an autocratic and presidential manner at the center, prevents strong leaders at the state level. This was one of Indira Gandhi’s Big Ideas: to plant mediocre dummies at the state level. The idea was a runaway success. The senior  Mrs. Gandhi started her career pitted against formidable leaders at the union and the state level. At her demise, no one in the party dared oppose her or her son.

Mrs. Sonia Gandhi’s Big Idea has been to copy her mother-in-law and at the center as well: not even Dr. Singh’s greatest admirers can charge him of being strong-willed (except during the passage of the Nuclear deal) . Aso, Mrs. Gandhi seems intent packing the union government with ordinary, pedestrian journeymen like Vilasrao Deshmukh, Sushil Kumar Shinde, CP Joshi and MS Gill. Mr. Guha’s comment thus applies at the center as well.

PS: Prem Shankar Jha argues that we must judge Dr. Singh ‘not by what he has been saying but by what he has done’. Unfortunately he builds his case by citing token actions, like the arrest of A Raja, and a questioning of the junior Ambani. With the Supreme Court’s action yesterday striking down the appointment of the CVC, the PM’s position has further weakened. Tokenism won’t help here.

(Ramchandra Guha article link via Churmuri).

Need versus Greed

Jeffery Sachs paints a grim scenario of the days to come:

There is something else hidden from view that is very dangerous. In many populous parts of the world, including the grain-growing regions of northern India, northern China, and the American Midwest, farmers are tapping into groundwater to irrigate their crops. The great aquifers that supply water for irrigation are being depleted. In some places in India, the water table has been falling by several meters annually in recent years. Some deep wells are approaching the point of exhaustion, with salinity set to rise as ocean water infiltrates the aquifer.

A calamity is inevitable unless we change. And here is where Gandhi comes in. If our societies are run according to the greed principle, with the rich doing everything to get richer, the growing resource crisis will lead to a widening divide between the rich and the poor – and quite possibly to an increasingly violent struggle for survival.

He also writes about the colonization of Africa by the big nations:

An analogous power grab is being attempted in Africa. The rise in food prices is leading to a land grab, as powerful politicians sell foreign investors massive tracts of farmland, brushing aside the traditional land rights of poor smallholders. Foreign investors hope to use large mechanized farms to produce output for export, leaving little or nothing for the local populations.

India’s own land grab in Africa is also described, in vivid detail, in a masterful essay by Rana Dasgupta on Delhi, and can be read here.

Why Guwahati is India’s next boom-town

A Marathi writer once told me how to identify the next investment hot-spot in India: watch where the politicians are parking their money.  If you see politicians investing large sums of time and money in an economic activity, no matter how obscure, expect that field to grow, he had said. The author provided many examples, of which I quote two: cricket, which the Indian politicians discovered as a lucrative investment option years before the IPL boom, and mining. (He also mentioned human-trafficking, but apart from the noble Indian ex-MP Babubhai Katara, there are no other known trailblazers right now).

Using this measure, one can also track the next geographical growth location: watch where corrupt politicians and bureaucrats buy land. By this measure, Guwahati seems to be India’s next boom-town. Arvind and Tinoo Joshi, corrupt IAS officers recently suspended by the Madhya Pradesh government, bought 18 apartments in Guwahati:

“SUSPENDED IAS couple of 1979 batch, Arvind and Tinoo Joshis’ reported amassing of assets worth Rs 300 crore has been the talking point among bureaucrats across the country on Wednesday, but what has intrigued many is why this Madhya Pradesh cadre IAS couple with stints at New Delhi and Bhopal chose to purchase 18 of out of 25 flats in far-flung North-East city of Guwahati? What’s their Assam connection? Or has Guwahati with its new property boom become a safe route to park unaccounted money of politicians and bureaucrats? No wonder, Guwahati’s property market witnessed a boom even when there was a dip across major metros thanks to global downturn and economic uncertainty.”

   

Even by the standards of corrupt Indian babus, the Joshi couple’s loot is eye-popping:

"The income-tax department here on Friday attached the bank accounts and properties of billionaire IAS couple Arvind and Tinu Joshi who are estimated to be worth Rs 360 crore.

As many as 77 bank accounts belonging to members of Joshi family, their real estate and other properties have been attached under the provisions of section 281-B of the Income Tax Act 1961."

Perhaps the Joshis were doing their bit towards national integration, addressing the growth imbalance in the North East.