Thursday, March 17, 2011

Too soon to give Brazil and India permanent seats on UN SC? I object

UN Flag
"It is the traditional powers in the West that will determine the international response to this crisis -- not because they are favored by global institutions, but because their word is backed by military and diplomatic weight. In contrast, the world's rising economies lack the ability -- and the values -- to project their power on the world stage." Jorge G. Castañeda (professor of politics and Latin American and Caribbean studies at New York University and former foreign minister of Mexico).

When India and other equally minded countries are looking forward to play a more constructive roles in UN; especially working for getting permanent status and reforming UN SC, it is important for us to know how far we are eligible for these roles. Are we just the crying babies in international politics, who always say "I too" or our current credentials are enough for us to say 'yes we deserve it'? Lets take a look at these issue.

Professor Castañeda continues his article, "These new powers lack the same commitment as the older ones to supranational[sic] institutions and universal values such as human rights, the collective defense of democracy, a robust climate change framework, nuclear nonproliferation, and so forth. Hence, permanent seats on the Security Council for Brazil, India, and South Africa, coupled with greater participation by China, Pakistan, Indonesia, and even Mexico in international agencies or bodies, might weaken the very foundations of the liberal democratic order -- although in this regard, their entrance would also make international bodies more globally representative."

Even if we are agreeing that the the new entrants lacks the commitment in the same level as that of the old ones, we cant accuse any of them solely on the basis of reluctance in participation. Many of these countries came to international arena after the establishment of a world order(after World War II) by old colonial powers. Well, everyone needs time to create political institutions on their own and expand it to accommodate international commitments. Now, when India with more than 1.2bn people (almost 1/6th of world population) is trying to expand her influence internationally and strengthening the international framework further by constructively engaging in UN and other international bodies, isn't it time to give her more importance by giving a permanent status?

As of now the track record of India in Nuclear non-proliferation activities is very clean. Is there any difference in opinion regarding climate change? Its beyond doubt that, rise in global temperature and increasing pollution will adversely affect the entire humanity. We need clean technologies to deal with pollution and global warming; with out a good track record in developing these clean technologies it will be difficult for the countries to maintain economic and ecological balance.

At the same time no one can run away from the fact that, it requires investment. But when you have millions of people living under poverty line; where you will invest? In buying buses - running on fossil fuel - for public transportation or hundreds of green cars? When you have to deliver electricity to millions of home, where you will invest in highly costly nuclear power plants or hydro/coal fired one? Still you can find that, India ranks very below in pollution rankings if anyone bothered to take per-capita emission. There arguments are not to escape from the responsibility of creating a clean environment, there is not doubt that India too will join in the ranks of other developed countries in using clean technologies, but it requires some time [projects like National Solar Mission are indeed a good initiative in that direction].

What is meant by collective defence of democracy? Democracy is not something which one should force on other countries. The institution and framework for democracy should come from the people of that country. As far as India is considered, whatever be the flows, people are still enjoying democratic rights. As far as human rights are concerned, unlike west, eastern countries normally don't attach it with foreign policy. Still we are committed to human rights, and also participate in the UN peace keeping missions.

After opening the economy in 1991, India become more and more active in organisations like IMF, WTO etc. India also signed FTA (Free Trade Area) agreements, CEPA (Comprehensive Economic Partnership Agreement) with a number of nations. Recent economic engagements with ASEAN, Middle East, South Asia, EU, Korea etc are notable steps from India to economically engage with other countries.

It is true that, we are not often expressing strong views on various global issues. Most of the time our response is very generic, which doesn't support or oppose anything. May be we fear of losing the goodwill by expressing strong negative views on many issues. May be we assume that, being neutral is beneficial in long term. There may be many more reason for that. As Castañeda put forward, if we are looking towards a permanent seat in security council, we should focus more on our values and be able to put forward opinions and suggestions which will constructively help other countries to solve their problems. Issuing late, non-binding statements which doesn't touch anything will not cut much ice in the long term. But it doesn't mean and should not mean forcibly pushing our opinions in to other countries.

When some problem comes countries and people are not looking for good will but for effective action. That may be the explanation for why people from many different countries - where flower revolutions or colour revolutions are going on - still looking towards Washington (even after it become one of the most disliked country in Middle east, especially after Afghanistan and Iraq wars).

Of course we have to go a long way forward, as Professor Castañedas said, in projecting our values etc. Its indeed a good article to remember us where we are and how people are looking towards us. But is it valid enough to deny permanent seat to India? Should we permanently postpone UN reforms? Well I object. There many not be a time better than this for UN reforms.


You can read full article of Professor Jorge G. Castañeda from The trouble with the brics

Results of a Revolution - Egypt and Tunisia

Tahrir Square during protests
Once Abraham Lincoln said "This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or exercise their revolutionary right to dismember or overthrow it." But what will happen after dismembering or overthrowing the institutions? Well Immanuel Kant also have to something to say about revolution, "Perhaps a revolution can overthrow autocratic despotism and profiteering or power-grabbing oppression, but it can never truly reform a manner of thinking; instead, new prejudices, just like the old ones they replace, will serve as a leash for the great unthinking mass."

Did anyone expect a revolution in North Africa and Middle East? A political change in Tunisia or Egypt? Till some months ago not much people expected about the possibility of a revolutionary wind flowing from Mediterranean to Arabian sea. And now the word Jasmine is giving sleepless nights to various regimes across North Africa and Middle East.

The principle of sufficient reason states that anything that happens does so for a reason. In the case of flower revolutions also it is not wrong. It may be unemployment for some people for others it may be poverty, for the rest it may be some other reason. But the root cause for many of the revolutions have more to do with the representation of common people around the table of power than the table of power itself.

If representation of people is the biggest challenge in autocracy it is the biggest advantage in democracy. Democracy provides a way for common people to express their concern and voice, regime knows that they have to face the people after four or five years. If you have any doubts about it read the election manifesto of various parties in India - it's another matter that many of the points mentioned in the election manifesto will remain there safely till next election. But representational democracy - with all its  flows- gives the feeling that he/she too is a part of the system, at least they have a say in the governmental policies.

Often autocratic regimes are acting on their own. Here a small number of individuals will be responsible for most of the decisions and its implementation. In such a scenario if the dissatisfaction in regime's policies went too far, then even a small spark can explode it. In the recent chain of events people of Egypt and Tunisia forced their head of states to step down. But did they able to bring a complete revolution in these countries?

Do you think that a single person is responsible for all the events - good or bad; progressive or repressive - in a country, even if it is autocratic? Do you think that replacing a single person will correct all the flows of the system? You can argue that a single individual may be responsible for shaping the system, but once the system is in place it knows how to survive.

Simply replacing one name with another will not cut much ice. At this point people of Egypt and Tunisia are able to replace the head of the state, but will they be able to sustain that momentum to bring a complete change to the system? Will they be able to force the system to work on improving the living environment?

This is the time to create a strong democratic and political institutions, to lead the country forward. But this is as much as or tougher than changing the name of the president. Will they be able to do it? Only time can tell... 


Photo Courtesy: Wikipedia

North East India and India-ASEAN trade

North East India consists of seven sister states (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland,Tripura) and Sikkim. These land locked states have borders with Bangladesh, Myanmar, Bhutan, China and Nepal. Difficulty in reaching Brahmaputra valley and due to the activities of insurgency groups, these areas didn't attract much commerce in the earlier days and remained backward in development as compared to many other states of India. But recent success in bringing down the insurgency, talks with ULFA, proposals for trade using Bangladeshi ports and physical closeness and geographical continuity with ASEAN offers a lot of new opportunities for this region.

There is no doubt that the recent proposals for Free Trade Areas (FTA), Comprehensive Economic Partnership Agreements(CEPA) between India and ASEAN countries will increase our trade with SE Asia. India's trade with ASEAN rose from $2.4bn in 1990 to $23bn in 2005. In 2010 it was $ 50.1bn and is expected to reach $70bn in 2014. Proposals to establish a trade route between Bay of bengal and NE-India through Bangladesh will not only increase the trade and other economic engagements between NE-India and Bangladesh, it will be a boon for Nepal and Bhutan also.

Sustained peace is one of the essential ingredients for a sustainable economic development. Here comes the  importance of talks between insurgent groups of NE-India and various government agencies.

Hanoi Tower
Government already has ceasefire agreements with some groups like NSCN-IM and talks are already underway with ULFA. It is important for us to give high importance for trade with Bangladesh and other ASEAN countries. Once the neighbouring countries are tightly coupled with each other and with India, terrorist activities in the region will reduce considerably. After all trade requires peaceful environments.

NE-India also provides land access to Myanmar; and through Myanmar to other ASEAN countries like Thailand, Laos, Cambodia, Vietnam and Malaysia. Creation of a grand India-ASEAN highway will definitely boosts the trade between India and ASEAN countries. There is no doubt that such commercial linkages over land will further increase our engagement with ASEAN. This proposal not only bring these countries closer to India but will also change the North-Eastern states of India in to a commercial hub. Another important byproduct of an India- ASEAN road link will be the gradual opening of Myanmar to the external world.

Not only with ASEAN, these links can also be used for trade with China. Deep ecnomic integration between the countries will help to reduce the tension. Even if its not reduced, there is no doubt that economic integration will keep the tensions from reaching an alarming level.

How far government of India will go forward in opening up India's land of rising sun to trade with ASEAN? Only time can tell...


Photo courtesy : Wikipedia

Sunday, March 6, 2011

Union Budget and Agricultural Sector- Required a change in Perception

Farming in India

In every budget (no matter whether it is Union or State) there will be something for farmers. Some sort of assurance that, the system still care about you. At the same time it is also an indication at you need help, you need low cost loans, you need fertilizer and kerosene subsidies; a discomforting message is passed - If you want to go forward, you need our help, you need subsidies. Another endless piece of exemplery sympathy.

But the question is how these farmers end up in the receiving end of sympaty? Its indeed a wonderful anomaly, not quitely fit in the demand and supply theorem of economics. There is no shortage of demand for agricultural products, whether it is Rice, Wheat, Ragi etc. These prodcuts are always in demand not only in India but in many other countries also. It not longtime back when the food riots rocked the stability of governments accross the continents. And the governments are ready to spend millions of dollors for importing these products in the situation of domestic shortage. So demand is there.

As the quesstion for the demand is over, we can quickly check for other reasons. Do these farmers really produce enough products? Are they able to live a life with dignity and earn a good profit from this enterprise?

These questions are indeed difficult to answer. Let us take a look at the the first question - about productivity. There is no doubt that productivity in India is often very low as compared to other countries. Let us take an example, there was a time when many people in my village went for pepper cultivation(they stil do). In the early years return was very good. At the end of each pepper season they used to get a good profit. But after some years prices started to show a declining trend. The reason was indeed an interesting one- Vietnam (not only Vietnam but many other nations also). Yes Vietnam was able to produce the pepper and sell it in international market for much lower price than that of Indina. A small country in SE Asia (whose forests and agricultural lands were devastated by the use of Agent Orange) was eating up the market share of one of the old and profitable item from Kerala.

Another question is about returns. Returns are tightly lined to efficiency- maximum production at lower cost. In a practical scenario we can form the question in this way - How far we are ready/able to use machines in the fields? There is no doubts that the use of machines will eliminate many manual jobs; but it is going to be eliminated anyway, isnt it? If the farm is not profitable for some time, then the reasons tell us that farmers will no longer be in a position to give the salaries to the workers. If we are using machines then the efficiency will be much higher and a good percentage of the people can be absorbed in to this area after some training.In this way they will be able to move up in the value chain and earn more money.So the current productivity/acre is indeed a problem.

Now lets come to the core part of the second question, do these farmers make enough profit? The answer is yes and no,profitability various from products to produts. Many products like rubber people are making enough profits, but many others are not. Let me tell you another example. I still remember the time when we plaed cricket in the rice fields in the summer season, after the harvest but not anymore.Some year back most of the people realised that rice is not profitable any more, so they switched to banana, ginger etc. In the last year when i went to the samw places it was covered with babana leaves. And as we cant eat banana for breakfast, lunch and dinner traders are importing rice from other states.But what will happen when other states also the experience the same? If people are able to generate a rasonable profit from agricultural activity then Wynad and Vidarba may have some different stories to tell.bIf this is the case will we saw that much suicides in Wynand and Viderbha?

The problem is quite complex here. Today I just went to the market and bought one kg of potato at 20Rs/kg. Some two to three days back the the price was around 16Rs/kg. In the case of Onion some months back it sky rocketted to 90 and slowly come back to 80  then to 50 then to 30 and today evening it is 20. Well I am not sure, how much money farmers will get for these potatos and onions. There prices are an indication that these items are in demand and people are paying for it? But the real question is, do the farmers are able to stand in the receiving end of this profit or simply observers?

Now come back to this year's Union budget. One of the new announcement in the budget is "government on Monday announced loans at interest rate of four per cent -- three per cent less than market rate -- for farmers who pay their dues in time and raised the credit target for farm sector by Rs 1 lakh target for the agriculture sector has been increased by Rs one lakh crore to Rs 4,75,000 crore."

Machine aided Farming
1. 300 crore for vegitables, nutri-cerals
2. promotion of edible oil
3. national protein mission
4. accelerated fodder development programme
5. boosting the pulses production
6. 400 crore for second green revolution (in Assam, WB, Orrissa, Bhihar, Jharkhand, Eastern UP, Chattisgarh)
7. 15 more mega foodparks to cut the wastage
8. Removal of bottlenecks in the production and distribution of items like fruits,vegetables, milk, meat paultry and fish.

Apart from this "... To ensure greater cost efficiency and better delivery for both kerosene and fertilizer, the government will move toward direct transfer of cash subsidy for people below poverty line (BPL) in a phased manner," Mukherjee said during his presentation of the Budget 2011-12". Considering the wide spread corruption in India the real question is how much amount will reach in the hands of farmers?

Well it is good to put money on some development scheme, but the condition is we should understand what we are doing. Is there any need for the government to promote adible oil? People will use it, if they want, and edible oil are part of everyone's life like salt.

Its make sense to invest money for a second green revolution. But how far we are investing in research for new seed verities and methods? We went for Green Revolution at a time when India was experencing severe shortage of food items. Do we have to wait for the repeatation of that to happen before investing in research for high performance seed verities? and what is going on in the genetic research sector, is it going anywhere?

Will the creation of 15 more mega food park to cut the wastage is going to work? considering the fact that arond 106.88 mn tonnes of damaged foodgrains are there in the godowns of FCI on January last year? Removing the bottlenecks are good, but how we are going to do it? If the fresh fish and other vegitables can reach gulf markets with in a short time, then why it is a problem for us to keep it fresh, in India?

Indeed Mr Pranab Kumar Mukerjeem, idetified and allocated funds to solve some of the key issues like availability of low interest loans etc. But what we need is a total overhaul of Agricultural sector. We should spend more in Agricultural research sector, introdue machinery in the fields, create the groups of farmers to form agricultural socities, which will be able to negotiate more strongly with wholesalers, cold storage to store and distribute perishable items etc. And please create a good supply chain like that of Wall Mart in FCI, no more damaged food items please - There are hundreads of thousands of people in India who are still not able to get two means a day. The efforts should make the country self sufficient and make a difference in the life of the people.


Thursday, March 3, 2011

Railway Budget and the question of Resources

Indian Railway
Finally presentation of this year's railway budget (2011-12) is over. Just like previous years this year also railway minister refrained from increasing the ticket rates. She also tabled an ambitious (highest ever) investment plan of 57,650 crore INR and proposed 56 new express, 3 new Shadabdis and 9 new Duronto trains. According to the budget estimates Railways are expecting 16.5% increase in passenger earnings (to 30,456 crore) and 9.8% growth in freight earnings (targeting 993mn freight carriage) in the next fiscal year. And for the first time in the history of Indian Railway total revenue will cross one lack crore.

But the prime question arising out of the budget is, who will fund the massive investment plan of 57,630 crore? According to the budget, only 14,219 crore is going to come from the internal resources of Railways. That means rest has to come from outside sources. According to the budget expectations 1041 crore will come as diesel cess, 22000 crore will come from Union budget and the rest 20,954 crore in the form of market borrowings.

It is a well known fact that, passenger section of IR is not profitable. Railways are able to cover this loss from through cross subsidies (earnings from the freight division) and support from Union Budget. The only chance to increase the ticket rate and thereby increase the revenue is in the early years of the five year term. No government will dare to increase the ticket rate in the last or last two years of their term. If the minister is not ready to take the hard decisions in these early years of UPA II, then when they are going to do it?

Moreover funding close to 36% of plan outlay through borrowing from market is not a sustainable way, today or tomorrow IR has to return this money with interest.

The other problem related to IR is its adventures in to unrelated fields like generating electricity (700MW gas power plant at Thakurli, Maharashtra). Is it necessary for the railways to invest in a non-core area like power production? If they really want to do something like that, then isn't it better to collaborate with NTPC? Railways should focus more on their core own area and try to expand their network with safe and quality service instead of building power plants. A lot of places in India still don’t have any access to the railway networks.

And what is the logic for reducing the age of women to qualify for senior citizen from 60 to 58? All over the world governments are increasing the pension age to save money. How women become senior citizen at the age of 58 and men have to wait two more years? What is the reason for providing subsidies to media persons and his/her family?

We can only hope that, at least next time minister will focus more on revenue generation. If IR is not ready to increase the ticket rate then they should go for alternate source of income otherwise the vision of IR becoming a major engine in Indian industrial growth will remain as a vision only. Connecting seaports to industrial areas, dedicated freight corridors, high speed rail networks for faster passenger and freight movement etc requires massive investments. For these funds they should not always look forward the union budget or borrowing from the market. Either they should raise the fund from internal resources by investing in their area of competence or have to look towards the participation with private sector. Still the allocation of funds for Dedicated Freight Corridors and the proposal for 1300km new lines in the next year are appreciable decisions.

Last time when I went to Shravanabelagola, I saw a railway line to this pilgrimage point partially covered in grass. Later I came to know that Railways built this line some years back and send their test train once. After that  - to this day – these tracks didn’t get a the chance to see another train.


JPC: Just another committee?

After plenty of arguments and counterarguments in and out of Parliament we finally got a JPC (Joint Parliament Committee) to investigate the spectrum scam. For many weeks if not months, creation of JPC was a matter of life and death for Indian political establishment!!! It was like creation of JPC means a full stop on corruption!!!

Will this new JPC become an effective one? Will they be able to uncover the facts related to the spectrum scam which are not in public domain? Will they be able to something more than what CBI and ED? Or will it simply ends up another political platform for bashing each other? 

The composition of JPC doesn’t offer much help. According to the strength in parliament ruling coalition will get 14 (INC 11, DMK 2, NCP 1) and opposition will get 13 (BJP 6, Left 2, AIADMK 1, BJD 1, SP 1, BSP 2) members. Opposition members include the members from SP and BSP; now the problem is to whom they will support? Will they be in favour of government policies or against it? As long as Women’s Reservation Bill and disproportionate asset cases are active, we can’t say anything about it; especially after the voting in the Civil Nuclear Bill.

Another important factor in the current JPC set up is the era it is going to investigate. Committee is expected to look at the telecom policies starting from 1998 onwards, that means it will cover BJP ruled years as well. If Janatha Dal had enough seat in opposition and protesting against the spectrum scam, then the investigation may go all the way back to 1996!!! Anyway the current era will put BJP in defensive mode.

If these points worked in favour of government (chances of not happening is almost null), then there is no doubt that the JPC report will be preserved in the safe lockers of Government forever; just like numerous other commission reports.

May be we are looking in to this issue through a pessimistic view point. May be these people will do a fantastic job and come up with an incredible report. Whatever they are going to do please make sure to clear one doubt from public’s mind – What is the exact amount involved in the telecom scam – is it 40,000 crore of 1.76 lack crore or in between?