By M H Ahssan
With Jamaat-e-Islami Hind (JIH) deciding to lobby alone during the upcoming general elections, the United Muslim Forum (UMF) that played a key role in 2004 polls in the state is in a quandary.
JIH was an important component of the UMF, a conglomeration of non-political outfits that also had Majlis-e-Tameer-e-Millat and Amarat-e-Millat-e-Islamia as its members. Jamiatul Ulemae-Hind was not part of the UMF, but all of them campaigned for the Congress during the last elections. After winning the elections, the Congress government rewarded Amarat leader Raheemuddin Ansari with the chairmanship of State Urdu Academy and made Jamiat president Hafiz Peer Shabbir chairman of the Haj Committee. Peer Shabbir was later nominated to the legislative council.
“We are trying to broaden our base and inviting some people to work together. Invitations have been sent to some Ulema (Islamic scholars) and Mashaekheen (head priests at dargahs). All Muslims should vote for the party that promises to redress their grievances and make them partners in decision making. One meeting has also been held”, M A Raheem Quraishi, UMF GS, told HNN.
According to sources, there were at least four new faces in the UMF meeting that was held last week. They were Syed Ali Akbar Nizamuddin, member of the State Wakf Board; Hasanuddin Ahmed, former bureaucrat and social activist; Shafeeq Rahman Mahajir, lawyer and; M Ziauddin Nayyar, Vice President Iqbal Academy.
Sources said that the meeting heard some participants praising the Congress for undertaking many measures benefiting the Muslim community. There were also some who criticised the Congress for failing to protect the Wakf properties and stop the harassment of the Muslim youth by police in the wake of Mecca Masjid bomb blast. The meeting also heard that Telugu Desam that was part of the BJP led NDA has now learnt its lesson and wishes to work for the upliftment of minorities. Therefore, the forum should also consider supporting the TDP and its alliance partners, some participants suggested.
The meeting decided to make the functioning of the forum methodical by giving it a constitution and binding the members to follow it in word and spirit. The forum is expected to finalize it statute in two weeks. “It is too early to say what would be final form of the forum and who it would support. We should wait and watch “, the sources said
Wednesday, February 18, 2009
Opinion: INSECURED INDIAN MUSLIM
By M H Ahssan
A recent public opinion poll on a popular Muslim Indian e-magazine tries to ascertain the most important issue that is plaguing Muslim Indians this year. The issues discussed are many, ranging from economy and employment, to security and spiritually. Interestingly, majority of the respondents felt economy as the biggest area of concern (almost 37%), followed by security (20%). What appears even more alarming is the fact that the readership of this e-magazine includes majority of elite and educated Muslim Indians (most of whom are NRIs in various parts of the world, including the Americas).
The alarming percentage of our elite population that acknowledges insecurity is a disturbing fact. [Maybe, economy has been recorded as the most important issue in this poll as a temporary but important issue, because of the persistent world economic slump underway.] Are we, Muslim Indians, insecure; to the extent that 20% of our elite class believes it to be the prime concern?
Arguably, the answer to the above question should be, YES. Muslim Indians are insecure because we face threats from all nooks and corners. We face insecurity in terms of employment, we face insecurity in terms of civil rights and codes, we face insecurity in terms of our beliefs and the edifice of our beliefs, we face insecurity in terms of our material possessions, and we face insecurity in terms of existence.
So much so that we have all developed a fear psychosis that has stripped us from exploring and evaluating the de facto. The insecurity of existence becomes the gravest when we hear of the consistent thumping of the media regarding the relationship between terrorism and Muslims, and Islam. It apparently feels strenuous to revere about anything else when we face this momentous insecurity of existence. We have lived, and continue to live in this abject fear of insecurity. However, have we ever contemplated that this is exactly what the adversaries actually want us to believe?
Cogitating the historical despoilment of the Great Partition of 1947, I am reminded of a popular informal saying that almost all Muslim Indians would have been worse than bonded labors in Independent India, had it not been for the efforts of Late Sir Syed Ahmed Khan and Aligarh Muslim University. [We do realize the fact how Independent India had been stripped off the elite and intellectual Muslims, our inspiration and think-tank, majority of whom had migrated to Pakistan in lure of greener pastures?] During those overcast days, AMU had emerged as the single source for dispensing distinction and virtuosity to Muslim Indians (and I should not be incorrect to say that perhaps it still continues to be so). Were Muslim Indians secure during those days? Perhaps not. How then, were we able to carve out a niche for ourselves during those days of insecurity – considering the fact that the magnitude of insecurity of existence was the highest during those days?
One prime and important reason that occurs to me is that Muslim Indians were definitely insecure in terms of existence; however, were not insecure in terms of their IDENTITY. Things are probably not much different today – we are in minority today as well, we do face prejudice and biasness today as well, and we do face the same threat to our property and lives today as well. The difference is that we did not face identity insecurity then, which we so deficiently face today.
To exemplify – how comfortable do we feel talking about Islam and Muslim Indians in public? How comfortable are we in discussing our rituals and beliefs? Most important of all, how comfortable are we in expressing ourselves as Muslim Indians (not Indian Muslims)? We ensure that we do not talk about the problems being faced by average Muslim Indians because we might be termed intolerant. We avoid expressing our rituals and beliefs because we fear becoming outcasts compared to the Majority. We fear (yes, FEAR) in expressing ourselves as Muslim Indians because we might be branded NON-SECULAR. This, the insecurity of IDENTITY, is the gravest concern that we are evidently faced with today.
The adversaries thrive on our insecurity of identity because they are aware and confident of the fact that this insecurity has all the aptitude to sojourn our rational thinking. And once we are stripped of rational thinking, everything starts slickly falling into their platter! Consider this revised sense of insecurity under the influence of stripped rational – We need to co-EXIST with a Majority. Therefore, we need to live at their disposal.
We need to abide by their rules of existence. If we cannot exist, how would we be able to proceed with our subsistence? Everything else (including education, employment, economy, empowerment, disposition, and social recognition and actualization) can wait; first we need to survive, EXIST. This is how things appear, and this is what and how the adversaries want us to believe!
The way out is easier said than done. It all is a vicious circle (something similar to the chakravyuh), the never-ending spiral formation of abjection, which needs to be broken; broken from various fronts simultaneously. The first front that we need to strike is our attitude and thought process, rational thinking, to be more precise. Let’s inspect the conditions a little more objectively, with a more rationale line of thought.
Muslim Indians constitute more than 13% of the total Indian populace. What percentage of Muslim representation do we have at various levels of national, social, political, economic, educational, and corporate governance? If we do not have adequate representation, how do we plan to wash out this enduring sense of insecurity? How do we ensure adequate representation if we are not adequately educated and consummate? One may argue that to be educated and consummate, one needs to be secure in terms of existence.
To address the previous concern, let’s appraise Article 29 of the Constitution of India, which states, “(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same. (2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.” So, if we are not educated and consummate, how can we expect to discern and implement this provision provided to us by our Constitution?
Having realized the importance of educational deficiency, we need to work on it manifolds. First, we need to collectively shun the premise of insecurity to existence being the highest level of our concern. Rather, we need to look at educational deficiency among Muslim Indians as the gravest of all concerns. We need to reconstruct our educational edifice so that our children get impartial education and excel in both religious and contemporary domains. At the same time, we need to hunt down the disgrace and de-branding of Muslim Indians in terms of insecurity of our IDENTITY. This calls for a revolution in its true sense – working on war footing to pull off both these ends simultaneously.
We need colossal efforts, sweat, toil, maybe blood, to uplift ourselves out of this sense of insecurity. That is the only way we can candidly and profoundly say that we are not prepared to lose even a small part of that legacy (being a Muslim) and we are equally proud of the fact that we are Muslim Indians, an essential part of the indivisible unity of the Indian nationhood, without which our noble edifice will remain incomplete.
A recent public opinion poll on a popular Muslim Indian e-magazine tries to ascertain the most important issue that is plaguing Muslim Indians this year. The issues discussed are many, ranging from economy and employment, to security and spiritually. Interestingly, majority of the respondents felt economy as the biggest area of concern (almost 37%), followed by security (20%). What appears even more alarming is the fact that the readership of this e-magazine includes majority of elite and educated Muslim Indians (most of whom are NRIs in various parts of the world, including the Americas).
The alarming percentage of our elite population that acknowledges insecurity is a disturbing fact. [Maybe, economy has been recorded as the most important issue in this poll as a temporary but important issue, because of the persistent world economic slump underway.] Are we, Muslim Indians, insecure; to the extent that 20% of our elite class believes it to be the prime concern?
Arguably, the answer to the above question should be, YES. Muslim Indians are insecure because we face threats from all nooks and corners. We face insecurity in terms of employment, we face insecurity in terms of civil rights and codes, we face insecurity in terms of our beliefs and the edifice of our beliefs, we face insecurity in terms of our material possessions, and we face insecurity in terms of existence.
So much so that we have all developed a fear psychosis that has stripped us from exploring and evaluating the de facto. The insecurity of existence becomes the gravest when we hear of the consistent thumping of the media regarding the relationship between terrorism and Muslims, and Islam. It apparently feels strenuous to revere about anything else when we face this momentous insecurity of existence. We have lived, and continue to live in this abject fear of insecurity. However, have we ever contemplated that this is exactly what the adversaries actually want us to believe?
Cogitating the historical despoilment of the Great Partition of 1947, I am reminded of a popular informal saying that almost all Muslim Indians would have been worse than bonded labors in Independent India, had it not been for the efforts of Late Sir Syed Ahmed Khan and Aligarh Muslim University. [We do realize the fact how Independent India had been stripped off the elite and intellectual Muslims, our inspiration and think-tank, majority of whom had migrated to Pakistan in lure of greener pastures?] During those overcast days, AMU had emerged as the single source for dispensing distinction and virtuosity to Muslim Indians (and I should not be incorrect to say that perhaps it still continues to be so). Were Muslim Indians secure during those days? Perhaps not. How then, were we able to carve out a niche for ourselves during those days of insecurity – considering the fact that the magnitude of insecurity of existence was the highest during those days?
One prime and important reason that occurs to me is that Muslim Indians were definitely insecure in terms of existence; however, were not insecure in terms of their IDENTITY. Things are probably not much different today – we are in minority today as well, we do face prejudice and biasness today as well, and we do face the same threat to our property and lives today as well. The difference is that we did not face identity insecurity then, which we so deficiently face today.
To exemplify – how comfortable do we feel talking about Islam and Muslim Indians in public? How comfortable are we in discussing our rituals and beliefs? Most important of all, how comfortable are we in expressing ourselves as Muslim Indians (not Indian Muslims)? We ensure that we do not talk about the problems being faced by average Muslim Indians because we might be termed intolerant. We avoid expressing our rituals and beliefs because we fear becoming outcasts compared to the Majority. We fear (yes, FEAR) in expressing ourselves as Muslim Indians because we might be branded NON-SECULAR. This, the insecurity of IDENTITY, is the gravest concern that we are evidently faced with today.
The adversaries thrive on our insecurity of identity because they are aware and confident of the fact that this insecurity has all the aptitude to sojourn our rational thinking. And once we are stripped of rational thinking, everything starts slickly falling into their platter! Consider this revised sense of insecurity under the influence of stripped rational – We need to co-EXIST with a Majority. Therefore, we need to live at their disposal.
We need to abide by their rules of existence. If we cannot exist, how would we be able to proceed with our subsistence? Everything else (including education, employment, economy, empowerment, disposition, and social recognition and actualization) can wait; first we need to survive, EXIST. This is how things appear, and this is what and how the adversaries want us to believe!
The way out is easier said than done. It all is a vicious circle (something similar to the chakravyuh), the never-ending spiral formation of abjection, which needs to be broken; broken from various fronts simultaneously. The first front that we need to strike is our attitude and thought process, rational thinking, to be more precise. Let’s inspect the conditions a little more objectively, with a more rationale line of thought.
Muslim Indians constitute more than 13% of the total Indian populace. What percentage of Muslim representation do we have at various levels of national, social, political, economic, educational, and corporate governance? If we do not have adequate representation, how do we plan to wash out this enduring sense of insecurity? How do we ensure adequate representation if we are not adequately educated and consummate? One may argue that to be educated and consummate, one needs to be secure in terms of existence.
To address the previous concern, let’s appraise Article 29 of the Constitution of India, which states, “(1) Any section of the citizens residing in the territory of India or any part thereof having a distinct language, script or culture of its own shall have the right to conserve the same. (2) No citizen shall be denied admission into any educational institution maintained by the State or receiving aid out of State funds on grounds only of religion, race, caste, language or any of them.” So, if we are not educated and consummate, how can we expect to discern and implement this provision provided to us by our Constitution?
Having realized the importance of educational deficiency, we need to work on it manifolds. First, we need to collectively shun the premise of insecurity to existence being the highest level of our concern. Rather, we need to look at educational deficiency among Muslim Indians as the gravest of all concerns. We need to reconstruct our educational edifice so that our children get impartial education and excel in both religious and contemporary domains. At the same time, we need to hunt down the disgrace and de-branding of Muslim Indians in terms of insecurity of our IDENTITY. This calls for a revolution in its true sense – working on war footing to pull off both these ends simultaneously.
We need colossal efforts, sweat, toil, maybe blood, to uplift ourselves out of this sense of insecurity. That is the only way we can candidly and profoundly say that we are not prepared to lose even a small part of that legacy (being a Muslim) and we are equally proud of the fact that we are Muslim Indians, an essential part of the indivisible unity of the Indian nationhood, without which our noble edifice will remain incomplete.
Tuesday, February 17, 2009
Obama, an economic unilateralist
By NEWSCOP
The silliest thing that clever people are saying about the world economic crisis is that the United States will lose its position as the dominant world superpower in consequence. On the contrary: the crisis strengthens the relative position of the United States and exposes the far graver weaknesses of all prospective competitors. It makes the debt of the American government the world's most desirable asset. America may deserve to decline, but as Clint Eastwood said in another context, "deserve's got nothing to do with it". President Barack Obama may turn out to be the most egregious unilateralist in American history.
America's supposed decline dominates the glossy magazines. Last September, Germany's Finance Minister Peer Steinbruck intoned, "One thing seems probable to me. As a result of the crisis, the United States will lose its status as the superpower of the global financial system." The German official is quoted by Professor Richard Florida in the March 2009 Atlantic Monthly, who adds, "You don't have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming and underproducing American empire - the fall long prophesied by [British historian] Paul Kennedy and others."
And the ubiquitous Professor Niall Ferguson told a Vanity Fair interviewer on January 20 that America would crumble like Great Britain in the 1970s. "It certainly will be extremely painful ... Half the federal debt is held by foreigners. And if the US either defaults on debt or allows the dollar to depreciate, the rest of the world is going to say, 'Wait a second, you just screwed us.' And that's, I think, the moment at which the United States experiences the British experience - when, in the dark days of the 60s and 70s, Britain fundamentally lost its credibility and ceased to be a financial great power."
But is this true? In fact, the rest of the world has queued up to lend America as much money as it might wish to borrow in order to get its consumers to spend again, and buy the manufactures and raw materials of the rest of the world. It won't work, but that is another matter. As I wrote last October, the world isn't flat, contrary to New York Times pundit Thomas Friedman's vision of a level global playing field. It's flattened.
Here's a thought-experiment to gauge the merits of different national markets as a safe haven. Close your eyes and try to imagine what Germany, Japan and China will look like 30 years from now, that is, when a newly-issued long-term bond will mature. Citing Pope Benedict XVI's critique of economics, I argued recently that the market cannot form accurate long-term expectations; it only can imagine future states of the world. (See Benedict XVI is magnificently right, Asia Times Online, December 9, 2008). Let us see what imagination tells us about the world's largest capital markets. The conclusions of this exercise, I will show later, reinforce the founding premises of "supply-side economics", the theory that guided America out of the 1979-1983 mini-depression.
Imagination fails in the case of Europe and Japan. One out of every four Germans today is older than 60, and in 30 years the proportion will rise to two-fifths. Japan is even worse: 30% of Japanese today are above 60, and in 30 years the number will be almost half. What does a national economy look like when the demographics are so skewed to pensioners?
We never have seen anything like this before in all of history. Pension and health costs projected forward will crush these economies a generation from now. Taxes will suffocate the dwindling population of young workers. A straight-line projection of present trends takes us to the cusp of national failure. We do not know whether present trends will continue in a straight line, to be sure. The race is not to the swift, nor the battle to the strong, as Damon Runyon said, but that's the way to bet.
Children are the wealth of nations, provided that their nations can put tools in their hands and the rule of law at their back. Countries that lack children are poor. Aging Germans do not have young people to whom to lend. That is why they lent their savings to Americans, through the subprime market, and why European banks are if anything worse off than American banks.
Imagination also fails in the case of China, not because extrapolation of present trends is so frightening, but rather because economic growth cannot possibly continue at the pace of the past 10 years. China is a different country than it was 30 years ago, and it will be a different country in another 30 years. It is in the midst of the largest migration of peoples in the history of the world, the fastest rate of urbanization and the greatest economic expansion of which we know. Its political system and social structure will change so radically that it is impossible to form a clear picture of the country in 2040.
Great opportunities are attended by enormous dangers. China has more young people than any other country in the world, more than all of Europe put together, but too many of them are trapped in rural poverty, uneducated and untrained.
That is why Chinese save half their income, more than anyone else in the world. Part of China's steroidal savings rate can be explained by the one-child policy. People whose children will not care for them in old age require financial assets. What economists call precautionary savings, saving for a rainy day, explains a great deal of the Chinese demand for savings. The sun has shone on the Chinese economy for a generation, but when it rains, who is to say how hard it will rain? Extreme uncertainty about the future explains China's savings rate.
But America's future is not hard to visualize in 2040. In fact, America in 1979 was not much different from America in 2009. Minor adjustments await Americans over the next generation compared with the great changes affecting its prospective competitors.
China may offer greater prospective returns than America - a billion Chinese will make the transition from a low-productivity rural environment into a high-productivity urban environment during the next generation - but it also requires a greater appetite for risk. Nothing can compete with the United States as a safe-haven investment for the long term. German petulance about America's domination of world markets rises in inverse proportion to the German birth rate. The German finance minister should know better.
The Chinese have no such illusions. Luo Ping, a director general at the China Bank Regulatory Commission, told an American audience, "We hate you guys. Once you start issuing $1 trillion-$2 trillion ... we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
A fearful world is buying trillions of dollars of securities from the US Treasury. Of all the cash flows in the world, nothing is more reliable than the tax revenues of the American state, the longest-lasting government on Earth presiding over the world's largest economy.
During the 1960s, a young Canadian economist, Robert Mundell, argued that an increase in US government debt might represent a true increase in wealth under certain circumstances. It is relatively easy to capitalize corporate income streams through bonds, Mundell observed, but much harder to capitalize household income streams. If the government cuts taxes and issues bonds to replace the lost revenue, the increase in the float of the government bonds outstanding will represent an increase in wealth, provided that the tax increase stimulates growth, and the resulting growth brings in enough taxes to pay the interest on the bonds.
From this insight emerged the economic program of president Ronald Reagan. Drastic tax cuts, reducing the marginal tax rate from 70% to 40%, vastly increased the US budget deficit during the early 1980s. But the increase in revenues from a recovering economy more than paid the interest on the additional bonds, and the increase in government debt represented an increase in wealth. Mundell went on to win the Nobel Prize for Economics in 1999, for work in a different area.
America's economic crisis in 2009 bears little resemblance to the mini-depression of 1979. Then, the baby boomers were in their 20s and 30s; now they are in their 50s and 60s. As I wrote in my year-end essay, the Reagan administration made it easier for homeowners and businesses to obtain leverage. Young people need leverage to start families; old people need savings. The medicine that cured the economy in the early 1980s turned into an addiction during the 2000s.
But there is a perverse parallel between the Treasury market of 1979 and 2009. In both cases, the market is willing to absorb an enormous increase in the float of US government securities. Looking into the future, no cash flows in the world are more secure than the tax revenues of the American Treasury.
The greater the uncertainty attached to all other cash flows, the greater the demand for US Treasury securities. America does not have to throw its political weight around to persuade the world to fund between $1.5 trillion and $2 trillion of new debt issuance; its political weight stems from the fact that the world needs the United States as a safe haven for its money.
The difference, of course, is that the increased issuance of Treasury securities during the Reagan years represented an absolute increase in wealth, capitalizing the recovery prospects of the US economy. All the other economies of the free world benefited. The Obama administration's multi-trillion dollar borrowing requirement constitutes a shift in relative wealth. Less capital will be available for other economies. The relative position of the United States will strengthen radically, which is to say that the position of many other parts of the world will weaken radically.
Obama isn't entirely to blame for this sorry state of affairs, to be sure, given that these trends were in place before he took office. Still, it is incongruous that the liberal consensus welcomed the multilateralist Obama and bade good riddance to the unilateralist Republicans. A radical shift in economic power in favor of the United States makes Obama the moral equivalent of a unilateralist, to a degree that Reagan never could have imagined.
To overpay unionized construction workers to build bridges, and bail out the bloated budgets of American states, the Obama administration will flood the world with so much Treasury debt that capital will flow out of the poorest countries to buy it. Rather than protest this outrageously unilateralist action, the rest of the world encourages him to do so, hoping that somehow the Obama stimulus package will get American consumers to buy their goods once again.
During the Reagan years, the rest of the world had the right to grumble about the dominance of the American economy. Now that American policy has become a millstone around the necks of most of the world's economies, the rest of the world's leaders flatter Obama while he beats them. No Republican president ever had it so good.
The silliest thing that clever people are saying about the world economic crisis is that the United States will lose its position as the dominant world superpower in consequence. On the contrary: the crisis strengthens the relative position of the United States and exposes the far graver weaknesses of all prospective competitors. It makes the debt of the American government the world's most desirable asset. America may deserve to decline, but as Clint Eastwood said in another context, "deserve's got nothing to do with it". President Barack Obama may turn out to be the most egregious unilateralist in American history.
America's supposed decline dominates the glossy magazines. Last September, Germany's Finance Minister Peer Steinbruck intoned, "One thing seems probable to me. As a result of the crisis, the United States will lose its status as the superpower of the global financial system." The German official is quoted by Professor Richard Florida in the March 2009 Atlantic Monthly, who adds, "You don't have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming and underproducing American empire - the fall long prophesied by [British historian] Paul Kennedy and others."
And the ubiquitous Professor Niall Ferguson told a Vanity Fair interviewer on January 20 that America would crumble like Great Britain in the 1970s. "It certainly will be extremely painful ... Half the federal debt is held by foreigners. And if the US either defaults on debt or allows the dollar to depreciate, the rest of the world is going to say, 'Wait a second, you just screwed us.' And that's, I think, the moment at which the United States experiences the British experience - when, in the dark days of the 60s and 70s, Britain fundamentally lost its credibility and ceased to be a financial great power."
But is this true? In fact, the rest of the world has queued up to lend America as much money as it might wish to borrow in order to get its consumers to spend again, and buy the manufactures and raw materials of the rest of the world. It won't work, but that is another matter. As I wrote last October, the world isn't flat, contrary to New York Times pundit Thomas Friedman's vision of a level global playing field. It's flattened.
Here's a thought-experiment to gauge the merits of different national markets as a safe haven. Close your eyes and try to imagine what Germany, Japan and China will look like 30 years from now, that is, when a newly-issued long-term bond will mature. Citing Pope Benedict XVI's critique of economics, I argued recently that the market cannot form accurate long-term expectations; it only can imagine future states of the world. (See Benedict XVI is magnificently right, Asia Times Online, December 9, 2008). Let us see what imagination tells us about the world's largest capital markets. The conclusions of this exercise, I will show later, reinforce the founding premises of "supply-side economics", the theory that guided America out of the 1979-1983 mini-depression.
Imagination fails in the case of Europe and Japan. One out of every four Germans today is older than 60, and in 30 years the proportion will rise to two-fifths. Japan is even worse: 30% of Japanese today are above 60, and in 30 years the number will be almost half. What does a national economy look like when the demographics are so skewed to pensioners?
We never have seen anything like this before in all of history. Pension and health costs projected forward will crush these economies a generation from now. Taxes will suffocate the dwindling population of young workers. A straight-line projection of present trends takes us to the cusp of national failure. We do not know whether present trends will continue in a straight line, to be sure. The race is not to the swift, nor the battle to the strong, as Damon Runyon said, but that's the way to bet.
Children are the wealth of nations, provided that their nations can put tools in their hands and the rule of law at their back. Countries that lack children are poor. Aging Germans do not have young people to whom to lend. That is why they lent their savings to Americans, through the subprime market, and why European banks are if anything worse off than American banks.
Imagination also fails in the case of China, not because extrapolation of present trends is so frightening, but rather because economic growth cannot possibly continue at the pace of the past 10 years. China is a different country than it was 30 years ago, and it will be a different country in another 30 years. It is in the midst of the largest migration of peoples in the history of the world, the fastest rate of urbanization and the greatest economic expansion of which we know. Its political system and social structure will change so radically that it is impossible to form a clear picture of the country in 2040.
Great opportunities are attended by enormous dangers. China has more young people than any other country in the world, more than all of Europe put together, but too many of them are trapped in rural poverty, uneducated and untrained.
That is why Chinese save half their income, more than anyone else in the world. Part of China's steroidal savings rate can be explained by the one-child policy. People whose children will not care for them in old age require financial assets. What economists call precautionary savings, saving for a rainy day, explains a great deal of the Chinese demand for savings. The sun has shone on the Chinese economy for a generation, but when it rains, who is to say how hard it will rain? Extreme uncertainty about the future explains China's savings rate.
But America's future is not hard to visualize in 2040. In fact, America in 1979 was not much different from America in 2009. Minor adjustments await Americans over the next generation compared with the great changes affecting its prospective competitors.
China may offer greater prospective returns than America - a billion Chinese will make the transition from a low-productivity rural environment into a high-productivity urban environment during the next generation - but it also requires a greater appetite for risk. Nothing can compete with the United States as a safe-haven investment for the long term. German petulance about America's domination of world markets rises in inverse proportion to the German birth rate. The German finance minister should know better.
The Chinese have no such illusions. Luo Ping, a director general at the China Bank Regulatory Commission, told an American audience, "We hate you guys. Once you start issuing $1 trillion-$2 trillion ... we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
A fearful world is buying trillions of dollars of securities from the US Treasury. Of all the cash flows in the world, nothing is more reliable than the tax revenues of the American state, the longest-lasting government on Earth presiding over the world's largest economy.
During the 1960s, a young Canadian economist, Robert Mundell, argued that an increase in US government debt might represent a true increase in wealth under certain circumstances. It is relatively easy to capitalize corporate income streams through bonds, Mundell observed, but much harder to capitalize household income streams. If the government cuts taxes and issues bonds to replace the lost revenue, the increase in the float of the government bonds outstanding will represent an increase in wealth, provided that the tax increase stimulates growth, and the resulting growth brings in enough taxes to pay the interest on the bonds.
From this insight emerged the economic program of president Ronald Reagan. Drastic tax cuts, reducing the marginal tax rate from 70% to 40%, vastly increased the US budget deficit during the early 1980s. But the increase in revenues from a recovering economy more than paid the interest on the additional bonds, and the increase in government debt represented an increase in wealth. Mundell went on to win the Nobel Prize for Economics in 1999, for work in a different area.
America's economic crisis in 2009 bears little resemblance to the mini-depression of 1979. Then, the baby boomers were in their 20s and 30s; now they are in their 50s and 60s. As I wrote in my year-end essay, the Reagan administration made it easier for homeowners and businesses to obtain leverage. Young people need leverage to start families; old people need savings. The medicine that cured the economy in the early 1980s turned into an addiction during the 2000s.
But there is a perverse parallel between the Treasury market of 1979 and 2009. In both cases, the market is willing to absorb an enormous increase in the float of US government securities. Looking into the future, no cash flows in the world are more secure than the tax revenues of the American Treasury.
The greater the uncertainty attached to all other cash flows, the greater the demand for US Treasury securities. America does not have to throw its political weight around to persuade the world to fund between $1.5 trillion and $2 trillion of new debt issuance; its political weight stems from the fact that the world needs the United States as a safe haven for its money.
The difference, of course, is that the increased issuance of Treasury securities during the Reagan years represented an absolute increase in wealth, capitalizing the recovery prospects of the US economy. All the other economies of the free world benefited. The Obama administration's multi-trillion dollar borrowing requirement constitutes a shift in relative wealth. Less capital will be available for other economies. The relative position of the United States will strengthen radically, which is to say that the position of many other parts of the world will weaken radically.
Obama isn't entirely to blame for this sorry state of affairs, to be sure, given that these trends were in place before he took office. Still, it is incongruous that the liberal consensus welcomed the multilateralist Obama and bade good riddance to the unilateralist Republicans. A radical shift in economic power in favor of the United States makes Obama the moral equivalent of a unilateralist, to a degree that Reagan never could have imagined.
To overpay unionized construction workers to build bridges, and bail out the bloated budgets of American states, the Obama administration will flood the world with so much Treasury debt that capital will flow out of the poorest countries to buy it. Rather than protest this outrageously unilateralist action, the rest of the world encourages him to do so, hoping that somehow the Obama stimulus package will get American consumers to buy their goods once again.
During the Reagan years, the rest of the world had the right to grumble about the dominance of the American economy. Now that American policy has become a millstone around the necks of most of the world's economies, the rest of the world's leaders flatter Obama while he beats them. No Republican president ever had it so good.
Obama, an economic unilateralist
By NEWSCOP
The silliest thing that clever people are saying about the world economic crisis is that the United States will lose its position as the dominant world superpower in consequence. On the contrary: the crisis strengthens the relative position of the United States and exposes the far graver weaknesses of all prospective competitors. It makes the debt of the American government the world's most desirable asset. America may deserve to decline, but as Clint Eastwood said in another context, "deserve's got nothing to do with it". President Barack Obama may turn out to be the most egregious unilateralist in American history.
America's supposed decline dominates the glossy magazines. Last September, Germany's Finance Minister Peer Steinbruck intoned, "One thing seems probable to me. As a result of the crisis, the United States will lose its status as the superpower of the global financial system." The German official is quoted by Professor Richard Florida in the March 2009 Atlantic Monthly, who adds, "You don't have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming and underproducing American empire - the fall long prophesied by [British historian] Paul Kennedy and others."
And the ubiquitous Professor Niall Ferguson told a Vanity Fair interviewer on January 20 that America would crumble like Great Britain in the 1970s. "It certainly will be extremely painful ... Half the federal debt is held by foreigners. And if the US either defaults on debt or allows the dollar to depreciate, the rest of the world is going to say, 'Wait a second, you just screwed us.' And that's, I think, the moment at which the United States experiences the British experience - when, in the dark days of the 60s and 70s, Britain fundamentally lost its credibility and ceased to be a financial great power."
But is this true? In fact, the rest of the world has queued up to lend America as much money as it might wish to borrow in order to get its consumers to spend again, and buy the manufactures and raw materials of the rest of the world. It won't work, but that is another matter. As I wrote last October, the world isn't flat, contrary to New York Times pundit Thomas Friedman's vision of a level global playing field. It's flattened.
Here's a thought-experiment to gauge the merits of different national markets as a safe haven. Close your eyes and try to imagine what Germany, Japan and China will look like 30 years from now, that is, when a newly-issued long-term bond will mature. Citing Pope Benedict XVI's critique of economics, I argued recently that the market cannot form accurate long-term expectations; it only can imagine future states of the world. (See Benedict XVI is magnificently right, Asia Times Online, December 9, 2008). Let us see what imagination tells us about the world's largest capital markets. The conclusions of this exercise, I will show later, reinforce the founding premises of "supply-side economics", the theory that guided America out of the 1979-1983 mini-depression.
Imagination fails in the case of Europe and Japan. One out of every four Germans today is older than 60, and in 30 years the proportion will rise to two-fifths. Japan is even worse: 30% of Japanese today are above 60, and in 30 years the number will be almost half. What does a national economy look like when the demographics are so skewed to pensioners?
We never have seen anything like this before in all of history. Pension and health costs projected forward will crush these economies a generation from now. Taxes will suffocate the dwindling population of young workers. A straight-line projection of present trends takes us to the cusp of national failure. We do not know whether present trends will continue in a straight line, to be sure. The race is not to the swift, nor the battle to the strong, as Damon Runyon said, but that's the way to bet.
Children are the wealth of nations, provided that their nations can put tools in their hands and the rule of law at their back. Countries that lack children are poor. Aging Germans do not have young people to whom to lend. That is why they lent their savings to Americans, through the subprime market, and why European banks are if anything worse off than American banks.
Imagination also fails in the case of China, not because extrapolation of present trends is so frightening, but rather because economic growth cannot possibly continue at the pace of the past 10 years. China is a different country than it was 30 years ago, and it will be a different country in another 30 years. It is in the midst of the largest migration of peoples in the history of the world, the fastest rate of urbanization and the greatest economic expansion of which we know. Its political system and social structure will change so radically that it is impossible to form a clear picture of the country in 2040.
Great opportunities are attended by enormous dangers. China has more young people than any other country in the world, more than all of Europe put together, but too many of them are trapped in rural poverty, uneducated and untrained.
That is why Chinese save half their income, more than anyone else in the world. Part of China's steroidal savings rate can be explained by the one-child policy. People whose children will not care for them in old age require financial assets. What economists call precautionary savings, saving for a rainy day, explains a great deal of the Chinese demand for savings. The sun has shone on the Chinese economy for a generation, but when it rains, who is to say how hard it will rain? Extreme uncertainty about the future explains China's savings rate.
But America's future is not hard to visualize in 2040. In fact, America in 1979 was not much different from America in 2009. Minor adjustments await Americans over the next generation compared with the great changes affecting its prospective competitors.
China may offer greater prospective returns than America - a billion Chinese will make the transition from a low-productivity rural environment into a high-productivity urban environment during the next generation - but it also requires a greater appetite for risk. Nothing can compete with the United States as a safe-haven investment for the long term. German petulance about America's domination of world markets rises in inverse proportion to the German birth rate. The German finance minister should know better.
The Chinese have no such illusions. Luo Ping, a director general at the China Bank Regulatory Commission, told an American audience, "We hate you guys. Once you start issuing $1 trillion-$2 trillion ... we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
A fearful world is buying trillions of dollars of securities from the US Treasury. Of all the cash flows in the world, nothing is more reliable than the tax revenues of the American state, the longest-lasting government on Earth presiding over the world's largest economy.
During the 1960s, a young Canadian economist, Robert Mundell, argued that an increase in US government debt might represent a true increase in wealth under certain circumstances. It is relatively easy to capitalize corporate income streams through bonds, Mundell observed, but much harder to capitalize household income streams. If the government cuts taxes and issues bonds to replace the lost revenue, the increase in the float of the government bonds outstanding will represent an increase in wealth, provided that the tax increase stimulates growth, and the resulting growth brings in enough taxes to pay the interest on the bonds.
From this insight emerged the economic program of president Ronald Reagan. Drastic tax cuts, reducing the marginal tax rate from 70% to 40%, vastly increased the US budget deficit during the early 1980s. But the increase in revenues from a recovering economy more than paid the interest on the additional bonds, and the increase in government debt represented an increase in wealth. Mundell went on to win the Nobel Prize for Economics in 1999, for work in a different area.
America's economic crisis in 2009 bears little resemblance to the mini-depression of 1979. Then, the baby boomers were in their 20s and 30s; now they are in their 50s and 60s. As I wrote in my year-end essay, the Reagan administration made it easier for homeowners and businesses to obtain leverage. Young people need leverage to start families; old people need savings. The medicine that cured the economy in the early 1980s turned into an addiction during the 2000s.
But there is a perverse parallel between the Treasury market of 1979 and 2009. In both cases, the market is willing to absorb an enormous increase in the float of US government securities. Looking into the future, no cash flows in the world are more secure than the tax revenues of the American Treasury.
The greater the uncertainty attached to all other cash flows, the greater the demand for US Treasury securities. America does not have to throw its political weight around to persuade the world to fund between $1.5 trillion and $2 trillion of new debt issuance; its political weight stems from the fact that the world needs the United States as a safe haven for its money.
The difference, of course, is that the increased issuance of Treasury securities during the Reagan years represented an absolute increase in wealth, capitalizing the recovery prospects of the US economy. All the other economies of the free world benefited. The Obama administration's multi-trillion dollar borrowing requirement constitutes a shift in relative wealth. Less capital will be available for other economies. The relative position of the United States will strengthen radically, which is to say that the position of many other parts of the world will weaken radically.
Obama isn't entirely to blame for this sorry state of affairs, to be sure, given that these trends were in place before he took office. Still, it is incongruous that the liberal consensus welcomed the multilateralist Obama and bade good riddance to the unilateralist Republicans. A radical shift in economic power in favor of the United States makes Obama the moral equivalent of a unilateralist, to a degree that Reagan never could have imagined.
To overpay unionized construction workers to build bridges, and bail out the bloated budgets of American states, the Obama administration will flood the world with so much Treasury debt that capital will flow out of the poorest countries to buy it. Rather than protest this outrageously unilateralist action, the rest of the world encourages him to do so, hoping that somehow the Obama stimulus package will get American consumers to buy their goods once again.
During the Reagan years, the rest of the world had the right to grumble about the dominance of the American economy. Now that American policy has become a millstone around the necks of most of the world's economies, the rest of the world's leaders flatter Obama while he beats them. No Republican president ever had it so good.
The silliest thing that clever people are saying about the world economic crisis is that the United States will lose its position as the dominant world superpower in consequence. On the contrary: the crisis strengthens the relative position of the United States and exposes the far graver weaknesses of all prospective competitors. It makes the debt of the American government the world's most desirable asset. America may deserve to decline, but as Clint Eastwood said in another context, "deserve's got nothing to do with it". President Barack Obama may turn out to be the most egregious unilateralist in American history.
America's supposed decline dominates the glossy magazines. Last September, Germany's Finance Minister Peer Steinbruck intoned, "One thing seems probable to me. As a result of the crisis, the United States will lose its status as the superpower of the global financial system." The German official is quoted by Professor Richard Florida in the March 2009 Atlantic Monthly, who adds, "You don't have to strain too hard to see the financial crisis as the death knell for a debt-ridden, overconsuming and underproducing American empire - the fall long prophesied by [British historian] Paul Kennedy and others."
And the ubiquitous Professor Niall Ferguson told a Vanity Fair interviewer on January 20 that America would crumble like Great Britain in the 1970s. "It certainly will be extremely painful ... Half the federal debt is held by foreigners. And if the US either defaults on debt or allows the dollar to depreciate, the rest of the world is going to say, 'Wait a second, you just screwed us.' And that's, I think, the moment at which the United States experiences the British experience - when, in the dark days of the 60s and 70s, Britain fundamentally lost its credibility and ceased to be a financial great power."
But is this true? In fact, the rest of the world has queued up to lend America as much money as it might wish to borrow in order to get its consumers to spend again, and buy the manufactures and raw materials of the rest of the world. It won't work, but that is another matter. As I wrote last October, the world isn't flat, contrary to New York Times pundit Thomas Friedman's vision of a level global playing field. It's flattened.
Here's a thought-experiment to gauge the merits of different national markets as a safe haven. Close your eyes and try to imagine what Germany, Japan and China will look like 30 years from now, that is, when a newly-issued long-term bond will mature. Citing Pope Benedict XVI's critique of economics, I argued recently that the market cannot form accurate long-term expectations; it only can imagine future states of the world. (See Benedict XVI is magnificently right, Asia Times Online, December 9, 2008). Let us see what imagination tells us about the world's largest capital markets. The conclusions of this exercise, I will show later, reinforce the founding premises of "supply-side economics", the theory that guided America out of the 1979-1983 mini-depression.
Imagination fails in the case of Europe and Japan. One out of every four Germans today is older than 60, and in 30 years the proportion will rise to two-fifths. Japan is even worse: 30% of Japanese today are above 60, and in 30 years the number will be almost half. What does a national economy look like when the demographics are so skewed to pensioners?
We never have seen anything like this before in all of history. Pension and health costs projected forward will crush these economies a generation from now. Taxes will suffocate the dwindling population of young workers. A straight-line projection of present trends takes us to the cusp of national failure. We do not know whether present trends will continue in a straight line, to be sure. The race is not to the swift, nor the battle to the strong, as Damon Runyon said, but that's the way to bet.
Children are the wealth of nations, provided that their nations can put tools in their hands and the rule of law at their back. Countries that lack children are poor. Aging Germans do not have young people to whom to lend. That is why they lent their savings to Americans, through the subprime market, and why European banks are if anything worse off than American banks.
Imagination also fails in the case of China, not because extrapolation of present trends is so frightening, but rather because economic growth cannot possibly continue at the pace of the past 10 years. China is a different country than it was 30 years ago, and it will be a different country in another 30 years. It is in the midst of the largest migration of peoples in the history of the world, the fastest rate of urbanization and the greatest economic expansion of which we know. Its political system and social structure will change so radically that it is impossible to form a clear picture of the country in 2040.
Great opportunities are attended by enormous dangers. China has more young people than any other country in the world, more than all of Europe put together, but too many of them are trapped in rural poverty, uneducated and untrained.
That is why Chinese save half their income, more than anyone else in the world. Part of China's steroidal savings rate can be explained by the one-child policy. People whose children will not care for them in old age require financial assets. What economists call precautionary savings, saving for a rainy day, explains a great deal of the Chinese demand for savings. The sun has shone on the Chinese economy for a generation, but when it rains, who is to say how hard it will rain? Extreme uncertainty about the future explains China's savings rate.
But America's future is not hard to visualize in 2040. In fact, America in 1979 was not much different from America in 2009. Minor adjustments await Americans over the next generation compared with the great changes affecting its prospective competitors.
China may offer greater prospective returns than America - a billion Chinese will make the transition from a low-productivity rural environment into a high-productivity urban environment during the next generation - but it also requires a greater appetite for risk. Nothing can compete with the United States as a safe-haven investment for the long term. German petulance about America's domination of world markets rises in inverse proportion to the German birth rate. The German finance minister should know better.
The Chinese have no such illusions. Luo Ping, a director general at the China Bank Regulatory Commission, told an American audience, "We hate you guys. Once you start issuing $1 trillion-$2 trillion ... we know the dollar is going to depreciate, so we hate you guys but there is nothing much we can do."
A fearful world is buying trillions of dollars of securities from the US Treasury. Of all the cash flows in the world, nothing is more reliable than the tax revenues of the American state, the longest-lasting government on Earth presiding over the world's largest economy.
During the 1960s, a young Canadian economist, Robert Mundell, argued that an increase in US government debt might represent a true increase in wealth under certain circumstances. It is relatively easy to capitalize corporate income streams through bonds, Mundell observed, but much harder to capitalize household income streams. If the government cuts taxes and issues bonds to replace the lost revenue, the increase in the float of the government bonds outstanding will represent an increase in wealth, provided that the tax increase stimulates growth, and the resulting growth brings in enough taxes to pay the interest on the bonds.
From this insight emerged the economic program of president Ronald Reagan. Drastic tax cuts, reducing the marginal tax rate from 70% to 40%, vastly increased the US budget deficit during the early 1980s. But the increase in revenues from a recovering economy more than paid the interest on the additional bonds, and the increase in government debt represented an increase in wealth. Mundell went on to win the Nobel Prize for Economics in 1999, for work in a different area.
America's economic crisis in 2009 bears little resemblance to the mini-depression of 1979. Then, the baby boomers were in their 20s and 30s; now they are in their 50s and 60s. As I wrote in my year-end essay, the Reagan administration made it easier for homeowners and businesses to obtain leverage. Young people need leverage to start families; old people need savings. The medicine that cured the economy in the early 1980s turned into an addiction during the 2000s.
But there is a perverse parallel between the Treasury market of 1979 and 2009. In both cases, the market is willing to absorb an enormous increase in the float of US government securities. Looking into the future, no cash flows in the world are more secure than the tax revenues of the American Treasury.
The greater the uncertainty attached to all other cash flows, the greater the demand for US Treasury securities. America does not have to throw its political weight around to persuade the world to fund between $1.5 trillion and $2 trillion of new debt issuance; its political weight stems from the fact that the world needs the United States as a safe haven for its money.
The difference, of course, is that the increased issuance of Treasury securities during the Reagan years represented an absolute increase in wealth, capitalizing the recovery prospects of the US economy. All the other economies of the free world benefited. The Obama administration's multi-trillion dollar borrowing requirement constitutes a shift in relative wealth. Less capital will be available for other economies. The relative position of the United States will strengthen radically, which is to say that the position of many other parts of the world will weaken radically.
Obama isn't entirely to blame for this sorry state of affairs, to be sure, given that these trends were in place before he took office. Still, it is incongruous that the liberal consensus welcomed the multilateralist Obama and bade good riddance to the unilateralist Republicans. A radical shift in economic power in favor of the United States makes Obama the moral equivalent of a unilateralist, to a degree that Reagan never could have imagined.
To overpay unionized construction workers to build bridges, and bail out the bloated budgets of American states, the Obama administration will flood the world with so much Treasury debt that capital will flow out of the poorest countries to buy it. Rather than protest this outrageously unilateralist action, the rest of the world encourages him to do so, hoping that somehow the Obama stimulus package will get American consumers to buy their goods once again.
During the Reagan years, the rest of the world had the right to grumble about the dominance of the American economy. Now that American policy has become a millstone around the necks of most of the world's economies, the rest of the world's leaders flatter Obama while he beats them. No Republican president ever had it so good.
Vote-Bank Politics: In the last year, mandarins of the ruling Congress Party (aided and abetted by various NGOs and self-styled "leftist" gurus) have been crafting policies with both eyes focussed exclusively on cultivating "winnable" vote-banks.
The hyper-aggressive quota-raj, the unprecedented (albeit opportunist and short-sighted) farm-loan waiver, unabashed (and often treacherous) Islamic appeasement, and the cynical Hindu-baiting (as in the frame-up of Sadhvi Pragya and Abhinav Bharat activists in the Malegaon blast) were all designed to shore up the Congress (and UPA) vote-banks in anticipation of state and national elections.
Even the left-initiated NREGS program (which was initially viewed with some skepticism) drew enthusiastic Congress support when its potential for attracting rural votes was highlighted. For an entire year, the Congress was consumed with harvesting specific vote banks, and so intent was the national media in advancing the image of the Congress that it chose to wilfully under-report or ignore a series of gross policy mis-steps (such as tightening interest rates when the entire world was heading towards a deep and long recession).
But the irony of the recent vote was not that the BJP failed to consolidate the anti-terror vote but that all the cynical ploys of the Congress bigwigs failed to make any impact on the two states where these crafty manouvers were expected to yield the highest dividends.
Candidates anointed by Quota Czar Arjun Singh failed miserably at the hustings, and the much touted loan waiver had only a minor impact on the rural vote. In a further karmic reversal, the tortuous attempts at concocting a "Saffron Terror Conspiracy" rudely backfired on the Congress with most voters seeing through the crude charade put up by the Maharashtra ATS.
For many months, the Congress-affiliated propaganda machine had gone over-board in portraying the BJP government as being ultra-harsh on the poor. International and domestic media outlets were rife with stories of "rampant malnutrition" and "starvation" deaths amongst the rural poor. And even though a CAG report had identified Madhya Pradesh as the most pro-active and efficient implementer of the NREG scheme, pro-Congress and pro-Left intellectuals rushed to trash the CAG report lest credit for the flagship scheme go the BJP. Yet, none of this cut much ice with the voters.
If anything, reports critiquing the BJP's implementation of the NREG program only revealed the many inherent limitations in the flagship scheme that put serious question marks on its long-term utility and viability. After all, there is only so much useful infrastructure that can be built in villages where economic conditions are otherwise not conducive for develoment.
In spite of mounting evidence that India's modernization requires widespread and rapid (but planned and orderly) urbanization, India's left (whether naxal or mainstream) remains fixated with the Indian village even though droves of villagers continue to abandon their stagnant or unviable rural habitats for the economically more vibrant city. Throughout the world, there has been an inexorable trend towards migration to the city. Yet, only in India, does the entire left respond to the inevitability of urbanization with repeated acts of defiant lunacy.
Consequently, in both Madhya Pradesh and Chhatisgarh, India's medievally obsessed leftists got the decisive brush-off they deserved. For years, the Indian left had salivated at the prospect of a tribal-dominated state in central India that would finally allow it to expand beyond the old forts of Bengal and Kerala. The entire left (along with their many cohorts in the Indian "Human Rights" community) had rallied sharply against the BJP, yet it was in tribal-dominated Bastar where the BJP did best. Tribal communities refused to be treated as museum pieces by armchair leftists and outsiders. They saw that development could happen in the state (as it had not only in Raipur and the twin cities of Bhilai and Durg, but also in Bilapsur, Rajnandgaon and emerging industrial centres like Raigarh and Korba). What they wanted was tangible progress, not hot air.
Other purveyors of such vote-bank politics also suffered humiliating rejections. The Samajvadi Party that once appeared to have perfected the art of benefiting from vote-bank policies (until its recent defeat in UP) also received a befitting rebuff.
However, in Rajasthan, the result was less than cheering for those hoping for the demise of caste as a factor in Indian politics.
Although it may be worth noting that only 1% separated the vote share of the two main parties (and the combined vote of the BJP and its rebels exceeded the Congress vote), nevertheless, there is some evidence that the caste-card had a deleterious effect on the fortunes of the BJP, particularly the Congress-backed (and possibly Congress-engineered) Gujjar agitation and the subsequent Meena backlash. Having opened the door to the politics of quotas in her first campaign, Vasundhara Raje fell to an even more toxic cauldron of the caste brew.
Having taken commendable steps in improving state highways, dramatically augmenting power supply, enhancing schemes for education of the girl-child, and greatly increasing options for vocational training and engineering education, proponents of development in the once BIMARU state may have anticipated a Raje win. But unfortunately, some of her efforts will only yield fruit later (and so failed to move enough voters) and dirty politics undoubtedly played a role in her undoing.
Nevertheless, there may well be other lacunae in Raje's strategy for the development of Rajasthan. In Gujarat, notwitstanding Sonia Gandhi's shrill "Maut ka Saudagar" campaign, Modi won handsomely. None of the semingly clever caste and other calculations were able to undermine his popular appeal.
Therefore, other factors may also be at play.
One of the industries that has put India on the international map is its pharmaceutical industry. Although it would be foolhardy to over-generalize from an analysis of this industry alone, one may be tempted to infer that the development of the pharmaceutical industry can be seen as one important marker of a state's industrial maturity. An on-line 2004 report on the spatial spread of pharma-manufacturers offers some useful clues.
By 2004, states like Gujarat (along with Punjab and Haryana) had achieved a remarkable developmental spread with pharmaceutical units setting up in almost every district; and in some districts, they had a presence in multiple blocks. In contrast, in Maharashtra, pharmaceutical units were concentrated almost entirely in the western third of the state. The Vidarbha region was conspicuously under-represented. This may have contributed to the earlier defeat of the Shiv-Sena led government which did quite poorly in the eastern regions of the state.
However, in MP, there appears to have been a modest (albeit visible) expansion in the industrialization of hitherto under-developed or undeveloped districts. Besides Indore and Bhopal, Gwalior has emerged as a growth magnet for northern MP and Jabalpur for southern MP. In addition, secondary growth clusters have emerged in Nimach, Mandsaur and Ratlam in the extreme west, Satna and Rewa in the north east, Sagar and Ujjain in central MP, and Balaghat and Damoh in southern/eastern MP. Even though substantive industrial growth has not yet encompassed all districts, the impact of development in neighboring districts has given hope to a majority of residents that progress is on the horizon.
In contrast (if one goes by the 2004 pharma survey), Rajasthan suffered from a more skewed and narrow pattern of industrialization. The spatial spread of its industries was noticeably worse than Orissa, AP and MP. Laudable as they were, Vasundhara Raje's efforts to accelerate industrial development bore fruit primarily in Jaipur and the neighboring districts of Alwar, Kota and Ajmer(and to a lesser extent in Central Rajsthan, and around Sikar, Ganganagar and Bikaner). Although southern Rajasthan experienced much faster growth than before, the relatively slower pace of industrialization in some of the southern (and some western) districts may have disappointed some, and this may have contributed to some disaffection within party ranks as well.
Just as TDP's Chandrababu Naidu had been punished by the state's voters for overly Hyderabad-centric growth, Raje may have missed the electoral bus for highly Jaipur-centric growth. In spite of a vastly improved record over her predecessor (Gehlot), Raje paid the price for being unable to direct growth uniformly across the state.
Rajasthan is a state where local (or sub-regional) identities can be very strong and expectations for progress were extremely high. Raje's hands-off approach to allow industry the full freedom to choose where it wished to invest may not have sat well with voters who wished her to play a more activist role in bringing industry closer to their door-step.
This is an important lesson for all aspiring state politicians. The same factors that played out against Vasundhara Raje this time may well come to the fore again if Gehlot's approach to government lacks the activism that was expected from Raje. Ridiculed as a developmental zero in his previous term, Gehlot will have to deliver on some very high expectations.
As for the charge that the BJP's attempt to "communalize" the anti-terror campaign failed, it must be emphasized that rural voters in undeveloped or under-developed blocks probably didn't care about the issue enough in a state election. The Congress and its allies should not delude themselves in thinking that their abysmal record in fighting terror will have no impact in the general election.
In Delhi, the BJP's anti-terror campaign fell on deaf ears partly because many of Delhi's RWA activists felt deeply estranged from the party due to its strong and unconditional affiliation with the traders lobby. Many popular RWA leaders who had distanced themselves from both the BJP and the Congress in the earlier Municipal elections actively campaigned for the Congress this time. Contrary to conventional wisdom, the increased voter turnout helped the Congress, not the BJP.
By promoting a Chief Ministerial candidate who was perceived as insensitive or aloof towards the RWAs, and by sidelining many hard-working women cadres and popular municipal councillers, the BJP was fighting the election with one arm tied behind its back.
The RWAs have emerged as a unique and significant grassroots force in the politics of the city. By and large, the candidates that enjoyed a healthy relationship with the RWAs prevailed. Those critical of Congress policies stayed away but couldn't bring themselves to vote for a BJP that had acquired the reputation of being adversarial towards the RWA movement.
However, should Sheila Dixit stubbornly persist in foisting foolhardy and unsound schemes such as the BRTS, it is quite likely that the RWA leaders who have swayed the vote in favor of the Congress will themselves lose credibility and the entire foundation of the RWA movement will be undermined.
Residents in East Delhi (who decisively voted Congress) were obviously unfamiliar with the BRTS fiasco in South Delhi. When such traffic nightmares recur elesewhere in the city, the mood of the city may well change, and quite dramatically so.
Voters are hungry for development, but not necessarily for the wrong kind of development.
It may also be noted that while the Congress did very well in terms of winning seats, it lost a considerable share of its previous votes to the BSP which increased its vote share in Delhi to 14%, in MP to roughly 10% and in Rajasthan to 8%. However, this has not yet translated into as many seats or any substantive political influence. Although the BSP has been able to demonstrate quite decisively that it can play the role of a "spoiler" (by drawing upon a shifting bank of protest votes), it has yet to be determined if similar trends will hold in a national election.
While identity politics may be understandably important for Dalits who are systematically denied the benefits that are their due to local corruption, it cannot be emphasized enough that for the BSP to emerge as a credible alternative to the Congress and BJP, it will have to articulate its views on issues that impact not just Dalits but all voters. It will have to feel the pulse of the entire citizenry if it hopes to lead the nation as a whole.
Even as the support of Dalits gives the BSP a certain moral standing, that may not ensure that other voters will give it a blank check on pressing issues of national importance. That will require more than placating some voters with promises of yet more quotas (even as it dodges key issues for fear of offending its Islamic and caste-related vote banks).
Even in terms of meeting the long-term aspirations of its core base, the BSP will have to carefully consider its present stance of (loosely) allying with an idealogically deformed left. Dalits have no real interest in the tired old left slogan of land reforms. The villages are where caste politics emerges in its ugliest and most baneful form. Most Dalits know that (relatively-speaking) cities liberate them and industrial development offers them the best jobs they can hope to find. They have few illusions about any rural "utopia" implied by the program of the left.
As it is, Dalits are typically the first to leave oppressive villages and the very last to return. That is why, the BSP had only very limited interest in supporting village-centric schemes (such as the NREGS) offered by the left.
Instead, the BSP has a far greater stake in rapid and balanced urbanization. As its urban base expands, it may be compelled to look at the urban-rural divide very differently. It may have to fight more forcefully for low-income urban housing and improved amenities in urban ghettoes and slums. These are issues that have been sorely neglected by the left and other so-called "secular" forces.
Unless sections of the left articulate an agenda of urban renewal and planned urbanisation, an alliance with the left is likely to remain one of temporal convenience - hardly the basis of long-term party building.
While the BJP may need to overcome its tendency towards conservatism and excessive economic liberalism, radical upstarts like the BSP may have to think more seriously about issues pertaining to national security and broad civilizational paradigms that extend beyond the immediate interests of its most avid supporters.
As for the Congress, it should not be too buoyed by its victory (by default) in Rajasthan. Instead, it should ponder very deeply over its predeliction for cynical policy manouvers that go against the overall good of the nation.
Not only is it bad politics, in a majority of districts, even the voters aren't buying.
The hyper-aggressive quota-raj, the unprecedented (albeit opportunist and short-sighted) farm-loan waiver, unabashed (and often treacherous) Islamic appeasement, and the cynical Hindu-baiting (as in the frame-up of Sadhvi Pragya and Abhinav Bharat activists in the Malegaon blast) were all designed to shore up the Congress (and UPA) vote-banks in anticipation of state and national elections.
Even the left-initiated NREGS program (which was initially viewed with some skepticism) drew enthusiastic Congress support when its potential for attracting rural votes was highlighted. For an entire year, the Congress was consumed with harvesting specific vote banks, and so intent was the national media in advancing the image of the Congress that it chose to wilfully under-report or ignore a series of gross policy mis-steps (such as tightening interest rates when the entire world was heading towards a deep and long recession).
But the irony of the recent vote was not that the BJP failed to consolidate the anti-terror vote but that all the cynical ploys of the Congress bigwigs failed to make any impact on the two states where these crafty manouvers were expected to yield the highest dividends.
Candidates anointed by Quota Czar Arjun Singh failed miserably at the hustings, and the much touted loan waiver had only a minor impact on the rural vote. In a further karmic reversal, the tortuous attempts at concocting a "Saffron Terror Conspiracy" rudely backfired on the Congress with most voters seeing through the crude charade put up by the Maharashtra ATS.
For many months, the Congress-affiliated propaganda machine had gone over-board in portraying the BJP government as being ultra-harsh on the poor. International and domestic media outlets were rife with stories of "rampant malnutrition" and "starvation" deaths amongst the rural poor. And even though a CAG report had identified Madhya Pradesh as the most pro-active and efficient implementer of the NREG scheme, pro-Congress and pro-Left intellectuals rushed to trash the CAG report lest credit for the flagship scheme go the BJP. Yet, none of this cut much ice with the voters.
If anything, reports critiquing the BJP's implementation of the NREG program only revealed the many inherent limitations in the flagship scheme that put serious question marks on its long-term utility and viability. After all, there is only so much useful infrastructure that can be built in villages where economic conditions are otherwise not conducive for develoment.
In spite of mounting evidence that India's modernization requires widespread and rapid (but planned and orderly) urbanization, India's left (whether naxal or mainstream) remains fixated with the Indian village even though droves of villagers continue to abandon their stagnant or unviable rural habitats for the economically more vibrant city. Throughout the world, there has been an inexorable trend towards migration to the city. Yet, only in India, does the entire left respond to the inevitability of urbanization with repeated acts of defiant lunacy.
Consequently, in both Madhya Pradesh and Chhatisgarh, India's medievally obsessed leftists got the decisive brush-off they deserved. For years, the Indian left had salivated at the prospect of a tribal-dominated state in central India that would finally allow it to expand beyond the old forts of Bengal and Kerala. The entire left (along with their many cohorts in the Indian "Human Rights" community) had rallied sharply against the BJP, yet it was in tribal-dominated Bastar where the BJP did best. Tribal communities refused to be treated as museum pieces by armchair leftists and outsiders. They saw that development could happen in the state (as it had not only in Raipur and the twin cities of Bhilai and Durg, but also in Bilapsur, Rajnandgaon and emerging industrial centres like Raigarh and Korba). What they wanted was tangible progress, not hot air.
Other purveyors of such vote-bank politics also suffered humiliating rejections. The Samajvadi Party that once appeared to have perfected the art of benefiting from vote-bank policies (until its recent defeat in UP) also received a befitting rebuff.
However, in Rajasthan, the result was less than cheering for those hoping for the demise of caste as a factor in Indian politics.
Although it may be worth noting that only 1% separated the vote share of the two main parties (and the combined vote of the BJP and its rebels exceeded the Congress vote), nevertheless, there is some evidence that the caste-card had a deleterious effect on the fortunes of the BJP, particularly the Congress-backed (and possibly Congress-engineered) Gujjar agitation and the subsequent Meena backlash. Having opened the door to the politics of quotas in her first campaign, Vasundhara Raje fell to an even more toxic cauldron of the caste brew.
Having taken commendable steps in improving state highways, dramatically augmenting power supply, enhancing schemes for education of the girl-child, and greatly increasing options for vocational training and engineering education, proponents of development in the once BIMARU state may have anticipated a Raje win. But unfortunately, some of her efforts will only yield fruit later (and so failed to move enough voters) and dirty politics undoubtedly played a role in her undoing.
Nevertheless, there may well be other lacunae in Raje's strategy for the development of Rajasthan. In Gujarat, notwitstanding Sonia Gandhi's shrill "Maut ka Saudagar" campaign, Modi won handsomely. None of the semingly clever caste and other calculations were able to undermine his popular appeal.
Therefore, other factors may also be at play.
One of the industries that has put India on the international map is its pharmaceutical industry. Although it would be foolhardy to over-generalize from an analysis of this industry alone, one may be tempted to infer that the development of the pharmaceutical industry can be seen as one important marker of a state's industrial maturity. An on-line 2004 report on the spatial spread of pharma-manufacturers offers some useful clues.
By 2004, states like Gujarat (along with Punjab and Haryana) had achieved a remarkable developmental spread with pharmaceutical units setting up in almost every district; and in some districts, they had a presence in multiple blocks. In contrast, in Maharashtra, pharmaceutical units were concentrated almost entirely in the western third of the state. The Vidarbha region was conspicuously under-represented. This may have contributed to the earlier defeat of the Shiv-Sena led government which did quite poorly in the eastern regions of the state.
However, in MP, there appears to have been a modest (albeit visible) expansion in the industrialization of hitherto under-developed or undeveloped districts. Besides Indore and Bhopal, Gwalior has emerged as a growth magnet for northern MP and Jabalpur for southern MP. In addition, secondary growth clusters have emerged in Nimach, Mandsaur and Ratlam in the extreme west, Satna and Rewa in the north east, Sagar and Ujjain in central MP, and Balaghat and Damoh in southern/eastern MP. Even though substantive industrial growth has not yet encompassed all districts, the impact of development in neighboring districts has given hope to a majority of residents that progress is on the horizon.
In contrast (if one goes by the 2004 pharma survey), Rajasthan suffered from a more skewed and narrow pattern of industrialization. The spatial spread of its industries was noticeably worse than Orissa, AP and MP. Laudable as they were, Vasundhara Raje's efforts to accelerate industrial development bore fruit primarily in Jaipur and the neighboring districts of Alwar, Kota and Ajmer(and to a lesser extent in Central Rajsthan, and around Sikar, Ganganagar and Bikaner). Although southern Rajasthan experienced much faster growth than before, the relatively slower pace of industrialization in some of the southern (and some western) districts may have disappointed some, and this may have contributed to some disaffection within party ranks as well.
Just as TDP's Chandrababu Naidu had been punished by the state's voters for overly Hyderabad-centric growth, Raje may have missed the electoral bus for highly Jaipur-centric growth. In spite of a vastly improved record over her predecessor (Gehlot), Raje paid the price for being unable to direct growth uniformly across the state.
Rajasthan is a state where local (or sub-regional) identities can be very strong and expectations for progress were extremely high. Raje's hands-off approach to allow industry the full freedom to choose where it wished to invest may not have sat well with voters who wished her to play a more activist role in bringing industry closer to their door-step.
This is an important lesson for all aspiring state politicians. The same factors that played out against Vasundhara Raje this time may well come to the fore again if Gehlot's approach to government lacks the activism that was expected from Raje. Ridiculed as a developmental zero in his previous term, Gehlot will have to deliver on some very high expectations.
As for the charge that the BJP's attempt to "communalize" the anti-terror campaign failed, it must be emphasized that rural voters in undeveloped or under-developed blocks probably didn't care about the issue enough in a state election. The Congress and its allies should not delude themselves in thinking that their abysmal record in fighting terror will have no impact in the general election.
In Delhi, the BJP's anti-terror campaign fell on deaf ears partly because many of Delhi's RWA activists felt deeply estranged from the party due to its strong and unconditional affiliation with the traders lobby. Many popular RWA leaders who had distanced themselves from both the BJP and the Congress in the earlier Municipal elections actively campaigned for the Congress this time. Contrary to conventional wisdom, the increased voter turnout helped the Congress, not the BJP.
By promoting a Chief Ministerial candidate who was perceived as insensitive or aloof towards the RWAs, and by sidelining many hard-working women cadres and popular municipal councillers, the BJP was fighting the election with one arm tied behind its back.
The RWAs have emerged as a unique and significant grassroots force in the politics of the city. By and large, the candidates that enjoyed a healthy relationship with the RWAs prevailed. Those critical of Congress policies stayed away but couldn't bring themselves to vote for a BJP that had acquired the reputation of being adversarial towards the RWA movement.
However, should Sheila Dixit stubbornly persist in foisting foolhardy and unsound schemes such as the BRTS, it is quite likely that the RWA leaders who have swayed the vote in favor of the Congress will themselves lose credibility and the entire foundation of the RWA movement will be undermined.
Residents in East Delhi (who decisively voted Congress) were obviously unfamiliar with the BRTS fiasco in South Delhi. When such traffic nightmares recur elesewhere in the city, the mood of the city may well change, and quite dramatically so.
Voters are hungry for development, but not necessarily for the wrong kind of development.
It may also be noted that while the Congress did very well in terms of winning seats, it lost a considerable share of its previous votes to the BSP which increased its vote share in Delhi to 14%, in MP to roughly 10% and in Rajasthan to 8%. However, this has not yet translated into as many seats or any substantive political influence. Although the BSP has been able to demonstrate quite decisively that it can play the role of a "spoiler" (by drawing upon a shifting bank of protest votes), it has yet to be determined if similar trends will hold in a national election.
While identity politics may be understandably important for Dalits who are systematically denied the benefits that are their due to local corruption, it cannot be emphasized enough that for the BSP to emerge as a credible alternative to the Congress and BJP, it will have to articulate its views on issues that impact not just Dalits but all voters. It will have to feel the pulse of the entire citizenry if it hopes to lead the nation as a whole.
Even as the support of Dalits gives the BSP a certain moral standing, that may not ensure that other voters will give it a blank check on pressing issues of national importance. That will require more than placating some voters with promises of yet more quotas (even as it dodges key issues for fear of offending its Islamic and caste-related vote banks).
Even in terms of meeting the long-term aspirations of its core base, the BSP will have to carefully consider its present stance of (loosely) allying with an idealogically deformed left. Dalits have no real interest in the tired old left slogan of land reforms. The villages are where caste politics emerges in its ugliest and most baneful form. Most Dalits know that (relatively-speaking) cities liberate them and industrial development offers them the best jobs they can hope to find. They have few illusions about any rural "utopia" implied by the program of the left.
As it is, Dalits are typically the first to leave oppressive villages and the very last to return. That is why, the BSP had only very limited interest in supporting village-centric schemes (such as the NREGS) offered by the left.
Instead, the BSP has a far greater stake in rapid and balanced urbanization. As its urban base expands, it may be compelled to look at the urban-rural divide very differently. It may have to fight more forcefully for low-income urban housing and improved amenities in urban ghettoes and slums. These are issues that have been sorely neglected by the left and other so-called "secular" forces.
Unless sections of the left articulate an agenda of urban renewal and planned urbanisation, an alliance with the left is likely to remain one of temporal convenience - hardly the basis of long-term party building.
While the BJP may need to overcome its tendency towards conservatism and excessive economic liberalism, radical upstarts like the BSP may have to think more seriously about issues pertaining to national security and broad civilizational paradigms that extend beyond the immediate interests of its most avid supporters.
As for the Congress, it should not be too buoyed by its victory (by default) in Rajasthan. Instead, it should ponder very deeply over its predeliction for cynical policy manouvers that go against the overall good of the nation.
Not only is it bad politics, in a majority of districts, even the voters aren't buying.
Vote-Bank Politics: In the last year, mandarins of the ruling Congress Party (aided and abetted by various NGOs and self-styled "leftist" gurus) have been crafting policies with both eyes focussed exclusively on cultivating "winnable" vote-banks.
The hyper-aggressive quota-raj, the unprecedented (albeit opportunist and short-sighted) farm-loan waiver, unabashed (and often treacherous) Islamic appeasement, and the cynical Hindu-baiting (as in the frame-up of Sadhvi Pragya and Abhinav Bharat activists in the Malegaon blast) were all designed to shore up the Congress (and UPA) vote-banks in anticipation of state and national elections.
Even the left-initiated NREGS program (which was initially viewed with some skepticism) drew enthusiastic Congress support when its potential for attracting rural votes was highlighted. For an entire year, the Congress was consumed with harvesting specific vote banks, and so intent was the national media in advancing the image of the Congress that it chose to wilfully under-report or ignore a series of gross policy mis-steps (such as tightening interest rates when the entire world was heading towards a deep and long recession).
But the irony of the recent vote was not that the BJP failed to consolidate the anti-terror vote but that all the cynical ploys of the Congress bigwigs failed to make any impact on the two states where these crafty manouvers were expected to yield the highest dividends.
Candidates anointed by Quota Czar Arjun Singh failed miserably at the hustings, and the much touted loan waiver had only a minor impact on the rural vote. In a further karmic reversal, the tortuous attempts at concocting a "Saffron Terror Conspiracy" rudely backfired on the Congress with most voters seeing through the crude charade put up by the Maharashtra ATS.
For many months, the Congress-affiliated propaganda machine had gone over-board in portraying the BJP government as being ultra-harsh on the poor. International and domestic media outlets were rife with stories of "rampant malnutrition" and "starvation" deaths amongst the rural poor. And even though a CAG report had identified Madhya Pradesh as the most pro-active and efficient implementer of the NREG scheme, pro-Congress and pro-Left intellectuals rushed to trash the CAG report lest credit for the flagship scheme go the BJP. Yet, none of this cut much ice with the voters.
If anything, reports critiquing the BJP's implementation of the NREG program only revealed the many inherent limitations in the flagship scheme that put serious question marks on its long-term utility and viability. After all, there is only so much useful infrastructure that can be built in villages where economic conditions are otherwise not conducive for develoment.
In spite of mounting evidence that India's modernization requires widespread and rapid (but planned and orderly) urbanization, India's left (whether naxal or mainstream) remains fixated with the Indian village even though droves of villagers continue to abandon their stagnant or unviable rural habitats for the economically more vibrant city. Throughout the world, there has been an inexorable trend towards migration to the city. Yet, only in India, does the entire left respond to the inevitability of urbanization with repeated acts of defiant lunacy.
Consequently, in both Madhya Pradesh and Chhatisgarh, India's medievally obsessed leftists got the decisive brush-off they deserved. For years, the Indian left had salivated at the prospect of a tribal-dominated state in central India that would finally allow it to expand beyond the old forts of Bengal and Kerala. The entire left (along with their many cohorts in the Indian "Human Rights" community) had rallied sharply against the BJP, yet it was in tribal-dominated Bastar where the BJP did best. Tribal communities refused to be treated as museum pieces by armchair leftists and outsiders. They saw that development could happen in the state (as it had not only in Raipur and the twin cities of Bhilai and Durg, but also in Bilapsur, Rajnandgaon and emerging industrial centres like Raigarh and Korba). What they wanted was tangible progress, not hot air.
Other purveyors of such vote-bank politics also suffered humiliating rejections. The Samajvadi Party that once appeared to have perfected the art of benefiting from vote-bank policies (until its recent defeat in UP) also received a befitting rebuff.
However, in Rajasthan, the result was less than cheering for those hoping for the demise of caste as a factor in Indian politics.
Although it may be worth noting that only 1% separated the vote share of the two main parties (and the combined vote of the BJP and its rebels exceeded the Congress vote), nevertheless, there is some evidence that the caste-card had a deleterious effect on the fortunes of the BJP, particularly the Congress-backed (and possibly Congress-engineered) Gujjar agitation and the subsequent Meena backlash. Having opened the door to the politics of quotas in her first campaign, Vasundhara Raje fell to an even more toxic cauldron of the caste brew.
Having taken commendable steps in improving state highways, dramatically augmenting power supply, enhancing schemes for education of the girl-child, and greatly increasing options for vocational training and engineering education, proponents of development in the once BIMARU state may have anticipated a Raje win. But unfortunately, some of her efforts will only yield fruit later (and so failed to move enough voters) and dirty politics undoubtedly played a role in her undoing.
Nevertheless, there may well be other lacunae in Raje's strategy for the development of Rajasthan. In Gujarat, notwitstanding Sonia Gandhi's shrill "Maut ka Saudagar" campaign, Modi won handsomely. None of the semingly clever caste and other calculations were able to undermine his popular appeal.
Therefore, other factors may also be at play.
One of the industries that has put India on the international map is its pharmaceutical industry. Although it would be foolhardy to over-generalize from an analysis of this industry alone, one may be tempted to infer that the development of the pharmaceutical industry can be seen as one important marker of a state's industrial maturity. An on-line 2004 report on the spatial spread of pharma-manufacturers offers some useful clues.
By 2004, states like Gujarat (along with Punjab and Haryana) had achieved a remarkable developmental spread with pharmaceutical units setting up in almost every district; and in some districts, they had a presence in multiple blocks. In contrast, in Maharashtra, pharmaceutical units were concentrated almost entirely in the western third of the state. The Vidarbha region was conspicuously under-represented. This may have contributed to the earlier defeat of the Shiv-Sena led government which did quite poorly in the eastern regions of the state.
However, in MP, there appears to have been a modest (albeit visible) expansion in the industrialization of hitherto under-developed or undeveloped districts. Besides Indore and Bhopal, Gwalior has emerged as a growth magnet for northern MP and Jabalpur for southern MP. In addition, secondary growth clusters have emerged in Nimach, Mandsaur and Ratlam in the extreme west, Satna and Rewa in the north east, Sagar and Ujjain in central MP, and Balaghat and Damoh in southern/eastern MP. Even though substantive industrial growth has not yet encompassed all districts, the impact of development in neighboring districts has given hope to a majority of residents that progress is on the horizon.
In contrast (if one goes by the 2004 pharma survey), Rajasthan suffered from a more skewed and narrow pattern of industrialization. The spatial spread of its industries was noticeably worse than Orissa, AP and MP. Laudable as they were, Vasundhara Raje's efforts to accelerate industrial development bore fruit primarily in Jaipur and the neighboring districts of Alwar, Kota and Ajmer(and to a lesser extent in Central Rajsthan, and around Sikar, Ganganagar and Bikaner). Although southern Rajasthan experienced much faster growth than before, the relatively slower pace of industrialization in some of the southern (and some western) districts may have disappointed some, and this may have contributed to some disaffection within party ranks as well.
Just as TDP's Chandrababu Naidu had been punished by the state's voters for overly Hyderabad-centric growth, Raje may have missed the electoral bus for highly Jaipur-centric growth. In spite of a vastly improved record over her predecessor (Gehlot), Raje paid the price for being unable to direct growth uniformly across the state.
Rajasthan is a state where local (or sub-regional) identities can be very strong and expectations for progress were extremely high. Raje's hands-off approach to allow industry the full freedom to choose where it wished to invest may not have sat well with voters who wished her to play a more activist role in bringing industry closer to their door-step.
This is an important lesson for all aspiring state politicians. The same factors that played out against Vasundhara Raje this time may well come to the fore again if Gehlot's approach to government lacks the activism that was expected from Raje. Ridiculed as a developmental zero in his previous term, Gehlot will have to deliver on some very high expectations.
As for the charge that the BJP's attempt to "communalize" the anti-terror campaign failed, it must be emphasized that rural voters in undeveloped or under-developed blocks probably didn't care about the issue enough in a state election. The Congress and its allies should not delude themselves in thinking that their abysmal record in fighting terror will have no impact in the general election.
In Delhi, the BJP's anti-terror campaign fell on deaf ears partly because many of Delhi's RWA activists felt deeply estranged from the party due to its strong and unconditional affiliation with the traders lobby. Many popular RWA leaders who had distanced themselves from both the BJP and the Congress in the earlier Municipal elections actively campaigned for the Congress this time. Contrary to conventional wisdom, the increased voter turnout helped the Congress, not the BJP.
By promoting a Chief Ministerial candidate who was perceived as insensitive or aloof towards the RWAs, and by sidelining many hard-working women cadres and popular municipal councillers, the BJP was fighting the election with one arm tied behind its back.
The RWAs have emerged as a unique and significant grassroots force in the politics of the city. By and large, the candidates that enjoyed a healthy relationship with the RWAs prevailed. Those critical of Congress policies stayed away but couldn't bring themselves to vote for a BJP that had acquired the reputation of being adversarial towards the RWA movement.
However, should Sheila Dixit stubbornly persist in foisting foolhardy and unsound schemes such as the BRTS, it is quite likely that the RWA leaders who have swayed the vote in favor of the Congress will themselves lose credibility and the entire foundation of the RWA movement will be undermined.
Residents in East Delhi (who decisively voted Congress) were obviously unfamiliar with the BRTS fiasco in South Delhi. When such traffic nightmares recur elesewhere in the city, the mood of the city may well change, and quite dramatically so.
Voters are hungry for development, but not necessarily for the wrong kind of development.
It may also be noted that while the Congress did very well in terms of winning seats, it lost a considerable share of its previous votes to the BSP which increased its vote share in Delhi to 14%, in MP to roughly 10% and in Rajasthan to 8%. However, this has not yet translated into as many seats or any substantive political influence. Although the BSP has been able to demonstrate quite decisively that it can play the role of a "spoiler" (by drawing upon a shifting bank of protest votes), it has yet to be determined if similar trends will hold in a national election.
While identity politics may be understandably important for Dalits who are systematically denied the benefits that are their due to local corruption, it cannot be emphasized enough that for the BSP to emerge as a credible alternative to the Congress and BJP, it will have to articulate its views on issues that impact not just Dalits but all voters. It will have to feel the pulse of the entire citizenry if it hopes to lead the nation as a whole.
Even as the support of Dalits gives the BSP a certain moral standing, that may not ensure that other voters will give it a blank check on pressing issues of national importance. That will require more than placating some voters with promises of yet more quotas (even as it dodges key issues for fear of offending its Islamic and caste-related vote banks).
Even in terms of meeting the long-term aspirations of its core base, the BSP will have to carefully consider its present stance of (loosely) allying with an idealogically deformed left. Dalits have no real interest in the tired old left slogan of land reforms. The villages are where caste politics emerges in its ugliest and most baneful form. Most Dalits know that (relatively-speaking) cities liberate them and industrial development offers them the best jobs they can hope to find. They have few illusions about any rural "utopia" implied by the program of the left.
As it is, Dalits are typically the first to leave oppressive villages and the very last to return. That is why, the BSP had only very limited interest in supporting village-centric schemes (such as the NREGS) offered by the left.
Instead, the BSP has a far greater stake in rapid and balanced urbanization. As its urban base expands, it may be compelled to look at the urban-rural divide very differently. It may have to fight more forcefully for low-income urban housing and improved amenities in urban ghettoes and slums. These are issues that have been sorely neglected by the left and other so-called "secular" forces.
Unless sections of the left articulate an agenda of urban renewal and planned urbanisation, an alliance with the left is likely to remain one of temporal convenience - hardly the basis of long-term party building.
While the BJP may need to overcome its tendency towards conservatism and excessive economic liberalism, radical upstarts like the BSP may have to think more seriously about issues pertaining to national security and broad civilizational paradigms that extend beyond the immediate interests of its most avid supporters.
As for the Congress, it should not be too buoyed by its victory (by default) in Rajasthan. Instead, it should ponder very deeply over its predeliction for cynical policy manouvers that go against the overall good of the nation.
Not only is it bad politics, in a majority of districts, even the voters aren't buying.
The hyper-aggressive quota-raj, the unprecedented (albeit opportunist and short-sighted) farm-loan waiver, unabashed (and often treacherous) Islamic appeasement, and the cynical Hindu-baiting (as in the frame-up of Sadhvi Pragya and Abhinav Bharat activists in the Malegaon blast) were all designed to shore up the Congress (and UPA) vote-banks in anticipation of state and national elections.
Even the left-initiated NREGS program (which was initially viewed with some skepticism) drew enthusiastic Congress support when its potential for attracting rural votes was highlighted. For an entire year, the Congress was consumed with harvesting specific vote banks, and so intent was the national media in advancing the image of the Congress that it chose to wilfully under-report or ignore a series of gross policy mis-steps (such as tightening interest rates when the entire world was heading towards a deep and long recession).
But the irony of the recent vote was not that the BJP failed to consolidate the anti-terror vote but that all the cynical ploys of the Congress bigwigs failed to make any impact on the two states where these crafty manouvers were expected to yield the highest dividends.
Candidates anointed by Quota Czar Arjun Singh failed miserably at the hustings, and the much touted loan waiver had only a minor impact on the rural vote. In a further karmic reversal, the tortuous attempts at concocting a "Saffron Terror Conspiracy" rudely backfired on the Congress with most voters seeing through the crude charade put up by the Maharashtra ATS.
For many months, the Congress-affiliated propaganda machine had gone over-board in portraying the BJP government as being ultra-harsh on the poor. International and domestic media outlets were rife with stories of "rampant malnutrition" and "starvation" deaths amongst the rural poor. And even though a CAG report had identified Madhya Pradesh as the most pro-active and efficient implementer of the NREG scheme, pro-Congress and pro-Left intellectuals rushed to trash the CAG report lest credit for the flagship scheme go the BJP. Yet, none of this cut much ice with the voters.
If anything, reports critiquing the BJP's implementation of the NREG program only revealed the many inherent limitations in the flagship scheme that put serious question marks on its long-term utility and viability. After all, there is only so much useful infrastructure that can be built in villages where economic conditions are otherwise not conducive for develoment.
In spite of mounting evidence that India's modernization requires widespread and rapid (but planned and orderly) urbanization, India's left (whether naxal or mainstream) remains fixated with the Indian village even though droves of villagers continue to abandon their stagnant or unviable rural habitats for the economically more vibrant city. Throughout the world, there has been an inexorable trend towards migration to the city. Yet, only in India, does the entire left respond to the inevitability of urbanization with repeated acts of defiant lunacy.
Consequently, in both Madhya Pradesh and Chhatisgarh, India's medievally obsessed leftists got the decisive brush-off they deserved. For years, the Indian left had salivated at the prospect of a tribal-dominated state in central India that would finally allow it to expand beyond the old forts of Bengal and Kerala. The entire left (along with their many cohorts in the Indian "Human Rights" community) had rallied sharply against the BJP, yet it was in tribal-dominated Bastar where the BJP did best. Tribal communities refused to be treated as museum pieces by armchair leftists and outsiders. They saw that development could happen in the state (as it had not only in Raipur and the twin cities of Bhilai and Durg, but also in Bilapsur, Rajnandgaon and emerging industrial centres like Raigarh and Korba). What they wanted was tangible progress, not hot air.
Other purveyors of such vote-bank politics also suffered humiliating rejections. The Samajvadi Party that once appeared to have perfected the art of benefiting from vote-bank policies (until its recent defeat in UP) also received a befitting rebuff.
However, in Rajasthan, the result was less than cheering for those hoping for the demise of caste as a factor in Indian politics.
Although it may be worth noting that only 1% separated the vote share of the two main parties (and the combined vote of the BJP and its rebels exceeded the Congress vote), nevertheless, there is some evidence that the caste-card had a deleterious effect on the fortunes of the BJP, particularly the Congress-backed (and possibly Congress-engineered) Gujjar agitation and the subsequent Meena backlash. Having opened the door to the politics of quotas in her first campaign, Vasundhara Raje fell to an even more toxic cauldron of the caste brew.
Having taken commendable steps in improving state highways, dramatically augmenting power supply, enhancing schemes for education of the girl-child, and greatly increasing options for vocational training and engineering education, proponents of development in the once BIMARU state may have anticipated a Raje win. But unfortunately, some of her efforts will only yield fruit later (and so failed to move enough voters) and dirty politics undoubtedly played a role in her undoing.
Nevertheless, there may well be other lacunae in Raje's strategy for the development of Rajasthan. In Gujarat, notwitstanding Sonia Gandhi's shrill "Maut ka Saudagar" campaign, Modi won handsomely. None of the semingly clever caste and other calculations were able to undermine his popular appeal.
Therefore, other factors may also be at play.
One of the industries that has put India on the international map is its pharmaceutical industry. Although it would be foolhardy to over-generalize from an analysis of this industry alone, one may be tempted to infer that the development of the pharmaceutical industry can be seen as one important marker of a state's industrial maturity. An on-line 2004 report on the spatial spread of pharma-manufacturers offers some useful clues.
By 2004, states like Gujarat (along with Punjab and Haryana) had achieved a remarkable developmental spread with pharmaceutical units setting up in almost every district; and in some districts, they had a presence in multiple blocks. In contrast, in Maharashtra, pharmaceutical units were concentrated almost entirely in the western third of the state. The Vidarbha region was conspicuously under-represented. This may have contributed to the earlier defeat of the Shiv-Sena led government which did quite poorly in the eastern regions of the state.
However, in MP, there appears to have been a modest (albeit visible) expansion in the industrialization of hitherto under-developed or undeveloped districts. Besides Indore and Bhopal, Gwalior has emerged as a growth magnet for northern MP and Jabalpur for southern MP. In addition, secondary growth clusters have emerged in Nimach, Mandsaur and Ratlam in the extreme west, Satna and Rewa in the north east, Sagar and Ujjain in central MP, and Balaghat and Damoh in southern/eastern MP. Even though substantive industrial growth has not yet encompassed all districts, the impact of development in neighboring districts has given hope to a majority of residents that progress is on the horizon.
In contrast (if one goes by the 2004 pharma survey), Rajasthan suffered from a more skewed and narrow pattern of industrialization. The spatial spread of its industries was noticeably worse than Orissa, AP and MP. Laudable as they were, Vasundhara Raje's efforts to accelerate industrial development bore fruit primarily in Jaipur and the neighboring districts of Alwar, Kota and Ajmer(and to a lesser extent in Central Rajsthan, and around Sikar, Ganganagar and Bikaner). Although southern Rajasthan experienced much faster growth than before, the relatively slower pace of industrialization in some of the southern (and some western) districts may have disappointed some, and this may have contributed to some disaffection within party ranks as well.
Just as TDP's Chandrababu Naidu had been punished by the state's voters for overly Hyderabad-centric growth, Raje may have missed the electoral bus for highly Jaipur-centric growth. In spite of a vastly improved record over her predecessor (Gehlot), Raje paid the price for being unable to direct growth uniformly across the state.
Rajasthan is a state where local (or sub-regional) identities can be very strong and expectations for progress were extremely high. Raje's hands-off approach to allow industry the full freedom to choose where it wished to invest may not have sat well with voters who wished her to play a more activist role in bringing industry closer to their door-step.
This is an important lesson for all aspiring state politicians. The same factors that played out against Vasundhara Raje this time may well come to the fore again if Gehlot's approach to government lacks the activism that was expected from Raje. Ridiculed as a developmental zero in his previous term, Gehlot will have to deliver on some very high expectations.
As for the charge that the BJP's attempt to "communalize" the anti-terror campaign failed, it must be emphasized that rural voters in undeveloped or under-developed blocks probably didn't care about the issue enough in a state election. The Congress and its allies should not delude themselves in thinking that their abysmal record in fighting terror will have no impact in the general election.
In Delhi, the BJP's anti-terror campaign fell on deaf ears partly because many of Delhi's RWA activists felt deeply estranged from the party due to its strong and unconditional affiliation with the traders lobby. Many popular RWA leaders who had distanced themselves from both the BJP and the Congress in the earlier Municipal elections actively campaigned for the Congress this time. Contrary to conventional wisdom, the increased voter turnout helped the Congress, not the BJP.
By promoting a Chief Ministerial candidate who was perceived as insensitive or aloof towards the RWAs, and by sidelining many hard-working women cadres and popular municipal councillers, the BJP was fighting the election with one arm tied behind its back.
The RWAs have emerged as a unique and significant grassroots force in the politics of the city. By and large, the candidates that enjoyed a healthy relationship with the RWAs prevailed. Those critical of Congress policies stayed away but couldn't bring themselves to vote for a BJP that had acquired the reputation of being adversarial towards the RWA movement.
However, should Sheila Dixit stubbornly persist in foisting foolhardy and unsound schemes such as the BRTS, it is quite likely that the RWA leaders who have swayed the vote in favor of the Congress will themselves lose credibility and the entire foundation of the RWA movement will be undermined.
Residents in East Delhi (who decisively voted Congress) were obviously unfamiliar with the BRTS fiasco in South Delhi. When such traffic nightmares recur elesewhere in the city, the mood of the city may well change, and quite dramatically so.
Voters are hungry for development, but not necessarily for the wrong kind of development.
It may also be noted that while the Congress did very well in terms of winning seats, it lost a considerable share of its previous votes to the BSP which increased its vote share in Delhi to 14%, in MP to roughly 10% and in Rajasthan to 8%. However, this has not yet translated into as many seats or any substantive political influence. Although the BSP has been able to demonstrate quite decisively that it can play the role of a "spoiler" (by drawing upon a shifting bank of protest votes), it has yet to be determined if similar trends will hold in a national election.
While identity politics may be understandably important for Dalits who are systematically denied the benefits that are their due to local corruption, it cannot be emphasized enough that for the BSP to emerge as a credible alternative to the Congress and BJP, it will have to articulate its views on issues that impact not just Dalits but all voters. It will have to feel the pulse of the entire citizenry if it hopes to lead the nation as a whole.
Even as the support of Dalits gives the BSP a certain moral standing, that may not ensure that other voters will give it a blank check on pressing issues of national importance. That will require more than placating some voters with promises of yet more quotas (even as it dodges key issues for fear of offending its Islamic and caste-related vote banks).
Even in terms of meeting the long-term aspirations of its core base, the BSP will have to carefully consider its present stance of (loosely) allying with an idealogically deformed left. Dalits have no real interest in the tired old left slogan of land reforms. The villages are where caste politics emerges in its ugliest and most baneful form. Most Dalits know that (relatively-speaking) cities liberate them and industrial development offers them the best jobs they can hope to find. They have few illusions about any rural "utopia" implied by the program of the left.
As it is, Dalits are typically the first to leave oppressive villages and the very last to return. That is why, the BSP had only very limited interest in supporting village-centric schemes (such as the NREGS) offered by the left.
Instead, the BSP has a far greater stake in rapid and balanced urbanization. As its urban base expands, it may be compelled to look at the urban-rural divide very differently. It may have to fight more forcefully for low-income urban housing and improved amenities in urban ghettoes and slums. These are issues that have been sorely neglected by the left and other so-called "secular" forces.
Unless sections of the left articulate an agenda of urban renewal and planned urbanisation, an alliance with the left is likely to remain one of temporal convenience - hardly the basis of long-term party building.
While the BJP may need to overcome its tendency towards conservatism and excessive economic liberalism, radical upstarts like the BSP may have to think more seriously about issues pertaining to national security and broad civilizational paradigms that extend beyond the immediate interests of its most avid supporters.
As for the Congress, it should not be too buoyed by its victory (by default) in Rajasthan. Instead, it should ponder very deeply over its predeliction for cynical policy manouvers that go against the overall good of the nation.
Not only is it bad politics, in a majority of districts, even the voters aren't buying.
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