The Villain within

A question has been occupying my head for quite some time: Why are we so quick to react to, get angry at and rally against an external threat or attack than solve problems that exist within ourselves, our homes and even our countries?

Take the example of road accident deaths in India. Each year more than 138,000 Indians lose their lives to road accidents. The solution to this problem is completely in our control. From the individual driver who could pursue safe driving and take standard safety measures like wearing a seatbelt and helmet to the government and the police who should be spending a lot more resources on road safety and enforcement. But this particular issue does seem to anger or concern much of the citizenry as compared to say terrorism. I am not in any way saying terrorism is something we should ignore but in comparison terrorism does not even cause a fraction of these deaths. Imagine if 138,000 people were killed by terrorists every year. How would we feel about that? I think our response would be somewhat more urgent and decisive. So even though solving a problem like terrorism is only partly in our control and a lot more complex we are extremely concerned about it. We can’t possibly convince our enemies to stop hating us which is why I don’t think we can do much as an individual to solve that problem.

Same is true for female infanticide. The issue is now somewhat at the forefront but I don’t see nearly as much anger as there should be about this subject. The numbers are once again astounding, approximately 500,000 girls are killed in India each year.

The culture of being hyper reactive about an external problem like terrorism or Chinese spying on Intellectual property is not unique to India. All over the world it’s much easier to mobilize people for problems that they don’t have much control over. Canadians for example are much more generous in being ‘concerned’ about world poverty than the persecution of First Nations people in their own backyard. I am speaking from experience of having lived here for 8+ years and don’t have hard data to back me up but I am sure many Canadians will agree.

The point of my post is not diminish issues like terrorism and world poverty. All I am saying is that if we could actually worry about problems in our control and immediate vicinity, we may actually be able to get somewhere. 

Addressing the symptoms and not the disease: Why arresting the Rupee’s fall is impossible.

Trying to control the falling Rupee by increasing duty on imports, raising FDI limit on certain sectors, removing restrictions on FDI in retail will not only fail, it is not the intention of this government for these measures to work in the first place. The situation is merely being used to push through reforms that benefit foreign investors such easing of conditions such local sourcing on the controversial FDI in retail.

The reason why the Rupee is falling is because India’s imports far exceed exports, Current Account Deficit (CAD) which the Finance minister keeps referring to is sky high, economic growth is slowing and unemployment increasing. If foreign capital stops investing in India there would be a serious problem as we won't be able to pay for imports that we need. Why are our imports so high? Can we not export more to stabilize the situation? Is there anything the government can do? These are obvious questions with even more obvious answers. 

Let’s look at India’s top imports: Crude oil and Gold. In terms of deficit, Crude oil accounts for about $100 billion in net deficit and Gold for about $54 billion. We are not an oil-rich nation so yes we cannot do much about reducing oil import, nor are we trying since our current economic model encourages us to buy cars which need oil to run. But I do not wish to debate the economic model here. The neoliberal advocates of consumption driven growth can rest peacefully. But gold? Why do we need so much gold? Does it feed people? Does it build houses? Well, not really. I would be quite interested to hear the argument about how necessary Gold is for survival or quality of life for that matter.

Incidentally, Mr. Ahluwalia (Chairman of the planning commission) and Mr. Chidambaram (Finance Minister) both agree with me on this one and have appealed to the public to stop buying Gold. With all due respect sirs, I have no sympathy for your cause. You raise import duties which you know will only encourage smuggling, you ‘appeal’ to people which isn’t what free market is about and you find fault with the RBI. People should be able to freely buy what they want right and the 'invisible hand' should save us all? So why are you ‘telling’ consumers what to buy?

I hope everyone sees who buys Gold. Not the one who cannot put two meals together. It is the wealthy and for the record I have nothing against wealthy. But Mr. Ahluwalia and Mr. Chidambaram, when you have created an economy with huge amount of black money, with massive disparity, with a super rich club that is growing every day, what exactly do think these rich people are going to do? Of course, they will buy gold and that is what they are doing. Don’t complain about the consequences of your own policies sir, please own up. 

In an economy that was actually making people rich because of real growth this would not be a problem. Innovation, better educated workforce, better infrastructure etc. would have ensured that exports rise as rapidly as imports. But alas, government of India chose a shortcut method. Even now, they cannot seem to see the connection between a well educated population, good administration, well planned cities and the economy. All I see in newspapers is coverage about what the RBI will do, how will markets react, will growth be 6.1 to 6.3? I hope my fellow countrymen see that it does not matter what the RBI does if we as a country cannot innovate, if our universities produce graduates that are not employable, if the cities keep growing haphazardly and our economy is fundamentally weak as a result. If the government had played its role in redistribution of wealth, the super rich club may have been smaller and instead we would have a country buzzing with entrepreneurship, with small and medium enterprises, with investors investing in new startups rather than this mindless quest for gold.

But Mr. Chidambaram, you only harp about economics. You have forgotten that factors such as clean administration, education, political leadership are necessary for an economy to do well. Otherwise, the FII’s have nothing to invest in no matter how liberal you make the economy. I write this from Canada. I benefited from liberalization which enabled my parents to take out a loan to send me abroad to study, but I feel we missed an opportunity in the last decade. We got too focussed on enabling middle class kids to go abroad, get loans to study at expensive business schools and establishing a few good elite institutions in India but forgot that catering to a select part of the population isn't enough to achieve growth. Now we are stuck with few rich people buying gold and imported cars while the pace of innovation is nowhere near what a huge country like India needs. Here in Canada, which has a very conservative government, when the government talks of stimulus, it talks of training youth, helping startups and small businesses, and yes natural resource development. But in India, which has so many youth, there is no focus on the first two. All I see coming out of Cabinet meetings (in the papers) is- let’s mine more coal, let’s get rid of the ministry of environment, let’s get more FIIs and Walmart. Is that all our intellectually bankrupt political leaders, economists and bureaucrats have for means of promoting growth? Is there even one substantial program for entrepreneurs or new industry?

A few days ago the Prime Minister met with 'top industry leaders' for 'ideas' on how to accelerate the economy. Has he ever bothered to connect with youth for ideas? Does the government spend even half as much time speaking about improving education as it does about increasing FDI? In the past 5 years FDI limits have gone up but how much has education expenditure changed? It has gone up from 3.2 to 3.3% of GDP (2010 to 2011). Is that enough to accelerate economic growth to 8%? Oh, sorry I forgot our leaders haven’t yet figured the correlation between better skills and better economy, but I hope they do soon because whether it is a socialist or a free market economy, without education and infrastructure neither will work.

As the Rupee plunges even more, I hope there will be a political war cry to change something fundamental about how the country is being governed. I will give our PM one simple idea, remove black money from Real Estate, mining and all the notorious sectors where there is more illegal than legal cash changing hands and your problem of the Rupee will be solved. Otherwise, raising duty on imported cars and watches aren't going to make a spec of a difference.

What I write is based on newspaper headlines, obvious statistics and what I hear from friends and relatives. I do not claim to know the ground situation but I feel that sometimes being outside can give you some perspective and therefore I have written this piece.

Why I am against FDI in retail

So a lot of hue and cry is currently being raised about the entry of foreign players like Walmart in the Indian multi-brand retail sector. This would become possible by allowing 51%FDI(Foreign Direct Investment)which is at the moment limited to 25%.

I would, in this post describe my reservations against this move. Before I go on, let me assure you that I think my economic views are quite moderate. That said, I am still strongly against this FDI in retail for the following reasons:

Here are the arguments presented by the proponents and their critique

1) FDI will help farmers by creation of back end infrastructure like supply chains and cold storage: While it is true that big retail would invest a lot of money in supply chain etc. but the question is for the benefit of who? In the west(or at least in Canada) that supply chain is mostly used to import bananas from Ecuador, apples from New Zealand and so forth) Essentially the supply chain is used to import goods from ultra cheap industrial scale farms all over the world (since it's so damn efficient and causes such a huge carbon footprint). To buy local food one needs to go to China town or other locally owned stores so obviously am not able to see the benefits this supply chain will have for local farmers in India. Essentially if a region has a bad crop and farmer is expecting to get compensated by higher prices this will not happen since the 'efficient' supply chain will enable stores to import cheaper produce from elsewhere.

2) Consumerism: It is often touted by businessmen that they are simply feeding the demand of the population. We know from observation that this is simply not true. Businesses create demand, Advertising makes us want to buy things. India is a growing economy and needs to decide what kind of development it really wants. We are already witness to the effect of consumerism on rural India a stark example of which is farmer suicides. Distinguished historian Ramachandra Guha points out the psychological impact consumerism has had on the rural farmer which looks upon himself as a loser in this quest for glamour. He points out that farmers in India have always been on the brink but they were not killing themselves in the past.

I know that disparity is inevitable, especially in a high growth economy. It will grow before it comes down. But we don't have to make it so in your face that a large part of the population feels like a loser.

The point I am trying to make is that the social engineering capability of a 400 billion dollar company like Walmart is many times more than Kishore Biyani. The socio economic impact it may have on an already volatile society where a large number of population is extremely frustrated can be disastrous.


3) Efficiency may not always be good: Economists would know that while efficiency will definitely increase GDP it also creates a more efficient way to deliver the profits to the top. The argument that big retail will create more jobs is simply absurd. How is it supposed to be efficient if you say you will employ even more people per square feet (one economist pointed out) than the corner stores.

4) What economics misses: Economists count well being by the number of good you buy, they are not concerned whether you actually needed that product or not. For an economist a $10 box of cigarette is better than a $4 cup of coffee but common sense tells us this defies logic. So why promote an industry which will make Indians buy things they do not need albeit at a lower price. I am all for lowering import tariffs, let Starbucks in India, let us not pay 300% duty on french wine. In fact single brand retail is just fine, but we simply do not need Walmart in India.

The job to create supply chains, efficient taxation to facilitate interstate movement of trucks, devolution of better technology to farmers cannot be outsourced.

Let there be FDI in infrastructure, technology, manufacturing but eating MTR ready to eat packages (because you can get 10 for a cheap price at Walmart and the packaging is attractive) instead of home made dal is not going to help anybody's cause even as it enhances our GDP.

The change that big retail creates in consumption habits of people is simply not healthy regardless of efficiency.

The arrogance of a Neo-liberal regime.

Here are some of my thoughts on the "Anna" phenomenon:

I start with a quote from PM's 'statement' on Anna's arrest. He said ,"there are forces who do not want India to have the rightful place in the commonwealth of nations" The statement while being absurd in the first place, shows how irritated politicians become at the slightest thought of people power.

The statement was also not surprising since MMS spends more time in Washington than in Delhi. The leadership of India seems so hopelessly unaware that millions of Indians living in abject poverty, millions of Indian looking for jobs, even millions of Indians working night shifts at call centers don't give a damn about this 'commonwealth of nations' All they want is a country where they have respect, dignity and peace. In fact, I don't even think the poor are expecting to get rich given the hopelessness drilled into their heads through centuries of discrimination. All they hope for is the someone to listen to them.

What this government has done is gotten away with scams on a grand scale. It is ironic that this very PM who is so concerned about India's image abroad could not deliver a successful Commonwealth Games. They have ended up pissing of the middle classes with such massive scams and the pooris pissed off that none of the growth is helping them due to a failed government machinery.

The government ministers are so filthy rich that they have forgotten basics of politics, they seem to have taken voluntary retirement of sorts. But what's with this weak governance? All over the world we are hearing the same cry, the governments are ineffective. Why is this so? well you can read Chomsky for that.

However, the corporates made one mistake. India is not America or Latin America. Gandhi is still printed on every currency note and forever Indians will have greater respect for him than Warren Buffet. No matter how you package capitalism, the ideas of democracy, of self determination are so ingrained in the Indian psyche that the whole 'customer is always right' bullshit is never gonna work here.

The leadership of India today seems frankly ill-trained to handle people. Yes they would be awesome at receiving Bill Gates and negotiating deals with the World Bank but they have forgotten how to practice politics. It is astounding how little coverage any government official has got since Anna went on fast. Astounding it may be, but it is not surprising.

August 2

Food at Cafe Mexico. Great Food! Awesome Service

Things to do with Chopsticks when not eating Sushi

1. Make holes
2. Poke people
3. Eat Cereal
4. Use as stirrer
5. Eat ice cream

Have more?

No longer afraid to travel.

When I graduated grade 12... I wasn't really sure of the world. I wasn't really sure of my friends. I didn't know who I could depend on and who I couldn't..

That was a time I did not like moving a lot. I didn't want to change my school even though I knew it was better for me because I was scared to adjust in a new environment. I reconciled with Status Quo for most things.

However, that is not who I am inherently.. I remember in grade 3 walking up to the principal to complain about a teacher who was beating up kids for no reason. This was not normal, at least I didn't think any other grade 3 kid in my school could do such a thing and it didn't even seem like a big deal to me.

Coming back to grade 12, I decided to come to Canada after school. Somehow I felt more comfortable coming here than going to engineering college in India; For whatever reason. But even here I was 'comfortable' in Victoria. I didn't want to move even If I could, I have friends who I value and didn't want to go somewhere I wasn't sure about.

However, this has changed in the past year and I have been wondering why..

I am not afraid to go anywhere today; this is not because I have suddenly reached a new level of confidence rather it's because over the years I have worked hard to forge strong relations with family and friends. I feel If I get into trouble, a lot of people will be there for me. Some of them would falter and I am taking no one for granted, but still there is a lot of support and it makes me feel pretty good.

In many traveler books I have read or movies I have watched, people seem to make travel a way to 'free' themselves, especially the original concept of travel like a pilgrimage to Jerusalem or the Haj was based on detaching oneself from what was comfortable and venturing out.

However, for me the strength and willingness to travel or try new things is because I feel attached and not detached.

Get what I am saying? Does that make sense for you?

What gives you the strength or desire to travel?