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Posts Tagged ‘Japan’

The G20 lacks legitimacy

Obama's media management 

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 ...

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

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!

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

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

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

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

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)

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!

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.

China and U.S. soften tone on yuan

The poor will pay a price ... as usual.

The poor will pay a price ... as usual.

Amid harsh rhetoric, Chinese Vice Commerce Minister Zhong Shan and U.S. Treasury Secretary Timothy Geithner sounded some conciliatory notes on Wednesday.Mr. Zhong, making a 30-hour visit to the U.S. to try to ease bilateral tensions, expressed confidence that politicians from the two countries “have the wisdom and ability to resolve existing problems.“Mr. Geithner said he be- lieved China would allow its currency to appreciate over time, according to a CNN interview transcript. While the U.S. “can’t force them to make that change…I think we can work through the tough things we have together,“ Mr. Geithner said.The stakes are high for both sides. The U.S. and China are among each other’s biggest trading partners, and numerous U.S. companies have investments in China. The U.S. is increasingly looking to China to cooperate on international strategic issues, such as nuclear nonproliferation and the fight against terrorism. (via WSJ ON YUAN – China and U.S. soften tone on yuan).

Let the games begin!

Rousing 'macho' WASP voters!

Rousing 'macho' WASP voters!

The Dragon and the Eagle are squaring off! An experienced US stalks China, waiting behind high walls of US$2500 billion foreign exchange reserves.

The US-China game has started in earnest. US, egged on by ‘macho’ voters and a cheering media, will:-

  1. Act tough
  2. Behave in a morally outraged and indignant manner
  3. Commentators will prescribe a trade war and sanctions

In parallel, analysts, academics, think-tanks, journalists will talk-up China. Like Greenspan talking-up the US dollar or Dow Jones. They will: –

  1. Hold up China an nation-exemplar
  2. Write books analysing on China. Such books will start pour out of our ears
  3. Make movies and novels about the ‘dominant’ Chinese in the US
  4. Study, extol Chinese culture /tradition /history, and hold forth as a shining example.

And China will be ‘uncompromising’! Act as though, they have a choice.

A certainty

The change in dollar-yuan exchange ratio will happen. Peacefully, or with violent side shows. Assuming that the dollar-yuan revaluation will happen smoothly, is fraught with risk. That it will happen, without any significant disruption, is one, big, huge, slippery assumption. What will follow the Chinese moment in the sun?

Economic mayhem?

What remains to be seen

What could set off economic mayhem in China? Crime in China (a simmering threat), terrorism in Xinjiang (remote possibility), real estate bubble (a real scenario)?

Will the Chinese Government be able to ride this storm? Without a war with India? Which side of the fence will China fall? Answers to these questions will be worth waiting for! And prepared with!

Last time …

It would do well to remember that last time when China had a problem, it resulted in the India China War of 1962. Just after the disastrous Great Leap Forward and before the equally disastrous Cultural Revolution.

The Great Leap Forward began in 1957-58, saw famine and hunger across China. After the Communist takeover of China, land seized from land owners, was given to peasants in 1949. Ten years later, in 1959, the Chinese State took away the same land from the same peasant. Food shortages, starvation followed. Western (questionable) estimates are that 30 million people died during this period. War with India followed in 1962 – a diversion from the domestic Chinese catastrophe.

What will it be this time?

Oz cops under scanner over porn, racist emails – Rest of World – World – The Times of India

Truth hurts, huh? This Indian cartoon got Australian goat!

Truth hurts, huh? This Indian cartoon got Australian goat!

About 100 Australian police are being investigated for circulating racist and pornographic emails via the internal police email system, and one officer involved in the scandal has committed suicide, a top official said on Thursday.

The probe in Victoria state follows an independent citizens group report last week … accusing the department of having a “culture of racism.”

Police Chief Commissioner Simon Overland acknowledged at the time that some officers were racist but said they were a small minority … the material involved a variety of offensive themes, including pornographic and sexist material … none of it was illegal but that all of it was offensive and in breach of department policy.

He would not confirm whether any of the racist material referred to Africans or Indians … the target of violence in Victoria state and have criticized police conduct in recent months. The Age newspaper reported that the investigation centered on a graphic image of a non-Caucasian man being tortured.

Overland confirmed that a police officer who committed suicide earlier this week … Tony Vangorp, 47, tendered his resignation on Friday and returned to the police station Monday night and shot himself. Overland said Vangorp had not been responsible for any racist emails. (via Oz cops under scanner over porn, racist emails – Rest of World – World – The Times of India).

Stand up and take the responsibility

It is a tragic that a low-level police officer, Tony Vangorp paid with his life – for essentially, criminal neglect and attitudes of the authorities. Tony Vangorp is possibly a modern-day version of Breaker Morant.

CNC Machines to Soviet Union

1982, Height of the US-USSR rivalry, under President Ronald Reagan. Japan was predicted to replace USA as the economic power. Toshiba, of Japan and Kongsberg Vapenfabrikk, Norway’s largest defense contractor, sold some multi-axis CNC machines to Russia – banned under COCOM rules, to which Japan was a signatory.

Details of this sale became known in 1987. Toshiba, President Sugiichiro Watari and Toshiba Chairman Shoichi Saba resigned soon after the affair became public. ”We have a big responsibility as the parent company,” the departing chairman said. ”We feel responsible for having troubled society.” reported the New York Times. Saba said, “must take personal responsibility for not creating an atmosphere throughout the Toshiba group that would make such activity unthinkable, even in an independently run subsidiary.”

Not some junior level clerk.

Shastri and Indian Railways

Lal Bahadur Shastri

Lal Bahadur Shastri

Post-colonial Railways system in India was the biggest scrap heap in India. Accidents were a regular feature – but naturally. The colonial practice was to blame the lower most employee, and tar the native workers as being lazy and slip-shod. The Brown Sahibs, continued with this practice, even after the British departed. Till, one day, one man stood up and said I am responsible. That man happened to be Lal Bahadur Shastri. From that day, the Indian Railways started improving – to become a low-cost, high safety transport system in the world.

Australian authorities have been consistently covered up the incidents, fudged and hid data, minimized the problem – and went into ritualistic denial.

To what end?

The Great Recession – Outlines of Round 2

March 26, 2010 1 comment

Is the global economy staring at a double-dip? Round-II of the Great Recession coming your way?

Gross Indebtedness - Some sample countries  |  Image source & courtesy - livemint.com  |  Click for image.

Gross Indebtedness - Some sample countries | Image source & courtesy - livemint.com | Click for image.

The next tsunami

Gross debt (government, private, corporate) of the Greece, Hungary, Ireland, Italy, Portugal, Spain, UK, US are all above 200% – going up to more than 1000% in case of Ireland.

These leaves the governments with a tough choice.

Analysts are already pointing to a policy dilemma: If these countries cut back on government borrowing, growth will suffer. But if they don’t prune their deficits, the bond market, spooked by the higher borrowing, will push up interest rates, which, in turn, will impact growth.

For the banks, much depends on what happens to the housing sector. US analyst Meredith Whitney has said the US is sure to see a double dip in housing, which will force credit writedowns in banks and impair capital. Bank lending in the US has still not picked up, which means that the US consumer is wary of taking on more debt. That is not difficult to understand, given the job losses and the fact that household debt to GDP ratios are still very high.

Societe Generale SA economist Albert Edwards, admittedly an unabashed bear, points out: “Household leverage has returned to 94% of GDP from its peak of 96% in both 2007 and 2008. But consider this: At the peak of the Nasdaq bubble, household leverage was just shy of 70%. There is a very, very long way to go.” (via Round 2 of crisis in developed world to mar global recovery – Economy and Politics – livemint.com).

The lure of a welfare state

The lure of a welfare state

So, what happens if a borrower(s) default on repayment? There is insurance for non-repayment.

Going insurance rates for repayment risk, knowwn as credit default swap (CDS) are indicative of the market perception. What exactly do CDS rates signal?

Explains a journalist,

Higher spreads on credit-defaults swaps indicate sellers have raised the price of guaranteeing protection because they perceive the likelihood of a default as higher. A spread of 97 means it would cost about $97,000 to buy protection on $10 million in U.S. government debt. (from U.S. sovereign-credit spreads rise sevenfold in year, By Laura Mandaro, MarketWatch, San Francisco).

The ratings game

The second patch of quicksand in money-markets is the ratings business.

Ratings game is a very curious business. India, a US$1 trillion economy, growing at 7%, with a gross debt of 129%, has a rating of BBB-. Look at Ireland, where accordingto the most recent World Bank data, Ireland’s number stands at a staggering 1,267%” – has a rating of AA-, after a recent rating downgrade in November 2009.

Brazil, India, Russia and South Africa are missing  |  Image & courtesy - paul.kedrosky.com  |  Click for image.

Brazil, India, Russia and South Africa are missing | Image & courtesy - paul.kedrosky.com | Click for image.

Or a situation where,

China swaps cost 66 basis points, down from 297 on Oct. 24. That’s cheaper than Greece and Ireland and within 9 points of Austria, Italy and Spain.

Obviously, such artificial pricing and manipulation can only be ‘sustained’ for short bouts.

And when does that short bout end?

It is obviously true that market perceptions of sovereign default risk in the eurozone (as reflected in CDS rates) are rising across the board and are now very high indeed by historical standards.  According to Markit, on 12 January 2009, Germany’s 5-year  CDS rate was 44 basis points, France’s 51 basis points, Italy’s  155 basis points and Greece’s 221 basis points.  The same is true, of course, for the US, with a CDS rate of 55 basis points and and for the UK, with a 103 basis points CDS rate.  Sovereign CDS markets may not be particularly good aggregators and measures of default risk perceptions because issuance is patchy and trading is often light, but the numbers make sense.

Engines of growth

EU’s economy is contracting now for the last 18 months. The burden of the Welfare State is not reducing. EU’s populations are not scaling down their expectations. Who will pay for these gold-plated services, that Europeans consider is their birthright.

The Chinese+ASEAN economies depend on exports to US and European markets for growth. With these bankrupt economies as customers, the outlook for China+ASEAN is questionable. Middle East depends on US+EU for security, banking, monetary and fiscal management.

That leaves the global economy with Brazil, Africa India and Russia as engines for growth

Debt-GDP Ratio's - Major economies  |  Image source & courtesy - visualeconomics.com  |  Click for source image.

Debt-GDP Ratio's - Major economies | Image source & courtesy - visualeconomics.com | Click for source image.

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 debt, it is the Russian corporate sector which is the main debtor. Russia is in a league of its own, with debt levels ranging between 2%-20%.

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.”

Never have so many depended on so few – for economic growth. Thin gruel to go round.

arch 10, 2009, 7:19 p.m. EDT · Recommend (31) ·


The looming Yuan-Dollar currency crisis

No dearth of pretenders - EU, Japan ... and now China!

No dearth of pretenders - EU, Japan ... and now China!

There are three separate reasons for this … The reasons refer to the broad determinants of economic growth — capital, labour and productivity.

On the first, India is investing at the same rate as China (approximately 40 per cent of GDP), on the second, India’s labour force growth is about 1.8 per cent per year faster than China, and on the third, China has outpaced India by about 2 per cent per annum (for the last five years).

Most of this outpacing has had to do with the deep and deeper currency undervaluation practised by the Chinese authorities which led to two unsatisfactory outcomes: the great financial crisis of 2008, and now the largest and fastest growing polluter of the world.

For how long will the international community stand idly by? Not very, and this is the first big forecast for the ensuing decade: China’s exchange rate will appreciate significantly starting 2010. How significantly? A first year appreciation to about 6 yuan per dollar from the present 6.8 level. (via Surjit S Bhalla: India’s Shining Decade).

Plausible! Probable … Possible?

'Get to heaven by climbing the terraced fields'. Great Leap Forward poster, Artist - Yang Wenxiu, Published - 1958, September, © Stefan R. Landsberger

'Get to heaven by climbing the terraced fields'. Great Leap Forward poster, Artist - Yang Wenxiu, Published - 1958, September, © Stefan R. Landsberger

Surjit Bhalla outlines a plausible scenario – with China needing to adjusting their exchange rate upwards – much like other US client-states had to! Europe had to in the 70s, Japan in the 90s, Asian Tigers in last 10 years. As examined earlier in some detail by 2ndlook. One question is settled. There will be economic mayhem.

However, Bhalla assumes that the Dollar-Yuan revaluation will happen smoothly – without any significant disruption. And that is one, big, huge assumption – which is based on really, really slippery slope.

Bhalla would do well to remember that last time when China had a problem, it resulted in the India China War of 1962. Just after the disastrous Great Leap Forward and before the equally disastrous Cultural Revolution.

The Great Leap Forward began in 1957-58, saw famine and hunger across China. After the Communist takeover of China, land seized from land owners, was given to peasants in 1949. Ten years later, in 1959, the Chinese State took away the same land from the same peasant. Food shortages, starvation followed. Western (questionable) estimates are that 30 million people died during this period. War with India followed in 1962 – a diversion from the domestic Chinese catastrophe.

What will it be this time?

The approaching mayhem

The next few years will be tumultuous for China.

Much like, when Europe was weaned off the low exchange rate crutch in 1967-1974 period. Stagflation, oil shock, the Nixon Chop followed. How Japan had to live with endaka, the Plaza accord, with S&L crisis in the US.  Or the Asian Tigers had to reset to a higher exchange rate and higher foreign reserves, that accompanied the 1997 (Asian Crisis) to 2000 (The Tech meltdown).

What will follow the Chinese moment in the sun? What will set off economic mayhem in China?

Crime in China (a simmering threat), terrorism in Xinjiang (remote possibility), real estate bubble (a real scenario), dollar-yuan exchange ratio (significant risk)?

Will the Chinese Government be able to ride this storm? Without a war with India? Which side of the fence will China fall? Answers to these questions will be worth waiting for! And prepared with!

Signs of coming troubles?

Great Leap Forward © Stefan R. Landsberger; Source - Zhongguo meishuguan (ed.), 中国美术年鉴 1949-1989 (Guilin: Guangxi meishu chubanshe, 1993). Designer: Zhang Xin'guo (张辛国); Liu Duan (刘端); 1958, October; Put organizations on a military footing, put actions on a war footing, put life on a collective footing; Zuzhi junshihua, xingdong zhandouhua, shenghuo jitihua (组织军事化,行动战斗化,生活集体化); Publisher: Hebei renmin meishu chubanshe (河北人民美术出版社).

Great Leap Forward © Stefan R. Landsberger; Source - Zhongguo meishuguan (ed.), 中国美术年鉴 1949-1989 (Guilin: Guangxi meishu chubanshe, 1993). Designer: Zhang Xin'guo (张辛国); Liu Duan (刘端); 1958, October; Put organizations on a military footing, put actions on a war footing, put life on a collective footing; Zuzhi junshihua, xingdong zhandouhua, shenghuo jitihua (组织军事化,行动战斗化,生活集体化); Publisher: Hebei renmin meishu chubanshe (河北人民美术出版社).

When the Soviet Union imploded, one of the unexpected fall out was the Russian mafia. Recent troubles in China, with the underworld creates a spectre of yet another mafia creating global disturbances. One more element in global trouble spots. To understand this better, turn to Chinese cinema.

Most films that have any Chinese element in it, (actors, directors, characters, locations) end up having the Chinese underworld as an important part of the storyline. Is it that the Chinese are morbidly fascinated by criminals and the underworld – much like Europe was with English pirates and murdering Spanish Conquistadors.

Ranging from Jet Li in Kiss of the Dragon, (Jet Li takes on the French mafia) or Chow Yun-Fat in The Corrupter (exposing police-underworld nexus and corruption in the USA), or Jackie Chan in Rush Hour series or the Chinese Ric Young in The Transporter, Jet Li in Lethal Weapon 4.

All have two elements in common.One is the pervasive Chinese underworld. Across Europe, in the USA. In drugs, fake currency, in smuggling boat people, the Chinese are there – everywhere. Many of these movies have Chinese stars, directed by Chinese directors or even partly funded by Chinese studios .

The second is the absence of the Buddhist monk.

India – the loose cannon!

What kind of ending will we see ...?

What kind of ending will we see ...?

Now, India is one box which defies description. By any global and historical standards, the country should not even exist – much less prosper, or be a significant global player. Too many languages, too much poverty, too much freedom, too many political parties, too many languages, too many religions, too many racial types are the common factors going against India (so goes the Desert Bloc narrative).

In such a situation, even in India, for the Westernized types or the remnants of the Desert Bloc admirers, India remains a failure waiting to happen.

Unfortunately, for these doubting Cassandra’s, India has proven them wrong for more than 5000 years now!

equally

Public debt imperils world economy

December 6, 2009 Leave a comment

Surprised at this 'perfect storm' - Don't be!

The Organisation for Economic Co-operation and Development (OECD) has warned that the world’s 30 leading industrialized economies will see their indebtedness grow to 100% of output in 2010, a near doubling from the percentage 20 years ago. (via Public debt imperils world economy – International News – livemint.com).

Till the fat lady sings

The debt spiral is not ended yet.

Like the Dubai crash shows, the world economy is not yet out of the woods. Struggling firms, in the face of a weak consumer and industrial markets, may just keel over. A domino effect may set off yet another round of closures, bankruptcies, mergers, and defaults.

More importantly, are Western Governments. With public debt (read that as Government debt) exceeding 100% of GDP for every Western Government – Ireland at more than 1000%, Britain at nearly 200%, US at more than 100%, they are the vulnerable soft-spot of the global economy.

I want more

The shopping bill for Western welfare state is not going away – except up. Welfare bills are getting more ambitious – and the domestic lobbies want more ambitious schemes. High cost economies are being protected by barriers and stockades.

Run … hide … but you can’t turn your back

The political constructs of the West have hit a wall – and there is no way but down! Since the West is busy hiding elephants in the room, the need for a different political ideology remains unaddressed.

An ideology like भारत-तंत्र Bharat-tantra.

Will China go the Japan way …

November 23, 2009 4 comments

 

After WWII, as old European powers were retreating, the US was building a new imperial system. Pax Americana.

Is this Western 'humility' or a flanking move on China? (Cartoonist - Mike Keefe, The Denver Post; courtesy - caglecartoons.com.).

Is this Western ‘humility’ or a flanking move on China? (Cartoonist – Mike Keefe, The Denver Post; courtesy – caglecartoons.com.).

During Obama’s visit, China secured everything it wanted – the political dividends of funding $800 billion debt to an ailing US economy. Having locked the US into economic inter-dependence, it also used American vulnerability to legitimise a much larger role for itself. Hitherto China was the greatest champion of “national sovereignty” which it deftly contrasted to the West’s intrusiveness. The seemingly innocuous reference to India and Pakistan marks a new willingness to step into an emerging void. China is not going to flex its muscles in a hurry. It has set the markers for a new, global architecture of power that will follow its inevitable emergence as the world’s biggest economy. India has reason to worry. (via China has tamed India with help from Obama – The Times Of India).

The US strategy

Most ‘future-of-China’ debates are incomplete as they miss a very important element –  the American template for co-opting client states. Let us call this as US-Client-Acquisition Programme (USCAP). China’s economic future will be decided by access to US markets, capital, technology, businesses – very closely.

After WWII, as British, French and Dutch colonialists were being thrown out of Asia, in country after country, the West was in real danger of losing markets and raw material sources. Fueled by a growing migrant population, USA, took the place of tired, old powers – Britain, France and the Dutch. Instead of the openly exploitative system of European powers directly running colonial governments in these Asian countries, the US installed an opaque system – which is equally exploitative. To impose its writ on the newly independent Asian countries, the US simply destroyed their  economies by war.

The USA, then instituted the innovative US-Client-Acquisition-Programme USCAP Program and ‘helped’ these countries. These countries (Taiwan, Singapore, Japan, South Korea, Indonesia, Malaysia, et al) were now ruled by overtly independent regimes – but covertly, client states of the USA.

US multinationals and home-grown oligarchs (keiretsus, chaebols, etc.) took over the economy – and sidelined British, French and Dutch companies. To impose this economic model, US armies, using nearly 1 million troops, killed 50 lakh Asians. The takeover of European colonial possessions by the USA was handled over 3 regimes of Eisenhower-Kennedy-Johnson seamlessly.

Club de USA. (Cartoonist - Gary Varvel; publication date - 30-10-2008; source and courtesy - thedailynews.com). Click for larger image.

Club de USA. (Cartoonist – Gary Varvel; publication date – 30-10-2008; source and courtesy – thedailynews.com). Click for larger image.

Multi-lever device

Apart from war, conflict, by using economic levers, it has successfully created client states across Europe, SE Asia, Japan, etc. Some economies have taken the bait, used US incentives and become ‘successful’ client states.

Some prospective  clients states have fallen by the wayside. South American failures, the Middle East, Pakistan, post-Gorbachev Russian reluctance have been signal failures of  American recruitment.

The strategy has 5 five corner-stones: –

  1. High dollar value – vis-à-vis the client state currency.
  2. Export led growth
  3. US multinational corporate investments
  4. US soft-power is allowed unimpeded run (Hollywood, Rock & Roll, Coca Cola, McDonald’s, etc.)
  5. US enemies are the enemies of the client states

The most ambitious target and the biggest challenge in the execution of this strategy is China. But before we look at China, we need to see the US pattern of recruitment and involvement.

In the aftermath of the WW2

After nearly 6 years of WW2, Europe was prostate, with more than 25 million killed (including the Holocaust). European economies were shattered. 10 years after WW2, Europe lost most of its colonies. In the midst of this, the US stepped in with the Marshall Plan and IBRD. Most European currencies were set at a low exchange rate, exports to the USA were boosted, and Europe made a comeback.

Money makes the world go round ... (Illustration by KAL | Feb 5th 2009 | Source and courtesy - economist.com). Click for a larger image.

Money makes the world go round … (Illustration by KAL | Feb 5th 2009 | Source and courtesy – economist.com). Click for a larger image.

During the 1950s and 1960s, Europeans amassed a huge stash of US treasury bills to keep up fixed exchange-rate pegs, much as China has done today. But the purchasing power of Europe’s dollars shrivelled during the 1970s, when the costs of waging the Vietnam war and a surge in oil prices contributed to a calamitous inflation. (from China’s Dollar Dilemma By Kenneth Rogoff)

In return for US aid, Europe agreed to be a junior partner in the NATO alliance. Unlike most overlords and masters of the past, the USCAP allowed significant leeway to their European client states in matters of culture, language, political, economic and religious freedom. The US yoke around the European necks was never too heavy or irksome. Mostly.

Italy, Germany, France, Austria, Sweden, Denmark, The Netherlands made a brilliant recovery. The only laggard was Britain – living on past glory and trying to unwind the past, at the same time. As European economies stabilized, the US ‘allowed’ European currencies to appreciate against the dollar, triggering 40 years of low-growth /economic stagnation in Europe.

The end of the Japanese miracle

As European success stabilized, US turned its attention to Japan. The Japanese star started ascending in the 70s. From the 80s, right upto the 90’s, the business and economic world were agog with the coming of the Japanese. The ‘Japan-MITI-keiretsu-Quality management system’ combination seemed unstoppable. The world waited with bated breath for the Japan to rail-road everyone else. Every businessman, first tried to learn Japanese etiquette.

Hollywood made films showcasing Japanese business and economic systems – like Black Rain (Michael Douglas teaches a few things to the Japanese Yakuza and the Tokyo Police); Die Hard (Bruce Willis fights terrorists in Nakatomi Plaza), Rising Sun (Sean Connery, Wesley Snipes investigate murder in an American subsidiary of a Japanese company).

1973-1985. The Japanese were strutting on the world stage. In their hubris, one Japanese businessman declared that the only world-class product made in USA was maple syrup.

From ‘The myths of Japanese quality; By Ray E. Eberts, Cindelyn G. Eberts’, Page 141

In business schools, Japanese management was the first lesson and the last word. American corporate icons like Xerox, FedEx, Motorola adopted various ‘QIP’ systems – quality improvement processes. The miracle of European Reconstruction and EU was not even in the consideration set any more. The USSR was still a power to reckon with. Berlin Wall looked like a permanent fixture across the heart of the Western world. And the Japanese manufacturing juggernaut seemed unstoppable.

Falling cherry blossoms

Finally, the Americans decided to bell the cat – and the yen-dollar exchange rate was rejigged. The American government put pressure on Japan’s politicians and central banking officials to raise the value of the yen against the dollar. Some U.S. industries, anxious about their eroding share of world markets, put political pressure on American politicians. With some support from academic economists, American producers argued that a higher-valued yen would help their products sell better in competition with Japanese products and therefore reduce the American trade deficit.

In 1985, the US worked out a deal, whereby the US dollar was devalued, without a formal devaluation. The dollar was allowed to sink against the Japanese Yen – only it was not called a devaluation, but was called the Plaza Accord. Whereby the dollar would be allowed to depreciate against other currencies – especially the Japanese Yen. Intense negotiations spread over nearly a decade followed. During crucial and intense negotiation with Japan, in 1992, George Bush Sr., vomited and fainted.

The Oil-Dollar Tango

Endaka – and the end of the Japanese run

After the Plaza Accord, the Japanese team went back home and prepared their industry for endaka – high yen prices. Between August 1971 through April 1995, the yen’s value ratcheted up from 360 to 80 for a dollar. In 1993, for the first time, a non LDP Government was formed in Japan – The Shinseito (Japan Renewal Party) came to power.

And the Japanese goose was truly cooked.

Net outcome, by the mid 1990s, the Japanese juggernaut was halted. Japan had to remain contented with being the world’s second largest economy. George Soros thought,

the prospect of Japan’s emerging as the dominant financial power in the world is very disturbing, not only from the point of view of the United States but also from that of the entire Western civilization

For the next 10 years, the Japanese economy stagnated, investments stagnated. Their dream of supplanting the US as the world’s largest economy were over – for now at least.

Stuffed Tigers

After Japan, the 90s was decade of the Asian Tigers – Korea, Malaysia, Thailand, Indonesia, Singapore were all set to replace Japan as the ‘new axis’ of world economy. India especially came out as a clumsy plodder against these countries. Lee Kuan Yew, held forth on the Indian character as faulty – and could not compete with the Chinese-Confucian value-set. Commentators tripped over themselves, predicting an Asian century.

Then followed the Asian Crisis. Significantly affected, Mahathir Mohammed claimed that the 1997 Asian Crisis was a foreign conspiracy. Specifically, he named George Soros as the master mind behind the Asian Crisis. Nine years later, Mahathir made up with George Soros – and at a joint press conference, retracted his charge. (Note: This story got a fresh lease of life during the pre-election campaign in Malaysia. Purportedly, George Soros funded some political parties and websites, with some new stories and fresh charges targetting Mahathir Mohammed.).

Has It Come To This? (Cartoon by David Horsey; publication date - 19th May 2008; source and courtesy - sanfranciscosentinel.com). Click for larger image.

Has It Come To This? (Cartoon by David Horsey; publication date – 19th May 2008; source and courtesy – sanfranciscosentinel.com). Click for larger image.

The ostensible reason for the Asian crisis was that investors in the Asian Tigers were funding long-term investments from short-term borrowings – a classic mismatch. The rapid withdrawal of foreign funds impacted development of these economies to the extent of a decade.

The real reason possibly was in the scheme of USCAP things, the US had turned its attention to the Chinese recruitment.

The 2 trillion trap

Similar to the success of the Europeans, the Japanese, Koreans and the Asian Tigers, China too has embraced the US-client state model. Booming exports to the US, massive FDI by the US in the Chinese economy, has put China in the earlier position of Japan and Korea – prime sub-contractors to the US economy. Where the Chinese economy seems to ‘partially different’ is the military side. On foreign policy and ‘American’ culture, the Chinese have been ‘superficially’ resistant and nominally ‘assertive’.

The Chinese miracle, much like the ASEAN, Japanese and European miracles before, is using exports to the USA as a stepping stone. Chinese growth and expansion depends on access to the US markets and a devalued currency. For how long will the US allow the Chinese to do that? Another 5 years – or is it 10 years. Was Obama’s China visit, the first round – in a 50 round bout, spread over the next 7 years?

What is China's future ...

What is China’s future …

The US dollar-renminbi tango will continue over the next 5-7 years. US pressures will be steadily increasing pressure on the Chinese. After the Asian crisis, China was in a better position to resist American pressure for renminbi revaluation. That resistance to renminbi revaluation, in turn, caught China, in another trap. China has US$ 2 trillion worth of rapidly depreciating foreign reserves.

Which brings us to India!

What will it be

What are the threats to the Indian economy! Will it be a ‘sudden’ collapse in software and outsourcing? Or will it be a severe contraction in gems and jewellery exports? Can it be a 3 year drought due to global warming? Many in India are panting for the day, when the US will deign to look India-wards and make India also into a client state. Most recently, we had the privilege of Shashi Tharoor, our Honourable Minister, who sees India replacing Israel in the US camp!

Without including factors like self-respect, national pride et al, two things make this scenario unlikely. India’s vast entrepreneurial class is unlikely to play second fiddle to American companies. More importantly, with declining US pre-eminence, it is late in the day to become an American client. A more equitable partnership may yet be possible for India.

PS

  1. China has regained roughly 45% in the last 17 years. The USCAP will need another 10%-20% upward revaluation before the US economy regains traction. StPTBarnum twitter message on 14th January, 2011.

China’s yuan at 13 year high. Close to 45% devaluation on 27th December 1993. Will China go the Japan way?: http://is.gd/Yr2ANG

  1. In the last 9 months, after this post, debates, analysis posts along similar logic, parallel lines and tangential orbits started appearing.You can’t go wrong, going with Quicktake!

I list below a selection: –

1. First of the block was a BBC itself. Roland Buerk from BBC News, Tokyo who asked

Is Japan’s economy a warning for China?

Japan’s workers have an air of purpose about them, even if their economy is no longer the rising giant it once was.

2. Then came a post by blogger, David Houle. He was sure that

As Japan Has Gone, So Will China?

wrote David Houle for the MediaBizBloggers group.

3. A littler while later, seekingalpha.com author Edward Harrison started wondering if

Is China Repeating Japan’s Mistakes?

4. In June, Deepak Lal started unravelling Chinese economy

Chinese Puzzle-I – Economy

China’s forex reserves look like going the way Japan’s did in the 1980s. Therefore, all talks of a G2 dominating the world economy are premature.

5. Most recently, we then had Huffington Post linking to a story from Foreign Policy, asking

Is China Turning Japanese?

6. Most recently, Businessweek, actually wished that

If Only China Were More Like Japan

China is heading toward a Japanese-style economic debacle, says columnist John Lee, who warns that the process won’t be as gradual or peaceful


A shift in position

November 22, 2009 3 comments

Last week, eyebrows were raised over yet another media appearance by the Rashtriya Swayamsevak Sangh chief, Mohan Rao Bhagwat. This time, the fuss centred on his categorical public announcement that the next national president of the Bharatiya Janata Party would not be a Delhi-based leader, and that L.K. Advani would soon relinquish his post as leader of the Opposition. Fortuitously for the Indian foreign policy establishment, his prognosis that Pakistan and Afghanistan “are a part of us and will return one day” did not arouse corresponding attention. (via The Telegraph – Calcutta (Kolkata) | Opinion | A shift in position).

From Ashvakan to Afghans

The task of subduing the Afghan, (a possibly corrupt form of Ashvakan, meaning horse specialists in Sanskrit), from the time of Alexander  to the latest Russian and American misadventures in Afghanistan underscores, the nature of the Indo-Afghan relationship. From the time of Tomyris (Thamyris), when Indian elephant units helped the Afghans to massacre Persian invaders under Cyrus the Great, or when the Afghans hopelessly tied up Alexander.

Alexander’s Indo-Afghan campaign ‘gave him the runs’ (dysentery), his soldiers deserted him in droves, he had to make a marriage alliance, pay nearly 1000 talents (25,000 kg in gold) for an alliance, his dear horse Bucephalus died, he was himself injured twice, made to release prisoners (without a ransom).

End result – he massacred defenceless non-combatant populations and armies alike, when ‘opportunities’ presented themselves.Why did Genghis Khan 'spare' India ...

Islamic ‘conquest’ of India

While Islamic armies were marauding Europe, Central Asia, Africa, India held out. When Genghis Khan’s Mongol armies were running rampant, Islamic refugees found shelter in India, during the reign of Iltutmish. In 1221 Genghis Khan‘s Mongol armies pushed Khwarezm-Shah and other Persian refugees across the Indus into the Punjab, India.

During early Islamic rule, when India was still viewed as militarily difficult target, the Mongols did not think of attacking India.  Remember, that the Mongols attempted to invade Japan, a rather poor country then, without the Sado gold mines! The Japanese blessed their good fortune, when typhoons or (‘The Divine Wind” is what the grateful Japanese called) the Kamikaze, that scattered the Mongol invasion fleet in 1274 and 1281. The Kublai Khan himself barely escaped the fury of the typhoon during the second invasion.

India, the richest economy of the world at that time, with known and famous for its wealth, was spared by Genghis Khan! Just why would history’s foremost looter, invader, pillager spare India?

The Mongol fleet destroyed in a typhoon, ink and water on paper, by Kikuchi Y'sai, 1847

The Mongol fleet destroyed in a typhoon, ink and water on paper, by Kikuchi Y'sai, 1847

Encyclopedia Britannica says Fortunately, the Mongols were content to send raiding parties no further than the Salt Range (in the northern Punjab region), which Iltutmish wisely ignored …” (emphasis mine). As Indian military reputation waned under foreign Islamic rule, the Mongols mounted a military expedition. The Mongols could succeed in India only under the foreign rule of the much-derided Islamic Tughlaks.

End of foreign Islamic rule

The 200-year foreign-Islamic rule from 1206 AD to 1400 AD ended when Ibrahim Lodi, an Afghan horse trader, cobbled together an alliance and sent the incompetent foreign rulers packing. The Lodis, were in turn deposed by another Afghan family, the Mughals.

The Mughals realized, early on, that freedom to Indians was non-negotiable – and enlisted Indian generals, kings, allies to expand their boundaries. The depredations of the foreign ‘Islamic’ rulers were partly reversed by these rulers of Afghan extract – with land reforms, tax reforms, reduction in forceful conversions, et al. The Lodis and Mughals partially reformed the Indic political model – deformed beyond recognition, during the 200 years of foreign Islamic rule. Land holdings remained concentrated in a few hands. Taxes were imposed and increased on the trading classes. Licenses and firmaans were reduced – but remained.

In the last 200 years

The only people who could win against the Afghans were the Indians – last under Ranjit Singhji. The British, and more recently, the Russians and Americans have failed miserably. British possessions of Afghanistan and Balochistan, which were handed to Pakistan on a platter, were a part of the Sikh-Punjab Empire, which fell into the British lap.

Kabuliwala - The movie posterTill about 1960’s India-Afghanistan trade and relations were close and neighbourly. Rabindranath Tagore wrote the short story, ‘Kabuliwalla’. Subhash Chandra Bose escaped from Colonial Raj imprisonment during WW2, using the Afghan route to reach Germany finally.

In early 1970s, in Hyderabad,  कागजी बेदाना अनार (seedless pomegranates) from Kabul, were available at around Rs.4 a kg – at today’s value is about Rs.100 a kg (based on gold prices). Local varieties were sold at less than Rs.1 a kg.

Between 1950 to the post-1973, Nixon Chop world, saw increasing of walls, barriers, battening down of national boundaries. Marxism-Communism seemed relentless and inevitable. Closed economies were seen as the panacea of all problems. Trade was a dirty word. During this period, something momentous happened – a complete and total closure of the Indian mind. India’s international profile underwent a profound change. Indians, who earlier saw the world as a their stage, suddenly retreated into a shell.

Right and wrong

So, yes RSS view is right.

India and Pakistan are a part of the Indic family. What this means is to see Pakistan and Afghanistan not as troublesome neighbours, but as prospective future allies. The Indian political construct was always to surround the Indian heartland by buffer states – like Bangladesh, Nepal, Tibet, Pakistan and Afghanistan. It was not to take over these countries and expand into an unwieldy land mass.

Akhand Bharat ...?

So, when RSS, dreams of an Akhand Bharat, they are wrong. The idea of Bharat was value driven and not power-driven or ruler driven. What Bharat needs to focus on is not to create an Akhand Bharat, but a real Bharat, which will become a model for other countries, especially of the Greater India.

Back to the future

But the Indic model was never to have one king who ruled over others. The Indic model allowed for smaller kingdoms to compete for populations – based on opportunities, freedom, equity. Land holdings in the hands of the populations remained a unique Indian feature for thousands of years – and the West saw this feature only in the last 150-250 years. Religious restrictions in India were not even discussed – unlike the Desert Bloc where the ‘Cuius regio, eius religio’ principle (meaning whose land, his religion; CRER) was established.

In the Desert Bloc, the land, the religion and the very life of all subjects belonged to the king – unlike in India. And that is the Akhand Bharat that we all need to work for!

कागजी बेदाना अनार
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