Friday, December 10, 2010

Prospect of liberal politics in India today - Part 2


The verdict, in the recent assembly election in the state of Bihar, has attracted a lot of interest across India. The ruling coalition of Janata Dal (United) (JD(U)), and Bharatiya Janata Party (BJP), won a record 85% of the seats, 206 seats in a house of 243. Did this huge margin of victory, signify a major shift in Indian politics? Is the political agenda in India being reshaped? What does this election really tell us about the future political direction in India? 

In Part 1, I look at the implication and impact of the Bihar assembly election, here.

In this the second part of the two part article, I try to look back at Indian politics,  attempt to identify the various strands that dominated politics at one point in time or another - language, region, religion, caste, and find that there is a diminishing political return from various shades of identity politics that has set in. With identity politics in decline, could political ideology find a legitimate space in India?

Part 2: Evolution of Politics in India 

In the first 15 years after Independence, politics was dominated by the identity of languages, and the states were reorganized along broadly linguistic lines.

In the next 15 years, poverty became the dominant element of political discourse, cutting across various social fracture lines, and encompassing different identities. During this phase, with nationalization of major industries such as banks, energy and oil, textile, etc, India entered a decidedly socialist era. But increased economic control, along with the first oil price shock, led inevitably to political discontent.

Consequently, in the historic election in the aftermath of the ‘Emergency’, in 1977, the INC lost power at the national level for the first time. As the world watched, India became the first major democracy in a developing country to undergo constitutional transfer of power from one party to another. This was an event of enormous political significance, empowering people, and entrenching democracy.

But the parties that formed the new government, pursued the socialistic economic vision with even greater rigour, and with the second oil price shock of 1979, inflation touched 20% per annum, and the fate of the first non-Congress government in Delhi was sealed.

In the 1980s, while the INC regained power, and took some tentative steps to reform the economy, the country was almost torn apart by various sectarian movements. Bolstered by socialistic attempt to re-distribute wealth, various political parties experimented with identity politics of caste, religion, and region, in the hope of capturing the organs of the state. The separatist movements in Punjab and Assam gathered steam. A lot of blood was spilled throughout the 1980s, including the assassination of then Prime Minister Indira Gandhi by her Sikh bodyguards.

At the same time, various caste groups attempted to organize and mobilize politically, particularly in north India. In an attempt to politically consolidate some of the backward castes, a sweeping policy of reservation or affirmative action was proposed.

On the other hand, another kind of identity politics raised its head. Hindu fundamentalists were already apprehensive of appeasement of religious minorities such as Muslims, for electoral gain by the INC. Now the same forces became concerned about social fragmentation on caste lines, and sought to unite the Hindu majority of India in to a cogent political force.

By the 1990s, while the separatists and secessionist movements had by and large been controlled, the caste and religious polarization completely fragmented Indian polity. This necessarily ushered in a new era of coalition politics, and for the first time, Indian politics became really competitive, for the first time. With people experiencing diverse political options, routinely threw out the ruling side. This has been described as the anti-incumbency syndrome. A point came, when a sitting legislator had barely 30% chance of getting re-elected.

Indian politics was again transformed. For the first time political parties sensed an opportunity to gain power by winning election, and by the same token feared the very real danger of losing power as well.

It is in this tumultuous political environment of the 1990s, when political uncertainty prevailed, that India began to reform her economy in a big way. This defied conventional wisdom that political uncertainty will lead to an uncertain economic outlook.

It is precisely this political uncertainty which made the political leaders and parties look for policies to improve governance and the economic performance, in the hope of winning the favour of the voters.

Policies became a subject of discourse out of sheer political necessity in an extremely competitive political environment. Just as competition improves the economic efficiency, political competition sustained the search for policies that might improve the prospect of getting re-elected.

As India’s economic growth increased gradually from 6% in the 1990s, to 8% and then 9% in the mid-2000s, politics of performance became a significant factor in elections.

The second significant consequence of increased political competition was the diminishing returns of earlier identity politics. While politicians tasted power riding their favourite identity, be it caste or religion, the voters began to relish the prospect of political competition, and explore ways to force the political parties to perform.

The BSP, the party of the most oppressed castes, had made its mark on Indian politics by rabidly polarizing caste opinon, and mobilizing and consolidating its targeted caste groups. It came close to political power in UP, propelled by narrow identity of its caste base. Yet, it had to rely on the support of other parties representing other caste groups, in order to cobble up the coalition with necessary numbers in the legislature. These experiments continued throughout the late 1990s and early 2000s, and each time such coalition of expediency was quite short lived.

It is then, that the BSP, the party of extremely narrowly defined caste groups, realized the need to broad base its political appeal if it had to have any realistic chance of securing political power in UP. With no caste group enjoying more than 20% share of the population, there was little possibility of any party being able to secure political power on its own. For over two years, BSP went about transforming itself from the party of the Dalits, to the party of all, particularly the poor, appealing to virtually every section of Indian society, caste and religions. While the other major parties in UP sought to consolidate their voter base, BSP was the only one that attempted to expand its base to other groups.

In the UP assembly election of 2007, BSP reaped the benefit broad basing its appeal. Defying all predictions, it won the assembly election on its own, and gained political power in India’s largest state.

After 1977, when INC lost the national election for the first time, and the1990s, when Indian politics became truly competitive, the UP assembly election, of 2007, is perhaps the most politically significant event in India. For it showed the limits of identity politics, and established the political reason for broad basing politics.

Real significance of Bihar election of 2010

The assembly election in Bihar, in 2005, also exposed the limits of identity politics. For 15 years, RJD leader Lalu Prasad enjoyed unquestioned political authority in the state. Yet, he failed to grasp the political reality. While he tried to consolidate his traditional support base, but his almost complete failure to maintain basic law and order, and governance, meant that his voters were growing increasingly dissatisfied.

One of the biggest advantage of the first past the post election system is that even a small shift in support base can bring in big electoral dividend in terms of seats. This greatly increases the prospect of new political entrants to make their mark.

In 2005, in Bihar, as RJD’s political fortune was fraying, its main coalition partners, the INC, and another local party, Lok Janshakti Party (LJP), moved away. As his vote base got divided, the coalition of JD(U) and BJP gained the upper hand, and captured political power.

The election in Bihar, in 2010, only reconfirms the basic thrust of this analysis. Increased political competition, inevitably diminishes the political returns of identity politics as voters begin to relish the greater range of political choices. Consequently, parties are forced to look at ways of improving their performance in governance.

Indians typically have multiple identities in terms of caste, language, religion and region, and the voters are increasingly aware of the advantage of switching their identity to take political advantage of the situation.

This is a fundamental lesson which Mr Kumar, the leader of JD(U) and BJP coalition in Bihar took to heart. Realising the fickleness of identity politics, he opted to improve governance as a way to appeal to broad section of voters beyond any particular identity. He moderated the caste based appeal of many in his own party, and convinced his coalition partner, the BJP, to moderate their Hindu religious agenda.

At the same time, since identity loyalties are not permanent, as his predecessor from RJD had learned at a high political cost, Mr Kumar embarked on basic governance issues. This allowed his coalition to increase their vote share by only 5%, getting about 39% of the vote in 2010 election, but ending up winning 85% of the seats. The major opposition combine of RJD and LJP, secured 25% of the votes, but only 10% of the seats. The INC, which increased its votes by 2% to 8%, won just 4 seats in 2010, compared to 9 seats in 2009.

Prospect for Liberal Politics in India

With identity politics running out of steam, and distributive politics failing to keep up with the rapidly rising aspiration of Indians today, the need for governance and development have clearly emerged on the political agenda.

This is the first time in the 60 years of Indian democracy, that the prospect of policies that boost performance of government and the economic sectors are likely to get prime attention, out of sheer necessity of political survival in the extremely competitive world of Indian politics. This implies that policies would have to be formulated with much greater care, and these would have to be politically viable. And since the ordinary voter is not a policy expert, the only way to get the message out to the voter is by narrating the policy proposals to the public through the filter of political ideologies.

Again, for the first time in the history of democratic India, political parties have the need to adopt a coherent ideology in order to explain the intricacies of policies to its voters. So far, Indian politics have been largely devoid of ideology. All parties tended to adopt the dominant ideology of the day, since their distinctive feature was identity. Ideology was only seen as a providing a veneer to mask the base identities to which the political parties traditionally appealed to.

But with increasing significance of political performance for survival of political parties, policies are coming to the centre stage. To make policies politically accessible to mass audiences, political ideology will necessarily have to be developed. With diminishing returns from identity politics, political ideology will emerge from the shadows to the forefront.

For liberals in India, this is a once in a life time opportunity. For all these years, liberals were devoted to their political ideals, but found very few takers. The liberals were either swepat away by identity politics of one kind or the other, or their ideological roots were seen as politically irrelevant, in an environment where ideologies were not needed to differentiate different political parties.

Today, with the demise of identity politics, and rise of the need for political ideology to distinguish themselves from one another, the political environment seems opportune for a liberal renaissance in India. Are the Indian liberals ready to seize their moment under the Indian sky!

This is the real significance of the Bihar assembly election. It has reconfirmed the focus on governance that had emerged over the past decade, while also confirming the limits of identity politics.

Indian democracy has always been very vocal, voluble and full of colour. Yet, one of the most startling features of democracy in India has been the near complete consensus on the core political beliefs of the day, among most of the political parties.

Over the past century, as political freedom expanded around the world, so too did economic freedom. Almost all the rich countries of today are democracies. While the poor and developing countries are not typically characterized by their weak democratic political institutions. India has been a proud exception to that narrative.

India retained her constitutional democratic republican character right through the past six decades. But for the first time, with political competition facilitating an environment for economic growth and improved governance, out of sheer political necessity, the prospect of India actually joining the ranks of those countries that are economically free, politically democratic, and enjoying the highest standards of life seem to be a distinct possibility.

Indian liberals have their ideology, can they rise to shape the political destiny of India in the coming decades? The liberals have their task clear cut, history is confirming their path, future is beckoning them, but they need to be able to rise to the occasion.

Tuesday, December 7, 2010

Prospect of liberal politics in India today - Part 1

The verdict, in the Bihar state assembly election held in November 2010, has attracted a lot of interest across India. The ruling coalition of Janata Dal (United) (JD(U)), and Bharatiya Janata Party (BJP), won a record 85% of the seats, 206 seats in a house of 243. Did this huge margin of victory, signify a major shift in Indian politics? Is the political agenda in India being reshaped? What does this election really tell us about the future political direction in India? I attempt to answer some of these questions in this two-part article. 

In this the first part, I analyse at the political scene in Bihar. And in the second part, I try to assess the direction Indian politics may take in the coming years, here.

Part 1: Lessons from the Bihar assembly election of 2010


Political configuration in Bihar 2010

This was the first major state to hold an election, since the general election to the national parliament (Lok Sabha) held in the summer of 2009. Naturally, there was a lot of interest to understand whether the verdict will be relevant only locally, or would it have national significance. Next year, 2011, as many as 5 or 6 states are expected to go to the polls to elect their legislators. So there was a high level of interest in the Bihar election, and speculation on the possible political fall out in the coming round of elections, and also on the probable impact on the political dynamics at the national level.

Secondly, the general expectation, and the opinion polls, had all indicated that the ruling coalition of JD(U), and BJP, will be re-elected. What was uncertain was the margin of victory.

Thirdly, Bihar is a state where caste based identity politics had struck deep roots. Almost all the major political parties in the state have come to rely upon the core caste based support it has. But in this election, there was a general consensus that issues of development - law and order, roads, electricity, employment, - were at the forefront during the campaign. So, there was a great deal of interest to see if the election really tilted the balance in favour of the development agenda.

Then there were other lesser themes running through this two month long election schedule. Given that most people expected the ruling coalition to win, there was an interest to see which of the two parties in the coalition would fare better. To keep the coalition together, BJP had to soft pedal its Hindu religious agenda.

There was also an interest to know how the Rashtriya Janata Dal (RJD), the party led by Lalu Prasad Yadav, who along with his wife, had ruled Bihar continuously between 1990 and 2005, through three legislative terms. The question was would the social coalition of Dalits (among the most oppressed castes), the Yadavs (among the backward castes) and the Muslims, that had seen the RJD through for 15 years, will continue to hold or dissipate.

The Indian National Congress (INC), the principal party in the national coalition government in Delhi, was seeking to make a comeback in the two major Hindi speaking states of the north – Bihar and Uttar Pradesh. Over the past 30 years, INC had slowly but steadily lost its support base in these two major states. But INC had done surprisingly well in the UP in the 2009 general election to national Parliament, and so there was speculation that perhaps the party had turned a corner, and might improve its position in Bihar.

Finally, among the other major parties, there was the Bahujan Samaj Party (BSP), which has emerged at the national level over the past two decades. The BSP now rules the largest state in India, Uttar Pradesh, having won the election to the state assembly in 2007. The BSP primarily represented the Dalits, which constitute about 20% of India’s population. But it changed its political strategy in prior to 2007, to include the poor, the religious minorities, and the disadvantaged among different social segments, and had built an unique rainbow coalition, which had propelled it to power on its own, in UP. So there was an interest to see if the BSP with its recent successes will have any impact in Bihar.

The past and the present in Bihar

Bihar is a major state in India, lying on the gangetic plains. It is politically a very significant state too. Yet, economically and socially, Bihar ranks among the lowest in India, in per capita income, or life expectancy, infant mortality, literacy, and many other developmental indicators. Over the past twenty-five years, there was a general sense, that Bihar moves only in one direction, which is, downwards, falling further behind the rest of the country.

Bihar had produced many leaders of national prominence during the decades of India’s struggle for Independence. The first President of India, Dr Rajendra Prasad, hailed from Bihar. In the first three decades after Independence in 1947, Bihar had a major role in shaping the social and political agenda of the country. During 1975-77, Indian democracy was under a cloud under the ‘Emergency’ rule of Mrs Indira Gandhi, when many constitutional rights and freedoms were suspended, Bihar was at the forefront of the movement to restore democracy in the country. Many of the current generation of political leaders are a product of that national movement.

Yet, over the next three decades, Bihar had lost its political prominence. Bihar had become synonymous with the worst of India’s social and political life. Identity politics of caste and religion fragmented the social fabric. Corruption and crime sky rocketed. Some of the worst forms of caste oppression and violence were witnessed in Bihar. Parts of the state were under the grip of extreme left wing forces. In other parts, mafia dons ruled their own fiefdom with impunity. Economic development had come to halt. Kidnapping had emerged as the most lucrative business. People, rich and poor, migrated out of the state in search of employment and safety. People of Bihar seemed to have lost their self-confidence and their pride. That was 2005.

The fifteen year rule of the RJD led coalition, in Bihar came to an end in 2005. Mr Nitish Kumar of the JD(U), formed a coalition government with the BJP. The soft spoken Mr Kumar was a study in contrast to the flamboyant Mr Prasad. With this election victory, people of Bihar seems to have confirmed their faith in Mr Kumar and his coalition. In return, Mr Kumar seems to have helped people regain their pride to be a resident of Bihar. 

Socially and economically, Bihar still has a long way to go. But there are a few things that the ruling coalition seems to have done in the past few years that have clearly impressed the people.

The most visible change was in restoration of law and order. Kidnappings declined dramatically. For the first time in years, people felt a degree of security. Even many parts of Patna, the capital city on the Ganges, particularly the river front had been abandoned to the criminals and bootleggers. Today, families with children feel safe to spend their afternoon and evening on the banks.

Apparently, the government had clearly instructed the police not to be swayed by any extraneous influence, but enforce the law. It is believed that about 50,000 suspected criminals were locked up.

The Economist, the international weekly magazine, reported on the changes in Bihar. Where there were no roads, now there were pot holes, recognizing the major effort of the state government to rebuild the roads and bridges.

Another popular step seems to have been the effort to promote education among girls. Hundreds of thousands of bicycles were distributed among girls who continued their education to the high school level. This step alone was credited with reducing the drop out rate among girls by about 25%.

In an effort to promote greater political participation among women, the state government also reserved half the seats in village councils, the third tier of electoral democracy in India, to women.

And women did participate in a major way during the recent election. According to Election Commission of India, 10% more women voted than men, when the overall voter turn out is estimated at about 54%. The turn out was 6% more than the number of people who voted in 2009 during the Parliamentary election.

In general, economic growth rate in Bihar has been averaging over 10%, higher than the national rate, for the past few years. This has been primarily driven by government expenditure on infrastructure.

While there has been a visible change in the ground situation in Bihar, it would be incorrect to assume that the bold efforts of the ruling coalition to improve governance had been the only factor that is responsible for its electoral success in 2010.

Development was clearly on the political agenda in Bihar as never before. But Mr Kumar also had undertaken a new form of social engineering. He promoted special welfare measures for two segments of the caste cauldron, in an attempt to create new sense of identities. Traditionally, social welfare programmes for the oppressed and underprivileged castes were captured by the more advanced segments within these sections. So Mr Kumar initiated special welfare programmes for the most backward among the Dalits (the Maha Dalits). He did the same for the most backward of castes (MBC) from among the other backward castes (the OBC).

In addition, Mr Kumar ensured that his coalition partner, the BJP, did not pursue the hardline Hindu agenda that alienates other religious groups, particularly the Muslims. Some of the more strident Hindu voices of the BJP, including the Chief Minister of Gujart, Narendra Modi, were not invited to campaign for the party.

These factors helped the ruling coalition to not only to consolidate their traditional social base, but also move break the core support base of the opposition as well. It prevented polarization of opinion among religious ground. And it prevented the consolidation of traditional caste support base in favour of the opposition.

Does this mean that identity politics continues to have a place even while developmental issues are emerging on the political horizon? To understand this question, one has to look back at the evolution of the Indian political scene over the past 60 years.

Save the tiger from those who love it

The summit in St Petersburg focusing on the plight of the tiger was the first international summit of its kind, though similar in content to the new Global Tiger Initiative launched by the World Bank in 2010 itself. Few of the tigers who roamed in the wild in the past remain that way at present, and many of the rest are in captivity. The greatest threat is the loss of habitat and man animal conflict. The tiger is a much valuable animal for human beings for parts like bones and skin. Environmental activists are busy blaming human beings for the problems of conservation without proposing practical solutions. My article titled "Save the tiger from those who love it" was published in The Financial Express on 7th December 2010.


Russia recently hosted a summit in St Petersburg to focus attention on the plight of the tiger in the wild. This is the first international summit of this kind, where heads of states of Russia, China, Bangladesh and some of the other range countries gathered to discuss the fate of the tiger. The summit follows the new Global Tiger Initiative launched by the World Bank earlier in the year. The bottle was new, but the content was the same old stale stuff!

It is believed that around 1,00,000, tigers roamed in the wild across 25 countries at the turn of the 1900. Today, barely 3,000 of them are in the wild. Another 10-15,000 are in captivity. The wild tiger, facing the prospect of extinction for the past 40 years, has seen a barrage of activism and funding. The Project Tiger was launched in the 1970s, then the World Bank’s Global Environment Facility directed more funds towards forestry and conservation, since the early 1990s. Over the years, innumerable conferences have been held and cash promised but nothing has helped the tiger yet. The summiteers in St Petersburg kept with that tradition, promising $350 million over the next few years, though more staunch environmentalists complained that barely 10% of this money is really new.

The delegates once again promised to work together to improve law enforcement so that the most profitable aspect, the smuggling of tigers parts, can be eliminated. They reaffirmed the belief that poaching of tigers poses the single biggest threat to wild tiger population, largely from India, which has half the wild tigers of the world today, to China, which has almost none, but where there is a demand for tiger body parts.

The biggest threat to the tiger comes from loss of habitat and man-animal conflict. Each year, a couple of hundred people die from wildlife attacks, mostly tigers, leopards and elephants. This often leads to revenge killings. On the other hand, poaching is estimated to constitute just about 25% of the threat to the tiger.

The most practical solution to saving tigers is allowing human beings some sense of property over them. Almost every species that brings any economic benefit to humans is generally nurtured and preserved: the humble cow is not facing extinction, despite the massive economic exploitation.

The tiger can also be as valuable. In the wild, it can attract tourists, nature lovers and even hunters, and generate revenue that can compensate for its keep. But this will only happen if the people living in its vicinity have some form of property right and ownership over the animal and its habitat, and can legitimately claim a share of profits.

A dead tiger is equally valuable for its skins and bones. And since the tiger breeds easily, even in captivity, it could be possible to breed them to meet the demand, again generating economic benefits. Alligator farming generates $20 million annually in the American state of Louisiana alone.

Demand for tiger parts in China could provide a big economic advantage and secure the future of the tiger in the wild. India is currently allocating about $20,000 per tiger per year and the money is not helping the tiger. Instead, a tiger could potentially earn 4 to 5 times as much and save itself from extinction.

The farmed or ranched animals could take the pressure off their wild cousins. And the wild ones could then become valuable as well for tourists and environmentalists.

Activists, and their political allies, don’t pursue these solutions; they are more interested in blaming humans as the problem. So they recommend clearing humans from tiger habitat areas.

Focusing on the problem creates an illusion for green summiteers that they are seriously engaged. It’s this illusive perception that helps political leaders consolidate their power in the name of protecting tiger. After all, in contrast to an ever demanding populace in a democracy, tigers make no demands. A blank check, that is a dream of all political leaders. But times are changing. Even the poorest forest dwellers in India are becoming aware of their citizenship in a democracy. They are demanding a way out of grinding poverty. They are voting for their rights. They are many times more numerous than the tiger wallahs!

At St Petersburg, delegates recognised that 40 years of conservation efforts to protect the tiger have failed, yet went on to promise more of the same. Pitting people, who live in close proximity to wild animals, against the animals. In such a conflict, the animals stand not a chance. It is time to realise that forests and wildlife are renewable resources. If the people are able to profit from those resources, then they will go out of their way to nurture and grow those resources. It is time to harness the power of commerce for the cause of conservation of tigers and its habitat. There is no need to wait for the delegates in St Petersburg to show the way.

Just as the world economy is trying to claw its way out of trouble on the basis of growing demand in developing countries, so too the tiger in the wild could be saved precisely because there is a demand for it, both dead and alive. Let the tiger earn its stripes!

Thursday, December 2, 2010

Climate of Politics vs Economics of Development

In this article, I look at the political dimension of various environmental concerns. This is particularly relevant since the annual meeting of the United Nations Framework Convention on Climate Change (UNFCC), opened in Cancun, Mexico, this week. Last week, the first global summit on tiger conservation was held in St. Petersburg, Russia. What is common to such diverse environmental agendas is that they offer enormous opportunity to political leaders to escape accountability. After all, if one claims to speak on behalf of the tigers, the animals won't make any demand. Likewise, if one claims to speak of protecting the interest of future generations 50 or 100 years later, the leaders can be sure that the future generations will not be able to hold them politically accountable for any misdeed. Such agendas tend to be political blank cheques! Please read and comment.

Can the climate save the tiger!

This week, the annual summit organized under the auspices of the United Nations Framework Convention on Climate Change is taking place in Cancun, Mexico. But after the collapse of the talks in Copenhagen last December, and the continuing economic turmoil in many parts of the world, not many are expecting any radical outcome.

The summiteers in Cancun may want to follow another meeting that was held in St Petersburg, last week. Russia hosted a summit to focus attention on the plight of the tiger in the wild, mostly in Asia, and Siberia, called the International Tiger Conservation Forum, organised under the auspices of the Global Tiger Initiative of the World Bank.

Economics of Tiger

The wild tiger has been facing the prospect of extinction for the past 40 years. Various initiatives such as Project Tiger were launched in early 1970s. Trade in tiger parts has been banned since 1975, (for Siberian tiger in 1987). Nearly two decades ago, the World Bank had launched the Global Environment Facility, a fund which was to have been used, among others, to help develop sustainable ecology in villages and reduce the human pressure on the forest and wildlife. Today, in India, many of the village eco-development committees are either non-existent or defunct.

India, which is home to about half of world’s tiger population, ranging between 1200 to 1500, now has nearly 40 forests areas are declared as tiger reserves. Thousands of villages dot these so-called tiger havens, where neither the tiger nor the people feel safe. In any such conflict between man and animal, where human toll ranges in a few hundred each year, the animal will necessarily lose out.

While participants gathered in Russia, in Chandrapur village in the western Indian state of Maharashtra, a tiger was found dead, and officials tallied the number of people killed, presumably by tigers, in the district to 11 this year. A senior official in Madhya Pradesh estimated that there were over 700 villages in the different tiger reserves in the central Indian state, but about 100 villages are really critical, located in the heart of the tiger territories, and the people need to be moved and resettled elsewhere. For just this task, the bill could be around $600 million.

The summiteers in St Petersburg discussed the threat to tiger, promised $350 million over the next few years, and environmentalists complained that barely 10% of this is new money.

It is this kind of hopeless mismatch between the ground realities and global discourse, which has only perpetuated the crisis, whether it is the tiger or the climate. Ironically, most of the environmental activists look at people as the problem, and fail to think of people as the possible solution as well.

Almost every species that brings any economic benefit to the people are generally nurtured and preserved. The humble cow is not facing extinction, despite massive economic exploitation. Wilderness areas with tigers can attract tourists, nature lovers and hunters, and generate revenue. Particularly, if the people living in the vicinity have some form of property right and ownership in the animal, the habitat and can legitimately claim a share in the profits. It is estimated, that annually fishing and hunting generates economic activity in the range of $ 50 to 70 billion.

A dead tiger is equally valuable for its skins and bones, for fashion and Chinese traditional medicine, respectively. Since the tiger breeds easily, even in captivity, it could be possible to breed them to meet the demand, again generating economic benefits.

Alligator farming in just the state of Louisiana, in the US, generates $20 million annually. Rather than breeding tigers for commerce, the participants at St Petersburg promised stronger effort at enforcing prohibition, a policy that has not helped the cause.

In addition, if trade is liberalized, there could be significant demand for tigers in zoos, private collectors,circuses and among a section of exotic animal owners. There is no reason for such a magnificent and valuable species to face the prospect of extinction from the wild, if only one practiced what is generally preached at every environmental summit – think globally, but act locally. Particularly, allow the local people the freedom to act, since they know their immediate environment much better than anyone else.

But many environmental activists, and their political allies, are more interested in focusing on the problem, rather than practical solutions. Focusing on the problem creates an illusion for the various green summiteers that they are seriously engaged. And it’s this illusive perception that usually helps political leaders to consolidate their power. As for the solutions, if the problem were to be really solved, a whole range of activists and managers, who have thrived from the political patronage, will lose their bread and butter.

Claiming to represent the tiger is an attempt to secure a political blank cheque. After all, tigers make no demand to the political leaders, unlike the increasingly demanding human voters.

Politics of Climate 

The debate on climate change actually illustrates the same argument. A problem is proposed so far ahead in the future, typically 50 to 100 years, that political leadership across the world finds it very convenient to escape accountability, in the name of the future generations. After all, the future generations will never be able to hold the present leaders accountable.

But if people’s present priorities are not met, the prospect of that political power turning out to be a mirage is quite real. The collapse of so many totalitarian and authoritarian political regimes in the past two decades is an illustration of that reality too.

Like the tigers, the leaders face a practical problem today. Most people, particularly in poor countries, have many immediate problems to grapple with. For two billion people, daily survival is a top priority, and they cannot afford the luxury of considering future options, decades or generations down the road.

So political leaders gathering in Cancun will have to again consider the option of either dealing with a distant future, or confront the realities of today. Whether planet’s climate will change 100 years later, and wreck havoc on the people is uncertain. But what is not in doubt is that at least 2 billion people around the world do not have access to clean and safe energy. In India alone, particularly in the villages, indoor air pollution from inefficient cooking stoves poses daily health hazard to millions, with an estimated annual death toll of around 500,000.

Diseases may pose a problem in the future, but malaria poses a daily threat to hundreds of millions today. Tens of thousands of people die each year in rural areas of India and elsewhere, because the rural clinics do not have reliable electricity to run the refrigerators and preserve many medicines, vaccines and anti-venoms.

Two decades ago, ozone depletion was considered to be a top threat, increasing the risk of skin cancer to people with lighter complexion. Under the auspices of the UN, the governments agreed to replace the CFCs, used in air-conditioning, refrigeration and various aerosol sprays, which were believed to be the culprits. Today, there is not much talk of ozone-hole, or skin cancer epidemic, but the HFCs that ultimately replaced the CFCs, are believed to be a far potent greenhouse gas, contributing to global warming.

Over the past year, the political undertones of the global warming debate have been thoroughly exposed. The mis-pronouncements of the IPCC were not mere mistakes, but inevitable consequence of following the political lead. The political risk of miscalculation is very high, and which is why the political leaders are wary. The leaders of the rich countries, which typically funded or supported many of the environmental causes, no longer have the economic muscle to engage in their favourite pastime. 

This provides a golden opportunity for political leaders going to Cancun, to focus on the realities of today. Whether it is the pressure on forests which is threatening the habitat of the tiger, or the lack of access to safe and cheap energy, these problems of today, affect millions, and these are all manifestation of misguided regulations stifling opportunities for economic development.

Reality check

With economic freedom, countries like China and India would be able to afford more efficient energy technologies, and reduce the load of pollution on the environment. After all, even with currently available technologies, energy intensity of Germany at 0.12 tons of oil equivalent for $1000 of GDP(2005), is less than one fifth of India’s at 0.68. Likewise, with economic development, and improvement in agricultural efficiencies, pressure on forest would decline, improved habitat will help revive the wildlife, including the tiger. It is agricultural productivity that helped China expand its man-made forest cover by over 2 million hectares, annually, from 2004 to 2008. In contrast, India added 0.3 million hectares annually, between 1997-2007, India. It is this kind of development that has allowed the US to reintroduce wildlife in to areas from where they had disappeared decades ago.

Today, half the world population does not have access to reliable sources of energy. Ignoring that reality, and focusing on a problem that may or may not occur 50-100 years later and demanding a reduction in consumption today, will not be very politically palatable.

If Copenhagen in 2009, exposed the limits of political power, Cancun could show the enormous possibilities if the political leadership of free countries focus more on the real concerns of today, rather than choosing to enter a battle like Don Quixote! That battle may be very exciting, but also completely futile. It is the economics of development that should determine the climate of politics, rather than the other way round. It is only with economic development, will environmental quality improve as well.

Wednesday, November 17, 2010

Corruption Trips Up India's Rise

The growing scandal over a newly built apartment tower in Mumbai, and the collapse of an old building in Delhi on the night of November 15, killing over 60 people reflect the peril that haunts Indians everyday - lack of secure property right, and strangulating regulation. The result is the pyramid of corruption that weighs heavily on citizens, and retards India's progress. This kind of systemic corruption cannot be dealt with by symbolic resignation of a minister. A shorter version of this article has been published in the Wall Street Journal, on 17 November 2010.

Just a week ago President Barack Obama received repeated applause from Indian Parliamentarians for saying that India has risen, not merely rising! In the week since, Indians have been witness to the scourge that has held India back, corruption, with a capital C. President Obama’s host in Mumbai, Mr Ashok Chavan, Chief Minister of Maharashtra, resigned due to serious allegations of malpractices surrounding an apartment tower in the heart of the city.

That India’s rise could literally collapse, was tragically brought home when a building collapsed in Delhi on Monday night killing over 60 people. Collusion between unscrupulous builders and various officials allowed the addition of two more floors to an old three-storey building when the tragedy happened.

In this past week, Mr Suresh Kalmadi, a member of parliament, and a senior office bearer of the Congress Party, resigned from his party post. Mr Kalmadi heads the much ridiculed Commonwealth Games organizing committee, for various acts of omission and commission. The allegations involve gross misappropriation of public money by a number of public and private bodies, operating under lax supervision, leading to deliberate delays, massive cost escalation, and last minute procurements at highly inflated price. The public games provided a golden opportunity for private loot to the tune of hundreds of millions of dollars.

Just this Sunday, Mr A. Raja, the minister for telecommunication, resigned. Since 2007, there had been growing questions over his decision to allocate 2G spectrum slots on a first come, first serve basis to companies many of whom were not even in the telecommunication business, at very low prices. Some of these companies then sold their allotments within months to others at five to six times the original price. Some have not bothered to launch their services in the past few years. The 2G spectrum scandal, which notionally involves a loss of about US$ 30 billion, to the exchequer, is a consequence of arbitrary exercise of discretionary power by the minister.

The winter session of Parliament which begun last week, have been continuously disrupted by opposition parties on three counts of corruption – the misappropriation of funds in Commonwealth Games, the loss to the exchequer from sale of 2G spectrum at a fraction of the market price, and the scandal surrounding the Adarsh housing society in Mumbai. Various official committees, departments, and law enforcement organizations have begun looking in to all these issues. Cases are being heard even at the Supreme Court. But very few Indians believe that anything substantive will come out of all these procedures. At the same time, unfortunately, influential sections of Indians believe that corruption is a consequence of moral failure, rather than inevitable outcome of the rent seeking regulatory and legal regime that have been established with the design to extort, behind the facade of public welfare.

Over the past six decades, Indians have heard about many financial irregularities in the government, and many people have resigned. Yet, hardly anyone has ever been convicted much less imprisoned for these alleged misdeeds. The current set of corruption charges has once again highlighted the systemic nature of the problem afflicting India.

The Adarsh housing society was formed with a few members in the mid-1990s, but it was only in 1999 that real action started. While Indian soldiers valiantly fought to push back the intrusion by Pakistani forces in to the Kargil hills in Kashmir region, a group of officials, military and civil, were strategizing to lay their hands on a piece of prime real estate in downtown Mumbai.

The society claimed to help provide low cost housing to the widows and soldiers who had sacrificed so much in the Himalayan hills of Kargil. For this noble effort, they received 3800 square metres of land at 15% the market price, for a six-storey block, very close to a navy establishment.

Neither the state government nor the defence ministry was sure about the ownership of the plot. Not unusual, since in most of India, land settlement has not been undertaken since the departure of the British. The state of land records are pathetic, and so very convenient to manipulate. Across the country, hardly any land transaction, particularly in urban India, takes place completely legally. In major cities like Delhi and Mumbai, it is believed that typically 60% of the payment is made in cash for high end properties.

Today, Adarsh housing society is a 31-storey tower, with 103 apartments, for which owners have paid between US $ 140,000 and 180,000 for the 625 to 1000 sq feet of carpet area. But market rates for these apartments are believed to be over 10 times that. Hardly, anyone of the members seems to have fought in Kargil, and in addition to defence officials, the society includes relatives of senior bureaucrats and politicians as well. So egalitarian has been the operation, that rich businessman and their chauffeurs have been given a roof in the same tower. People with monthly salary of US $ 250, seem to have got generous loans of US $ 150,000 from their companies.

According to news reports, the modus operandi of the promoters of the housing society was to simply offer an apartment to any bureaucrats or politicians who either helped in securing various permissions, or turned a blind eye to the various regulatory violations.

The scandal had been brewing for the past two years, but it really hit the headlines in the past couple of months. Today, every department of the state and central governments, from defence and environment ministries to land and revenue, are competing with each others to point out the various violations by the society. Yet, the same departments had by their acts of omission and commission had allowed the tower to come up in the first place.

In Mumbai, over 8.6 million live in slums, out of 18-20 million people in the city. Yet, Mumbai regularly finds itself among those with the highest real estate prices in the world. Here, land is almost completely controlled by the political mafia. No surprise that traditionally, the urban development ministry in the state always remains with the chief minister. Successive chief ministers of different political hues have had no reason to kill the goose that laid the golden eggs.

For instance, a former Chief Minister had secured a prime land at a fraction of the price, in the city of Pune, for his educational trust. Across India, massive land grab under diverse welfare initiatives are rampant, with the powerful getting access to public property at notional prices.

Resignation of the political leaders will not help resolve the regulatory mess, but may only detract attention from the real source of the problem.

It is time to realize that the legal and regulatory framework in India, particularly that surrounding land, has been tailor made to facilitate the wheeling and dealing of the powerful and privileged class, all in the name of protecting the poor, and providing them affordable housing. While yet another official panel has just found that over 93 million Indians live in slums today, an increase of 18 million from 2001.

India’s poverty can be traced to this single most important factor – poor land records, and lack of respect for private property rights. Thus greatly limiting the capitalization potential of assets for the vast majority of Indians. This is coupled with arbitrary regulatory regimes, which instead of facilitating smooth transactions among people, invite powerful middlemen to extract their pound of flesh.

President Obama may have pleased India’s political leaders, by acknowledging India’s rise, but ordinary Indians are unlikely to be able to rise as long as they are weighed down by systemic corruption of their regulatory regime.

Wednesday, November 3, 2010

Obama calling India: Is anyone listening?

President Barack Obama will be coming to India later this week. He is the third US president to visit India in this decade, and the only one to have done it so early in his term. Yet, the visit has not triggered any great popular interest. In my article titled "In Bush's footsteps in India" in the Walls Street Journal Online, published on November 2, 2010, I outline the possible issues on the agenda, and the reason for the lack of expectation from this visit.

In a longer version of the article "Obama calls on India: Is anyone listening?" I contrast the different political contexts between President Obama's visit now, and that of his predecessor President Bush in 2006. I suggest that President Bush and Prime Minister Manmohan Singh shared a political vision for India, and that enabled the two leaders to stake so much political capital on issues such as the civilian nuclear deal that the two signed. In contrast, India does not seem to figure significantly in President's Obama's scheme of things, consequently, neither side is willing to risk precious political capital on any significant issue. Here is an excerpt from this article.

In politics timing and popular mood significantly impact policy and colour the perception. President Barak Obama is coming to India this week. But the visit by the leader of the only superpower in the world has not raised much expectation among Indians, this time. The only hope is that there would not be any new flashpoint, given the whole range of issues on which the perceptions between the two governments diverge today. But most importantly, what is missing is a mutually shared vision that looks convincing!

Let’s look at the two issues which could have transformed the dynamic between the two sides, and taken the relationship to a really new phase. For the first time, the Indian side has agreed to buy fighter aircrafts from the US, worth $11 billion. And for the first time in decades that the US had agreed to sell offensive military equipments to India. Yet, the Indian government is unable to bell the cat, unsure of the political cost.

Likewise, the US administration is keen that the India’s civil nuclear liability law meets the concerns of the private players. This would have taken the hard fought India-US nuclear deal to a culmination. But in the aftermath of the re-ignition of the controversy over the Bhopal gas leak in 1984, the Indian government is unsure whether to risk further political capital at this moment.

The contrast with the 2006, visit by George W Bush could not be starker. Bush and Manmohan Singh had staked huge political capital on the India-US nuclear deal. Bush was already becoming unpopular at home because of the direction of the war in Iraq, and there were high decibel protests in India too. Manmohan Singh risked the survival of his government to get the deal signed.

No US president had done so much to accommodate India. And No Indian prime minister had put so much faith in a single piece of Indo-US policy. To this day many Indian policy wonks wonder why and how such a thing came about. This was one rare instance when two political leaders chose to lead from the front, in the face of major opposition to the deal on both sides. But this spark of leadership was underscored by an unusual level of trust and confidence the two leaders seemed to enjoy.

Obama will address the joint session of Indian Parliament during this visit. In 2006, rising political temperature in India meant that Bush did not get the same honour. Bush spoke to a select audience under shadow of the old fort in Delhi. Most Indian’s who heard that speech felt convinced that George W Bush truly believed in India’s democracy. The shared values of democracy, tolerance and pluralism were not mere clich├ęs, but ideals that Bush and Manmohan Singh really believed in, and were convinced that the other truly shared that belief. In the context of emergence of international terrorism, the political significance of the democracy agenda had been greatly enhanced, and stood in sharp contrast.

Once that kind of relationship is established, almost all political obstacles can be overcome. Manmohan Singh and the Congress party leadership were completely vindicated when the parties that had opposed the new Indo-US camaraderie lost heavily in the 2009 general election. This is why the Indian prime minister had unusually warmly received Bush even after he had demitted office.

Obama had come to the world stage capturing the imagination of the people with his inspiring ‘Yes we can’ theme. Yet, he seems to lack the broad political vision that unites many people for a common purpose. Consequently, Obama, who won promising bipartisanship in domestic affairs, has now polarized the Americans as much as Bush or Bill Clinton. Internationally, Obama’s personal approval rating is still high, but over the past years his charisma has lost a lot of shine.

Obama’s lack of unifying vision could be on display during his maiden trip to India. To his credit, he is the first US leader to come to India so early in his term. If reelected in 2012, Obama may have an opportunity to come to India again, and perhaps he would discover his own vision by then. But this time, it is clear that in two years India and the US have drifted apart on a whole range of issues.

Obama has three key issues on his international agenda – Af-Pak, the Yuan-US dollar exchange rate, and climate change. In none of them the two sides share a common perspective. Either the US administration does not see any significant role for India, as in Af-Pak, or the Indian priorities are different as in climate change.

When Bill Clinton visited India in 2000, the reception was euphoric. A lot of Indians saw the first visit by an US president after a gap of 20 years, following the economic reforms of the 1990s, as an indication of India’s emergence on the global stage. But in the aftermath of India exploding nuclear devices in 1998, Clinton hardly had anything tangible to offer to India.

In 2006, Bush visited India amidst very polarized conditions, experiencing eulogies from one side of the political spectrum, and extreme political hostility from another. Indian democracy with its attendant debate, dissent and dirt were in full display.

Obama’s lack of broad vision for this trip has meant that he has failed to attract enthusiastic supporters, nor energized the traditional detractors of US policies. For the leader of the oldest and the second largest democracy in the world, the trip to the largest and vibrant democracy, is likely to turn in to a damp squib.
You may read the complete article on our website In Defence of Liberty.

Wednesday, September 22, 2010

Ayodhya awaits court ruling: Indians’ have already given their verdict on the temple-mosque dispute

This week India would be awaiting the verdict of a court in a title suit.  But it is much more than a property dispute. It is a contest between rule of law and politicisation of religion. The dispute has come to symbolise different visions of India. Should Indians today be burdened by the past, or should India move forward, drawing the proper lesson from the past, while preparing for the future.

In contrast to the frenzy surrounding this dispute twenty years ago, the prevailing disinterest in this issue is a sign of progress, and an illustration of how far the people have moved on.

A shorter version of this article, "India Has Moved on From Its Mosque Controversy", appeared in The Wall Street Journal Asia on SEPTEMBER 21, 2010

At one level, it is a dispute over land, which is quite a common occurrence. After all it is said that 80% of court cases in lower judiciary relate to land. The verdict is coming sixty years after the original suit was filed. But that too is not unusual, given that 30 million cases that are pending at various levels, judicial wheels are known to turn distressingly slowly in India.

Yet, this no ordinary title suit. This is a debate that has simmered for a few centuries. Over the past two decades, the dispute has come to symbolise two contesting visions of India. Twenty years ago, a political campaign to claim the site sparked off most vicious riots across half the country, that had raised the most serious doubts about the viability of a muti-religious, multi-linguistic, multi-ethnic sub-continent that is India.

The dispute surrounds a piece of land in the small town of Ayodhya, in the northern state of Uttar Pradesh. This town of 150,000 people, share the name of the mythical capital of Lord Rama, the heroic prince in the oldest Indian epic, the Ramayana. Rama is believed to be the incarnation of the Hindu God Vishnu, who was born to end the regime of a demon king.

In the 16th century, the founder of the Moghul dynasty in India, Emperor Babur had built a mosque in Ayodhya. Some Hindus believe that the Lord Rama was born at the very site on which the Mosque stood. Others believe that a temple existed on the spot where the mosque was built. There had been reports of Hindu - Muslim conflict over this spot in the 18th and 19th centuries.

Then in 1949, some idols had mysteriously been placed inside the mosque. And that started the present legal dispute over ownership of the property. Petition was filed in the name of the residing deity that the property belonged to Lord Rama. Members of the Muslim community contested the claim, and held that the property was a mosque. The disputed site remained locked up for fifty years.

In late 1980s, the BJP had mounted a political campaign to build a temple on the disputed site. The campaign brought rich political dividend for this marginal party, which had won just 2 seats in the 1984 general election, The social and political mobilisation on the issue of the Rama temple during this period was among the largest in post-Independent India. In response to the rising sentiments, and accusations of playing vote bank politics with different minority religious groups, the Congress government led by Rajiv Gandhi allowed partial access to Hindus to offer prayers in the hope of diffusing the tension.

Not unexpectedly, the political machinations only helped further boost the Hindu extremist groups, and contributed in no small way to the rise of the BJP. Their numbers in Lok Sabha jumped to 84 seats in 1989, and became a major political force and staked claim in the name of Hindu cultural nationalism. Ten years later, in 1998, BJP became the single largest party in the Lower House with 182 seats out of 545, and led a coalition government in Delhi for the first time. They repeated their success in the mid-term election of 1999, and lasted the full term till 2004.

From being dormant, the politicisation of the dispute came to define the political agenda of India in the 1990s. The highlight of the movement was BJP leader, Mr L K Advani’s 6000 km drive across the country, in 1990 to mobilise support in the name of the Lord Rama and the promise of building a temple. Although, the mobilisation did not enable the BJP to come to power in Delhi in the 1991 general election, it did shape the political agenda of the day. The movement climaxed on 6 December 1992, when tens thousands of Hindu zealots gathered near the disputed site, and stormed the old mosque to raze it to the ground. During this period, communal riots repeatedly flared up in different parts of the country that led to about 2000 deaths.

Twenty years later, the Allahabad High Courts is scheduled to give its verdict on September 24. There is a distinct change in public mood. And the two contesting side seems to have sensed the change.
   
In the past few decades, five suits have been filed, four by Hindu organisations, and one by a Muslim organisation. They have all been consolidated in to one, and now judgment day is near. There are three key elements in this suit are,
  • did a temple exist at the disputed site, before 1538
  • did the Muslims perfect their title through adverse possession
  • is the suit filed by one of the Muslim organisations, in 1961, barred by limitation
If the court goes to look in to issues surrounding the mysterious appearance of idols inside the mosque in 1949, that could be seen as matters of faith, and pose the biggest challenge to the judges who are best suited to decide on matters of fact. On the other hand, if the court looks at adverse possession, and decides on any pre-existing temple at the site of the mosque, and overrules any time limitation, that could open the Pandora’s box, with the prospect of igniting fresh disputes over many other religious sites. The best course of action for the court would be to limit the scope of their verdict to the legal issues surrounding the title of the land.

With the prospect of possible communal discord in the aftermath of the verdict, the government is appealing for calm. Even more importantly, all the organisations involved in the legal dispute have been repeatedly affirming that they will abide by the verdict, and adopt constitutional and legal measures in response to the verdict. All sides retain the freedom to appeal the verdict in the Supreme Court. This is a far cry from the belligerent claims by both the sides twenty years ago that matters of faith cannot be subject to judicial rulings.

What is even more significant is that since 1992-93, there have been many communal flash points in different parts of the country. Yet, hardly any has spread to other areas. Even the most serious communal riots in Gujarat in 2002, which left about 2000 people dead, did not spill beyond the province. The diminishing political returns from religious polarisation are clear, at least for now.

Even the BJP when in government, had to put the issue of temple on the back burner, for the sake of the coalition partners who supported the government. It is this moderating impact of electoral calculus that is perhaps the most understated strength of Indian democracy.

Popular mood has shifted away from sectarian issues, and political parties are being forced to recgnise this change. This provides a good opportunity to take a fresh look at the idea of India.

How has the idea of India or Bharat survived centuries of military conquest and political turmoil? It seems that given the diversity of the population, and a lack of political or religious or social structure and authority that could have a sway across the sub-continent, authority and social customs evolved locally. For instance, every practicing Hindu would have a temple in his or her own home, and had the freedom to choose from the plethora of gods, without much inhibition. Consequently, the invaders and conquerors could defeat the local rulers on the battlefield, or destroy a few places of worship, but not the ideas that prevailed in almost every home. In the civilisational sense, it was quite futile to destroy  religious or temporal structures, in an attempt to subjugate the population.

The rich mythologies and the epics of India provided guidance, without requiring a structure. This best explains the survival of the civilisation that is India over the past two millennia. As the poet Rabindranth Tagore had noted a century ago, invaders rarely went back, instead got absorbed and added to the richness of the mosaic of India. This explains the many instances of different religions living in close proximity with each other. Today, a Muslim flower seller meeting the needs of Hindu devotees, or a Muslim artisan making Hindu deities or Hindus visiting the tomb of a Muslim saints hardly raise any eyebrows.

In this sense, the fundamental questions that the disputed site in Ayodhya raises are how Indians should look at historical wrongs. Should historical evidence of a temple pre-existing at the disputed site in Ayodhya be found, would it automatically require reestablishment of the temple? Would it then follow that other such religious sites where conquerors had left their imprint be corrected too? Should India attempt to correct these alleged historical wrongs, or should India take a leaf from its own history, and try not to repeat the same mistakes again?

After all, historical wrongs can never be corrected. Any such efforts inevitably lead to compounding of the wrongs, and perpetuation of misery for ordinary people. If India’s survival as a civilisation did not depend on correcting historical wrongs, now that India is emerging on the international horizon, it has no reason to try and do the impossible.

Twenty years ago, India was a very different place. It was characterised by scarcities, and government was the principal source of patronage. Today, many Indians have got a glimpse of the possibilities, as the Indian economy and society have opened up. Increasing number of Indians are no longer satisfied being frogs in the well. 

Like the rest of the country, the people of Ayodhya have moved on, too. The town is said to have 20,000 temples and three mosques. But the young people are flocking to the numerous institutes that have sprung up to teach English, prepare them for various entrance examinations for engineering, management, and medical schools, and to cyber cafes. The ubiquitous cell phone towers dominate the skyline, over temples and mosques. The future beckons the young in Ayodhya, as elsewhere in India. It would be a far greater injustice to try and sacrifice the youth of India to the past in the name of correcting history.

In India, religious freedom matters, not religious structures.

Wednesday, September 8, 2010

Land and mineral rights must belong to private people

The multi-billion dollar Vedanta bauxite mining project in Orissa has been been mired in controversy. Recently the Ministry of Environment and Forest issued show cause notice to the company for violating various provisions of the Forest Rights Act, and suspended their mining permission. Following is my latest oped on this issue. I look at the debate from the perspective of land and mineral rights, and say that these should belong to the people who live there. This article was published in the Wall Street Journal under the title, "Landing India's Next Big Investment", on September 8, 2010.

Endemic poverty amid environmental riches has been the fate of most indigenous tribes in India for generations. There are perhaps 90 million so-called "tribals" in India today, 80% of whom live in the central belt from the states of Orissa in the East to eastern Gujarat in the West, to Madhya Pradesh in the North and Andhra Pradesh in the South. Most of these people live in and around forested areas and are extremely poor. And a recent government decision to block a British company's investment shows why they're likely to stay that way.

Last month the central government suspended London-based Vedanta's permission to mine bauxite in Orissa and issued a "show cause" notice for violation of forest laws. The committee that reviewed the proposed $8 billion project noted that the lifestyle of two tribes—the Dongria Kondh and Kutia Kondh—might be disrupted by interruptions to water supplies and other natural resources. The committee also said the tribes consider the hills sacred, although the exact location of the holy site isn't clear. Vedanta's co-investors withdrew their support for the project on possible human-rights violations.

Never mind that these two tribes consist of 8,000 people, of whom about 20% are believed to have been adversely affected. Or that the mining project lies in the 250-square-kilometer Niyamgiri Hills—of which only seven square kilometers of one hilltop were supposed to be mined. Or that none of the tribes were expected to be displaced.

The problem is not necessarily that tribals might object to this particular mining project. Rather, the trouble is that a lack of clear property rights makes it impossible for anyone to determine whether the tribals truly do object—or whether other special interests are cloaking their own causes in the mantle of tribals' rights. This lack of clarity helps crony capitalists to muscle in with state patronage.

Under colonial rule, the British failed to recognize the land rights of tribal people, denying them the ability to own or sell their property or profit from its resources. Now, some 60 years after independence, tribals still don't legally own their property, either individually or as part of a village's common land holdings. The problem is compounded by the fact that minerals and other underground natural resources by law belong to the state, not to the people who work and live on the land.

One result is that an investments like Vedanta's become more politicized than they otherwise would. Where mining interests seek ready access to resources, anticorporate activists find an easy target to campaign against. But if individual tribals were granted land ownership rights, they could decide for themselves whether to accept a development project or not. Rather than being forced off their property, thanks to the abuse of eminent domain by the government—as often happens—they would be able to shape their own destiny. By the same token, they would be free to pursue projects they truly wanted. Only then could land owners and capital providers negotiate as equals and explore areas of mutual interest.

Delhi is trying to strike a balance, but as usual the politicians may make matters worse. The government is considering a draft mining law that proposes to give 26% equity of mining projects to local populations. The mining industry is vehemently opposed to this idea, mostly because giving equity may lead to greater uncertainty over management control. In addition, the tribal population would have to share the risks associated with such projects that stem from the wide fluctuations in commodity prices. Most importantly, though, without clear ownership and objective valuation of assets, it would be impossible to determine the value of the local people's equity holdings, leading to possible legal disputes.

Rather than muddy the waters in this way, Delhi would be better served to consider more fundamental changes. It is time to recognize not only individual and community land rights, but the right to the minerals lying under that land too. In addition, there must be a greater recognition of property rights over village common land and the associated forests on which its residents depend.

There are already precedents for doing this. In the United States, for instance, the right to minerals, including oil and gas, belong to the land owners. These mineral rights can be sold, leased or subdivided, and these mineral rights can also be separated for different minerals found in the same property. An estimated one million landowners in America enjoy these rights.

The Dongria Kondh tribe, at the heart of the present controversy in Orissa, is officially classified as "primitive." Its members practice slash-and-burn agriculture and are among the country's poorest citizens. They are too deprived—socially, economically and educationally—to be able to reach the rarefied heights of salaried employment in India; only 10% of India's workforce has that privilege. The current Chief Justice of India once pitied them as "living on grass."

How ironic, then, that because of the archaic laws of India, promoters of a multibillion-dollar mining project cannot directly negotiate with the people who are on the land. And how tragic that this project's closure is being celebrated by NGO activists as a "victory." It is just the opposite.

Wednesday, August 25, 2010

Save the tiger: Environmental dividend from economic development

This is the Chinese year of the tiger and people are interested in saving the tiger from extinction more than ever. Several conferences are being held, and a lot of money is being thrown at saving the tiger, but all this can't work if the Government can't mitigate the conflict between locals and wild animals. The lack of agricultural productivity forces farmers to encroach on the habitat of the tigers. This has to be resolved. China and India can save the tigers by cooperating with each other.

A shorter version of my article was published in The Wall Street Journal on August 25th.

Asia’s economic potential was first demonstrated by the four tiger economies. In recent decade, the focus has shifted to China, India and others. While economies are growing, the real tigers in the wild are living a precarious existence. It is time to reap the environmental dividend from growing prosperity, and save the tiger from extinction.

This is the Chinese Year of the Tiger! Undoubtedly, the focus is once again on ways of saving the wild tiger from extinction. This coming weekend the international Tiger Forum will meet in the north-eastern Chinese city of Hunchun. Next month a tiger summit is scheduled in St Petersburg, Russia. Last month 13 nations - Bangladesh, Bhutan, China, Cambodia, India, Indonesia, Laos, Malaysia, Myanmar, Nepal, Thailand, Vietnam, and Russia agreed, at a meeting of the Global Tiger Initiative (GTI), to double the tiger count from about 3200 at present to 7,000 by 2022. Incidentally, the tiger numbers have halved since 2002, when the claim was 7,000. Many today believe that these numbers were grossly inflated due to faulty counting procedures.

In 1900, it is believed that there were about 100,000 tigers in the forests of Asia. The number declined to about 40,000 by the 1950. Today, billions of dollars are being spent to save one of the iconic animals in the world, but the future of the tiger continues to be bleak.

According to estimates used in draft documents for the St Petersburg Tiger Summit, the economic benefit of ecological services coming from forestry and wildlife estimated in 1997 to be as high as $ 33 trillion annually, and would be much higher today. But another estimate claimed that for the people living in tiger forest in countries like Cambodia, the annual economic benefit per household to be barely $675. The numbers don’t add up!

Over the past decade, just the central government in India increased its allocation for Project Tiger, from $ 16 million (Rs 75 crore) in the 9th five year plan, to $ 32 million (Rs 150 crore) in the 10th plan, and $ 128 million (Rs 600 crore) in the current 12th Plan (2007-2012). This is equivalent of about $ 25,000 per tiger per year, for a mere 1200 animals. Compare this with the flagship rural employment programme for the poor that promises about $ 70 per family per year.

There seems to be growing gulf between the prescriptions offered by many international, largely western experts, and what domestic policy makers in China, India, and elsewhere confront on the ground.

Many of the international experts agree on the need to commit larger sums of money, monitoring of the tigers and their habitat, and almost military style enforcement to keep people and poachers out.

But these old prescriptions don’t inspire confidence any more. Indian policy makers are increasingly aware of the rising aspirations of the people, and the demand for land, for agriculture and other developmental purposes. For some others, the biggest threat to tiger comes from the growing intensity of conflict between man and wild animals. They would not like to stake everything on counting tigers.

Just in the past two months, two people lost their lives in the vicinity of the famous Ranthambore tiger park. Typical compensation for a life lost is only $2200. This is barely 10% of the annual allocation by the central government for every tiger each year, at present. Just this week, in the same park, a forest ranger who was bravely trying to shepard a tiger that had strayed near a village, armed only with a stick, was mauled.

Last year Bangladesh reported 50 deaths from tiger attacks in the Sundarbans area of the Gangetic delta. In India, the annual death toll from wild animal attacks range from 200-300 each year, in addition to injuries, loss of property and crops. Tigers and other wild animals will have a future, only if this conflict can be diffused. Otherwise the beasts will stand no chance against the ire of man.

The problem in India, and some other tiger range countries, is not that there are too many people living in close proximity to wildlife. Typically, in such areas agricultural productivity is abysmal, poverty is endemic, and non-farm economic opportunities non-existent. Without resolving this human problem, neither a proliferation of conferences nor throwing cash will help the cause of the tiger.

But this need not be the situation. If India doubles its agriculture productivity the demand for agricultural land could fall by almost 40%. If non-farm opportunities are allowed to spread, dependence on subsistence agriculture will decline rapidly. One can already see glimpses of how the natural environment can recharge once the human pressure declines.

This is most dramatically visible in China. China’s agricultural productivity is almost double of India’s. The rapid movement of millions of people from rural to urban, and changing economic structure from agriculture to industrial, explains the rise in forest cover.

Between 1990 and 2007, according to World Bank database, China’s Per capita GDP increased 8 fold, from $ 314 to $2,566, while for India it just tripled, from $374 to $ 1,046. During this same period, China’s agricultural GDP shrank from 27% to 11%, and forest cover as a share of total area rose from 17% to 22%. It is this 30% increase in forest cover in 17 years, which makes it plausible for China to attempt to rebuild wildlife habitat, and reintroduce animals. In contrast, for India, agricultural GDP declined slowly from 29% to 18%, but forest cover stayed almost the same from 22% to 23%. This indicates that in India, there is a much higher pressure on forest from people who are not able to move beyond rural livelihood, and explains the continuing conflict between man and animal.

China and India, are neighbours and competitors in many fields. But in the arena of tiger conservation, they could greatly complement each other. China barely has 45-50 tigers in the wild, mostly near the Russian border in Siberia. India has among the best wildlife experts with capacity to manage tiger habitats.

India is already trying to reintroduce tigers in to two tiger parks where all the tigers were lost in recent years. India is also toying with an ambitious effort to reintroduce the Asiatic Cheetah, which had gone extinct in 1947. But today, India’s economic transformation is not yet deep enough to remove the potential for man and animal conflict. But it will happen. Working with the Chinese on tiger conservation would help build up Indian capacity to reap their own environmental dividend.

By cooperating with each other today, China and India would not only save the tiger in the wild, but redefine the meaning of “Asian Tigers”. Wildlife and forest are not mere intangible resources, whose values are only determined by creative book-keeping. For instance, in the US, the tangible economic benefit from wildlife and nature tourism, including fishing and hunting, was estimated at $125 billion in 2005. Asia could surely give the US a run for its money, if it manages the environmental resources better.

This will require a see change in thinking. Only when people profit from forest and wildlife, will they have any interest in preserving them, and then counting every tiger will become irrelevant. Tiger economies are better equipped to secure the future of the species too!

Sunday, August 15, 2010

Commonwealth Games: The Politics of Sports

The excitement of the forthcoming Commonwealth Games is building up in Delhi. The spot light is not on sporting performance, but the construction delays, cost overruns, and allegations of corruption. These are symptoms which have affected many other projects. I believe, the legacy of these games could be that all such projects would be put under similar scrutiny. Below there is a table giving the official break up of expenditure on account of the games, and related development project. A version of this article was published in the Wall Street Journal Online, on 10 Aug 2010, titled "India's Political Games".

Indian politicians played games in Parliament, this week, as they debated the chaos surrounding the Commonwealth Games set to open in Delhi, on October 3. While dozens of members of Parliament from many political parties had their say, the chairman of the CWG organizing committee, Mr Suresh Kalmadi, who is also a MP from the ruling Congress party, chose not to speak.

It is politically correct to believe that sports and politics should not be mixed. But international sporting events are often close to a war, which is politics by another name! Equally politics is a sport too, and can be even more exciting.

Less than two months before the Commonwealth Games is to open in Delhi, the media is giving live commentary on the state of preparations. Everything that could have gone wrong, seems to have gone wrong – construction delays, poor quality of construction, cost escalation, allegations of corruption and money laundering, inflated prices of items procured, resignation and sacking of senior officials.

Virtually every agency of the government at the city, state and national levels, and the CWG organizing committee, have been starring in this competition for a share of the wealth, which the games have provided.

But should anyone be surprised? Political leaders have always used sporting opportunities to try and claim a share of the glory and the pie.

For instance, the communist countries traditionally invested a lot in sports in order to show its prowess, in an attempt to seek legitimacy for its political system. Following the collapse of the Soviet Empire, China has the baton, and has emerged as a major sporting nation. The Beijing Olympics in 2008, was therefore much more than just the medals won by China.

Politics in sports has a long history. The 1936 Berlin Olympics was tailor made for Hitler to display his Aryan supremacy. Unfortunately, Jesse Owens punctured that balloon on the field. Even India had a small role, winning the first field hockey gold medal by beating the German team. That was India’s first of the eight Olympic gold medals in hockey.

But India is not a sporting powerhouse. According to some calculations, India is among the two bottom ranked countries on the ratio of Olympic medals to population size. India’s lone individual Olympic gold was won only in Beijing by Mr Abhinav Bindra in shooting. Bindra hardly owed anything to India’s sports establishment, but to his parents who were capable of meeting the requirements for his talents to blossom.

Comparisons with the Beijing Olympics and the recent Soccer World cup in South Africa are inevitably being drawn.

The question is, if Beijing did it, South Africa could do it, can India follow? The answer lies in politics. Both China and South Africa had primarily a political reason for wanting to host a major international sporting event. For the Chinese authorities, the Olympic was an opportunity to announce to the world, and more importantly to its own people, that it can exercise control, yet awe the world. On display was China’s political capacity, in terms of resources, technology and management, to handle the spectacle. Although an area in Beijing was demarcated for officially sanctioned protests, officials did not approve even one of the 77 applications for protest during the games. And it was among the top two in the medals tally.

For South Africa, following the end of apartheid, and establishment of democratic freedoms, it wanted an event that would provide an opportunity to showcase the new country. South Africa overcame all the doubts and hiccups to present a most fun filled World Cup, probably because most South Africans had apparently accepted the idea. Although, the tickets were priced beyond the reach of most citizens, and the home team was not expected to progress beyond the initial group stage, the fans more than made up for it by staying engaged and supporting a diverse range of teams competing. They created a new icon – the vuvuzela! The noise of the vuvuzelas was drowned only once when the real life icon, Nelson Mandela, made a brief appearance during the closing ceremony.

Unlike South Africa, organizers of CWG have not really involved the ordinary people, and the public at large seems to have not taken to the idea of the games with any particular enthusiasm. And, unlike China, Indian leaders did not really have any broad political vision for the games.

India had bid for the CWG in 2003, when the “India Shining” campaign of the BJP led coalition government in Delhi was at its peak in the run up to the national parliament election in 2004. But, the campaign did not inspire the voters, and the electoral mandate passed on to the Congress led coalition. The Congress in its election strategy had focused on the common man, the “aam admi”, in contrast to those who few were perceived to be real beneficiaries of India’s economic changes.

Consequently, CWG was no longer a political priority. Despite repeated efforts to rope in Mr Rahul Gandhi, the influential Congress general secretary, and son of the party leader, Mrs Sonia Gandhi, he showed little interest. This is in contrast to his father, late Mr Rajiv Gandhi, who began his sudden entry in to public life, by taking over the leadership of the Asian Games in 1982, the last major international sporting event held in India.

The 1982 Asian Games did not bring any political benefit for the political leaders of the day. Within a year the country was torn by social and political unrest, and bloody insurgency in Punjab and Assam. Then in 1984, the violence in Punjab escalated, and the Prime Minister Mrs Indira Gandhi was assassinated by her Sikh bodyguards.

The Asian Games quickly faded from memory, and the sporting infrastructure decayed due to neglect. But the political class seems to have taken a vital lesson, political dividend from such international events are quite illusive. This explains the consistently lukewarm political support for these games.

This lack of political interest in CWG, however, seemed to have created a new incentive for a game of wealth. It would not be far-fetched to suggest that almost every project was initiated late, and deliberately so. After all, unlike traditional infrastructure projects, the CWG projects have a sharp deadline. These delays created an opportunity to justify cost escalation, and lower oversight in the rush to meet the deadline. This is perhaps the best explanation for the unprecedented increase in costs, and the delays.

Connaught Place is the circular arcade at the heart of Delhi. The construction of a new series of underground walkways was initiated barely six months ago, and now the holes on the roads are being filled up, because of the realization that the project cannot be completed before the games.

The Jawaharlal Nehru Stadium, the main venue of the games, was built in 1982 for about US$ 2.1 million (Rs 10 crores). Today, the cost of renovation and expansion of the facilities in that stadium alone has been put at US$ 204 million (Rs 961 crores). The cost of organizing the games had been put at US$ 31.9 million (Rs 150 crores) in 2003, the current estimate is over ten fold. At that time, it was said the games village would be converted in to students’ hostel after the event. Now it is being sold as premium apartments to the rich and powerful. The total cost of games including some of the infrastructure in Delhi and the various venues have been officially set at US$ 2.4 billion (Rs 11,494 crores), others have estimated at two or three times as much. However, barely 5.7% of the official expenditure is actually aimed at helping the sports persons who are expected to bring laurels to the country.

The games have also been criticized on the ground that the money could have been much better spent on more important developmental projects. But only a small fraction of such expenditure actually reaches the targeted beneficiaries. Administrative costs and leakage, consume the bulk of the budget. There is nothing to assume that the games' money could have been well spent elsewhere. This week, the government acknowledged in parliament that of the 578 large infrastructure projects being monitored, 268 are delayed and have had cost overrun to the tune of $ 10.6 billion (Rs 50,000 crores).

But like everything else, India runs on multiple tracks. While many of the publicly supported sports bodies have systemically failed to produce champions in their disciplines, there are quite a few sports persons who have made their mark on the international arena through their personal dedication and commitment. Ms Saina Nehwal, the current world number two in badminton is the latest star on the horizon, and has just been joined by Ms Tejaswini Sawant who became the first Indian women shooter to win a gold medal at the World Championship in Germany.

The organizing committee of CWG is struggling to raise funds, and has so far secured sponsorship from 11 companies, of which all but two are public sector enterprises, and the Indian Railway. Yet over the past three years, Indian Premiere League for cricket, a game that is played in barely a dozen countries, has emerged among the most promising sporting ventures in the world. The value of the league, in its third year, is estimated at US$ 4.13 billion (Rs 18,000 crores), which compares with the National Football League in the US, and the English Premiere League football ($14 bn). The IPL reportedly had an income of $450 million in 2009, and that is expected to double in 2010. This contrasts sharply with the struggles of the CWG, which got a loan of $500 million from government, with little prospect of recovery.

CWG is caught in an unprecedented dilemma. If it is conducted well, there will be little political dividend, and still be accused of wasting money could have been spent elsewhere. If the games go badly, then of course, they will be damned.

The current public acrimony over CWG is in a way a demonstration of changing political dynamics. The gulf between the abilities of the public and private sector in India are out in the open. The deepening of democracy is bringing the all its public agencies under unprecedented scrutiny, and that is likely to have a much longer lasting impact, than the games. That impact could be more than the medals won in sports, and much more than the apparent gold medal in corruption that many are offering to these games. Asking questions and holding the authorities accountable are the necessary first steps forcing political leaders to explore alternative policy options. That would be a much preferred legacy of the Commonwealth Games for India.

Some tidbits –
  • Over 8000 sports persons and officials from 71 countries are expected to participate. But the hotel industry has not reported any surge in bookings.
  • The Delhi government is trying to ship the beggars out of the some areas of the city where CWG participants might be visiting.
  • Over 70 construction workers have died at different CWG sites. The condition of workers is hardly befitting those who are supposed to be building world class facilities for others.
  • The 1982 organising committee has continued to exist because of a court case involving a dispute over Rs 1.5 crore or about US$ 3 million, and must have spent more money during the past three decades.
  • In 2009, the IPL is estimated to have had an income of $450 million, which is expected to double in 2010. The CWG is struggling to raise even $250 million
  • The current economic crisis in Greece was not helped by the extravaganza at the Athens Olympics in 2004. The legacy of these sporting jamborees is not very rosy.
Commonwealth Games official expenses, based on the statement by Jaipal Reddy, Minister for Urban Development, Govt of India, in Lok Sabha on Aug 9, 2010
Responsibility Type of Project Expenditure in Rs Crores In US dollar (million)
Government of India Sports infrastructure 2,934 624

Training of sports teams 678 144

Loan to CWG organizing committee 2,394 509

MTNL (telephone and connectivity) 182 39

Ministry of Urban Development 828 176

Ministry of Information and Broadcasting 483 103

Ministry of Home affairs (security) 747 159

Ministry of Health 71 15

Archeological Survey of India (monuments) 26 6

Government of Delhi 2,800 596

Others 351 75

TOTAL 11,494 2,446




Government of Delhi On Commonwealth Games (stadiums) 670 143

Flyovers and bridges 3,700 787

ROB, RUB and IG Airport 450 96

BRTS (dedicated bus corridor) 215 46

DTC bus fleet 1,800 383

DTC bus depots 900 191

Roads 650 138

Streetscaping 525 112

Road signages 150 32

Delhi Metro connectivity 3,000 638

Power plants 2,800 596

Water supply 400 85

Health 50 11

Parking facilities 400 85

Communication and IT 200 43

Others 650 138

TOTAL 16,560 3,523