Prem Shankar Jha

Shortly after posting my article on how government formation in Kashmir could promote better India-Pakistan relations, I read an article by a distinguished former Pakistan High Commissioner to India, Ashraf Jehangir Qazi. I felt that this needed to be shared with a wider audience in India. Hence this post:

The need to rethink, radically

Ashraf Jehangir Qazi


A state of “no war, no peace”, with a neighbour several times our size provides no context to pursue counterterrorism policies. That too against organisations we have ben using as proxies and which have done us no end of harm diplomatically and domestically.

 

Another all-parties conference; a dash to Kabul; a rage of hangings; a 20-point National Action Plan to succeed the still-born Nacta and NISP; a committee for every point of the NAP; subcommittees for every committee; an overall oversight committee led by the prime minister who proclaims zero tolerance; a defining moment; a do-or-die challenge; an unending jihad against jihadis; eternal cooperation with the military which is invited to discharge his responsibilities; military courts of dubious value and still more dubious constitutionality.
“Democratic” political leaders who until recently were locked in mortal combat are now united in complicit support for a  “soft coup” and a resurrection of the doctrine of necessity.
The Supreme Court judges realising the gravity of the situation met under the chairmanship of the chief justice to assess how the prosecution of those accused of terrorism could be prioritised and completed expeditiously. They have, accordingly, agreed on an eight-point plan. Their plan has been summarily shoved aside by the 20-point plan. So much for the rule of law! Will the Supreme Court now accept amendments to the Constitution that are against its “basic structure” and clear intent and purpose? The superior judiciary is not incompetent. It has been impeded by those who would now supersede it.
There has been no collective and public (civil and military) leadership apology to the bereaved families and the nation. No acknowledgement of responsibility — indeed guilt — for bringing about a state of affairs in the country that directly and indirectly made the atrocity possible, if not likely. How can anyone say “this is a watershed moment” or “we have at last turned the corner”? Our 9/11, no less, have been so many self-inflicted tragedies in our short history including the fall of Dhaka, military surrender and the break-up of the country. There has been the loss of the Siachen Glacier and the fiasco of Kargil. There has been the intermittent war in Balochistan over decades. There were unprincipled deals ceding control in a number of Fata areas to dangerous militants.
These militants have become today’s monsters responsible for the school atrocity and murder and mayhem of every kind in Pakistan. There has been Abbottabad leading to national humiliation and isolation abroad.
Have we responded to all this criminal impunity with a greater concern for national security, governance and leadership? Why, or rather how will it be any different this time? Well, because enough is enough! Our cup of patience runneth over! The leopard will at last change its spots. Inshallah! Indeed, we have a plan for it. Mashallah!
We know the history of inquiry commissions in Pakistan. Even so, why has our suddenly “united” civil and military leadership not immediately sought to “break the mould” by establishing a genuinely independent, repeat independent, and competent commission to inquire into all aspects of how December 16 came to pass? Such an inquiry should, needless to say, seek to ascertain who bore the greatest responsibility for the political and security milieu, as well as the specific lead-up circumstances, including lapses, that resulted in the tragedy. It should make a meaningful and comprehensive set of concise, relevant and mutually reinforcing policy recommendations that are continuously monitored and reported upon to the nation on a weekly basis by our “born-again” leadership.
Counterterrorism in Pakistan has to be part and parcel of a comprehensive state and, indeed, societal transformation process. Yes, this is a longer term effort. But given our truly rotten circumstances, unless our action plan is embedded in a simultaneous commencement of this longer-term and much bigger project, it will lose direction, momentum and credibility very rapidly.
Solemn assurances to the contrary are rhetorical and meaningless because outside this broader transformation context they cannot be credible. This credibility of our counterterrorism commitment will also need to manifest itself in our foreign policy.
Take Afghanistan. Unless we deny the Afghan Taliban and their various cohorts and networks safe havens, sanctuaries and cross-border supply routes on our territory, how do we expect our commitments to President Ashraf Ghani and his government to be taken seriously? How would we play an acceptable role in a peacemaking and political reconciliation process in Afghanistan if the government in Kabul has grave reservations about our reliability as a partner?
If the Afghan Taliban in Afghanistan are viable inside Afghanistan without our assistance we can still play a constructive role in facilitating reconciliation without seeking to use them as a check on India’s influence. If a terror-prone Afghan Taliban once again takes over Afghanistan, with or without our deniable assistance, it will be the TTP and not us who will gain “strategic depth”.
Take India. We need to have a predictable working relationship with it despite our continuing and significant differences on Kashmir and other issues. We will need to develop and implement modalities for managing our differences on Kashmir and building essential bilateral and regional cooperation to confront the challenges of the 21st century.
A state of “no war, no peace” with a neighbour several times our size provides no context in which to pursue counterterrorism policies against organisations we have been prone to use as ‘proxies’, and which have done us no end of harm diplomatically and domestically.
Unless we radically rethink our external policy strategies how will we develop a credible counterterrorism policy and transform our economy and society? There is no indication of any of this in the national action plan. Will we finally do what we say and dismantle the whole infrastructure of terror inside Pakistan? Will we begin to rationalise our India and Afghanistan policies and come across as credible to ourselves and the international community?
In memory of our lost angels:
You were the faces of tomorrow
Our living dreams of today.
May you help transcend our sorrow
May you abide and show the way.

Published in Dawn from Karachi and The Tribune from Chandigarh.The writer is a former Pakistani ambassador to the US, India and China and head of UN missions in Iraq and Sudan.

 

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Despite the setbacks the BJP suffered in the bye-elections of August and September, there was never any serious doubt that it would emerge as the winner in the Maharashtra and Haryana elections. What has come as a surprise is the magnitude of the victory. Not only has it gained an absolute majority in the Haryana assembly, but it has come close to doing so in Maharashtra inspite of breaking its alliance with the Shiv Sena.   The doubling of its share of the vote in Maharashtra, and its tripling in Haryana, confirms its pre-eminence today. The message of these elections is therefore unambiguous: five months after the May elections the ‘Modi wave’ has not begun to retreat.

The reason is not hard to seek. In May the country had been suffering from a recession that had stalled industrial growth and completely stopped the growth of employment for the previous three years. Modi promised to revive the economy  and offered the ‘Gujarat model’ as proof that he could do so. Desperate to see a ray of sunshine in their lives huge numbers of people believed him and voted for the BJP. As a result the BJP’s share of the national vote increased  from below 19 to 31 percent.

Today people continue to believe Prime minister Modi’s promises despite the fact that there has been absolutely no improvement in their condition in the past five months.  They do so because with his common touch, now amplified a million-fold by the media, he has struck a chord in their hearts. The message he has managed to convey is that his government will not make decisions for the poor, he will allow the poor to set their own priorities. So they are prepared to give him more time.

But the ‘Modi wave’ is only a relative one. The BJP’s share of the vote is still only 27.8 percent in Maharashtra, and 33.2 percent in Haryana. Thus it still owes its win to the utter disunity among the secular parties. This is most clearly visible in Maharashtra. The vote of the Congress and the NCP, together,   fell by only 2.1 percent. As had happened in Rajasthan and Madhya Pradesh in December, 11 out of the  BJP’s 14 percent gain in vote took place at the cost of independents and unrecognized parties.  The message this conveys is the same as the one that  the four major state elections in December conveyed: that voters are no longer prepared to waste their vote by giving it to people who have no hope of winning.

The Haryana election has delivered a different, but equally important message. Here two thirds of the increase in the BJP’s vote has come from the Congress. As in adjoining Delhi last December, this is a vote born out of pure  disillusionment. In Delhi  the beneficiary was the Aam Admi Party. In Haryana, since  AAP did not fight the Haryana elections,  it has been the BJP.

For the BJP, the message is clear: the entire country wants a revival of the economy. If the BJP cannot deliver this,  its honeymoon will not last much longer. What is more, were  faith in Mr Modi’s promises tocollapse, the rejection of the BJP will be severe.

For the Congress these elections have shown that unless it makes a herculean effort to pull itself together and present, or at least lead, a credible alternative to the BJP, its vote will keep slipping away.   Its introspection must start with why it has lost every election  since last despite  having poured four times as much money as the Vajpayee government into programmes of ‘inclusive development’.  This introspection is necessary because the collapse of growth is the only reason that the Congress’ pundits did not offer during its soul searching conference after its defeat in May.

Accepting that chasing the phantom of inflation at the cost of growth was the main cause of its election debacle will not set anything right, but it will at least carry the reassurance that such a thing will not happen again were it to come back to power.  However the Congress would do well not to bank upon the BJP’s non-performance to bring it back to power as the default option for the electorate. Mr. Modi’s government has not done anything tangible to revive the economy yet, but it would be foolish of the Congress to hope that it will not do so in the coming four years.

But there are other areas in which the Congress can build an alternative platform that will attract the voters to its banner in coming elections. Among these are the destruction of the nexus that has developed between crime, black money and politics in the last fifty years; empowering the common man against the State by amending article 311 of the constitution to allow people  to prosecute the state for the dereliction of its duties; providing security to the poor through social insurance, instead of throwing money at them in the hope that some of it will stick, and acquiring land for development in ways that will make the owners and users permanent stakeholders in development instead of its victims.

The Congress also urgently needs organizational changes: if there is anything it needs to learn not only from its defeat in May but the absolute disarray in the party since then, it is that the days of relying on the Gandhi-Nehru charisma to win elections, have ended. The current generation of the family neither has the acceptability nor the sheer grit (that Indira Gandhi had in abundance)  to pull the party out of the morass of defeat. The Congress needs a compete remake, and the remake has to start with its present leaders formally  handing over power to a younger generation of central and state leaders who have the long vision, and the perseverance,  to rebuild the party democratically from its roots.

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WITCH DOCTORS AT THE HELM
Prem Shankar Jha
Coming on the heels of July’s 0.5 percent, the 0.4 percent growth of industrial production in August shows that the Indian economy is not on the road to recovery. The reason is the sustained high interest rate regime of the past four years. Industry has been begging for cuts in the cost of borrowing since March 2011. When Modi came to power it thought that its troubles were about to end. But on August 5, RBI governor Raghuram Rajan surprised the country by announcing that he would not lower interest rates, because at 8 percent consumer price inflation was still too high. He also announced that he would not lower rates till inflation, measured by the cost of living, had come down to six percent. So his September 30 refusal to bring down interest rates came as no surprise.
But Rajan went a step further and unveiled an inflation forecasting model which estimated that under the very best of conditions CPI inflation would not fall to 6 percent till January 2016. To Indian industry, which ceased to grow three years ago, this was the kiss of death.
Today there is not a spark of demand anywhere in the entire economy. Inspite of every inducement the growth of credit in the festive season till the 3rd week of September was Rs 17,800 crores against 108,000 crores in the comparable period of last year. Two of the RBI’s own reports have shown that capacity utilization in industry has been falling since the early months of 2012. But Raghuram Rajan remains fixated only on bringing down inflation.
What is worse he is using only one of four measures of inflation—the consumer price index, and ignoring the other three. These are the wholesale price index (WPI), the Reserve Bank of India’s non-food manufacturing index, and the ‘core rate’ of inflation. The WPI is an approximate measure of the rise in production cost. It is therefore crucially important for manufacturers and builders. The RBI’s non-food manufacturing index is a rough measure of the pressure of excess demand on prices because it filters out the impact of weather and export policies on agriculture. But CRISIL’s core rate of inflation is the most precise measure as it includes manufactured food items but excludes globally traded fuels and metals to filter out the impact of world commodity price changes.
Today WPI inflation has fallen from 9.6 percent in 2010-11 to a record low of 2.38 percent. The RBI’s NFMI has also fallen from 8.4 percent in June 2009 to 2.8 percent, mainly on the back of declining world commodity prices. CRISIL’s core rate of inflation is therefore higher, but only by 0.2 percent.
So why has the Consumer price inflation rate remained so stubbornly high? The answer is that the new method of calculation introduced in January 2011 has, in an unforeseen way, become a measure of the effect on prices not of excess demand but of bottlenecks in supply and the failure of the State to provide the infrastructure for growth. .
Primary foods, whose prices are determined almost entirely by supply constraints such as rainfall, area sown, and in the case of vegetables , the amount exported, account for 42.2 percent of the index. Housing accounts for 9.77 percent, but the index includes only urban housing whose supply is severely constrained by the shortage of urban land and the severe curbs the government has imposed on loans to builders.
Health and education make up another 9.04 percent. The cost of both has risen because of drug price decontrol and a growing reliance on private doctors and schools that reflects the failure of the state The only manufactured products included in the CPI are clothing , bedding and footwear (4.6 percent) and manufactured foods ( 8.2 percent). If housing is taken as a proxy for basic industries the total weight of manufacturing in the index comes to just 21 percent. The rest of this index reflects constraints in supply that high interest rates cannot remedy.
This is why four years of ‘inflation targeting’ using the CPI as the yardstick, has failed to make any dent in the CPI inflation. Today people are expecting the RBI to lower rates , but only because CPI inflation has fallen to 6.38 percent and, with diesel prices falling, will go lower.. But the cause — a sharp fall in world commodity, and particularly oil, prices—has nothing to do with India. And we have no idea how long it fall will last. Should domestic interest rates go up again if ISIS captures Basra, or China goes on another investment spree?
The Government has belatedly realized that interest rates determine not only money supply but also economic growth. So it is setting up a joint finance ministry and RBI panel to decide what it should be. But even this is not a sufficient safeguard. The Congress learned to its cost that inflation indices misinterpreted, and interest rates misapplied, can not only sink the economy, but the government as well. If interest rates are to be indexed to inflation it must be to the core rate of inflation, and be subject to whether the government wants growth or price stability. That is a decision that only the cabinet and the prime minister are qualified to make.

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In a few days the 16th Lok Sabha will be prorogued and the UPA’s – basically the Congress’– ten year reign will come to an end. With that will end the most tragic period in independent India’s history. Tragic not because any catastrophe has befallen the nation, but because during this period Indians got a brief glimpse of affluence, a brief taste of global respect, and a brief view of a more secure future, only to have all three snatched away from before it ended.

This is not India’s first lost decade. There was another between 1965 and 1974. But that was triggered by events outside the government’s control – two successive droughts in 1965 and 1966 and two wars in 1962 and 1965. The Indira Gandhi government’s response deepened the economic crisis these caused and slowed down growth even further, but it was not responsible its onset.

In sharp contrast, most of the wounds of the past decade have been self –inflicted. In 2004 Atal Behari Vajpayee’s government bequeathed to the UPA a country whose economy had just recovered from a five year recession and recorded an 8.1 percent rate of growth in 2003-4, the highest the country had known. It had demonstrated India’s nuclear weapons capability, weathered the storm of sanctions the world had unleashed upon it, forced the US into its first serious dialogue with India, and made it rethink its policies towards Pakistan and Kashmir.

It had pushed through Kashmir’s first truly free and fair election in 2003, in the teeth of universal scepticism, a Hurriyat boycott, and determined opposition by the National Conference, and shown Kashmiris that they could make Indian democracy work for them. It had decisively won the Kargil war and, two years later forced Pakistan to reconsider and all-but-abandon its proxy war, using ‘non-state actors’, against India. It had then held out a hand of friendship to Pakistan in 2003, symbolically from Srinagar.

It had signed the Islamabad agreement with President Musharraf in January 2004, brought lasting peace on the LOC in Kashmir and begun the detente that led to the almost consummated Manmohan-Musharraf Delhi Agreement on Kashmir in 2005.

In the realm of economic policy it passed the Fiscal Responsibility and Budgetary Management Act and reduced the Centre’s fiscal deficit to 2.5 percent of the GDP before handing over to the UPA. It halved interest rates between 2000 and 2003 and set off the boom in the stock market that continued, almost without interruption, till January 2008.

All that the UPA had to do, when it came to power was build upon the foundation that Vajpayee and the NDA had built. It began well, but then gradually allowed everything to fall to pieces. In its relations with Pakistan, it dragged its heels over negotiating the details of the four point plan for settling the Kashmir dispute, ignoring warnings that Musharraf was losing power within his own country, till the Judges crisis took power out of his hands altogether. It also came close to settling decades long disputes with Bangladesh over the Ganges basin waters and the demarcation of the border, but then failed to live up to key commitments, leaving Sheikh Hasina’s Awami League government vulnerable to attacks from the BNP and the Jamaat-i-Islami. It persuaded the Maoists in Nepal to rejoin the mainstream of democratic politics but inexplicably withdrew its support from them just when their moderate, pro-India, leader Prachanda needed it most.

In 2013, when Prime Minister Manmohan Singh pulled out of the Commonwealth Heads of Government meeting in Colombo, he humiliated the Sri Lankan President Rajapakse and severely damaged a relationship with Sri Lanka that had taken more than a decade to rebuild after the IPKF debacle. In order to appease Tamil nationalist sentiment in Tamil Nadu, he threw away the considerable capacity India had built for influencing Colombo’s policy towards its Tamil minority.

India’s two year tenure of a non-permanent seat in the UN Security Council was perhaps the most undistinguished of any in the post cold war period. Its hallmark was an unending search for ways to avoid taking a stand on key international issues that would offend the US, Europe, and the Islamist sheikhdoms of the Arab world. At a time when these countries were launching unprovoked wars upon sovereign members of the United Nations and thereby destroying every pillar of the UN charter upon which a multi-polar world order could be built, India never once voted against them. Instead it abstained in the Security Council as they planned their assaults upon Libya and Syria, and voted with them on non-binding general assembly resolutions to show that they did not need to take its abstentions in the Security Council seriously. It justified this to itself by claiming that it was taking a ‘balanced’ position when balance was the last thing that a world headed for chaos needed from a large, rapidly growing and uncommitted middle power.

Within the country it came within a hairsbreadth of ending the deep alienation in Kashmir, but then took a series of decisions, starting with the crackdown upon Kashmir in August 2008 and ending with the surreptitious hanging of Afzal Guru, that made it infinitely deeper. As if that was not enough, after having made a catastrophic mistake in promising separate statehood to Telengana, it did not have the courage to admit it, and rammed the division of Andhra through the Lok Sabha after throwing its opponents out of the house in the last days of its last session when it had already become a lame duck government.

But none of these failures has come close to matching its ruin of the economy. In 2004, the Congress inherited a nation was growing at more than 8 percent. Today that growth rate has slipped well below 5 percent. Industrial output grew by 8.4 percent in 2004-5 and rose to 13 percent in 2006-7. In April to December 2013 it contracted by 0.1 percent. Non–agricultural employment has been the main casualty. According to the 66th round of the National Sample Survey, this grew by more than 37 million between 2004 and 2009. A partially overlapping set of data collected by the ministry of Industry shows that between April 2008 and March 2013 it rose by only 2.3 million. This suggests that more than 30 million job-seekers failed to find jobs. Another, more recent, survey by the NSO has shown that rural womens’ employment has also fallen by 9.1 million.

Indian industry has taken a terrible beating. Relentlessly high interest rates have ensured that there has not been one IPO ( Initial Public Offer) of shares in the last four years. Instead large industrial houses have been moving their investment in what a Singapore based industrial consultant described as ‘a Lemming –like rush’ to Indonesia, Thailand, Kazakhstan, Uzbekistan and elsewhere.

India’s road, rail and power infrastructure remains as starved of investment as it was a decade ago. Today not only are its bottlenecks even more forbidding to foreign investors than they were in the 1990s, but these have become the biggest hurdle to the diversification of agriculture out of cereals into high value fruit and vegetable crops. A simultaneous liberalisation of exports of the latter, under the mistaken impression that the free market cures all evils, has fed food price inflation and kept the cost of living index rising by more than ten percent a year for the past four years. This combination of joblessness and a relentless, supply side, inflation has created the mounting sense of insecurity that has proved the Congress’ undoing.

All this has happened not because the government was corrupt, or short-sighted, or sold out to the industrialists, but because of weakness and ineptitude. Nowhere has this been more apparent than in its attempt to achieve ‘inclusive development’. In the last decade it has quadrupled the annual expenditure on rural development and social welfare. There are now more than 80 schemes under which the rural poor have a right to the largesse of the State. But India has slipped down three places in the UN’s Human Development index.
Within the nation the balance of power between centre and states has tilted so far towards the latter that India is beginning to look dangerously like it did under the later Mughals. The UPA has enacted statutes on tribal welfare and land acquisition that predators in the state governments have contemptuously ignored or circumvented. It has enacted Rights to Food, Education and Employment that have built a permanent deficit into the central budget and will bankrupt the treasury.

It has set the dangerous precedent of allowing Mamta Bannerjee, a state chief minister, not only to sack a central minister but also choose his successor. As if that were not enough it has allowed her to veto an international agreement with Bangladesh over the sharing of the waters of the Teesta river. Today, as the Coalgate scam showed, there is hardly a central subject left on which the centre feels it can act without first securing the assent of the states.

The Congress is not solely responsible for this all-round deterioration. In India’s relations with its Pakistan, for instance, the weakness of governments in Islamabad is at least as much to blame. In an era of coalition governments it is also a moot point how far any central government could have kept the states in check. But there is one common thread that runs through all the changes described above for which the Congress party is solely to blame. This is a lack of statesmanship, and of decisive leadership, at the epicentre of government. This has given India a dysfunctional government.

In the last two years it has become fashionable to say that UPA-1 ruled well and to heap all the blame for its ineptitude after 2009 upon the prime minister, but the real damage was done when Mrs Sonia Gandhi led the Congress to victory in 2004, but then created a dyarchy by refusing to become the prime minister and appointing Dr Manmohan Singh in her place. Although she did this with the best of intentions the confusion it created in decision-making sowed the seeds of the ineptitude that has virtually paralysed the government in recent years.
This has made the last decade one of good intentions betrayed by sloppy implementation and oversight; of promising starts seldom carried to fruition, of opportunities missed and challenges ignored. In 2008 the Congress party almost buckled under the pressure of its ally, the Left Front, and decided to let go of the Indo-US nuclear deal rather than risk its withdrawal of support. Only late in the year, when President George W Bush’s tenure was about to end, did it muster up the courage to call the Left Front’s bluff. By then it was almost too late to get the 44-nation Nuclear Suppliers’ Group to accept the deal. It was only Bush’s tireless calling in of favours that made the NSG lift its embargo on the supply of dual use technology to India.

At the BRICS’ Delhi meeting in 2012 India joined Russia and China in strongly criticising NATO’s intervention in Libya and Syria, but failed to vote with them in the Security council. In the same year Delhi could not prevent Dinesh Trivedi from resigning as railways minister when Mamta ordered him to do so, but it could have made it clear to her that it would cost the Trinamool Congress a seat in the cabinet.

In September 2012, when RBI governor Subba Rao refused to heed finance minister P Chidambaram’s agonised pleas to lower interest rates after he had effected cuts in subsidies that would reduce the central and state deficits by around Rs 100,000 crores in a full year, the prime minister should have sided with his finance minister and forced the RBI to fulfil its tacit promise of July. Instead he did nothing and succeeded only in deepening the recession in industry.

In the end the decision-making vacuum at the Centre has consumed the Congress itself. Six years of relentless belt tightening, with only a small break at the onset of global recession, has given the poor neither growth nor price stability. It is their rage at being cheated of a future that the Congress has begun to feel today.

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