Learning to live with hawkers

In every Indian town, there is always space for an English medium school, a play ground for Western sports, money for Western auditoriums, stadiums, theaters.

Mere paas democracy hai! | Creative, publisher credits embedded. Cartoon date – April 2008

Several realities need to be grasped at the outset. India is not China and you cannot get rid of hawkers in busy parts of Kolkata by doing a mini Tiananmen Square. The hawkers have been earlier successfully removed without serious violence because they knew they would be able to get back. The latest move recognises this, even though the motive, with an eye on elections, is insincere. There is no point in playing around with words like “sunshine” and “sunset” in headlines because Operation Sunshine-I has not and Operation Sunshine-II will not work. It is not an available option. Conversely, regularising hawkers is no real solution to the unemployment problem or poverty. Left unchecked and carried to its logical conclusion, hawkers will cover not just pavements but entire carriageways. (via Subir Roy: Learning to live with hawkers).

This is the nicest thing he’s given us, so that he can come once every five years to make an election speech.

Poor should not be seen or heard

Subir Roy’s tone, from the heart of India’s English-speaking, urban, middle class sees hawkers as a ‘necessary’ evil. China is the epitome of this economic approach. And India is moving down that road – quite fast.

The biggest block is when the establishment loses touch with the people. For Indian instances, look at modern Indian city planning. In each new Indian township, there is always space for an English medium school, always space for a play ground where Western sports can be played, always space for Western style auditoriums, stadiums, theaters, etc. The Indian State is spending huge amounts of money on the Commonwealth Games.

But there is a funds constraint for Indian sports like polo, kabaddi, wrestling, unarmed combat, etc. Why is it that (almost) all the mandis in every city (at least I have lived in) has come up in pre-Independence India. No modern township sets up a mandi.

If the poor insist on being seen and heard, then throw them a few bones!

Why bother? Do they matter? | Ajit Ninan cartoon; source & courtesy – indiatimes.com; dated January 10, 2010

The poor are such a bother …

From Davos to Delhi, the rich, the famous and the powerful never talk of infrastructure for the poor.

1. In no road broadening proposal, are public toilets included in the infrastructure, in any city. The rich don’t need public toilets – and hence none are built.

2. While the Government puts its most powerful bureaucrats, tramples on all and sundry to acquire land for large industrial projects, how come such resolve in never seen in acquiring land for landless agricultural labour?

3. Instead of giving various tax-breaks and crafting municipal laws for large malls and shopping plazas for the rich, how about building reserving some road space for hawkers. After all, hawkers are the lowest-cost retailers – and will drive even a Walmart out of business. Indians consumers love hawkers – and hawkers resist all Government attempts to kill hawking.

4. How about temporary housing ‘infrastructure’ for poor, migrant workers, who pay exorbitant prices for shanties in slums. How come no rich lobby ever talks about such infrastructure?

The poor … preferably, not to be seen … definitely, not to be heard!

5. How about some increase in public transport? Why does everyone talk about more road space – and so little about public transport. Instead of the Bandra-Worli sea-link, Mumbai could have put some 3000 electric buses on the road. Mumbai traffic would have been vastly better off with these 3000 electric buses instead of the Bandra-Worli sea-link.

6. Why is Bangalore still without a decent rail based public transport system? Why is Bangalore bus service so sparse – while everyone talks about the traffic jams in Bangalore!

All these ‘infrastructure’ projects will lower the urban costs, make urban economics low capital, and benefit the poor. Is it that I am afflicted by selective amnesia that I don’t see media coverage of such ‘infrastructure’ or is it that the poor don’t matter anyway.

Of course, Government sponsorship of such projects will immediately increase costs and bureaucracy. Such ‘infrastructure’ should be funded, built and based on users’ payments. But then, isn’t it always better to do a joint private-public project? That way the Rich and the Powerful are both on the same side!

Against the poor.

Big Money and Big Power – married to each other!

Return of the Raj

The one thing that the British Raj did better than independent India was build massive ‘edifices’ in their last 60 years. This helped them to hide the enormous poverty and misery that the Raj created.

In Mumbai this has created a conservation industry. Of Colonial buildings! Rudyard Kipling’s bungalow is more important that Lokmanya Tilak’s! Don’t even mention the Chaphekar Brothers! May Mumbai’s Buddhist caves go to ruination.

Among India’s chatterati, glitterati, the papparazzi, there is barely concealed longing for a return of the Raj. This hides a deeper malaise. The need for an Asuric Raj, which will build gleaming towers, glass and chrome plazas, shopping malls for the rich.

But we are not going to let this bother us!

Are we?

Related Articles

• Bridges that widen the gap (thehindu.com)
• India’s Prime Minister should not betray the People (icrindia.wordpress.com)
• More tray return facilities at hawker centres soon: Balakrishnan (todayonline.com)

How Safe Is Britain’s Proud Pound? – Speculators Eye Next Prey

Britain may soon turn into a nation for the government, from the government and by the government.

Will there be a private sector in the future?

budgetary and debt problems facing Greece, Portugal, Italy, Ireland and Spain have reinforced (British) conviction that staying out of the euro zone was the right decision. Unlike Berlin, London is not under pressure to come to the aid of Athens.

But speculators have taken aim at the British pound – a favored target. Market pressure on the British currency is not likely to disappear overnight.
Alarm on the Markets
Markets were alarmed … that a close election could make it difficult for parliament to pass a strict package of savings measures. Such political concerns are temporary. More permanent, however, are the fundamental debt and budgetary problems that have fuelled the British currency’s downward trend since October 2008.
The problems start with the size of the country’s budget deficit. With a budget deficit of 13 percent of GDP this year — Greece’s is 12.7 percent — Britain is by far the deficit champion of the G-20 states. Britain has so far avoided an Athens-style crisis primarily (because) unlike Greece, which is facing the need to immediately refinance €20 billion in debt, most British debt won’t come due until 14 years from now..

Mass consumer debt in Britain is whitewashed in a similar manner. With an average personal debt of 170 percent of annual income, British households are even further indebted than the Americans. And interest rates kept artificially low by the Bank of England are still feeding this bubble. Sooner or later, a rise in interest rates is inevitable — at which point domestic demand could take a nose dive. (via Speculators Eye Next Prey: How Safe Is Britain’s Proud Pound? – SPIEGEL ONLINE – News – International. Parts excised, punctuation provided).

If everyone is part of the Government, who will you tax?

Safe for now

In the short run, Britain may be safe. Redemption 14 years away, debt designated in GBP and issued out of London. With the unraveling of the Bretton Woods, London’s reign at the cross-roads of the world capital markets, may be thin and short-lived. A seemingly probable scenario is an increase in interest rates will increase defaults by British households unwinding British banks.

But in the meantime, Britain will need to place additional debt to tide over the next 10 years. Britain (and the world) will see another cycle of recession, inflation and economic dislocation. The main difficulty for Britain will be placement of new debt when the new crises hit the world. Considering the frequency of financial crises, Asian Crisis (1997), the Tech Meltdown (2000), The Great Recession (2008), Britain will face a fresh crises soon.

Will there be takers for British debt then?

Population Break up of UK | Source - ons.gov.uk

Debt and demographics

The other element in this equation is the size of the British public sector. The British public sector with “6.1 million people on the state payroll, (and) an increase of about 900,000 in 13 years.”

From a population of some 60 million. And a working population of some 30 million. From a working population of some 30 million, the British Public Sector (significantly) funded by the Government) employs some 6 million.

Britain and Europe - One huge public sector nation!

The coming storm

For every four private sector employee, there is one public-sector employee. If India were to follow this model, the Indian tax payer would be burdened with 10 crore public-sector employees.

Add another 2.5 million unemployed, who are also taken care of by the State. Add another 8.0 million inactive people (largely students) who are subsidized. a working population of some 29-30 million supports 15-17 million people from the public sector, unemployed, inactive. Add to this difficult situation, an aging British population. A perfect recipe for an economic disaster. Most promises of public sector cutbacks are met with disbelief and incredulity.

This may soon turn Britain into a nation from the Government, for the Government and by the Government.

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Related articles

• British economy sinks back into recession (abc.net.au)
• This is no way to meet Britain’s looming infrastructure challenge (telegraph.co.uk)
• Is Austerity to Blame for the UK’s Recession? (thedailybeast.com)
• Chancellor, this new recession isn’t Labour’s mess – it’s yours (guardian.co.uk)
• British recession won’t shake government’s fiscal plan (cbc.ca)
• Britain’s richest people see fortunes rise to record highs (vancouversun.com)
• Eurozone crisis has a long way to go, warns Cameron – The Independent (independent.co.uk)
• Britain in double-dip recession as growth falls 0.2pc – Telegraph.co.uk (telegraph.co.uk)

The G20 lacks legitimacy

 

The spirit of the Congress of Vienna, where great powers assembled to effectively govern the world, has no place in the contemporary international community. The G20 is sorely lacking in legitimacy and must change. 

A number of countries that have been central to international cooperation in the past, including Norway and the Nordic countries, are excluded from direct membership. Low-income countries and the continent of Africa are almost entirely without the needed representation. 

As the response to the financial crisis showed, there is value in having an effective, smaller forum of nations, equipped to act quickly when necessary. But, within that framework, there are simple ways to make the G20 more representative of the world it influences. (via The G20 lacks legitimacy). 

It is every man for himself

Caught in a vicious downward spiral, Europe is at a loss. Britain is moaning about the demise of its special relationship with the USA. Sarkozy is off to the US, to mend fences with the Americans. At Copenhagen, while the BASIC countries were negotiating a ‘deal’ with the USA, European countries were sitting out. Waiting for the Big Boys to finish their talks. Japan, China, Korea – along with the USA and India are meeting at Seoul in June to create a strategic oil reserve, against possible supply shocks. To be shuttered out like this, is an unfamiliar experience to Europe. 

The Norwegian appeal for inclusion in G20 is to be seen in light of the above reality. 

That man with a tan – Obama

Obama has been stressing that EU needs to get its act together and speak in a common voice. The days when 6-12 European countries walked onto centre-stage, are over, seemingly. And Norway is one such victim of the changed circumstances. 

The Greek crisis is stressing the weak links between European States. A ‘suspected’ withdrawal by Germany from the EMU would devastate Europe – and EU. Should the EU collapse, the Nordic countries would be shut out from many global forum. 

And it is this fear that fuels Norway’s plea for G20 membership!. 

In the doghouse

After a Nobel .. a grateful Obama was the least that Europe expected ...

 

But it was not Obama who put European principalities (Norway, ruled by a king, is too small to be called country) in the doghouse. It started when George Bush railroaded Europe into Iraq and Afghanistan. And excluded the habitual European attendees from G20 – like Norway. 

On Dec 10th, 2009, President Barack Obama landed in Oslo, to receive the Nobel Peace Prize – an annual ‘price’ that is 

“decided by a secretive five-strong committee appointed by the Norwegian parliament. All current members are former politicians drawn from Norway’s four biggest parties. It is chaired by Thorbjørn Jagland, a former Norwegian prime minister.” 

It was noted that, 

“Worldwide astonishment greeted the decision yesterday to give Barack Obama the Nobel Peace Prize. The U.S. President has been in office for less than nine months, has yet to score a major foreign policy success. He had not even known he was among the record 205 nominations. The deadline for submitting candidates had come just 12 days after he entered the White House.” 

At the airport, he was welcomed by the “Norwegian Foreign Minister Jonas Gahr Støre and Kaci Kullmann Five, deputy chairman of the Norwegian Nobel Committee.” In his acceptance speech, Obama admitted that maybe there were “more deserving” candidates. Was the Nobel price in anticipation of a Nordic inclusion in G20? For turning a more benign American eye towards Europe? 

Norway raised its claim for G20 membership, the Financial Times wrote 

a month before Barack Obama, the US president, visits Oslo to receive the Nobel Peace Prize.  Jonas Gahr Store proposed that members of the Nordic Council – Norway, Sweden, Denmark, Finland and Iceland – could share a rotating seat together with the Baltic states and possibly Poland. 

Spain and the Netherlands have managed to secure invitations to all three summits since the financial crisis without being official members. But others such as Poland, Belgium and the Nordic countries have been excluded. 

So much for Norway’s Nobel price. 

The legitimacy of G20

Jonas Gahr Støre is stressing about the ‘legitimacy’ of the G20 group. If the G20 is indeed illegitimate, then in that case, Shri Støre, you should ask for disbanding the G20! Not make a desperate plea for inclusion into the G20. Will an illegitimate forum become legitimate by Nordic Norway’s inclusion? 

That reminds me. Norway was one of the ‘moving’ spirits’ behind the Copenhagen Circus on climate change. This Copenhagen Circus sought to impose a rule of Western NGOs on poor countries of the world.  Faceless NGOs, without accountability to anyone, were able to bring global political leadership, to the very brink of an agreement. How legitimate was that Shri Støre? 

Støre’s logic somehow escapes me. 

Norway- One Great Power

Media is falling over themselves - courting Obama

 

Shri Støre invokes the hoary spirit of the “Congress of Vienna, where great powers assembled to effectively govern the world” . Now, by what logic do ‘Great Powers’ derive legitimacy to govern the world? By Norway’s inclusion? 

Shri Jonas Gahr Støre has sent out copies of the same PR material, to Malaysia (published in the New Straits Times), in Canada (published in the Ottawa Citizen), and in the (as per the Ministry of Foreign Affairs, Norway) in The Straits Times (Manila, the Philippines), 6 April 2010 – Al Hayat, 7 April 2010. 

Norway’s economy

God has been kind to Norway! Instead of thanking God for His kindness, for underground  wealth – and for natural beauty above the ground. Instead, Norway wants to be ‘recognized’ as a ‘Great Power’! 

Norway’s claim to fame is oil. Some 12%-15% of Norway’s  GDP is oil. A significant part of Norway’s wealth is “raw products mined and processed in Norway include iron ore, lead concentrates, titanium, iron pyrites, coal, zinc, and copper.” Is Norway’s claim to be a ‘Great Power” based on something buried underground! 

15% of Norway’s GDP is Tourism! With more than 1,1oo hotels and nearly 1,000 registered campsites, with picturesque coastline and fjords plus a number of well-known ski resorts. By the way, Norway’s population is about 45 lakhs – 4.5 million. 

Manufacturing accounts for an awesome, jaw-dropping 1 percent of Norway’s annual GDP. 

The world must listen to

Norway’s population is lesser than Haiti! If there is one country that the world needs to hear clearly and audibly, it is Haiti. Compared to Norway, Haiti has a far superior claim to be a Great Power. Single-handedly responsible for forcing the West to abandon slavery, Haiti has been a victim of Western vindictiveness. It is time that the world listened to Haiti. And for Norway to keep quiet! 

And be grateful to God!

L’Americain in Washington: Sarkozy Searches for an Elusive Friendship with Obama

Will Sarkozy reverse 75 years of irritants!

There are two types of European state visitors in the United States capital. One seeks to underscore his or her closeness to Washington. The other likes to emphasize how independent Europe really is. But French President Nicolas Sarkozy, who is visiting American Senators and US President Barack Obama, would like to be both at the same time.

Sarkozy also wants to remind the Americans that, as a European, he can defy them. In a speech given in New York on Monday, the Frenchman repeated his demand for better regulation of the global economy. “We can no longer accept a capitalist system without rules or order,” Sarkozy said. “The world economic regulations cannot go on as they are,” Sarkozy said. “A system in which the most money is earned through speculating instead of producing, I don’t want to live in such a system.”

Of course, Sarkozy needs to score points back at home, too. Only last weekend, he was punished in regional elections in France. In an interview, Sarkozy’s own father advised his son not to run for re-election. Given his electoral setback, it makes sense for Sarkozy to bang the drum for French and European interests in Washington. Obama, on the other hand, is feeling reinvigorated following the passage of his healthcare reform through Congress and the new arms treaty with Moscow.

When the US president traveled to Paris last year, he preferred to dine with his wife Michelle rather than Sarkozy. “The hoped-for partnership never materialized,” the French daily Le Figaro wrote. Sarkozy hasn’t forgiven his American colleague for it, either. He has complained to those close to him that Obama is ill-prepared to govern, noting that he didn’t even hold a cabinet-level position before taking office.

The Americans are disappointed that, even after the ratification of the Lisbon Treaty — which was meant to give the European Union’s common foreign policy more clout — the individual European countries are continuing to pursue their own interests abroad. The question, former senior US diplomat and current Harvard professor Nicholas Burns argued in an interview with the New York Times, is whether Europe can “develop a collective European idea of global power? They talk about it a lot, but they don’t do it.” The Washington Post has even criticized Obama for this, noting that in contrast to his predecessors, he hasn’t established close ties to a single European leader.

John Podesta, the leader of Obama’s transition team that helped prepare the newly elected president for the White House in 2009, told SPIEGEL: “His style is certainly different from George W. Bush who wanted to be liked and really developed deep personal relationships.””But if you have the wrong foreign policy and good personal relations, you end up with bad results,” he added. “And if you have the right foreign policy, a strong team to implement it, and thinner personal relations, you’re more likely to have very good results.”(via L’Americain in Washington: Sarkozy Searches for Friendship with Obama that Has Eluded Him – SPIEGEL ONLINE – News – International).

Between Europe and racism

Even US media cannot ignore Obama's race! (NYPOST cartoon).

While 2ndlook was analyzing the new calculus between USA and Europe, a worried European press (for instance, Der Spiegel) was looking at Franco-American relations through a German prism.

For Europe, the experience of dealing with Obama has been different – and difficult. Europeans would   like to pretend that Obama’s race does not make a difference – but it took Berlusconi to spell out the European ‘superiority’! That probably rankles with Obama.

Behind prickly Franco-American relations is history – and gold!

Franco-American relations – a perspective

In the 1960s, the USA was bleeding gold. Most of the world was buying gold at an artificially low price US$35 – under the Bretton Woods Agreement. USA was printing dollars and dumping it in world markets. Calls for devaluation of the dollar price was resisted by the US, as that “would reward the speculators and be a special windfall for two gold producing countries that have few friends in the Congress, namely Russia (which usually sells at least $400 of gold a year) and South Africa (which sells about $1 billion).”

The French team of Charles de Gaulle and his economic advisor, Jacques Rueff did some quick maths. It was clear this मेला mela (a ‘fun-fair’) would not last long. Based on huge dollar outflows from the US, the French decided to call the bluff. The French started redeeming gold for their dollar earnings – and for this ‘perfidy’ the US had not forgiven France.

The French, unhappy with a “monetary system of gold, dollars and pounds” redeemed their dollar holdings (1958 onwards), sent the French navy (in 1965) to take delivery of gold from USA and bring it to Banque de France. The French raised gold reserves and dumped dollars.  Time magazine called this “an open assault on the monetary power of a friendly nation” – dutifully, echoing American Government’s feeling. Banque De France finally, by 1968, increased its gold reserve to 92% (as a percentage of total foreign currency /monetary reserves). This was much like the pre-WW2 French methodology devaluation, new peg, of old debt for new gold routine got the US hackles up.

Many decades have passed since these redemptions by France.  The new French President, Sarkozy believes it is now possible to renew US-French relations.

If wishes were horses!

USA-Europe-Asia

It was at Copenhagen, that for the first time, Europe realized that they no longer have the inside track with the USA. At least, in Obama’s administration. The ‘special relationship’ that swells the British chest, has been under some strain. For some time now. The US engagement with Asia makes some sense – as it is Asia, which has extended some US$3-4 trillion in credit, growth opportunities to the US. Europe increasingly seems more like a liability – and a truculent competitor.

The US presumably knows which side of their bread is buttered.

Indian dress in Moscow – German magazine, French agency, Russian locale

The lady on the left (Two shoppers check out the display at the annual Millionaire Fair in Moscow. But economic troubles may lurk just under Russia's glossy surface. Courtesy - AFP photograph in Der Spiegel).

A dress in Moscow

This photograph is intriguing to say the least.

The lady on the left is wearing a ‘modern’ Indian salwaar-kameez with a dupatta. The colours of the dress also gel into Indian ‘aesthetics’. Compared to the dark and ‘sober’ colours of the lady on the right, the extravagant colours with the embroidered pattern is a dead giveaway of Indian dress sensibilities.

Then look at the shoes worn by the lady on the right, with the slippers worn by the lady on the left. Then the flared sleeves of the salwaar-kameez are another design feature that Indian women love.

Russian in Indian clothes?

So, is this a Russian lady wearing an Indian dress in Moscow? If it is Russian wearing Indian dresses with Indian colours in Moscow, where is she getting the colours, tailoring, designs, etc.? Or has she picked it up on one of her trips to India? Or is it a case of a ready-made dress, which she has bought, off-the-shelf in Moscow? Are there dress-shops in Moscow dealing with Indian-style dresses?

An Indian in Russia?

Or an Indian lady in Moscow, in an Indian dress? Now that raises different questions. Why don’t we see Indian males in Indian dresses – especially when abroad. On the other hand, Indian women have the confidence to carry off their dresses. Why do Indian males lack that confidence? A usual answer is ‘acceptance’. Why would other cultures have a problem, if people dress differently. I know that in India ‘differences’ in clothing will arouse curiosity.

And little else.

Rock-solid Russia Returns to Bond Markets for $5.5 Billion

With Government debt level ranging between 2%-20%, Russia is in a league of its own. No other major government in the world has such low-levels of debt.

Dependance on raw materials can be the first step!

Russia is selling dollar bonds for the first time since the government defaulted on $40 billion of domestic debt in 1998. The five-year notes yield 125 basis points over similar-maturity U.S. Treasuries and the 10-year bonds have a 135 basis-point spread.

The sale is the second-biggest public dollar debt offering in emerging markets on record, after Qatar sold $7 billion of five-year, 10-year and 30-year bonds in November, Bloomberg data show.

The yield on Russia’s 11 percent dollar note due July 2018 has dropped 77 basis points to 4.489 percent this year, according to prices by Renaissance Capital. The nation’s debt is rated BBB by Standard & Poor’s, two levels above non-investment grade, and one step higher at Baa1 by Moody’s Investors Service. (via Russia, Egypt Return to Bond Markets for $7 Billion Update3 – BusinessWeek).

The Russian conundrum

After decades of boycott, machinations and confrontation, the Russian Government is in  a strong position of being low on debt. With the lowest levels of Government and private (household) debt, it is the Russian corporate sector that is the main debtor. With debt levels ranging between 2%-20%, Russia is in a league of its own.

At the start of the Great Recession, the Russian industrial and corporate systems were on the verge of bankruptcy. Russian industry with hugely in debts to Western banks, payable in the next 12 months, were in difficulties, refinancing these debts. Defending the Russian rouble, riding the treacherous waves of the The Great Recession, Russian foreign exchange reserves went down from nearly US$400 billion to US$275 billion.

Without depositors panicking about Russian banks.

Squeezing Russia

Russian crisis and default are ‘artificial’ and opportunistic creations of Western bankers, trying to squeeze a recalcitrant country. Russia managed the “budget deficit to hit 6.8% of GDP this year and wants to lower that to around 3% by 2012.” G7 and OECD countries have created a club for themselves, by giving each other unlimited line of credit – while the developing world gets credit based on fast-depreciating dollar/euro foreign exchange reserves.

Maybe this needs an inversion.

As demand and prices crashed … so did Russian economy!

Russia’s Achilles’ heel

Russia is too dependent on high raw material prices. High prices result from hot demand from the world economy. Russia feeds on high growth rates – but cannot be the reason for growth of the global economy.

What happens to Russia if a ‘new’ Caribbean Republic (Cuba, Haiti, West Indies, etc) were to start drilling for oil? In 5 years, the world would be awash with oil – and Russia’s mineral earnings could evaporate.

The Russian economy remains structurally weaker than widely perceived. High oil prices of the last 5 years built up foreign exchange reserves – as did inflows in the Russians stock market. Russian entrepreneurs remain an endangered species.

Large swathes of Russian enterprise have reverted back to the state – albeit in a corporate form, in the hands of oligarchs, a proxy for the State . The world has not yet forgotten the Russian debt default. Russia has come out from a default about a decade ago – with a nearly US$400 billion reserves – flexing its muscles in Georgia and dependent on a high oil prices.

Russia should get off its high military horse. Instead Putin-Medvedev should build alliances, sign agreements within the BRICS framework and rebuild the Russian system.

Heads you lose, tails I win

Russia’s mineral resources map – (Courtesy – Der Spiegel)

Like Quicktake has pointed out in earlier posts, the US has alternated between an overvalued currency to gain ownership over large sections of world economy – and now with a devalued dollar, it seeks to gain an upper hand in merchandise exports. The three main points that one needs to understand are: –

One – It reduces the real value of US debt. The Chinese, the Rest of BRICS and the Others need to be paid a lot less in the future. (as pointed out earlier in various posts linked here.) Two – It makes US exports artificially competitive. (as pointed out earlier in linked posts). Three – US competitiveness will be anchored to assets purchased with over-valued dollars.

What the US is now proposing is that the Chinese Yuan must become ‘stronger’ – and the dollar must become weaker. This will mean a real reduction in US debt – and a subsidy for US exports. Of course, a devaluation has never helped any regime in the long run – but in the short run it reduces imports and increases exports. But is a ‘fix’ that the patient begins to become dependent on!

Is that the US is wanting to do to itself?

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Related Quicktakes

• Toward a robust globalisation
• Fitch cuts Russian debt rating, sparks memories of ‘98 crash- Internation…
• Leadership in the Developing World

Related articles

• Putin Seeks Russian Presidency, Eyes Job Swap With Medvedev (businessweek.com)
• Fears Vladimir Putin will turn Russia into outright dictatorship (telegraph.co.uk)
• Finance Minister Will Quit Russian Government (nytimes.com)
• Russian bonds riding a wave of success (rt.com)
• Russia Yield Advantage Shrinks to 10-Month Low Amid Bond Sales (businessweek.com)

Indian economy – Complacency?

Why waste time with ‘small’ projects for ‘small’ people that hardly add upto any top-line or bottom-line figures?

The fallacy of ‘growth’ | Cartoonist Nick Anderson; source & courtesy – cartoonistgroup.com | Click for image.

one can understand why everyone in India may be getting a little complacent and even smug. It is almost as if investors and policy-makers are convinced that this rosy outlook is baked in the cake, so to speak. If it is going to happen and India is going to march ahead anyway, why take hard decisions? Does one really need to battle vested interests when 8 per cent or even 9 per cent long-term growth is assured? (via Akash Prakash: Complacency Setting In).

Out of place

Importantly, the Indian economy (say observers) is getting strangled by

the increasing politician-industrialist nexus … beginning to resemble Russia, with the same characteristics of crony capitalism and huge wealth transfer from state assets to private ownership. India may not like hearing it, but in certain sectors, its institutions are too weak to face off against corporate interests.

India is US$1 trillion economy. Simplistically, each US$10 billion project will add one more percent to the Indian GDP. There is a clear policy-bias in ‘growth’ oriented economic system. Bias towards the rich and the powerful – who can swing bigger and more ‘important’ projects.

Why waste time with ‘small’ projects for ‘small’ people  – which will anyway hardly add upto any top-line or bottom-line figures?

The eco-system of small business | Cartoonist – Lisa Benson; source & courtesy – cartoonistgroup.com | Click for image.

Out of touch

Perceived complacency in the Indian policy establishment may be misplaced. It would do well to remember that

only 12 or 13 countries … have been able to grow at 8 per cent or faster for at least 25 years” of which only four countries (of a reasonable size) have been able to do what India aspires to. What investors are assuming is a done deal is actually extraordinarily rare.

The biggest block is when the establishment loses touch with the people. For Indian instances, look at modern Indian city planning. In each new Indian township, there is always space for an English medium school, always space for a play ground where Western sports can be played, always space for Western style auditoriums, stadiums, theaters, etc. The Indian State is spending huge amounts of money on the Commonwealth Games.

But there is a funds constraint for Indian sports like polo, kabaddi, wrestling, unarmed combat, etc. Why is it that (almost) all the mandis in every city (at least I have lived in) has come up in pre-Independence India. No modern township sets up a mandi. China is the epitome of this economic approach. And India is moving down that road – quite fast.

Why bother about the poor – especially if it is about infrastructure for the poor.

The nature of ’employment’ (Cartoon by polyp; courtesy – polyp.org.uk). Click for larger image.

The usual suspects

The usual prescription for removing inequities centres around jobs – for the poor. Foreign investors, (the writers goes on) are

surprised at the very low levels of political noise around job creation compared to China, where the government has an almost single-point agenda around creating 20 million jobs per annum.

That is because Indian’s are not hot about life-long servitude – but more about enterprise.

The writer cannot see that high quality of Indian enterprise and low noise-levels on job creation are complementary. Indian enterprise, which the toast of the investment world, is precisely because Indian are not enamored with job creation.

After making these two excellent points, the post descends into the usual “Indian democracy slows down India” routine. He then goes onto making the mistake of “small sections of society can seemingly hold back progress and the country to ransom.” What would you do – have an even smaller section of society dictate ‘progress’ to the country? A classic Platonic-Confucian model where a ‘wise’ ruling oligarchy will lead us to prosperity and peace.

Give me some other story!

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• Trains, Savings, and My Favorite Indian Moment – Deogarh, India (travelpod.com)
• No toilet? You’re Not Marrying My Daughter! (suzanneyork.wordpress.com)
• Development of India: Bright or Dark (socyberty.com)
• Indian economy slumps to 6.1pc in three months (nation.com.pk)
• India to barter financial reforms with US for oil from Iran (dailymail.co.uk)
• India was better off under British rule: Mohan Bhagwat – The Times of India (quicktake.wordpress.com)

India, US and China consider joint strategic crude oil response – Money Matters – livemint.com

Big Oil is way too big to be managed by a few meetings in Seoul ... But

To protect themselves against disruptions in crude oil supplies, India, Japan, China, South Korea and the US will meet in June in Seoul to work on a joint response mechanism based on their combined strategic crude oil reserves. The five nations together account for 44% of global demand.Strategic crude oil reserves are a country’s answer to counter short-term supply disruptions. They are state-funded and meant to tackle emergency situations. (via India, US and China consider joint strategic crude oil response – Money Matters – livemint.com).

So quietly

A rather sudden development – and not widely reported, at that. Much trawling over the internet could not find any other reports on this meeting – except this one report in Livemint, linked above. It appears that this meeting in Seoul, is a follow-on meeting to the one that China proposed and hosted in 2006.

Energy security has long been an issue with China – which seems to have influenced its foreign policy strongly. Korea has long  been working on energy security with Middle East producers. India has worked on some oil storage plans with foreign investments.

Considering the low-output since the China confab, nearly four years ago, in the short run, there is little scope for any tangible outcome from the Seoul conclave. Developments if any, will only be long-term in nature – and will need significant co-ordination in oil exploration, shipping, storage, and transportation. But what it does, is establish an Asian forum for Asia’s big economies to coördinate policy.

Not a bad idea at all.

Korea-India

Oil prices and uncertainty could derail economies

This meeting has quite some background. With the changing power equations in Asia, Korea finds itself in a difficult situation. For historical reasons, they cannot see themselves being very close to Japan (bad memories of Japanese occupation) or China (China’s support for North Korea, hegemonic designs of China, etc.).

On the other hand, the Korean experience in India has been positive. Korean brands like Hyundai, Samsung and LG have done exceedingly well in India, Unlike Chinese brands, Korean products have been received warmly by Indians. Indian prowess in design, R&D, software, also complement Korean manufacturing, global scales and plans. Korea and India have signed a Comprehensive Economic Partnership Agreement (CEPA) in August, 2009.

In India, Korea is seen as a rare, non-threatening, non-exploitative industrial-economy player.

USA-Europe-Asia

It was at Copenhagen, that for the first time, Europe realized that they no longer have the inside track with the USA. At least Obama’s administration. The ‘special relationship’ that swells the British chest has been under some strain – for some time now. The US engagement with Asia makes some sense – as it is Asia which has extended nearly US$3-4 trillion in credit, growth opportunities to the US. Europe increasingly seems more like a liability – and a truculent competitor.

The US presumably knows which side of their bread is buttered.

China-India

Post-Copenhagen, a grateful China has been effusive towards India – at least temporarily. The Chinese press did a roundel for 60 years of India-China diplomatic relationship. With this we have a round-up of the entire scenario. The sentiment and motivation are thick enough to cut with even a blunt knife.

This time around.

Warped Indian history – By Nehru

A mentally shackled Nehru on 15th August 1947 - could not break free of the English

The old culture managed to live through many a fierce storm and tempest, but though it kept its outer form, it lost its real content. Today it is fighting silently and desperately against a new and all-powerful opponent — the bania civilisation of the capitalist West. It will succumb to the newcomer, for the West brings science, and science brings food for the hungry millions. But the West also brings an antidote to the evils of this cut-throat civilisation — the principles of socialism, of cooperation, and service to the community for the common good. This is not so unlike the old Brahmin idea of service. (from Jawaharlal Nehru, an autobiography: with musings on recent events in India By Jawaharlal Nehru via Nehru: Man Among Men By Raja R. Mehrotra).

Bad start

India and Nehru got off to wrong start at the very first instant. When he made his ‘famous’ tryst with destiny speech, who was Nehru talking to? To the less than 5% Indians who understood English? If Free India’s first Prime Minister did not see fit to talk to Indians intelligibly, how close or how much did he care for India?

Nehru’s ideas about Indian history are possibly his biggest failing. Nehru’s puerile ignorance about India’s scientific tradition does not deserve further examination. Look at his pseudo-romantic ideas of Indian Brahminism.

Indian tradition

Jawaharlal Nehru with Girja Shankar Bajpai, the first Secretary-General, Ministry of External Affairs, at Commonwealth Prime Ministers, 1948, London. (THE HINDU PHOTO LIBRARY)

In Upanishadic times, there was the Nachiketa story, where his rich Brahman father, Uddalaka, /Vajasrava, was ‘giving’ away old, barren, unproductive cows – and keeping the best for himself. Obviously, Uddalaka, /Vajasrava did not become rich through ‘selfless’ service. Probably, Nehru was not Brahmin enough to know this lesson. Or we can blame his British school, Harrow. Why did they not teach him anything much about Upanishads?

Much after Uddalaka /Vajasrava, foreign students paid upto 1000 coins in advance to receive education at Takshashila – and there were thousands of such students. Students came from all over the world – and paid large sums of money to Indian teachers for education!

The Tibetan-Buddhist student, Marpa, the Translator (1012–1099), was warned by a co-traveller “If you go to India without lots of gold, searching for dharma will be like trying to drink water from an empty gourd.” Interestingly, Naropa, the Indian teacher forced Marpa to give up his entire stock of gold. Having extracted all of Marpa’s gold, Naropa threw all the gold dust, up in the air, exclaiming that the whole world was gold to him. Where was Nehru’s much-vaunted Brahmin idea of service then. Nehru’s ideas of Brahminical selfless service were alien to India – as were his ideas of rampant, extractive, profiteering banias.

Indian trade ethics

Indian banias were limited in their profit-taking by शुभ लाभ ‘shubh-labh’ ethics. It is शुभ लाभ shubh labh, that prevents traditional Indian merchant community, from dealing with slaves, drugs and alcohol. The ‘green’ agenda of शुभ लाभ shubl labh, also prevents traditional banias from dealing in meat products. Unlike Nehru’s British banias whose wealth was created from slave trade – apart from drugs and alcohol.

Historically, trade in India is governed by शुभ लाभ ‘shubh labh’ – and hence Indians have not been major players in drugs proliferation (unlike Japan, the West, which traded Opium in Korea and China) or in slave trade. In modern times, India is not a big player in spamming or in software virus – though a power in computing industry. In August 2008, a hoax story alleged that an Indian hacker, had broken into a credit card database, and sold it to the European underworld. Some ‘experts’ feared that this would spark of a crime wave across Europe.

On slavery, the very basis of Western dominance, in his autobiography of nearly 500 pages, Nehru mentions slavery less than 5 times. Which just goes onto to show how well the Indian colonial masters had ‘supressed’ their own real history and source of wealth.

Underneath the Western sky

Colonial India’s English push was understandable. But, Nehru’s imposition of English on India is beyond defence. What more, after 60 years of Independence, state patronage of English language is unwarranted by the Indian Republic – and illegitimate. Making sense of the newly formed Indian nation was herculean task – even for Nehru. After more than a century of propaganda, Western ‘education’, inversion of history, post-colonial Indian rulers struggled between the ‘glossy’ imported idioms and the familiar native dialogue.

Caught in this dilemma, the Nehruvian Indian State vacillates between a unique Indic inheritance and the detritus of dead-end colonialism.

Assault on Indian academia

Nehru - at his Harrowian best!

Mohammed Bakhtiar Khilji destroyed the Universities and schools of Nalanda, Vikramshila, Odantapura and Jagddala around 1200 AD. This marked the destruction, persecution and decline in Indian education, thought and structure. 600 years later, the British further damaged the Indic system of education, with State subsidies and patronage of Western education – the watershed being Bentinck’s proclamation in 1835.

Thus, the reduced (quality and quantity) output from the ‘Indian thought factory’ led to stasis and the decline that we see today – through the prism of last 800 years of violence and destruction of Indic thought. This problem gets further magnified with the existing and continued subsidy to English language /Western education by the Indian Government.

Many centuries ago, Indians (under Islamic rulers) thought that Persian was the most important language in the world. And then it became Urdu. Now there are hosannas to English. Persian and Urdu were languages that the ruling class foisted on the Indians.

As is English.

SEC to sue Goldman Sachs

The gentle art of suing Big Guns

SEC’s decision to sue Goldman Sachs, brings to an end, a long drama.

In August and September of 2008, 2ndlook was calling for investigations into the collapse of Bear Sterns, Lehman, et al. When the Great Recession was not real – and only a fear. While Preet Bharara was busy building a flimsy case against Rajarathnam? When Bharara should have been investigating Hank Paulson, the Former Treasury Secretary, under whose watch many bankruptcies happened. Conveniently in favour of JP Morgan and Goldman Sachs. Even now, this investigation,

To say that it comes at an awfully convenient time for President Barack Obama’s Democrats is a colossal understatement.

With mid-term elections just a few months off and the U.S. Congress set to debate a massive financial regulatory reform package — one that Wall Street lobbyists and their pals in the Senate have been fighting every step of the way — the suit offers tailor-made reformist ammo for Obama & Co.

Birds of feather

Khuzami tells us that Goldman Sachs is cared. Tell that to the birds!

By sending a notice to Goldman Sachs, in July 2009, SEC gave enough time to Goldman Sachs to enable them to prepare adequately for an extended court-room battle. Businessweek  writes about three issues,

Robert Khuzami, shortly after becoming the Securities and Exchange Commission’s enforcement chief last year, told Congress the agency must be willing to fight big cases to show it poses a “credible threat.”

Does Khuzami think that SEC scares Goldman Sachs? With the kind of money power that Goldman Sachs has, it can manage a battle with SEC for an entire generation. What SEC’s action will do is scare the likes of the co-accused in the Rajarathnam case. Extremely small fry. Even Rajarathnam was  not scared of SEC. Minions – that is who Khuzami is trying to scare.

European regulators are following the SEC’s case. Britain’s Financial Services Authority said today it will start a formal probe of Goldman Sachs’s London unit. BaFin, Germany’s financial-services regulator, is requesting information from the SEC about the case.

Big Business loves regulatory overload. It kills competition!

Win over voters. Avoid charges of collusion. Shake the money tree. Gordon Brown has a tough election to win. In the middle of the Great Recession, the German Government needs to show ‘resolve.’ In the meantime, AIG has also decided to try a shakedown.

The SEC’s Republican commissioners, Kathleen Casey and Troy Paredes, opposed the lawsuit against Goldman Sachs, which was approved in a 3-2 vote, two people with knowledge of the matter said yesterday.

Nobody’s ‘tellin’ but everybody knows. Big business and Big Government. That is the axis on which ‘progressive’ economies of the world are being built – and depend on. Or become a large public-sector enterprise – like Europe has become. This is the regulation gambit.

Government’s impose regulation to eliminate the small players – who cannot bear the regulatory overload and compliance costs. More regulation helps the big players – and big players have the financial and bureaucratic muscle to manage excess regulation.

The trouble with Hank

Was Hank Paulson making it easier for his ex-employer Goldman to buy up competitors? Was he helping out JP Morgan with WaMu and Bear Stearns? It was well-known that JPMorgan Chief, Jamie Dimon had long drooled over WaMu. While a lot of stressed organizations were getting support, Hank Paulson allowed Lehman to go under! JPMorgan was being blamed for Lehman collapse.

US bank JPMorgan Chase stands accused of precipitating the collapse of American investment bank Lehman Brothers by freezing Lehman assets days before it filed for bankruptcy protection, the Sunday Times reported.

After 60 Days

Was Paulson looking at his own future, while deciding on the future of Bear Stearns, Lehman Brothers, WaMu? How 60 days later, when he would need a new job! Was the collapse of Lehman, a deal for a job with Goldman – or was it JP Moran Chase? While a lot of people were getting support, Paulson allowed Lehman to go under!

I wonder why?

Transparency International does not call this corruption. But then, that is par for the course!

Been there and done that

In a democracy, people have choice!

This is very similar to Joseph Kennedy’s shorting the market before The Great Depression. It has always been a source of wonder to me how could Joseph Kennedy, a bootlegger and a friend of the mafiosi become SEC Chairman? And after that, could the Great Depression not follow?

It was always 2ndlook’s suspicion that Hank Paulson’s behaviour in the Lehman collapse is similar to Bootlegger Kennedy’s behaviour. And this now coming out all in the open!!

The biggest bankruptcy in history might have been avoided if Wall Street had been prevented from practicing one of its darkest arts.

As Lehman Brothers Holdings Inc struggled to survive last year, as many as 32.8 million shares in the company were sold and not delivered to buyers on time as of September 11, according to data compiled by the Securities and Exchange Commission and Bloomberg. That was a more than 57-fold increase over the prior year’s peak of 567,518 failed trades on July 30.

The SEC has linked such so-called fails-to-deliver to naked short selling, a strategy that can be used to manipulate markets. A fail-to-deliver is a trade that doesn’t settle within three days.

“We had another word for this in Brooklyn,” said Harvey Pitt, a former SEC chairman. “The word was ‘fraud.’” (via Naked short sales hint fraud in bringing down Lehman).

Back then in 2008, first, the world was hit by Big Oil at US$150 per barrel. As though that  was not enough, came the Big Banks! After Big Oil and Big Banks, we will have the pleasure of getting the The Big Lie!

Goebbels is alive, well and kicking. All of us.