2 April 2013

Strategic realism

M K Bhadrakumar, Apr 1, 2013 :

The two countries have began realising their shared interests and common concerns in the emerging world order. 

The meeting between prime minister Manmohan Singh and the Chinese president Xi Jinping turned out to be, inevitably, the highlight of last week’s BRICS summit in Durban from the Indian viewpoint. This was the first meeting between the two leaders and to the extent that personalities matter in diplomacy, a good chemistry with the new leader in Beijing becomes an asset while navigating the relationship with China forward. And, this is more so because Xi is destined to leave his mark in restructuring the Chinese policies, internally and externally through a formative period in that country’s modern history.

The India-China relations are at a turning point. Looking back, 2012 was a transformative year insofar as the two countries began acknowledging that their shared interests and common concerns in the emerging world order. There was added poignancy in that 2012 was also the fiftieth ‘anniversary’ of the war. Despite the unresolved border dispute, the two countries have shown the political will to advance the bilateral cooperation. High-level meetings are frequent, peace and tranquility prevail on the Line of Actual Control and trade and economic ties are on upward curve. There is growing coordination and cooperation on international issues.

The meeting in Durban took place against a challenging regional and international backdrop. China’s reach and influence in the South Asian region is expanding and India has special interests in its region. Specifically, China-Pakistan strategic ties are acquiring new directions different from their past ‘India-centric’ approach. The Afghan war is getting over but uncertainties lie ahead and India and China are stakeholders in regional stability.

Again, the US’ ‘rebalancing’ policy has not buffeted the India-China relations and the two countries have a manifest desire to keep things that way. Paradoxically, the tensions in the Asia-Pacific following the US’ ‘pivot to Asia’ may even have given an impetus toward preserving a tension-free atmosphere in the China-Indian relationship. Least of all, both India and China are entering a new phase of reform and both have grave internal problems to tackle. All in all, therefore, the balance has tilted in favour of cooperation rather than competition.

The meeting in Durban was not expected to produce results. Yet it exceeded expectations. It needs to be noted that whereas Indian officials were coy about divulging details, the Chinese side came out with a fairly detailed account. It reflects, arguably, Beijing’s sense of satisfaction with the Durban talks as much as underscores the degree of transparency that already characterises the high-level exchanges.

From the Chinese and Indian accounts, it is at once obvious that Manmohan Singh had a substantive discussion with Xi regarding the future trajectory of the bilateral relationship. The prime minister stressed the four main templates – respect for each other’s core interests and major concerns, deepening of mutual strategic trust, greater coordination and cooperation on international affairs and pursuit of policies conducive to peace and stability. He also specifically addressed the issues that come within the ambit of “core interests and major concerns.”

One river, two countries, too many dams

Published: April 2, 2013
Sandeep Dikshit

PTI Prime Minsiter Manmohan Singh and Chinese President Xi Jinping.

Chinese reticence about projects on its stretch of the Brahmaputra do not assuage Indian fears about diversion of the river’s waters

By raising the Brahmaputra dams construction issue during his first meeting with the new Chinese President Xi Jinping, Prime Minister Manmohan Singh was following a two-pronged strategy.

On the one hand, Dr. Singh wanted to bring India’s unease with Chinese construction on Brahmaputra’s main channel to the world’s notice. On the other, by saying publicly that most Chinese projects might not store water, he was trying to ensure that any ensuing debate in the country does not snowball into one more round of panic-stricken news reports.

The Chinese government has been reticent about dams being constructed on transborder rivers. India is not alone in seeking these details. Many lower riparian South East Asian countries and even Kazakhstan in Central Asia want China to be more forthcoming about plans to build dams or divert water from transborder rivers.

Even though some of the dams India is concerned about have recently figured in the Chinese government’s plan documents, for a long time open source literature, satellite reconnaissance and source reports were unable to confirm their actual impact on river flows, thus raising anxiety levels here.

During a press conference on his way back from Durban where he met the Chinese President and sought a joint mechanism, Dr. Singh was careful to add a caveat. While confirming that he had asked for greater transparency from China, the Prime Minister added that the projects on the main channel of the Brahmaputra appeared to be run-of-the-river, that is, they would not have significant storage.

Perhaps he was keen to avoid the alarm of media reports on China’s plans to divert 40 billion cubic metres of water from the Brahmaputra (known as Yarlong Tsangpo in China) in 2003. The Chinese have put the brakes on the project or perhaps shelved it, but India’s apprehensions found another outlet when, a few years later, a massive landslip blocked portions of the river at an area known as the Great Bend. The misgivings were quelled after water cut a course through the blockade and flows returned to normal.

In both cases, the Chinese shared little information about the developments. India kept hoping that its diplomatic notes and media exposure of Beijing’s aversion to sharing details would make the problem go away. It was only a couple of years back that China agreed with the Indian request (and separately to that of some Asean states) to share hydrological data.

But another concern had arisen by then. Prime Minister Manmohan Singh first raised it with then Chinese President Hu Jintao in March, 2012. The Chinese were already aware of India’s concerns as then Foreign Ministers S.M. Krishna and Yang Jiechi had discussed it in their preparatory meeting before Mr. Hu’s visit.

Policy cowardice

Mar 31, 2013

When the Chinese protest our exploration for oil in the South China Sea, we are not prepared to ask them what they are doing in PoK

Foreign policy has been much in the news recently, but for all the wrong reasons. The moves by Pakistan and China mostly have us on the backfoot. Our handling of the Maldives leaves much to be desired. And our relations with Sri Lanka have plummeted as we struggle to deal with our own internal contradictions.

The real problem is that we deal with foreign policy on an ad hoc basis. We react to events, rather than anticipating them. We are absorbed with the surface symptoms but are unable to pinpoint the central malaise, which is that our approach to security, of which foreign policy is an integral part, is sloppy, unplanned, reactive and completely lacking in focus and will. In short, the real problem is that modern India has not developed a clear-cut, unequivocal and well-thought-out security doctrine.

Strategic vision requires the ability to adopt that policy which is best suited for a particular situation. That is why Chanakya articulated the four tools of sama, dana, danda, bheda — reconciliation, inducement, deterrent action and subversion — and the lesser-known asana, or the strategic art of deliberately sitting on the fence. Each tactic has a specific use. The need for us today to have an effective security doctrine incorporating each of the above elements is self-evident given the fact that we are located in one of the most troubled neighbourhoods of the world; we have two implacably hostile states as our neighbours: Pakistan and China; Afghanistan is endemically unstable; Nepal is imploding; large parts of Burma are under the sway of terrorists of varying hues; the entire region is in the grip of fundamentalist and violent radicalism; China’s policy of encircling India by finding strategic bridgeheads in our neighbours is well known; we have the problem of externally sponsored terrorism, and now increasingly home-grown terrorism; and, as many as 200 districts in eight states of the country are infested with Naxal violence.

Given the gravity of this scenario, it is unfortunate that our foreign policy establishment has been devalued to an unprecedented extent in recent times. The routine day-to-day requirements of diplomacy have overwhelmed any cerebral policymaking, both short term and long term, which must be the prime purpose of a foreign office. Institutions are devalued when they forget their principal focus and allow minutiae to crowd out the fundamentals. For instance, a critical component of the ministry of external affairs (MEA) should be the policy planning division (PPD), which is currently near defunct. It needs to be managed by the best and the brightest who, free from the routine work of diplomacy, present policy options on a continuous and dynamic basis. In particular, security diplomacy must be embedded in a first-rate PPD. In an ideal situation, the external affairs minister should see a memo prepared by the PPD the first thing in office, and only then go about his official routine.

The Italian affair

Apr 02, 2013

The voices of the families of the two fishermen killed have been drowned in the clash of geopolitical egos between India and Italy

The United Nations Vienna Convention on Diplomatic Relations held in 1961 evolved universally accepted guidelines for diplomatic interaction in international relations. But when one sovereign government decides to act in contravention of the Convention and break its own solemn national assurances to another, high international diplomacy stands in danger of being reduced to the level of knavish schoolboys cheating in a game of marbles.

This is precisely what the Government of Italy had descended to by reneging on its agreement to repatriate to India two naval marines from the ship Enrica Lexie detained in Indian custody for the alleged murder of two Indian fishermen off the coast of Kerala but allowed to return home on parole for Christmas.

I believe the narrative of the Enrica Lexie case is familiar to the Indian public by now (and does not require another burdensome repetition here). At the core of the dispute is the accurate nautical position of the vessel at the time of the shooting incident and hinges on conflicting claims by both countries over legal jurisdiction at that particular point on the ocean, a point admittedly difficult to argue dispassionately on the high seas under the guns of an Indian Navy frigate.

However, intense politico-diplomatic interaction between the two countries has been under way ever since, leading to dramatic and often startling twists in the murky narrative, providing manna from heaven for the media in both countries.

At this stage, it is tempting to speculate upon the possible fallout and turn of events had the Enrica Lexie been an American flagged vessel rather an Italian one. To begin with, keeping the relative international weightages commanded by Italy vis-a-vis the US, realpolitik would require India’s reactions to be on a different, possibly lower, scale regardless of public opinion in this country.

It is somewhat astonishing that the Enrica Lexie was provided security by Italian marines. It would be safe (as well as logical) to assume that the vessel under an American flag would not have been guarded by US Marines, but by private security contractors like Blackwater. American interest, if any, would have been restricted to any Americans who might have been involved, while for its part India, too, might have handled the issue more gingerly, via a more accommodative Track-2 approach. The Opposition in the Indian Parliament would as always be expected to provide background music of sound and fury, which political crisis managers in the ruling party would have to handle.

One of the reasons why the Italian government was particularly anxious to prevent incarceration of its marines in Indian custody were the horror stories that abound about the police and lower courts in India. True or false, these impressions do exist, and have been further reinforced abroad by reports of their experiences with the Indian system by European jailbirds like Peter Bleach, Kim Davy and the Latvian pilots who were the fall guys in the Purulia arms drop case. Indeed, some of the arguments advanced in court when seeking relief during the trial of Bleach and Davy were on the grounds that the poor living conditions in Indian prisons violate human rights and dignity.

The lessons to be drawn from the Italian episode are important. These must not be allowed to fade away as the crisis recedes, and necessary corrective action must be taken at the required level.

China and the Tibet imbroglio

Mar 31, 2013

Does Lobsang Sangay believe that China will engage in any kind of dialogue with himself or the Dalai Lama, whom the Chinese foreign ministry calls ‘an incestuous murderer’?

March 31st marks the 54th anniversary of the day His Holiness Dalai Lama was delivered to Indian custody by Tibetan freedom fighters, through a perilous mountain pass in Arunachal Pradesh with the Chinese Army in rapacious pursuit. And throughout the Tibetan diaspora, there is much deliberation about the state of Tibet’s freedom struggle. As the people in Tibet enact a singularly urgent form of protest — self-immolation — to challenge Chinese atrocities, those in exile feel despair and confusion about the refusal of the international community, Western powers in particular, to hold China accountable for the escalating crisis in Tibet.

In the name of “stability”, Western powers are committed to policies that support the longevity of the Chinese Communist Party, puzzling indeed when considering the billions of Cold War dollars spent to defeat the same totalitarian ideology in the Soviet Union. Thanks to another Cold War relic, the Kissinger Doctrine, the People’s Republic of China has been legitimised and integrated into the world economy, Stalinist methodologies intact. China has a seat on the UN Security Council, while democratic India is denied such power and representation. China pays no reputational or economic price for its obscene record of genocide and destruction in Tibet, heads of state routinely snub the Dalai Lama, more Tibetans set alight their bodies, and the world looks away in uncomfortable silence.

There appears to be a collective global amnesia about Communist China’s crimes against humanity, past and present. Mao Dezong killed at least 60 million people — some studies put the number at 80 million. Mao’s police state routinely tortures and murders its subject peoples for the crime of “counterrevolutionary thought”. The students of Tiananmen were punished for seeking democracy, Tibetans for practising the Buddhist faith. No one would think of walking into a party in New York or New Delhi wearing a Hitler T-shirt, but it is chic to sport an image of Mao Dezong, one of history’s greatest brutes. Why?

Apologists for the Chinese Communist Party are ubiquitous, especially among Western academics who have a ludicrous nostalgia for Marxist thought — having never lived in a Marxist state makes it easier — and businessmen who profit off the cheap labour provided by Beijing’s party bosses. Apologists proffer the party line that China must never “lose face”, that China isn’t ready for democracy, pledging allegiance to the Communist Party, not the Chinese people and their aspirations for a rule of law, and willfully ignoring the plight of Chinese dissidents like 2010 Nobel Peace Prize laureate Liu Xiaobo, who languishes in prison for his brave and eloquent writings on democracy and justice.

The gruesome images of self-immolations in Tibet — 110 at last count — and China’s ever more strident attacks on the Dalai Lama, add to unease about China’s aggressive stance with Japan and Vietnam, and reports of the extent of Chinese cyber espionage worldwide. The China apologists are on the ropes, and the Tibetan exiles have an opportunity to make their case that Tibet is a sovereign nation colonised by Communist China, which creates enormous ecological and security risks for all of South and Southeast Asia. But the powers that be in Dharamshala seem unwilling to seize the moment.

Lobsang Sangay, the head of the Tibetan exile government, has been travelling the world, holding press conferences, where he is asked about the conflict in Tibet. Despite the grim statistics, Mr Sangay seems oddly placid as he smiles and repeats his motto that “peaceful dialogue will resolve the situation”. Does

The shame of Kolkata

Apr 01, 2013

On March 30, members of the All Bengal Minority Youth Federation and various other affiliated Islamist groups held a rally in central Kolkata in support of the perpetrators of the genocide in East Pakistan (now Bangladesh) in 1971.

Their principal argument, it appears, was that they believe that those who have been indicted for war crimes did not receive a fair trial. As the noted journalist, Praveen Swami, argued in a recent article, these protesters had every right to hold a rally even if their views are utterly loathsome and, frankly, beneath contempt. The Indian constitutional dispensation, after all, does grant the right of free speech subject to some limited constraints.
Six elements about this protest require comment. First, apart from the attempt of these demonstrators to sanitise a particularly squalid period in the subcontinent’s history, this protest amounts to a calumny against the Indian forces whose actions had ended the reign of terror of a genocidal regime.

The charge of genocide had come from multiple sources. Anthony Mascarenhas, a noted Pakistani journalist, had made the initial charge in the Sunday Times, after fleeing Pakistan. However, few were as significant as that of Archer Blood, the US consul-general in Dhaka, and a significant number of his colleagues had used the “dissent channel” of the US department of state to protest against American support for Pakistan during this crisis. In that justly famed telegram, Blood had written, “the much overused term ‘genocide’ is precisely applicable in this case”.

Second, it is also appalling that the Communists in Bengal who are no strangers to holding rallies and public protests on the slightest political pretext and do not lack street power, have done little or nothing to mount a counter-protest. This deafening silence from a party that has long professed to decry any form of communal sentiment simply underscores the utter bankruptcy of their ideological stance let alone moral authority. They, like, any number of their counterparts, have their eyes firmly cocked on the very substantial Muslim voters and the possible stranglehold that the most obscurantist elements from within that community can exercise on the electorate.

Third, in an entirely related vein, the Trinamul Congress, despite its much-vaunted claims of “paribartan” (transformation) has now shown that it is no better than its Communist counterparts. In a fashion that is equally craven, it has abjectly failed to speak out let alone organise a counter-protest to this despicable demonstration. Like its Communist nemesis the Trinamul Congress, too, can ill afford to displease what it deems to be a critical constituency. Instead of standing its ground and demonstrating that it can take an ethical position it has simply caved in, once again, before the forces of communal hatred.

Other parties, such as the Congress and the Bharatiya Janata Party, have a limited presence in West Bengal. The Congress, which many decades ago held sway, could have nevertheless issued a token protest. However, given its acute dependence on Muslims elsewhere in the country, its silence is hardly unexpected. The BJP, given its own fraught history with India’s largest minority, has probably decided that discretion may well be the better part of valour.

Fourth, the postures of the Communists, and the Trinamul Congress in particular, reveal that they deem the Muslims of West Bengal to be an undifferentiated mass. By indulging a vocal minority who may well not reflect the wider body of Muslim public opinion they are allowing an extremist fringe to define the views of a larger community. This approach will invariably play into the hands of other communalists who will inevitably harp on the pandering to these parochial fanatics from within the community. In the end, this form of gutless behaviour will prove costly for the well-being of secularism in India as parties will all seek to outbid religious zealots.

The contractor state

Tue Apr 02 2013

It is no accident that the auditor has become the new subaltern figure of resistance

The government of India is a government of contractors, by contractors, for contractors. There may be a touch of exaggeration in this claim. But this simplified description of India's political economy explains the main contours of current economic and political woes. At the most general level, our challenge is that the government contract process is misaligned with the larger social contract in more ways than one can list. It has a relentless power of its own, defying all logic of social utility, cost or even efficiency. We often complain that outlays are not translated into outcomes. There is a big assumption that the purpose of outlays is to produce outcomes. But there is little evidence that this is the logic underlying state action. The purpose of the outlay is to create a broad justification for expanding the reach of the contracting state. The end is the awarding of the contract. But the nature of contracting is now producing systematic misalignments.

Take example after example. Why is our infrastructure so badly under-designed? The obvious answer is that the main interest in infrastructure is not in its social utility: whether it gets to move goods or people faster, whether it is safe, whether it is economically viable. The main interest in infrastructure is the awarding of contracts. Why is there a fascination with unsustainable mega projects but no funding available for sensible low-cost alternatives? Why would we rather transport water for hundreds of miles than fix leaking pipes? Was JNNURM an urban regeneration scheme or driven by the logic of projects? Is the shape of our cities governed by any logic of social design or does it simply adapt to the political economy of contracting? Contemporary Gurgaon is the most astonishing example of, literally speaking, a contracting-driven city. The point of an irrigation scheme is not water, it is contracts. Take a more recent example: the aborted Aakash project. The idea of using cheap tablets may or may not have pedagogic utility. But the execution of the project was governed by the rush to give out a contract. Instead of making the design and intellectual property freely available and spurring innovation, the scheme was turned into a giant procurement exercise. The misalignment of social purpose and the political economy of contracting is generating more negative externalities than we can handle.

The logic of contracting is not aligned to social purpose. But does it have a consistent inner logic of its own? The real breakdown in the state in the last few years has been that even its inner logic is now broken. Most of our contracts seem to be horrendously designed: an odd combination of a narrow accounting mentality on one hand, and clever ways of systematically introducing ambiguities on the other. No wonder they are being contested across the board, bringing the economy to a grinding halt.

It would be naïve to pretend that contracts have very little to do with rent-seeking and corruption. But the political economy of rent-seeking, through contracts with the state, has its own norms. Previously, the norm was to stick to how much you charged the state, but make money by compromising on quality. Then we invented clever devices like build-and-maintain contracts, and public-private partnerships, ostensibly to align the incentives of government and contracting parties. For a while, it looked like these new arrangements would work. But now they are generating their own pathologies. It turns out that much of the private sector that was interested in these contracts believed some of the following. These contracts could in time be renegotiated, and the procedural façade would allow great room for political discretion. They also figured out that their investments could be recouped very fast, and after they had recouped their initial investment, they could lose interest in the project or simply bolt, notwithstanding any long-term commitment. So you now have the mess of projects like the Gurgaon expressway. Or they and their political masters believed in the possibility of abnormally high returns to the point that almost all the cost efficiency arguments seem to be nullified. The minute some questions were asked about costs they began to bolt, using the lack of government decision-making as an excuse. This was combined with another fact. The government also had touching faith in the power of contracts. It invited bids without necessary homework or clearance, as if a contract would miraculously generate the forest, environmental and other clearances required for its operation. And now it is finding that matters are not so simple.

How not to deal with defence corruption

Tue Apr 02 2013

The problem is not foreign suppliers, but a dysfunctional defence marketplace

Sunil Dasgupta and Stephen P. Cohen

The furore over the latest arms procurement scandal in India — this time over the AgustaWestland helicopters — has led, predictably, to calls for greater indigenisation of the military industrial complex, as if excluding foreign weapons-makers will clean up the corruption.

The problem is not foreign suppliers, but a defence marketplace where domestic industry produces low-quality weapons at great cost, often late, which India's armed services do not want. To the extent that foreign suppliers act in venal manner, it is because India's defence marketplace is dysfunctional. Excluding foreign sellers only reduces the number of players and externalises the problem; it does not stop corruption.

The so-called "China solution," which lauds Beijing's success in weapons development and manufacture, is misconstrued: China's self-reliance has not produced new conventional weapons. Chinese aircraft, tanks and ships are quite ordinary platforms. Its successes in nuclear, missile, laser, and cyberwar technologies are all unconventional. The causes of Chinese successes in unconventional military technologies are many, but it is worth remembering that the Chinese government has used an extensive spying campaign in pursuit of commercial and military secrets. This consequences of the campaign are now catching up with Beijing as the United States and other Western powers gear up to prevent Chinese infiltration.

As an emerging power, India is better off being seen as a benign force. It is better off buying technology rather than stealing it. It is better off inviting the world to participate in its rise than keeping the world outside and suspicious. Better off acting transparently in the defence marketplace even at the cost of sacrificing secrecy. Better off reforming its procurement system, rather than winnowing down the market. India buys weapons from foreign suppliers not only to develop military capacity but also to build relationships with other key countries that facilitate its rise.

The key instrument of economic efficiency in any market, pricing, is mind-bogglingly inefficient when it comes to armaments. Weapons in the same category made by different manufacturers are not readily comparable, especially at the higher rungs of the technology ladder. There are too few sellers and even fewer buyers to make a truly competitive market. Further, the value of a particular weapon-system in the context of a national security strategy is hard to calculate. Try, for example, figuring out whether missiles or attack aircraft have greater utility; practically every government faced with the decision went with both, the most expensive and least efficient option.

India's defence market faces these challenges and more. We argued in our book Arming without Aiming that Indian military procurement is disconnected from national objectives. Indian grand strategy de-emphasises the use of force and consequently, the military receives little strategic guidance from the political leaders. Prime Minister Manmohan Singh, for example, has repeatedly said at conferences with Indian military commanders that the country's primary threats are internal, without publicly clarifying the role of the armed forces in meeting internal security challenges. Only the Indian army participates in internal security operations, that too, in well defined areas such as Kashmir; what should the Indian Air Force and the Indian Navy do? According to the Constitution, the armed forces are not responsible for internal security. The police, which is responsible for domestic law and order, remains in the hands of the states and outside the ability of the Central government to reform.

On the military side, the result is that the services are left to define the threats they believe the country faces and accordingly they appear to be preparing to fight three different wars against three different enemies. Today, the army thinks it needs an air force of its own, the navy wants to acquire its own thermonuclear capability, and the IAF appears to be planning for wars independent of the other two services. India was one of the first countries in the world to integrate officer training — at the NDA and the Staff College — but everything else seems to be contributing to service rivalries. India's unified commands are feeble and there is no movement on a new combined defence chief. Only actual wars and initial setbacks seem to produce inter-service cooperation, such as between the army and the IAF in Kargil.

The silent war over education reforms

Krishna Kumar

Despite apparent similarities, the reports of two centrally appointed committees are split on the relationship between knowledge, skills and social needs

Two major reports with overlapping concerns were submitted to the central government during the last decade. They were drafted by committees appointed by two different offices of the same government. One was chaired by Yash Pal, and the other by Sam Pitroda. The titles of the two committees indicated both the contours of their deliberation as well as areas of potential overlap. The first committee, chaired by Yash Pal, was appointed by the Ministry of Human Resource Development in 2008, and was called the “committee to advise on rejuvenation and renovation of higher education.” The second, chaired by Sam Pitroda, was appointed by the Prime Minister’s Office in 2005 and carried the more compact title, the “National Knowledge Commission (NKC).”

Both reports talk about expanding the provision of higher education without sacrificing quality, and as such, a cursory reading would suggest that there is not much difference between the views articulated by the two groups. In the specific sphere of knowledge, both panels favour imaginative interface between areas and disciplines as a means of promoting creativity. They evince equal amounts of anxiety over the problems of accreditation and licensing faced by institutions that impart professional education. And, on the matter of institutional fragmentation at the apex level, both recommend establishment of an umbrella body capable of subsuming the overlapping functions of existing structures. With so many apparent similarities, it is not surprising that the Yash Pal report and Sam Pitroda’s NKC are routinely invoked in the same breath whenever a new policy or decision comes up for discussion. A careful decoding, however, reveals that the two reports are based on contrasting perspectives on the relationship between knowledge and education, and between these and social needs. From the point of view of the political economy embedded in the two reports, the visions of reform they endorse are incompatible.

Skill deficit

Both reports recognise a crisis in higher education, but their diagnosis of the nature of that crisis is quite different. While NKC views the narrow growth of higher education in the context of skills, it is not quite clear how it relates the current parlance of “skill deficit” to higher education. The idea comes across as an obvious issue or as an assumption: “While higher education enrolment has to increase markedly, the skill requirement of the growing economy means that a large proportion of our labour force needs to be provided vocational education and be trained in skills. This skill element has to be integrated with the higher education system to ensure maximum mobility.” Confusing as these words are, they convey the shape of things to come if NKC’s vision becomes reality. The report discusses the paucity of skills in the vast unorganised sector, but shows little interest in the context in which this paucity has grown. After all, the economy must be in a position or evolve towards one which provides employment prospects attractive to skilled personnel.

Knowledge and skills

The fact that Indian manufacturing has provided slow employment growth — called “jobless growth” during the 1990s — or that the IT-enabled sector provides less than 0.5 per cent of total employment, indicates that at least two sectors commonly linked with skills and the so-called knowledge economy, respectively, are not in a position to provide massive additional employment, or at least not immediately. No doubt the economy might evolve, and these or other sectors change in ways that provide additional employment, but the push for vocational skills, whether or not at the cost of higher education, cannot ignore a detailed plan of how industry-training linkages will also be simultaneously developed. This is precisely what NKC ignores, harnessing the rhetoric of knowledge with a variety of suffixes while refraining from relating it to the actual needs of the economy or higher education.

Troublemakers of Bangladesh

A peep into Sheikh Mujib’s assassination
by TV Rajeswar

PRESIDENT Pranab Mukherjee was recently on a state visit to Dhaka. Bangladesh is witnessing turbulent times with clashes between nationalists and Jamaat elements who had links with anti-Bangladesh forces, manipulated by Pakistan. 

The President’s visit reminds me of my own visit to Bangladesh in 1972 as Security Adviser to Bangabandhu Sheikh Mujibur Rehman. It may be recalled that after Partition, Pakistan consisted of two wings — West and East Pakistan — which later emerged as Bangladesh.

In the elections held in 1970, Mujibur Rehman and his party emerged as winners which were not acceptable to diehard elements like Z A Bhutto. After a brief incarceration in Pakistan, Mujibur Rehman was released but sent to the UK as a neutral destination. Immediately thereafter Mujibur Rehman flew to Delhi where he was given a rousing reception with Prime Minister Indira Gandhi herself receiving him at the foot of the ladder. Mujibur Rehman expressed his gratitude to Indira Gandhi for India’s support to the cause of Bangladesh and flew off to Dhaka in the same plane. His arrival in Dhaka witnessed a massive reception from Bangladeshis.

Indira Gandhi’s senior adviser DP Dar was sent to Dhaka as observer of Bangladesh affairs while JN Dixit, a senior Foreign Service officer, was sent as CDA to Dhaka. Soon after a request came to Prime Minister Indira Gandhi from Mujibur Rehman for sparing the services of a senior officer of the Intelligence Bureau to look into the security arrangements for himself in Bangladesh and suggest the necessary recommendations. I was chosen for this job. 

I arrived in Dhaka on January 21, 1972, and stayed there for a week interacting with senior officers of the Bangladesh security establishment and also visited the residence and office of Mujibur Rehman. The Bangabandhu, as he was reverentially called by the Bangladeshis, preferred to stay at his own residence at Dhanmandi, a middle class area of Dhaka. His family members stayed with him in the same house and Mujibur Rehman’s wife cooking food for her husband. There was a state guest house with sufficient space and security arrangements such as adequate fencing, etc, and this would have been a better and safer place for the President and his family to stay.

When President Mujibur Rehman set out on a visit to the countryside by road and I travelled in the motorcade observing the security arrangements made at various places where he was stopped and requested to address them. There was total chaos in the arrangements and he was literally mobbed everywhere. President Mujibur Rehman travelled up to Tangail, about 75 miles north of Dhaka, where he accepted the surrender of arms by Tiger Siddiqui, who was one of the Mukti Bahini heroes of Bangladesh liberation movement and had fought the Pakistani forces in 1971.

President Mujib made a visit to Calcutta in February 1972 where a massive public reception awaited him at the maidan. It was one of the largest gatherings in Calcutta’s history. Indira Gandhi was with Mujib on the rostrum and she was dressed in the traditional Bengali garad saree. She also spoke in Bengali in which she was proficient because of her education at Santiniketan during her younger days. 

Later, I met Mujibur Rehman in the Calcutta Raj Bhavan and discussed with him for nearly half an hour on the essentials of my security scheme which had already been given to him. An important recommendation was that he should shift from his ancestral house in Dhanmandi and move into the state guest house. He dismissed the suggestion out of hand. He said that the guest house was notorious as Yahya Khan, Pakistan’s erstwhile military ruler, used to do all sorts of undesirable acts during his official visits and that he would not move out of his own Dhanmandi residence. I said that he should at least look for a spacious house with ample frontage and distance from the road to enable the construction of certain security structures and positioning of the inner and outer cordons. He dismissed this suggestion also and said, “Who would think of causing me any harm.”

I found myself talking to an overconfident leader living in an unreal world. No doubt, the Bangabandhu had nothing to fear from his own people at this time. 

India must look North-East

Monday, 01 April 2013

The reason why the legendary freedom-fighter from Meghalaya, U Kiang Nanbah, is an unknown figure for the rest of the country is that we are so poorly informed about the history and culture of the Seven Sisters

At the first instance, the name struck as perhaps one of some South East Asian political leader. It was later one realised that he was one of the greatest freedom-fighters this country has produced. Unfortunately, not only in the rest of the country but even in his own native Meghalaya, U Kiang Nanbah is not a well-known figure, thanks to a policy of sheer indifference successive Central Governments have adopted towards the history and culture of the people of the North-East,

Remembering Nanbah now assumes all the more significance as 2013 marks 150 years of his execution at the hands of the British rulers. Not much is known about his early days except that he was a child when the British annexed the Jaintia kingdom in 1835. He had no royal lineage whatsoever and was born in an ordinary peasant family, but what ignited the spirit of patriotism in the young Nanbah was the high-handedness of the alien rulers and the daredevil exploits of his maternal uncle U Ksan Sajar Nangbah, who fought against the invaders at a place called Chanmyrsiang.

Like in other places, the British initially adopted a policy of least interference in the internal affairs of the newly annexed kingdom, but gradually started imposing taxes and restrictions on the religious beliefs and cultural practices of the locals, which was resisted by Nanbah and his many compatriots.

The movement against the aliens intensified after they set up a police station at Jwai in 1855 to establish “Government authority” over the hills. The establishment of the military outpost near the cremation grounds of the Dkar clan and orders restricting the burning of the dead was seen as interference in religious beliefs and fuelled popular resistance against the British.

The establishment of a missionary school, the destruction of weapons ahead of a traditional ceremony and attempts by British-supported missionaries to slam the beliefs of the locals as superstitions added fuel to fire. U Kiang emerged as the leader of the resistance movement and led the attacks on the Jwai Police Station, which was totally destroyed. Subsequently, the group burnt down the Christian settlement and besieged the military post. The resistance was so fierce that the British had to rush in reinforcements and launch full-scale military operations against U Kiang and his men. Unfortunately, U Kiang fell ill and was finally nabbed after stiff resistance, with the help of informers.

This revolutionary leader was put on mock trial and was sentenced to death within three days of his capture, before the very eyes of the locals, to send across a tough message that any resistance to the British rule would not be tolerated and would be suppressed with an iron hand.

However, as he was being taken to the gallows on the evening of December 30, 1862, U Kiang said something prophetic, “Brothers and sisters, please look carefully on my face when I die on the gallows. If my face turns towards the east, my country will be free from foreign yoke in the next 100 years and if it turns west, it will remain in bondage for good.”

In less than a century, India became independent. Like the native American Indians, U Kiang fought for the rights of the people in the face of imposition of an alien way of life and values. People of Khasi and Jaintia Hills have since lost much of their traditional culture. In fact, not many in the younger generation even remember U Kiang Nanbah.

The ignorance about U Kiang Nanbah is a reflection on the Government’s education policy, which has totally neglected the history of the North-East. Forget Nanbah, most history textbooks prescribed by the Central Board of Secondary Education do not have any reference to the history, culture or traditions of the region. It seems as if their history begins with the British annexation of their territories. A serious attempt was made in this direction under the leadership of the then National Council of Educational Research and Training Director, JS Rajput, during the NDA regime, but hundreds of textbooks prepared during the time were later thrown into the dustbin under the garb of preventing ‘saffronisation’ of education.

Mauritius: the end game?

Mon Apr 01 2013, 01:22 hrs

Just as India has hit a high current account deficit of 6.7 per cent for the third quarter of the fiscal year, Mauritius which accounts for just a shade less than 40 per cent of foreign investment into India too has hit a 7 per cent current account deficit.

Should this be a cause for worry? The island is tied to the Indian capital markets even before New Delhi began to allow foreign investors a peep into the markets from 1991 onwards. Of course almost none of the money that is funnelled into BSE and NSE from Mauritius originates from Mauritius. But all of it does use the banking system of the island.

In its Article IV consultation with Mauritius conducted in January this year the IMF has noted "The persistently large external current account deficit reflects low savings and could give rise to future vulnerabilities. This should be addressed through policies to promote national savings and foster competitiveness, which will require longer-term adjustments to reduce fiscal deficits".

This is the standard IMF speak. The problem is that as an open but small economy the island's fiscal space is limited. The pressure on domestic savings is coming from the huge spike in real estate market, with even South Africans buying up large chunks on beach fronts. Mauritius is the best real estate story in Africa.

Again the IMF notes "developments in the real estate sector should continue to be monitored carefully, both in terms of price and rental growth and with respect to the impact on the banking sector". So what could a pressure on the banking sector look like for the dollars and reconstituted rupees flowing through it and mainly coming to India? If the deficit stays stubborn and the value of the Mauritius rupee slips, would this translation still remain active just on the basis of the tax concession India gives? The stock of broad money in Port Louis is about 125 per cent of the GDP (India, for instance is less than 80 per cent of the GDP). Comparable figures are those of Iceland before the crisis and Singapore or Macau now.

There are of course several buffers in the story. Mauritius, unlike Cyprus is not in the European fault zone. Within a generation the country has moved from an agriculture exporter (sugar) to a manufacturing one (textiles) to a service economy. It is highly adaptable to change and its inflation at around 4 per cent is modest. But despite all that, for India-focussed investors from abroad who have grown used to the Mauritius context, it may be time to do a rethink.

Subhomoy is a Deputy Editor based in New Delhi.

Dealing with Pak N-weapons

Better to remain involved in dialogue
by PR Chari

THE non-BJP views that had argued against India conducting its nuclear tests in May 1998 are worth recalling now when Pakistan’s nuclear arsenal is causing so much anxiety. They had held that if India went nuclear Pakistan would follow suit, as it had established the ability to explode nuclear devices despite some reservations existing in the Indian nuclear establishment. It was also argued that Pakistan’s display of nuclear prowess would establish a state of nuclear deterrence that would neutralise India’s conventional superiority against Pakistan. In other words, Pakistan, with the nuclear deterrent, would become the strategic equal of India. The BJP government, however, equated power with military strength and military strength with nuclear weapons; it was, therefore, anxious that India should reveal its military nuclear capabilities by testing its devices. The rest, as the saying goes, is history.

A rule of wisdom prescribes that nuclear adversaries must maintain a continuous dialogue between themselves to ensure that their tensions and instabilities do not lead to conflict that could escalate and cross the nuclear threshold. But in an interview to The Tribune, Salman Khurshid, India’s Foreign Minister, admitted that India’s dialogue with Pakistan was not “ dead or in a coma,” but “ has gone very sleepy”. Such insouciance should alarm citizens in India and Pakistan. Why? Several reasons are obtaining here.

First, it is naïve to believe that either country will give up its nuclear weapons or place them under international control. The Nuclear Five have ignored UN Secretary-General Ban Ki Moon’s calls to prioritise nuclear disarmament and arms control. Instead, the Non-Proliferation Treaty (NPT), which embodies these high ideals, is collapsing due to break-outs by North Korea and Iran that could inspire an exodus from the Treaty. Besides, the Nuclear Five have not kept their NPT commitment to eliminate their nuclear stockpiles within a specified time-frame. Instead, President Obama and other NATO leaders have declared they will retain their nuclear arsenals. Why, then, should India and Pakistan give up their nuclear weapons? But if they are here to stay, India and Pakistan need to manage their nuclear relations through greater dialogue rather than by a brooding silence.

Second, the need for talking is accentuated by the reality that India and Pakistan had fought each other after their nuclear tests in Kargil (May-July 1999), had a serious border confrontation crisis (December 2001-October 2002) and were about to begin a conflict after the Mumbai attacks (November 2008). An edict of the nuclear age is that nuclear adversaries must not provoke conventional conflicts since they could escalate unpredictably. India and Pakistan are not exceptions to this rule, but this edict should inform them of the need for dialogue to defuse crises before they occur.

Third, the bilateral India-Pakistan nuclear standoff has drawn China into an unstable triangular relationship for which there are no precedents. A nuclear trialogue between India, Pakistan and China would be of obvious utility, but it has not been possible to achieve this modality at the official level. The reason is that China objects to discussions with India on nuclear issues, arguing that India is not a nuclear weapon state recognised by the NPT. Besides China shuns discussions on its nuclear relations with Pakistan with other nations on the grounds that these are strictly bilateral issues. But China’s cooperation with Pakistan on its nuclear and missile programme by direct transfers and through North Korea is well documented. Abandoning the nuclear dialogue with Pakistan also would assuredly create a dangerous void.

Is This a Pandemic Being Born?

China's mysterious pig, duck, and people deaths could be connected. And that should worry us.

APRIL 1, 2013

Here's how it would happen. Children playing along an urban river bank would spot hundreds of grotesque, bloated pig carcasses bobbing downstream. Hundreds of miles away, angry citizens would protest the rising stench from piles of dead ducks and swans, their rotting bodies collecting by the thousands along river banks. And three unrelated individuals would stagger into three different hospitals, gasping for air. Two would quickly die of severe pneumonia and the third would lay in critical condition in an intensive care unit for many days. Government officials would announce that a previously unknown virus had sickened three people, at least, and killed two of them. And while the world was left to wonder how the pigs, ducks, swans, and people might be connected, the World Health Organization would release deliberately terse statements, offering little insight.

It reads like a movie plot -- I should know, as I was a consultant for Steven Soderbergh's Contagion. But the facts delineated are all true, and have transpired over the last six weeks in China. The events could, indeed, be unrelated, and the new virus, a form of influenza denoted as H7N9, may have already run its course, infecting just three people and killing two.

Or this could be how pandemics begin.

On March 10, residents of China's powerhouse metropolis, Shanghai, noticed some dead pigs floating among garbage flotsam in the city's Huangpu River. The vile carcasses appeared in Shanghai's most important tributary of the mighty Yangtze, a 71-mile river that is edged by the Bund, the city's main tourist area, and serves as the primary source of drinking water and ferry travel for the 23 million residents of the metropolis and its millions of visitors. The vision of a few dead pigs on the surface of the Huangpu was every bit as jarring for local Chinese as porcine carcasses would be for French strolling the Seine, Londoners along the Thames, or New Yorkers looking from the Brooklyn Bridge down on the East River.

And the nightmarish sight soon worsened, with more than 900 animal bodies found by sunset on that Sunday evening. The first few pig carcass numbers soon swelled into the thousands, turning Shanghai spring into a horror show that by March 20 would total more than 15,000 dead animals. The river zigzags its way from Zhejiang province, just to the south of Shanghai, a farming region inhabited by some 54 million people, and a major pork-raising district of China. Due to scandals over recent years in the pork industry, including substitution of rendered pig intestines for a toxic chemical, sold as heparin blood thinner that proved lethal to American cardiac patients, Chinese authorities had put identity tags on pigs' ears. The pig carcasses were swiftly traced back to key farms in Zhejiang, and terrified farmers admitted that they had dumped the dead animals into the Huangpu.

Few Chinese asked, "What killed the pigs?," because river pollution is so heinous across China that today people simply assume manufacturing chemicals or pesticides fill the nation's waterways, and are responsible for all such mysterious animals demises. The Yangtze, which feeds Shanghai's Huangpu, has copper pollution levels that are 100 times higher than U.S. safety standards, and leather tanning facilities along the river have notoriously been responsible for toxic waste, including chromium. And across China -- especially in Beijing -- air pollution was so bad in January and February that pollution particulate levels routinely peaked at highly than 10 times the U.S. safety standards set by the Environmental Protection Agency. When I was in Beijing in late January, the air pollution was so thick that it visually looked like fog, obscuring all sunlight and even skyscrapers located less than three city blocks away. So, hideous as the pig carcasses might be, Shanghai residents tended to shrug them off as yet another example of the trade-offs China is making, pitting prosperity against pollution.

But 12 days after the first Shanghai porcine death flow was spotted, pig carcasses washed up along the shores of Changsha's primary river, the Xiang -- also a Yangtze tributary, this one located hundreds of miles west of Shanghai. Known as "the Sky City" for its 2,749-foot-tall central tower, Changsha is home to more than 7 million people and capital of Hunan province. Along with some 50 dead pigs, authorities collected a few thousand dead ducks from the Xiang on March 22 and 23.

Two days later, another mass duck and swan die-off was spotted, this time along the Sichuan River hundreds of miles to the north, near Lake Qinghai. The lake is the most important transit and nesting site for migratory aquatic birds that travel the vast Asia flyway, stretching from central Siberia to southern Indonesia. In 2005, a mass die-off of aquatic birds in and around Lake Qinghai resulted from a mutational change in the long-circulating bird flu virus, H5N1 -- a genetic shift that gave that virus a far larger species range, allowing H5N1 to spread for the first time across Russia, Ukraine and into Europe, the Middle East and North Africa -- it has remained in circulation across the vast expanse of Earth for the last seven years.

Rebalancing the economy

Consumption in China may be much higher than official statistics suggestMar 30th 2013 | HONG KONG 

AT HONG KONG airport, a couple hold an animated discussion about whether to buy a $350 polo shirt from Hugo Boss. Their conversation, like many in luxury shops across the city, is in Mandarin, the language of mainland China, and not the local variant, Cantonese. The mainland provides a third of the airport’s visitors and many of its most avid shoppers.

In 2012, according to estimates by Jonathan Garner and Helen Qiao of Morgan Stanley, a bank, the Chinese spent over 2.3 trillion yuan ($370 billion) on domestic tourism alone. And yet China’s GDP statistics captured only a tiny part of that spending, they argue, as well as missing spending on financial services, health care and housing. As a result, official figures show private consumption languishing at around 35% of GDP. Morgan Stanley’s “bottom-up” calculations, by contrast, imply that it has grown since 2008 to almost 46% of GDP (see chart). Mr Garner and Ms Qiao draw on company reports and industry studies to fill gaps in the official data, which, they say, undercounted consumption by $1.6 trillion in 2012, more than Australia’s entire GDP. Their calculations echo earlier studies, which also found that official statistics undercount consumption, albeit by a smaller margin.

As well as stuff bought offshore, spending online is also undercounted, the two economists argue. On a single weekend in November, Chinese consumers spent more than $3 billion on two websites, Taobao and Tmall (both part of Alibaba, an online giant), in celebration of “singles’ day”, the bachelor’s equivalent of Valentine’s day. But official statistics have failed to keep pace with changing consumer habits, Ms Qiao argues, neglecting entire categories of e-spending. Online gaming, for example, is largely missing. Yet it amounted to 53 billion yuan ($8.5 billion) last year, according to Morgan Stanley’s tally of revenues earned by online gaming firms.

China’s statistics have long been viewed with scepticism or worse. Some economists worry that they fail to reflect reality, others that they slavishly reflect political imperatives. In 2002 Thomas Rawski of the University of Pittsburgh complained about a “tornado of deception”. Five years later Carsten Holz, then of Princeton University, said that official statistics should be taken with a “rock of salt”. When Li Keqiang, now China’s prime minister, was party chief of Liaoning province in 2007, he called the province’s output figures “man-made” and “for reference only”.

But things are not as bad as they were. China’s National Bureau of Statistics (NBS), for example, long ago stopped relying on provincial output figures to calculate national GDP. China’s economic census in 2004 gave the national statisticians a better baseline for subsequent work. In 2006 a book published by the OECD argued emphatically that China’s national accounts are inevitably “wrong”, in that they are forced to plump for one of a range of plausible figures, but that they are not politically manipulated.

But the NBS does not make it easy for independent outsiders to cross-check their work. Sceptics instead look for inconsistencies between China’s growth figures and other indicators, such as power generation or cement output. To track Liaoning’s economy, Mr Li looked at rail cargo, bank lending and electricity consumption.

Are Infosys, Wipro, TCS, HCL, etc. losing to China’s outsourcing companies?

Posted on Apr 1 2013

Infotech Lead India: IT service companies — Infosys, Wipro, Tata Consultancy Services (TCS), HCL, etc. — have shaped India’s IT growth due to their differentiated offerings. But China’s emerging outsourcing companies Gamutsoft, Pactera and iSoftStone are emerging as big threats to India’s leadership position.

Each time there are new technological, economic or socio-political developments or changes in the global scene, people sound the death knell for the Indian outsourcing industry and announce that the outsourcing bubble has finally burst. Yet the Indian IT industry seems to find ways around every new hurdle and is thriving, if various reports and analysis are to be believed.

According to an analysis published last November by Gartner, India is likely to maintain a three-to-five-year lead over rival nations, as an offshoring destination. However, Gartner cautioned that the rate of infrastructure development has to keep pace with customer demand, as labour and other costs continue to rise.

A report compiled by Angel Broking that looks at 13 of the top global IT outsourcers – eight MNCs and five Indian – reveals that that the Indian outsourcers’ share in the total revenues of the 13 companies has risen from 7.7 percent in fiscal 2007 to 14.3 percent in fiscal 2012, and that of the MNCs has dipped correspondingly from 92.3 percent to 85.7 percent.

Angel Broking’s report attributes the gain of Indian companies to a substantial 20-25 percent cost saving for clients along with availability of a young workforce. This factor has considerably made up for the decline in the labour cost advantage which has been Indian companies’ USP so far.

Pradeep Udhas, partner and head of IT/ITeS in consultancy firm KPMG India, says that Indian companies have developed people capabilities and moved up the value chain to be able to pitch for bigger contracts.

According to him, Indian companies are no longer grouped together based on low-cost offerings without any other point of differentiation. In the past few years, Indian IT companies have improved their strategy to be able to sell a differentiated proposition while deepening the client relationship.

Siddharth Pai, partner & MD of outsourcing advisory firm ISG, noted that other regional IT players are steadily winning market share. He noted that companies like Xchanging and Atos are chipping away market share from MNCs with their specialized offerings.

Chinese outsourcing companies challenge

Indian IT industry body Nasscom is confident of the future prospects for the likes of Infosys, Wipro and HCL. Nasscom estimates that aggregate revenues will reach $300 billion by 2020.

In the long term, the industry has good growth prospects, as corporations all over the world are always in need of cost effective providers of technology services that improve their processes and efficiency. The Indian IT industry is is also benefitting from a large number of technology outsourcing deals signed nearly a decade ago that are due for renewal now.

According to Nasscom, deals where corporations are looking to reduce the number of smaller deals and service providers had increased by 25 percent in 2012.

India’s main competitors in the outsourcing game, China and the Philippines are quickly catching up with their large pools of skilled but cheap labor.