Selected Articles from Various News Paper: Civil Services Mentor Magazine - April 2016

Selected Articles from Various Newspapers & Journals

Turkey’s failed double game

The January 12 suicide bombing in Istanbul that killed 10 people is yet another violent reminder that something is terribly wrong with Turkey’s regional and security policies. This is the third bombing in Turkey by suspected Islamic State (IS) militants in six months. In July 2015, a suicide bomber killed more than 30 people in Suruc, a Kurdish town on the Turkish-Syrian border. In October, in one of the deadliest terror attacks in the country, suicide bombers blew themselves up outside the central railway station in the capital, Ankara, killing more than a 100 people and injuring over 400. If the attacks in Suruc and Ankara primarily targeted Kurds, the victims of the Istanbul bombing were tourists, mostly foreigners. Over the past few years, the security situation in Turkey has steadily deteriorated. The ceasefire with the Kurdish rebels has broken and a full-fledged war is taking place in the border areas.

Much of the blame should lie with President Recep Tayyip Erdogan. After becoming Prime Minister in 2003, Mr. Erdogan adopted an assertive foreign policy. He opposed the Iraq war, grew critical of Israel’s atrocities on the Palestinians, and presented Turkey as a regional power in West Asia. But his approach also pandered to sectarian Sunni sentiments and to Islamist Turkish nationalism, which counterposed the Kemalist secular order. When the dictators in Tunisia and Egypt were overthrown by popular protests in early 2011, Mr. Erdogan found it an opportunity to expand Turkish influence. In both countries, the direct beneficiaries of the regime change were the Muslim Brotherhood or its offshoots, the brethren of Mr. Erdogan’s Justice and Development Party. He expected the “Arab Spring” would radically change the political landscape of the Arab street. But his calculations went wrong. In Egypt, the Brotherhood rule was crushed by the army. In Tunisia, the Islamist Ennahda party is competing with the secularists for political power. Libya, which Mr. Erdogan visited and hailed the “advent of democracy” soon after Muammar el-Qaddafi was overthrown, is at war with itself. Mr. Erdogan’s biggest mistake yet was Syria. He expected Syria to follow Egypt and Tunisia. He was among the first global leaders to call for President Bashar al-Assad to quit. Ankara wanted to replace Mr. Assad, an Alawite and an ally of Iran, with a Sunni ruler, possibly from the Syrian Muslim Brotherhood. That would not only strengthen the Turkish influence in the region, but also help the Sunni bloc to curtail Iran’s rise.

Hard-core jihadists, particularly the IS and Jabhat al-Nusra militants, were the biggest beneficiaries of this open door policy. Russia has also accused Ankara of having deep ties with the IS. There were several independent reports about Turkish middlemen being involved in people smuggling and oil trade along the Syrian border. Despite international outcry, Ankara didn’t do much to seal the border or act tough against the jihadists, as Mr. Erdogan was ready to go to any extent to see the fall of President Assad.

This approach, however, had an undesirable outcome. The Syrian government had withdrawn its troops from the Kurdish-populated border regions in the initial phase of the civil war. When IS militants, after capturing Raqqa, moved towards border towns, Kurdish rebels took out a strong resistance. The People’s Protection Units, the armed wing of the Syrian Kurdistan, defeated the IS in Kobane and Tal Abyad. The YPG is closely associated with the Kurdistan Workers’ Party, the insurgent group which has been fighting the Turkish army for years over autonomy. Their glorious resistance did not just bring the Kurdish cause once again to global attention, but also prompted the U.S. to coordinate with them in the fight against the IS. On the Syrian border, Kurds, after throwing the IS out of their towns, formed autonomous enclaves, which created a new nightmare for Turkey.

On the other side, Turkey was under enormous international pressure to do more against the IS and other jihadists in Syria. The pressure mounted from domestic quarters as well after the Suruc bombing. It was against this backdrop that Mr. Erdogan declared war against the IS. Though his government took some steps to control movements across the border and let the U.S. use its Incirlik airbase to bomb IS targets, the focus of Ankara’s bombing campaign remained on the Kurds. But Ankara’s increased collaboration with the American coalition and the domestic crackdown on jihadist networks seem to have angered the IS, which established a strong logistical and organisational network within Turkey, thanks to Mr. Erdogan’s open door policy.

Turkey is now trapped in a complex tri-directional war. If Ankara acts firmly against the IS, it would undermine its own Syria policy. If it doesn’t act, the threat from the IS to domestic security will grow as will the international efforts to co-opt the Kurds in a larger fight against extremism. There are no easy ways out. Ideally, President Erdogan has to resume peace talks with the Kurds, step up attacks against the IS and pave the war for a larger anti-IS coalition by including the Kurds to take on the jihadists on the ground. But for that, he has to give up his neo-Islamist regional ambitions and sectarian tendencies and start thinking like a statesman. This is something unimaginable, given Mr. Erdogan’s recent record.

Starting up to stand still?

Two lakh passes were sought for the Start Up India workshop at New Delhi’s Vigyan Bhawan with a seating capacity of 1,350, a good indicator of the interest in the action plan for start-ups unveiled by Prime Minister Narendra Modi after a nine-hour talkathon between Silicon Valley honchos, financiers, Indian unicorns and top government officials. Amidst the euphoria, at least one Silicon Valley CEO, B.J. Arun of July Systems, warned that India was witnessing a bubble similar to the heady dot-com rush of 1999-2000 in Silicon Valley with too much money chasing too few ideas. The high demand for passes to the event is probably a sign of that growing bubble. India, Mr. Arun warned, won’t recover as easily as the U.S. did after the bubble bursts, only to be told by his Indian counterparts that there is no bubble and even if there is, the fittest would survive. That confidence is refreshing, coming from under-40 first generation entrepreneurs. The government’s action points seem laudable for starters, if not deep enough. They include Rs. 10,000 crore of funding for the next four years, tax-free and labour-inspection-free existence for start-ups for the first three years, speedier patent clearances with the exchequer footing most of the bill, and promises to fix taxation hurdles that deter domestic and global financiers from bankrolling new ventures in the coming Budget. That the government must intervene less for start-ups to succeed — Mr. Modi’s core message — drew the loudest cheers, followed by the tax breaks on start-up profits. The tax breaks fly in the face of the corporate tax reform being pursued to lower rates and phase out exemptions; but it is a headline-grabbing measure that won’t hit revenues as few start-ups would make profits in the first three years.

A bigger issue is the attempt to define the start-ups eligible for the sops, support and funding announced by the Prime Minister: firms set up in the past five years with an annual turnover below Rs. 25 crore, working ‘towards innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property’. The mere act of developing products or services that do not have potential for commercialisation or have no or limited incremental value for customers would not be a start-up. Moreover, a start-up shall be eligible for tax benefits only after it is certified by an inter-ministerial board. Slotting something like innovation into a template may not click and until more details emerge, it just sounds like more red tape to clear to avoid some red tape. Smarter ventures would seek funding on their own and work without official sops, but the government must not lose sight of the need to fix India’s overall business climate. Failing that, even with tax sops, start-ups will continue to quit India and list or register elsewhere. Bubble or not, that’s one issue Indian unicorns are unanimous about.

A new beginning with Iran

It was a remarkable moment in international diplomacy. Until last year, it was unimaginable that there would be a peaceful solution to the Iranian nuclear crisis. Even when a deal was reached in July, critics continued to attack the efforts, questioning the operating challenges of the accord and Iran’s dubious nuclear record. But proving its critics wrong again, Iran quickly acted to rein in its nuclear programme. It decommissioned its enrichment centrifuges, removed the core of its heavy-water reactor and shipped out most of its low-enriched uranium stockpile — all in months. On Saturday, the International Atomic Energy Agency confirmed Iran had complied with its commitments. Within hours, nuclear sanctions were removed, signalling Iran’s reintegration with the global economy. The implementation of the deal demonstrates the willingness of both the U.S. and Iran to move past their history of hostilities and begin a new future of cooperation. U.S. President Barack Obama and his Iranian counterpart Hassan Rouhani deserve credit for their visionary determination. It was not easy to effect structural changes in the thinking of their respective foreign policy establishments and chart a new course of constructive engagement. Both faced criticism at home. There were regional challenges as well, such as the steadfast opposition from Israel. Still they stuck to the path of diplomacy which brought new hopes to a region that is otherwise tormented by conflicts.

Over the past few months, U.S.-Iran ties have substantially improved. Though both sides maintain that cooperation is limited to the nuclear deal, in actuality it is much broader. Tehran and Washington are engaged in Syria and Iraq. They share common interests in Afghanistan. The quick release of American sailors whose patrol boats drifted into Iranian waters signalled the shift in ties. The prisoner swap deal, announced just hours before the sanctions were lifted and under which Iran released four Americans and the U.S. seven Iranians, is another indicator. But the question is whether these changes are sustainable and, if so, what effects they can have on the troubled West Asian geopolitics. In Iran there appears to be a consensus on enhanced engagement with the West. Despite the anti-American public posturing, often from the hard-line quarters of the establishment, Iran’s political elite remains largely supportive of President Rouhani’s moves. But it’s not the case in the U.S., where the Republican front runners for the presidential election are highly critical of the deal. It is not clear what could happen to the Iran-U.S. détente if a Republican is elected to the White House. But if both nations overcome these challenges and sustain the momentum, it can transform the region for the better in the long run. India should take the cue from the deal. A peaceful, stable Iran is vital for its interests, particularly for energy security and connectivity. New Delhi should get Tehran on board, again.

A tale of two economists

Chief Economic Advisor (CEA) Arvind Subramanian started 2015 on an over-optimistic note. He is likely to have ended it in disappointment. The economy is slowing down: in the first six months of the financial year, real GDP grew 7.2 per cent, slower than the 7.5 per cent in the corresponding earlier-year period. In 2016-17 too, GDP growth will not be significantly greater unless some specific steps are taken, the CEA has said. Thankfully, there are few takers in the government for the main measure he is suggesting: a further pause on fiscal deficit reduction.

The brave outlook underestimated the weakness in the exports sector. It relied on the Rs. 70,000 crore of public investment that was earmarked in the year’s budget — as suggested by him — for building infrastructure to stimulate private investments. The stimulus he had designed was implemented. It proved insufficient to generate the growth impulses needed to kick-start the over $2 trillion economy and rekindle animal spirits gone numb in the dying years of the United Progressive Alliance’s 10-year stint due to policy paralysis and corruption scandals.

A government not shy of its business-friendly credentials should have picked up these stress signals early on and administered the remedies, but its mandarins were too excited: international agencies had declared that 2015 was going to be the year in which India would race past China (the Chinese economy is about five times as large as India’s) to be the fastest growing economy in the world.

In the boom years during the UPA government’s tenure, four engines had powered the economy. Of those, just two are still running: government investments and private consumption. Exports and private investments, the other two, are out of steam. The UPA years saw an investment boom, which was bound to turn sooner or later, and has.

Lower borrowing costs could restart the investments cycle but the hands of the Reserve Bank of India Governor, Raghuram Rajan, are tied. An agreement that the government and the RBI signed a year ago has made controlling inflation the main objective of monetary policy. The agreement formalised a policy goal that the central bank has always pursued anyway, except that it set the targets in terms of consumer price inflation. Moreover, government-owned public sector banks have been slow to pass on to borrowers the rate reductions that Dr. Rajan has announced. Banks are a cartel and keep interest rates high because higher interest rates mean bigger profits.

Dr. Rajan is well on course to bring inflation within the 6 per cent target that the government set around the same time the CEA made his cheery growth forecast. In fact, the ‘rock star’ Governor, with whom the CEA has worked closely earlier in the International Monetary Fund, has had an excellent year. India was still one of the ‘fragile five economies’ when the year began. Yet, it is the only one to have come out of the phase of heightened currency volatility and current account deficit instability that characterised the group. Besides, the purse-string managers of the government’s budget in North Block, who haven’t yet let its fiscal deficit slip, Dr. Rajan too deserves credit for restoring India’s macroeconomic stability, which the government hasn’t quite leveraged to push growth, just as it has been caught sitting on its hands despite the favourable global trends in oil and commodity prices.

On growth, Dr. Rajan has been spot on. By the end of the summer, he had cut the Reserve Bank’s GDP growth projection for the year not once but twice. In July, even as Dr. Subramanian was sticking to 8.1-8.5 per cent, Dr. Rajan’s call was 7.4 per cent. The overconfidence in Delhi lasted till the last day of November, when new official data released, revealed a slowdown instead of the promised smart recovery. Within hours, the government cut its growth projection to 7.5 per cent.

Abandoning the committed path for fiscal rectitude now will put macroeconomic stability at risk. It might end up hurting growth rather than supporting it with the government and the RBI working at cross purposes. How? To fund a wider deficit, the government will have to borrow more, which could push up interest rates and crowd out private borrowers. Inflation might have been tamed but the Reserve Bank’s key interest rate, despite cuts adding up to 125 basis points in 12 months, is still high for a revival in investments and growth. Although higher public investments are desirable, the government needs to do all it can to create the environment for lower interest rates, not higher.

Public investments can be increased without deferring deficit reduction, though. There is a perceptible improvement in the quality of government spending with a shift towards capital expenditure. This can be built upon. Savings from efficiency in spending remain an underrated resource. The government ought to cross the political hurdles for strategic disinvestment. If the government’s fiscal consolidation would distract from the demand in the economy, much of its spending will also add to it. Government employees’ salaries and pensions are set to rise as the Seventh Pay Commission award is accepted and disbursed. The hikes are bound to result in a surge in demand for goods and services. So are other transfers from the government.

Ancient prejudice, modern inequality

On Sunday, January 17, Rohith Vemula (25), a doctoral student at the University of Hyderabad, reportedly committed suicide by hanging himself from the ceiling fan in a friend’s hostel room. The conflicts in both the University of Hyderabad and the IIT-M illustrate a deep fracture between the Hindu Right and Dalit-Bahujan ideologies, particularly those of the Ambedkarite strain, a fault line that cannot be papered over by electoral alliances of convenience and occasional instances of power-sharing between the two sides.

In the Mahabharata, Ekalavya, a talented archer prince of the forest tribe of the Nishadas, goes to Dronacharya, the master who teaches young men of the Pandava and Kaurava clans how to wield their weapons. Drona will not admit Ekalavya on account of the tribal status that makes him an outsider to the caste system. Ekalavya goes away, makes an image of Drona, secretly watches him give lessons to Arjuna and the other royals, and teaches himself archery, treating the mud-and-clay Drona as a stand-in for the recalcitrant guru.

When Ekalavya turns out to be a better bowman than the Kshatriya prince Arjuna, Drona asks for his right thumb as tuition fee. Ekalavya agrees, but not without understanding that he is being discriminated against yet again. Ekalavya’s initial disobedience (which makes him a secret apprentice) as well as his later compliance (which costs him his thumb) shame both Drona and his favourite pupil, the supposed beneficiary of this blatant act of prejudice, Arjuna. The story of the Nishada prince shows Drona up as a caste bigot whose classroom reeks of nepotism, even if he knows how to teach his students well, at least the high-born ones he favours.

Ekalavya’s dismembered digit, a bloody and visceral embodiment of caste consciousness, has haunted the Hindu schoolyard from time immemorial. It can be read as quite literally a thumb in Drona’s eye, a jab at our conscience that is as painful for us to experience as it must have been for Ekalavya to lose the very source of his hard-earned skill. He is denied access at every stage: he cannot become Drona’s pupil, but neither is he allowed to become a great archer through his own efforts.

The story of Satyakama Jabali from the Chandogya Upanishad is more complex. Satyakama has no father, and takes his mother Jabala’s name. He goes to the hermitage of the sage Gautama, and wants to be admitted. When asked about his parentage, he acknowledges honestly that he does not know his father’s name or caste. Gautama admits him nevertheless, and performs the initiation ritual to pronounce him a twice-born Brahmin, after which his education begins in earnest.

In the ancient text of the Upanishad , Gautama is willing to entertain Satyakama as a potential pupil because of his honesty: he takes the boy’s love of truth (which is the literal meaning of his name, satya-kama ) as proof of his essentially Brahmin nature. Once the teacher has assessed the applicant’s innate worth, he then translates his positive assessment into an upanayana (bestowal of the sacred thread on the boy’s body), naming Satyakama a proper Brahmin and proceeding to educate him accordingly.

Satyakama’s Brahmin identity is clearly attributed to him; it cannot be proven to be intrinsic, since his mother Jabala cannot identify his father. Gautama seems to suggest that ‘Brahmin is as Brahmin does’, i.e., Satyakama has the lakshana (characterising feature) of a Brahmin (because he speaks the truth), even though he does not have the gotra (lineage) of a Brahmin (because his mother was unmarried).

For a modern reader, this is a confusing account. Does Gautama make an exception and admit a non-Brahmin pupil into his hermitage, or does Gautama accept Satyakama because he thinks he recognises him, despite appearances, to be a genuine Brahmin? The exchange between Satyakama and Gautama at the threshold of the ashram , as it were, raising fundamental questions about identity (Who are you? Who am I?), about rights to entry into the portals of the academy, about rule and exception in the caste system, and about the entailments of caste in the strongholds of knowledge and seats of power, is again a moment that has not left our collective conscience for two millennia. Dr. Ambedkar himself reminds us of both these characters, Ekalavya and Satyakama, who for him are damning evidence of the stubborn longevity of caste in Indian history.

Ekalavya did not die and neither did Satyakama, but Rohith did. This sad fact could lead to various conclusions. It is a reflection on the unexpected cruelty and the adamantine ideologies undergirding the modern state and its institutions of higher learning. Drona and Ekalavya, Gautama and Satyakama could to some extent negotiate the terms of their relationship. Rohith ostensibly had the might of the Indian Constitution behind him — his fundamental rights as a citizen, reservations policy for students of his socioeconomic background, and the empowering discourses of the Ambedkarite student group which gave him a certain political awareness and the radical energy to fight for the equality he fully expected and deserved, but never got.

His heartbreaking suicide note states the piercing truth, the skewer that caste ideology drives into every heart filled with hope: “My birth is my fatal accident.” Yes, this is the human condition: our birth, all birth, is an accident. We do not choose our father or mother, our group or community. But only in India, only in caste society, and only for Dalits does this accident of coming into an unequal life become the fatality of either living with relentless inequality and enduring its cruelties, or dying a terrible, unfair, premature and unredeemed death.

Anil Kumar Meena, a first-year Dalit student at All India Institute of Medical Sciences (AIIMS), India’s premier medical college, had hung himself from the fan of his hostel room in March 2012. In Rohith’s poignant Facebook photos, his family’s meagre possessions now stand witness to a life whose promise was extinguished. He had posted that before he got a Junior Research Fellowship, his mother’s humble sewing machine had supported the family.

Dealing with the slowdown

The International Monetary Fund has added to the prevailing economic gloom by cutting the global growth forecast. It now expects the world economy to expand by 3.4 per cent in 2016. This is 0.2 percentage points below its forecast of October last year. The revision has come just as Beijing released numbers that showed China posting the slowest growth yet in 25 years. Though it reported a growth of 6.9 per cent in 2015, the year saw turbulence in the Chinese economy, with heavy capital outflows and stock market volatility. The IMF has kept its growth forecast for China unchanged at 6.3 per cent in 2016, and the fear is that China’s economic slowdown could have a trigger effect on others. Reading the China factor in tandem with weak commodity prices, the Fund has chosen to pare its global growth forecast. The latest IMF growth numbers no doubt reflect the unfavourable ground conditions around the globe. Yet, they also underscore a sense of urgency in putting in place an action plan that would catalyse and hasten the economic recovery process. Not surprisingly, the IMF has emphasised the need for supportive measures in the near term to assist a recovery.

While ringing the slowdown alarm, the IMF, however, finds India better-placed vis-à-vis other large economies. It has kept its growth forecast for India in 2016-17 unchanged at 7.5 per cent. Coming as it does at a time when global political and business leaders make a beeline for Davos, the IMF’s prediction could be seen to be a shot in the arm for Indian leaders to hard sell the country at the World Economic Forum. At best, it could give India a psychological edge over others. But that alone may not be sufficient to pull India to a higher growth orbit. In an inter-connected environment, global headwinds cannot be wished away. Oftentimes, there have been comparisons between India and China in the global investing community. Managing the ‘China factor’ is very crucial for India to stay its course on the growth path. Containing the spillover effects of volatility in Beijing could, however, prove a big challenge for monetary and fiscal planners in India in the coming days. Given that Indian exports have been contracting month after month, the developments on the Chinese currency front are bound to pose fresh worries for the economy. Though India is relatively better-placed, the economic slowdown is as much a concern for the country as it is for others. Even as the IMF forecast provides India a comparative edge in wooing the global investor community, it is essential for the government to coherently address the growing anxiety among domestic consumers and stem, if not fully reverse, the demand slump. The budget will provide the NDA government an opportunity to announce a plan to mitigate economic distress, especially in the farm sector, and show the political will to push job-creation as a central objective. It is a task the government must not dodge.

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