Monday, 16 May 2011

Here come the West Indies?

Yesterday evening, West Indies pulled of a hard fought 40 run win in the first test vs Pakistan at Guyana.

Admittedly, the No.7 team beating the No.6 side in the world is hardly earth-shattering news and yet it was significant on two counts. For one, it was West Indies' first test win in over two years. For another, it was built on a team performance, in the course of which the team showed a determination, a hard will that was wholly uncharacteristic of West Indian sides of recent vintage.

Anyone who has followed West Indies cricket in the recent past would have observed that there has been a steady improvement in the Carribean team's performances over the last 3 years. Never mind what results say- scratch the surface, and the improvement is tangible. There was the 1-0 win against England two seasons ago, a drawn series in New Zealand in 2008-09, a test win in South Africa in 2007-08, a series against Australia in 2008 that was much closer than the final margin might suggest and a hard fought series in Australia, where West Indies had the better of their hosts in a drawn test at Adelaide and went down by just 35 runs in the final test.

For that matter, West Indies' performance at the 2011 World Cup was much better than cold statistics might suggest. Admittedly they won not a game against better ranked opposition, but it does not vitiate the fact that they were in complete control in the game against India and lost to England by a mere 18 runs. In fact when you scratch the surface, what emerges is that West Indies in recent times have frequently got themselves into situations from which they could have won but failed to capitalise. Time and again, West Indies have shown tenacity and a determination not to give up- quite unlike most West Indies sides of recent vintage. In short, the problem is not of ability or commitment, but of temperament.

What is encouraging is that there exists the nucleus of a competitive side. Gayle, Sarwan and Nash are all in their early 30s and could be around for another 4-5 years. Behind them is a promising bunch of young batsmen like Barath, Simmons and Bravo. In Taylor, Russel, Rampaul, Bravo, Bishoo and Benn, they have some pretty decent bowlers. This lot may not be champion material, but there enough in there to beat lower ranked sides consistently and occasionally topple the better teams.

What Carribean cricket desperately needs is a better administration and a players association that can put the interests of  West Indies cricket ahead of self interests- by no means an impossible ask, given the way Indian cricket has transformed itself over the last decade or so. A more understanding administration could go a long way towards resolving the deadlock that has frequently decimated the side (notably against Bangladesh two seasons ago).

There is no reason to assume that the situation will never get resolved. Remember the shambles in which England and India were at the turn of the century. Both sides are currently in the top 3. There is nothing that cannot be achieved with hardwork, planning and most importantly, that ounce of intent.

Saturday, 14 May 2011

Left out

It is not yet twenty fours hours since the results of the assembly elections in four Indian states were declared. The day proved every bit the dreade Friday the 13th for the Left front. Having lost by a slender margin to the opposition in Kerala, their long standing bastion- West Bengal- was prised away by the Congress-Trinamool Congress combine. Thirty four years of communist hegemony in West Bengal was wiped out, very possibly forever.

Thirty four years. To give some idea of what it means, India's GDP in 1980- a good 3 years after the arrival of communism in West Bengal- was around US$ 175 billion, as against US$ 1.5 trillion in 2010 (Source: IMF), India's population in 1981 was about 683 million (Source: National Commission on Population). Back in 1977 the cold war was at its height, communism looked an inevitable reality, terrorism was a word virtually unknown in most parts of the world, China had only just opened its economy, apartheid looked unshakeable in South Africa, Elvis Priestly was still alive and...I'm sure you get the drift.

There is no doubt that thirty four years of communist administration has done little good for West Bengal. It is today one of the most impoverished and indebted regions in India (West Bengal's debts were roughly  US$ 37 billion- 1620 billion INR as of March 2010- which is more than the state's GDP). Most industries have long since fled the state due to the constant pressures created by labour unions. As of 2010, West Bengal had the highest number of unemployed persons in any single Indian state.

All of which gives some idea of the magnitude of the challenge that Mamata Banerjee faces. Take the example of neighbouring Bihar: after six years of outstanding work by Nitish Kumar, Bihar still remains backward and impoverished despite massive improvements at many touchpoints of day to day life (as this writer can attest from personal experience). Using Bihar as a guideline, one could safely assume that Mamata Banerjee and her party will require at least two terms just to make basic improvements in terms of employment, economic revival, food sufficiency and law and order- four pillars of good governance.

It is a gargantuan challenge that confronts the new CM of the state. The vast majority of the residents of West Bengal were born well after 1977, which means that the only administrative/ political culture they have ever known is the communist one. Can the new leadership weed out attitudes that have become completely ingrained in the psyche of the people over three and a half decades? Can the new regime manage to convince a people long used to striking for trivial matters to give up their unionistic tendencies? Can they weed out the culture of corruption and partonage that has held sway through the lifetime of the vast majority of the state's population?

And all these represent but a small part of the challenge that the new regime confronts- we are not even talking about the maoist menace in most districts of the state and the Gorkhaland movement that may well cause the eventual loss of the hilly regions.

In short, the people of West Bengal need to realise that the Trinamool Congress and Mamata Banerjee are not magicians. They have massive problems to overcome, which will require a strong will, concerted efforts and most importantly, time. Improvement is going to be slow because attitudes do not change overnight- no leader, howsoever charismatic, can change the mentality of the people in a short span of time.

The people of West Bengal have given Mamata their vote. They now need to give her their patience- the biggest challenge for both sides has only just started.

Tuesday, 10 May 2011

Lokpal- a solution?

The Lokpal Bill, a proposed piece of legislation that is supposed to provide an effective tool against corruption in public life in India, has captured the popular imagination in India. Amidst scenes unprecedented in the history of independent India, the common people made a joint stand in support of a mass movement spearheaded by a social activist for the enactment of a piece of legislation that is expected to have revolutionary potential.

Intimidated by the spectre of mass discontent, the central government quickly gave in to the demands of the social activists spearheading the movement and setup a committee to oversee the drafting of the proposed bill.

I came across an article on yesterday (Can you spot any loopholes in the Lokpal Draft? 9th May 2011) which outlines the main provisions of the Lokpal Bill. Having been one of the most passionate advocates of the bill, I could not help feel concerned when I saw the broad contours of the draft bill. Admittedly I have not seen the original text and so the views that follow will necessarily be subject to qualification on that score.

Apparently, the bill proposes to empower the Lokpal to recommend penalties and possibly even dismissal of government servants where corruption is proved. The question that automatically arises is whether parties proven guilty can escape on appeal. Unless there is a specific provision that the recommendations of the Lokpal will be binding on a court of law, baring demonsrably mitigating circumstances, the Lokpal will be no more than an authority making recommendations that could easily be rejected by a court of law- which would effectively preserve the status quo.

Secondly, what kind of a judicial mechanism will the bill provide to dispose of cases relating to corruption? In all probability, recommendations made by the Lokpal will be passed on to a high court. In that case, will there be dedicated benches in the high courts across India to ensure that such cases are quickly disposed? If not, there is the very real danger that the cases will be stuck with high courts for several years, which would defeat the very purpose of enacting the bill. 

Furthermore, what kind of an appeal mechanism will the bill provide? Apparently, appeals will have to be made to the high court. Given the fact that the bill empowers the Lokpal to cancel or modify licenses, agreements or contracts, will there be a mechanism to ensure that corruption cases do not add to the responsibilities to an already overburdened judiciary? Ideally a court of law should only be responsible for deciding on a question of law in such cases (which means that courts of law should only be responsible for looking into the legal merits of the case and not be called upon to decide on the facts of the case), which would enable speedy disposal.

Apparently, cases under the act (which is what the bill will become, once enacted by parliament) will be decided within a year. Is the one year time limit mandatory or is it merely a guideline? What safeguards will the bill provide to ensure that the one year limit is actually observed in practice? What kind of remedial action will be taken, should the time limit prove difficult to meet?

Another significant fact that needs closer scrutiny is that the bill proposes to empower the Lokpal to tap phones and intercept internet communications. That being the case, will there be an authority to which the Lokpal will be accountable? If not, there is the very real risk that the Lokpal could end up becoming an instrument for domestic espionage in the wrong hands.

With the proposals still subject to negotiations, these are just a few out of several questions that demand reflection on the part of our legislators. This is a golden opportunity for India to provide a platform for the common man to seek justice against corruption which, if frittered away, could keep millions of our citizens defenceless for several years more to come. This could be just another short-lived upheaval, this could be a tipping point that could trigger off a siesmic shift in the history of India.

Only time will tell us which way the winds of history will blow.

Wednesday, 4 May 2011

To do or not to do?

I was reading an article in the Times of India earlier today, that the Government of India is going to increase fuel prices by a further Rs. 3 one the state assembly polls will be over. Given the fact that fuel prices in India are already at a historic high, the latest development, when it happens, is only going to further fuel inflation.

Citizen unfriendly policy many might say. For sure, there will be opposition parties queuing up to take advantage of the situation to embarass the beleaguered Congress government already trying hard to combat the twin embarrasments of mounting inflation and corruption charges against cabinet ministers. There will most probably be calls for increasing fuel subsidies. Had it not been for the fact that they are themselves fighting a battle of survival, the communist parties would have been baying for subsidies now.

Truth be told, the situation is a double-edged sword. With international fuel prices in excess of $100 per barrell and going further up, there is little any government can do about the resultant cost-push inflation (for the benefit of those who do not have background in economics: cost-push inflation refers to inflation caused by rising prices of essential comodities).

To be sure, one area that merits review is the taxation policy, given the fact that most, if not all, state governments in India levy VAT on fuels- one of the well kept secrets that no one ever bothers to ever mention. In states like Maharashtra, that tax is somewhere in the region of 30%. Its hard to see how the government is going to tackly inflation as long as it taxes essential commodities so heavily (for the record, the party in power in Maharashtra is the same one which is in power at the centre).

Nevertheless, even if the tax component were reduced, the government would still have quite a job on hand battling oil price fuelled inflation. Those who argue for an increase in subsidies would do well to explain where the money for those subsisides will come from. With the government already running a massive budgetary deficit, an increase in subsidies will only aggravate the situation, resulting in substantially increased deficit financing, which will only push interest rates further up- the net result? Increased cost of financing, which will cause companies to raise the prices of their products/ services. The net effect? You guessed it right, inflation.

In short, inflation on account of rising fuel prices is inevitable. Subsidies will only delay the inevitable, but make no mistake: subsidising fuel costs is no solution for cost-push inflation.

Which way do we go then? Not being an expert economist, I for one cannot honestly claim to have a solution. But given the fact that even world renowed economists like Ahluwalia and Dr. Manmohan Singh themselves have been unable to conjure up a solution, the problem must surely be a very tricky one.

In other words, the only way ahead is to accept that inflation is here to stay and that we are just passing through a period of extraordinary inflation- there have been historic periods of high inflation before and this is the latest of them. It would be futile to blame the Government for rising prices- the cost push inflation that's sending prices skyrocketing in India is something no Government can do anything about.

The solution to this problem (insofar as there is one, since inflation is normally a short-term phenomenon) necessarily needs to be long term: identify substitutes for fossil fuels. The day India can find a sustainable alternative to imported fossil fuels, we will have a solution to fuel price induced inflation.

Until then we can only hope that international fuel prices will cool down and give us some respite from the monster of rising prices.