The Prime Minister has got it right this time!
August 17, 2007
I have never been much of a fan of Dr.Manmohan Singh. I have always believed that a Prime Minister without a national political constituency can get very out of touch with reality and unable to respond to public aspirations and manage long cherished beliefs. His prime ministership should never have been for this long, for at best he could have been another Moin Qureshi, the former IMF and World Bank official, who led Pakistan for a brief period (July 18-October 19, 1993) to conduct fair and early elections after all avenues to resolve a not infrequent political impasse in that country failed. Like Manmohan Singh, Qureshi too has a PhD in Economics, but I suspect a slightly better one in quality even if is from a middling US university. But before he faded into relative obscurity, Qureshi managed to put into place some long overdue reforms, the economic benefits of which Pakistan is still reaping. We all know how Manmohan Singh became our Prime Minister? Sonia Gandhi did not want that job and was not willing to trust a politician from her party with that job either. So we got our own former IMF and World Bank official.
Like Moin Qureshi, Manmohan Singh too is motivated to do what he thinks is right for the country. And like Moin Qureshi, Manmohan Singh also wears blinkers forged by the dubious consensus that prevails in the rarefied heights of the international monetary system. Like Qureshi, Manmohan Singh is also a decent, honest and well meaning man wanting to do the right thing for the country. Unfortunately for him, a democracy is a system of government by elected politicians and not by nominated bureaucrats. If you look at the construct of the PMO and the small circle of advisors the Prime Minister has around him, not one has, let alone been an elected politician, even served in a party organization.
Politics is the art of the possible, but to a bureaucrat everything is possible. This is why the PMO is seen to be initiating and attempting to ram home policies without building a political consensus. Besides I don't see any qualities and experience in the Prime Minister that gives him that consensus building ability, which is the single most essential quality of leadership. Jawaharlal Nehru had that in abundance. Even Indira Gandhi, for all her imperiousness, never went ahead without building a broad consensus. Every other Prime Minister we had seldom went forward without seeking general approval first. Even Rajiv Gandhi with his massive majority was never oblivious of political opinion around him. And here we have a Prime Minster wanting to do things, no doubt by his lights the right things, despite not having the right numbers behind to do it.
The Manmohan Singh track record in the recent months has been truly deplorable. Look at the manner in which the SEZ issue was handled. Even a Cambridge educated economist should be able to convince the nation that a Services dominated economy is not what the doctor should prescribe for India. It seems that we have become a post-industrial economy without ever having industrialized! This is a truly absurd situation. Only industrialization can create the jobs required to absorb the millions coming into the job market each year. But over the years we have created an atmosphere inimical to industrialization. Like China did during the Mao era. This is a major reason why we need SEZ's now.
Now our politicians are not among our better informed persons. To compound matters, our civil society, which is where ignorant politicians get conditioned to imperative policy options, can often be just as ignorant. Our problem is that we see facility in English as a mark of education and civil society is full of self-educated and versatile English speaking people. Instead of seeking to condition political opinion on SEZ's, the government just announced a policy and left the selling to be done by interested parties like the CII and others. It should be obvious to even one most ignorant about politics that this is like showing red to the bull.
Take the case of the policy allowing FDI in retail. Heavens would not have fallen if the Prime Minister of India did not make the time for Joe Menzer, who is not even the CEO of Wal-Mart. Wal-Mart has a particularly odious reputation all over the world, and particularly in the USA, for its ruthless exploitation of unskilled workers, women, minorities and vendors. Hating Wal-Mart is a major and to many a fulltime vocation in the USA where dozens of websites proliferate on the inequities heaped by Wal-Mart on the helpless and hapless. India's retail business is its largest employer after agriculture and it is so because small retail is often the only recourse of the unemployed or uneducated. Our failings in creating jobs and not educating our people are well known. On the other hand mass format retailing brings with it certain efficiencies of scale and consumer benefits. It is also inevitable. Not market democracy can deny it an existence. But the entry of the big rapacious ones like Wal-Mart could have been delayed as foreign investments are governed by a different administrative regime. But the Prime Minister and his top advisors made it the leitmotif of liberalization.
Once again in the recent months we have had a flurry of Indo-American military exercises. It seems that one is on every other month, giving the impression of a far deeper and greater military understanding between the two countries. Now let me backtrack a bit. No nation can have a military understanding with the US as an equal or partner. The American mindset disallows this. The US does not participate in any international peace-keeping operation unless it is under American command. Therefore real military co-operation with the US, now or in the future, is only for NATO countries or formal allies of the US. We are told that the naval exercises are meant to get us prepared for joint patrolling of the Indian Ocean and of choke points like the Straits of Hormuz and Malacca. But under whose command will this happen?
The US has a penchant for acting without UN sanction. It will not allow reform of the UN so that majority opinion can prevail. The irony of this is that if this was so the US would have got majority support in the Security Council over Iraq. But typically the US wants to keep the cake and eat it too. That is why there was so much popular anger over the visit of the USS Nimitz and the ongoing naval exercises. Now one can understand all these exercises and joint planning taking place, if we got a good deal from the US in terms of grants and assistance for weapons procurement. Israel, Egypt and many others benefit from US largesse for their co-operation. But does India get any deal from the US which makes this co-operation worthwhile? Even to buy obsolete military hardware from the US like F-18 fighters we are obliged to pay the highest prices. So the question is why this touching faith for all things emanating from Washington DC?
Now it seems the birds are coming home to roost over the nuclear deal with the USA. It's another matter that the BJP was discussing just this deal with the US before it was ingloriously turned out of office. Mind you the BJP led NDA government was even willing to send troops to Iraq in return for little more than just a pat on its head. This is the party that recognized China's occupation of Tibet for as little as a semi-official website acknowledging Sikkim's integration into India as a done deed, after having taunted Jawaharlal Nehru for years for having forsaken the Tibetans. Then for a while it had a different view of Jinnah's place in history. But now the BJP has once again discovered nationalism and so it goes hammer and tongs at the nuclear deal with America. On the other hand the communists have stayed true to form. In their book anything anti-American is kosher. Just anything anti-Congress is kosher for the BJP. Both parties are driven by their antipathies even if it means throwing out the baby with the bathwater.
Which is what is they are doing when they reject the Indo-US nuclear deal. Three concerns seem to predominate. The first is that it would undermine the indigenous nuclear program. The second is that it would impair the weaponization program. And the third is that it would compromise our independent foreign policy. None of these fears are well founded. It seems just politics as usual.
If the indigenous program was any way on track or near it, we would not have needed the deal with the US as badly as we do it now. The simple truth is that the AEC, much like the DRDO has hidden behind layers of secrecy to cover up its non-performance. We have less than 4000MW of nuclear power generation capacity and our nuclear power plants are functioning at about half that capacity due to serious technical and unresolved safety issues. A white paper would be order. And this is not the time or place to delve deeper into this.
As far as the weaponization program is concerned, the communists have all along decried it. Even the BJP did not have more than a cock-a-snook round of tests. Remember it wanted the tests for little more than political reasons. Vajpayee has often been on record as wanting to test even in his first thirteen-day interregnum as Prime Minister. I can understand if he has forgotten about it, but surely his colleagues can still recollect it? Further the BJP voluntarily eschewed all further testing. So what is this fuss about testing all about? The day India thinks it needs to test; it can abrogate the treaty with the US and get on with it. A treaty is not for life. It is only for as long as it suits both parties.
And was far as compromising our independent foreign policy, after committing troops to Iraq has the BJP any moral right to speak about? Now let's examine this charge even further. Does signing the deal imply that we have to see eye to eye with the US on all issues? Even its NATO allies don't do that and there is no reason why we should?
On the Indo-US nuclear deal, the government has done well and done the right thing. The Prime Minister and his negotiating team must be congratulated for securing the best bargain under the circumstances. As India embarks on a period of high economic growth, and we have a window of just a few decades in which we make our transition from a low- income country to atleast a middle-income country, our requirement of energy to power that growth will grow exponentially. International hydrocarbon resources are finite just as national hydro-electric potential is. Coal based thermal plants too are a limited option given the attendant problems due to atmospheric pollution. Nuclear power, under the circumstances, is our best and possibly only option. We need atleast 45-50000 MW's of nuclear power capacity if we are to get on to a growth trajectory that is annually 2% more than what we are expected to achieve. Assuming we grow at 10% after 2020 instead of 8%, the cumulative difference in GNP created till 2050 would be in the order of over $100-120 trillion. That is not small change. Remember India's population will stop growing around then and it will start aging. This means the dependency ratios will become increasingly burdensome, precluding rapid economic growth. Therefore this one time I am with Manmohan Singh. The numbers are with him!