When asked about what US policy should be towards Panamanian independence, the former California Senator S. Hayakawa replied, “There is no reason for a policy – we stole it fair and square”. The Kashmir problem is different, and the history of its peoples more unfortunate. The complexity of the one people two-nation formula that was Partition, and the strategic location of Kashmir, led to demands from both India and Pakistan for its ownership. The only way out is a plebiscite, a formula proposed first by India, and as early as Nov. 1947. Unfortunately, the much promised referendum has not been held and the tragedy of Kashmir has slowly unfolded over the last fifty years.
The Congress has initiated a navel-examining process – why is it nowhere. The prime culprit identified by the wannabe leaders of the declining-into-oblivion political party is the economic reforms initiated by its very own Dr. Manmohan Singh, Finance Minister during 1991-96. During these economic reform years, especially 1991-1993, Manmohan Singh helped initiate major departures from India’s socialist state path which it had assiduously followed for 40 years.
The fundamental issue for governments, and their protégé’s, quasi-government organizations(QGO) like the World Bank, IMF and the UN, is one of accountability, or what goes by the QGOs fashionable phrase of “corporate governance”. Corporate governance is ensured in the private sector via the market. If a firm is perceived to even have a shade of corporate mis-governance, the highly competitive international marketplace is very quick to penalize it. To ask for corporate governance in today’s competitive international world, for publicly listed firms, is like mandating rules that a politician has to campaign – she will do so because it is in her self-interest to do so.
There are few principles in economics, or commonsensical life, more fundamental than the principle of equality between a buyer and a seller. If the two face a different price, something is wrong, right? Wrong. Welcome to India where the anthropologists are delighted to find primitive behaviour, called badla, in its capital market.
It is in the interest of all cricket administrators to show that match-fixing never occurred. The Delhi Police waylaid the best plans of people wanting to look the other way; the tapes, not unlike Nixon’s Watergate tapes, carried both smoke and considerable fire. Hansie Cronje’s admission of guilt, while welcome, was inevitable. If pangs of guilt were enough, then Saeed Anwar would have stopped the rot ages ago: Mr. Anwar is reported to have felt guilty after receiving money, revealed this fact to his friends and Justice Quayyum, and is believed to have been off the gravy train since. There are several other scandals lurking in the shadows – will there be, can there be, enough evidence for the fans to assess whether match fixing actually took place?
The match-fixing scandal that has rocked the cricketing world in the recent Cronje days is not a new phenomenon. In 1919, the White Sox, an American baseball team, threw away a World Series match for monetary gain. The baseball authorities in the US reacted swiftly and banned the players for life. The next baseball betting scandal was in the form of Pete Rose, (a habitual gambler and a brilliant batter, the latter a la Azharuddin) whose induction into the baseball Hall of Fame has been stopped because he bet on baseball matches other than the ones he was involved in. Note that gambling on baseball games is legal in Las Vegas.
In two articles on Indian financial markets, (Where have all the profits gone? and Gone to markets, everyone, Economic Times, Feb. 1 and 15) I fervently hoped that there would not be an occasion to write an article entitled “When will they ever learn?” I spoke too soon. The recent Income-Tax - Foreign Institutional Investors (ITFII) fiasco shows how everyone is learning except the policy makers. Indeed, what appears likely is that the Ministry of Finance (Mof), and its 1999 report on “How to save UTI and mess up the financial system” are the main culprits behind the ITFII drama of last week. A drama not at all different than the illegal betting match-fixing affair a la the South African cricket team captain, Hansie Cronje.
All of us are trying to survive, and compete, in the ICE economy. The extinct dinosaur and the ultimate survivor – the cockroach - are all of us, and often the same person, or institution, has elements of both. But what is ICE ? The award for the most creative acronym for the new economy - Information technology, Communications and Entertainment (electronic variety)- goes, perhaps not surprisingly, to an Indian, Gurcharan Das who coined this term sometime in November, 1999. Business-Standard, foreseeing this elegance, developed an index of all the ICE stocks in the Indian economy. But what is surprising is that this fantastically elegant term (can you imagine the permutations – melting ICE, cool ICE, burning ICE i.e. ICE for every event) has not yet been universally accepted. This turf battle reveals a lot about the transition to the new age.
Next March, the BJP will complete three years in office. There are several assessment yardsticks e.g. performance with regard to GDP growth, inflation, fiscal deficit, poverty reduction, economic reforms. Disinflation is part of a global phenomenon, so neither the BJP (nor the previous UF government) gets any credit for the structural decline in inflation to less than 3 percent today; the opening up of the economy was the cause, and not misguided and misinterpreted monetary or fiscal policy. Change in poverty is a long-term phenomenon made even longer by the highly misleading National Sample Survey data. GDP growth has been of a new Hindu constant variety for the last twenty years (at around 5.5-6.0 percent). Economic reforms – since 1991, we are all Manmohan Singhites. The only yardstick is whether any government pressed the accelerator. Precious few have; indeed, none since the first surgery of 1991. After that, it has been either band-aids or tinkerization – indeed, a radical reformer is one who did both. Thus, one is left with just the fisc.
The beginning of the millennium presented Mr. Yashwant Sinha with several opportunities to mark a new beginning for India. Mr. Sinha capitalized on this opportunity, and mentioned all the “motherhood is good” mantra in his two hour long speech. There was some practical motherhood as well – about Rs. 5000 crores for the poor sector, and decreased food prices, and increased food availability, for the third of the population that lives below the poverty line. The milk was flowing.
