Prem Shankar Jha

The central bank and the finance ministry must be able to have a mature discussion on how much of the RBI’s reserves can be handed over to the government.

After Urjit Patel Drama, RBI Must Turn Its Attention to How It Can Help India's Economy

Arun Jaitley and Urjit Patel. Credit: PTI/Files

By resigning as the Reserve Bank of India’s governor without a shadow of warning, Urjit Patel has delivered a coup de grace to India’s tottering economy.

One does not have to be a psychic to divine what made Patel take this drastic action now. He was almost certainly instructed to transfer some of the central bank’s reserves to the finance ministry to meet its expenditure commitments. He had already refused point blank during the marathon board meeting of November 19. He must have suspected, or been warned, that if he did not agree, he would be directed to do so under Section 7 of the RBI Act.

The forerunners of the deluge that Patel has let loose have not taken long to appear. On Tuesday morning, the rupee was trading 112 paise lower and on Wednesday morning, it opened 0.33% down from Tuesday’s close of 71.87.

More falls are certain because most investors will conclude that, sensing the need to compensate for the losses in the current round of state elections, the BJP will use the central bank’s reserves to  go on a spending spree to recover ground before the general elections next year.

This may well be true. But even if, by a miracle, Patel’s resignation makes the government pause before raiding some of the RBI’s reserves, this is unlikely to save the Indian economy from the major problems that now stares it in the face.

The trouble ahead is writ large in the Rs 1,140,000 crore worth of stalled and abandoned projects, in the Rs 1,00,000 crore worth of irretrievable bank debt, in the more than 200 large firms struggling desperately to stave off bankruptcy, in the country’s struggling small and medium industry, in the falling rupee, not to mention India’s stagnant employment growth.

The resignation could not have come at a worse time. If there was a right moment for him to have registered his protest, it should have been on November 8, 2016, when Prime Minister Narendra Modi announced his controversial decision to demonetise Rs 500 and Rs 1,000 notes. But Patel has chosen to quit now, when two more years of suicidal economic policies have left the Indian economy in tatters and confidence abroad in the stability of the Indian rupee is at an all time low.

High interest rates

The inescapable fact is that the Indian economy has been hurt over the past decade by the intolerably high interest rates inflicted upon it. Inflicted by a central bank so single-mindedly focused on curbing an inflation that was not caused by an excess of demand in the domestic economy. That futile exercise led to a crash in demand for housing and consumer durables, and pushed up the interest burden and cost of infrastructure projects till investors simply left them incomplete and walked away.

Had anyone in the Modi government studied the experience of other countries  it might have been able to find an antidote to India’s epidemic of bankruptcies  long ago.

Today, only one narrow avenue remains open.

The first step is to lower commercial bank lending rates on medium and long term loans, of longer than three years to today’s core rate of inflation of 4%. Also, allow borrowers to refinance their existing debt at the new low rate and balance this by lowering interest paid on term deposits in the banks by 1 to 1.25%, in order to avoid a further constriction of bank revenues.

Readers may wonder how a 1 to 1.25% average reduction in interest paid out by banks to depositors will reduce outflows by enough to offset the fall in revenue from a 6% cut in lending rates. There are three reasons: first, only 37% of the commercial bank loans by public sector banks is for three years or more.

Second, most of the longer term loans within this category are now non-performing and therefore yield nothing. Finally, since even a 1% reduction in deposit rates will make some savings shift from the banks to the equity and bond markets, there will be a further reduction in the servicing cost of the PSB’s debt.

An examination of the balance sheets of several companies that are now facing bankruptcy proceedings before the National Company Law Tribunal shows that while many will be able to start meeting their liabilities if they are allowed to refinance their loans, a substantial number, including some of the biggest investors in infrastructure, will still remain in the red.

The Barack Obama model

To salvage the most important projects among these, the government will need to follow the example set by Barack Obama in the US in 2009, when he asked the Federal Reserve to buy a controlling share in General Motors and Chrysler, to save them from bankruptcy and bring in new management to turn them around. Not only did he succeed, but the Federal Reserve was able to resell its shares in the market at a profit within four years.

The second essential step, therefore, is  to persuade the RBI to transfer some of the reserves it holds within the central bank to a Special Facility that will buy controlling  shares in the most important and least severely indebted of the remaining companies.

Contrary to the impression created by the recent controversy between it and the ministry of finance, the RBI not only has the funds to do the buying, but the need for credibility abroad will ensure that it deploys the funds responsibly, chooses companies to buy into that are really capable of being revived, and not succumb to political pressure in making its choices.

It has the funds to do this because its two principal reserves, the Currency and Gold Revaluation Reserve (CGRR) and the Contingency Fund far exceed the maximum that any RBI committee has recommended. While the Subrahmanyam committee in 1997 had suggested 12% of total assets in each fund, the Usha Thorat committee had recommended 12.26% for the CGRR and 5% for the Contingency reserve.\

Today the CGRR  stands at 19.11%, and the Contingency Fund at 6.41%. The two together are therefore 1.52% above the limit prescribed by the Subrahmanyam committee and 10.4% above the Thorat recommendations.

If the RBI brings the CGRR down to Thorat’s 12.26% but simultaneously raises the Contingency Fund to 9%, it will be able to create a Special Investment Facility (SIF) with the remaining 5.5% and invest in the shares of companies in dire need of recapitalisation, without damaging confidence abroad in the RBI. The surplus amounted to Rs.198,967 crores in 2017-18.

This facility can be further enlarged by discontinuing, temporarily, the practice begun in 2014 of transferring all of the RBI’s annual profits to the government to help finance its budget, and transferring it for two years into the SIF. The net surplus in 2017-18 was Rs 50,004 crores. So this would add another Rs 100,000 crores to this facility by March 2020.

Asking the RBI to create the SIF will force it to take responsibility for reviving economic growth, something it has adamantly refused to do, even while it controls the one instrument that spells life or death for the economy. It will also have to understand the challenges industries faces both at home and abroad.

It will be forced to bring top flight industrial managers, past and present, onto its board and perhaps also look abroad for talent and ideas. Over time, this will end the poisonous dichotomy that exists today, without any need for strong arm measures by the government.

A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi, November 9, 2018. Credit: REUTERS/Altaf Hussain

The RBI can invest in the shares of companies in dire need of recapitalisation, without damaging confidence abroad in the bank. Credit: REUTERS/Altaf Hussain

Commercial and public sector banks

Two more bridges will still remain to be crossed. The first is how to make the commercial banks actually pass through the RBI’s cuts in policy rates to their borrowers. They have now enjoyed autonomy in setting their minimum lending rates (subject to guidelines set by the RBI) for several years, and may therefore drag their feet in doing so, as they did two years ago. The second is that the RBI lacks any experience of running an industrial or infrastructure enterprise, so may baulk at taking the responsibility for doing so.

These are real challenges that will have to be met with circumspection, but they cannot be allowed to block the reforms altogether. As to the first, the fact that the bad loans are almost entirely concentrated in the public sector may prove a blessing in disguise, because these are more likely to fall in line with the government’s wishes. Among them, the most stressed banks will do so first, because they will have the least to lose. After that, competition for business will make the rest fall in line.

As to the second, the RBI will have to hire retired professional managers from the private and public sectors to sit on their boards and bring in internationally renowned consultants to assist them. This will start a learning process within the bank that will end the dyarchy that has developed between it and the ministry of finance.

This learning process will take time, but the alternative, of allowing the present bankruptcy procedures to continue, will take much more.

https://thewire.in/economy/urji-patel-india-economy-rbi-reserves

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To save the future the world does not need carbon dioxide capture and removal. All it needs is a ban on the setting up of new coal-based power plants, and stable price agreements with producers of synthetic fuels.

katowice,IPCC,katowice summit

COP24 President Michal Kurtyka and Executive Secretary of the UN Framework Convention on Climate Change Patricia Espinosa pose with the heads of delegations after adopting the final agreement during a closing session of the COP24 UN Climate Change Conference 2018, Katowice, Poland, December 15(REUTERS)

 

In a media dominated age, no international conference is allowed to end in failure. The Katowice climate summit is no exception. Michal Kurtyka, the Polish President of the conference, admitted that finding global consensus on the issues discussed at the summit had been “politically fraught”, but claimed nonetheless that “through this package, you have made 1,000 little steps forward together”.

The truth is the exact opposite. The Katowice summit was a resounding failure. The size of the failure has to be measured against the urgency of the challenge it refused to face. A bare six weeks earlier, the IPCC had warned that the world had to reduce net carbon emissions by 45% by 2030 and bring them down to zero by 2055, if it wanted to keep the planet livable in the 21st century. But the conference turned its back on the warning.

There was no agreement on financing, and little of it even on the verification methods to be used for assessing claims of carbon reduction. even There was no consensus even on whether the conference should accept a reduction of the limit to global warming by 2100 from 2 degrees Celsius to 1.5 degrees Celsius.

Why has the world buried its head in the sand ? The short answer is that it does not know what else to do. Nearly everyone is blaming US President Donald Trump, but his denial of climate change is only a brusque way of saying that he would rather not know about something that he cannot prevent.

Emission reductions of this magnitude seem impossible because they can only be achieved by a rapid shift out of fossil fuels. But no one knows what to replace them with. This is not because renewable energy technologies that draw their power from the sun do not exist, but because none of the 24 climate summits held since 1994 ever discussed technology.

The job of finding alternatives to fossil fuels was left to the free interplay of market forces. A Clean Development Mechanism was set up under the Kyoto Protocol to encourage the search for alternatives. But in the first 10 years of its existence it reduced greenhouse gas emissions by an estimated 1.58 billion tonnes. In the same period, human-induced CO2 emissions increased by 10 billion tonnes.

Today it is apparent that the market has led us astray. The only renewable energy technologies that it has promoted vigorously are wind and solar photovoltaic power. This despite the common knowledge that these can only limit and not replace fossil fuels because they can neither supply guaranteed, round the clock power, nor the process heat that industry consumes in prodigious quantities.

Had technology, and not target setting, been the focus of COP summits, the world would have known that technologies that can harness the energy of the sun for meeting all the three needs — power, heat and transport fuels — already exist and have been now refined to the point where they are fully competitive with fossil fuels.

The two that can do so virtually without limit are Concentrated Solar Thermal (CSP), as opposed to photovoltaic (SPV) power, and biomass gasification, as opposed to fermentation. Far from being new, these have been in sporadic use for between four and ten decades. The first CSP power station that fed electricity into the grid came up in California in the 1980s. The first plant that turned municipal solid waste into methanol — a clean and superior transport fuel — came on stream in the USA in 1922!

CSP power stations solved the problem of storing the energy of the sun at night in the late 1980s. The first power station to supply round-the-clock power to a small town near Seville in Spain came on stream in 2011 and has been doing so for seven years. The cost of generation from CSP plants has fallen almost as fast as that from photovoltaic plants. The most recent power purchase agreements for such plants have been signed in Chile and Dubai for 5 to 6. 7 cents per kwh. That is half the average cost of power in the US in 2017, which was 12.06 cents.

What is more important, these are lower than the cost of power generation by new coal based power plants. So the way is now open for more governments to join the 30 countries have already agreed to put a ban the establishment of new coal based power plants.

Most of the world’s attention has been focused so far on power generation. But there are now several proven, versatile, technologies that can also produce transport fuels and petrochemicals from literally any crop residue or waste biomass. They do this by first gasifying the biomass to obtain a mixture of carbon monoxide and hydrogen called synthesis gas, and then synthesise these into the desired fuel or petrochemical, using appropriate catalysts.

Unlike solar thermal power, these technologies have not so far got off the ground because the investment in them, that has been planned repeatedly since the early 2000s, has been repeatedly postponed or abandoned because of steep, albeit temporary, falls in the price of oil and natural gas. These have made it impossible for the investors to get the long term purchase price agreements that will make their investment secure.

To save the future, the world does not need carbon dioxide capture and removal. It does not need to pump sulphur dioxide into the atmosphere to reduce sunlight. It does not need hundreds of billions of dollars of subsidies for expensive renewable energy technologies. All it needs is a ban on the setting up of new coal-based power plants, and stable price agreements with producers of synthetic fuels that are linked to the long term average cost of oil and gas. These will suffice to make private capital flow as spontaneously into solar thermal and biomass energy projects as it is doing into wind and solar PV projects today.

Prem Shankar Jha is a senior journalist and former member of energy panel of the World Commission on Environment and Development ( 1985-88) and the author of Dawn of the Solar Age: An End to Global Warming , and to Fear

The views expressed are personal

https://www.hindustantimes.com/analysis/the-katowice-summit-has-been-a-resounding-failure/story-A2BuBSYduWUvf2lNJFgpeK.html

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What Pakistan has essentially done at Kartarpur is to ask for India’s help in ending its own impossible predicament.

 A view of the Sikh shrine in Kartarpur. Credit: PTI

When opportunity comes knocking, unbidden, to one’s door, a wise person does not let it slip away. India has done this twice in the past 70 years: First when it shooed away American companies that came to Asia in search of a cheap labour platform to manufacture goods for the world market, and sent them on to southeast Asia.

It did this a second time when risk averse advisors in both India and Pakistan succeeded in delaying the fleshing out of the Manmohan Singh-Pervez Musharraf framework agreement to end the Kashmir dispute signed in Delhi in 2005, till Musharraf lost his power to push it through the Pakistan national assembly in 2008.

The monumental silence with which Prime Minister Narendra Modi greeted Pakistan’s offer three months ago, the curt reassertion last week by foreign minister Sushma Swaraj that India would not attend the SAARC summit in Pakistan, and the Congress leadership’s tepid reaction to the initiative, has made it likely that we will send it away yet again.

Also read: After Kartarpur, Mehbooba, Congress Leaders Bat for Sharada Peeth Cross-LoC Route

The reason for the Modi government’s lack of enthusiasm is written in saffron across the sky: having wrecked the economy, failed to create any jobs and alienated each and every one of India’s neighbours, it has nothing left to fall back upon in its bid to win the 2019 general elections except the whipping up of paranoia towards Muslims, towards Pakistan and towards China.

But how does one explain the ambivalence of the Congress? For was it not Prime Minister Manmohan Singh who said in 2007 that his dream was to be able to have breakfast in Delhi, lunch in Islamabad and dinner in Kabul on the same day? Was it also not Singh who fashioned the Delhi Framework Agreement? If these initiatives were not popular, why did the Congress win the 2009 election with a near-majority of its own?

An opportunity with a difference

The opportunity created by Kartarpur Sahib must not be allowed to slip away, for it is born of radically different and deeply enduring roots. While previous peace initiatives originated in the corridors of Islamabad and New Delhi, this one has originated in a small village close to the India-Pakistan border. While previous negotiations have been carefully planned and orchestrated, this one is unplanned, disorderly and very largely spontaneous. Finally while all previous initiatives have started at the top of the social and political pyramid, this one has been born out a yearning among the poorest people on both sides of the Punjab border for peace and reconciliation.

The gurudwara at Kartarpur Sahib was established by Guru Nanak in 1522. It was there that he lived for 18 years, wrote the Guru Granth Sahib and, in all probability, died. It is therefore the second holiest shrine in the Sikh religion.

Partition forced the Sikhs of Punjab to one side of the newly created border, but left Kartarpur Sahib a bare three km on its other side. As a result, for 70 years Sikhs have been going in their hundreds of thousands to the closest point on the border, from where they can see the domes of the gurudwara, to pray.

Also read: Five Questions that the Modi Government’s Latest U-Turn on Pak Talks Raises

The idea of a visa-free corridor from the border to Kartarpur Sahib was first mooted by Prime Minister Atal Bihari Vajpayee during his bus journey to Lahore in February 1999. Despite the Kargil War, the Nawaz Sharif government responded positively the next year, but the Pakistan Army, which was smarting from its defeat in Kargil, was in no mood for compromise. The spate of ISI-backed terrorist attacks on high value targets in India that followed and eventually triggered Operation Parakram, and the ISI’s reckless use of mujahideen in Kashmir put an end to any further discussion of the subject.

The possibility of a corridor was raised by Navjot Singh Sidhu three months ago when he attended Imran Khan’s swearing in as prime minister. Sidhu had gone in his personal capacity, as one of the three Indian cricketers whom Khan had invited. According to his account of what followed, not only did Khan leap at his suggestion but General Bajwa, the Pakistan Army chief, who was present at the function, immediately offered to build a barricaded corridor from the border to the gurudwara. This would prevent any actual contact between the pilgrims and people in the intervening area. It was this spontaneous offer that made Sidhu give Bajwa a Punjabi jhappi.

The Pakistan Army’s enthusiasm

Was the offer from Khan and Bajwa really a spur of the moment reaction to Sidhu’s suggestion? It might have been had only Khan made it, for he has been saying from the day of his inauguration, “If India takes one step forward, then we will take two steps forward toward friendship.”

But why should General Bajwa have gone that step further? A knee-jerk assessment would be that he saw it as a propaganda opportunity and, in case Delhi reacted negatively, a chance to rekindle disaffection in Punjab. But Khan made it crystal clear in his speech and press conference that he and the army are “all on one page” in wanting to mend ties with India.

Is such a radical change of heart in the Pakistan Army really possible? The answer, with suitable caveats, is ‘yes’, because seven decades after independence, its policy of jumping from the back of one circus-horse to another, while keeping its gaze locked firmly on Kashmir, has reached its pre-destined end – there are no more horses left to ride.

Thirty-five years ago, General Zia-ul-Haq felt that he could afford to adopt a forward policy because Pakistan’s GDP had been growing at 5-6% percent per annum for three decades; it was an indispensable ally of the US in the latter’s proxy war against the Soviet Union in Afghanistan, and therefore had no dearth of foreign exchange to buy military toys.

The Lahore-Delhi bus at the Attari Wagah border on November 26. Credit: PTI

Today’s Pakistan could not be more different. It has been chastened by its failure to spark secession in Punjab and Kashmir: Despite every pain that India has inflicted on Kashmir, a 2009 Chatham House poll in the Valley showed that while a majority of its people wanted a radical change in Kashmir’s relationship with India, only 2.5% to 7.5% wanted to join Pakistan.

Not only has it lost the patronage of the US, but the Donald Trump administration, and most of the world, considers Pakistan to be a dangerous and unpredictable breeding ground for terrorists, and the principal threat to Pax Americana in Afghanistan.

Islamabad has attempted to replace the US with China and Saudi Arabia as its political, military and economic sponsors, but China has been far less tolerant towards its use of terrorism to realise its regional aspirations than Washington was three decades ago.

This is because, contrary to the prevailing impression in India, Beijing’s huge investment in the Karakoram-Gwadar transit corridor is, like other projects of its Belt-Road Initiative, more defensive than offensive. It is primarily intended to create one of several backdoors for its trade with Asia, Europe and Africa to pass through in case the US and its allies decide to block the sea lanes through which most of its imports and exports currently pass.

Its fear of the US’s naval power is understandable, because its dependence upon trade for economic growth is the highest for a large industrial economy that the world has ever known. China’s dependence on trade to generate employment is even greater. So from the early days of its investment in Pakistan, Beijing has been putting a quiet but unrelenting pressure on Pakistan to crack down on terrorist groups and maintain peace with India, especially in the Karakoram region.

Till the end of February this pressure was private and bilateral. Then, on February 23, China stopped shielding Pakistan and agreed to put it on the “grey list” of the Financial Action Task Force, a global body created to monitor the financing of terrorist organisations all over the world. Pakistan was put on the list in June. It now has till June 30, 2019 year to show that it has taken decisive action against organisations in the country that are sponsoring terrorist activities.

This withdrawal of support could not have come at a worse time for Pakistan, for it is facing its worst economic crisis in a decade. In 2017-18, it recorded a $19 billion balance of payments deficit, amounting to 5.7% of its GDP. The Pakistani rupee has depreciated by 20% in less than a year and its foreign exchange reserves have fallen to under $10 billion.

Till now, Islamabad has relied upon loans from China and Saudi Arabia to remain solvent, but Saudi Arabia too agreed to put Pakistan on the grey list last February. Pakistan has therefore been left with no option but to go to the International Monetary Fund for another – its 13th – bailout. That loan will now almost certainly come with conditionalities that will cross the border between economics and politics.

Also read: The Real Googly: More than Imran, the Pakistan Army Wants Peace With India

Finally, the Pakistan Army has been locked in a civil war for more than a decade. It has managed to establish a semblance of peace in the tribal areas by denuding its Indian border of troops. But insurgency and sectarian killings have continued to grow in other parts of the country. It would be surprising indeed if it had not begun to look for a way out of the morass.

To the army high command too, therefore, peace with India must have begun to look like the silver bullet that can end most of its miseries. The is almost certainly why General Bajwa seized the olive branch that Sidhu innocently extended at Khan’s swearing in with such alacrity.

What Pakistan has essentially done at Kartarpur, therefore, is to ask for India’s help in ending its own impossible predicament. Peace with India will remove the very ground on which much of the Islamist extremism which has spawned terrorism feeds in Pakistan. Since these groups gain legitimacy by posing as the champions of the oppressed in Kashmir, finding a solution to the dispute that Islamabad can present to its own people as a fulfilment of its commitment to them is the best way forward.

It would therefore be folly for India not to seize the opening that Kartarpur Sahib has created to end the Cain versus Abel conflict that has held both countries back, while the rest of Asia has raced ahead. An immediate cease fire along the Line of Control in Kashmir, the resumption of talks, involving Kashmiri leaders in the deliberations, and an agreement to review the Manmohan-Musharraf framework agreement will get the ball rolling towards peace.

https://thewire.in/diplomacy/india-pakistan-peace-kartarpur-sahib

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The Emergency may be the most controversial part of her legacy but Mrs Gandhi’s greatest contribution to India was the way she handled the economic, political and foreign policy challenges the country faced after 1966.

On Her Birth Centenary, We Need to Pay Tribute to the Early Indira Gandhi

This article was originally published on November 19, 2017. It is being republished on November 19, 2018 to mark Indira Gandhi’s birth anniversary.

Indira Gandhi is the most controversial prime minister that India has had. A third of a century after her tragic and untimely death, an older generation of Indians remembers her mainly for India’s victory in the 1971 war, and the Emergency. Scholars have also accused her of undermining democracy by splitting the Congress in 1969, repeatedly sacking chief ministers to concentrate power in her own hands, and splitting the party a second time for the same purpose in January 1978. But the poor of India remember her for her programme of ‘Garibi Hatao’ and still call her ‘Amma’. On the foreign policy side, all of us, without exception, remember with pride the way in which she stood up to Nixon and Kissinger during the run-up to the Bangladesh war. . .

The end of the Nehruvian honeymoon

So vivid is the image we have of the later Indira that very few remember the young and unsure, woman who came to power after the sudden death of Lal Bahadur Shastri in January 1966. Even fewer, therefore, appreciate the difficult circumstances in which she did what she did and her immense contribution to stabilising the nascent India she inherited. For in January 1966, the country was in the grip of a multi-faceted crisis, and did not even know it.

The production of food grain had hit a plateau in 1961. The resulting food shortage had combined with two wars in 1962 and 1965, and the worst drought of India’s history in 1965, to generate the kind of inflation the country had never known and therefore had never dealt with. Inflation and a closed economy had landed us in a foreign exchange crisis – the first of many. Devaluing the rupee was the only way forward, and the World Bank had been urging India to do this since 1961. But the Nehru and Shastri governments had procrastinated till India had run out of time.

As if this was not enough, two wars in four years had emptied India’s coffers. And two successive droughts had brought the poor to the verge of starvation, to be saved only by PL 480 wheat from the United States.

The challenges she faced within the party were no less severe. In 1966, most people believed that Indira Gandhi had been chosen as prime minister because of her father’s charisma and because the “syndicate” believed that she would be more malleable than her seasoned opponent, Morarji Desai. But the party’s organisational leaders were also disenchanted with Nehruvian socialism. Huge sums of money had been sunk into heavy industries in the public sector that had yet to yield even a notional surplus on investment, let alone profits and dividends that could be ploughed back into growth and employment. The increasing uncertainty about finding jobs had created a rising wave of discontent among students. In mid-1966, this had turned violent.

These challenges could not be met without taking hard decisions, but the country was not aware of the need for them because it did not know that it was in a crisis. The glow of independence had not faded. The 1950s had been a honeymoon period in which almost nothing went wrong: food production grew rapidly because cultivation was extended to most of the remaining arable land in the country. Industrialisation was not hindered by foreign exchange shortages because of the sterling balances inherited from the war. Nehru had carved a niche for India on the world stage. People, therefore, trusted the government implicitly and could not imagine that the difficulties they had faced were anything more than temporary.

The first devaluation and after

Indira Gandhi’s first important decision therefore shattered this cocoon of security. In June 1966, she devalued the rupee by 57.5%. The move shocked the country and aroused bitter criticism in parliament from both Left and Right. Had it succeeded in rebalancing the economy speedily, her future economic policies might have been very different. But first, a $900 million aid package that the World Bank had promised to meet the increased cost of imports till exports picked up was held up in the US Congress. Second, India was hit by its second consecutive, and equally severe, drought in 1966. As a result, by the time the promised aid began to trickle in, prices had risen by a full 32% and neutralised the price advantage that devaluation had been intended to give to India’s exports.

Indira Gandhi taking her oath of office from President S. Radhakrishnan, 1966. Credit: YouTube

The devaluation did eventually boost India’s exports. From barely one per cent a year between 1952-53 and 1965-66, export growth jumped to 14% a year between 1968-69 and 1982-83. The Green Revolution, which had been piloted through a recalcitrant Congress by food minister C. Subramaniam, also took off in 1967. So good was the response of the economy in the years that followed that despite another drought in 1972 and a four-fold rise in oil prices the next year, India began to record balance of payments surpluses in January 1976, and continued to do so till the second oil price hike in 1979-80.

But it took two years for this recovery to begin. By then, the Congress had lost four major state assemblies and come within 10 seats of losing its majority in parliament in the 1967 general elections. This, and a pronounced leaning towards the left-wing of the party under the influence of ideologues like P.N Haksar and Mohaan Kumaramangalam, was the true reason behind the Congress split of 1969.

Who split the Congress?

Critics have accused Indira Gandhi of being an autocratic prime minister who weakened Indian democracy split, citing her splitting of the Congress in 1969 and her declaration of the Emergency in 1975 as proof. The truth is rather more complex. Space does not permit a study of the Emergency, but there is ample evidence that the 1969 split was forced upon her by the party organisation in an attempt to wrest control over economic policy

The spark that set it off was the selection of a successor to President Zakir Husain after his untimely death in 1969. The syndicate chose N. Sanjiva Reddy over the incumbent vice-president and briefly acting president, V.V Giri, and did it rather obviously without consulting Mrs. Gandhi. She had every good reason to oppose this. First, V.V Giri was already the acting president. Second, choosing Reddy broke an immensely important unwritten convention drawn from Westminster’s democracy, that like the British constitutional monarch, the Indian head of state had to be an eminent, non-political, person. V.V Giri fulfilled this requirement because, as vice-president, he had not only been far removed from current politics but was a highly respected veteran trade union leader. Sanjiva Reddy was, on the other hand, very much a practicing politician.

Morarji Desai, the Union finance minister, in conversation with John Foster Dulles, U.S. secretary of state at the time, when he met the latter in the State Department, Washington. (September, 1958). Credit: Photo Division, GOI

Despite this, Indira Gandhi first sought to avoid a showdown with the syndicate. She filed Reddy’s nomination but when Giri decided to compete as an independent, announced that she preferred an open vote. Had the syndicate agreed, there would have been no split in the party when Giri won. But by then, its members had the bit between their teeth so when Congress president S. Nijalingappa found that two-thirds of the Congress parliamentary party had declined Indira Gandhi’s implicit invitation to revolt against the organisation, he took the unprecedented step of expelling the sitting prime minister from the Congress party, nor renamed Congress (O) while Indira Gandhi’s party was called Congress (R). In the March 1971 general election, she won handily, securing 350 seats to the 51 seats won by the ‘National Democratic Front’ led by the Congress (O), Bharatiya Jan Sangh, the Swatantra and socialist parties.

Over the years, many personal motives have been ascribed to Mrs. Gandhi for defying the collective will of the party organisation and refusing to resign. But history will back her because she was defending not only the primacy of the prime minister over the party but the party in parliament over the party organization. As the eminent French political scientist, Maurice Duverger, pointed out in his classic 1957 work Party Politics, these are the two fundamental principles that distinguish democratic from ideological political parties.

The birth of Bangladesh

Indira Gandhi’s determination to be a prime minister in substance and not only in form was vindicated within only days of the 1971 election, when the Bangladesh crisis erupted. Only a leader with a clear vision of India and immense national pride would have been able to resist the subtle blandishments of western leaders who wanted India to absorb the 10 million refugees from East Pakistan and let sleeping dogs lie. The members of the syndicate were all seasoned politicians, but they were, in the end, provincial leaders without this vision. It is, therefore, doubtful whether they would have remained unmoved. Indira Gandhi, by contrast, had inherited a clear-cut idea of India from her father, and developed it through her own education and experience. So she had no difficulty in giving the West a clear-cut warning of her intentions and developing a multi-pronged strategy to safeguard India’s security.

Prime Minister Indira Gandhi with Sheikh Mujib-ur-Rehman, Prime Minister of Bangladesh at Palam airport prior to latter’s departure on April 11, 1974. Credit: Photo Division, GOI

Contrary to a near-universal belief, Indira Gandhi did not have her heart set upon breaking up Pakistan from the very beginning. Confronted by a seemingly endless flow of refugees into West Bengal, Mrs. Gandhi first did her best to persuade General Yahya Khan to allow the Awami League of Sheikh Mujib-ur-Rehman to form the government in Pakistan. When she failed, she sent emissaries to all major countries, and herself went to several European capitals and to Washington, to make they put pressure on Pakistan to release Sheikh Mujib. But to insure against failure she made the army train the Mukti Bahini, and draw up contingency plans to invade East Pakistan if it became necessary. This was her second use of both stick and carrot to achieve her goal, the first having been the election of V.V Giri as president. In both cases, force was her weapon of last resort.

The Bangladesh war, and the Congress’s sweeping victory in the state elections a year later, marked the high point of Indira Gandhi’s prime ministership. The Emergency is considered the lowest. But as I have argued earlier in these columns, it was the product of her understandable, and probably justified, belief that stepping down from the prime ministership then would have left the country in even greater turmoil than it already was in. She also redeemed herself in the peoples’ eyes by resisting every exhortation to extend the Emergency and holding a fresh general election in 1977 despite the near-certain knowledge that she would lose.

 

https://thewire.in/history/birth-centenary-need-pay-tribute-early-indira-gandhi

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Narendra Modi is seen as being unflinchingly loyal to his subordinates. In contrast, recent events have shown people that Rahul Gandhi is not a fighter.

Why the Congress Will Continue to Lose Elections

 

Congress president elect Rahul Gandhi. Credit: PTI

Congress president Rahul Gandhi. Credit: PTI

Before commencing any analysis of the Gujarat and Himachal Pradesh assembly elections, it is necessary to lay one ghost to rest. The Election Commission needs to be congratulated on having achieved 100% transparency in its conduct of the elections, and putting a verification procedure in place that will become the gold standard for the conduct of elections in the future. By doing this, it has lifted the darkest shadow that had been hanging over Indian democracy since allegations of possible fraud surfaced after the Punjab and UP assembly elections – a fear in the populace that it was in danger of being deprived of its last weapon for holding its rulers accountable for their misdeeds.

It is not surprising, therefore, that days after the BJP’s victories in Gujarat and Himachal, celebrations are still going on at the BJP headquarters in Delhi and various regional capitals while, in sharp contrast, the Congress has begun to look for scapegoats to pin its defeat upon. Congress former minister Veerappa Moily has led the charge by singling out Mani Shankar Aiyar and Kapil Sibal as the prime architects of its defeat. “Of course, these two statements, by Kapil Sibal (on the Ram mandir) and Mani Shankar Aiyar (on Prime Minister Narendra Modi being a “Neech kisam ka aadmi“) have harmed the party,” he said, because they have allowed Modi to take “maximum advantage” of them. Had it not been for these two statements, Rahul Gandhi’s spectacular performance in the campaign in Gujarat would have yielded victory, he added.

Congress spokespersons have brushed off their defeat in Himachal Pradesh as a typical anti-incumbency vote. They have not asked themselves why anti-incumbency should have raised its head against the Congress after a single five-year term in Himachal, but not against the BJP after five consecutive five-year terms in office in Gujarat. The short answer to this question is the disheartening contrast between Modi’s ruthless will to win at any cost and Rahul’s tepid, fumbling leadership being passed off as ‘gentlemanliness’.

Moily has been joined in this by Rajasthan ex-chief minister Ashok Gehlot. Soon others will join in, and with every word they speak they will dig the Congress’s grave a little deeper. Indeed, the BJP’s spokespersons have already seized upon Moily and Gehlot’s attacks on the ‘rebel duo’ as attempts to save a leader who cannot save himself and is therefore unfit to lead a nation.

Taking responsibility

The contrast is all the more striking because in three and a half years of ruling India, Modi has never admitted that he has made a single mistake. His almost-daily statements during these years offer a chronicle of colossal policy blunders and unfulfilled promises. Modi promised a return to high growth – ‘achhe din‘ – but only statistical legerdemain has allowed him to hide the fact that GDP growth in the April to June quarter of the current year has been lower than at any time since 2001.

No such hiding has been possible, however, with industrial growth – which has continued to sink beyond the abysmal level it had reached in the last two years of UPA’s rule. Even with the vamped-up data, it is now below 3%.


Also Read: Rahul Gandhi Is Congress President. Now What?


Modi promised the youth ten million jobs a year, and has failed to create even one million. Jobs created in eight labour-intensive industries, which can be taken as a proxy for the rest of the economy, fell from 9.3 lakh in 2011 to 1.35 lakh in 2016.

Modi promised to revive industry but has speeded its descent into bankruptcy. He promised to destroy black money through demonetisation but unearthed less than 1% of it. Instead, he destroyed at least 300,000 small industries in the unorganised sector, sent the construction industry into a coma and forced tens of millions of migrant workers to flee the suddenly jobless towns and start making desperate bids to enrol themselves in MGNREGA in their home villages.

He carried through the UPA’s plan to consolidate all central and state indirect taxes into a single Goods and Services Tax but bungled it so badly that he pushed unorganised industry and trade to the edge of bankruptcy.

But there is one thing Modi has not done: he has never admitted that anything he or his government had done was wrong. He has never backtracked; he has never shifted blame; he has never said ‘sorry’.

Prime Minister Narendra Modi. Credit: PTI

Prime Minister Narendra Modi. Credit: PTI

He could have easily blamed Arun Jaitley for the poor economic performance, Suresh Prabhu for the huge rise in train accidents, Rajnath Singh for the return to civil war in Kashmir. He could have ‘let it be known’ that the bureaucracy was responsible for the  failure of the Swachh Bharat and Make in India programmes, the dilatoriness of the judiciary for the paltry rise in India’s ease of doing business ranking and the RBI for the rising volume of abandoned infrastructure projects.

Modi has not done even one of these things. Instead, he has taken full responsibility for everything he has done, and has told the people that he has taken these hard decisions, fully knowing the pain they would inflict, for their own long-term good. The small intelligentsia of this country, which understands the truth behind this facade, has dismissed Modi’s tall claims as theatre. Mystified by his continuing popularity, they have taken refuge in that old, old adage: “You can fool all the people for some of the time; some of the people for all the time, but not all the people for all of the time.”

But the people have chosen to believe him. This is not because they have been taken in by Modi’s inflated rhetoric, but because they have chosen to forgive him. What they are seeing in him is an unflinching loyalty to his subordinates. And they recognise this as the hallmark of a born leader.

Not a fighter

Compare this to the way Rahul and the Congress party have treated Aiyar and Sibal, both of whom were cabinet ministers in Manmohan Singh’s government. When Modi twisted Aiyar’s remark into a caste slur, he did not counterattack by exposing Modi’s misrepresentation (to use a word that fits into the Congress’s heritage). Nor did he remind Gujaratis that both B.R. Ambedkar and Jagjivan Ram were members of the Congress party; that it was the Congress that had made SC/ST reservation a part of the constitution and that it was the Congress that had put up a Dalit, Meira Kumar, to be the president of India last June. Instead, he went into a blind panic, hastened to distance himself and the Congress from Aiyar, and then asked him to apologise to Modi.

 

The lesson that Gujarat, and one suspects India, learned was not that Rahul is a gentleman, but that he is not a fighter. Not only will he not defend his foot soldiers on the battlefield, but he is also far more likely to cut and run at the first whiff of grapeshot. The contrast between him and Modi could not, therefore, be more stark.

Not surprisingly, Modi was the first person to sense this. That is why he made Aiyar the single point focus of every speech during the rest of his campaign, accusing him of going to Pakistan to take a supari (contract) for arranging Modi’s assassination; of hosting a “secret” dinner for Pakistani officials to meet high-ranking Indian leaders, including the former prime minister and vice president of India; and so on ad nauseam.

He did this because he knew that, having thrown Aiyar to the wolves, the Congress could only sit and watch as he and other BJP leaders savaged him into pieces till there was nothing left of him to tear into bits. Modi knew, moreover, that every time he mentioned Aiyar, his audiences would think: Congress, thus the appeasement of Pakistan and therefore appeasement of Muslims in general. So he threw truth, decorum and constitutional propriety to the winds and went for the Congress’s jugular, while Rahul and his sycophantic advisers stood on the sidelines and watched.

Rahul’s lack of leadership qualities is the real reason why the Congress lost in Gujarat. In the 2014 Lok Sabha elections, the BJP’s share of the vote had risen to a mammoth 60%, from 48% only two years before, because Congress voters simply did not cast their vote. As a result, Gujarat recorded the fifth-lowest voter turnout, at 63.7%, in 2014. This was 7.6% below the turnout in 2012.

Mani Shankar Aiyar. Credit: PTI

Mani Shankar Aiyar. Credit: PTI

This year, both the Congress and the BJP’s share of the vote reverted to more or less what they had been in 2012, but its distribution was hugely different. The voting pattern shows that there was a huge anti-incumbency surge in Saurashtra and a smaller one in north and central Gujarat. Only in Bhuj, and south Gujarat, did the BJP vote remain utterly unshaken.

But the voting pattern also shows that the revival of the Congress vote remained incomplete, for inspite of the large anti-incumbency sentiment revealed by the pattern of victories and defeats, only 4.7% of the 7.6% who had boycotted the polls in 2014 returned to vote. Had even a small fraction of the rest done so, it is possible that the BJP would have lost its majority, for the BJP scraped through to a victory in nine constituencies in north and central Gujarat, and seven in Saurashtra, with margins of 5,000 or fewer votes. Nine of these were won with less than 2,000 votes. It is these seats that could have gone to the Congress, had the voters fully regained their confidence in the Congress.

The targeting of Aiyar occurred so late in the campaign – when the first phase of voting was already over – that it is impossible to tell how much it affected the morale of anti-BJP voters and dissuaded them from going out and being counted. But it could hardly have raised it, or reinforced their confidence in Rahul’s capacity to lead the nation.

That is why “seasoned leaders” like Moily and Gehlot have been pulled out of mothballs to defend Rahul’s ‘gentlemanly’ behaviour. But these are has-beens whose names have not even been heard in the past year. What Rahul needs to learn from is the silence of the leaders who have been most active in bringing the Congress back into the media limelight, such as P. Chidambaram, Sibal, Manish Tiwari, Jyotiraditya Scindia, Sachin Pilot and Shashi Tharoor. They know the damage, tantamount to suicide, that Rahul and his cronies have inflicted not only on the Congress but also on India. Because after his tame acquiescence to Modi’s destruction of him through the instrumentality of Aiyar, there is once more no leader visible on the ‘secular’ horizon, who can make ordinary Indians feel safe as Modi has managed to do.

 

https://thewire.in/politics/gujarat-elections-bjps-congress-loss-rahul-gandhi

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With 78 of the largest companies in the country are facing dissolution under the Indian Bankruptcy Code, India’s economy is heading for a meltdown.

 The 'Indian Flu', or Why the Crash of the Economy Is Imminent

Fitch Ratings has raised its estimate of India’s expected growth rate in 2018-9 to 7.8%. For anyone who has the least knowledge of business conditions in India today, this can only be a sick joke. For India’s economy is heading for a meltdown – 78 of the largest companies in the country are facing dissolution under the Indian Bankruptcy Code. Of them, 20 have already been declared insolvent and sent to the National Company Law Tribunal for dissolution.

Another 30 companies, all in the power sector, are also facing the guillotine because the Allahabad high court has denied them more time to sort out their woes. The debt of these companies alone amounts to Rs 140,000 crore. Among them are three giant power plants, the 4,000 MW Coastal Gujarat Power of Tatas, Adani power, Mundra and Essar Power. They are bankrupt because they had the temerity to base their plants and have been denied the right to set tariffs that will cover the higher cost of imported coal, by the Supreme Court of India.

Yet another 92 companies are on the chopping block because they are more than 180 days behind on their loan repayments. And as if that were not enough bad news, loan defaults by small companies have also doubled in the past year, signalling an imminent crisis in that sector as well.

The sickness has spread to the private financial sector. Infrastructure Leasing and Financial Services (IL&FS), a financial giant, has just defaulted on its interest payments and sent the stock market into a tailspin. Foreign investors have been leaving the Indian money market in droves: the rupee plunged to 71.7 to the dollar on September 20, against 65 on March 31, less than six months earlier. The RBI has halted the slide by raising the repo rate by a full half percent.

But how long will its finger keep the dyke from bursting?

Who, or what, is responsible? 

In a note he submitted to the Estimates Committee of parliament earlier this month, former RBI governor Raghuram Rajan has identified two causes: an “irrational exuberance from 1994 till 1996” generated in promoters (of new projects) by the prolonged spell of rapid economic growth that began in 2003, and the government’s failure to live up to its commitments to the investors.

“A large number of bad loans,” he points out, “were originated in the period 2006-2008 when economic growth was strong, and previous infrastructure projects such as power plants had been completed on time and within budget. It is at such times that banks (and, needless to say, promoters) make mistakes”.

A woman walks past the Reserve Bank of India (RBI) head office in Mumbai, India, December 6, 2017.
Photo taken December 6, 2017. Credit: Reuters//Shailesh Andrade/File Photo

Their chief mistake was to “extrapolate past growth and performance to the future” and accept projects with very little equity capital, that relied almost entirely upon loans. When the upswing ended with the onset of global recession in 2008 and demand slackened, many projects became unviable.

Fraud, in the shape of inflated capital costs, over-invoiced import bills and unacceptably low promoters’ capital has played a part, he wrote, but it is only a small one. Rajan placed the remainder of the blame upon “governance problems” – a euphemism for the Central and state governments’ failure to provide promised inputs, such as land free of encumbrances, coal, power, water, and transport connections. Unable to generate revenues, the investors ate into their equity capital to meet the mounting burden of interest payments, till there was none left. Then they walked away from them. This is the reason why India is saddled with up to 1,160,000 crores of stalled, “zombie “ projects and Rs 950,000 crore of largely irrecoverable debt.

Rajan’s analysis is cogent, but incomplete. India has never been free of “governance problems”. There was a spell of “irrational exuberance from 1994 till 1996, followed by a steep slump in 1997 that lasted till 2002. But there was no pile-up of abandoned projects and irrecoverable debt then.

His ascription of the current decline to the impact of global recession is also suspect. For the recession began at the end of 2008, but India’s slide into industrial stagnation and insolvency began three years later in 2011. In between, it recorded two years of the highest industrial and GDP growth that the country has known. Why this delay? The answer is the crippling interest rates that the Reserve Bank imposed on the economy in 2010-11 and is persisting with, in the face of catastrophe, today.

A simple calculation is all that is needed to show what high interest rates do to infrastructure investment: If the promoters of power and highway projects, for instance, borrow money at 5% a year their capital cost, if not repaid, will doubled in 14 years. At 10% it will double in seven years. At 12% — the rate that even blue-chip companies were paying until 2015 – doubling takes place in 5.5 years.

Since the same high rates will simultaneously kill the demand for housing and make car and refrigerator loans unaffordable, investors will be hit from both sides. In addition to this the government reneges on its promises to provide the infrastructure needed for production, such as coal, power, water and transport, the only option left open to them will be to cut their losses and walk away. Rajan does not have a single word to say about this, because he is one of the high priests of the high interest rate regime that has bankrupted the country.

The evidence that this is indeed the cause of both the crisis in industry and in banking, comes from the pattern of bankruptcies. All but a few of the companies that are on the chopping block had dared to invest in infrastructure projects. The reason they had done so was that the public sector, which used to invest in infrastructure in the past, was no longer doing it. Public sector investment had been even more prone to delays because of the government’s failure to meet its commitments, but there were no stalled projects because it had the dual advantage of being loaned money by the banks at paltry rates of interest, and never having to fear bankruptcy.

Workers hold iron rods at the construction site of a bridge on the river Tawi in Jammu. Credit: Reuters

To justify their suicidal commitment to price stability, three RBI governors in succession – Y.V. Reddy, D. Subbarao and Raghuram Rajan – have argued that price stability will automatically lead to growth. They have been buttressed by a much touted finding of IMF and other neo-classical economists that, contrary to the previously unquestioned belief, high rates of inflation do not automatically raise the rate of economic growth, but actually lower it.

“Inflation targeting” was born out of his flaky belief. The RBI made this its Bible despite the fact that none of these studies had been able to establish a causal link from high inflation to low growth. And it did so in the face of compelling theoretical and empirical evidence that the causal chain runs in the opposite direction, i.e from economic growth to inflation.

Some inflation has to accompany industrialisation because it requires the diversion of a part of current investment from producing consumer goods to capital goods. Every government of a rapidly industrialising country has had to face this problem and has resorted to price and distribution controls, such as rationing, fair price shops and food coupons. South Korea had an average inflation rate of 21% during the three decades in which it became an industrial powerhouse, and China has become one only with the help of stringent price controls on essentials, and negative real rates of interest on bank loans. In India, by allowing the RBI to make price stability the sole goal of policy the elected government sacrificed growth at the altar of stability.

What has made the RBI impose this suicidal policy on the country, and why have two governments capitulated? The first reason, the suicidal adoption of “inflation targeting” by the RBI without realising that the rich nations have entirely different goals for adopting it than the poor, has been described at length in these columns on an earlier occasion. 

But the second, more pressing, reason is the imperative need to keep not prices, but the exchange rate stable. This has gained in importance with every year of high interest rates, because these have forced investors to borrow abroad, where loans have been available at rates as low as one to three percent, to keep their interest burden down.

Between 2008 and March 2015 around 300 of India’s largest companies borrowed Rs 4.5 lakh crores ($680 billion) abroad, mostly with maturity periods ranging from 3 to 20 years. Between March 2014 and March 2015, after Modi’s victory became certain, borrowings increased by $ 181.9 billion. This raised India’s outstanding external debt by 38% to $580 billion.

The euphoria was so intense that a very large part of the new debt was not hedged against the risk of a fall in the value of the rupee. As a result, in 2015, 59% of the $580 billion was vulnerable to devaluation.

For the borrowers, maintaining the exchange rate regardless of side effects therefore became a matter of life and death. The real, unspoken, goal of ‘Inflation targeting’ is to maintain not price but exchange rate stability at any cost. This quest has not only killed the real economy but created an imbalance between India’s foreign exchange debt and its reserves that has brought international hedge funds into the Indian money market, circling like wolves scenting a killing. What India is experiencing, therefore, is a mild version of the “Asian Financial ‘flu” that began in Thailand and spread to the whole of Southeast Asia in 1997 and 1998.

Unlike the Bank of Thailand in 1997, the RBI has had the sense to allow the rupee to depreciate in response the demand for dollars in recent weeks. But every few points drop in its value is increasing the risk of insolvency for the companies that have borrowed abroad. 

How to stem the collapse

The only way to stem a further collapse is to lower the interest rate on long and medium term loans drastically to 4% or less. This will allow the embattled infrastructure and heavy industries to refinance their loans and drastically reduce their debt burden. Since the lower rates will also revive the housing, real estate and consumer durables industries, these companies will have a far better chance of repaying their re-structured loans than they have had in the past seven years.

Why 4%? The short answer is that in no country in the 19th century did companies building infrastructure face real interest rates of more than one or two per cent. The US government provided much of the capital that American companies sank into 300,000 kms of railroads between 1870 and 1891 free of cost in the form of land and timber felling rights that they could sell in the market. In the 20th century, South Korea and China achieved their breakthroughs by raising capital at negative real rates of interest, in effect taxation of peoples’ savings. 

There is some risk that a sharp reduction of interest rates will cause an outflow of short term foreign investment . But this will get reversed when foreign portfolio investors see a sustained rise in share prices. More importantly, the availability of cheap capital that is free of exchange rate risk will end the long-term borrowing spree abroad by Indian investors that has precipitated the present crisis. The resulting reduction of demand for dollars will ease the pressure on the rupee.

But time is of the essence, for every day that the rupee continues to depreciate increases the repayment obligations of companies loaded with foreign debt and weakens their capacity to respond positively to measures designed to revive economic growth. One more attempt to avoid domestic collapse by propping up interest rates will bring on the foreign exchange crisis that the government is mistakenly trying to avert through monetary policy alone.

https://thewire.in/economy/the-indian-flu-or-why-the-crash-of-the-economy-is-imminent

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Most of Atal Bihari Vajpayee’s supposedly chameleon-like behaviour, and his failure to act decisively at critical moments, stemmed from his conviction that the battle against Hindu extremism could only be fought from within the Sangh parivar.

When Vajpayee Failed to Stand Up to Modi in 2002, He Changed the Course of Indian History

 

There is no limit to the lengths to which politicians will go to deceive the public. Facing a general election that they can lose, Narendra Modi and Amit Shah have got the jitters. So they have suddenly developed a profound admiration for Atal Behari Vajpayee. Ministers in the Uttar Pradesh state government went out carrying urns containing his ashes for immersion in the 16 rivers of Uttar Pradesh. But it is this same party that rejected each and every tenet of government that Vajpayee had espoused, carried out an internal coup d’etat against his successors L.K. Advani and Murli Manohar Joshi, rejected Advani’s nominee for leadership of the party, Sushma Swaraj, and handed the baton to Narendra Modi and Amit Shah. And it is Modi who has handed over Vajpayee’s BJP, which was a mildly right-wing, only culturally Hindu party, to the RSS. That is what has wrecked the Indian economy, and turned India into a county ruled by vigilantes.

What has given Modi and Shah the opportunity to turn Vajpayee’s death into an apolitical circus? It is the English speaking, Left-leaning, secular intelligentsia of this country. Instead of remembering Vajpayee for his contributions to peace and communal harmony, one writer after the next has delved into his motives, with the purpose of showing that he was either ‘the right man in the wrong party’ or a wolf in sheep’s clothing. That was all that Modi and Shah, with their so far infallible killer instinct in politics, needed.

What our secular intelligentsia missed, or did not wish to acknowledge, is that it was not Vajpayee who changed during the 65 years between his joining the RSS in 1939 and his resignation from prime ministership in 2004, but the world around him. Most of his supposedly chameleon-like behaviour, and his failure to act decisively at critical moments, stemmed from his conviction that the battle against Hindu extremism could only be fought from within the Sangh parivar. His ambivalence resulted from the compromises this harsh truth imposed upon him.

It must be remembered that Vajpayee joined the RSS in a completely different world. It was a year before the Muslim League had even committed itself to the creation of a separate Muslim state at Lahore. At that point the RSS was still headed by K.B. Hedgewar, who was a Hindu nationalist, but not virulently anti-Muslim. In his youth, Hedgewar had belonged to the Anushilan Samiti, a revolutionary group that counted Shri Aurobindo and Bankim Chandra among its members. Hedgewar founded the Hindu Mahasabha, which became the parliamentary wing of Hindu nationalism. The extent to which it was part of the nationalist mainstream is reflected by the fact that Jawaharlal Nehru asked its leader Syama Prasad Mookerjee to join his cabinet, and Mookerjee accepted.

All that changed, of course, with the assassination of Mahatma Gandhi. We know very little about how this affected Vajpayee, who was a very junior member of the RSS, having become a pracharak only six months earlier. But an essay he wrote many years later suggests that one of the things that had attracted him to the RSS and possibly made him decide to stay in it was its explicit rejection of caste within its cadres. His brother had joined the Sangh before him, and at its first training camp had refused to share food from the common kitchen. Vajpayee wrote, not without a touch of humour, that it had taken the Sangh only 44 hours to make him change his mind.

But there can be little doubt that on other issues, Vajpayee found himself increasingly at odds with the RSS as it developed under Hedgewar’s successor, M.S. Golwalkar. The key issue, that Ramachandra Guha has so succinctly described, was Golwalkar’s virulent hatred of Muslims. For, in the same essay, Vajpayee wrote:

It was Islam, not Hinduism, Vajpayee went on, that found it difficult to come  to terms with religious pluralism, because of its Messianic origins.

This statement is of profound significance because it defines the limits of his “Hindutva” and explains his growing distaste for the direction in which the RSS was trying to drag the Hindu community, which is Hindu majoritarianism. For while his observation was probably true for the Muslims who wanted Partition and left India in its aftermath, it was not true for the 45 million who did not leave, and showed, with their feet, their trust in free India.

Narendra Modi, A.B. Vajpayee and L.K. Advani. Credit: PTI/Files

Narendra Modi, A.B. Vajpayee and L.K. Advani. Credit: PTI/Files

In the decades that followed, Vajpayee could not but have noticed what the RSS so studiously chooses to ignore – that while sectarian strife continued and became more entrenched in Pakistan, there has not been a major Sunni-Shia riot (an annual feature in British days) in India in the half century since independence. What this showed him was that the Hindu ethos of “Sarva Dharma Sambhava”, enunciated explicitly by Swami Vivekananda at Chicago in 1893, and explicitly rejected by Muslims in Pakistan, had been increasingly internalised by the Muslims of India.

This was the understanding of India that Vajpayee brought to the BJP, and when the chance finally came, to government. It explains why he did not speak, at least publicly, at moments of crisis like the destruction of the Babri Masjid, or after the Gujarat riots. For the dilemma he faced is perhaps the oldest in politics: “Will I achieve more by resigning, or by staying in office and waiting for an opportunity to repair the damage?”

It explains why he took the BJP into a merger with the Janata Party in 1977, instead of simply lending support from the outside. It explains why he initially opposed the party’s withdrawal from it. It explains his distancing himself from Advani’s Rath Yatra; it explains his determination (shared by Advani) to broaden the base of the BJP by opening its doors to scholars, journalists, retired administrators and army officers who had had nothing to do with the RSS. It explains his willingness to jettison core elements of the RSS’s agenda, such as the imposition of a uniform civil code, and the revocation of Articles 370 and 35(a) of the constitution to abolish Kashmir’s special status within India, and a tacit decision to put Ayodhya on the back burner where there was neither a mosque nor a temple but, by implication, every one was free to worship whomsoever they wished.

Vajpayee’s true nature surfaced when he became the prime minister in 1998. He began by not including a single member of the Vishwa Hindu Parishad in his cabinet. The VHP took its revenge by raping Christian nuns, burning churches and killing missionaries in the Dang region of Gujarat, and thrusting him right back into the dilemma that he thought he had escaped. Vajpayee responded by repeatedly demanding that the BJP state government control the situation. When it did (not could) not, he went on a fast unto death. Given his love of good food and drink, it is doubtful that he would have sustained it for long, but it had the necessary shock effect on the state government, and the attacks on Christians stopped.

Four months later, Vajpayee muzzled the zealots in the Sangh parivar by hammering out an agreement with his coalition partners to control the extremists in the Sangh parivar if they stopped criticising the BJP in their public utterances. To implement this, he created a coordination committee with defence minister George Fernandes as its convener. When the Ahmedabad riots broke out and Modi refused to take Vajpayee’s frantic phone calls through the morning of February 28, it was George Fernandes whom he sent to Ahmedabad to call out the army late that afternoon.

As has been extensively described, Vajpayee’s vision of peace extended beyond the boundaries of India and encompassed Pakistan and the whole of South Asia. It is difficult not to conclude that he chose to swallow the personal insult of the Kargil war, declared a unilateral ceasefire in Kashmir in 2000, and extended the hand of friendship to Pakistan from Srinagar in April 2003 because he understood that Indian Muslims would remain a threatened species so long as India-Pakistan tensions continued. Finally, while his overtures to Kashmir and Pakistan are well remembered, no one has commented on the way in which he blocked the dispatch of Indian troops to Iraq at a meeting of the cabinet committee on security in July 2003, hours before they were scheduled to board the ship for Basra, after this had been agreed to by both Advani and Jaswant Singh during their visits to the US.

Vajpayee's Asthi Kalash Yatra in Allahabad. Credit: PTI

For me, however, Vajpayee’s finest hour was the way he accepted the NDA’s defeat in the vote of confidence in 1999, and submitted his government’s resignation to the president, when he knew that the vote had passed only because Giridhar Gamang, who had already taken over as chief minister of Odisha, had come back  to vote against Vajpayee because he had not yet submitted his resignation from the Lok Sabha. It was not only his, but Indian democracy’s finest hour.

Such a long career in politics cannot be without its blemishes and Vajpayee is no exception. The two that stand out in my mind is his staying on in the RSS after the assassination of Mahatma Gandhi, and his ringing endorsement of Modi at the Goa meeting of the BJP’s national executive in April 2002, when the killing and post-riot persecution of Muslims had still not ended.

Speaking for myself, I can try to understand the first, but cannot condone the second. Vajpayee knew from intelligence reports that Modi had ordered the corpses of the Godhra victims to be sent to Ahmedabad because the RSS and VHP had well laid plans to start a pogrom against Muslims in Gujarat. It is now common knowledge that he intended to sack Modi at the national executive meeting in Goa two months later. So when he was checkmated by, among others, Arun Jaitley, who brought and presented Modi to the assembled members as the hero of Gujarat before Vajpayee’s address, why did he not assert his pre-eminence and explain to the audience why Modi had to go inspite of having won the Gujarat assembly elections? Worse, why did he go on the dais and put the blame for the riots in Ahmedabad on a still-to-be-proven Muslim conspiracy in Godhra?

The truth is that this single failure of nerve has set off a chain of events which today jeopardises India’s very future as a viable nation state. Its first victim was he himself. As both Ram Bilas Paswan and Chandrababu Naidu said while leaving the NDA after the 2004 election defeat, they and the coalition paid the price for Ahmedabad in the 2004 elections. Its second victim was the moderate, forward-looking BJP that Vajpayee and Advani had fashioned in the years after 1991. The RSS pinned the blame for the defeat on “the Vajpayee line” of cosying up to the opponents of a Hindu rashtra, staged an internal coup within the BJP and reimposed hardline Hindutva upon the party.

Vajpayee’s evasion thus changed the course of history, for had the NDA won in 2004 there would not have been the revolt in the RSS against Vajpayee and Advani’s attempt to modernise and civilise the BJP. Narendra Modi would have remained in Gujarat; Amit Shah would probably have been in jail for murder; the Kashmir dispute would have almost certainly been resolved; and the economy would not have collapsed, robbing 40 million youth of their future, after 2011. Most important of all, India would have remained a country governed by law instead of vigilantes posing as saviours of Hinduism

Today, the budding opposition alliance does not have to take on the Modi government’s performance point-by-point to prove its ineffectiveness and its contempt for the canons of democracy. All it has to do is to hold up the mirror of the Vajpayee government’s performance to Modi’s face, and let the public see the image it reflects.

https://thewire.in/politics/atal-bihari-vajpayee-narendra-modi

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In transferring the Kathua trial out of Jammu and Kashmir, the apex court has conceded that communal polarisation has advanced so far in the state that a fair trial is no longer possible there.

The Supreme Court Robbed J&K of the Chance to Prove its Secularism

Supreme Court of India in New Delhi. Credit: PTI/Atul Yadav

If the Supreme Court’s dismissal of the writ petitions requesting an independent investigation into Judge Loya’s death was a mistake, its decision to move the trial of the eight persons accused of raping and murdering an eight-year-old in Kathua out of the state of Jammu and Kashmir to Pathankot – although well-intentioned – is also a mistake.

The move is well-intentioned, for its goal is to ensure a fair trial. Both, the victim’s father and the relatives of the accused, had asked for the trial venue to be shifted out of the state. But the fact that they had done so for diametrically opposed reasons should have made the apex court dig in its heels and insist that the state’s judiciary be first given the opportunity to rise above these contending pressures and give a fair and impartial judgement.

There were several things the judges could have done to ensure a fair trial. They could have given all the directives that they gave to the district court in Pathankot – that the trial should be held in camera; that it should be fast-tracked to avoid delays in adjudication; that a special public prosecutor should be appointed to conduct the trial and that full security should be provided to the families, witnesses and lawyers involved – to the trial court in Jammu and Kashmir. They could have gone a step further and asked the J&K high court to take up the case directly and thus minimise the possibility of quirky verdicts and subsequent appeals that will delay the final sentencing till it loses its moral force.

They could also have insisted that the bench include high court judges from both the Jammu and Kashmir divisions of the high court. And they could have monitored the trial on a day-to-day basis to ensure its fairness. But they took the easier route of shifting the case out of Jammu and Kashmir altogether. In doing so, they implicitly conceded that communal polarisation has advanced so far in Jammu and Kashmir, that a fair trial is no longer possible within the state.

This assumption is based solely on an unfounded surmise. One glance at the eight-year-old’s face is sufficient to convince any normal viewer that this was an unspeakable and depraved crime, born of sadism and perverted passion, rationalised as a blow struck for Hinduism against Islam only when the police moved with unexpected speed to identify and arrest the suspected culprits.

Sanji Ram – the custodian of the temple where the minor girl had been held, drugged and raped, who is alleged to be the mastermind of the crime – trotted out this cowardly justification because he was confident that it would bring the cohorts of the Rashtriya Swayamsevak Sangh (RSS) and its shadowy offshoots storming out to defend the bastions of Hinduism and paralyse the law and order machinery of the state, while Mr Modi and Amit Shah made tut-tutting noises and looked the other way.

And just look how close Sanji Ram came to success. Two policemen allegedly conspired actively in their attempt to cover up the crime; two BJP ministers addressed crowds demanding the release of Ram and the other accused and a gang of local lawyers stormed the courthouse in an attempt to block their arraignment, just as their peers had stormed the Patiala House court in Delhi three years ago, to beat up Kanhaiya Kumar and the Jawaharlal Nehru University professors who had come to the court to give him moral support.

Ram failed because the crime had not been committed in Unnao or Una or Bishara or Jaipur, or any other state which is inflicted with a BJP government. It was committed in Jammu and Kashmir, which is a Muslim-majority state with a Muslim-majority party in power, a Muslim chief minister and a Muslim majority in the police.

New Delhi: People display placards as they take part in ‘Not In My Name’ protest against the
recent incidents of rapes, at Parliament Street in New Delhi. Credit: PTI Photo by Ravi Choudhary

 

“Oh, but isn’t that exactly why the lawyers of the accused asked for the trial to be shifted out of the state?” Yes, that was their ploy, and it succeeded because none of the learned judges had any first-hand experience of the unique, syncretic, religious tradition of Kashmir Valley that has survived three decades of unrelenting, despotic, military rule, the ethnic cleansing of Kashmiri Pandits in the 1990s and the rise of militant Islam among the youth in recent years in the Valley.

This tradition, which is hard-wired into the genes of the Kashmiri Muslims, asserted itself when militants of the Lashkar-e-Taiba shot dead Lieutenant Umer Fayaz in cold blood in Shopian last year. The killing was not only condemned by the Kashmiris, but the local people even helped the army to identify the killers.

It surfaced once again a few days ago in the unanimous condemnation of the killing by stone pelters of a tourist from Chennai. It has surfaced a third time in the demand for a ceasefire during Ramzan and the Amarnath yatra.

What is far more telling is the absence of attacks on yatra pilgrims, despite five to six lakhs of them flooding the Valley every year. Sceptics may say that this is only because the pilgrims bring money to Kashmir, but the way in which Kashmiris have gone out of their way, year after year, to help pilgrims in trouble – whether as a result of a freak storm in the mountains, a bus falling into a ravine, or a sudden lockdown of the Valley such as the one that followed the death of Burhan Wani – belies this cosy dismissal. In fact, the sanctity of the Amarnath yatra empahasises the umbilical connection that Kashmir has with the rest of India.

At Kathua, the suspected culprits were caught so swiftly not because the key members of the government and the police were Muslim, but because they were Kashmiris. The Gujjar-Bakarwals are mostly Sunnis, but not of the Sufi-Hanafi-Reshi variants found in the Valley. They do not even speak Kashmiri. So to claim that the People’s Democratic Party and the Kashmir police acted swiftly only because they were ‘Muslims’ is from the reality.

By the same token, it would be a grotesque caricature of the truth to believe that all the Hindus in Jammu have been communalised by the incessant propaganda of the RSS. One has only to experience the stiff opposition to any suggestion that Jammu and Kashmir should be separated, to grasp that an overwhelming majority of Jammu prefers to remain a part of J&K state.

The unassailable truth is that Jammu and Kashmir is probably the only truly pluralist state in the country where the administration has not been poisoned by the hate-filled propaganda of the RSS. It should, therefore, have been given the chance to prove the secular credentials through the fairness of its judicial process. The Supreme Court did not really have the right to deny that opportunity to the state.

recent incidents of rapes, at Parliament Street in New Delhi. Credit: PTI Photo by Ravi Choudhary

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Shujaat Bukhari’s killing was the most cold-blooded and meticulously planned assassination in recent years and was, beyond a shadow of doubt, instigated by Pakistan’s ISI.

Modi's Kashmir Policy Is Playing Right Into the Hands of Pakistan's ISI

Photo edit: The Wire

Since the fateful evening when I heard that Shujaat Bukhari, my friend and colleague for the past 26 years, had been assassinated in Srinagar while going home to break his Ramzan fast with his family, I have often wondered who his assassins could have been, and what could have been going through their minds as they sat on their motorcycle waiting for him to emerge from his office. Were they simply semi-educated youth with no future in civilian life, brainwashed into believing that Shujaat was a traitor to Kashmir who was taking money from the state and Central governments to undermine the fight for freedom? Or were they mercenaries who were lining their pockets and soothing their consciences by pretending that they were doing Allah’s work?

Till today, more than a month after his death, there is no answer. Speculation still is rife. The majority view is that Shujaat’s murder was the outcome of the radicalisation and Islamisation that Prime Minister Narendra Modi has unleashed upon the Valley. Writing in Firstpost, Khalid Shah concluded that “the situation in the state has slipped from contemporary timelines and is back to the 1990s now”. In the Washington Post, Barkha Dutt echoed this: “Kashmir is sliding into a black hole of possibly no return.”

But Shujaat’s assassination was not a by-product of the tidal wave of anger created by the Modi government’s relentless use of brute force to crush Kashmiri separatism. It was the most cold-blooded and meticulously planned assassination in recent years, on par with those of Mirwaiz Maulvi Farouq in 1990 and Abdul Ghani Lone in 2002.

And it was, beyond a shadow of doubt, instigated by Pakistan’s Inter-Services Intelligence (ISI).

Four video cameras caught the assassins riding on their motorbike before and after the assassination. But not one caught them loitering for 45 minutes as they waited for Shujaat to emerge from his office because they had chosen the only ten-metre stretch of road that was not covered by any of the CCTV cameras scanning this high security area. Only inside information, possibly from within the police, could have made them choose that precise spot.

Since 1990, 19 journalists have been killed in Jammu and Kashmir, including Bukhari. Credit: Twitter

Weapon of choice

For the ISI, assassination has been a weapon of choice not only in Kashmir, but much more so in Pakistan itself. According to the Human Rights Commission of Pakistan, nearly 10,000 people have gone missing in the country since 2001, with nearly 3,000 still unaccounted for. In 2016 alone, there were 728 disappearances.

Journalists have figured prominently on the ISI’s hit list, two of the most celebrated being Hamid Mir, the host of Geo TV’s ‘Capital Talk’, and Shahzad Saleem, the former bureau chief of Asia Times (online). Mir miraculously survived six bullets in his stomach because, knowing that an ISI car was following him, he drove straight to a hospital to seek shelter there, and was shot at its doorstep. Saleem was tortured and killed ten days after the publication of his book detailing links between the ISI, various rogue officers of the Pakistan army and terrorist organisations like the Tehrik-e-Taliban-i-Pakistan (TTP). In the same year, 12 other Pakistani journalists met a similar fate, though perhaps not all at the hands of the ISI.

In Kashmir, the ISI has a 28-year record of killing any leader who has shown willingness to negotiate peace with the Indian government. The list of its victims begins with Mirwaiz Maulvi Farouq, the father of Mirwaiz Umar Farouq, on May 21, 1990, and the elimination of all the six other Kashmiri leaders with whom George Fernandes had held secret talks in the first few months of that year. It stretches through Qazi Nissar, the leader of the Muslim United Front, in 1993; professor Abdul Ghani Butt’s brother in 1996; Abdul Majid Dar, the area commander of the Lashkar-e-Tayabba, who declared a unilateral ceasefire, in July 2,000; Abdul Ghani Lone, who had decided to take the Hurriyat into the 2002 elections, on May 21, 2002; Mir Mushtaq, the uncle of Mirwaiz Umar Farouq, in 2006; and the failed assassination of Fazal Qureshi, the senior most member of the Hurriyat (M)’s executive council in 2007 only weeks after he formally announced its acceptance of the Manmohan Singh-Pervez Musharraf four-point formula for settling the Kashmir dispute.

ISI’s ambition to wrest Kashmir from India had dwindled during the years of peace and reconciliation that had followed Atal Bihari Vajpayee’s historic 2004 meeting with Musharraf. They dwindled further when, in 2012, the Pakistan army command officially revised its threat perception and stated that this lay mainly to its west and not its east .

Its ambitions were revived when the surreptitious hanging of Afzal Guru by Delhi in February 2013 caused a spike in the number of young men joining the armed militancy, just as the hanging of Maqbool Butt had done in 1986.

But it was Modi’s policies, of humiliating the Hurriyat, spurning Nawaz Sharif’s overtures for peace, destroying the Peoples Democratic Party by entering into an alliance with it that it had no intention of respecting, ignoring and trivialising the remaining mainstream parties in the Valley, putting ever moderate nationalist leader in Kashmir – from Mirwaiz Umar Farouq, Yasin Malik and Ali Shah Geelani, to Shabbir Shah, Naeem Khan and Shahid-ul-slam – into jail or under house arrest, and adopting a “ten for one” policy of retaliation for firing across the Line of Control that claimed the better part of 832 civilian lives in Pakistan-occupied Kashmir that sent the ISI and the Pakistan army onto a full offensive in Kashmir. 

The ISI concluded that its chance had finally come when his government began to gun down Kashmiri youth, branding them all as “terrorists”, often without giving them a chance to surrender and then boasting about its ‘kills’ to the national press. This had the opposite of the desired effect because from a mere 16 in 2013, the number of young men who joined the militancy in south Kashmir rose to 126 in 2017. More disturbing still, data collected by the Kashmir police showed that most of new recruits are coming from the villages where “encounters” had taken place, and that the maximum recruitment was taking place after the funerals of slain ‘terrorists’.

Jammu and Kashmir Police personnel take positions during an encounter with the militants at Nowhatta in Srinagar.
Credit: PTI

From the ISI’s point of view, therefore, the Modi government was a gift from heaven. The very last thing it wanted was for anything to impede India’s accelerating descent into self-destruction in Kashmir. Asad Durrani, a former director general of the ISI and convinced “peacenik”, summed this up at a recent book launch in Delhi. When asked what the ISI would do next, he said, “Nothing. You have done everything it wanted.”

The one obstacle that remained was the ordinary Kashmiris’ aversion to Pakistan and the overwhelming desire for peace. A Chatham House survey carried out as recently as in 2009 had shown that even in the four most estranged districts of Kashmir valley, only 2.5 to 7.5% of the respondents had said that they wished to be a part of Pakistan. This was changing thanks to Modi, but the last thing the ISI wanted was the sudden emergence of a civil society movement in Kashmir that would give a voice and direction to this inchoate desire for peace.

That emergence took place in 2015 and Shujaat was one of its principal architects. That year, he and Ershad Masood, an academic and journalist based in Rawalpindi and Islamabad, set up a Kashmir Initiative Group, whose stated purpose was to take the now stalled dialogue on peace to civil society. The group started working in a small way by organising a tour of PoK by ten journalists from Jammu and Kashmir, and held meetings in the two parts of Kashmir. It gained strength when it obtained the financial backing of Conciliation Resources, an international NGO with impeccable credentials.

The group’s work gained importance, however, when even after Burhan Wani’s death had shut down the Valley for four months, Delhi refused to change its one track policy of repression by even a jot. But it became a threat to the ISI’s plans only after it organised a large conference in Dubai on July 31 last year. The two-day meeting was attended by 28 people belonging to political parties in both parts of Kashmir and national parties in India and Pakistan, including the BJP, and a number of eminent observers who included two former director generals of the ISI – Durrani and Ehsan-ul Haq – and Air Vice-Marshal Kapil Kak.

The Dubai meeting turned out to be a roaring success. Despite disagreements on many issues, the conference arrived at a strong consensus on several key points. These were: the need for both the Indian and Pakistani governments to make human security their paramount concern and therefore declare an immediate and complete ceasefire on the LoC and take strong measures against extremism in all its forms in both parts of Kashmir; to encourage their respective governments to re-engage in a political dialogue, in consultation with Kashmiri groups; and for these groups to keep talking to each other despite their differences, to explore creative proposals that did not involve an immediate shift in their stated positions. Lastly, the conference was unanimous that civil society in Kashmir, as well as in India and Pakistan, had an important role to play in creating an atmosphere conducive to dialogue.

Had this conference taken place during former prime minister Manmohan Singh’s rule, both governments might have welcomed the initiative. But in August 2017, the quality and eminence of the participants, and the sheer breadth of consensus, came as a rude shock to the Pakistan army and the ISI because it threatened not only to derail its plans in Kashmir but perhaps more importantly its use of the threat from Modi’s India to restore a creeping military rule within Pakistan.

The attempt to do so began with the leaking of an open quarrel at a national security meeting in October 2016 between Nawaz Sharif and key members of his cabinet and the army chief, over the latter’s refusal to reign in the Lashkar-e-Tayabba, Jaish-e-Mohammad, and the Haqqani network, to Pakistan’s premier newspaper Dawn. Since then, with the help of a quiescent judiciary, the army has succeeded in ousting, charging and now jailing Nawaz Sharif and members of his family, placing an exit ban on the journalist who wrote the story for Dawn, and now placing a similar ban on General Asad Durrani for having taken part in the book launch in Delhi. Modi’s continuing his policy of killing Kashmiri militants has therefore become a necessity for the Pakistan army’s continued seizure of power in the country.

This is what turned the Kashmir Initiative Group into a target for the ISI. Shujaat Bukhari had always been an outspoken champion of peace. His entire career in journalism had been built on the conviction that negotiations based upon misconceptions were doomed to fail. Only truth and honesty in reporting what was happening on the ground could create the essential bedrock upon which the edifice of peace could be constructed. When the Modi government abruptly closed all doors to dialogue with Hurriyat in Kashmir, by force of circumstance, he and his newspaper became the ISI’s targets.

Shujaat Bukhari, editor of the Rising Kashmir, was laid to rest on Friday at his ancestral village,
Kreeri, near Baramulla. Credit: Rising Kashmir

The ISI might even then have done nothing if it had believed that Modi would return to power in 2019. But the growing unity of the opposition, the succession of bye-election defeats suffered by the BJP, and the coming together of the Congress and JD(s) in Karnataka have made its return less and less likely. This may have been the final straw that made it take the decision to crush any possible revival of dialogue in Kashmir, by killing its current principal icon of peace.

Shujaat is not, however, the only ‘peacenik’ that the ISI might attack in coming months. In the months after the Dubai conference, two Kashmiris who head NGOs that had not been invited to the conference – Nazir Gilani and Athar Masood Wani, a former adviser to the prime minister of PoK – condemned the conference as a “sell out” for not insisting on the right to self-determination on the basis of UN resolutions. Pakistan based Hizbul Mujahideen chief Syed Salahuddin also described the participants in the conference as being on the payroll of India. In Pakistan, the attack upon it became so shrill that one paper headlined it as “Kashmir Blood Was Sold in the Air Conditioned Halls of Dubai”.

In Srinagar, this theme was picked up by the Kashmir Reader, and Hurriyat (Gilani) general secretary general Ghulam Nabi Sumji, but later rejected by Gilani. Shujaat began to receive warnings that he and two other participants in the conference were on the hit list of the ISI.

The campaign ended abruptly in October after Ershad Masood and a colleague met Salahuddin in Islamabad. Salahuddin denied playing any part in the campaign against the conference, said that he had initially been misinformed about its proceedings, and assured Masood that he was not so mean as to order the killing of a journalist.

However it revived again, abruptly in April, two months before his assassination, with virulent attacks on the participants in the conference and specific threats to the lives of Shujaat and two or three others who attended it. Shujaat took these threats very seriously, went to the Kashmir police and gave them the names of the principal attackers. For the record, they were Nazir Gilani in London, Sheikh Tajamul Islam, Abdullah Geelani, Raees Mir, Aslam Mir, and Athar Masood Wani in Islamabad and Muzaffarabad, and Iftikhar Rajput in Brussels.

It is difficult not to link this revival of threats to the declining fortune of the BJP in India. Suffice it so say that Shujaat took the attack on the internet very seriously and lived in fear of his life. Two days before he was killed he had confided to a friend in his office, “I have young children, I don’t want to die”.

Hours after Shujaat died, one of his young reporters told me in a voice choked with grief, “Sir, we have lost everything, everything!”

But he and his colleagues had not lost everything. On the contrary, they had kept the one thing Shujaat had given them – raw courage. So, after accompanying Shujaat’s body to the hospital and giving their accounts to the police, his staff came back to the office not only to bring out the paper, but fill the front page with his picture and words that will be graven on every Kashmiri heart: “We won’t be cowed down by the cowards who snatched you from us. We will uphold your principle of telling the truth howsoever unpleasant it may be…” And in a magnificent act of defiance, they carried links on the editorial page to every recent article Shujaat had written.

The message they sent was unambiguous: terrorists, and their puppet masters, could kill a man but not the ideals he embodied. The next day, between 60,000 and 200,000 mourners who attended his funeral at Kreeri, his home village 23 km from Srinagar, drove the same message home to their fellow Kashmiris, to Pakistan, and the world. Burhan Wani and Sabzar Bhatt were not the only people who could make lakhs of Kashmiris grieve for them. Those who fought and gave their lives for peace, for a future in which ordinary Kashmiris could plan and dream without fear, could do so too.

https://thewire.in/security/shujaat-bukhari-assasination-modi-kashmir-policy-pakistan-isi

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Missiles were rained on Syria by the US, UK and France without any credible reason and with no international sanction.

After the Bombings in Syria, the West Is Drifting Towards a Big War

A boy sits on a chair along a damaged street at the city of Douma in Damascus, Syria April 16, 2018. Credit: Reuters/Ali Hashisho

In an article published in The Wire on April 9, I had expressed deep foreboding that, with the American century in its twilight years, the danger of war being used by weak, confused Western leaders as a distraction from the terminal decline of their global hegemony had grown exponentially.

Hours after it was published, the US and UK accused the Bashar al-Assad government of launching a gas attack on the last rebel stronghold in Ghouta, the once verdant but now heavily populated oasis that adjoins Damascus. Four days later, the US, UK and France fired 105 Tomahawk missiles into Syria from ships scores of miles offshore. This attack reflects, in microcosm, every facet of the breakdown of order and reversion to a barbaric, ‘State of Nature’, that is dragging the world ever closer to War.

Their justification for the attack reeked of moral self-righteousness: Theresa May claimed it was necessary “to protect innocent people in Syria from the horrific deaths and casualties caused by chemical weapons… We cannot allow the erosion of the international norm that prevents the use of these weapons.”

Emmanuel Macron of France said: “The facts and the responsibility of the Syrian regime are beyond doubt. The red line set by France in May 2017 has been crossed. We cannot tolerate the trivialisation of the use of chemical weapons, which is an immediate danger for the Syrian people and for our collective security.”

Trump knew within minutes of the attack that ‘Animal Assad’ was responsible, so he warned that “missiles are coming”.

Their self-satisfaction after the attack was equally odious: It was a ‘precision’ attack. It was 100% successful. Three known Syrian chemical weapons production sites were destroyed. There had been no civilian casualties. Syria had been taught a lesson. The West had upheld international law.

These is something obscene about this haste to condemn; to affirm the right to bomb and kill without provocation, without conclusive proof of wrongdoing, and without any prior sanction from a quasi-juridical body like the UN Security Council or General Assembly. It shows a contemptuous disregard not only for the international law enshrined in charter of the United Nations which the US itself largely drew up, but a disdain for the moral principles upon which civilisation itself is founded.

While the Syrian army was an obvious first choice in any search for culprits because it was in the process of cleaning out the last remaining rebel stronghold in Ghouta, Russia, which has a Reconciliation Team on the ground that has been supervising the evacuation of civilians from Ghouta through three humanitarian corridors, has not only dismissed the accusations as ludicrous, but claims it has evidence that it was a false flag operation actually instigated by the British.

It was, therefore, all the more essential to wait for a detailed examination of the site of the alleged attack by experts. A team of experts from the Organisation for the Prohibition of Chemical Weapons (OPCW) had already arrived in Damascus and was scheduled to hold its first meeting with the vice-foreign minister Feisal Mekdad, on Sunday, April 15. So what was the urgency that made the three countries decide to fire 105 Tomahawk missiles into Syria the previous night?

There is one possible answer: the strong likelihood that the OPCW might not endorse the conclusion that there had been a gas attack, or that the Syrian army had made it. This, according to Pulitzer Prize-winning journalist Seymour Hersh, had happened once before already: Two days before Barack Obama was to launch a devastating missile attack backed by B-52 bombers on Syria in August 2013, the British Chemical and Biological Weapons Research Centre at Porton Down had informed Prime Minister David Cameron that the Sarin gas used in the August 21 attack could not possibly have come from the Syrian army. In Hersh’s words “analysis demonstrated that the gas used didn’t match the batches known to exist in the Syrian army’s chemical weapons arsenal”. This was the reason why Cameron decided at the last minute to refer his decision to the parliament, and Obama called off the strike a few hours later.

France, UK and the US fired 105 Tomahawk missiles into Syria last week. Credit: Reuters

Macron is still a relative newcomer to the twisted power game going on in the Middle East, but the need to avoid another Iraq-sized blunder should have made at least the British and American governments pause and make doubly sure that they were doing the right thing. The fact that neither government chose to remember Iraq shows that the attack wasn’t about punishing Syria at all.

This assessment, which is widely shared in the US and been expressed with withering elegance by Jeremy Corbin, the leader of the Labour party in the UK, explains two other anomalous features of the assault: First, if Syria had chemical weapons complexes and supply depots operational in 2018, how did the OPCW certify in 2016 that Syria had destroyed all of its chemical weapons and its manufacturing facilities?

If its experts were not fooled, (or bribed) how had Syria, which has fought, and been bankrupted by, the most vicious and brutal war in recent history, managed to rebuild even a rudimentary chemical weapons capability in just two years? Could it be that Russia has given them the plants/laboratories? Or China? or Iran?

Sensing this absurdity, a source in the US government has pointed the finger of suspicion at that other member of the Axis Of Evil, North Korea, by leaking a so far confidential UN report on it’s violation of UN sanctions to the New York Times. This report detailed a brisk trade that North Korea was doing in chemical plant equipment with Syria. It reported that there had been 40 shipments to Syria of acid resistant tiles, valves, thermometers, and other equipment that could be used to manufacture chemical weapons.

But as one American commentator pointed out in an article in the paper’s online edition (now deleted), these are used in many other chemical industries. In fact, a similar finding of dual use capability had briefly blocked even the import of lead pencils by Iraq in the nineties on the grounds that the graphite in them could be extracted and used to manufacture the heat shields of missile cones!

There could, in fact, be a more innocent explanation for these purchases: By 2012 (when I visited Syria) rebel attacks targeting Syria’s chemicals industry had almost wiped it out. The principal target had been its pharmaceutical sector, possibly because the same equipment could also be used to produce chemical weapons. As a result, the shortage of life-saving medicines had become so acute that WHO had launched a world-wide appeal for funds to supply Syria with these medicines. But so complete was the demonisation of the Assad regime by then that it was able to raise only $60 million.

Syria’s President Bashar al-Assad. Credit: Reuters

The Syrians could not have forgotten this. So it would have been surprising indeed if rebuilding the pharmaceuticals industry had not been one of the first tasks the government undertook after regaining control of central Syria.

The second anomaly is even harder to explain. In the reams of reporting and opinion-making not one commentator has raised the question of motive? In murder trials, the absence of motive is the single greatest obstacle to proving guilt beyond reasonable doubt. Why then has no one asked what Assad could possibly have hoped to gain from launching a single chemical bomb or rocket at an already beleaguered remnant of a rebel force in the last stronghold it still held in Ghouta?

By the end of March, Assad had regained control of all but one last rebel stronghold in Ghouta. A tally kept by the Syrian Red cross (Red Crescent) and the Russian Reconciliation Centre showed that 1,166,644 civilians, well over half of its population, had left Ghouta through the three humanitarian corridors created by Syria before the gas attack. These included thousands of rebels, their families and sympathisers. What need was there for him to risk all by using one lone chemical warhead now?

Precisely this accusation had brought him within a hairsbreadth of annihilation in August 2013. What is more, a single chemical bomb allegedly dropped by a Syrian air force fighter plane upon Khan Shaykhun, in April 2017, had brought 59 Tomahawk missiles down on his airbase in Lattakia. So Assad would have had to be a half-witted idiot not to know what would happen if he did it again. Needless to say, he is not a half-wit. But nor are the rebels, for whom this was the fourth attempt to drag the West into overt war against the Assad regime

Writing in the Washington Post a few days before the attack Carrie A. Welch gave one succinct explanation for the US-EU attack:

“The real reason for the attack threats is probably this: Midterms (elections to the Congress and the Senate in the US) are approaching, the Russia investigation ( of tampering in the US elections to put Trump in power) is escalating and former FBI director James B. Comey’s book is being released.

Research shows that diversionary wars — wars started to distract the public from domestic unrest — are hard to start in democracies and rarely have the intended effect. Military operations in an already existing conflict are much easier to manipulate — and are not as risky as starting a war.

My research finds that, during periods of political fragility, U.S. presidents systematically manipulate the timing and tempo of military operations. That’s true most often in the lead-up to elections, when public opinion quite literally determines the fate of a president. However, presidents also manipulate military operations when they need support from their domestic political base — for example, during negotiations over major pieces of legislation, bids for legacy, midterms or while threatened with impeachment.”

Since the attack was limited, no civilians were apparently killed, and no Russian and Iranian personnel killed or assets destroyed, there have been no repercussions. But Russia has warned the US and its NATO allies that if any of its assets in Syria are attacked, it will not only destroy the missiles in the air but also their launch platforms. That means the US naval task force in the Mediterranean. For the next eight months therefore, and possibly for the two years after that as well, the world will continue to teeter on the edge of a world war.

https://thewire.in/world/syria-airstrike-us-uk-france-war

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