Manmohan’s tragic dilemma

August 28, 2005 on 4:15 pm | In Newspapers, Times of India | No Comments

I wouldn’t want to be in Manmohan Singh’s shoes these days. His heart says, ‘yes’; his head says, ‘no’. His political boss has pushed through parliament a national employment guarantee act, which feels good to his heart–after all, what could be nicer than to know that all Indians are employed! But his conscience tells him that this will be the biggest ‘loot for work’ program in India’s history.   Thus, he is in a tragic dilemma, a dharma sankat. More...

 

A Chinese expert on India who lives in Beijing sent me an email saying that the Chinese would never contemplate such a job-creating scheme. ‘It would bankrupt us’, he said. ‘We create jobs by building roads, for example. A road creates opportunities for productive, permanent jobs as villagers begin to move between villages and towns. We have learned that job-creating schemes don’t create roads even when they are supposed to. This is because they are not accountable for road quality but only for creating jobs–the road is washed away in the next rain.’

 

Manmohan Singh knows that the Chinese expert is right–the only way to prosperity is not by giving a man a fish but by teaching him to fish. Only by giving people skills, creating infrastructure, and encouraging private investment are productive jobs born. Manmohan is a fine economist and knows that another one percent of GDP borrowed from the banks to finance this program will crowd out private investment, push up interest rates, lower the economy’s growth rate–and saddest of all, will actually reduce jobs! It troubles him that this act will pay Rs 60 a day when economists have demonstrated that paying the minimum wage diverts people from productive to unproductive jobs. The answer to more jobs is to reform our labour laws so that employers are not scared to hire workers.  

 

The entire political class, meanwhile, smells the opportunity for a big corruption feast. This is why no one spoke out in the Lok Sabha, but only proposed amendments that would make corruption easier. Even if Rajiv Gandhi was wrong in thinking that only 15 percent of the funds reach beneficiaries, studies over 25 years in the EPW show that the poor never received more than 30 percent. Jean Dreze, author of this bill and someone I deeply admire, confesses that muster rolls were either absent or fudged in five out of six states studied under the current food-for-work program. ‘Loot for work’ are his words! Ask Manisha Varma, Solapur’s collector, how it’s done–she has just uncovered a Rs 9.1 crore EGS fraud in her district. All this puts a man of conscience like Manmohan in a dilemma–how to support a bill when you know that perhaps Rs 28,000 out of Rs 40,000 of the hard earned savings of the Indian people will be stolen. The states know it too and are thus unwilling to contribute even 10 percent of its cost.  

 

One day I fear I shall meet Manmohan Singh weeping in a corner of India’s history–a knowing accomplice in the worst robbery in free India since the Fifth Pay Commission Award. He’ll be thinking how did this statist virus affect us just when things were going so well for India? I shall sympathize with him and hope that one day we too will become a middle class nation, and then the politics of India will also change. We will elect different sort of leaders, who will encourage us to depend on ourselves, and who will invest in infrastructure and in better schools rather than in populist giveaways.

Letter from A Friend

August 25, 2005 on 10:12 pm | In Newspapers, Times of India | No Comments

It is early to say if 2002 will go down as the year that the rains failed, but the misery in many parts is unquestionably extreme and profound. Every inhabitant of this sub-continent, I think, has secretly wished that we could be freed from this primeval bondage. The grand dream was always to connect the waters of the Ganges to the Kaveri, and one English engineer even forced a debate in the British parliament in the mid-19th century, where he argued that instead of building railways in India, Britain ought to develop inland waterways by connecting its rivers and join up the country through a network of canals. In this way one would create not only a transport network, but irrigate the country, bring abundance and prosperity, and even create a richer market for British goods. The railway lobby was, however, too strong for this sensible idea to take root. Continue reading…

Unsentimental choices

August 14, 2005 on 4:17 pm | In Newspapers, Times of India | No Comments

 

History has its winners and its losers, and in the 20th century there was no bigger loser than the Soviet Union. Born in 1917, it died in 1991. India, its ally in the Cold War, also ended on the losing side. I am not sure if it could have been otherwise, but let us not pretend that our diplomacy achieved anything but defeat. True, we led the non-aligned movement, but what is the point of being the leader of a failed movement? Call me naïve, but I think unworthy Pakistan did better. Not only did it end up on the winning side of the Cold War, but it also got the world to equate itself with India. More...  

 

Those strident voices, particularly on the Left but also in the BJP, who have been critical of recent breakthroughs in our relationship with the United States, ought to ponder this before giving any further lessons in patriotism to Manmohan Singh. They have accused him variously of ‘selling-off India’, ’tilting to America’, and ‘making us America’s junior partner’. The Left is of course immune to knowledge. It still sees the world through antique anti-imperial, anti-colonial lenses. But others should know better. They should be asking instead how do we avoid repeating our earlier mistakes and end up on history’s winning side the next time.

 

Seeing India emerge as the globe’s potential back office and a rising economic power, the world has now started to equate us with China rather than Pakistan. Thus, we are feeling better and more self-assured. But we shouldn’t allow this to go to our heads. The fact is we cannot go it alone in the world, and the smug, new autarchic rhetoric in parliament should be nipped.   Everyone needs friends and allies. The world distrusts a nation that is everyone’s friend.   Such a friend is unreliable.

 

I owe this lesson to Henry Kissinger, who taught the introductory course in international politics when I was an undergraduate at Harvard. This was during the spring of 1962, before he became famous. He taught the basic lesson of the Arthashastra, which is that there are no good or bad nations; there are only powerful and powerless ones. The leader’s duty is to relentlessly pursue his nation’s self interest. His own hero was Metternich, who sketched the map of 19th Europe at the Congress of Vienna and brought a “century of peace” to Europe. He said that when nations pursued their self-interest, it led to a balance of power, predictability and peace.

 

Because I couldn’t follow Kissinger’s heavy German accent, I used to sit in the front row of his class. To my dismay, he would look at me and hold up Nehru as an example of how not to conduct foreign policy. This distressed me for I passionately shared Nehru’s idealism. Kissinger felt it was dangerous to have dreamers in power, because they injected morality into foreign relations. Because of his own likes and dislikes, he thought Nehru might have compromised India’s national interest with regard to China. Although I dislike Kissinger, I think he may have been right.

 

To avoid repeating our failures of history we need to make choices. And we need an unsentimental awareness of our national self-interest in the 21st century. This is a talent scarce among argumentative and sentimental Indians. When the chips are down and there is a war, we may do worse than have America as an ally. If that is true, then we should not allow our personal dislike of Bush’s Iraq policy to compromise India’s growing friendship with the United States.

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