Archive for October, 2008

Our Man In Pakistan

October 31, 2008 3 comments
Is USA the cause, the solution or the victim (Cartoonist -  Joel Pett).

Is USA the cause, the solution or the victim (Cartoonist - Joel Pett).

State of the Union

Pakistan is actually 5 parts. First is the army and the ISI combination. Then there are the popular politicians who participate in elections. Add the mullah-madrasa-mujahhid combine with a fundamentalist clergy, various terrorist groups – like JeM, LeT, Al Qaida, various Taliban factions et al make up the third.

The fourth part are the 22 families that control the economy and wealth of Pakistan. Mahbub-ul-Haq’s “22 families” speech in Karachi in 1968 highlighted the power and wealth of a few families in Pakistan.

And bringing up the rear there are the rest. No one in Pakistan talks to anyone. Each has contempt for the other four. And all five have separate agenda.

The benefits of being an American ally (Cartoon by Peter Brookes published by The Times.).

The benefits of being an American ally (Cartoon by Peter Brookes published by The Times.).

During this economic crisis

“In the last two decades Mahbub ul Haq has arguably had a greater impact than anyone else on the lives of the world’s poor … it is the Pakistani economist who, by pioneering the human development revolution, has managed to change both thinking and practice.”

In a famous speech he said,“In the next two decades, almost 90 per cent of the additional population will be born in the Third World….it is a matter of power because that is where the markets are going to be….The real problem has been that the world has moved very fast towards interdependence because of technological revolution, without discovering the institutions of interdependence. Three institutions — an international central bank, a system of international taxation…, and global management of scarce resources of the world (including oceanbeds) will simply have to emerge.” He had clearly anticipated four major challenges of our times — the importance of emerging markets, globalisation and its discontents, sustainable development and the current global economic turmoil in the absence of an effective international economic order …

A landmark in his intellectual life was the “22 families” speech he gave in Karachi in 1968 which highlighted the power and wealth of a few families. It was a summery (sic) indictment of the government from within. (via Putting people before GNP Subir Roy / New Delhi October 31, 2008, 0:58 IST).

He died in 1998. And we are still to do something about the ideas this man left us with. And these observations are true for India as well. He was, our man – in Pakistan.

Same difference … BJP supports bail out for India Inc

October 31, 2008 Leave a comment

BJP supports bail out for India Inc

The opposition Bharatiya Janata Party (BJP) today called on the government to respond to the “present economic crisis” and take specific measures to bail out companies in civil aviation, real estate, automobile, textiles and gems and jewellery sectors and help them tide over the slower consumer demand and rising costs.

In a joint briefing today, BJP leaders and former finance ministers Jaswant Singh and Yashwant Sinha, accompanied by former Communications and Disinvestment Minister Arun Shourie, said unless the government took immediate “sector-specific steps”, and that too on a large scale, “companies would start shutting shop and lay off employees in large numbers”.

The largest employer in India is the SME sector

And the BJP does not talk about the SME at all. Just like the Congress is not bothered about them at all. Save the big industry. There is space for big industry and India needs big industry too.

The big moneybags call the shots

In both the Congress and the BJP. So, any belief that any one is any different is all wrong. They are more or less of the same agenda.

Shallow thinking

Both have the same limitation in the thinking – set by the external agenda and vocabulary. The difference is language. Congress swears by India (a Roman name of Bharat) and BJP swears by Hindustan and Hindutva (a Levantine name for Bharat). Both miss out on the Bharati nature of people.

No talk of Third currency

Neither (the Congress or the BJP) has the imagination or the strategic depth to think out of the Western box. They are all trying out the same tired Western cliches of IMF and World Bank reform – which is going nowhere. It is the IMF and World Bank which keep the Third World poor and backward.


Ask Unca Ben …

October 31, 2008 Leave a comment

mint COLUMN MARK TO MARKET – ShouldweaskUncleBenfordollars?:

“U S Federal Reserve chairman Ben Bernanke’s helicopter has been sighted for the first time in emerging markets, raining dollars in South Korea, Mexico, Brazil and Singapore. The currency swap lines of $30 billion (Rs1.5 trillion) arranged by the Fed for each of these markets led to a drop in dollar borrowing costs in Asia on Thursday, strengthened Asian currencies (the Korean won was up 14% against the dollar) and, together with the cut in the fed funds rate, led to a polevault in stocks in the region.

The global dollar shortage has played havoc with emerging market currencies, which have been plummeting.”

Don’t Ask … Demand

It is more like US responsibility …

The US has been evading transparency by not revealing M3 figures (on dubious grounds), printing money 24x7x365 and creating toxic assets. Now when the muck has hit the fan, they are acting coy.

China was right that the US is now looking after its own – and not bothered about the problems the US has created for other countries. Like this news article shows, India is unlikely to get seriously affected – which is possibly creating complacency in India about what needs to be done.


The 2ndlook model for a Third currency Bloc is ready. Join in to review, participate, critique and develop the First Cut. While the need for a new global reserve currency has been evident, there is very little in the public sphere. The speed of events has clearly caught the BRICS and Third World napping – and unprepared. But, not 2ndlook – who, from the very beginning, proposed that the world should stop clinging to the Dollar-Euro skirts.

Why is BCCI getting tough with Lankan board?

October 30, 2008 Leave a comment

BCCI gets tough with Lankan board – News – News – Cricket on Times of India

BCCI has reportedly decided to put on hold all future bilateral series with Sri Lanka because of “hostile” statements made by Sri Lanka

Cricket chairman Arjuna Ranatunga. ( Watch )

BCCI officials refused to confirm the development while Sri Lankan sources said that talks between the boards had run into rough weather. The dispute had started over a proposed Test tour by Sri Lanka to England in April-May next year, when the IPL tournament takes place.

Sub-continental cricket success

The Indian cricketing establishment was lone succes in sub-continental relations. India, Pakistan and Sri Lanka jointly took on the might of UK, Australia to move cricket headquarters from UK to Asia.

From the 1987 World Cup to the 2007, Australian tour, the entire sub-continent approached issues in a concerted manner. This gave them significant leverage.

With a new ‘political’ dispensation at BCCI, are things changing? Is India trying to bully its friends and neighbours?

Possibly. ‘Jaggu Dada’s’ touch is required!

What do the Europeans want … in the new global financial architecture

October 30, 2008 Leave a comment Worldwide

Asian and European leaders called for an overhaul of World War II-era banking rules, lending support to French President Nicolas Sarkozy as he pushes the U.S. to embrace greater supervision of global financial markets.

The leaders “pledged to undertake effective and comprehensive reform of the international monetary and financial systems,” according to a statement in Beijing yesterday. Chinese Premier Wen Jiabao told reporters after the gathering of more than 40 heads of state and government that “we need even more financial regulation to ensure financial safety.”

U.S. and European leaders have sparred over the causes of the credit crunch and how to cure it. Sarkozy has called for stricter government oversight of banks and hedge funds. President George W. Bush, who will host the Group of 20 industrialized and developing nations on Nov. 15, emphasized the role of free markets in a speech yesterday.

China cosies with Europe

China is making common cause with EU over the dollar crisis. While Chinese disappointment is understandable, their actions are beyond comprehension. Just why will Europeans be bothered about Chinese welfare? Just look at their history!!

For that matter why in the world would anyone be interested in Chinese welfare – except the Chinese, of course. The Chinese Government is looking at all options – except Chinese welfare, unfortunately.

And what do Europeans want – some seats at the global regulatory table, to force US moneybags to seek approvals, which will come at a cost … or is that the approvals will come at a price …

Which will solve no one’s problems … back to square one …

Pak and Afghanistan hold ‘mini-jirga’ on violence | Pakistan | News | Newspaper | Daily | English | Online

October 29, 2008 Leave a comment

Pak and Afghanistan hold ‘mini-jirga’ on violence | Pakistan | News | Newspaper | Daily | English | Online

Pakistani and Afghan officials and tribal leaders met for talks in Islamabad on Monday to find ways to end mounting Taliban and Al-Qaeda violence along their troubled border. The two-day meeting has been dubbed a “mini-jirga” as it is a smaller follow-up to a traditional “jirga” or tribal meeting held between the two feuding neighbours in August 2007. “Both Afghanistan and Pakistan are faced with terrorism and together they need to face the challenge,” Pakistani Foreign Minister Shah Mehmood Qureshi told the start of the session. The meeting features 50 members 25 from each side including government officials, representatives of political parties and members of the ethnic Pashtun tribes that straddle the Afghan-Pakistan border. Afghanistan’s hardline Islamist Taliban militia, which ruled that country from 1996-2001, and a newer grouping of Pakistani Taliban militants are both effectively Pashtun groups.

Khan Abdul Ghaffar Khan with JN Nehru

The first step

On February 22nd, 2008, the Deoband Seminary, the most respected Islamic seminary in South and South East Asia, issued a anti-terrorism declaration at a huge public meeting attended by hundreds and thousands of people. This set up a new direction in Islamic social dialogue – where a non-establishment, Islamic theological group came out against terrorism. Subsequently, some other ‘liberals’ jumped onto this bandwagon.

And then …

Pakistan was sent on a cold turkey … by Saudi Arabia, China and the US. Pakistan has been forced to go to IMF which is prescribing a heavy cut back in defence spending.

But most interestingly …

Suddenly the world has been reminded about Khan Abdul Khan Ghaffar Khan. The LA Times recently ran an column on him.

As the 2ndlook post ‘Behind The Web of terror’, on December 17th, 2007, pointed out, the answer to the Pakistani problems in the North West tribal areas was Khan Abdul Ghaffar Khan. On October 3rd, 2008, the Frontier Gandhi’s grandson was the target of suicide bomber. The terrorists are obviously worried that Khan Abdul Khan Ghaffar Khan’s sensibility may make a comeback.

Hopefully, this a new beginning for Pakistan …

Asia eyes key stake in new global financial system- Global Markets-Markets-The Economic Times

October 28, 2008 Leave a comment

Asia eyes key stake in new global financial system- Global Markets-Markets-The Economic Times

As Europe and the United States clash over their leadership role in framing a new international financial architecture at the November 15 meeting in Washington, Asians feel they have much of a stake in the stability of the global system as the industrialized countries, the experts said.

“The big question is how you can restructure the international economic regime in a way that makes countries such as India and China feel that they not only have a stake but also have real influence,” said Eswar Prasad, former head of the China division at the International Monetary Fund.

No clash … more like fighting over spoils …

In the last 10 years, the Euro has managed to make a niche for itself – and make space for itself. With the dollar under pressure, now the Euro wants to twist the knife into the dollar side. The Euro-zone knows that the G-5 (Russia, China, India, Brazil, South Africa) are not prepared with an alternate plan.

Without such ‘special’ mechanisms, the Euro and dollar zones have to compete, without significant weight advantage on their side. The institutional mechanisms in the G-5 have large gaps – and the Euro Bloc knows that. Hence, the Euro Bloc is trying to gain advantage over the dollar – and they can succeed only if China and Russia ‘co-operate’ with the Euro zone.


The 2ndlook model for a Third currency Bloc is ready. Join in to review, participate, critique and develop the First Cut. While the need for a new global reserve currency has been evident, there is very little in the public sphere. The speed of events has clearly caught the BRICS and Third World napping – and unprepared. But, not 2ndlook – who, from the very beginning, proposed that the world should stop clinging to the Dollar-Euro skirts.

Sharp Slowdown in Asia Nears –

October 28, 2008 Leave a comment

Sharp Slowdown in Asia Nears –

… in the past 10 years, Asia has doubled down with its bet on exports as an economic engine — at the expense of developing a domestic consumer market that many economists believe will ensure more sustainable growth.

Exports accounted for 47% of gross domestic product in Asia, excluding Japan, in 2007. That is a jump of 11 percentage points from the comparable figure in 1998, during the last economic crisis in the region, notes Stephen Roach, Morgan Stanley’s Asia chairman. Asia “may not be levered in the strict sense of reliance on global credit,” says Mr. Roach. “But it’s certainly levered to the global economy.”

The Indian difference

India is an exception in this regard – more due to the entrepreneurial drive of Indians rather than design. Government was pushing for FDI – whereas the Indian entrepreneurs were pushing the Government for opening of foreign investments in domestic equity, VC, debt, infrastructure, markets.

FDI investments in India were less than US$100 billion – and came with many tax concessions, licensing, royalties and most importantly, ceding large sectors of economy to MNCs.

But equity investments in Indian markets, fuelled an investment boom in India – which is supporting Indian enterprise.

Categories: Uncategorized

India must take inclusive growth more seriously – Economy and Politics –

October 28, 2008 Leave a comment

India must take inclusive growth more seriously – Economy and Politics –

“In Africa, poverty is a tragedy; in India, it is a scandal.” And I understand what he means by that. In Africa, there are all sorts of conditions, the state, the society, lack of education and so on. In India, you have very competent and bright people, very strong institutions in education like IIMs (Indian Institutes of Management) and IITs (Indian Institutes of Technology) and yet 400 million or whatever number of people are under poverty. This is cataclysm. This is not only terrible so far as the poor people are concerned, this is also a terrible indictment of the Indian establishment… My concern is how seriously the Indian establishment is taking this issue of inclusive growth. I asked a government official, he could not answer me. I said when you wake up in the morning, do you have a plan how to ensure inclusive growth?

The Elite barricades itself, using colonial laws, language …

English is the language of exclusion in India. India spends nearly US$6 billion on English education. In Purchase Power Parity exchange terms, it is possibly greater than US$100 billion towards education in English.

Korea, Japan, China, Russia, Germany, France, Spain – do not use English and are significant industrial or cultural powers. Most importantly, what happens when US declines as an economic force. The influence of English is largely today due to the dominance of Britain and USA (by turn) from 1850 to 2000. In the next 25-50 years, the importance of English and US will decrease. Where will Indian-English dominated education system be at that time?

Categories: Uncategorized

Cold turkey for Pakistan …

October 28, 2008 Leave a comment

Fearing IMF riders, Pak seeks allies aid- Politics/Nation-News-The Economic Times

… the IMF has revealed that Islamabad has sounded out the ‘international lender of last resort’ for aid. Pakistan needs, according to one estimate, $4 bn to roll over loans and $10-15 bn to pay for imports.

Islamabad is still trying to get a loan from friendly powers such as the US, China and Saudi Arabia, to avert a loan from the IMF, …

One condition (for the IMF loan) reportedly being sought and stiffly resisted is a 30% reduction in Pakistan’s defence budget over the next 10 years. Other reported conditionalities include sharp downsizing of the government, taxes on farm production and direct monitoring of taxation and the budget by the IMF.

What is intriguing is that Pakistan’s traditional allies, the US, Saudi Arabia and China, for whom the amounts needed by Pakistan are small change, are forcing Islamabad to go to the IMF.

But Pakistan is continuing its negotiations with the so-called Friends of Pakistan, to avoid IMF loans and conditionality.

Is this the start of a new war on terror … a more intelligent war … Pakistan is the largest breeding ground for terror – largely supported by the US (aid, arms, sponsorship) and to a much smaller extent by China.

Categories: Uncategorized
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