pics of the day

I've been out the entire day and have little to post. Here are two images to fill the gap. First, another encounter between Foreign Minister Pranab Mukherjee and a visiting giant, in this case the British Foreign Secretary David Miliband.


Second, in the lead up to Martin Luther King Junior's birth anniversary on January 15, an image of him delivering the famous I Have a Dream speech. The entire speech can be viewed on YouTube. What struck me when I first saw a film of the historic event was the number of people wearing Gandhi caps.

Twenty20

I turned 40 yesterday. In the manner of Macbeth, I had imagined the event with such dread as it approached that I endured its arrival with equanimity.
In some ways life is as it was twenty years ago. I live in the same flat. I have no responsibilities. No job, debts, boss, employees, property or children. On any given day, I can wake when I want and do pretty much what takes my fancy. I am still with the same partner and wear the same size jeans. Since relationships and waistlines occupy so much space in lifestyle magazines, that must count for a lot.

Slumdog Q and A

Slumdog Millionaire, which has yet to be released in India, just swept the Golden Globe Awards. The film is based on a novel titled Q and A by Vikas Swarup, which I snippet-reviewed when it came out. Here's that review:

Ram Mohammad Thomas wins a billion rupees on a quiz show. The sponsor’s convinced he’s cheated, and gets the police to arrest Ram. A female lawyer rescues him, and wants to know how he, a barely educated waiter, could answer twelve complex general knowledge questions. Each chapter of Vikas Swarup’s novel Q and A corresponds to one of the questions from the quiz. In telling the lawyer how he knew each answer, Ram ends up telling a part of his life story.

The device makes for an intriguing structure and allows Swarup to stuff the book with sensationalist yarns. To give you a feel of them, here’s some of the action. Chapter 1: Policeman sodomises Ram using baton. Chapter 2: Film star enters auditorium in disguise and gropes Ram’s friend Salim. Chapter 3: Priest sodomises adolescent son of fellow priest. Chapter 4: Drunk former astronomer molests daughter. Chapter 5: Assistant Warden of remand home attempts to sodomise Salim. Events stay mainly in the sordid-squalid range, but rarely come through as depressing, thanks to Swarup’s snappy, easy-to-read style, full of phrases like ‘soulful melody’, ‘bevy of beauties’ and ‘whirlwind romance’.

In a canvas painted with such broad brush strokes it’s silly to expect a refined understanding of caste and community (the north Indian Salim can become a Bombay dabbawala), or anything approaching realism. But Q and A is a fun, fast, unpretentious novel, and there aren’t many of those being written in English by Indians.

Odd One Out

A few days ago, President George Bush invited the three living former US presidents to the White House for a meeting with Barack Obama.



They chatted before the cameras for a fair time, but none of the others so much as looked at Jimmy Carter, who stood uneasily at a distance from the main group. I can't help feeling that the weird body language had something to do with the current violence in Gaza. Carter has written a book, Palestine: Peace, Not Apartheid, which places him at the fringes of the American political spectrum: way out left, like he was in the presidential gathering. The others in the meeting might have many foreign policy differences, but they have all been at pains to register their unwavering support for Israel. Perhaps even looking toward the only Nobel Peace Prize winner in the room and smiling would have sent wrong signals to the incredibly powerful pro-Israel lobby.
Ironically, Jimmy Carter has done more for Israel's security than perhaps any non-Israeli alive. The greatest achievement of his presidency was the agreement at Camp David, signed by Menachem Begin and Anwar Sadat, which led to the normalisation of relations between Israel and Egypt. The land-for-peace formula established at Camp David became a template for future deals, but none of the agreements signed after 1980 proved as robust as the Egypt-Israel detente, which has endured for three decades.
Carter put his reputation on the line to push the agreements through, extending the deadline for negotiations, patiently going back and forth between two leaders who hated each other. They got Nobel Peace Prizes immediately, he had to wait 22 years for his own gong. Unjust, perhaps, but better than the volley of bullets that was Sadat's ultimate reward for signing the treaty.

Complaining

Over fifty hours after Ramalinga Raju confessed to carrying out the biggest fraud in Indian corporate history, the police have yet to pop across to his house and question the man, let alone arrest him. They say they are waiting for a complaint. Funny thing is, anytime people arrange a party, cops land up at 11pm and inform the organisers that playing loud music isn't allowed after 10.30. Those who enquire if anyone's complained are informed rudely that the authorities can act even in the absence of complaints. Then negotiations start over the amount of cash or booze to be handed over before the partying can begin again.
I suppose Raju has sent negotiators to police headquarters in advance.

Roots of the Crisis

In my last post I wrote of how the threat of war distracts from the "roots of the crisis". I was referring to Pakistan's support of terrorism. The deeper root is, of course, the dispute over Kashmir. The current Indian administration could have negotiated some kind of deal while General Musharraf was in charge. He held all the levers of power and offered some very reasonable approaches to resolving the issue. Unfortunately, Manmohan Singh followed the tradition of Indian heads of government in showing no interest in resolving the vexed question. I wrote an article about it in the Sunday Times of India last April, and warned the window of opportunity would not remain open forever. Notwithstanding the recent election in Jammu and Kashmir state, that window seems to have firmly shut.

Copycats 2: Israel, India and Pakistan

CNN IBN is not the only media outlet asking if India should bomb Pakistan, emulating Israel's assault on Gaza. A concise response to such an idea is provided by Tunku Varadarajan in a Forbes magazine article .
When the possibility of attacking Pakistan is brought up in Indian newspapers and on television, there is, as a rule, no serious discussion of a potential nuclear holocaust. Pundits speak of surgical strikes and limited war, ignoring the atomic weapons pointed at Bombay and Delhi. We have no way of stopping those once the missiles take off. All we could do in response to the killing of millions of our civilians is to kill millions of Pakistani civilians. There is now talk of India buying a missile shield from the US, but it will be years before we get it and the technology's unproven in any case.
If Hamas had nuclear weapons, Israel would never have attacked Gaza. If Saddam Hussein had nuclear weapons, Bush would never have invaded Iraq.
India, then, needs to exert diplomatic pressure without rattling sabres, and that's precisely what it is doing. Nothing pleases Pakistan's politicians more than headlines about war. The world immediately get scared and does all it can to cool things down between the countries. The United States, which wants Pakistan's forces to focus on the border with Afghanistan, asks India to tone down its rhetoric in order to stop any shifting of battalions eastward. Attention is drawn away from the roots of the crisis.
Pakistan's foreign minister tried to highlight the threat of war in a television address, but India didn't take the bait. It continued to demand a crackdown by Pakistan on militant groups. It saw that the Pakistani government had painted itself into a corner by reflexively talking about the need for proper evidence, and denying the terrorists were Pakistani. This time India did have evidence about the origins of the attackers. One of them was captured on cameras and closed circuit TV and then captured by the police. Now the Pakistan government has really tied itself in knots over the issue, as demonstrated by the sacking of the National Security Advisor.
Compare the measured response of India now with its bellicosity after the Parliament attack of December 2001. All leave was cancelled for military personnel, and troops were sent to frontlines. Threats and counter-threats filled the airwaves. In May 2002, Prime Minister Vajpayee went to Kashmir and told troops to prepare for a 'decisive battle'. Of course, it was all just posturing, he was never going to be able to carry out the threat. In the end, nothing whatsoever was achieved by a tense standoff that lasted over a year.
I have two classmates who joined the military after school: KJ is a naval officer and MB is in the army. KJ was posted in Bombay through the 2001-2002 crisis. When we met one day, he spoke of how easy he had it compared to MB, who was stuck in a tent near Jaisalmer in 50 degree celsius heat. That's how army officers and jawans spent 2002: without leave, without any opportunity to see their families. Does wonders for morale.
I'm glad the current administration is low on posturing and high on procedure. That's what you get when policy wonks are in charge rather than poets. No charisma at all, little to appeal to the media or the public at large, but in the end more effective in making India's case to the world. I can't bear to watch Manmohan Singh speak for more than two minutes, but there's no man I would rather have at India's helm during the current global financial crisis.
Pranab Mukherjee, I believe, has been an outstanding external affairs minister. He is, in a way, a ridiculous figure. It's almost embarrassing seeing his 4 foot 10 frame next to visiting foreign secretaries. Condoleezza Rice always has an amused smile when she's with him, and it sometimes appears she's trying hard to stop it from turning into a giggle.


Mukherjee's Bengali accent is so thick that I have problems deciphering what he is saying. I can only imagine the difficulty foreign visitors go through. It would be rude to ask for a translator, but how else to conduct a proper conversation?
The Pakistani Foreign Minister Makhdoom Shah Mehmood Qureshi on the other hand has a bearing worthy of his impressive name. He is tall and poised, immaculately dressed, equally comfortable in Urdu and English. Clearly a member of the feudal elite, the sort who possess thousands of acres and an Oxbridge education.


Once you get past Mukherjee's physical limitations, however, you develop great respect for him. The nuclear deal negotiated by India with the US under his watch was the single greatest triumph of Indian diplomacy in the past thirty years. His speech in Parliament during the debate about the 123 Agreement was outstanding, though his careful argument was overshadowed by Rahul Gandhi's dimples.
It's a pity so many Indians are deluded by the bluster of right-wingers and take to parroting nonsense about the country being a 'soft state'. What we need to be is not a soft state or a hard state but a smart state. A smart state is aware of its limitations. It does not cry havoc and let slip the dogs of war against a neighbour armed with nuclear weapons. And it understands there are many kinds of pressure that can be brought to bear on countries aside from the threat of invasion or bombing.

Satyam's topsy-turvy plan

The letter sent out yesterday by Ramalinga Raju brought to mind an Agatha Christie story titled Murder in the Mews. A woman is found dead in her house, apparently having shot herself. The gun is in her right hand, but the wound is above her left ear, leading police to believe she has, in fact, been murdered. Evidence points to a blackmailer, but in the end Hercule Poirot discovers it is not murder disguised as suicide, but suicide disguised as murder.
The victim's housemate returned home to find her friend had taken her own life. Wanting to implicate the blackmailer, whom she held responsible for the suicide, the housemate removed the gun from her friend's left hand and placed it in the right, knowing the police would immediately notice the discrepancy.
How does this connect with Satyam? Well, when Ramalinga Raju decided to buy the family-owned Maytas Properties and the family-run Maytas Infra, everybody assumed that Satyam was bailing them out with its huge cash reserve. It now turns out that he was planning to pay them with money that did not exist, thus cleaning up Satyam's balance sheet while acquiring real assets for the company. It wasn't Satyam bailing out Maytas, but Maytas bailing out Satyam.
Maytas, however, simply wasn't valuable enough to justify the price decided upon by Raju, which matched the amount of fictitious cash Satyam was carrying on its books. After the September-October crash hit real estate harder than any other sector, shelling out 1.6 billion dollars, most of it for an unlisted firm, was never going to fly. Had Raju acted a few months earlier, he might have managed to push the plan through, though opposition from insitutional investors was guaranteed.

Hobson-Jobson

Hobson-Jobson: A Glossary of Colloquial Anglo-Indian Words and Phrases, and of Kindred Terms, Etymological, Historical, Geographical and Discursive is a fascinating dictionary devoted to the influence of Indian languages on English (with a smattering of words from other colonies). The dictionary supplied substantial portions of the vocabulary used by British sailors in Amitav Ghosh's novel, Sea of Poppies.
A native festal excitement, is how Hobson-Jobson defines its own title, whose root lies in Ya Hassan, Ya Hussain, the cry of mourners beating their breasts during Muharram processions marking the killing at Karbala of Imam Hussein, grandson of prophet Muhammad. Tonight's the night for those processions, climaxing ten days of prayer, preaching and tears. Those in Bombay interested in viewing the flaggelants can make their way to Dongri, a precinct with a strong Shia Muslim presence.
Dongri, which gets its name from dongar, Marathi for hill, figures in Hobson-Jobson as the root of a word all of you will know. The area was a center of textile trading in the 19th century, producing a rough cloth called dongri kapad. This eventually mutated to dungarees, referring to overalls made from denim. Denim itself is related to another place name, the town of Nimes in France, which used to produce twill fabric known as serge de Nimes.
Back in the nineteenth century, when the word Hobson-Jobson was in common use, the Ashura procession was the single largest religious gathering of the year in Bombay. Sunni Muslims participated in large numbers, as did Hindus, "especially the Mahrattas". After Lokmanya Tilak came up with the idea of public Ganeshotsavs, those Mahrattas got their own celebration to look forward to, and gradually dropped out of the Muharram ranks, switching from Ya Hussain Ya Hussain to Ganpati Bappa Morya.

Copycats

The mainstream media in India have been turning tabloid for years, and the crises of recent weeks pushed their irresponsibility quotient up many notches. I was stunned last night to find a long discussion on CNN-IBN about whether India should emulate Israel’s response to Hamas rocket attacks. In other words, should we deal with Pakistan the way Israel is currently dealing with Gaza.

I will return to the specific issue of Israel-Gaza and India-Pakistan in a bit. For the moment, let me examine the media’s love of copycat formulations. A great example of this was the reaction of Raghav Bahl, Managing Director of India’s biggest business channel CNBC TV18, to the market crash of October 2008. Bahl suggested that interest rate cuts and stimulus packages were no way to tackle the crisis. What was needed was a “big idea”. His own big idea? India ought to shore up share prices by creating a Sovereign Wealth Fund that would buy Indian equities.

‘Sovereign Wealth Fund’ is such a buzz phrase that mediapeople are dying to jump onto the bandwagon and take their country with them. Me too, they shout, my country should have an SWF too. If Kuwait and Taiwan can, why not us?

Now, anybody who knows anything about SWFs is aware they are created by nations running budget surpluses as a way of deploying excess money. Most such funds are employed by countries whose economies depend on a single commodity. The investments serve as a hedge against the potential drop in price of that commodity.

India does not depend on a single commodity. More importantly, it does not enjoy a budgetary surplus. It has run large deficits for decades, the reining in of which has been one of the main challenges for successive administrations.

As for Bahl’s suggestion that we buy shares in Indian firms with this wealth fund, the purpose of SWFs is to acquire assets abroad. Purchasing in the parent country would defeat the primary goal of such vehicles.

Bahl suggested in an interview on his own channel that we dip into our foreign exchange reserve, sell 20 billion dollars worth of US treasuries, and use the money to buy shares. His interviewer politely suggested (I give him credit for this, since Bahl presumably has the power to fire him) that selling foreign exchange reserves would be unwise because, no matter where India takes the money from, it would add to its deficit, reducing its creditworthiness. Since the forex reserve is used as a marker of a country’s ability (and the ability of corporations within that country) to pay foreign obligations, lowering our reserves would immediately impact our credit rating. The cost of accessing funds abroad could rise for Indian firms, potentially negating any positive effect that shoring up share prices might produce.

Bahl replied: “If one doesn’t arrest the secondary price damage in the economy today, the equity capital formation will be gone and the GDP growth will be seriously jeopardised, and that is a fundamental downgrade. This is only a financial rejigging of the balance sheet of the country, temporarily, and I am not saying do this forever.

The US stepped in and picked up USD 6 trillion of gross Fannie Mae and Freddie Mac assets. It is a temporary measure. They are not going to be holding that forever. Why cannot our policymakers, given the cornucopia they have in their hands, go out and do that.”

Hacking our way through the jargon, we spot Bahl’s second copycat formulation. The first, remember, was: Kuwait and Norway have sovereign wealth funds, why not us? Answer: we don’t run a surplus and our government does not receive commodity-related windfalls.

Now the argument is: The US bought distressed assets, and provided bailouts, why can’t we? Well, consider the position the US was in. Its mortgage network was on the verge of collapse; the banking system was like a swimmer with cramp waving frantically before disappearing underwater; two of the ‘big three’ car companies were weeks away from running out of cash and filing for bankruptcy. Most people agreed the nation was facing its worst financial crisis for seventy years.

Compare with India. Is our financial system under threat? No, our banks are well capitalised and conservatively run. Is our mortgage market in danger? No, virtually all borrowers are able to pay back their loans because Indian banks never offer subprime clients easy money. Is any major Indian company about to go bankrupt? No, our big companies are, in general, financially healthy, and will be able to weather comfortably the fall in price of their shares. Is India looking at a painful recession? No, while the economies of dozens of countries, including the US, have begun to shrink, the worst case scenario for India in the absence of further global shocks is GDP growth of about 6% for the financial year 2008-09 and 4% for 2009-10. What if there are further global shocks? We'd be in deeper trouble, but buying 20 billion dollars worth of shares wouldn't help us weather that in any case.

You might recall that, in early 2008, India offered a bailout package of its own. It wrote off small loans that public sector banks had extended to farmers. The move was, without doubt, made with an eye to the general election of 2009. But it was also a reaction to the real pain millions of farmers were feeling. The loan waiver attempted to redress in some measure the enormous imbalances of wealth within the country. These imbalances have always existed, but the gap has grown substantially while India’s economy boomed these past years.

When the policy was announced, CNBC TV18 was full of experts deriding the measure, cursing government handouts, invoking moral hazards. A few months later, the head of the same channel argued for government support to the 2% of Indians affected by share movements, the same 2% who’ve been making money hand over fist for four years while markets scaled one peak after another. Moral of the story: subsidies are fine as long as they are given to the rich.