Indian National Security 101 - The Cunning Hindu Bania Version
I have often been asked - "What is India's national security all about?". The books that people write on this speak of ancient history and a great "civilization of civilizations" etc... all of which - I find to just be overwhelming amounts of useless detail. It is an Indian habit to tell you the entire Ramayana when you simply ask "Who was Rama?".Whatever is true about India's past, its glorious history, its grand mythology etc.. etc... it is all irrelevant to the national security of the India that exists today.
At no point in history has India ever had to support so many people on its landmass.
So unless Indians want to tell their children "how great India once was" while they watch them starve to death - India's economy has to develop to keep apace with the needs of its population.
In order to develop (whatever Modiji's grand plans for that may be) India needs to pull together capital resources. These resources come together more/less simultaneously from two sources.
1) Internally generated through some GoI sponsored investment scheme.
2) Externally through a sale of government held assets.
Regardless of how exactly the investment scheme is crafted, there has to be an investment-rate-of-return (IRR) that the investor can live with.
Given the culture of investing in India, the internal rate of capital generation is very slow. This is changing for the better over the last three decades, but it is still at 1% of where it needs to be. So the only way to get money together for anything is to borrow from international sources.
As the prosperity wave first hit India in 2004, the vocal segments of the voters began demanding more out of the government. They wanted roads, electricity and water. This was a shift from the old demands of food, shelter and employment.
There was a small problem, despite the prosperity, rich Indians did not have enough capital to fulfill the needs of the poorer ones. So the Government of India used the newly found public interest in India to begin borrowing from international lenders (directly or indirectly). The money so borrowed was funneled into the Indian economy by printing money and giving loans to Indian financial institutions. The rate of money flow into India was slow and there was very little exposure. As with all investment a certain fraction flowed into the real estate sector and a bubble was born.
As the global economy went into a recession in 2009, the Fed dropped its interest rates in the hope of warding off a depression. The money that came from the Fed went straight into investments in places like India. This increased the exposure of the global economy to India's debt. The rate of flow increased rapidly due to two factors - firstly the money had to leave the US where it less likely to grow, and secondly the GoI was facing a drop in its revenue generation from exports so it was willing to borrow more to cover the gap. Again as with any rapid increase in flow of capital - this flow too fueled the Indian real estate bubble.
And that is where the problems now lie. The money has been borrowed, it has been carefully organized into risk-managed vehicles, and we are waiting for the infrastructure developments funded by these vehicles to get going - i.e. finish on time and then start driving new economies and connecting new consumers to the world markets. A large amount of money is tied up in real estate investments. These cannot strictly become productive unless there is concurrent infrastructure development. No one wants to live in a fancy apartment complex with swimming pool and gym if there is no road that goes there and there is no water or electricity.
It takes time for infrastructure investments to get going. Until they get going, one has to keep investor confidence high. If you don't do that - the existing investors will get nervous and start pulling out. The only way to keep investor confidence high is to not piss people off.
Everyone in the world will support GoI if it chooses to go after corrupt people and clean up the cesspool of graft that drowns most investments in India. No one will support GoI if it decides to get sectarian in its approach to investors. This is because all investors will see sectarian behavior as a sign that GoI can't pay its debts and is making excuses for default.
So - to be brutally honest - it is time to dry clean and iron the old khaki chaddi, white shirt and black topi and put it back in the cupboard (it has served its purpose). And don whatever keffiyah, patka, kufi, yarmulke, bowler hat, fedora, cowboy hat, Chinese overcoat one needs to put on and get on your knees and bow before the investors. Engage each and every investor you can and show them that you share their notion of core values and worship the same God.
That is your best hope. As things stand when the Fed increases its interest rates, a number of investors will pull out. As the recession draws to a close in the US, the investment flows will reverse. So move to secure what investment you can while you *still* can.
Tell your sectarian friends to get stuffed and stick to work the nation needs.
posted by maverick @ 4:36 AM
7 Comments:
http://www.bloomberg.com/news/articles/2015-08-20/modi-s-outreach-to-pakistan-falls-flat-as-army-looms-over-talks?cmpid=yhoo
"“Modi’s magic usually works where people understand business sense,” said Sreeram Sundar Chaulia, dean of the Jindal School of International Affairs on the outskirts of Delhi. “Pakistan’s army doesn’t answer to that kind of cost-benefit analysis.”"
“The military has no interest whatsoever in the talks,” said Sumit Ganguly, a professor of political science at Indiana University in Bloomington, referring to Pakistan. “The only reason, I think, that India is going ahead with them is because Modi wants to present a reasonable -- and not intransigent -- face to the world.”
Yep - if that keeps up - then there is going to be a serious problem in the region.
there is no danger in talking if you are prepared for failure there of. I do not get the feeling that Modi is unprepared. I have no great love for Modi, it's just that he doesn't give off any vibe that he can be pushed around like the way Obama does unfortunately.
Looks like the trouble in China is sweeping the globe. Let's see where it stops. If it does.
Not really sure whose interests are served by cancelling the talks.
Mav,
Are you on Twitter? Have you seen the neo Aryan circle jerk of few sangh leaning South Indian professionals in USA? Their relentless advocacy of re establishing Varnashrama on basis of latest genetic research . Inciting fear that hinduism will die out in a generation. That Modi will prove to be our Constantine. Abusing sikhs as ushnishas, calling them abrahamised, Jains as nagna. This has not gone down well with sikhs in punjab AFAIK. How dear is re establishment of varna ashrama to these folks and what kind of traction do they have with top leadership of RSS?
Dear quantum chaos,
I am not on twitter.
I have not seen anything about this group of people.
As things stand right now, the RSS is no longer the organization that my grandfather and father knew. It used to be a place where everyone knew everyone. Now it is more like a large multinational where one hand doesn't quite know what the other does, and it is never clear whether that is intentionally done or simply unavoidably real.
One of my close relatives was objecting to the manner in which entities like the Ford Foundation were funneling money to various groups in India but then the in the same conversation the same relative praised NRI's abroad for donating money to BJP and other related organizations. Later in the conversation my relative objected to the Catholic Church seeking to harvest souls among India's marginalized and poor, but then was full of praise for the work the RSS did in Gujarat. I couldn't decide if I was watching a Jaspal Bhatti sketch or if my reality had twisted so much that Jaspalji's world had become reality. I just kept quiet throughout the exchange as there was obviously more to be gained by listening.
I guess what I am saying is that ideology is a dime a dozen, money talks. If this group has money (or equivalently media power) their influence over the central leadership will grow. So I guess the real question is how much money can these people bring to the table. If the money is good, i.e. (this is the important part) the flow is big and steady - they will get airtime.
The impracticality of their ideas is not really a limitation. That Ramdev fellow is going around talking up a storm and as long as it boosts the ratings of Aastha Channel, it will be put on TV.
In my opinion, the RSS has a critical function in India.
It serves as a non-denominational forum on which to air ideas about Hindu social issues. Such fora exist for every non-Hindu religious group in India and given its sheer size and diversity - the Hindus need one. If you don't have one of these non-denominational fora, then the various babajis (Holy Men) take over the discourse and use it to line their pockets. That situation quickly becomes unstable.
What the RSS is not.
- a forum for increasing orthopraxy. Those ideas were discarded by Hindus a long time ago in India.
- a forum for forming political associations, this kind of thing happens with any gathering, but that is not what RSS is for.
- a forum for mixing religion and nationalism. This sort of thinking was rejected a long time ago, but the younger generation needs to be periodically re-educated on the lessons of the past.
- a version of 4Chan where any idiot can put up any views that harass and intimidate minorities.
Unfortunately with the proliferation of RSS funding sources and rise in membership numbers, it is unclear whether the RSS conforms to any of these ideas.
Things are very chaotic right now.
Post a Comment
<< Home