Friday, February 25, 2011

Fighting for Tripoli - Tunisia, Egypt, Libya who is next?

Adlai Stevenson once said "My definition of a free society is a society where it is safe to be unpopular." But now the question changed to - how far? how far you can go in politics with out the support from common people? Just take the cases of Tunisia and Egypt. They didn't saw any changes in governments for decades. But the Jasmine Revolution was more than enough for the people to protest and bring down the governments. When the protesters were gaining strength in Egypt, many people said that Egypt is not Tunsia, this powerful Arab regime will not crumble so fast. But time proved them wrong. The irony is the same statement is coming out from Tripoli - "Libya is not Tunisia or Egypt!!!".

There is no shortage of non-democratic countries in the world especially in Africa and Middle East. Protesters are already in motion in many of these countries like Libya, Yemen, Syria, Algeria, Jordan, Morocco, Bahrain etc. These protests are not only making the African and Middle Eastern countries nervous, but raises the fever level in many other countries across the globe. As Thomas Fried man said "Word is Flat", the information about the upraising is travelling like wild fire across various states resulting in more and more protests. Indeed the news of success in other countries are giving new hopes to the people who are still living in the autocratic regions.

Look at the case of Libya, an upraising which started against the 40 year long rule of Col Muammar el-Qaddafi already took a violent turn. Official death toll is around 300, but according to witnesses the number is much higher. NYT reports that at least half of the nation's 1000 mile long Mediterranean cost is already fallen in to the hands of protesters. They are slowly approaching the Capital - Tripoli; cities like Zawiya (Just 30 miles away from the capital),  Mizurata (130 miles east of Tripoli), Zabrata (50 miles west) are already experiencing the heat.

But the regime is not quite, they are fighting the protesters using Special Brigades and African mercenaries. This bloody crack down already resulted in numerous deaths and a number of defectors including fighter pilots, Justice Minister, interior minister (Gen. Abdel Fattah Younes al-Abidi), Quaddafi's Cousin (Ahmed Gadhaf al-Dam) etc. But in the midst of protests and bloody crack downs people are fleeing from the country east to Egypt and West to Tunisia. Its not sure whether he will be able to retain the power (the chances are very low), if not how far he can continue to fight using his battalions and mercenary groups?

There is no surety that the aftereffects of Jasmine Revolution will end after bringing down the current Libyan Government and there is not hard rule that it will be limited to North Africa and Middle East. But the success of revolution is popping up many questions also. What will happen after bringing down the regime? Will the inter  tribal rivalry play the spoil sport? Will the protesters be able to go over the traditional barriers like tribe and other things and create  a transitional regime? It is very important in the case of Libya as there is hardly any organised opposition parties. What will happen after the protesters achieve their common goal of bringing down the government? Will they be united to fight and achieve democracy and other fruits of democracy like - Liberty, Equality, justice etc? Only time can give the answer...


Photo Courtesy : BBC

Wednesday, February 23, 2011

India – A Nation in Crossroads, Urgency of Immediate Reforms I

Dmitry Medvedev & Manmohan Singh during G8 Summit
The story of rising India is all over the paper, for many years we are hearing about the strength and growth of Indian economy. News papers and talk shows are filled with the optimism (or over optimism?), people mostly Indians) are talking about India as a developed country, if not a future superpower. When Obama said India is not an emerging country but an emerged country, our happiness touched the sky. News papers are proudly declaring the growth forecasts by quoting World Bank, Financial ministry, Sample survey etc. It is another matter that reports from Transparency International, World Health Organization etc are not received with much enthusiasm.

Anyway we don’t have to read Transparency International’s reports to know about the pathetic condition India is in, regarding Corruption, people can experience it in the streets, in their day to day life or just go to a news paper stand, pick any newspaper and read the front page.

The irony is; political parties which are supposed to be the light holders of democracy often slip in to ultranationalism, minority politics, majority politics, caste politics etc to effectively put themselves in power. In India election forecasts are often made based on the number of people belonging to a particular caste or religion in a constituency. Just like grass is popping up in the ground after rain, political parties are popping up in every other day with the claim of representing the interest of dalits, upper castes, lower castes, OBC etc; Of course they will also claim that they are representing the common man, but overtime the common man become so common that political parties didn’t find anything special in them – it slowly became another jargon in election rhetoric.

But they are not the only entities to blame for this situation. If people are not subscribing their ideology, will they go for such unwanted tactics? If people aren't ready to enjoy - be it lower caste or upper caste - the benefits or disadvantages of being identified in the name of caste, will they follow these methods? You can’t claim you are not part of the deal, only because you are silent spectator, or by posting angry comments or sending letters to news paper editors. Do you remember the questions you asked - last time - to the politicians when they came to to your home asking for vote? Is it a hai..hai.. bye bye scenario or any serious questions regarding to his/her opinion on education, finance, infrastructure, corruption etc?
Tata Nano

Why parties are always popping up and revolving around some individual? Is the prospect of more regional parties and fading appeal of national parties good for India? Parties revolving around a powerful person or a family often fells in to chaos after the rein of first generation leaders are over (inheritance problem, losing appeal among common people etc). Moreover a regional party will concentrate more on regional affairs, where they have some influence. What will happen if they come to power in the centre? Will they be able to distribute the governmental operations across the country or will it become another Railway ministry?

After experimenting with socialism for four decades we reached close to disaster in 1991. As necessity is the mother of invention, financial crisis of 1991 paved the way for reforms. Government started selling the sacred cows of public sector, License Raj faced a severe setback, telecom sector opened up, rules were relaxed in service sector etc. All these resulted in a jump from Agricultural Revolution to Service Revolution skipping the labor intensive industrial revolution.Because of the skipping of Industrial revolution, percentage of people moved from Agricultural to service economy was small.

In US around 3-5% of the population produces the agricultural products for whole country [also for export]; here in India close to 60% people are involved in this sector. It is obvious that only further reforms can pull the plug and allow people to move seamlessly across industries, but after taking more than enough credits we stopped the reforms in between.

Once the so called GDP showed a consistent progress for over a decade, many people even forget the need for further reforms, thinking that the numbers will keep on increasing. But the dangerous fact is there are many countries in the world which lost the sheen after performing very well for a decade.

Moreover good numbers in GDP didn’t help - in improving the falling sex ratios; food supplies in many of the tribal areas; proportionate increase in primary healthcare facilities in many of the Indian states; didn’t stopped the corruption scandals etc. The list is very long. It may seem ironic but the situation regarding sex ratio is more complex on many of the developed parts of India. Premier organizations in the world even said that situation in many part of the country related to food supplies is as worse as that of the poorest regions of Africa.

Wadala slums, Mumbai
If it was 'Curse of Oil' for many African and other countries, for us it was curse of minerals. A good number of states have heavy mineral deposits, but mining didn't create much dividend - apart from pollution - to the local population (I am not saying that there is no benefit at all). India Inc may be increasing its revenue and profits; but many of the big and hundreds of companies - and the ones popping up in every year - are revolving around mining and real estate, not in Engineering and Design. As if these are not enough, separatists in many part of the country want to split the nation, no matter whether it is in J&K or NE. Over and above Maoists problem is running their rounds too.

There is no doubt that all these will affect the growth of nation. According to the reports Foreign Direct Investment (FDI) declined by a stunning 31% in a single year; from $34.6bn in 2009 to $23.7bn. This is happening at a time when a city state like Singapore - a country less than the size of NCR Delhi, posted an amazing 122% increase in FDI - to a stunning $37bn. As if this isn’t enough; India reported a current account deficit of $15.8bn in July-September 2010, a whopping 72% increase over the previous year's $7.26bn.

If we are not ready to address the issues now, then the cumulative effect may even acquire a critical mass to derail the progress we made so far. Government's job is not to produce items ranging from salt to cars; Days of the command economies are gone and it is better not to look in to that era. Primary job of government is to protect and guarantee the security for the people, secondly to facilitate proper environment for the people to improve themselves, third to act as a regulator in economic and other basic functions of the nation. Hyperactivity from government, only create a mammoth bureaucracy - which will keep on expanding to satisfy their needs - and the license raj associated with it.

This is the time for a second reform, for freeing the locked up spirit of Indian economy. Otherwise the service revolution will no longer remain as the face of nation. Cheap labour, human capital, low production cost, not much explored economy etc. which made India an attractive investment destination may no longer remains so. As time progress wages, cost of living, manufacturing cost etc will increase; this will force many companies to look for countries which have low production cost.

There is no point in keeping the wages low. No country can progress only by providing cheap labour. But the point is we should be able to innovate more fastly than that of the increase in the wages. Moreover countries like Bangladesh, Vietnam, African nations will give India a tough competition for jobs. So it is important for us to move up in value chain, and it required a dynamic political system, free economy and a competitive educational sector. Whatever left out, our nation should be able to provide high quality education to the people regardless of their financial power. For all this changes to happen people should be politically proactive and responsive to the political changes.


Photo Courtesy: Wikipedia

Tuesday, February 22, 2011

Kabul and a bank

Kabul City
What will be your expectations from the leadership of  a war-torn country? From her politicians, business heads, regulators etc regarding to their behavior, accountability? What will be your answer if the country in question is Afghanistan?

Its hard to imagine that, a country like Afghanistan devastated by decades long civil war and occupations will be back in normal state within some years. These long and continuous wars not only increased the hardships of common man but also finished almost all political institutions and financial stability of this land-locked country. But one decade should be enough for any country to show some progress, at least to make sure that the country is moving in the right path, but in the case of Afghanistan, things are totally different.

In many part of the world corruption is slowly but steadily becoming a part of governance. Even common citizens are started to acknowledge the fact. But hopes for a better tomorrow are still in air, and to preserve that hopes people from Atlantic to Arabian sea are on the streets to protest against the autocratic regimes. Effects of Jasmine revolution of Tunisia is spreading like a wild fire across the autocratic regimes from Atlantic to Arabian Sea. Two governments are already down and no one knows how many will go before it ends. 

In the case of Afghanistan, people and institutions which are supposed to show lights for others to follow are still searching in the darkness. Otherwise how can you explain the pathetic situation of a leading bank in the country?

Kabul bank, established in June 2004 is one of the most important financial institutions in Afghanistan. Its not only the largest bank in the country but also handles most of government's accounts - including the coalition funded $1.5bn annual salary payments for Soldiers, Police and other government employees like teachers. But after financial irregularities came to limelight, Kabul bank become a model- a model which exemplifies what not to do in banking.

According to reports bank's exposure to toxic assets could be anywhere between $800mn to $1bn. A huge amount compared to Afghan government's annual revenue. According to WSJ's report,

"Apart from the alleged loans and bribes to politically connected people, the bank made large donations to President Karzai's 2009 re-election campaign, Afghan and U.S. officials say. Its chairman has said he spent more than $150 million of the bank's money to buy Dubai villas in his and his wife's name. The villas were then occupied by members of Afghanistan's political and economic elite, including President Karzai's brother Mahmood, who owned a 7% stake in the lender."

Well you may be wondering, how they escaped from scrutiny till now? If WSJ reports are to be believed, for that also they found a novel way - by giving loans, bribes and other payments to senior government officials.

The results of these type of actions will be a devastating one. These type of actions will result in the loss common people's trust in banking and other political institutions. Donor agencies like IMF and other western governments -which are already under credit crunch- will think twice before pledging further monetary assistance to Afghanistan. This episode taught one more lesson - in fact an expensive one - to US and its partners.

But what about Afghan people, don't they deserve some thing more?


Monday, February 21, 2011

BP - RIL marriage, a new dawn in Indian Oil and Gas Industry?

American Senator John Kerry once said "No young American should be held hostage to America's dependence on oil". The same case is applicable for us also. One of the most important item in our import basket is oil. Its not only running the vehicles, but also a key factor in many political decisions across the world.

There is no doubt that our dependence on oil will continue for many more decades to come. Ralph Nader once said "The use of solar energy has not been opened up because the oil industry does not own the sun." Well, this may seems to be an over stretched statement, but the fact is that,if governments are ready to promote alternate energy, in the way US promoted the research for Atom Bomb or the legendary space race against Russia, we may already have more than one answer for 'Successful' alternative energy sources.

This situation makes RIL-BP deal more important. There is no doubt that this deal will boost the confidence of investors in Indian industry. But the attractive factor in this deal is not limited to the investment of $7.2bn or performance payments in the tune of $1.8bn, but technology. According to the deal, BP will take a 30% interest stake in 23 oil and gas blocks and form a joint venture with RIL for sourcing and marketing of gas.

Mukesh Ambani and BP CEO Bob Dudley 
Ninth round of NELP (New Exploration Licensing Policy) offered 34 bocks for exploration; out of which 7 are in deep sea and 2 in shallow waters. In the recycled blocks one is in deep water and five are in shallow waters. Oil excavation is a highly costly business and the chances of striking a commercially exploitable oil reserves are not so high in unproven terrains. In the case of deep water and ultra deep water drilling, even the usage of the best technology and decades of experience may not be enough. Only companies with a deep war chest can go for deep water drilling even with a limited confidence.

In such a situation a deal with BP will be helpful for both RIL and India. BP have the technological know-how and the experience of deep water drilling along with a war chest for exploration. But how much time it will take the government to approve the deal? Please don't put this in rad tapes, at least this time.


Photo Courtesy : British Petroleum

Sunday, February 13, 2011

Egypt Waking up to the new realities

Army and the Common man
30 years is indeed a long time, as far as human beings are considered. People's taste can change over night, best friend of today may be the worst enemy of tomorrow. But for hosni Mubarak, nothing changed much for three decades he ruled Egypt - a major country in Arab world, Asia and Afric. Its indeed a miracle that a person was able to rule 80 million people for asuch long period, considering the fact that politician in India are not sure what will happen to them once their term is over. 

Till 3-4 weeks back no one even thought that all this will end so quickly. But human history is full of unexpected events like the sudden rise and fall of regimes and nations. It was in the form of inspiration from Tunisia's Jasmine revolution, that changed everything. People from Cairo, Alexandria, Suez and many others from different part of the country created history by peacefully bringing down the government. A warning for many people who still thinks that revolutions will come through the barrel of the gun only.

Mubarak gone; what next? What will happen to Egyptian emergency laws - which allows detention with out charges? How long it will take the transition governmet to make amenmends to the consititution and conduct a general election? Will the protesters get, what they wanted or will they simply end up with another

As of now Army assured that, Egypt will continue to honour the international treaties and the current civilian leadership will manage the country's affairs till the next election.

Egyptions are celebrating the event accross the nation, after all they are now part of, one of the rare events in Egyption history after independence. They not only bring down the Mubarak's government, but they are also able to bring down fear factor among the people. Common people across non-democratic countries, who once feared to come out and protest against the regime, have no such hesitations the recent days. Its time for caution also; If Egyptions are able to create stable and secular democrcy then it will make an end to the assumptions like - the end of autocratic governments will bring the fundamentalists in power etc. But if it happend otherwise, then the arguments like this will remain as an excuse for all autocratic regimes to stay on power.

Indeed the entire world is looking towards Egypt, what will happen next?


Photo Courtesy : NewYork Times

Wednesday, February 9, 2011

A new nation and hundred questions

A bridge Across White Nile- Sudan
Finally that happened, a new country registered their birth on the banks of White Nile. After long civil wars, which almost locked Sudan in the past, South was finally separated from North and most probably they will declare independence in July 9.Its indeed a commendable action from all the parties involved in the peace process to conduct the referendum with out much bloodshed and north for accepting the results peacefully. An overwhelming majority of 98.83% voted in favour of separation, resulting in the creation of a new state.

But is it over? Is the creation of South Sudan an answer for the all problems faced by Sudanese? Will the mere independence transform one of the least developed countries in the face of the earth and fill the dreams of the people? If the world history has anything to say, then the answer is no. As long as the the new administration is not able to find the solutions for the problems, which resulted in civil wars and separation, the fight is far from over.

If the state of democracy in the neighbouring states can be considered as an indication for the future, then the road ahead is more like a desert than an oasis. Many African countries fell in to the hands of dictators after enjoying a brief stint in democracy. In order to escape from the pit falls Juba have to work hard on creating new political institutions and developing the culture of democracy among the people.

But as usual, change is not easy, issues like gun culture and cattle raids required continued efforts and patience. Another major problem is a phenomenon called 'Curse of oil'. There is no reason to believe that South Sudan will be free from this decease, which already affected many of the African countries. South Sudan is blessed by both oil and nature. Protected areas of South Sudan have a spectacular wild life population and hosts the second biggest wildlife migrations in the world. But the question is  will the government be able to use the oil wealth for developing infrastructure, primary health care, education etc or will it fly over Alps? I can only wish that good sense will prevail over the politicians and they will be able to spend money for the benefit of the people rather than heavily arming the already heavily armed military.

The issues related to Citizenship, sharing oil revenues (South Sudan is a land locked country, oil have to travel through other countries to reach sea) and the future of Abyei are yet to be resolved. If not solved quickly, then Abyei have the potential to become a long running border issue between South and North. If experiences around the world have anything to teach, it will be better to complete the separation as fast as possible, otherwise another war will start for that stretch of land (Abyei). Responsibility of international community is not over by conducting referendum, this is the time for a nation building process along with overseeing a smooth separation and closure of partition book.

Future of Sudan will depend on How Juba will answer the critical questions in Initial years. My congratulations to all the people of South Sudan.